UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
The Fiscal Year Ended
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
(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 (
Securities registered pursuant to Section 12(b) of the Securities Exchange Act: None
Securities registered pursuant to Section 12(g) of the Securities Exchange Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes
☐
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.
Indicate by check mark whether the registrant has submitted electronically 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 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES ☐ ☒
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company”in Rule 12b-2 of the Exchange Act.
Large
Accelerated Filer ☐ Accelerated Filer ☐
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
☐
The aggregate market value of the Company’s common stock held by non-affiliates computed by reference to the closing bid price of the Company’s common stock, as of the last business day of the registrant’s most recently completed second fiscal quarter:
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.
Not Applicable
APPLICABLE ONLY TO CORPORATE REGISTRANTS
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 December 31, 2021 | |
| Common Stock, $.0001 par value |
DSwiss, Inc.
FORM 10-K
For the Fiscal Year Ended December 31, 2021
Index
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K contains forward-looking statements. These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:
| ● | The availability and adequacy of our cash flow to meet our requirements; | |
| ● | Economic, competitive, demographic, business and other conditions in our local and regional markets; | |
| ● | Changes or developments in laws, regulations or taxes in our industry; | |
| ● | Actions taken or omitted to be taken by third parties including our suppliers and competitors, as well as legislative, regulatory, judicial and other governmental authorities; | |
| ● | Competition in our industry; | |
| ● | The loss of or failure to obtain any license or permit necessary or desirable in the operation of our business; | |
| ● | Changes in our business strategy, capital improvements or development plans; | |
| ● | The availability of additional capital to support capital improvements and development; and | |
| ● | Other risks identified in this report and in our other filings with the Securities and Exchange Commission or the SEC. |
This report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Use of Defined Terms
Except as otherwise indicated by the context, references in this Report to:
| ● | The “Company,” “we,” “us,” or “our,” “DSwiss” are references to DSwiss, Inc., a Nevada corporation. | |
| ● | “Common Stock” refers to the common stock, par value $.0001, of the Company; | |
| ● | “U.S. dollar,” “$” and “US$” refer to the legal currency of the United States; | |
| ● | “Securities Act” refers to the Securities Act of 1933, as amended; and | |
| ● | “Exchange Act” refers to the Securities Exchange Act of 1934, as amended. |
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PART I
ITEM 1. BUSINESS
Corporate History
DSwiss, Inc., a Nevada corporation (“the Company”) was incorporated under the laws of the State of Nevada on May 28, 2015.
DSwiss, Inc. operates through its wholly-owned subsidiary, DSwiss Holding Limited, a Company organized under the laws of Seychelles.
The principal activity of the Company and its subsidiaries is to supply high-quality health and beauty products, including beverages to assist in weight management, anti-aging products, and immune system products designed to improve the overall health system in our body.
We have currently conducted our business through DSwiss Sdn Bhd, a private limited liability company, incorporated in Malaysia. DSwiss Holding Limited, incorporated in Seychelles is an investment holding company with 100% equity interest in DSwiss (HK) Limited, a company incorporated in Hong Kong, which subsequent hold 100% equity interest in DSwiss Sdn. Bhd. We have invested in DSwiss Biotech Sdn. Bhd., a Company incorporated in Malaysia and owned a 40% equity interest.
The Company, through its subsidiaries and its variable interest entities (“VIEs”), mainly supplies high quality beauty products. Details of the Company’s subsidiaries:
| Company name | Place and date of incorporation | Particulars of issued capital | Principal activities | Proportional of ownership interest and voting power held | |||||
| 1. | DSwiss Holding Limited | Seychelles, May 28, 2015 |
1 share of ordinary share of US$1 each | Investment holding | 100% | ||||
| 2. | DSwiss (HK) Limited | Hong Kong, May 28, 2015 |
1 share of ordinary share of HK$1 each | Supply of beauty products | 100% | ||||
| 3. | DSwiss Sdn Bhd | Malaysia, March 10, 2011 |
2 shares of ordinary share of RM 1 each | Supply of beauty products | 100% | ||||
| 4. | DSwiss Biotech Sdn Bhd (1) | Malaysia, March 17, 2016 |
250,000 shares of ordinary share of RM 1 each | Supply of biotech products | 40% |
| (1) Based on the contractual arrangements between the Company and other investors, the Company has the power to direct the relevant activities of this entity unilaterally, and hence the Company has control over this entity. |
Business Overview
DSwiss is a premier biotech-nutraceutical company, supplying high-quality health and beauty products, including beverages to assist in chronic illness prevention supplement, weight management supplement, anti-aging creams, and products designed to improve the overall health system in our bodies.
Since our establishment, our growth has been tremendous in Malaysia. From a mere selection of two (2) products, the company had expanded to twenty-three (23) products in 2021. With the strong leadership of our company’s Chief Executive Officer; Vincent Leong, our products are now consumed around the world, such as Malaysia, Singapore, Indonesia, Hong Kong, Taiwan, Macau, and China. To date, we had expanded across Asia regions through the support of our distributors and determined to expand our geographical presence to markets that we have yet to explore.
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At DSwiss, research and development are an ongoing effort whose purpose is to ensure our products on the forefront of quality and effectiveness. Equipped with state-of-the-art manufacturing management skill, our innovative research and development team are constantly exploring new development and product lines and implementing the latest science and technology, that will enable us to create more evidence-based high value-added formulations and products and remain competitive in the industry. We conduct research and development based on our philosophy of “creating beauty, health and the ecology” to meet customers’ needs. In 2020, with the team’s enormous efforts on product research and development, DSwiss has also successfully delivered a wide range of novel OEM/ODM products that respond to our clients’ needs and create values for society as the developed OEM/ODM products have managed to improve the health status of the end consumers. DSwiss is actively embarking on its journey to continue excel in functional food industry and expand into health supplement and pet supplement industry.
DSwiss’s products are certified and approved by the Ministry of Health (“MOH”) Malaysia. Due to the stringent requirements from MOH Malaysia, we strive to upkeep the highest possible standard in our products to provide assurance and continuous commitment to providing quality products.
Talent Development in Product Research and Development
The company hired food science, nutrition and technology professional, herbal science professional and biotech professional as our product specialists to involve in developing new product research and development. Such development will require clinical studies, market research and testing of physical products for overall effectiveness, and comply with the Ministry of Health Malaysia JAKIM Halal standards. Currently, the company is undergoing research on the benefit of functional foods enhancing our human body immune system, eye health, skin health, anticancer, brain development and skin regeneration.
Currently, we are fulfilling last year future plan as in Talent Development, product research and development, and providing Original Equipment Manufacturer (OEM) and Original Design Manufacturer (ODM) services into functional food and beauty product of which is currently under research and development with Malaysia biotech and research professionals. Our professionals manage from custom formulation of scientifically-proven and naturally-effective, sourcing raw materials, production, quality control, stability and safety test, clinical testing by third-party labs, packaging and shipping including import and export, all licenses needed so customer can concentrate on what they should do. In 2020, with our experience and expertise, we have successfully expanded our client base in OEM/ODM services and gained a better brand awareness in the industry.
Moving forward, we plan to form certain alliances and business partnerships with a few selected local companies from various countries. We strongly believe a healthy business relationship is vital for one’s business expansion, and more importantly; growth. While DSwiss has always been focused on pursuing operations within Asia, we certainly hope to expand our brand across the world in the future.
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Our Products
DSwiss Coffee
DSwiss Coffee is a combination of Citrus Extract and eight other natural ingredients for digestive health. Apart from burning the fats, the drink provides a soothing and refreshing sensation.
It helps to:
| ● | Reduce fat – reduces extra calories from your body fat and turn it into energy and inhibit the formation of fat | |
| ● | Suppress appetite and increase satiety – gives a fullness feeling to overcome hunger pangs | |
| ● | Digestive cleansing – detox toxins from the body | |
| ● | Natural safe for consumption – lose weight the natural healthy way | |
| ● | Alleviate constipation | |
| ● | Eliminate edema |
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DSwiss Kiwi
Kiwi helps to strengthen the body’s immune system, improves skin complexion, reduces blood pressure and prevents heart disease and stroke. DSwiss Kiwi helps to reduce the risk of getting gastrointestinal diseases such as irritable stomach disorders and dermatitis.
It helps to:
| ● | Detoxify and dispose waste and toxins | |
| ● | Neutralize stomach excessive acid | |
| ● | Remove waste on the intestinal wall | |
| ● | Lose weight | |
| ● | Protect intestinal mucosa |
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DSwiss Triple SC
DSwiss Triple SC focuses on stem cell and consists of three (3) types of cell’s combination which includes Apple Stem Cells, Argan Stem Cells and Grape Stem Cells.
Apple Stem Cells are extracted from the rare “Uttwiler Spatlauber” apples. It contains rich nutrients, protein, and amazing vitality of plant stem cells. It helps to protect and renew skin cells. Argan Stem Cells help maintain functions of dermis to provide elasticity to the skin. In order to maintain elasticity, healthy skin undergoes constant cell turnover, which renews and repairs the dermal connective tissue. It helps to rejuvenate skin cells and reduce wrinkles. Grape Stem Cells protect the skin from chronological and light-induced aging, extending skin cells’ vitality and keeping the skin’s appearance young and beautiful longer. It helps improve the skin’s resistance.
It helps to improve:
| ● | Deoxyribonucleic Acid (“DNA”) Repair | ||
| i. | Repair cellular DNA | ||
| ii. | Stimulate skin stem cells regeneration | ||
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| ● | Skin | ||
| i. | Enhance collagen production in the body. | ||
| ii. | Promote skin injury recovery | ||
| iii. | Recondition dry or rough skin | ||
| iv. | Reduce wrinkles | ||
| v. | Skin repair rejuvenation. | ||
| vi. | “Oral Ultra Violet (“UV”) Protection”, to enhance whitening moisturizes skin. | ||
| vii. | Promote glowing skin | ||
| viii. | Control melanin production which causes dull skin tone or pigmentation | ||
| ix. | Reduce pores | ||
| x. | Enhance skin flexibility | ||
| ● | Breast Firming | ||
| ● | Promote the growth of hairs and nails | ||
| ● | Blood Circulation | ||
| i. | Blood detoxification | ||
| ii. | Strengthen blood vessel flexibility | ||
| ● | Enhance brain cells for better memory | ||
| ● | Renal | ||
| i. | Better renal function | ||
| ii. | Reduce Edema for better weight loss result | ||
| ● | Hormone | ||
| i. | Hormone balancing | ||
| ii. | Regulate menstrual cycle and reduce menstrual pain | ||
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Genmune-Pro
Genmune-Pro is a product that helps to boost up the human’s immunity system through enhancing the digestive health. It is uniquely formulated with probiotic strains Bifidobacterium longum BB536, Lactobacillus rhamnosus GG, prebiotic galacto-oligosaccharides and Wellmune® Baker’s Yeast Beta Glucan. Genmune-Pro helps to replenish beneficial bacteria in the gut to support digestive and immune health.
Scientifically proven by more than 150 clinical studies, Bifidobacterium longum BB536 promotes intestinal health, supports a healthy immune system, relieves constipation and enhances bone strength.
Scientifically proven by more than 800 clinical studies, Lactobacillus rhamnosus GG promotes digestive health, protects against upper respiratory tract infections and cavities and improves skin condition.
Wellmune® is a proprietary baker’s yeast beta glucan. It uses a unique mechanism to boost immune system by priming the immune cells to kill foreign bacteria faster. Galacto-oligosaccharides stimulate the growth of probiotic bacteria and retard the growth of harmful bacteria.
It helps to:
| ● | Improve digestive health | |
| ● | Restore the intestinal microbial balance | |
| ● | Boosts the immune system | |
| ● | Strengthen the recognition ability of immune cells | |
| ● | Enhance resistances to infections | |
| ● | Reduce symptoms of allergy | |
| ● | Promote skin health | |
| ● | Reduce occurrences of cold and flu | |
| ● | Improve emotional well-being |
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DSwiss Silk Mask
The mask is made by natural silk which contains a structure that is similar to human skin. DSwiss Silk Mask best suits for customers who have dry, damaged and sensitive skin. Silk contains 18 types of amino acids to moisturize the skin, strengthens the skin elasticity as well as repairs skin cells. Also, it brightens the skin tone and restores the skin health of users.
Unique Characteristics:
| ● | Safe and highly compatible with skin cell | |
| ● | Modulates moisture | |
| ● | Absorbs oil and sebum at the skin | |
| ● | Protect from UV rays | |
| ● | Anti-inflammation hypoallergenic | |
| ● | Accelerates the regeneration of skin cells | |
| ● | Anti-oxidants antibacterial effects | |
| ● | Stabilizes pigments and colorants |
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DSwiss Coffee Slimming Scrub
DSwiss Coffee Slimming Scrub is a natural body scrub containing fine uniform particles, mainly used to remove dirt on the skin layers, through a gentle friction with skin. It is also used to exfoliate the skin to remove dead skin, smoothen the skin and promote skin metabolism. The product can be used as face scrub or body scrub. Alternatively, we can use this product to remove dead skin on our joints. The product also helps to eliminate excess fats and may apply to therapeutic use.
DSwiss Peppermint Slimming Gel
DSwiss Peppermint Slimming Gel is an effective cooling agent which brings a cooling and refreshing feeling to the body. Peppermint is one of a commonly used Chinese herb to reduce symptoms of influenza, sore throat, and even weight loss! It helps to provide the slimming effect of silhouette and soothing skin. The purified menthol (active thermo agent) ingredient helps activating cellular micro-circulation. It is also formulated with avant-garde plant extract that aids in reducing stretch mark and scars.
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DSwiss New Age Essence
The multi-action DSwiss New Age Essence delivers skin-loving nutrients to moisten, brighten and revive tired looking skin. It brings a youthful vitality to your delicate skin and convenient to be used at anytime, anywhere and whenever you need.
The key active ingredient of the product, RoyalEpigen P5 which inspired by epigenetic science, this peptide mimics royal jelly to maximize its positive effects on the skin. It is a new and biologically-active peptide that activates skin regeneration and glow. Scientists discovered that epigenetic modification may passed down from one generation to the next by the technology of epigenetic science.
Additionally, PhytoCellTec™ is the technology used to generate and cultivate the key active ingredients, Nunatak® stem cell and apple stem cell. PhytoCellTec™ has used the auto-repair function of plant stem cell to replicate a large number of new cells, and then continue to grow into stem cells. This stem cell is filled with regeneration growth factor and metabolic factor, which can enhance DNA repair and slow down aging process. This is one of the remarkable anti-aging discoveries for this century.
It helps to:
| ● | Accelerates epidermal regeneration for a smooth skin | |
| ● | Activates the cellular cleaning process | |
| ● | Reveals a more even toned skin | |
| ● | Delays cell aging by applying new discoveries in epigenetic sciences | |
| ● | Reduces aging signs (fine lines / wrinkles) | |
| ● | Restores skin firmness / lifting effect | |
| ● | Replenishes skin moisture | |
| ● | Brightening effect | |
| ● | Restores skin luminosity | |
| ● | Skin refining moisture retention |
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DSwiss Enlighten Essence (“EE”) Cream
Brightened, Flawless, Even- toned. This extraordinary Luminous White Cream is effective to cover skin imperfection, yet providing a natural look on skin throughout the day. It is a light and nourishing cream adapted to all skin types, to protect, conceal, and enlivens, dull looking complexions for a luminous complexion.
PhytoCellTec™ is the technology used to generate and cultivate the key active ingredients, Nunatak® stem cell and apple stem cell. PhytoCellTec™ has used the auto-repair function of plant stem cell to replicate a large number of new cells, and then continue to grow into stem cells. This stem cell is filled with regeneration growth factor and metabolic factor, which can enhance DNA repairing and slow down aging process. This is one of the remarkable anti-aging discoveries for this century.
SuiSu Hand Purifier and Sanitiser
SuiSu Hand Purifier and Sanitiser is a powerful alcohol-free antibacterial hand sanitiser that is effective in maintaining the hand hygiene, keeping the skin moisturized, soft and protecting the hands against germs and viruses. The food-grade bioflavonoid technology used was tested and proven to be effective against common household bacteria, molds, fungi and even coronavirus. This advanced and unique ingredient is certified by BioGro Organic New Zealand,
Australian Therapeutic Goods Administration, EcoCert Cosmos Natural, NASAA Organic and even FDA GRAS. Being chemical- free and non- toxic, the product is safe and harmless for kids and family.
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SuiSu Air Sanitiser
SuiSu Air Sanitiser maintains the surrounding air clean and fresh for a healthier living. It is ideal for cleaning surfaces and area that you come into contact with every day, such as door handles, kitchen bins, toilet areas, curtains, sofas, mattresses and most soft fabrics. The food-grade bioflavonoid technology used was tested and proven to be effective against common household bacteria, molds, fungi and even coronavirus. This advanced and unique ingredient is certified by BioGro Organic New Zealand, Australian Therapeutic Goods Administration, EcoCert Cosmos Natural, NASAA Organic and even FDA GRAS. Being chemical- free and non- toxic, the product is safe and harmless for children and pet.
SkinEra
Specially formulated to deliver unique 5-in-1 skin solutions: antibacterial, anti-inflammatory, antioxidant, epidermis repair and moisturizing. SkinEra is infused with the unique bioflavonoid technology, mangosteen skin extract and high purity essential oils, its premium quality delivers a sophisticated key to skin problems such as acne, pimples, atopic dermatitis, dry skin and even allergy rashes.
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SensiBath
SensiBath is saturated with high moisturizing factor to replenish the moisture stripped from our everyday life activities and maintain the skin barrier moist and healthy through filaggrin boost. Its skin barrier strengthening ability is able to hydrate and relieve skin problems such as dry skin, atopic dermatitis, wrinkles and acne. The gentle formulation is hypoallergenic, dermatologically-tested and dedicated to provide a 24-hour long-lasting hydration and moisturization after single use, thus able to re-energize and regenerate skin cells for silky smooth skin.
Medical Consumables
| Product | Description |
Surgical Gowns
|
Premium quality of surgical grade gowns which can effectively reduce Surgical Side Infections (SSI):
● Level 3 Protection Surgical Gown ● Level 4 Protection Surgical Gown ● Coverall Isolation Suit |
3-ply Face Masks
|
Multiple types of masks to choose from in order to ensure the protections for those needed.
● Single- use Face Masks ● ASTM Level 1 Surgical Masks ● ASTM Level 2 Surgical Masks ● ASTM Level 3 Surgical Masks |
N95 Masks
|
The NIOSH- approved disposable N95 particulate respirator is designed to provide comfortable and at least 95% reliable respiratory protection and protect the users against dust particles, airborne and non-oil-based particles with low breathing resistance. |
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Surgical Gloves
|
Multiple types of gloves to choose from: ● Latex surgeon gloves (Powdered) ● Nitrile Examination Gloves (Powder Free) ● Latex Gloves (Powdered / Powder Free) |
Protective Goggles
|
Specially designed to provide maximum eye protection and fit on the users without causing discomfort. |
Body Infrared Thermometer
|
Provides instant accurate temperature reading on body and surfaces. |
Disposable Bedsheet and Stretcher Cover
|
The 3- layer disposable bedsheets are made of strong yet soft to skin materials and provide an easier way for cleaning |
DSwiss BioSpec
DSwiss BioSpec is a medical eye-wear which provides health benefits to our eyes.
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(1) Frame
The main components of the DSwiss BioSpec frame are Negative Ions, Far Infra Ray, Nano Silver, and Germanium.
| ● | Negative Ions are known as "air vitamins", which can release negative ions and facilitate blood oxygen transport, absorption and utilization, which can effectively increase the oxygen content in the blood, help regulate blood pressure and eliminate static electricity. | |
| ● | Far Infra Ray can promote blood circulation, strengthen metabolism and activate cells. | |
| ● | NanoSilver has antibacterial and anti-inflammatory properties, hence it can effectively kill 650 kinds of bacteria. | |
| ● | Germanium is beneficial to anti-cancer, anti-aging and anti-oxidation. |
(2) Lens
The main components of DSwiss BioSpec lenses are UV 400 filters, Anti-blue Light, and Far Infrared.
| ● | UV 400 Filter blocks for UVA UVB shorter than 400 nm and 99.9% UVA and UVB protections. | |
| ● | Anti-blue Light is a yellow-adjusting filter that reduces harmful blue light to the eyes. | |
| ● | Far Infra Ray can promote blood circulation, strengthen metabolism, and activate cells. |
Major Features:
| ● | Patented production | |
| ● | Better micro blood circulation | |
| ● | Antibacterial and anti-inflammatory | |
| ● | Durable and safe | |
| ● | Economical and practical |
Our Equipment
DSwiss Quantum Magnetic Analyzer
In year 2017, DSwiss launched Quantum Magnetic Analyzer, an equipment that rapidly reads and analyze body energy field to test the health status and suggest recommendations. Simply by holding sensors in your palm, health data from multiple body systems will be collected and analysed within minutes.
The DSwiss Quantum Magnetic Analyzer offers new high-tech innovation to collect data from the magnetic field of human cells for scientific analysis. This provides the user with a guide to determining their health status and potential problematic areas with solution recommendations.
DSwiss Quantum Magnetic Analyzer provides more than 30 types of test analysis. A complete health screening will help you to assess your overall health and identify the risk factors for disease.
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AI Skin Analyzer Machine
The intelligent facial camera is one of the recognized statistical instruments for facial skin image data. Capable of capturing high-definition facial images in RGB+UV+PL three-spectrum, it uses artificial intelligence (AI) algorithms to analyze skin features for the beauty industry. It also provides a data reference for tailored skincare solutions in the beauty industry.
By running the smart camera software in the tablet, the controller receives the tablet software command. This allows for change of the constant current source to control the corresponding LED light. The tablet is connected to the camera through the USB port to collect image analysis.
Major Functions:
It analyses the conditions of skin through different aspects:
| 1) | Pores | |
| 2) | Stains | |
| 3) | Roughness | |
| 4) | Texture | |
| 5) | Acne | |
| 6) | Color | |
| 7) | Moisture | |
| 8) | Skin Tone Uniformity | |
| 9) | Brown Area | |
| 10) | Black and White Area |
Unique Characteristics:
| ● | High stability | |
| ● | Connected to tablet | |
| ● | Wireless data | |
| ● | Easy to carry | |
| ● | Fast data transfer speed |
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International Turnkey Private Label Manufacturing Service
Our professionals manage from custom formulation of scientifically-proven and naturally-effective, sourcing raw materials, production, quality control, stability and safety test, clinical testing by third-party labs, packaging and shipping including import and export, all licenses needed so customer can concentrate on what they should do. We have export and import experience in dealing with both overseas and domestic customers.
Besides, we ventured into the genetic testing field and provide private label DNA screening service. The DNA analysis is performed at accredited laboratory with international recognized quality standards and protocols. The information processed is handled with utmost accuracy and trusted security in order to protect the privacy of users.
Turnkey Private Label OEM/ODM Services
As we have thorough understanding of the market, paired with sound technical expertise, this enables us to develop innovative products and solutions at a defined quality level, tailored to the multifaceted needs of our clients in the areas of functional food, skincare and personal care products. With our well-established processes, many years of experience and complimentary nutrition/technical consultation, our clients benefit from the best possible delivery times and a high service quality.
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| Category | Successfully developed OEM products and the associated benefits | ||
| Functional Food | ● | Liver health supplement to support liver health and the body’s vital detoxification processes | |
| ● | Blood glucose control supplement to support healthy blood sugar balance and energy metabolism | ||
| ● | Weight loss supplement to help body shaping by focusing on the reduction of body fat percentage | ||
| ● | Probiotics to help reestablish protective probiotic gastrointestinal and vaginal microflora and to support immune health. | ||
| ● | Hair growth supplement to support hair wellness from the inside out. | ||
| ● | Local herbs supplement to help support the healthy uric acid balance in body. | ||
| ● | Meal replacement to improve overall skin health. | ||
| ● | Supplement that improves bone and joint health. | ||
| ● | Eye supplement that promotes health vision and brain health. | ||
| ● | Brain supplement that supports optimal cognitive function and immunity. | ||
| ● | Supplement that promotes healthy detoxification. | ||
| ● | Supplement that supports skin rejuvenation. | ||
| ● | Functional Omega oil blend that supports healthy cardiovascular functions | ||
| ● | Calcium and magnesium supplements that support relaxation and nerve health | ||
| ● | Iron supplement that supports healthy iron levels in body | ||
| ● | Antioxidant juice beverage enriched with polyphenols for overall wellness | ||
| Functional Food (Combination of traditional Chinese medicine concepts and modern science) | ● | Heart health supplement that helps maintain optimum heart health and smooth blood circulation for lower risk of developing coronary heart diseases. | |
| ● | Meal replacement that improves overall gut health and reduces the unfavorable bloating and acid reflux. | ||
| Skincare | ● | Quintuple action serum developed with multi-size hyaluronic acids to support skin hydration and lifting | |
| ● | Amino-acid based facial cleanser that supports gentle and thorough face cleansing | ||
| Personal Care | ● | Hair shampoo and conditioner that serve 5R functions: Repair, Refresh, Restore, Reinforce and Revitalize | |
| ● | Plant oils blend mouthwash developed based on the ancient oil pulling ayurvedic therapy | ||
| DNA Microarray Genotyping | ● | Utilization of Asian Screening Array to yield better results and analyzing over 550 different genes, providing a comprehensive insight about nutrient needs, drug sensitivity, health risk, carrier status and many more is provided with more than 500k markers tested, over 100 alleles compared and above 300 actions suggested. |
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Trademark
The Company owned several trademark registers under its subsidiaries in respective jurisdiction of which the subsidiary is operates.
| ● | Cambodia | |
| ● | Malaysia | |
| ● | Singapore | |
| ● | China | |
| ● | Hong Kong | |
| ● | India | |
| ● | Myanmar | |
| ● | Vietnam | |
| ● | EUIPO |
Future Plan
Marketing Campaign and Publicity Enhancement
The Company is actively seeking opportunity to increase the market share of beauty and health industry locally and overseas, which requires continuous spending on marketing campaign primarily via social media and other online e-commerce partners which already in place currently to ensure the company product exposure and brand awareness.
Future marketing campaign and publicity enhancement will be conduct thru but not limited to following:
| 1. | Work closely with Professional biotech and life sciences partner to straighten our advantages. | |
| 2. | Work closely with new retail tech partner to increase our sales and exposure. | |
| 3. | Providing the complete provider solution in biotechnology, nutraceutical, skincare for turnkey private label manufacturing services |
Human Resources and Talent Development
Taking into consideration of the aforementioned development, the company is well aware that with existing manpower is far from sufficient to the materialization of future plan, thus spending on human resources and talent development is inevitable, including but not limited to internal admin and operation, sales and marketing, accounting and finance as well as top management. Besides, we would like to invest in the pet supplement innovation and development and explore new business opportunities in the growing pet supplement industry.
Merger and Acquisition
The Company is actively seeking opportunity to merge and acquire potential target company to derive extraordinary synergies in multiple segments but limited to healthcare, bio-technology, beauty slimming and wellness, food science and related industries. The management believe that organic growth itself is incapable of coping with the expectation of shareholders in the current dynamic business environment, thus via merger and acquisition the Company can create greater value to every stakeholder not limited to shareholders.
Marketing
We recognise the growing trend of social media and because of that, the management had decided to place a higher priority on social media for our marketing strategy. Coupled with the extensive networks we had built since our inception, the nature of our job has become easier and efficient to reach out to our clients. But, perhaps the most imperative to our success is the ability to connect with our customers and receive their feedback directly. From the feedback we received, we can understand our customer’s demands better and make further improvements. As a result, our customers’ base has been growing exponentially and resulted in a robust brand image of our company.
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Competition
The beauty and healthcare industry are highly competitive, we might be in disadvantage competing with competitor who greater reserve or access to capital than we do to carry out production output and marketing efforts. We hope to maintain our competitive advantage by utilizing the experience, knowledge, and expertise of our current staff as well as offering exemplary our customer service.
Customers
For the year ended December 31, 2021, the Company has generated $1,958,655 revenue from clients under the ordinary course of business of the Company. The revenue mainly represented OEM/ODM sales of Nutraceutical / Skincare and Medical Consumable Supplies to clients.
Employees
As of December 31, 2021, the Company has nine (9) full time employees including Mr. Leong Ming Chia who is our Chief Executive Officer, director, secretary and treasurer that works full time.
Currently, Our CEO all have the flexibility to work on our business up to 60 hours per week, but are prepared to devote more time if necessary.
We do not presently have pension, health, annuity, insurance, stock options, profit sharing, or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our Officers, Directors or employees.
Government Regulation
We are subject to the laws and regulations of the jurisdictions in which we operate, which may include business licensing requirements, income taxes and payroll taxes. In general, the development and operation of our business is not subject to special regulatory and supervisory requirements.
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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 1B. UNRESOLVED STAFF COMMENTS
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. PROPERTIES
Our principal executive office is located at Unit 18-11, 18-12 18-01, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi, 59200, Kuala Lumpur, Malaysia. This location has been rented by DSwiss Sdn Bhd for a 24-month period from January 1, 2022 to December 31, 2023, for an initial deposit of MYR 67,200 and additional monthly payments in the amount of MYR 16,800 over the course of the lease. The office lease ended on December 31, 2023.
In July 2018, the Company obtained a loan in the principal amount of MYR250,000 (approximately $60,479) from Public Bank Berhad, a financial institution in Malaysia, to finance the acquisition of a motor vehicle. The loan bears interest at the base lending rate less 2.38% per annum, is payable in 83 monthly instalments of MYR3,473 (approximately $840) each and a final monthly instalment of MYR3,391 (approximately $820) and matures in June 2025.
As of December 31, 2021, the Company has an outstanding loan to be settle for aforementioned acquisition of motor vehicle of MYR145,784 (approximately $34,935), of which MYR 41,676 (approximately $9,987) to be settled in 12 instalments in year 2022 and MYR104,108 (approximately $24,948) to be settled in 30 instalments after year 2022.
In December 2021, the Company had obtained another loan financing in the principal amount of MYR180,000 (approximately $43,134) from Public Bank Berhad, a financial institution in Malaysia, to finance the acquisition of a motor vehicle. The loan bears interest at the base lending rate less 2.04% per annum, is payable in 60 monthly instalments of MYR3,306 (approximately $792) each and matures in December 2026.
As of December 31, 2021, the Company has an outstanding loan to be settle for aforementioned acquisition of motor vehicle of MYR195,054 (approximately $46,741), of which MYR39,672 (approximately $9,507) to be settled in 12 instalments in year 2022 and MYR155,382 (approximately $37,235) to be settled in 47 instalments after year 2022.
Loan acquired for the acquisition of motor vehicle mentioned above are denominated in MYR, of which subjected to the fluctuation in reporting currency.
ITEM 3. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. There are currently no pending legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results. None of our directors, officers or affiliates is involved in a proceeding adverse to our business or has a material interest adverse to our business.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock is currently quoted on the OTC Pink under the trading symbol “DQWS.”
Trading in stocks quoted on the OTC Pink is often thin and is characterized by wide fluctuations in trading prices due to many factors that may have little to do with a company’s operations or business prospects. We cannot assure you that there will be a market for our common stock in the future.
For the periods indicated, the following table sets forth the high and low bid prices per share of common stock based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
| Fiscal Year 2021 | Highest Bid | Lowest Bid | ||||||
| First Quarter | $ | 55.00 | $ | 8.21 | ||||
| Second Quarter | $ | 14.96 | $ | 3.29 | ||||
| Third Quarter | $ | 10.99 | $ | 1.52 | ||||
| Fourth Quarter | $ | 6.95 | $ | 0.12 | ||||
Holders
As of December 31, 2021, we had 206,904,585 shares of our Common Stock par value, $.0001 issued and outstanding. There were 419 beneficial owners of our Common Stock.
Transfer Agent and Registrar
The transfer agent for our capital stock is VStock Transfer, LLC, with an address at 18, Lafayette Place, Woodmere, New York 11598 and telephone number is +1 (212)828-843.
Penny Stock Regulations
The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share. Our Common Stock, when and if a trading market develops, may fall within the definition of penny stock and be subject to rules that impose additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors (generally those with assets in excess of $1,000,000, or annual incomes exceeding $200,000 individually, or $300,000, together with their spouse).
For transactions covered by these rules, the broker-dealer must make a special suitability determination for the purchase of such securities and have received the purchaser’s prior written consent to the transaction. Additionally, for any transaction, other than exempt transactions, involving a penny stock, the rules require the delivery, prior to the transaction, of a risk disclosure document mandated by the Securities and Exchange Commission relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Finally, monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Consequently, the “penny stock” rules may restrict the ability of broker-dealers to sell our Common Stock and may affect the ability of investors to sell their Common Stock in the secondary market.
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In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit the investors’ ability to buy and sell our stock.
Dividend Policy
Any future determination as to the declaration and payment of dividends on shares of our Common Stock will be made at the discretion of our board of directors out of funds legally available for such purpose. We are under no contractual obligations or restrictions to declare or pay dividends on our shares of Common Stock. In addition, we currently have no plans to pay such dividends. Our board of directors currently intends to retain all earnings for use in the business for the foreseeable future.
Equity Compensation Plan Information
Currently, there is no equity compensation plan in place.
Unregistered Sales of Equity Securities
Currently, there is no unregistered sales of equity securities.
Purchases of Equity Securities by the Registrant and Affiliated Purchasers
We have not repurchased any shares of our common stock during the fiscal year ended December 31, 2021.
ITEM 6. SELECTED FINANCIAL DATA
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 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the notes to those financial statements appearing elsewhere in this Report.
Certain statements in this Report constitute forward-looking statements. These forward-looking statements include statements, which involve risks and uncertainties, regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategy, (c) anticipated trends in our industry, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or the negative of these words or other variations on these words or comparable terminology. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.
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The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Overview
DSwiss, Inc., a Nevada corporation (“the Company”) was incorporated under the laws of the State of Nevada on May 28, 2015. DSwiss Holding Limited owns 100% of DSwiss (HK) Limited, a Hong Kong Company, which owns 100% of DSwiss Sdn Bhd, the operating Malaysia Company of which is described below. In 2016, DSwiss (HK) Limited invested in DSwiss Biotech Sdn Bhd, incorporated in Malaysia, and owned 40% equity interest. We have incorporated a new company namely DSwiss International Trading (Shenzhen) Limited in China, with 100% equity interest owned by DSwiss (HK) Limited. On November 9, 2020, DSwiss International Trading (Shenzhen) Limited was officially deregistered.
Our Company is a beauty supply company formed with the goal of supplying high quality beauty products directly to our clients. Our beauty supplies include, but are not limited to, beverages to assist in burning and reducing fat, anti-aging creams, and products designed to improve the overall health and physical appearance of our clients. Currently we supply our products in Malaysia, Singapore, Indonesia, Hong Kong and China. However, we have intentions to expand to Myanmar, Macau, Vietnam and Cambodia, and subsequent to that we will make efforts to expand throughout the world a premier biotech-nutraceutical company, supplying high-quality health and beauty products, including beverages to assist in weight management, anti-aging creams, and products designed to improve the overall health system in our body.
At this time, we operate exclusively online through our website: http://www.dswissbeauty.com/
Our Company continuously strives to improve the already high standard of our goods and services through ongoing research and market development. We are going to penetrate into South East Asia markets through the recruitment of distributors and via the social media like Facebook and Instagram. We foresee to spend a substantial amount in marketing and advertising in the coming year. At DSwiss we are determined to bring new products to markets that we have not yet explored.
Products which meet the definition of a functional food and cosmetics related products need to be registered or notified with the Drug Control Authority (DCA), Ministry of Health Malaysia. Manufacturing, marketing, importation and the sale of unregistered products is a violation of the Drug Control Regulations and Cosmetics Act 1984 of Malaysia and enforcement action can be taken.
At DSwiss, research and development is an ongoing effort whose purpose is to ensure our products on the forefront of quality and effectiveness. Equipped with state-of-the-art machinery, our innovative research and development team are constantly exploring on new development and product lines that will enable us to provide the highest quality standard and remain competitive in the industry.
DSwiss’s products are certified and approved by the Ministry of Health (“MOH”) Malaysia. Due to the stringent requirements from MOH Malaysia, we strive to upkeep the highest possible standard in our products to provide assurance and as a prove of our continuing commitment to providing quality products.
We always strive to offer products as high quality as possible, and hope that this assurance from an esteemed regulatory body will also serve to prove our continuing commitment to providing quality goods.
DSwiss have own brand Quantum Resonant Magnetic Analyzer which is DSwiss Quantum Resonant Magnetic Analyzer. DSwiss Quantum Resonant Magnetic Analyzer is a Hi-tech innovation project, which is related to medical, bio-informatics, electronic engineering, etc. It is based on quantum medical, and scientifically analyzes the human cell’s weak magnetic field collected by advanced electronic device. The analyzer can work out the customer’s health situation and main problem. According to the checking result, the analyzer can figure out the reasonable treatment recommendation. The quantum resonant magnetic analyzer is the individualized guide of comprehensive healthy consulting and updated healthy sciences, and its characteristics and advantages are comprehensive, non-invasive, practical, simple, quick, economical and easy to popularize. We can see DSwiss Quantum Resonant Magnetic Analyzer can help our customers to more concern about their health and skin condition.
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Our expected growth is planned to occur primarily through the implementation of our social media marketing strategy. DSwiss already has a strong relationship with social media (eg. Facebook, Instagram and Wechat). The global presence social media has helped provide to us has been an invaluable resource, and as we continue to expand our business operations and spread our brand awareness, we intend to primarily utilize social media to reach our customers. The benefits of social media are countless, but perhaps the most imperative to our future success is our ability to connect with customers directly, to receive their feedback almost instantaneously. On that note, the feedback we have received from our clients has been overwhelmingly positive, which has helped us to create a robust brand image.
While DSwiss has been focused almost exclusively upon pursuing operations within Asia, we do have plans to expand outward and become a household name across the world. Our strategy to do so going forward is by forming partnerships with local companies in various countries that may be willing to stock our products or promote them to their own customers. We believe that by forging strategic relationships and partnerships we can expand our operations across the globe at a greater pace and with greater certainty than we would if we tried to expand on our own.
Results of Operations
Business Performance
The COVID-19 pandemic has had, and continues to have, a significant impact around the world, prompting governments and businesses to take unprecedented measures, such as restrictions on travel and business operations, temporary closures of businesses, and quarantine and shelter-in-place orders. The COVID-19 pandemic has at times significantly curtailed global economic activity and caused significant volatility and disruption in global financial markets. The COVID-19 pandemic and the measures taken by many countries in response have affected and could in the future materially impact the Company’s business, results of operations and financial condition, as well as the price of the Company’s stock.
The extent of the continuing impact of the COVID-19 pandemic on the Company’s operational and financial performance is uncertain and will depend on many factors outside the Company’s control, including the timing, extent, trajectory and duration of the pandemic, the emergence of new variants, the development, availability, distribution and effectiveness of vaccines and treatments, the imposition of protective public safety measures, and the impact of the pandemic on the global economy and demand for consumer products.
Despite COVID-19 pandemic posted challenging restrictions on travel and business operations, the Company has responded positively to the crisis, with selling medical consumables products such as Surgical Gowns, 3-ply Face Masks, N95 Masks, Surgical Gloves, Protective Goggles, Disposable Bedsheet and Stretcher Cover for the needs of for frontline response workers and other customers.
Consolidated revenues for the year ended December 31, 2021 increased 45.33% or $610,937 as compared to 2020. The revenue mainly represented OEM/ODM sales of Nutraceutical / Skincare and Medical Consumable Supplies to the customers. We contribute our increase in revenue towards the success in local and oversea marketing effort.
On an overall basis, demand for the Company’s products and services increased in 2021 as compared to 2020, and together with the Company’s continued investments in sales growth initiatives. As the conditions related to the pandemic improved in many geographies in 2021 compared to 2020, the Company generally experienced increased demand in the end-markets it serves. Improving pandemic conditions continued to generate strong demand for biotech-nutraceutical and health-care products in the Company’s health and beauty product segment. Geographically, the year-over-year sales growth during 2021 were driven by Malaysia segment.
Revenues for the year ended December 31, 2021 and 2020
The Company generated revenue of $1,958,655 and $1,347,718 for the year ended December 31, 2021, and 2020 respectively. Revenue has increased by $610,937 which is a 45.33% increase comparatively. The revenue mainly represented OEM/ODM sales of Nutraceutical / Skincare and Medical Consumable Supplies to the customers . We contribute our increase in revenue towards the success in local and oversea marketing effort.
Cost of Revenue and Gross Margin
Cost of revenue for the Company year ended December 31, 2021, amounted to $1,459,531 as compared to $980,243 for the year ended December 31, 2020. Increase of $479,288 in cost of revenue was contributed by increasing packing material cost and product purchase price. As a result, the gross profit has increased from $367,475 for the year ended December 31, 2020 to $499,124 for the year ended December 31, 2021, while the gross margin of the Company decreased from 27.27% in year ended December 31, 2020 to 25.48% in year ended December 31, 2021, which is a net decrease of 1.78%.
Operating Expenses
Selling, general and administrative expenses for the year ended December 31, 2021 and 2020 amounted to $308,686 and $287,995 respectively, the increase of $20,691 which is 7.18% higher comparatively which was contributed by the increase of group operations.
Operating expenses for the year ended December 31, 2021 and 2020 amounted to $1,464 and $1,216 respectively, the increase of $248 which is 20.39% higher comparatively, such increase was associated with the higher bank charges and amortization of intellectual property.
Other Income
The Company recorded an amount of $8,390 and $104,976 as other income for the year ended December 31, 2021 and 2020 respectively. This income is derived from the interest income earned and exchange gain.
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Net Profit/Loss and Net Profit/Loss Margin
The net profit for the year was $150,278 for the year ended December 31, 2021. The net profit for the year was $30,045 for the year ended December 31, 2020. The increase in net profit of $120,233 which is a 400.18% higher comparatively due to higher contribution on revenue and stringent cost control. Taking into the profit for the year ended December 31, 2021, the accumulated loss for the Company has decreased from $1,483,170 to $1,309,711.
Liquidity and Capital Resources
As of December 31, 2021, we had working capital deficit of $10,674 consisting of cash and cash equivalent of $234,546 as compared to working capital deficit of $142,357 and our cash and cash equivalent of $158,004 as of December 31, 2020.
Net cash generated from operating activities for the year ended December 31, 2021 was $251,691 as compared to net cash generated from operating activities of $58,913 for the year ended December 31, 2020. The cash generated from operating activities are mainly derived from higher operating profit.
Net cash used in investing activity for the year ended December 31, 2021 was $62,075 as compared to net cash used in investing activity for the year ended, 2020 were $2,045. The cash used in investing activities are mainly for purchase of plant and equipment.
Net cash used in financing activities for the year ended December 31, 2021 was $78,951 as compared to net cash provided by financing activities $105,143 for the year ended December 31, 2020. The net cash used in financing activities in year 2021 was the repayment to a director of Company, while the net cash provided by financing activities in year 2020 was the advances from a director of Company.
The revenues generated from our current business operations alone was sufficient to fund our operations or planned growth. However, we will consider acquiring additional funding to continue to operate our business, and to further expand our business. Sources of additional capital through various financing transactions or arrangements with third parties may include equity or debt financing, bank loans or revolving credit facilities. We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not obtain the capital we require by other means. Our inability to raise additional funds when required may have a negative impact on our operations, business development and financial results.
Critical Accounting Policies and Estimates
Leases
The company determines if an arrangement is a lease at inception. Operating leases are included in operating in operating lease right-of-use (“ROU”) as assets, operating lease non-current liabilities, and operating lease current liabilities in our consolidated balance sheet. Finance leases are property and equipment, other current liabilities, and other non-current liabilities in the consolidated balance sheet.
ROU assets represent the right to use an asset for the lease term and lease liability represent the obligation to make lease payment arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over lease term. As most of the leases doesn’t provide an implicit rate. The company generally use the incremental borrowing rate on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating ROU asset also includes any lease payments made and exclude lease incentives. Lease expense for lease payment is recognized on a straight -line basis over lease term. The Company adopted Public Bank Berhad’s base rate lending rate as a reference for discount rate.
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Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30, “Imputation of Interest”.
Use of estimates
In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets, and revenues and expenses during the periods reported. Actual results may differ from these 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.
Revenue recognition
In accordance with the Accounting Standard Codification Topic 605 “Revenue Recognition” (“ASC 605”), the Company recognizes revenue when the following four criteria are met: (1) delivery has occurred or services rendered; (2) persuasive evidence of an arrangement exists; (3) there are no continuing obligations to the customer; and (4) the collection of related accounts receivable is probable.
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue.
Revenue from supplies of beauty products is recognized when title and risk of loss are transferred and there are no continuing obligations to the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the products are collected by the customer at the Company’s office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments that are based upon management’s best estimates and historical experience and are provided for in the same period as the related revenues are recorded. Based on limited operating history, management estimates that there was no sale return for the period reported.
Cost of revenues
Cost of revenues includes the purchase cost of retail goods for re-sale to customers and the packing materials (such as boxes). It excludes purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs and other costs of distribution network in cost of revenues.
Shipping and handling fees
Shipping and handling fees, if billed to customers, are included in revenue. Shipping and handling fees associated with inbound and outbound freight are expensed as incurred and included in selling and distribution expenses.
Shipping and handling fees are expensed as incurred for the year ended December 31, 2021 were $2,876 while for the year ended December 31, 2020 were $3,956.
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Selling, general and administrative expenses
Selling, general and administrative expenses are primarily comprised of travelling and accommodation fees such as petrol, toll and parking and shipping and handling fees.
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.
Inventories
Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Condensed Consolidated Statements of Operations and Comprehensive Income.
Property and equipment
Property and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of plant, equipment and software are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows:
| Classification | Estimated useful lives | |
| Computer and software | 5 years | |
| Furniture and Fittings | 5 years | |
| Office equipment | 10 years | |
| Motor vehicle | 5 years |
Intangible assets
Intangible assets are stated at cost less accumulated amortization. Intangible assets represented the registration costs of trademarks in Malaysia and Hong Kong which are amortized on a straight-line basis over a useful life of ten years.
The Company follows ASC Topic 350 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. There were no impairment losses recorded on intangible assets for the year ended December 31, 2021.
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.
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The Company conducts major businesses in Malaysia. The Company is subject to tax in these jurisdictions. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.
The Company did not have any unrecognized tax positions or benefits and there was no effect on the financial conditions or results of operations for the year ended December 31, 2021 and year ended December 31, 2020. The Company and its subsidiary are subject to local and various foreign tax jurisdictions. The Company’s tax returns remain open subject to examination by major tax jurisdictions.
Net profit per share
The Company calculates net profit per share in accordance with ASC Topic 260 “Earnings per share”. Basic profit per share is computed by dividing the net profit by the weighted average number of common shares outstanding during the period. Diluted profit per share is computed similar to basic profit 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 Condensed Consolidated Statements of Operations and Comprehensive Income.
The reporting currency of the Company is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company’s subsidiaries and VIEs in Malaysia, Hong Kong and China maintains their books and record in their local currency, Ringgits Malaysia (“MYR”), Hong Kong Dollars (“HK$”) and Chinese Renminbi (“RMB”) respectively, which 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 subsidiaries whose functional currency is not 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 statements of stockholders’ equity.
Translation of amounts from MYR into US$1, HK$ into US$1 and RMB into US$1 has been made at the following exchange rates for the respective periods:
| As of and for the year ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Year-end MYR : US$1 exchange rate | 4.17 | 4.02 | ||||||
| Year-average MYR : US$1 exchange rate | 4.13 | 4.08 | ||||||
| Year-end HK$ : US$1 exchange rate | 7.80 | 7.75 | ||||||
| Year-average HK$ : US$1 exchange rate | 7.78 | 7.75 | ||||||
| Year-end RMB : US$1 exchange rate | 6.46 | 6.54 | ||||||
| Year-average RMB : US$1 exchange rate | 6.45 | 6.90 | ||||||
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.
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Fair value of financial instruments:
The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts payable and accrued liabilities, and amount due to a director 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. |
Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Recent accounting pronouncements
FASB issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915) Elimination of Certain Financial Reporting Requirements, including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) entirely from current accounting guidance. The Company has elected adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception.
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
Off-Balance Sheet Arrangements
As of December 31, 2021, 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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this item are located in PART IV of this Annual Report.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosures Control and Procedures
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:
| ● | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company; | |
| ● | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and | |
| ● | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
As of December 31, 2021, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and SEC guidance on conducting such assessments. Based on such evaluation, the Company’s management concluded that, during the period covered by this Report, internal controls and procedures over were not effective. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.
Identified Material Weakness
A material weakness in internal control over financial reporting is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected.
Management identified the following material weakness during its assessment of internal controls over financial reporting as of December 31, 2021.
| 1. | We do not have Written Policies Procedures – Due to lack of written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines, the Company did not establish a formal process to close our books monthly and account for all transactions and thus failed to properly record the Private Placement or disclose such transactions in its SEC filings in a timely manner. |
| 2. | We do not have adequate segregation of duties and effective risk assessment – Lack of segregation of duties and effective risk assessment may cause the Company to face the likelihood of fraud or theft, due to poor oversight, governance and review to detect errors. |
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Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2021 based on criteria established in Internal Control—Integrated Framework issued by COSO.
Management’s Remediation Initiatives
In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:
| 1. | We plan to create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. The accounting personnel is responsible for reviewing the financing activities, facilitate the approval of the financing, record the information regarding the financing, and submit SEC filing related documents to our legal counsel in order to comply with the filing requirements of SEC. |
| 2. | We plan to prepare written policies and procedures for accounting and financial reporting to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity and debt transactions. |
| 3. | We intend to add staff members to our management team for making sure that information required to be disclosed in our reports filed and submitted under the Exchange Act is recorded, processed, summarized and reported as and when required and will the staff members will have segregated responsibilities with regard to these responsibilities. |
We anticipate that these initiatives will be at least partially, if not fully, implemented by the end of fiscal year 2021.
Changes in internal controls over financial reporting
There was no change in our internal controls over financial reporting that occurred during the period covered by this Report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting:
This annual report does not include an attestation report of the Company’s registered independent public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered independent public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this Annual Report on Form 10-K.
ITEM 9B. OTHER INFORMATION
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Our executive officer’s and director’s and their respective ages as of the date hereof are as follows:
| NAME | AGE | POSITION | ||
| Leong Ming Chia | 39 | Chief Executive Officer, President, Secretary, Treasurer, Director | ||
| Wong Sui Ting | 49 | Director |
Set forth below is a brief description of the background and business experience of our executive officer and director for the past five years.
Leong Ming Chia - President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, Director
Mr. Leong achieved an Advanced Diploma of Microelectronics Physics from TAR College in 2003 as well as a Bachelor’s Degree of Microelectronics Physics from Campbell University in 2005. In 2007 Mr. Leong joined Tradenex, which is a subsidiary of the Federation of Malaysian Manufacturers, as part of their sales and marketing department. Mr Leong was responsible for developing a marketing plan, overseeing the execution and evaluating the results across B2B, B2C and retail sales channels in order to enable inter-enterprise connectivity, communication and collaboration along the business value chain. From March 2009 onward Mr. Leong was appointed as a committee member of Cross Border Business Association in Hong Kong, promoting cross border trade and opportunities. Since January 2012 Mr. Leong joined DSwiss Sdn Bhd as a Business Development Advisor where Mr Leong developed a set of marketing tool and is bringing the company from traditional sales model to e-commerce model. In September 2015, Mr. Leong was also appointed as the chief executive officer and director of the Company.
On May 31, 2017, upon the resignation of Mr. Chua Lee Yee resignation as a Chief Financial Officer, Secretary, Treasurer and Director, Mr. Leong has took over the position as a Chief Financial Officer, Secretary and treasurer along with existing position as the Chief Executive Officer, President and Director.
Mr. Leong’s experience in the marketing and business development have led the Board of Director to reach the conclusion that he should serve as a Director of the Company.
Wong Sui Ting - Director
Mr. Wong serves as a Director in the Company. Mr. Wong holds a Bachelor of Business (Accounting) from Monash University since year 1995. Also, he is an Associate Member of Malaysia Institute of Accountancy (MIA, Chartered Accountant) since 1999 and CPA Australia since 1998. Mr. Wong co-founded Qinetics Solutions Sdn Bhd in 2000 and acts as Chief Financial Officer since the establishment. He was tasked with overseeing and managing the overall financial affairs and operations of Qinetics, playing an active role in corporate decisions and strategies. In 2011, Mr. Wong co-founded and acts as Chief Executive Officer of Forum Digital Sdn Bhd. His responsibility in the company is to oversee the operation and in charge of business development of the company.
Mr. Wong’s experience in accounting and the financial industry, as well as his knowledge of business development, has led the Board of director to reach the conclusion that he should serve as the director of the Company. On May 31, 2017, Mr. Wong was appointed as the director of the Company.
Corporate Governance
The Company promotes accountability for adherence to honest and ethical conduct; endeavors to provide full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with the Securities and Exchange Commission (the “SEC”) and in other public communications made by the Company; and strives to be compliant with applicable governmental laws, rules and regulations. The Company has not formally adopted a written code of business conduct and ethics that governs the Company’s employees, officers and Directors as the Company is not required to do so.
In lieu of an Audit Committee, the Company’s Board of Directors, is responsible for reviewing and making recommendations concerning the selection of outside auditors, reviewing the scope, results and effectiveness of the annual audit of the Company’s financial statements and other services provided by the Company’s independent public accountants. The Board of Directors, the Chief Executive Officer and the Chief Financial Officer of the Company review the Company’s internal accounting controls, practices and policies.
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Committees of the Board
Our Company currently does not have nominating, compensation, or audit committees or committees performing similar functions nor does our Company have a written nominating, compensation or audit committee charter. Our Directors believes that it is not necessary to have such committees, at this time, because the Director(s) can adequately perform the functions of such committees.
Audit Committee Financial Expert
Our Board of Directors has determined that we do not have a board member that qualifies as an “audit committee financial expert” as defined in Item 407(D)(5) of Regulation S-K, nor do we have a Board member that qualifies as “independent” as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(14) of the FINRA Rules.
We believe that our Director(s) are capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The Director(s) of our Company does not believe that it is necessary to have an audit committee because management believes that the Board of Directors can adequately perform the functions of an audit committee. In addition, we believe that retaining an independent Director who would qualify as an “audit committee financial expert” would be overly costly and burdensome and is not warranted in our circumstances given the stage of our development and the fact that we have not generated any positive cash flows from operations to date.
Involvement in Certain Legal Proceedings
Our Directors and our Executive officers have not been involved in any of the following events during the past ten years:
| 1. | bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
| 2. | any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| 3. | being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his/her involvement in any type of business, securities or banking activities; or |
| 4. | being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated. |
| 5. | Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; |
| 6. | Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; |
| 7. | Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:(i) Any Federal or State securities or commodities law or regulation; or(ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or(iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or |
| 8. | Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. |
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Code of Ethics
We have not adopted a formal Code of Ethics. The Board of Directors evaluated the business of the Company and the number of employees and determined that since the business is operated by a small number of persons, general rules of fiduciary duty and federal and state criminal, business conduct and securities laws are adequate ethical guidelines. In the event our operations, employees and/or Directors expand in the future, we may take actions to adopt a formal Code of Ethics.
Shareholder Proposals
Our Company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for Directors. The Board of Directors believes that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our Company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. The Board of Directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.
A shareholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our President, at the address appearing on the first page of this Information Statement.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation of our Chief Executive Officer, and the executive officers who served at the end of the period December 31, 2021, for services rendered in all capacities to us.
Summary Compensation Table:
| Name and Principal Position | Period | Salary ($) |
Bonus ($) |
Stock ($) |
Option ($) |
Non-Equity ($) |
Nonqualified ($) |
All
Other ($) |
Total ($) |
|||||||||||||||||||||||||||
Leong Ming Chia, Chief Executive Officer, President, Secretary, Treasurer, Director (1)
|
For the year ended December 31, 2021 | 29,024 | 12,093 | - | - | - | - | 15,836 | 56,953 | |||||||||||||||||||||||||||
| For the year ended December 31, 2020 | 28,648 | - | - | - | - | - | - | 28,648 | ||||||||||||||||||||||||||||
Wong Sui Ting, Director (2)
|
For the year ended December 31, 2021 | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| For the year ended December 31, 2020 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
| (1) | On September 8, 2015 Leong Ming Chia was appointed Chief Executive Officer, President and a member of our Board of Directors. On May 31, 2017, upon the resignation of Chua Lee Yee from the position of Chief Financial Officer, Treasurer, Secretary and Director, Leong Ming Chia replaced Chua Lee Yee as the Chief Financial Officer, Treasurer and Secretary of the company. |
| (2) | On May 31, 2015 Wong Sui Ting was appointed as a member of our Board of Director. |
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Narrative Disclosure to Summary Compensation Table
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive stock options at the discretion of our board of directors in the future. We do not have any material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors from time to time. We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control.
Stock Option Grants
We have not granted any stock options to our executive officers since our incorporation.
Compensation of Directors
The table below summarizes all compensation of our directors as of December 31, 2021.
| Name and Principal Position | Period | Fee ($) |
Bonus ($) |
Stock ($) |
Option ($) |
Non-Equity ($) |
Nonqualified ($) |
All
Other ($) |
Total ($) |
|||||||||||||||||||||||||||
Leong Ming Chia, Chief Executive Officer, President, Secretary, Treasurer, Director (1) |
For the year ended December 31, 2021 | 29,024 | 12,093 | - | - | - | - | 15,836 | 56,953 | |||||||||||||||||||||||||||
| For the year ended December 31, 2020 | 25,480 | - | - | - | - | - | - | 25,480 | ||||||||||||||||||||||||||||
| For the year ended December 31, 2019 | - | - | - | - | - | - | 17,805 | |||||||||||||||||||||||||||||
Wong Sui Ting, Director (2) |
For the year ended December 31, 2021 | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
| For the year ended December 31, 2020 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
| For the year ended December 31, 2019 | - | - | - | - | - | - | - | - | ||||||||||||||||||||||||||||
| (1) | On September 8, 2015 Leong Ming Chia was appointed Chief Executive Officer, President and a member of our Board of Directors. On May 31, 2017, upon the resignation of Chua Lee Yee from the position of Chief Financial Officer, Treasurer, Secretary and Director, Leong Ming Chia replaced Chua Lee Yee as the Chief Financial Officer, Treasurer and Secretary of the company. |
| (2) | On May 31, 2015 Wong Sui Ting was appointed as a member of our Board of Director. |
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Employment Agreements
We do not have an employment or consulting agreement with any officers or Directors.
Compensation Discussion and Analysis
Director Compensation
Presently only Leong Ming Chia receives fee for his service as a member of the Board of Directors. The Board of Directors reserves the right in the future to award the members of the Board of Directors cash or stock-based consideration for their services to the Company, which awards, if granted shall be in the sole determination of the Board of Directors.
Executive Compensation Philosophy
Our Board of Directors determines the compensation given to our executive officers in their sole determination. Our Board of Directors reserves the right to pay our executive or any future executives a salary, and/or issue them shares of common stock in consideration for services rendered and/or to award incentive bonuses which are linked to our performance, as well as to the individual executive officer’s performance. This package may also include long-term stock based compensation to certain executives, which is intended to align the performance of our executives with our long-term business strategies. Additionally, while our Board of Directors has not granted any performance base stock options to date, the Board of Directors reserves the right to grant such options in the future, if the Board in its sole determination believes such grants would be in the best interests of the Company.
Incentive Bonus
The Board of Directors may grant incentive bonuses to our executive officer and/or future executive officers in its sole discretion, if the Board of Directors believes such bonuses are in the Company’s best interest, after analyzing our current business objectives and growth, if any, and the amount of revenue we are able to generate each month, which revenue is a direct result of the actions and ability of such executives.
Long-term, Stock Based Compensation
In order to attract, retain and motivate executive talent necessary to support the Company’s long-term business strategy we may award our executive and any future executives with long-term, stock-based compensation in the future, at the sole discretion of our Board of Directors, which we do not currently have any immediate plans to award.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
As of December 31, 2021, the Company has 206,904,585 shares of common stock issued and outstanding, which number of issued and outstanding shares of common stock have been used throughout this report.
The following table sets forth, as of December 31, 2021 certain information with regard to the record and beneficial ownership of the Company’s common stock by (i) each person known to the Company to be the record or beneficial owner of more than 5% of the Company’s common stock, (ii) each director of the Company, (iii) each of the named executive officers, and (iv) all executive officers and directors of the Company as a group:
| Title of Class | Name of beneficial owner(i) | Shares
of Common Stock Beneficially Owned |
Percent of Class |
||||||||
| Common Stock | Leong Ming Chia (i), (ii), (iii) | 62,906,493 | 30.40 | % | |||||||
| Common Stock | Wong Sui Ting (ii) | 50,000 | 0.02 | % | |||||||
| All of the officers and directors as a group (iv) | 62,956,493 | 30.42 | % | ||||||||
| 5% Shareholders | |||||||||||
| Common Stock | Greenpro Venture Capital Limited (i) | 15,159,157 | 7.33 | % | |||||||
| Common Stock | Hew Yuen Foong (i) | 33,000,000 | 15.95 | % | |||||||
| Common Stock | Teo Jen Jiang (i) | 44,000,000 | 21.27 | % | |||||||
| Common Stock | Siow Kock Yong (i) | 33,000,000 | 15.95 | % | |||||||
Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Under this rule, certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire shares (for example, upon exercise of an option or warrant) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares is deemed to include the amount of shares beneficially owned by such person by reason of such acquisition rights. As a result, the percentage of outstanding shares of any person as shown in the following table does not necessarily reflect the person’s actual voting power at any particular date.
| (1) | Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Beneficial ownership also includes shares of stock subject to options and warrants currently exercisable or exercisable within 60 days of the date of this table. In determining the percent of common stock owned by a person or entity as of the date of this Report, (a) the numerator is the number of shares of the class beneficially owned by such person or entity, including shares which may be acquired within 60 days on exercise of warrants or options and conversion of convertible securities, and (b) the denominator is the sum of (i) the total shares of common stock outstanding on as of the date of this Annual Report (206,904,585 shares), and (ii) the total number of shares that the beneficial owner may acquire upon exercise of the derivative securities. Unless otherwise stated, each beneficial owner has sole power to vote and dispose of its shares. |
| (2) | Based on the total issued and outstanding shares of 206,904,585 as of the date of this Annual Report. |
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, DIRECTOR INDEPENDENCE
Related Party Transactions
For the years ended December 31, 2021 and December 31, 2020, the Company has the following transactions with related party:
| For
the year ended December 31, 2021 (Audited) | For
the year ended December 31, 2020 (Audited) | |||||||
| Professional Fees: | ||||||||
| - Related party A | $ | 13,279 | $ | 15,700 | ||||
| Sales | ||||||||
| - Related party B | $ | 374,555 | $ | - | ||||
| - Related party C | 13,124 | - | ||||||
| - Related party D | 11,607 | - | ||||||
| Total | $ | 412,565 | $ | 15,700 | ||||
The related party A is a wholly owned subsidiary of a 7.33% shareholder of the Company.
The related party B’s director and shareholder is the founder of the Company.
The related party C’s director and shareholder is the founder of the Company.
The related party D’s director is the founder of the Company. The shareholder of related party D is related party C.
The related party transaction is generally transacted in an arm-length basis at the current market value in the normal course of business.
Review, Approval and Ratification of Related Party Transactions
Given our small size and limited financial resources, we have not adopted formal policies and procedures for the review, approval or ratification of transactions, such as those described above, with our executive officer(s), Director(s) and significant stockholders. We intend to establish formal policies and procedures in the future, once we have sufficient resources and have appointed additional Directors, so that such transactions will be subject to the review, approval or ratification of our Board of Directors, or an appropriate committee thereof. On a moving forward basis, our Directors will continue to approve any related party transaction.
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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Below is the aggregate amount of fees billed for professional services rendered by our principal accountants with respect to our last two fiscal years.
| For
the Year Ended December 31, 2021 | For
the Year Ended December 31, 2020 | |||||||
| Audit fees | $ | 16,000 | $ | 14,000 | ||||
| Audit related fees | 7,500 | 11,979 | ||||||
| Tax fees | - | - | ||||||
| All other fees | - | - | ||||||
| Total | $ | 23,500 | $ | 25,979 | ||||
The category of “Audit fees” includes fees for our annual audit, quarterly reviews and services rendered in connection with regulatory filings with the SEC, such as the issuance of comfort letters and consents.
The category of “Audit-related fees” includes employee benefit plan audits, internal control reviews and accounting consultation.
All of the professional services rendered by principal accountants for the audit of our annual financial statements that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for last two fiscal years were approved by our board of directors.
| 41 |
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements
The following are filed as part of this report:
Financial Statements
The following financial statements of DSwiss, Inc. and Report of Independent Registered Public Accounting Firm are presented in the “F” pages of this Report:
| Page | |
| Index | F-1 |
| Report of Independent Registered Public Accounting Firm | F-2 |
| Financial Statements | |
| Consolidated Balance Sheets | F-3 |
| Consolidated Statements of Operations | F-4 |
| Consolidated Statements of Stockholders’ Equity | F-5 |
| Consolidated Statements of Cash Flows | F-6 |
| Notes to Consolidated Financial Statements | F-7 – F-20 |
(b) Exhibits
The following exhibits are filed or “furnished” herewith:
| 3.1 | Articles of Incorporation** |
| 3.2 | Bylaws** |
| 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* |
* Filed herewith.
** As filed in the Registrant’s Registration Statement on Form S-1 Amendment No.8 (File No. 333-208083) on July 20, 2016.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| DSWISS, INC. | ||
| (Name of Registrant) | ||
| Date: March 31, 2022 | ||
| By: | /s/ Leong Ming Chia | |
| Title: | President, Chief Executive Officer, Chief Finance Officer, Secretary, Treasurer, Director | |
Principal Executive Officer Principal Financial Officer | ||
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INDEX TO FINANCIAL STATEMENTS
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of DSwiss, Inc.
Unit 18-11, 18-12 18-01, Tower A,
Vertical Business Suite, Avenue 3, Bangsar South,
No. 8, Jalan Kerinchi, 59200, Kuala Lumpur,
Malaysia
Opinion on the Financial Statements
We have audited the accompanying balance sheets of DSwiss, Inc. (“the Company”) as of December 31, 2020 and December 31, 2021 and the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows for the year ended of December 31, 2020 and December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and December 31, 2021, and the results of its operations and its cash flows for the year ended of December 31, 2020 and December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, as at December 31, 2021 the Company has suffered an accumulated deficit of $1,309,711. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to those charged with governance that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. We determined that there are no critical matters.
| /s/ JP CENTURION PARTNERS PLT | |
| We have served as the Company’s auditor since 2020. | |
| Date: March 31, 2022 |
| F-2 |
DSWISS, INC.
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2021, and 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Audited)
| As of December 31, | ||||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable | ||||||||
| Other receivables, prepaid expenses, and deposit | ||||||||
| Tax recoverable | ||||||||
| Inventories | ||||||||
| Total current assets | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets, net | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Total non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Other payables and accrued liabilities | ||||||||
| Finance lease liability | ||||||||
| Amount due to a director | ||||||||
| Operating lease liability | ||||||||
| Current tax liabilities | - | |||||||
| Total current liabilities | ||||||||
| NON-CURRENT LIABILITIES | ||||||||
| Finance lease liability | ||||||||
| Operating lease liability | - | |||||||
| Total non-current liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $ par value, shares authorized, issued and outstanding | - | - | ||||||
| Common stock, $ par value, shares authorized, shares and shares issued and outstanding as of December 31, 2021 and 2020 respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive losses | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL DSWISS, INC. STOCKHOLDERS’ EQUITY | ( | ) | ||||||
| NON-CONTROLLING INTEREST | ||||||||
| TOTAL STOCKHOLDERS’ EQUITY | ( | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-3 |
DSWISS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE PROFIT/(LOSS)
FOR YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Audited)
| For
the year ended December 31, 2021 | For
the year ended December 31, 2020 | |||||||
| REVENUE | $ | $ | ||||||
| COST OF REVENUE | ( | ) | ( | ) | ||||
| GROSS PROFIT | ||||||||
| OTHER INCOME | ||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | ( | ) | ( | ) | ||||
| OPERATING EXPENSES | ( | ) | ( | ) | ||||
| FINANCE COST | ( | ) | ( | ) | ||||
| LEASE EXPENSES | ( | ) | ( | ) | ||||
| LOSS ON LIQUIDATION | - | ( | ) | |||||
| PROFIT/(LOSS) BEFORE INCOME TAX | $ | $ | ||||||
| INCOME TAXES PROVISION | ( | ) | ( | ) | ||||
| NET PROFIT/(LOSS) | ||||||||
| Non-Controlling Interests | ( | ) | ||||||
| Other comprehensive profit/(loss): | ||||||||
| - Foreign exchange adjustment profit/loss | ( | ) | ||||||
| COMPREHENSIVE PROFIT/(LOSS) | $ | $ | ||||||
| Net profit/(loss) per share- Basic and diluted | ||||||||
| Weighted average number of common shares outstanding - Basic and diluted | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-4 |
DSWISS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Audited)
| COMMON STOCK | ADDITIONAL | ACCUMULATED | NON- | |||||||||||||||||||||||||
| Number of shares | Amount | PAID-IN CAPITAL | COMPREHENSIVE GAIN/(LOSS) | ACCUMULATED GAINS/(LOSSES) | CONTROLLING INTEREST | TOTAL EQUITY | ||||||||||||||||||||||
| Balance as of December 31, 2020 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Shares spinoff adjustment resulted from a stock distribution by a corporate shareholder | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | ( | ) | |||||||||||||||||||||
| Net gain | - | ( | ) | |||||||||||||||||||||||||
| Balance as of December 31, 2021 | ( | ) | ( | ) | ||||||||||||||||||||||||
See accompanying notes to consolidated financial statements
| F-5 |
DSWISS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”))
(Audited)
| For the year ended December 31, 2021 | For the year ended December 31, 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Profit/(loss) before tax | $ | $ | ||||||
| Adjustments to reconcile net loss to net cash generated from/(used in) operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization for intangible assets | ||||||||
| Unrealised gain | - | |||||||
| Write off accounts receivable | - | |||||||
| Written off fixed asset | - | |||||||
| Loss on liquidation | - | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Accounts payable | ||||||||
| Inventories | ( | ) | ||||||
| Other payables and accrued liabilities | ( | ) | ||||||
| Prepaid expenses and deposits | ( | ) | ||||||
| Reduction in lease liability | ( | ) | ( | ) | ||||
| Cash generated from operating activities | $ | $ | ||||||
| Taxation (paid)/refunded | ( | ) | ||||||
| Net cash generated from operating activities | $ | $ | ||||||
| CASH FLOWS FROM INVESTING ACTIVITY: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activity | $ | ( | ) | $ | ( | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Advance from / (Repayment to) directors | ( | ) | ||||||
| Advance to related companies | ( | ) | - | |||||
| Additional of finance lease | - | |||||||
| (Repayment) of finance lease | ( | ) | ( | ) | ||||
| Net cash (used in) / provided by financing activities | $ | ( | ) | $ | ||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ( | ) | ||||
| Net change in cash and cash equivalents | ||||||||
| Cash and cash equivalents, beginning of year | ||||||||
| CASH AND CASH EQUIVALENTS, END OF YEAR | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||
| Income taxes paid/(refunded) | $ | $ | ( | ) | ||||
| Interest paid | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
| F-6 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
1. ORGANIZATION AND BUSINESS BACKGROUND
DSwiss, Inc., a Nevada corporation (“the Company”) was incorporated under the laws of the State of Nevada on May 28, 2015.
DSwiss, Inc. operates through its wholly owned subsidiary, DSwiss Holding Limited, a Company organized under the laws of Seychelles.
The principal activity of the Company and its subsidiaries is to supply high-quality health and beauty products, including beverages to assist in weight management, anti-aging creams, and products designed to improve the overall health system in our body.
We
have historically conducted our business through DSwiss Sdn Bhd, a private limited liability company, incorporated in Malaysia. DSwiss
Holding Limited, incorporated in Seychelles, is an investment holding company with
We
have invested in DSwiss Biotech Sdn Bhd, a Company incorporated in Malaysia, and owned
The Company, through its subsidiaries and its variable interest entities (“VIEs”), mainly supplies high quality beauty products. Details of the Company’s subsidiaries:
| Company name | Place
and incorporation | Particulars
of issued capital | Principal
activities | Proportional of ownership interest and voting power held | ||||||||
| 1. | % | |||||||||||
| 2. | % | |||||||||||
| 3. | March 10, 2011 | % | ||||||||||
| 4. | % | |||||||||||
| (1) |
| F-7 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Business Overview
DSwiss is a premier biotech-nutraceutical company, supplying high-quality health and beauty products, including beverages to assist in chronic illness prevention supplement, weight management supplement, anti-aging creams, and products designed to improve the overall health system in our bodies.
Since our establishment, our growth has been tremendous in Malaysia. From a mere selection of two (2) products, the company had expanded to twenty-three (23) products in 2021. With the strong leadership of our company’s Chief Executive Officer; Vincent Leong, our products are now consumed around the world, such as Malaysia, Singapore, Indonesia, Hong Kong, Taiwan, Macau, and China. To date, we had expanded across Asia regions through the support of our distributors and determined to expand our geographical presence to markets that we have yet to explore.
At DSwiss, research and development are an ongoing effort whose purpose is to ensure our products on the forefront of quality and effectiveness. Equipped with state-of-the-art manufacturing management skill, our innovative research and development team are constantly exploring new development and product lines and implementing the latest science and technology, that will enable us to create more evidence-based high value-added formulations and products and remain competitive in the industry. We conduct research and development based on our philosophy of “creating beauty, health and the ecology” to meet customers’ needs. In 2020, with the team’s enormous efforts on product research and development, DSwiss has also successfully delivered a wide range of novel OEM/ODM products that respond to our clients’ needs and create values for society as the developed OEM/ODM products have managed to improve the health status of the end consumers. DSwiss is actively embarking on its journey to continue excel in functional food industry and expand into health supplement and pet supplement industry.
DSwiss’s products are certified and approved by the Ministry of Health (“MOH”) Malaysia. Due to the stringent requirements from MOH Malaysia, we strive to upkeep the highest possible standard in our products to provide assurance and continuous commitment to providing quality products.
2. GOING CONCERN UNCERTAINTIES
The accompanying financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
As
of December 31, 2021, the Company suffered an accumulated deficit of $
There is no assurance that the Company will able to maintain profitable in the future, which raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes.
Basis of presentation
These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
Basis of consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries in which the Company is the primary beneficiary. All inter-company accounts and transactions have been eliminated upon consolidation.
| F-8 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Use of estimates
In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets, and revenues and expenses during the periods reported. Actual results may differ from these estimates.
Cash and cash equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, time deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of six months or less as of the purchase date of such investments.
Property and equipment
Property and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of plant, equipment and software are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows:
| Classification | Estimated useful lives | |
| Computer and software | ||
| Furniture and Fittings | ||
| Office equipment | ||
| Motor vehicle |
Intangible assets
Intangible
assets are stated at cost less accumulated amortization. Intangible assets represented the registration costs of trademarks in Malaysia
and Hong Kong which are amortized on a straight-line basis over a useful life of
The
Company follows ASC Topic 350 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. There were
Leases
The company determines if an arrangement is a lease at inception. Operating leases are included in operating in operating lease right-of-use (“ROU”) as assets, operating lease non-current liabilities, and operating lease current liabilities in our consolidated balance sheet. Finance leases are property and equipment, other current liabilities, and other non-current liabilities in the consolidated balance sheet.
ROU assets represent the right to use an asset for the lease term and lease liability represent the obligation to make lease payment arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over lease term. As most of the leases doesn’t provide an implicit rate. The company generally use the incremental borrowing rate on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating ROU asset also includes any lease payments made and exclude lease incentives. Lease expense for lease payment is recognized on a straight -line basis over lease term. The Company adopted Public Bank Berhad’s base rate lending rate as a reference for discount rate.
Leases
that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance
leases.
Inventories
Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Condensed Consolidated Statements of Operations and Comprehensive Income.
Revenue recognition
The Company follows the guidance of Accounting Standards Codification (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.
| F-9 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Revenue from trading of retail goods is recognized when title and risk of loss are transferred and there are no continuing obligations to the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the products are collected by the customer at the Company’s office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments that are based upon management’s best estimates and historical experience and are provided for in the same period as the related revenues are recorded.
The Company mainly derives its revenue from the sale of healthy food products. Generally, the Company recognizes revenue when OEM, Home brand and medical consumables products are sold and accepted by the customers and there are no continuing obligations to the customer.
Cost of revenue
Cost of revenue includes the purchase cost of retail goods for re-sale to customers and packing materials (such as boxes). It excludes purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs and other costs of distribution network in cost of revenues.
Shipping and handling fees
Shipping and handling fees, if billed to customers, are included in revenue. Shipping and handling fees associated with inbound and outbound freight are expensed as incurred and included in selling and distribution expenses.
Selling and distribution expenses
Selling and distribution expenses are primarily comprised of travelling and accommodation, transportation fees such as petrol, toll and parking and shipping and handling fees.
Income taxes
The provision of income taxes is determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 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
The Company conducts much of its businesses activities in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company will file separate tax returns that are subject to examination by the foreign tax authorities.
The Company calculates net profit per share in accordance with ASC Topic 260 “Earnings per share”. Basic profit per share is computed by dividing the net profit by the weighted average number of common shares outstanding during the period. Diluted profit per share is computed similar to basic profit 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.
| F-10 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the Condensed Consolidated Statements of Operations and Comprehensive Income
The reporting currency of the Company is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company’s subsidiaries and VIEs in Malaysia, Hong Kong and China maintains their books and record in their local currency, Ringgits Malaysia (“MYR”), Hong Kong Dollars (“HK$”) and Chinese Renminbi (“RMB”) respectively, which 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 subsidiaries whose functional currency is not 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 statements of stockholders’ equity.
Translation of amounts from MYR into US$1, HK$ into US$1, RMB into US$1 and THB into US$1 has been made at the following exchange rates for the respective periods:
| As of and for the year ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Year-end MYR : US$1 exchange rate | ||||||||
| Year-average MYR : US$1 exchange rate | ||||||||
| Year-end HK$ : US$1 exchange rate | ||||||||
| Year-average HK$ : US$1 exchange rate | ||||||||
| Year-end RMB : US$1 exchange rate | ||||||||
| Year-average RMB : US$1 exchange rate | ||||||||
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
Fair value of financial instruments:
The carrying value of the Company’s financial instruments: cash and cash equivalents, subscription receivables, prepayment and deposits, accounts payable, and other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.
| F-11 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
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. |
Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Recent accounting pronouncements
FASB issues various Accounting Standards Updates relating to the treatment and recording of certain accounting transactions. On June 10, 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-10, Development Stage Entities (Topic 915) Elimination of Certain Financial Reporting Requirements, including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation, which eliminates the concept of a development stage entity (DSE) entirely from current accounting guidance. The Company has elected adoption of this standard, which eliminates the designation of DSEs and the requirement to disclose results of operations and cash flows since inception.
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
| F-12 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
4. VIE STRUCTURE AND ARRANGEMENTS
On
June 27, 2016, DSwiss (HK) Limited (“DSHK”) entered into a Management Services Agreement (the “Management Services
Agreement I”) which entitles DSHK to substantially entitled to all of the economic benefits of DSwiss Biotech Sdn Bhd (“DSBT”)
in consideration of services provided by DSHK to DSBT. Pursuant to the Management Services Agreement I, DSHK has the exclusive right
to provide to DSBT management, financial and other services related to the operation of DSBT’s business, and DSBT is required to
take all commercially reasonable efforts to permit and facilitate the provision of the services provided by DSHK. As compensation for
providing the services, DSHK is entitled to receive a fee from DSBT, upon demand, equal to
The Management Services Agreement I also provides DSHK, or its designee, with a right of first refusal to acquire all or any portion of the equity of DSBT upon any proposal by the sole shareholder of DSBT to transfer such equity. In addition, at the sole discretion of DSHK, DSBT is obligated to transfer to DSHK, or its designee, any part or all of the business, personnel, assets and operations of DSBT which may be lawfully conducted, employed, owned or operated by DSHK, including:
(a) business opportunities presented to, or available to DSBT may be pursued and contracted for in the name of DSHK rather than DSBT, and at its discretion, DSHK may employ the resources of DSBT to secure such opportunities;
(b) any tangible or intangible property of DSBT, any contractual rights, any personnel, and any other items or things of value held by DSBT may be transferred to DSHK at book value;
(c) real property, personal or intangible property, personnel, services, equipment, supplies and any other items useful for the conduct of the business may be obtained by DSHK by acquisition, lease, license or otherwise, and made available to DSBT on terms to be determined by agreement between DSHK and DSBT;
(d) contracts entered into in the name of DSBT may be transferred to DSHK, or the work under such contracts may be subcontracted, in whole or in part, to DSHK, on terms to be determined by agreement between DSHK and DSBT; and
(e) any changes to, or any expansion or contraction of, the business may be carried out in the exercise of the sole discretion of DSHK, and in the name of and at the expense of, DSHK; provided, however, that none of the foregoing may cause or have the effect of terminating (without being substantially replaced under the name of DSHK) or adversely affecting any license, permit or regulatory status of DSBT.
In addition, DSHK entered into certain agreements with Jervey Choon, (the “DSBT shareholder”), including
| (i) | a Call Option Agreement allowing DSHK to acquire the shares of DSBT as permitted by Malaysia laws; |
| (ii) | a Shareholders’ Voting Rights Proxy Agreement that provides DSHK with the voting rights of the DSBT; and |
| (ii) | an Equity Pledge Agreement that pledges the shares in DSBT. |
This VIE structure provides DSHK, a wholly-owned subsidiary of DSwiss Holding Limited, which is the wholly-owned subsidiary of DSwiss Inc, with control over the operations and benefits of DSBT without having a direct equity ownership in DSBT.
5. STOCKHOLDERS’ EQUITY
As of December 31, 2021 and 2020, the Company had a total of and of its common stock issued and outstanding. There are shares of preferred stock issued and outstanding.
| F-13 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
6. PROPERTY AND EQUIPMENT
| As of December 31, | As of December 31, | |||||||
| 2021 | 2020 | |||||||
| Computer and software | $ | $ | ||||||
| Furniture and fittings | ||||||||
| Office equipment | ||||||||
| Motor vehicle | ||||||||
| Total property and equipment | $ | |||||||
| Accumulated depreciation | ( | ) | ( | ) | ||||
| Effect of translation exchange | ( | ) | ( | ) | ||||
| Property and equipment, net | $ | $ | ||||||
Depreciation
expense for the year ended December 31, 2021 and December 31, 2020 were $
7. INTANGIBLE ASSETS
| As of December 31, | As of December 31, | |||||||
| 2021 | 2020 | |||||||
| Trademarks | $ | $ | ||||||
| Amortization | ( | ) | ( | ) | ||||
| Effect of translation exchange | ( | ) | ( | ) | ||||
| Intangible assets, net | $ | $ | ||||||
Amortization
for the year ended December 31, 2021 and December 31, 2020 were $
8. OTHER ERECEIVABLES, REPAID EXPENSES AND DEPOSITS
| As of December 31, | As of December 31, | |||||||
| 2021 | 2020 | |||||||
| Prepaid expenses | $ | $ | ||||||
| Deposits | ||||||||
| Total other receivables, prepaid expenses and deposits | $ | $ | ||||||
9. INVENTORIES
| As of December 31, | As of December 31, | |||||||
| 2021 | 2020 | |||||||
| Finished goods, at cost | $ | $ | ||||||
| Total inventories | $ | $ | ||||||
| F-14 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
10. OTHER PAYABLES AND ACCRUED LIABILITIES
| As of December 31, | As of December 31, | |||||||
| 2021 | 2020 | |||||||
| Other payables | $ | $ | ||||||
| Accrued audit fees | ||||||||
| Accrued other expenses | ||||||||
| Accrued professional fees | ||||||||
| Total payables and accrued liabilities | $ | $ | ||||||
11. FINANCE LEASE LIABILITIES
The
Company purchased motor vehicles with finance lease.
| As of December 31, | As of December 31, | |||||||
| 2021 | 2020 | |||||||
| Finance leases | $ | $ | ||||||
| Less: interest expense | ( | ) | ( | ) | ||||
| Net present value of finance leases | ||||||||
| Current portion | ||||||||
| Non-current portion | ||||||||
| Total | $ | $ | ||||||
As of December 31, 2021, the maturities of the finance leases for each of the years are as follows:
| 2022 | ||||
| 2023 | ||||
| 2024 | ||||
| 2025 | ||||
| 2026 | ||||
| Total | $ |
12. AMOUNT DUE TO A DIRECTOR
As
of December 31, 2021, and December 31, 2020, the amount due to director of the Company are $
| F-15 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
13. INCOME TAXES
For the year ended December 31, 2021 and year ended December 31, 2020, the local (United States) and foreign components of profit/(loss) before income taxes were comprised of the following:
| For
the year ended December 31, 2021 | For
the year ended December 31, 2020 | |||||||
| Tax jurisdictions from: | ||||||||
| - Local | $ | ( | ) | $ | ( | ) | ||
| - Foreign, representing | ||||||||
| Seychelles | ( | ) | ( | ) | ||||
| Hong Kong | ( | ) | ( | ) | ||||
| Malaysia | ||||||||
| PRC | ||||||||
| Profit/(Loss) before income tax | $ | $ | ||||||
The provision for income taxes consisted of the following:
| For
the year ended December 31, 2021 | For
the year ended December 31, 2020 | |||||||
| Current: | ||||||||
| - Local | $ | $ | ||||||
| - Foreign | ( | ) | ( | ) | ||||
| Deferred: | ||||||||
| - Local | - | - | ||||||
| - Foreign | - | - | ||||||
| Income tax expense | $ | ( | ) | $ | ( | ) | ||
| F-16 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
The following table sets forth the significant components of the aggregate deferred tax assets of the Company for the period ended December 31, 2021 and 2020.
| For
the year ended December 31, 2021 | For
the year ended December 31, 2020 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carry forwards | ||||||||
| -United States of America | $ | ( | ) | $ | ( | ) | ||
| -Seychelles | ||||||||
| -Hong Kong | ( | ) | ( | ) | ||||
| -Malaysia | ( | ) | ( | ) | ||||
| -PRC | $ | $ | ( | ) | ||||
| ( | ) | ( | ) | |||||
| Less: valuation allowance | $ | $ | ||||||
| Deferred tax assets | $ | $ | ||||||
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 and its subsidiary that operate in various countries: United States, Seychelles, Hong Kong, Malaysia, PRC 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 31 December, 2021,
the operations in the United States of America incurred $
Seychelles
Under the current laws of the Seychelles, DSwiss Holding Limited is registered as an international business company which governs by the International Business Companies Act of Seychelles and there is no income tax charged in Seychelles.
Hong Kong
DSwiss
(HK) Limited is subject to Hong Kong Profits Tax, which is charged at the statutory income tax rate of
Malaysia
DSwiss
Sdn Bhd and DSwiss Biotech Sdn Bhd are subject to Malaysia Corporate Tax, which is charged at the statutory income tax rate range from
| F-17 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
14. CONCENTRATIONS OF RISKS
(a) Major customers
For the year ended December 31, 2021 and 2020, the customers who accounted for 10% or more of the Company’s revenues and its accounts receivable balance at year-end are presented as follows:
| For the year ended December 31 | ||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Revenues | Percentage of Revenues | Accounts Receivable, Trade | ||||||||||||||||||||||
| Customer A | $ | $ | $ | $ | ||||||||||||||||||||
| Customer B | $ | $ | % | $ | $ | |||||||||||||||||||
| Customer C | $ | $ | % | $ | $ | |||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||
(b) Major vendors
For the year ended December 31, 2021 and 2020, the vendors who accounted for 10% or more of the Company’s purchases and its accounts payable balance at year-end are presented as follows:
| For the year ended December 31 | ||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Purchases | Percentage of Purchases | Account Payable, Trade | ||||||||||||||||||||||
| Vendor A | $ | $ | % | $ | $ | |||||||||||||||||||
| Vendor B | $ | $ | $ | $ | ||||||||||||||||||||
| Vendor C | $ | $ | % | $ | $ | |||||||||||||||||||
| Vendor D | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Vendor E | $ | $ | % | $ | $ | |||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||
(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 trade 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 steady; therefore, there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of MYR, HK$ and RMB converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.
| F-18 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
15. LEASE RIGHT-OF-USE ASSET AND LEASE LIABILITIES
The Company officially adopted ASC 842 for the period on and after January 1, 2019 as permitted by ASU 2016-02. ASC 842 originally required all entities to use a “modified retrospective” transition approach that is intended to maximize comparability and be less complex than a full retrospective approach. On July 30, 2018, the FASB issued ASU 2018-11 to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, ASU 2016-02 of which permits entities may elect not to recast the comparative periods presented when transitioning to ASC 842. As permitted by ASU 2018-11, the Company elect not to recast comparative periods, thusly.
As
of January 1, 2019, the Company recognized approximately US$
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.
The initial recognition of operating lease right and lease liability as follow:
As of December 31, 2021, operating lease right of use asset as follow:
| Year ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| As of January 1, | $ | $ | ||||||
| Add: New Lease commenced on 1 January 2022 | - | |||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Effect of translation exchange | ( | ) | ( | ) | ||||
| Balance as of December 31 | $ | $ | ||||||
As of December 31, 2021, operating lease liability as follow:
| Initial recognition as of January 1, 2020 | $ | |||
| Add: New operating lease liability commenced on 1 January 2022 | ||||
| Less: gross repayment | ||||
| Add: imputed interest | ( | ) | ||
| Effect of translation exchange | ( | ) | ||
| Balance as of December 31, 2021 | $ | |||
| Less: lease liability current portion | ||||
| Lease liability non-current portion | $ |
For
the year ended December 31, 2021 and 2020, the amortization of the operating lease right of use asset are $
| Year ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| (unaudited) | (unaudited) | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | - | |||||||
| Operating cash flow from operating lease | $ | $ | ||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | ||||||||
| Remaining lease term for operating lease (years) | ||||||||
| Weighted average discount rate for operating lease | ||||||||
For
the year ended December 31, 2021 and 2020, lease expenses were $
| F-19 |
DSWISS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(Currency expressed in United States Dollars (“US$”), except for number of shares)
16. RELATED PARTY TRANSACTIONS
For the years ended December 31, 2021 and December 31, 2020, the Company has the following transactions with related party:
| For
the year ended December 31, 2021 (Audited) | For
the year ended December 31, 2020 (Audited) | |||||||
| Professional Fees: | ||||||||
| - Related party A | $ | $ | ||||||
| Sales | ||||||||
| - Related party B | $ | $ | ||||||
| - Related party C | ||||||||
| - Related party D | ||||||||
| Total | $ | $ | ||||||
The
related party A is a wholly owned subsidiary of a
The related party B’s director and shareholder is the founder of the Company.
The related party C’s director and shareholder is the founder of the Company.
The related party D’s director is the founder of the Company. The shareholder of related party D is related party C.
The related party transaction is generally transacted in an arm-length basis at the current market value in the normal course of business.
17. SEGMENTED 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 period ended December 31, 2021 | ||||||||||||||||||||
| Nevada | Seychelles | Hong Kong | Malaysia | Total | ||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | |||||||||||||||
| Cost of revenues | ( | ) | ( | ) | ||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net income (loss) before taxation | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Total assets | $ | $ | $ | $ | $ | |||||||||||||||
| For the period ended December 31, 2020 | ||||||||||||||||||||||||
| Nevada | Seychelles | Hong Kong | Malaysia | China | Total | |||||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Net income (loss) before taxation | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Total assets | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| * |
18. 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 December 31, 2021 up through the date the Company issued the audited consolidated financial statements.
19. SIGNIFICANT EVENTS
During the fiscal year, the World Health Organization declared the Coronavirus (COVID-19) outbreak to be a pandemic, which has caused severe global social and economic disruptions and uncertainties, including markets where the Company operates.
The Company considers this outbreak as non-adjusting-events. The consequences brought about by Covid-19 continue to evolve and whilst the Company actively monitoring and managing its operations to respond to these changes, the Company does not consider it practicable to provide any quantitative estimate on the potential impact it may have on the Company.
| F-20 |