UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM
10-K
x
ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF
1934
For the
fiscal year ended
December 31,
2009
o
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
000-26119
UONLIVE
CORPORATION
(Exact name of small business issuer as
specified in its charter)
|
Nevada
|
87-0629754
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(IRS Employer Identification No.) |
5/F,
Guangdong Finance Building
88
Connaught Road West
Hong
Kong
(Address
of principal executive offices)
852-2116-3560
(Issuer's
telephone number)
Securities
registered under Section 12(b) of the Exchange Act:
None
Securities
registered under Section 12(g) of the Exchange Act:
Common
Stock, par value $.001 per share
Indicate
by check mark whether the registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act. Yes
o
No
x
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
o
No
x
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 shorter period that the registrant as required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes
x
No
o
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. Yes
o
No
x
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
one):
Large
accelerated filer
o
Accelerated
filer
o
Non-accelerated
filer
o
Smaller
reporting company
x
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act) Yes
o
No
x
Aggregate
market value of the voting and non-voting common stock of the registrant held by
non-affiliates of the registrant at March 22, 2010, computed by reference to the
closing price of $0.125 at which the common stock was last sold on that
date:
$122,309
As of
March 18, 2010, there were outstanding 1,996,355 shares of the issuer's
common stock, par value $.001.
2
TABLE
OF CONTENTS
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Page
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| Part I | ||
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4
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9
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10
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10
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| Part II | ||
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10
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11
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11
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15
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16
- 32
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33
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33
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33
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| Part III | ||
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33
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36
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38
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38
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39
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| Part IV | ||
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39
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41
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CAUTIONARY
STATEMENT REGARDING FORWARD LOOKING INFORMATION
The
discussion contained in this 10-K under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), contains forward-looking statements that involve
risks and uncertainties. The issuer's actual results could differ significantly
from those discussed herein. These include statements about our expectations,
beliefs, intentions or strategies for the future, which we indicate by words or
phrases such as "anticipate," "expect," "intend," "plan," "will," "we believe,"
"the Company believes," "management believes" and similar language, including
those set forth in the discussion under "Business," including the "Risk Factors"
described in that section, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" as well as those discussed
elsewhere in this Form 10-K. We base our forward-looking statements on
information currently available to us, and we assume no obligation to update
them. Statements contained in this Form 10-K that are not historical facts are
forward-looking statements that are subject to the "safe harbor" created by the
Private Securities Litigation Reform Act of 1995.
History
of Our Company
We were
incorporated in the State of Nevada on January 29, 1998 under the name Txon
International Development Corporation to conduct any lawful business, to
exercise any lawful purpose and power, and to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Laws of Nevada.
On August
14, 2000, pursuant to a share exchange agreement dated August 10, 2000, by and
among Main Edge International Limited (“Main Edge”), Virtual Edge Limited
(“Virtual Edge”), Richard Ford, Jeanie Hildebrand and Gary Lewis, we acquired
from Main Edge all of the shares of Virtual Edge (the “Acquisition”) in exchange
for an aggregate of 1,961,175 shares of our common stock, which shares equaled
75.16% of Txon International’s issued and outstanding shares after giving effect
to the Acquisition. On September 15, 2000, Txon International Development
Corporation changed its name to China World Trade Corporation
(“CWTD”).
On March
28, 2008, CWTD entered into a Share Exchange Agreement (the “Exchange
Agreement”) by and among CWTD, William Tsang (“Tsang”), Uonlive Limited, a
corporation organized and existing under the laws of the Hong Kong SAR of the
People’s Republic of China (“Uonlive”), Tsun Sin Man Samuel, Chairman of Uonlive
(“Tsun”), Hui Chi Kit, Chief Financial Officer of Uonlive (“Hui”), Parure
Capital Limited, a corporation organized and existing under the laws of the
British Virgin Islands and parent of Uonlive (“Parure Capital”). Upon
closing of the share exchange transaction contemplated under the Exchange
Agreement, Tsun and Hui transferred all of their share capital in Parure Capital
to CWTD in exchange for an aggregate of 150,000,000 shares of common stock of
the Registrant and 500,000 shares of Series A Convertible Preferred Stock of the
Registrant, which is convertible after six months from the date of issuance into
100 shares of common stock of the Registrant, thus causing Parure Capital to
become a direct wholly-owned subsidiary of the Registrant.
On July
2, 2008, the proposal to amend the articles of incorporation to change the name
of the corporation to Uonlive Corporation was approved by the action of a
majority of all shareholders entitled to vote on the record date and by CWTD’s
Board of Directors. CWTD desired to change its name to truly reflect its new
business as a holding company for Uonlive Limited, and possibly other companies
that may be acquired in the future by the company (the “Company” or
“Uonlive”).
On May
15, 2009, the Company approved the 1 for 100 reverse split of its common
stock.
The
Company and subsidiaries are hereinafter collectively referred to as the
“Company.”
Overview
of Our Company’s Business
Uonlive
is a leading private online multimedia company established in July 2007 with its
headquarters in Hong Kong, China. The main business of Uonlive is
operating an online radio station, a kind of virtual community able to provide
the public with free online radio services, and mainly targets a younger
listening audience.
In
Uonlive, all the people are involved in the Multimedia Communication Platform
(MCP). Uonlive is the abbreviation for “You Are on Live”, which means
no matter where you live around the world, Uonlive’s information can be
transmitted to you. With online radio, there are no geographic
boundaries.
Uonlive
provides multi-division entertainment programs through live-audio-radio and
audio-on-demand. Audio-on-demand allows the listener to choose his or her own
programming. Uonlive also utilizes the most advanced technologies for
DJs and audiences to control their broadcasting techniques. Uonlive is also
endeavoring to develop new radio receiving techniques. For example, in the near
future, Uonlive will distribute online radio programs for communication products
including mobile, family electronics etc., anytime and anywhere.
Different
than traditional radio stations, Uonlive is continuously adding more interactive
features, including online live voting, chat rooms, and download service, etc.
in order to reach more audiences.
In
addition, Uonlive provides professional training courses to DJs. It
is committed to developing new radio personalities by providing professional and
systematic training programs. After completion of the courses, the participants
are qualified to take part in large-scale activities and ceremonies. Such
opportunities work for the mutual benefit of the online station and the
participant. Currently, Uonlive has over 50 DJs hosting online radio
programs.
Currently
Uonlive has over 40 diversified programs, which operate 24-hours a
day. No matter when and where, listeners can hear Uonlive voices
anytime.
Our
executive office is located at 5/F, Guangdong Finance Building, 88 Connaught
Road West, Hong Kong.
Our
Corporate Structure
Products
and Services
Uonlive
operates online radio by using audio or video data that can be converted into
the desired format and directly transmitted onto the
Internet. Whenever the listeners log into the website, they can
download the audio information they desire, and broadcast this information out
through the related software such as Realplay or Winamp. Online radio
does not use satellite frequency bands and resources, therefore the broadcast is
influenced by the network bandwidth available.
In
Uonlive, all the people are involved in the multimedia communication
platform. This virtual community is able to provide the public with
free online radio services. Currently Uonlive focuses on the
following products and services:
(1) Air
Time
--With
unlimited airtime, no boundary, flexibility and expandable.
--Started
from 16th September 2007;
--Three
different online radio channels;
--Over
100 DJs;
--about
160 programs through 3 channels;
--Existing
35,000 registered members, 16-25 sectors.
(2) UJ on
demand
--Anyone
can become a UJ;
--UJ
status can be upgraded to a senior level depending on how many programs the
users get involved in, how many programs users update or are in charge of and
also the download rates or response rate from the audiences;
--The
higher the rank, the more airtime users can operate;
--Own
your own radio channel with specific topics.
(3) U on
Ad
-- The
audience members can record their own advertisement in audio and upload to
Uonlive;
--UJ can
pick different categories of products and record the advertisement, and post on
Uonlive;
--Advertisement
on demand with target customers, and advertisement with hit rate
record;
--Target
customers can allocate target products;
--Become
a yellow page, youth and recommendation specialist on particular
products;
--Different
UJs become specialists on particular products in specific
industries.
(4) U PR
Network
--Through
its UJ’s, members’ database, and clients, Uonlive has established a public
relations (PR) Network.;
--Building
awareness and a favorable image for clients through our network and closely
monitoring numerous media channels for public comments.
Currently,
we focus and market our products in the following industries, where we believe
our capabilities and networks are easily utilized:
· Sports
· Tourist
· Property
· Music
· Wedding
· Comics/
Games
· Super
Natural Science
· Online
Shopping
Online
Radio Industry Overview
Industry
Background
Online
radio is a new broadcasting media which is transmitted through the
Internet. A radio server is set up on Internet websites and provides
radio programming through media play software. As a result, the
listeners are able to listen, watch, and read radio programs through their own
computers. The programs of online radio include audio, video,
multi-media and text contents. Online radio is one of the major
Internet media which provides online audio and video programming
services.
According
to the statistics of eTForecasts, there were over 1.08 billion Internet users in
2006 globally, and an estimated 2 billion users were predicted within the next 5
years. The USA has 197.8 million Internet users, China has 120 million Internet
users, and other countries in declining sequence are Japan, India, Germany, UK,
and Korea.
A study
of Understanding & Solutions shows that compared to global Internet income
from advertising amounting to US$25 billion, the global radio and TV advertising
income was US$160 billion in 2006. According to statistics of the
Office of Management and Budget in the U.S., the USA radio advertisement income
was US$20 billion in 2002, occupying 14% of the whole US media advertisement
market.
In 2000,
there were 21,500 TV stations and 44,000 radio stations globally, of which 59%
of the total TV stations were located in the USA and 30% of total radio stations
were located in the USA. In the radio industry, there were 514,000 employees in
2001. Most of these TV and radio stations are commercial entities relying on
commercial advertisement income.
According
to the statistics of US Radio Advertising Bureau in 2002 and 2003, over 96%
of American citizens over 12 years old listen to radio programs every
week; over 77% of American citizens listen to radio programs everyday; 99% of
adults (over 18 years old) with yearly income of $50,000 listen to radio
programming for 3 hours and 18 minutes every day; over 96% of lawyers,
accountants, professionals, and senior corporate management listen to
radio for 3 hours and 01 minute everyday; 97% of college students listen to
radio for 3 hours and 5 minutes every day. The time distribution ratios of
American citizens on various media are 44% on radio, 41% on TV, 10% on
newspaper, and 5% on magazine.
Characteristics
of Online radio
Currently,
the most popular online radio is live radio and audio-on-demand radio programs.
The live online radio is similar to traditional radio, which provides audio
programs according to a scheduled program list on the Internet. By contrast,
audio-on-demand online radio provides radio programs on the website, and
audiences are able to play their favorable programs on their
demand.
The
following is a comparison of Online Radio to Traditional Radio
Broadcasting:
--Online
radio programs are targeted to more specialized and detailed
audiences. Online radio segments its listening audience more than
traditional radio.
--Online
radio audiences are able to listen to radio programs in their free time and can
avoid being stuck to listening to traditional radio programs in a synchronous
manner.
--Online
radio audiences are able to select programs on demand and enjoy real-time news,
music, and other programs.
--Online
radio audiences are able to mutually interact and communicate with broadcast
hosts more closely and quickly through MSN, mobile messaging, blogs and radio
Forum, as well as hot-line telephone etc.
--Online
radio is able to utilize news and program resources of traditional broadcast
stations, which is complementary to that provided by traditional broadcast
stations.
Competition
Our
competitive strategy and competitive advantages include the
following:
(1)
Simple equipment, no boundary and time constraints.
The cost
to establish an online radio station is very low, not only the hardware but also
the technology. In theory, any person who has a computer, a
microphone, and software can have a radio station of his
own. Moreover he can recruit DJs from all over the world through the
network. All programs are stored on the site, and are saved in a
database. People can retrieve a specific program that they missed and
listen to it at any time, any place. Therefore, it enables the acceptance
rate to be greatly increased.
(2)
Utilize audience interaction.
In the
online network, DJs can chat with audiences through instant communication tools
such as QQ, MSN, Forum Posting and SMS to achieve instant
interaction. They can immediately experience the interaction with
audiences and re-arrange the programs according to the audience’s
needs. The interactive forms of communication have made a greater
variety of entertainment more widely available.
(3)
Strong personalization features and more attractive to young
people.
At
present, many hosts or DJs are the broadcast reporters and editors, thus showing
the greatest personality in the programs. Such characters can often
attract listeners, especially the young people pursuing personality in their
DJs. Uonlive is a special form of personalized media, and has many
types of radio programs.
(4) Wide
range of interactive methods for transmission.
Uonlive
can also use the resources and technical means of the network to achieve
transmission of audio-visual language. The audience can not only see
a program through video, the face of a host if it is music, but also at the same
time enjoy the songs of the music videos This transmission ability
greatly raises the visibility of the programming. In addition, the
continual development of network technology provides a platform for all Internet
users that can become a potential radio audience.
(5)
Significant information, easy for sourcing what the users need.
Users can
choose programs depending on their preferences and favorites. They can easily
skip Internet advertising on the home page, and also can tune into the world's
radio and listen to what they prefer.
(6)
Advanced technology is a strong support to the growth of online radio, and
technological development a means for change.
Uonlive
uses Internet Audio Radio and Audio-on-Demand, and makes full use of advanced
interactive features, to present the most diversified entertainment
programs. In addition, Uonlive uses the most advanced equipment and
the latest technology, to help the audience more easily master and control
the skills of radio. In the near future, it will bring “Anytime,
Anywhere” radio to communication products such as mobile phones, or even on the
stereo such as stationary units or any mobile unit that has an internet
browser.
More
importantly, Uonlive does not need to download or install any software, which
makes its use simpler and more convenient. The powerful website does
all this and can even support keyword search.
However,
we cannot assure you that we will compete successfully with any of our current
or future competitors.
Future
Plans
Our Plan
for Increasing Revenue and Cutting Costs
|
—
|
We
will launch new service targeting manufacturers in China who need our
platform as an advertising agent and our UJs as their sales agents to
increase their sales.
|
|
—
|
We
will increase our broadcasting channels with different popular categories
to increase our revenue from selling of air time,
|
|
—
|
We
will provide free training to people who want to be UJs and UJs are part
of our sales team who sell our products through their personal network.
Our sales department will also provide sales techniques to
UJs.
|
|
—
|
We
will co-operate with local newspapers and magazines to bundle our services
and products together with newspaper and magazine advertisements in one
package to expand our revenue
|
|
—
|
Our
direct cost of sales will be based on commissions paid to UJs, which will
not increase our cost unevenly.
|
|
—
|
We
are in the process of developing a “point to point” technology which will
improve our number of online audiences without increasing the bandwidth,
so as to reduce the cost.
|
How
do we intend to expand our programming and technology?
|
—
|
We
plan to raise adequate capital over the next three
years
|
|
—
|
We
plan to purchase technology that has come down in
price.
|
|
—
|
We
plan to acquire other online radio stations in China with positive
cash flow
|
|
—
|
We
plan to acquire software development companies that specialize in our
field and these companies will have mutual benefits for us after
acquisition
|
|
—
|
We
plan to expand our programs through our training of UJs
|
|
—
|
We
are in the process of developing a point-to-point technology which will
reduce the usage of bandwidth.
|
Growth
Strategy
Uonlive’s
vision is to be the largest online radio station in the world. Management
intends to grow Uonlive’s business by pursuing the following
strategies:
|
—
|
Grow
capacity and capabilities in line with market demand
increases
|
|
—
|
Enhance
leading-edge technology through continuous innovation, research and
study
|
|
—
|
Continue
to improve operational efficiencies
|
|
—
|
Build
a strong market reputation to foster and capture future growth in Hong
Kong
|
Existing
Facilities in China
We have
three recording studios established in Hong Kong equipped with Sony HDR-SRIE
Video & Accessories, Tascan IRU, CD Player, Lexicon Multi-effect mixer,
and Mackie 16 ch-4 Bus Mixer for recording and on-air broadcasting. We also have
a Dell PowerEdge 2950 Rack Mount Server and an IBM X3650 server for online
broadcasting.
On
September 2008, we established a studio with recording equipment in Guangzhou,
China as our PRC channel targeting audiences in China.
Sales
and Marketing
Uonlive
has established an extensive sales network throughout Hong Kong and in bordering
locations in China. It has a Sales and Marketing Department with
four staff members.
Source of Income
. Our main
source of income is from airtime sales. The airtime sales may be a
combination of air time and other services that Uonlive has the capabilities to
supply, which includes website banner sales, public relations service and
downloading from a clients’ database through our network.
Advertising
Customers
For the
twelve month period from January 1, 2009 to December 31, 2009 the Company
achieved revenues of $44,153. The revenue was generated from 5
customers with the following details:
|
Name
of Customer
|
Sales
for the Period by Customer
|
%
of
Sales
for
the Period
|
||||||
|
Dbtronix
(Far East) Ltd.
|
$
|
15,480
|
35.1%
|
|||||
|
Hong
Kong Asia Pacific Publication
|
$
|
11,610
|
26.3%
|
|||||
|
Clear
Water
|
$
|
2,490
|
5.6%
|
|||||
|
Hong
Kong Tours Ltd.
|
$
|
1,031
|
2.3%
|
|||||
|
Youth
Square
|
$
|
13,542
|
30.7%
|
|||||
|
Total
of 5 Customers
|
$
|
44,153
|
100.0%
|
|||||
Intellectual
Property
. At present, the Company has no trademarks or other
intellectual property.
Regulation
Regulation
of Telecommunications
Internet
information services in China are governed by the Telecommunications Regulations
issued on September 25, 2000 by the State Council. The Telecommunications
Regulations categorize all telecommunications businesses in China as either
basic telecommunications businesses or value-added telecommunications
businesses. The Catalog of Classes of Telecommunications Businesses (updated on
February 21, 2003 and effective as of April 1, 2003) that is attached to
the Telecommunications Regulations provides that an Internet information service
is a value-added telecommunications business. According to the
Telecommunications Regulations, any commercial operator of telecommunications
businesses in China must obtain an operating license from MII or
provincial-level communications administrative bureaus (“CAB”). The
Telecommunications Regulations also set forth extensive guidelines with respect
to various aspects of telecommunications operations in China.
The
Administrative Measures for Telecommunications Business Operating Licenses (the
“Telecom License Measures”) were promulgated by MII on December 26, 2001 and
became effective as of January 1, 2002. The Telecom License Measures, which are
formulated in accordance with the Telecommunications Regulations, set forth the
types of licenses required to operate a telecommunications business and the
procedures for obtaining such permits. With respect to licenses for value-added
services, the Telecom License Measures draw a distinction between licenses for
business conducted in a single province (which are issued by CAB) and licenses
for inter-provincial activities (which are issued by MII).
Regulation
of Internet Content
The
Internet Measures set forth a list of prohibited types of content. Duly licensed
ICPs are required to monitor their websites, including chat rooms and electronic
bulletin boards, for prohibited content and remove any such content that they
discover on their websites. In addition, some of the specific types of
prohibited content are vague and subject to interpretation. Therefore, the
responsibilities and the potential liabilities of ICPs are unclear.
ICPs are
subject to an array of other regulations with respect to types of content and
services, for which providers must obtain approval from various government
agencies. ICPs in the more sensitive or regulated areas (that is, news,
publication, education, medical care, pharmaceuticals and medical apparatuses
and instruments) are required to be examined by the authority in charge of the
relevant area prior to applying for an operating permit.
The
posting of news on websites and the distribution of news over the Internet are
highly regulated and can only be engaged in by ICPs that have been specifically
approved to do so. The Provisional Administrative Measures Regarding Internet
Websites Carrying on the News Posting Business issued by the State Council News
Office and MII in November 2000 stipulate that only ICPs that are
government-authorized news units may operate online news posting business that
post news reported by such ICPs. Other ICPs may apply to the State
Council News Office for approval to post on their websites news supplied under
contract by approved news providers, a copy of which shall be filed with the
applicable provincial requirements with respect to facilities and experience
personnel that must be met by applicants for approval to post news on their
websites.
Regulation
of Online Advertisements
ICPs
require approval from the State Administration for Industry and Commerce (SAIC)
or its relevant local branches to carry advertisements on their
websites. Uonlive does not have such approval, but Uonlive is
incorporated in Hong Kong which is not under the Chinese
regulations.
Employees.
We currently have
16 employees and 97 UJs working for our company. We believe our
future success will depend in large part upon the recruitment of more
experienced UJ’s and management officers; and our ability to attract and retain
sales and marketing personnel. There can be no assurance that we will
retain our key sales and marketing employees or that we can attract, assimilate
or retain other highly qualified sales and marketing personnel in the
future. None of our employees are subject to any collective
bargaining agreements.
Our main
office and three recording studios are located at 5/F, Guangdong Finance
Building, 88 Connaught Road West, Hong Kong and there is one recording studio
located at Guangzhou World Trade Center Club at the 3rd Floor, Goldlion Digital
Network Center, 138 Tiyu Road East, Tianhe, Guangzhou 510620, People’s Republic
of China. The Company rented office spaces under non-cancelable operating lease
agreements in Hong Kong and the PRC for various terms ranging from one to three
years, with fixed monthly rentals, expiring through March 2011. Costs incurred
under these operating leases are recorded as rental expense and totaled
approximately $97,732 and $77,048 for the years ended December 31, 2009 and
2008.
As of
December 31, 2009, the future minimum annual operating lease payments are as
follows:
|
Years
ending December 31,
|
||||
|
2010
|
$
|
92,842
|
||
|
2011
|
23,211
|
|||
|
Total
|
$
|
116,053
|
||
We know
of no material, active or pending legal proceedings against us, our subsidiaries
or our property, nor are we involved as a plaintiff in any material proceedings
or pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholders are an
adverse party or have a material interest adverse to us.
Market
Information
Our
common stock is currently quoted on a limited basis on the Over-the-Counter
Bulletin Board (“OTCBB”) under the symbol “UOLI.” The quotation of our common
stock on the OTCBB does not assure that a meaningful, consistent and liquid
trading market currently exists. We cannot predict whether a more active market
for our common stock will develop in the future. In the absence of an active
trading market:
|
(1)
|
Investors
may have difficulty buying and selling or obtaining market
quotation;
|
|
(2)
|
Market
visibility for our common stock may be limited;
and
|
|
(3)
|
A
lack of visibility of our common stock may have a depressive effect on the
market price for our common stock.
|
The
following table sets forth the range of bid prices of our common stock as quoted
on the OTCBB during the periods indicated. The prices reported represent prices
between dealers, do not include markups, markdowns or commissions and do not
necessarily represent actual transactions.
|
High
|
Low
|
||||||||
|
2009
|
First
Quarter
|
$
|
0.50
|
$
|
0.35
|
||||
|
Second
Quarter
|
$
|
0.45
|
$
|
0.20
|
|||||
|
Third
Quarter
|
$
|
1.01
|
$
|
0.10
|
|||||
|
Fourth
Quarter
|
$
|
0.55
|
$
|
0.10
|
|||||
|
2008
|
First
Quarter
|
$
|
11.00
|
$
|
5.00
|
||||
|
Second
Quarter
|
$
|
8.00
|
$
|
1.50
|
|||||
|
Third
Quarter
|
$
|
5.40
|
$
|
1.00
|
|||||
|
Fourth
Quarter
|
$
|
2.00
|
$
|
0.40
|
|||||
Our
common shares are issued in registered form. Interwest Transfer Co., Inc., 1981
East 4800 South, Ste 100, Salt Lake City, UT 84111, Tel: (801)
272-9294, is the registrar and transfer agent for our common stock.
From
January 1 to March 22, 2010, the highest and lowest prices of our common shares
on the OTC Bulletin Board were $0.13 per share and $0.10 per share. On
March 22, 2010, the closing price of our common stock on the OTC Bulletin
Board on the last day it traded before the filing of this Annual Report was
$0.125 per share.
As a
result of the affirmative vote in the Annual General Meeting held on August 8,
2007, we increased our number of shares of authorized Common Stock, $.001 par
value, from 50,000,000 shares to 200,000,000 shares.
As a
result of the exchange agreement with Tsang William, Uonlive Limited, Tsun
Samuel, Hui Chi Kit and Parure Capital Limited on March 31, 2008, 1,500,000
shares of common stock and 500,000 shares of Series A Convertible Preferred
Stock, which are convertible at 100 to 1 anytime six months after the date of
issuance (provided there is sufficient authorized common stock), were
issued. The total outstanding common stock was 1,996,355 immediately after the
closing of the exchange agreement.
As of
March 18, 2010, there were 92 shareholders of record of 1,996,355 outstanding
shares of common stock of the Company, not including approximately 5,000 holders
of our shares in street name.
Dividends
We have
not previously paid any cash dividends on its common stock and do not anticipate
paying dividends on its common stock in the foreseeable future. It is the
present intention of management to retain any earnings to provide funds for the
operation and expansion of our business. Any future determination to pay
dividends will be at the discretion of our board of directors and will depend on
our results of operation, financial condition, contractual and legal
restrictions and other factors the board of directors deem
relevant.
Equity Compensation
Plans
As of
December 31, 2009, we did not have any equity compensation plans.
Recent Sales of Unregistered
Securities
We have
not recorded any sales of unregistered securities during the reporting
period.
Purchases of Equity
Securities by Issuer and Affiliated Purchasers
We have
not repurchased any of our common stock and have no publicly announced
repurchase plans or programs as of December 31, 2009.
Not
applicable.
PRELIMINARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
discussion contains forward-looking statements. The reader should understand
that several factors govern whether any forward-looking statement contained
herein will be or can be achieved. Any one of those factors could cause actual
results to differ materially from those projected herein. These forward-looking
statements include plans and objectives of management for future operations,
including plans and objectives relating to the products and the future economic
performance of the company. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions, future business decisions, and the time and money required to
successfully complete development projects, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
company. Although the company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of those
assumptions could prove inaccurate and, therefore, there can be no assurance
that the results contemplated in any of the forward-looking statements contained
herein will be realized. Based on actual experience and business development,
the company may alter its marketing, capital expenditure plans or other budgets,
which may in turn affect the company's results of operations. In light of the
significant uncertainties inherent in the forward-looking statements included
therein, the inclusion of any such statement should not be regarded as a
representation by the company or any other person that the objectives or plans
of the company will be achieved.
OVERVIEW
The
predecessor of Uonlive Corporation was incorporated in the State of Nevada on
January 29, 1998 under the name Txon International Development Corporation to
conduct any lawful business, to exercise any lawful purpose and power, and to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Laws of Nevada. On August 1, 2008, the
Company changed its name to Uonlive Corporation.
On March
28, 2008, the Company entered into the Exchange Agreement with Tsang William,
Uonlive Limited, Tsun Samuel, Hui Chi Kit and Parure Capital Limited. Upon
closing of the Share Exchange on March 31, 2008, Tsun and Hui delivered all of
their share capital in Parure Capital to the Company in exchange for 150,000,000
shares of common stock of the Company and 500,000 shares of Series A Convertible
Preferred Stock, resulting in Parure Capital becoming a wholly owned subsidiary
of the Company and Uonlive becoming an indirect wholly owned subsidiary of the
Company.
As a
result, post reverse split, 495,566 shares of the Company’s common stock were
outstanding immediately prior to the closing of the Share Exchange, and
1,995,659 shares of the Company’s common stock were outstanding immediately
after the closing of the Share Exchange. In addition, 500,000 shares of Series A
Convertible Preferred Stock were outstanding immediately after the closing of
the Share Exchange. Of these shares, approximately 263,559 shares represented
the Company’s “public float” prior to and after the Share Exchange. The
1,500,000 shares of common stock and 500,000 shares of Series A Convertible
Preferred Stock issued in the Share Exchange were issued in reliance upon an
exemption from registration pursuant to Regulation S under the Securities Act of
1933, as amended (the “Securities Act”). The shares in the public float will
continue to represent the shares of the Company’s common stock held for resale
without further registration by the holders thereof. After the Share Exchange,
Uonlive becomes our operating subsidiary.
On May
19, 2009, we approved a 1:100 reverse stock split (the “Reverse Split”) of our
common stock and an amendment to our Articles of Incorporation to effectuate the
Reverse Split.
Uonlive
is a leading private online multimedia company incorporated in April 2007 with
its headquarters in Hong Kong, China. It is one of the members of Jingu Group.
The main business of Uonlive is operating an online radio station, a kind of
virtual community able to provide the public with free online radio services,
and mainly targets the younger listening audience.
Uonlive
is the abbreviation for “You Are on Live”, which means no matter where you live
around the world, Uonlive’s information can be transmitted to you. With online
radio, there are no geographic boundaries.
Uonlive
provides multi-division entertainment programs through live-audio-radio and
audio-on-demand. Audio-on-demand allows the listener to choose his or her own
programming. Uonlive also utilizes the most advanced technologies for
DJs and audiences to control their broadcasting techniques. Uonlive is also
endeavoring to develop new radio receiving techniques. For example, in the near
future, Uonlive will distribute online radio programs for communication products
including mobile, family electronics etc., anytime and anywhere.
Different
than traditional radio stations, Uonlive is continuously adding more interactive
features, including online live voting, chat rooms, and download service, etc.
in order to reach more audiences.
In
addition, Uonlive provides professional training courses to DJs. It
is committed to developing new radio personalities by providing professional and
systematic training programs. After completion of the courses, the participants
are qualified to take part in large-scale activities and ceremonies. Such
opportunities work for the mutual benefit of the online station and the
participant. Currently, Uonlive has over 50 DJs hosting online radio programs.
Currently Uonlive has over 40 diversified programs, which operate 24-hours a
day. No matter when and where, listeners can hear Uonlive voices
anytime.
Our
objective is to develop and provide diversified programming that has an upbeat
message for anyone who listens. We will use advanced technologies to provide a
variety of interactive channels through a Multimedia Communication Platform to
give the audience impressive and fun radio shows.
Development
of Our Business
The
commercial market for the online radio business is developing rapidly. Many
large competitors have been formed or are in the process of being formed to take
advantage of an expanding market. The commercialization of the Internet has
effectively promoted the development of online radio communication technologies.
The significant business opportunities inherent in online radio will cause the
utilization of the various kinds of equipment necessary for an online radio
station.
Our
development strategies include opening up new channels, attracting more members,
strengthening and diversifying online programs, selling or renting our channels,
attempting to develop a “U outlet,” and later attempting co-operation with
Karaoke, and developing a voice-ecard for our stations. Uonlive will also sell
its commercial products to users through its multimedia communication platform.
It hopes to set up a team to source products in Guangdong Province, China and
market the product on the website. Lastly, Uonlive will try another model
allowing users to call up and record a message and leave it on the website so
that other people listen to them (thereby setting up a sound recording
library).
Our
objective is to develop and provide diversified programming that has an upbeat
message for anyone who listens. We will use advanced technologies to provide a
variety of interactive channels through a Multimedia Communication Platform to
give the audience impressive and fun radio shows.
Our
revenue model is to (1) sell air time or spot time to customers in different
time sections with a tailor made package to be designed for each customer, which
package may contain a number of air or spot times with a time frame of, say, 30
seconds, (2) to sell title sponsorships to customers for each program, and (3)
to sell banner advertisements on our website. We planned to have eight banners
this year for customers to place their advertisements.
Management
believes that Uonlive has a niche market in the online radio industry in Hong
Kong and Mainland China. The prospect for this industry is enormous with high
margin potential. Uonlive is the pioneer in this market and hopes to be the
leader, taking the largest market share in the coming years.
RESULTS OF
OPERATIONS
The
following table shows the financial data of the consolidated statements of
operations of the Company and its subsidiaries for the years ended December 31,
2009 and 2008. The data should be read in conjunction with the audited
consolidated financial statements of the Company and related notes
thereto.
|
For
the year ended
|
For
the year ended
|
|||||||||||||||
|
December
31, 2009
|
December
31, 2008
|
|||||||||||||||
|
US$
'000
|
%
of Revenue
|
US$
'000
|
%
of Revenue
|
|||||||||||||
|
OPERATING
REVENUES
|
44
|
100
|
%
|
31
|
100
|
%
|
||||||||||
|
GROSS
PROFIT
|
4
|
9
|
%
|
7
|
23
|
%
|
||||||||||
|
OPERATING
EXPENSES:
|
||||||||||||||||
|
Sales
and marketing expense
|
(24
|
)
|
(55
|
%)
|
(18
|
)
|
(58
|
%)
|
||||||||
|
Consulting
and professional fee
|
(24
|
)
|
(55
|
%)
|
(59
|
)
|
(190
|
%)
|
||||||||
|
General
and administrative
|
(724
|
)
|
(1,645
|
%)
|
(606
|
)
|
(1,954
|
%)
|
||||||||
|
Provision
for impairment of intangible assets
|
-
|
|
(167
|
)
|
(539)
|
%
|
||||||||||
|
TOTAL
OPERATING EXPENSES
|
(772
|
)
|
(1,755
|
%)
|
(850
|
)
|
(2,742
|
%)
|
||||||||
|
Loss
from operations
|
(767
|
)
|
(1,745
|
%)
|
(843
|
)
|
(2,719
|
%)
|
||||||||
|
Income
tax expense
|
(41
|
)
|
(93
|
%)
|
-
|
|||||||||||
|
NET
LOSS
|
(808
|
)
|
(1,836
|
%)
|
(843
|
)
|
(2,719
|
%)
|
||||||||
|
Net
loss per share – Basic and diluted
|
(0.40
|
)
|
(0.42
|
)
|
||||||||||||
|
Weighted
average number of shares outstanding – Basic and
diluted
|
1,996,355
|
1,996,355
|
||||||||||||||
FISCAL
YEAR ENDED DECEMBER 31, 2009 COMPARED TO YEAR ENDED DECEMBER 31,
2008.
OPERATING
REVENUE
The
Company recorded a total of $44,153 consolidated revenue for the year ended
December 31, 2009 compared to $30,819 for the same corresponding period in
2008. The revenue for the year ended December 31, 2009 came from five
different clients, which is a 43% increase compared to the year ended December
31, 2008. The increase was mainly due to the result of new customers
being brought in during the year 2009. The consolidated gross profit
for the year ended December 31, 2009 was recorded at approximately $4.448, which
accounted for 10% of total revenue.
Consolidated
operating loss from operation decreased by $76,128 or 9% to $766,976 for the
year ended December 31, 2009 from $843,104 for the corresponding year 2008. The
decrease was caused by no provision for impairment of intangible assets, which
was offset by the increase in general and administrative expenses.
SALES AND
MARKETING EXPENSES
Sales and
Marketing expense increased to $23,731 or 54% of total revenue in fiscal year
2009, from $18,173 or 59% of total revenue in the corresponding period of 2008,
an increase of 31%. The increase was mainly due to implementation of our
promotion strategy.
GENERAL AND
ADMINISTRATIVE EXPENSES
General
and administrative expenses for the year ended December 31, 2009 increased to
$723,703 from $606,522 in the corresponding period of 2008, an increase of 19%.
The increase in general and administrative expense was mainly due to the result
of our growing business. The general and administrative expenses
included approximately $220,800 of salaries paid, $77,700 of rental expense,
$93,400 of computer technology expenses, $74,900 of depreciation expenses, and
$239,400 of consulting and professional fees.
PROVISION
FOR IMPAIRMENT
During
the 2009 fiscal year, we did not record any impairment charges relating to
online radio technology compared to $166,908 the same corresponding period in
2008.
NET LOSS
Net loss
was $807,942 for the year ended December 31, 2009, as compared to a loss of
$843,104 for the same corresponding period in 2008, a decrease of $35,162 or 4%.
A majority of the net loss was the result of the increase in selling, general
and administrative expenses.
LIQUIDITY
AND CAPITAL RESOURCES
For the
year ended December 31, 2009, the Company has incurred a net loss of $807,942
and experienced negative cash flows from operations of $700,669. The
continuation of the Company is dependent upon the continuing financial support
of shareholders and generating significant revenue and achieving profitability.
The actions involve certain cost-saving initiatives and growing strategies,
including rapid promotion and marketing the radio program in Hong Kong and
China. However, there is no assurance that the Company will be successful in
securing sufficient funds to sustain the operations. These and other factors
raise substantial doubt about the Company’s ability to continue as a going
concern.
As of
December 31, 2009, cash and cash equivalents totaled $53,850. This cash position
was the result of a combination of net cash used in operating activities in the
amount of $700,669, net cash used in investing activities in the amount of
$66,770 and the net cash provided by financing activities in the amount of
$821,232. The net cash used in operating activities was mainly the result from
the net loss of $807,942 offset by the depreciation expenses amounting to
$74,905 and deferred tax asset of $40,989. The net cash used in
investing activities was mainly the additional purchase of plant and equipment
of $66,770. The increase in financing activities was mainly advances from a
director of $821,232,
We
believe that the level of financial resources is a significant factor for our
future development and, accordingly, may choose at any time to raise capital
through private debt or equity financing to strengthen our financial position,
facilitate growth and provide us with additional flexibility to take
advantage of business opportunities.
OFF-BALANCE
SHEET ARRANGEMENTS
We have
no significant off-balance sheet arrangements that have or are reasonably likely
to have a current or future effect on our financial condition, changes in our
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to our
stockholders.
CRITICAL
ACCOUNTING POLICIES
In
presenting our financial statements in conformity with generally accepted
accounting principles, we are required to make estimates and assumptions that
affect the amounts reported therein. Several of the estimates and assumptions we
are required to make relate to matters that are inherently uncertain as they
pertain to future events. However, events that are outside of our control cannot
be predicted and, as such, they cannot be contemplated in evaluating such
estimates and assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact to our
consolidated results of operations, financial position and liquidity. We believe
that the estimates and assumptions we used when preparing our financial
statements were the most appropriate at that time. Presented below are those
accounting policies that we believe require subjective and complex judgments
that could potentially affect reported results. However, the majority of our
businesses operate in environments where we pay a fee for a service performed,
and therefore the results of the majority of our recurring operations are
recorded in our financial statements using accounting policies that are not
particularly subjective, nor complex.
Valuation
of long-lived assets
We review
our long-lived assets for impairment, including property, plant and equipment,
and identifiable intangibles with definite lives, whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be fully
recoverable. To determine recoverability of our long-lived assets, we evaluate
the probability that future undiscounted net cash flows will be greater than the
carrying amount of our assets. Impairment is measured based on the difference
between the carrying amount of our assets and their estimated fair
value.
Allowance
for doubtful accounts
We
perform ongoing credit evaluations of our customers and adjust credit limits
based upon customer payment history and current creditworthiness. We
continuously monitor collections and payments from our customers and maintain a
provision for estimated credit losses based upon our historical experience and
any specific customer collection issues that have been identified. While such
credit losses have historically been within our expectations and the provisions
established, we cannot guarantee that we will continue to experience credit loss
rates similar to those we have experienced in the past. Measurement of such
losses requires consideration of historical loss experience, including the need
to adjust for current conditions, and judgments about the probable effects of
relevant observable data, including present economic conditions such as
delinquency rates and financial health of specific customers.
Credit
Risk
Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash and trade accounts receivable. The
Company performs ongoing credit evaluations of its customers’ financial
condition, but does not require collateral to support such
receivables.
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 HK$ converted
to US$ on that date. The exchange rate could fluctuate depending on changes in
political and economic environments without notice.
UONLIVE
CORPORATION
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
|
Page
|
||
|
Report
of Independent Registered Public Accounting Firm
|
17
|
|
|
Consolidated
Balance Sheets
|
18
|
|
|
Consolidated
Statements of Operations And Comprehensive Loss
|
19
|
|
|
Consolidated
Statements of Cash Flows
|
20
|
|
|
Consolidated
Statements of Stockholders’ Deficit
|
21
|
|
|
Notes
to Consolidated Financial Statements
|
22
- 32
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board
of Directors and Stockholders of
Uonlive
Corporation
We have
audited the accompanying consolidated balance sheets of Uonlive Corporation and
its subsidiaries (“the Company”) as of December 31, 2009 and 2008, the related
consolidated statements of operations and comprehensive loss, cash flows and
stockholders’ deficit for the years ended December 31, 2009 and 2008. The
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits include consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, 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. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of the Company as of December
31, 2009 and 2008, and the results of operations and cash flows for the years
ended December 31, 2009 and 2008 in conformity with accounting principles
generally accepted in the United States of America.
The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has incurred substantial losses
and capital deficit, all of which raise substantial doubt about its ability to
continue as a going concern. Management’s plans in regard to these matters are
also described in Note 2. These consolidated financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
/s/ ZYCPA Company
Limited
ZYCPA
Company Limited
Certified
Public Accountants
Hong
Kong, China
March
29, 2010
9
FLOOR, CHINACHEM HOLLYWOOD CENTRE, 1-13 HOLLYWOOD ROAD, CENTRAL, HONG KONG
| Phone: (852) 2573 2296 Fax: (852) 2384 2022 | http://www.zycpa.us |
UONLIVE
CORPORATION
CONSOLIDATED
BALANCE SHEETS
AS
OF DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
|
As
of December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 53,850 | $ | 100 | ||||
|
Accounts
receivable
|
11,605 | 7,741 | ||||||
|
Accounts
receivable, related party
|
- | 3,871 | ||||||
|
Deposits
and other receivables
|
17,208 | 11,795 | ||||||
|
Total
current assets
|
82,663 | 23,507 | ||||||
|
Non-current
assets:
|
||||||||
|
Plant
and equipment, net
|
227,565 | 235,832 | ||||||
|
Intangible
asset, net
|
- | - | ||||||
|
Deferred
tax asset
|
- | 40,989 | ||||||
|
TOTAL
ASSETS
|
$ | 310,228 | $ | 300,328 | ||||
|
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable and accrued liabilities
|
$ | 25,014 | $ | 28,214 | ||||
|
Amount
due to a shareholder
|
1,914,513 | 1,094,211 | ||||||
|
Total
current liabilities
|
1,939,527 | 1,122,425 | ||||||
|
Non-current
liabilities:
|
||||||||
|
Note
payable to a shareholder
|
167,603 | 167,698 | ||||||
|
TOTAL
LIABILITIES
|
2,107,130 | 1,290,123 | ||||||
|
Commitments
and contingencies
|
||||||||
|
Stockholders’
deficit:
|
||||||||
|
Series
A, Convertible preferred stock, $0.001 par value; 10,000,000 shares
authorized, 500,000 shares issued and outstanding as of December 31, 2009
and 2008
|
500 | 500 | ||||||
|
Common
stock, $0.001 par value; 200,000,000 shares authorized; 1,996,355 shares
issued and outstanding as of December 31, 2009 and, 2008
|
1,996 | 1,996 | ||||||
|
Additional
paid-in capital
|
197,570 | 197,570 | ||||||
|
Accumulated
deficit
|
(1,993,036 | ) | (1,185,094 | ) | ||||
|
Accumulated
other comprehensive loss
|
(3,932 | ) | (4,767 | ) | ||||
|
Total
stockholders’ deficit
|
(1,796,902 | ) | (989,795 | ) | ||||
|
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$ | 310,228 | $ | 300,328 | ||||
See
accompanying notes to the consolidated financial statements.
UONLIVE
CORPORATION
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
|
Years
ended December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Revenue,
net
|
||||||||
|
-
Related party
|
$ | 15,480 | $ | 15,410 | ||||
|
-
Non-related party
|
28,673 | 15,409 | ||||||
|
Total
revenues, net
|
44,153 | 30,819 | ||||||
|
Cost of revenue
(exclusive of depreciation)
|
39,705 | 23,602 | ||||||
|
Gross
profit
|
4,448 | 7,217 | ||||||
|
Operating
expenses:
|
||||||||
|
Sales
and marketing
|
23,731 | 18,173 | ||||||
|
Consulting
and professional fee
|
23,990 | 58,718 | ||||||
|
Impairment
charge on intangible asset
|
- | 166,908 | ||||||
|
General
and administrative
|
723,703 | 606,522 | ||||||
|
Total
operating expenses
|
771,424 | 850,321 | ||||||
|
Loss
before income taxes
|
(766,976 | ) | (843,104 | ) | ||||
|
Income
tax expense
|
(40,966 | ) | - | |||||
|
NET
LOSS
|
$ | (807,942 | ) | $ | (843,104 | ) | ||
|
Other
comprehensive income (loss):
|
||||||||
|
-
Foreign currency translation gain (loss)
|
835 | (4,897 | ) | |||||
|
COMPREHENSIVE
LOSS
|
$ | (807,107 | ) | $ | (848,001 | ) | ||
|
Net
loss per share – basic and diluted
|
$ | (0.40 | ) | $ | (0.42 | ) | ||
|
Weighted
average shares outstanding during the year – basic and
diluted
|
1,996,355 | 1,996,355 | ||||||
See
accompanying notes to the consolidated financial statements.
UONLIVE
CORPORATION
CONSOLIDATED
STATEMENT OF CASH FLOWS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”))
|
Years
ended December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Cash
flow from operating activities:
|
||||||||
|
Net
loss
|
$ | (807,942 | ) | $ | (843,104 | ) | ||
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
|
Depreciation
|
74,905 | 57,293 | ||||||
|
Impairment
charge on intangible asset
|
- | 166,908 | ||||||
|
Deferred
tax expense
|
40,989 | |||||||
|
Changes
in operating assets and liabilities:
|
||||||||
|
Accounts
receivable
|
- | (1,284 | ) | |||||
|
Deposits
and other receivables
|
(5,422 | ) | (11,740 | ) | ||||
|
Accounts
payable and accrued liabilities
|
(3,199 | ) | 8,154 | |||||
|
Amount
due to a related company
|
- | (57,785 | ) | |||||
|
Net
cash used in operating activities
|
(700,669 | ) | (681,558 | ) | ||||
|
Cash
flows from investing activities:
|
||||||||
|
Purchase
of plant and equipment
|
(66,770 | ) | (79,028 | ) | ||||
|
Net
cash used in investing activities
|
(66,770 | ) | (79,028 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Advances
from a shareholder
|
821,232 | 710,505 | ||||||
|
Net
cash provided by financing activities
|
821,232 | 710,505 | ||||||
|
Effect
of exchange rate change on cash and cash equivalents
|
(43 | ) | 181 | |||||
|
NET
CHANGE IN CASH AND CASH EQUIVALENTS
|
53,750 | (49,900 | ) | |||||
|
CASH
AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
100 | 50,000 | ||||||
|
CASH
AND CASH EQUIVALENTS, END OF YEAR
|
$ | 53,850 | $ | 100 | ||||
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
|
Cash
paid for income taxes
|
$ | - | $ | - | ||||
|
Cash
paid for interest
|
$ | - | $ | - | ||||
See
accompanying notes to the consolidated financial statements
UONLIVE
CORPORATION
CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ DEFICIT
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
|
Series
A, Convertible preferred stock
|
Common
stock
|
|||||||||||||||||||||||||||||||
| No. of shares | Amount | No. of shares | Amount | Additional paid in capital | Accumulated deficit | Accumulated other comprehensive loss | Total stockholders’ deficit | |||||||||||||||||||||||||
|
Balance
as of January 1, 2008, as restated
|
500,000 | $ | 500 | 1,500,317 | $ | 1,500 | $ | 148,500 | $ | (292,524 | ) | $ | 130 | $ | (141,894 | ) | ||||||||||||||||
|
Share
issued for reverse acquisition
|
- | - | 496,038 | 496 | 49,070 | (49,466 | ) | - | 100 | |||||||||||||||||||||||
|
Net
loss for the year
|
- | - | - | - | - | (843,104 | ) | - | (843,104 | ) | ||||||||||||||||||||||
|
Foreign
currency translation adjustment
|
- | - | - | - | - | - | (4,897 | ) | (4,897 | ) | ||||||||||||||||||||||
|
Balance
as of December 31, 2008
|
500,000 | $ | 500 | 1,996,355 | $ | 1,996 | $ | 197,570 | $ | (1,185,094 | ) | $ | (4,767 | ) | $ | (989,795 | ) | |||||||||||||||
|
Net
loss for the year
|
- | - | - | - | - | (807,942 | ) | - | (807,942 | ) | ||||||||||||||||||||||
|
Foreign
currency translation adjustment
|
- | - | - | - | - | - | 835 | 835 | ||||||||||||||||||||||||
|
Balance
as of December 31, 2009
|
500,000 | $ | 500 | 1,996,355 | $ | 1,996 | $ | 197,570 | $ | (1,993,036 | ) | $ | (3,932 | ) | $ | (1,796,902 | ) | |||||||||||||||
See
accompanying notes to the consolidated financial statements
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
1. DESCRIPTION
OF BUSINESS AND ORGANIZATION
Uonlive
Corporation (“UOLI” or the “Company”) was incorporated under the laws of the
State of Nevada on January 29, 1998 as Weston International Development
Corporation. On July 28, 1998, the name was changed to Txon International
Development Corporation. On September 15, 2000, the Company changed to its
company name to China World Trade Corporation. On July 2, 2008, the Company
further changed its company to Uonlive Corporation.
On May
15, 2009, the Company approved the 1 for 100 reverse split of its common stock.
All common stock and per share data for all periods presented in the
accompanying consolidated financial statements have been restated to give effect
to the reverse stock split.
UOLI,
through its subsidiaries, mainly engages in the provision of online multimedia
and advertising service and the operation of an online radio station in Sheung
Wan, Hong Kong. All the operations and assets are located in Hong
Kong.
Business summary of
subsidiaries
|
Name
|
Place
of incorporation
and
kind of
legal
entity
|
Principal
activities
and
place of operation
|
Particulars
of issued/
registered
share
capital
|
Effective
interest
held
|
||||
|
Parure
Capital Limited (“PCL”)
|
British
Virgin Island (“BVI”), a limited liability company
|
Investment
holding in Hong Kong
|
10,000
issued shares of HK$1 each
|
100%
|
||||
|
Uonlive
Limited (“Uonlive”)
|
Hong
Kong, a limited liability company
|
Provision
of advertising service and operation of a net radio in Hong
Kong
|
10,000
issued shares of HK$1 each
|
100%
|
UOLI and
its subsidiaries are hereinafter collectively referred to as “the
Company”.
2. GOING
CONCERN UNCERTAINTIES
These
consolidated financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the realization of assets
and the discharge of liabilities in the normal course of business for the
foreseeable future.
For the
year ended December 31, 2009, the Company has suffered from a net loss of
$807,942 and experienced negative cash flows from operations of $700,669 with an
accumulated deficit of $1,993,036 as of that date. The continuation of the
Company is dependent upon the continuing financial support of shareholders and
generating significant revenue and achieving profitability. The actions involve
certain cost-saving initiatives and growing strategies, including rapid
promotion and marketing the radio program in Hong Kong and China. However, there
is no assurance that the Company will be successful in securing sufficient funds
to sustain the operations.
These and
other factors raise substantial doubt about the Company’s ability to continue as
a going concern. These consolidated financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and
classification of assets or the amounts and classification of liabilities that
may result in the Company not being able to continue as a going
concern.
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
3. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
l
|
Basis
of presentation
|
These
accompanying consolidated financial statements have been prepared in accordance
with generally accepted accounting principles in the United States of
America.
|
l
|
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.
|
l
|
Basis
of consolidation
|
The
consolidated financial statements include the financial statements of UOLI and
its subsidiaries. All significant inter-company balances and transactions within
the Company have been eliminated upon consolidation.
|
l
|
Cash
and cash equivalents
|
Cash and
cash equivalents are carried at cost and maintained in bank deposit accounts
with an original maturity of three months or less to be cash
equivalents.
|
l
|
Accounts
receivable
|
Accounts
receivable consist primarily of trade receivables. Accounts receivable are
recognized and carried at original invoiced amount less an allowance for any
uncollectible accounts. Management reviews and adjusts this allowance
periodically based on historical experience, current economic climate as well as
its evaluation of the collectibility of outstanding accounts. The Company
evaluates the credit risks of its customers utilizing historical data and
estimates of future performance. For the years ended December 31, 2009 and 2008,
the Company did not provide an allowance for doubtful accounts, nor have been
any write-offs.
|
l
|
Plant
and equipment
|
Plant and
equipment are stated at cost less accumulated depreciation and accumulated
impairment losses, if any. Depreciation is calculated on the straight-line basis
over the following expected useful lives from the date on which they become
fully operational:
|
Depreciable life
|
||
|
Furniture,
fittings and office equipment
|
5
years
|
|
|
Computer
and broadcasting equipment
|
5
years
|
Expenditure
for maintenance and repairs is expensed as incurred. The gain or loss on the
disposal of plant and equipment is the difference between the net sales proceeds
and the carrying amount of the relevant assets and is recognized in the
statement of operations.
|
l
|
Intangible
asset
|
Intangible
asset represents the acquisition cost of online radio broadcasting technology
and its domain name paid to Mr. Samuel Tsun, a shareholder and director of the
Company at the fair value of $167,698. Purchased technical know-how includes
webpage development cost, acquisition cost of domain name of
www.uonlive.com
,
online radio technology, broadcasting technical and procedural manuals, with an
indefinite useful life.
In
accordance with the provisions of Accounting Standards Codification ("ASC") ASC
Topic 350-50,
“General
Intangibles Other Than Goodwill”
(“ASC Topic 350”), if an intangible
asset is determined to have an indefinite useful life, it should not be
amortized until its useful life is determined to be no longer indefinite. The
asset’s remaining useful life should be reviewed each reporting period. If such
an asset is later determined to have a finite useful life, the asset should be
tested for impairment. That asset should then be amortized prospectively over
its estimated remaining useful life and accounted for in the same way as
intangible assets subject to amortization. An intangible asset that is not
subject to amortization should be tested for impairment at least
annually.
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
The
Company evaluates the recoverability of identifiable intangible assets whenever
events or changes in circumstances indicate that an intangible asset’s carrying
amount may not be recoverable. Such circumstances could include, but are not
limited to: (1) a significant decrease in the market value of an asset, (2) a
significant adverse change in the extent or manner in which an asset is used, or
(3) an accumulation of costs significantly in excess of the amount originally
expected for the acquisition of an asset. The Company measures the carrying
amount of the asset against the estimated undiscounted future cash flows
associated with it. Should the sum of the expected future net cash flows be less
than the carrying value of the asset being evaluated, an impairment loss would
be recognized. The impairment loss would be calculated as the amount by which
the carrying value of the asset exceeds its fair value. The evaluation of asset
impairment requires the Company to make assumptions about future cash flows over
the life of the asset being evaluated. These assumptions require significant
judgment and actual results may differ from assumed and estimated
amounts.
Based on
the results of the Company's discounted cash flows calculation, the Company
evaluated that the carrying value of the intangible asset exceeded its fair
value and recognized a full impairment loss of $166,908 for the year ended
December 31, 2008.
|
l
|
Impairment
of long-lived assets
|
Long-lived
assets primarily include plant and equipment and intangible asset. In accordance
with ASC Topic 360-10-5, “
Impairment or Disposal of Long-Lived
Assets”
, the Company reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of
the assets may not be fully recoverable. If the total of the expected
undiscounted future net cash flows is less than the carrying amount of the
asset, a loss is recognized for the difference between the fair value and
carrying amount of the asset.
|
l
|
Revenue
recognition
|
The
Company derives revenues from the sale of advertising airtime to customers.
Revenue is recognized when the following four revenue criteria are met:
persuasive evidence of an arrangement exists, delivery has occurred, the selling
price is fixed or determinable, and collectibility is reasonably assured, as
defined by ASC Topic 605, “
Revenue
Recognition
”.
|
l
|
Cost
of revenue
|
Cost of
revenue included IT service cost for maintenance and operating the online radio
domain and rent charge of radio studio in Hong Kong and the PRC.
|
l
|
Advertising
expenses
|
Advertising
costs are expensed as incurred under ASC Topic 720-35,
“Advertising Costs”.
Advertising
expense, included in
sales and marketing was approximately $22,198 and $18,173 for the years ended
December 31, 2009 and 2008.
|
l
|
Comprehensive
loss
|
ASC Topic
220
, “Comprehensive
Income”
, establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income as defined
includes all changes in equity during a period from non-owner sources.
Accumulated comprehensive income, as presented in the accompanying consolidated
statements of stockholders’ deficit consists of changes in unrealized gains and
losses on foreign currency translation. This comprehensive income is not
included in the computation of income tax expense or benefit.
|
l
|
Income
taxes
|
The
Company adopts the ASC Topic 740,
“Income Taxes”
regarding
accounting for uncertainty in income taxes which prescribes the recognition
threshold and measurement attributes for financial statement recognition and
measurement of tax positions taken or expected to be taken on a tax return. In
addition, the guidance requires the determination of whether the benefits of tax
positions will be more likely than not sustained upon audit based upon the
technical merits of the tax position. For tax positions that are determined to
be more likely than not sustained upon audit, a company recognizes the largest
amount of benefit that is greater than 50% likely of being realized upon
ultimate settlement in the financial statements. For tax positions that are not
determined to be more likely than not sustained upon audit, a company does not
recognize any portion of the benefit in the financial statements. The guidance
provides for de-recognition, classification, penalties and interest, accounting
in interim periods and disclosure.
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
For the
years ended December 31, 2009 and 2008, the Company did not have any interest
and penalties associated with tax positions. As of December 31, 2009 and 2008,
the Company did not have any significant unrecognized uncertain tax
positions.
The
Company conducts major businesses in Hong Kong and is subject to tax in this
jurisdiction. As a result of its business activities, the Company files tax
returns that are subject to examination by the foreign tax
authority.
|
l
|
Net
loss per share
|
The
Company calculates net loss per share in accordance with ASC Topic 260,
“Earnings per Share.”
Basic
loss per share is computed by dividing the net loss by the weighted-average
number of common shares outstanding during the period. Diluted loss per share is
computed similar to basic loss per share except that the denominator is
increased to include the number of additional common shares that would have been
outstanding if the potential common stock equivalents had been issued and if the
additional common shares were dilutive.
|
l
|
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 consolidated statement of
operations.
The
reporting currency of the Company is the United States Dollars ("US$") and the
accompanying consolidated financial statements have been expressed in US$. In
addition, the Company’s subsidiaries in Hong Kong maintain their books and
record in their local currency, Hong Kong Dollars ("HK$"), which is functional
currencies as being the primary currency of the economic environment in which
their operations are conducted.
In
general, for consolidation purposes, assets and liabilities of its subsidiaries
whose functional currency is not US$ are translated into US$, in accordance with
ASC Topic 830-30, “
Translation
of Financial Statement
”
, using the exchange rate on
the balance sheet date. Revenues and expenses are translated at average rates
prevailing during the period. The gains and losses resulting from translation of
financial statements of foreign subsidiaries are recorded as a separate
component of accumulated other comprehensive income within the statement of
stockholders’ deficit.
Translation
of amounts from HK$ into US$1 has been made at the following exchange rates for
the respective period:
|
2009
|
2008
|
|||||||
|
Year-end
rates HK$:US$1 exchange rate
|
7.7551 | 7.7507 | ||||||
|
Annual
average rates HK$:US$1 exchange rate
|
7.7522 | 7.7874 | ||||||
|
l
|
Segment
reporting
|
ASC Topic
280,
“Segment
Reporting”
establishes standards for reporting information about
operating segments on a basis consistent with the Company’s internal
organization structure as well as information about geographical areas, business
segments and major customers in financial statements. For the years ended
December 31, 2009 and 2008, the Company operates in one reportable
segment.
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
|
l
|
Related
parties
|
For the
purposes of these financial statements, parties are considered to be related if
one party has the ability, directly or indirectly, to control the party or
exercise significant influence over the party in making financial and operating
decisions, or vice versa, or where the Company and the party are subject to
common control or common significant influence. Related parties may be
individuals or other entities.
|
l
|
Fair
value measurement
|
ASC Topic
820, “
Fair Value Measurements
and Disclosures
” ("ASC 820") establishes a new framework for measuring
fair value and expands related disclosures. Broadly, ASC 820 framework requires
fair value to be determined based on the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction
between market participants. ASC 820 establishes a three-level valuation
hierarchy based upon observable and non-observable inputs. These tiers include:
Level 1, defined as observable inputs such as quoted prices in active markets;
Level 2, defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable; and Level 3, defined as unobservable
inputs in which little or no market data exists, therefore requiring an entity
to develop its own assumptions.
For
financial assets and liabilities, fair value is the price the Company would
receive to sell an asset or pay to transfer a liability in an orderly
transaction with a market participant at the measurement date. In the absence of
active markets for the identical assets or liabilities, such measurements
involve developing assumptions based on market observable data and, in the
absence of such data, internal information that is consistent with what market
participants would use in a hypothetical transaction that occurs at the
measurement date.
|
l
|
Fair
value of financial
instruments
|
The
carrying value of the Company’s financial instruments include cash and cash
equivalents, accounts receivable, deposits and other receivables, accounts
payable and accrued liabilities, amounts due to a shareholder. Fair values were
assumed to approximate carrying values for these financial instruments because
they are short term in nature and their carrying amounts approximate at fair
values.
|
l
|
Recent
accounting pronouncements
|
The
Company has reviewed all recently issued, but not yet effective, accounting
pronouncements and does 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.
In
September 2009, Accounting Standards Codification (“ASC”) became the source of
authoritative U.S. GAAP recognized by the Financial Accounting Standards Board
(“FASB”) for nongovernmental entities, except for certain FASB Statements not
yet incorporated into ASC. Rules and interpretive releases of the SEC under
federal securities laws are also sources of authoritative U.S. GAAP for
registrants. The discussion below includes the applicable ASC
reference.
The
Company adopted ASC Topic 810-10, “
Consolidation
” (formerly SFAS
No. 160, “
Non-controlling
Interests in Consolidated Financial Statements – an amendment of ARB No.
51
”) effective January 2, 2009. ASC Topic 810-10 changes the manner of
presentation and related disclosures for the non-controlling interest in a
subsidiary (formerly referred to as a minority interest) and for the
deconsolidation of a subsidiary. The adoption of these sections did not have a
material impact on the Company’s financial statements.
ASC Topic
815-10, “
Derivatives and
Hedging
” (formerly SFAS No. 161, “
Disclosures about Derivative
Instruments and Hedging Activities
”) was adopted by the Company effective
January 2, 2009. The guidance under ASC Topic 815-10 changes the manner of
presentation and related disclosures of the fair values of derivative
instruments and their gains and losses.
In April
2009, the FASB issued an update to ASC Topic 820-10, “
Fair Value Measurements and
Disclosures
” (“ASC 820-10”) (formerly FASB Staff Position No. SFAS 157-4,
“
Determining Fair Value When
the Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly
”). The
standard provides additional guidance on estimating fair value in accordance
with ASC 820-10 when the volume and level of transaction activity for an asset
or liability have significantly decreased in relation to normal market activity
for the asset or liability have significantly decreased and includes guidance on
identifying circumstances that indicate if a transaction is not orderly. The
Company adopted this pronouncement effective April 1, 2009 with no impact on its
financial statements.
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
In April
2009, the FASB issued FSP SFAS No. 107-1, “
Disclosures about Fair Value of
Financial Instruments
” (“ASC 825-10”). ASC 825-10 requires fair value of
financial instruments
disclosure for interim reporting
periods of publicly traded companies as well as in annual financial statements.
ASC 825-10 is effective for interim periods ending after June 15, 2009 and was
adopted by the Company in the second quarter of 2009. There was no material
impact to the Company’s financial statements as a result of the adoption of ASC
825-10.
In June
2009, the FASB finalized SFAS No. 167, “
Amending FASB interpretation No.
46(R)
”, which was included in ASC Topic 810-10-05 “
Variable Interest Entities
”.
The provisions of ASC Topic 810-10-05 amend the definition of the primary
beneficiary of a variable interest entity and will require the Company to make
an assessment each reporting period of its variable interests. The provisions of
this pronouncement are effective January 1, 2010. The Company is evaluating the
impact of the statement on its financial statements.
In July
2009, the FASB issued SFAS No. 168, “
The Hierarchy of Generally Accepted
Accounting Principles
”. SFAS 168 codified all previously issued
accounting pronouncements, eliminating the prior hierarchy of accounting
literature, in a single source for authoritative U.S. GAAP recognized by the
FASB to be applied by nongovernmental entities. SFAS 168, now ASC Topic 105-10
“
Generally Accepted Accounting
Principles
”, is effective for financial statements issued for interim and
annual periods ending after September 15, 2009. The adoption of this
pronouncement did not have an effect on the Company’s financial
statements.
In August
2009, the FASB issued an update of ASC Topic 820, “
Measuring Liabilities at Fair Value
”. The new guidance provides clarification that in circumstances in which
a quoted price in an active market for the identical liability is not available,
a reporting entity is required to measure fair value using prescribed
techniques. The Company adopted the new guidance in the third quarter of 2009
and it did not materially affect the Company’s financial position and results of
operations.
In
October 2009, the FASB issued Accounting Standards Update (“ASU”) No. 2009-13,
“
Revenue Recognition (Topic
605): Multiple-Deliverable Revenue Arrangements (a consensus of the FASB
Emerging Issues Task Force)
” which amends ASC 605-25, “
Revenue Recognition:
Multiple-Element Arrangements
.” ASU No. 2009-13 addresses how to
determine whether an arrangement involving multiple deliverables contains more
than one unit of accounting and how to allocate consideration to each unit of
accounting in the arrangement. This ASU replaces all references to fair value as
the measurement criteria with the term selling price and establishes a hierarchy
for determining the selling price of a deliverable. ASU No. 2009-13 also
eliminates the use of the residual value method for determining the allocation
of arrangement consideration. Additionally, ASU No. 2009-13 requires expanded
disclosures. This ASU will become effective for us for revenue arrangements
entered into or materially modified on or after April 1, 2011. Earlier
application is permitted with required transition disclosures based on the
period of adoption. The Company is currently evaluating the application date and
the impact of this standard on its financial statements.
4. DEPOSITS
AND OTHER RECEIVABLES
Deposits
and other receivables consist of the following:
|
As
of December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Prepaid
operating expenses
|
$ | 17,208 | $ | 11,749 | ||||
|
Deposits
|
- | 46 | ||||||
| $ | 17,208 | $ | 11,795 | |||||
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
5. PLANT
AND EQUIPMENT
Plant and
equipment consist of the following:
|
As
of December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Furniture,
fitting and office equipment
|
$ | 107,329 | $ | 61,214 | ||||
|
Computer
and broadcasting equipment
|
283,272 | 262,617 | ||||||
|
Exchange
translation difference
|
1,875 | 2,086 | ||||||
| 392,476 | 325,917 | |||||||
|
Less:
accumulated depreciation
|
(164,493 | ) | (89,588 | ) | ||||
|
Less:
exchange translation difference
|
(418 | ) | (497 | ) | ||||
|
Plant
and equipment, net
|
$ | 227,565 | $ | 235,832 | ||||
Depreciation
expense for the years ended December 31, 2009 and 2008 was $74,905 and $57,293,
respectively.
6. INTANGIBLE
ASSET
During
the fiscal year 2008, the Company tested for impairment in accordance with ASC
Topic 360-10-5. Based on the results of the Company's discounted cash flows
calculation, the Company evaluated whether or not there was an impairment loss
by comparing the fair value of the intangible asset to its carrying value. Since
the carrying value of the intangible asset exceeded its fair value, the Company
recognized an impairment loss of $166,908 for the year ended December 31,
2008.
7. AMOUNT
DUE TO AND NOTE PAYABLE TO A SHAREHOLDER
(a) Amount
due to a shareholder
As of
December 31, 2009 and 2008, the balances totaling $1,914,513 and $1,094,211
represented temporary advances for working capital purposes from a major
shareholder, Mr. Samuel Tsun, which was unsecured and interest free, with no
fixed terms of repayment.
(b) Note
payable to a shareholder
As of
December 31, 2009 and 2008, the balance due to a shareholder amounted $167,603
and $167,698, which was unsecured, interest free, with no fixed repayment
term.
8. STOCKHOLDERS’
EQUITY
On May
15, 2009, the Company approved the 1 for 100 reverse split of its common stock.
All common stock and per share data for all periods presented in the
accompanying consolidated financial statements have been restated to give effect
to the reverse stock split.
As a
result of reverse stock split, the Company had a total of 1,996,355 shares of
its common stock issued and outstanding as of December 31, 2009.
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
9. INCOME
TAXES
For the
years ended December 31, 2009 and 2008, the local (“the United States of
America”) and foreign components of loss before income taxes were comprised of
the following:
|
Years
ended December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Tax
jurisdictions:
|
||||||||
|
-
Local
|
$ | - | $ | - | ||||
|
-
Foreign
|
(766,976 | ) | (843,104 | ) | ||||
|
Loss
before income taxes
|
$ | (766,976 | ) | $ | (843,104 | ) | ||
The
provision for income taxes consisted of the following:
|
Years
ended December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Current:
|
||||||||
|
-
Local
|
$ | - | $ | - | ||||
|
-
Foreign
|
- | - | ||||||
|
Deferred:
|
||||||||
|
-
Local
|
- | - | ||||||
|
-
Foreign
|
40,966 | - | ||||||
|
Provision
for income taxes
|
$ | 40,966 | $ | - | ||||
The
Company generated an operating loss for the years ended December 31, 2009 and
2008 and did not record income tax expense. The Company has operations in
various countries and is subject to tax in the jurisdictions in which they
operate, as follows:
United
States of America
UOLI is
registered in the State of Nevada and is subject to United States of America tax
law. No provision for income taxes have been made as UOLI has generated no
taxable income for reporting years.
British
Virgin Island
Under the
current BVI law, the Company’s subsidiary, PCL is not subject to income
taxes.
Hong
Kong
The
Company’s subsidiary, Uonlive is subject to Hong Kong Profits Tax at the
statutory rate of 16.5% on its assessable income for the years ended December
31, 2009 and 2008, respectively. For the years ended December 31, 2009 and 2008,
Uonlive incurred an operating loss of $572,408 and $668,706 for income tax
purposes.
For the
year ended December 31, 2009, the Company has written off the deferred tax
assets of $40,966 relating to net operating loss carryforwards from Hong Kong
tax regime, because management believes it is more likely than not that the
deferred tax assets will not be fully realizable in the future.
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
The
following table sets forth the significant components of the aggregate net
deferred tax assets of the Company as of December 31, 2009 and
2008:
|
As
of December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Deferred
tax assets:
|
||||||||
|
Net
operating loss carryforwards
|
$ | 216,178 | $ | 167,221 | ||||
|
Less:
valuation allowance
|
(216,178 | ) | (126,232 | ) | ||||
|
Net
deferred tax assets
|
$ | - | $ | 40,989 | ||||
For the
year ended December 31, 2009, the Company has provided for a valuation allowance
of $216,178 against the deferred tax assets of $216,178 on the expected future
tax benefits from the net operating loss carryforwards as the management
believes it is more likely than not that these assets will not be realized in
the future. The valuation allowance is increased by $89,946, primarily relating
to net operating loss carryforwards from the foreign tax regime.
10. NET
LOSS PER SHARE
Basic net
income per share is computed using the weighted average number of the ordinary
shares outstanding during the year. Diluted net income per share is computed
using the weighted average number of ordinary shares and ordinary share
equivalents outstanding during the year. On May 15, 2009, the Company approved
the 1 for 100 reverse split of its common stock. All common stock and per share
data for all periods presented in the accompanying consolidated financial
statements have been restated to give effect to the reverse stock
split.
The
following table sets forth the computation of basic and diluted net loss per
share for the years indicated:
|
Years
ended December 31,
|
||||||||
|
2009
|
2008
|
|||||||
|
Basic
and diluted net loss per share calculation
|
||||||||
|
Numerator:
|
||||||||
|
Net
loss in computing basic net loss per share
|
$ | 807,942 | $ | 843,104 | ||||
|
Denominator:
|
||||||||
|
Weighted
average ordinary shares outstanding
|
1,996,355 | 1,996,355 | ||||||
|
Basic
and diluted net loss per share
|
$ | 0.40 | $ | 0.42 | ||||
Since the
Company reported a net loss for the years ended December 31, 2009 and 2008, all
potential common shares have been excluded from the computation of the dilutive
net loss per share for all periods presented because the effect would have been
anti-dilutive.
11. RELATED
PARTY TRANSACTIONS
(a) Accounts
receivable and sales – related company
For the
years ended December 31, 2009 and 2008, the Company earned sales revenue of
$15,480 and $15,410 from a related company, Dbtronix (Far East) Ltd., which was
controlled by Mr. Samuel Tsun, a director and a major shareholder of the Company
in a normal course of business.
As of
December 31, 2009 and 2008, accounts receivable from a related party was
amounted to $0 and $3,871.
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
(b) IT
service cost paid to a related company
For the
years ended December 31, 2009 and 2008, the Company paid IT service cost of
$34,055 and $17,978, respectively to the related company, which was controlled
by Mr. Samuel Tsun, a director of the Company at the current market value in a
normal course of business.
(c) Rent
charge paid to a related company
For the
years ended December 31, 2009 and 2008, the Company paid rent charge of $89,007
and $77,048, respectively to the related company, which was controlled by Mr.
Samuel Tsun, a director of the Company at the current market value in a normal
course of business.
12. CONCENTRATIONS
OF RISK
The
Company is exposed to the following concentrations of risk:
(a) Major
customers
For the
years ended December 31, 2009 and 2008, a customer who accounts for 10% or more
of the Company’s revenues and its outstanding balance as at year-end dates, are
presented as follows:
|
Year
ended December 31, 2009
|
December
31, 2009
|
|||||||||||
| Revenue |
Percentage
of
revenue
|
Accounts
receivable
|
||||||||||
|
Customer
A, related party
|
$ | 15,480 | 35 | % | $ | - | ||||||
|
Customer
B
|
11,610 | 26 | % | 11,605 | ||||||||
|
Customer
D
|
13,542 | 31 | % | - | ||||||||
|
Total:
|
$ | 40,632 | 92 | % | $ | 11,605 | ||||||
|
Year
ended December 31, 2008
|
December
31, 2008
|
|||||||||||
|
Revenue
|
Percentage
of
revenue
|
Accounts
receivable
|
||||||||||
|
Customer
A, related party
|
$ | 15,410 | 50 | % | $ | 3,871 | ||||||
|
Customer
B
|
7,705 | 25 | % | 7,741 | ||||||||
|
Customer
C
|
7,704 | 25 | % | - | ||||||||
|
Total:
|
$ | 30,819 | 100 | % | $ | 11,612 | ||||||
(b) Major
vendors
For the
years ended December 31, 2009 and 2008, there is no vendor who accounts for 10%
or more of the Company’s purchases.
(c) Credit
risk
Financial
instruments that potentially subject the Company to significant concentrations
of credit risk consist principally of cash and trade accounts receivable. The
Company performs ongoing credit evaluations of its customers’ financial
condition, but does not require collateral to support such
receivables.
UONLIVE
CORPORATION
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008
(Currency
expressed in United States Dollars (“US$”), except for number of
shares)
(d) Exchange
rate risk
The
Company cannot guarantee that the current exchange rate will remain steady;
therefore there is a possibility that the Company could post the same amount of
profit for two comparable periods and because of the fluctuating exchange rate
actually post higher or lower profit depending on exchange rate of HK$ converted
to US$ on that date. The exchange rate could fluctuate depending on changes in
political and economic environments without notice.
13. COMMITMENTS
AND CONTINGENCIES
(a) Operating
lease commitments
The
Company rented office spaces and recording studios under several non-cancelable
operating lease agreements in Hong Kong and the PRC for various terms ranging
from one to three years, with fixed monthly rentals, expiring through March
2011. Costs incurred under these operating leases are recorded as rental expense
and totaled approximately $97,732 and $77,048 for the years ended December 31,
2009 and 2008.
As of
December 31, 2009, the future minimum rental payments due under various
non-cancelable operating leases in the next two years are as
follows:
|
Years
ending December 31:
|
||||
|
2010
|
$ | 92,842 | ||
|
2011
|
23,211 | |||
|
Total:
|
$ | 116,053 | ||
(b) Royalty
fee commitments
The
Company is committed to pay an annual fee to the Composers and Authors Society
of Hong Kong Limited for music playing right on its net radio portal with a term
of 2 years, expiring December 31, 2010. As of December 31, 2009, the Company has
future minimum contingent payment of $11,605 in the next 12 months.
None
Pursuant
to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”),
the Company carried out an evaluation, with the participation of the Company’s
management, including the Company’s Chief Executive Officer, Tsun Sin Man Samuel
(“CEO”) and Chief Financial Officer, Hui Chi Kit (“CFO”), of the effectiveness
of the Company’s disclosure controls and procedures (as defined under Rule
13a-15(e) or 15d-15(e) under the Exchange Act) as of the end of the period
covered by this report. Based upon that evaluation, the Company’s CEO and CFO
concluded that the Company’s disclosure controls and procedures were effective
to provide reasonable assurance that information required to be disclosed by the
Company in the reports that the Company files or submits under the Exchange Act,
is recorded, processed, summarized and reported, within the time periods
specified in the SEC’s rules, regulations and forms, and that such information
is accumulated and communicated to the Company’s management, including the
Company’s CEO and CFO, as appropriate, to allow timely decisions regarding
required disclosure.
Management’s Report on
Internal Control over Financial Reporting
Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting for the company in accordance with Rules
13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over
financial reporting is designed to provide reasonable assurance regarding the
(i) effectiveness and efficiency of operations, (ii) reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles, and (iii) compliance
with applicable laws and regulations.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Management
conducted an evaluation of the effectiveness of the Company’s internal control
over financial reporting based on the criteria set forth in Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Based on this evaluation, management has concluded
that the Company’s internal control over financial reporting was effective
as of December 31, 2009.
This
annual report does not include an attestation report of the Company's registered
public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered
public accounting firm pursuant to temporary rules of the SEC that permit the
Company to provide only management's report in this annual report.
Changes in Internal
Controls
During
the year ended December 31, 2009 there were no changes in our internal control
over financial reporting that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
None.
Directors
and Executive Officers
Our
Bylaws provide that we shall have that number of directors determined by the
majority vote of the board of directors. Currently we have four directors. Each
director will serve until our next annual shareholder meeting. Directors are
elected for one-year terms. Our Board of Directors elects our officers at the
regular annual meeting of the Board of Directors following the annual meeting of
shareholders. Vacancies may be filled by a majority vote of the remaining
directors then in office. Our directors and executive officers are as
follows:
|
Name
|
Age
|
Position
|
|
Tsun
Sin Man Samuel
|
42
|
Chairman,
Chief Executive Officer, Director
|
|
Hui
Chi Kit
|
34
|
Chief
Financial Officer
|
|
Wong
Kin Yu Beta
|
29
|
Chief
Operating Officer, Director
|
|
Carol
Kwok
|
31
|
Director
|
|
Zeng
Yang
|
26
|
Director
|
Backgrounds
of Directors
Executive
Officers and Directors
Mr.
Tsun Sin Man Samuel, age 42, Director, Chairman & Chief Executive
Officer
Mr. Tsun
Sin Man Samuel, who has more than 20 year experience in the acoustic components
and ultra-sonic products market, served as the Chief Executive Officer of DB
Products Ltd for the period 1988 to 2008, a company specializing in the
manufacturing of acoustic components. He also served as CEO of DBtronix (Far
East) Ltd. Headquartered in Hong Kong, DB Products Ltd. has
introduced over 4,000 models of acoustic components including Magnetic Buzzer,
Piezo Element Mechanical Buzzer and speakers into the market place. He
established Uonlive Limited on April 2007, which is the first online radio
station in Hong Kong.
Mr.
Hui Chi Kit, age 34, Chief Financial Officer
Mr. Hui
Chi Kit, is the Chief Financial Officer of Uonlive Limited since April 2007. He
is also the Accounts Manager of DB Products Ltd., which he joined in
1997. Mr. Hui is experienced in accounting and specializes in the
manufacturing sector. Before joining DB Products, Mr. Hui was awarded the
Certificate of HKCEE from the Hong Kong Education Board when he graduated from
St Paul’s College.
Mr.
Wong Kin Yu Beta, age 29, Chief Operating Officer, Director
Mr. Wong
was appointed as Chief Operating Officer of Uonlive Ltd. He was the director of
Shining Pearl (HK) Co. Ltd. and the company secretary of Hong Kong United Youth
Association Ltd. for the period 2006 to 2007. Mr. Wong graduated from
Jinan University and was awarded the Bachelor of Business Administration degree
in 2005.
Ms.
Carol Kwok, age 31, Director
Ms, Kwok
has served as the Director of Administration of DODI Network Tech (Guangzhou)
Limited, a company specializing in software development, starting from 2005.
She graduated from the University of Aberdeen, Scotland with an M.Sc.
degree in Finance & Investment Management.
Ms.
Yang Zeng, age 26, Director
Ms. Zeng
served as the Network Engineer of DODI network Tech (Guangzhou) Ltd. from 2005.
She is currently completing a Network Engineer professional training course at
Beida Jade Bird Aptech Guangzhou High-Tech Training Centre. Ms. Zeng
graduated from Wuhan Military School of Economics and Management in 2004 with a
major in Economics management.
Family
Relationships
There are
no familial relationships between our officers and directors.
Meetings
of Our Board of Directors
The
Registrant’s Board of Directors took all actions by unanimous written consent
without a meeting during the fiscal year ended December 31, 2009.
The
Registrant’s Board of Directors took all actions by unanimous written consent
without a meeting during the fiscal year ended December 31, 2008.
Board
Committees
Audit Committee
.
The Company intends to
establish an audit committee of the board of directors, which will consist of
soon-to-be-nominated independent directors. The audit committee’s duties would
be to recommend to the Company’s Board of Directors the engagement of
independent auditors to audit the Company’s financial statements and to review
the Company’s accounting and auditing principles. The audit committee would
review the scope, timing and fees for the annual audit and the results of audit
examinations performed by the internal auditors and independent public
accountants, including their recommendations to improve the system of accounting
and internal controls. The audit committee would at all times be composed
exclusively of directors who are, in the opinion of the Company’s Board of
Directors, free from any relationship which would interfere with the exercise of
independent judgment as a committee member and who possess an understanding of
financial statements and generally accepted accounting principles.
Compensation Committee
.
The Company intends to
establish a compensation committee of the Board of Directors. The compensation
committee would review and approve the Company’s salary and benefits policies,
including compensation of executive officers.
Director
Compensation
We have
no standard arrangement pursuant to which our directors are compensated for
their services in their capacity as directors. The Board of Directors may award
special remuneration to any director undertaking any special services on behalf
of our company other than services ordinarily required of a
director.
Significant
Employees
Other
than the directors and officer described above, we do not expect any other
individuals to make a significant contribution to our business.
Involvement
in Legal Proceedings
None of
our directors, executive officers, promoters or control persons has been
involved in any of the following events during the past five years:
|
—
|
any
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;
|
|
—
|
any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor
offenses);
|
|
—
|
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
involvement in any type of business, securities or banking activities;
or
|
|
—
|
being
found by a court of competent jurisdiction (in a civil action), the SEC 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.
|
Code
of Ethics
The
Company has adopted a Code of Ethics that applies to the Company’s principal
chief executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, as well as other
employees (the "Code of Ethics"), a copy of which is included as Exhibit 14.1 to
our Form 10-KSB for the fiscal year ended December 31, 2005, and is incorporated
herein by reference. The Code of Ethics is designed with the intent to deter
wrongdoing, and to promote the following:
|
–
|
Honest
and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional
relationships
|
|
–
|
Full,
fair, accurate, timely and understandable disclosure in reports and
documents that a small business issuer files with, or submits to, the
Commission and in other public communications made by the small business
issuer
|
|
–
|
Compliance
with applicable governmental laws, rules and
regulations
|
|
–
|
The
prompt internal reporting of violations of the code to an appropriate
person or persons identified in the code
|
|
–
|
Accountability
for adherence to the code
|
Section
16(a) Beneficial Ownership Reporting Compliance
Under
Section 16(a) of the Exchange Act, all executive officers, directors, and each
person who is the beneficial owner of more than 10% of the common stock of a
company that files reports pursuant to Section 12 of the Exchange Act, are
required to report the ownership of such common stock, options, and stock
appreciation rights (other than certain cash-only rights) and any changes in
that ownership with the Commission. Specific due dates for these reports have
been established, and the Company is required to report, in this Form 10-K, any
failure to comply therewith during the fiscal year ended December 31, 2009. The
Company believes that all of these filing requirements were satisfied by its
executive officers, directors and by the beneficial owners of more than 10% of
the Company’s common stock. In making this statement, the Company has relied
solely on copies of any reporting forms received by it, and upon any written
representations received from reporting persons that no Form 5 (Annual Statement
of Changes in Beneficial Ownership) was required to be filed under applicable
rules of the Commission.
Compensation
Discussion and Analysis
We
maintain a peer-based executive compensation program comprised of fixed and
performance variable elements. The design and operation of the program reflect
the following objectives:
|
-
|
Recruiting
and retaining talented leadership.
|
|
-
|
Implementing
measurable performance targets.
|
|
-
|
Correlating
compensation directly with shareowner value.
|
|
-
|
Emphasizing
performance based compensation, progressively weighted with seniority
level.
|
|
-
|
Adherence
to high ethical, safety and leadership
standards.
|
Designing
a Competitive Compensation Package
Recruitment
and retention of leadership to manage our Company requires a competitive
compensation package. Our Board of Directors emphasizes (i) fixed compensation
elements of base salary that compare with our compensation peer group of
companies, and (ii) variable compensation contingent on above-target
performance. The compensation peer group consists of those companies in the
Guangdong region that we deem to compete with our Company for executive talent.
Individual compensation will vary depending on factors such as performance, job
scope, abilities, tenure, and retention risk.
Fixed
Compensation
The
principal element of fixed compensation not directly linked to performance
targets is based salary. We target the value of fixed compensation generally at
the median of our compensation peer group to facilitate a competitive
recruitment and retention strategy.
Incentive
Compensation
Our
incentive compensation programs are linked directly to earnings growth, cash
flow, and total shareowner return. Annual bonuses are tied to the current year’s
performance of our company. Restrictive stock awards are tied to an individual’s
success in exceeding targeted results set by management.
No
compensation in excess of $100,000 was awarded to, earned by, or paid to any
executive officer of Uonlive Corporation during the years 2009, 2008 and 2007,
except as described below. The following table and the accompanying notes
provide summary information for each of the last three fiscal years concerning
cash and non-cash compensation paid or accrued by our chief executive officer
and other executive officers earning in excess of $100,000 for the past three
years.
SUMMARY
COMPENSATION TABLE
|
Name
of officer
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan Compensation
|
Nonquali-
fied
Deferred Compen-
sation
|
All
Other
Compen- sation
|
Total
|
|||||||||
|
William
Tsang (1)
|
2009
|
Nil
|
-
|
-
|
-
|
-
|
-
|
-
|
Nil
|
|||||||||
|
2008
|
Nil
|
-
|
-
|
-
|
-
|
-
|
-
|
Nil
|
||||||||||
|
2007
|
150,000
|
150,000
|
||||||||||||||||
|
C.M.
Chan (2)
|
2009
|
Nil
|
-
|
-
|
-
|
-
|
-
|
-
|
Nil
|
|||||||||
|
2008
|
Nil
|
-
|
-
|
-
|
-
|
-
|
-
|
Nil
|
||||||||||
|
2007
|
26,419
|
26,419
|
||||||||||||||||
|
Cheung
Chi Ho (3)
|
2009
|
Nil
|
-
|
-
|
-
|
-
|
-
|
-
|
Nil
|
|||||||||
|
2008
|
12,300
|
-
|
-
|
-
|
-
|
-
|
-
|
12,300
|
||||||||||
|
2007
|
20,000
|
-
|
-
|
-
|
-
|
-
|
-
|
20,000
|
||||||||||
|
Tsun
Sin Man Samuel
|
2009
|
Nil
|
-
|
-
|
-
|
-
|
-
|
-
|
Nil
|
|||||||||
|
2008
|
Nil
|
-
|
-
|
-
|
-
|
-
|
-
|
Nil
|
||||||||||
|
2007
|
Nil
|
Nil
|
||||||||||||||||
|
Hui
Chi Kit
|
2009
|
16,500
|
-
|
-
|
-
|
-
|
-
|
-
|
16,500
|
|||||||||
|
2008
|
11,500
|
-
|
-
|
-
|
-
|
-
|
-
|
11,500
|
||||||||||
|
2007
|
Nil
|
Nil
|
||||||||||||||||
|
Wong
Kin Yu Beta
|
2009
|
24,500
|
-
|
-
|
-
|
-
|
-
|
-
|
24,500
|
|||||||||
|
2008
|
27,000
|
-
|
-
|
-
|
-
|
-
|
-
|
27,000
|
||||||||||
|
2007
|
12,200
|
-
|
-
|
-
|
-
|
-
|
-
|
12,200
|
(1) Ex-Chairman
of China World Trade Corporation
(2) Ex-
CEO of China World Trade Corporation
(3) Ex-CEO
of Uonlive Corporation who resigned on December 9, 2008
Option
Grants in Last Fiscal Year
There
were no options granted to any of the named executive officers during the year
ended December 31, 2009.
During
the year ended December 31, 2009, none of the named executive officers exercised
any stock options.
Pension, Retirement or
Similar Benefit Plans
There are
no arrangements or plans in which we provide pension, retirement or similar
benefits for directors or executive officers. We have no 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 the Board of Directors or a committee
thereof.
Employment
Agreements
The
Company established standard employment agreements with its employee whereby
each party may terminate its service to the other party with one month
notice.
Equity Compensation
Plan
The
Company currently does not have any equity compensation plans; however the
Company is currently deliberating on implementing an equity compensation
plan.
Directors’ and Officers’
Liability Insurance
The
Company currently does not have insurance insuring directors and officers
against liability; however, the Company is in the process of investigating the
availability of such insurance.
Compensation
Committee
We
currently do not have a compensation committee of the Board of Directors. The
Board of Directors as a whole determines executive compensation.
Compensation of
Directors
The
Company paid service compensation of $24,500 to one of its directors during
the reporting period. The Company has not paid its other directors any separate
compensation in respect of their services on the board. However, in the future,
the Company intends to implement a market-based director compensation
program.
Change of
Control
As of
December 31, 2009 we had no pension plans or compensatory plans or other
arrangements which provide compensation on the event of termination of
employment or change in control of us.
The
following table sets forth as of December 31, 2009, the number of shares of the
Registrant’s Common Stock owned of record or beneficially by each person known
to be the beneficial owner of 5% or more of the issued and outstanding shares of
the Registrant’s voting stock, and by each of the Registrant’s directors and
executive officers and by all its directors and executive officers as a
group.
Except as
otherwise specified below, the address of each beneficial owner listed below is
5/F, Guangdong Finance Building, 88 Connaught Road West, Hong Kong, People’s
Republic of China.
|
Title
of Class
|
Name
|
Number
of Shares Owned (1)
|
Percent
of Voting Power (2)
|
||||||
|
Other
Principal Stockholders (5%)
|
|||||||||
|
Common
|
William
Tsang
|
217,880
|
10.9
|
%
|
|||||
|
Common
|
Oxford
Global Capital Limited
|
550,000
|
(3)
|
27.6
|
%
|
||||
|
Common
|
Continental
Worldwide Holdings Limited
|
100,000
|
(6)
|
5.0
|
%
|
||||
|
Directors
and Executive Officers
|
|||||||||
|
Common
|
Tsun
Sin Man Samuel, Chairman, CEO and Director
|
700,000
|
(4)
|
35.1
|
%
|
||||
|
Common
|
Wong
Kin Yu Beta, COO and Director
|
0
|
0
|
%
|
|||||
|
Common
|
Hui
Chi Kit, CFO
|
0
|
0
|
%
|
|||||
|
Common
|
Carol
Kwok, Director
|
0
|
0
|
%
|
|||||
|
Common
|
Yang
Zeng, Director
|
150,000
|
(5)
|
7.5
|
%
|
||||
|
Common
|
All
Officers and Directors as a Group (5 persons)
|
850,000
|
42.6
|
%
|
|||||
|
(1)
|
Except
as otherwise indicated, the shares are owned of record and beneficially by
the persons named in the table.
|
|
(2)
|
Based
on 1,996,355 shares of common stock issued and
outstanding.
|
|
|
(3)
|
Wanjun
Guo is the indirect beneficial owner of the 550,000 shares of common stock
of the Registrant through Oxford Global Capital Limited, of which Mr. Guo
is the beneficial owner of 100% of its share
capital.
|
|
|
(4)
|
Mr.
Tsun is the indirect beneficial owner of the 700,000 shares of common
stock of the Registrant through Dragon Ace Global Limited, of which Mr.
Tsun is the beneficial owner of 80% of its share
capital.
|
|
|
(5)
|
Ms.
Yang is the indirect beneficial owner of the 150,000 shares of common
stock of the Registrant through Stanford Global Capital Limited, of which
Ms. Yang is the beneficial owner of 100% of its share
capital.
|
|
|
(6)
|
Ms.
Kwok Sim Ching is the indirect beneficial owner of the 100,000 shares of
common stock of the Registrant through Continental Worldwide Holdings
Limited of which Ms. Kwok is the beneficial owner of 100% of its share
capital.
|
On March
28, 2008, the Company entered into the Exchange Agreement with Tsang William,
Uonlive Limited, Tsun Samuel, Hui Chi Kit and Parure Capital Limited. Upon
closing of the Share Exchange on March 31, 2008, Tsun and Hui delivered all of
their share capital in Parure Capital to the Company in exchange for 1,500,000
shares of common stock of the Company and 500,000 shares of Series A Convertible
Preferred Stock, resulting in Parure Capital becoming a wholly owned subsidiary
of the Company and Uonlive becoming an indirect wholly owned subsidiary of the
Company.
In
connection with the Exchange Agreement, the Company transferred the capital
stock of Virtual Edge Limited, a British Virgin Islands corporation, China World
Trade Corporation, a British Virgin Islands corporation, China Chance
Enterprises Limited, a British Virgin Islands corporation, and Rainbow Wish
Ltd., a British Virgin Islands corporation, to Top Speed Technologies Ltd., a
British Virgin Islands corporation which is wholly owed by William Tsang, the
former Chairman and President of the Company. The corporations whose
stock was transferred represented all of the assets and liabilities of the
Company, and contain viable, ongoing businesses. No fairness opinion
was sought by the Board of Directors with respect to the transfers and no
appraisals were sought by the Board of Directors with respect to the assets
indirectly transferred.
Except
for the transactions described above, there are no proposed transactions and no
transactions during the past two years to which the Company was (or is) a party,
and in which any officer, director, or principal stockholder, or their
affiliates or associates, was also a party.
The
amounts due to related parties represent unsecured advances which are
interest-free and repayable on demand.
Director
Independence
Our
securities are quoted on the OTC Bulletin Board, which does not have any
director independence requirements. Once we engage further directors
and officers, we will develop a definition of independence and scrutinize our
Board of Directors with regard to this definition.
Fees
Billed For Audit and Non-Audit Services
The
following table represents the aggregate fees billed for professional audit
services rendered by the accounting firm of ZYCPA Company Limited, our
current independent auditor, and all fees billed for other services rendered by
the said firms during those years.
|
Year
Ended December 31
|
2009
|
2008
|
||||||
|
Audit
Fees (1)
|
46,000
|
46,000
|
||||||
|
Audit-Related
Fees (2)
|
-
|
-
|
||||||
|
Tax
Fees (3)
|
-
|
-
|
||||||
|
All
Other Fees (4)
|
-
|
-
|
||||||
|
Total
Accounting Fees and Services
|
46,000
|
46,000
|
||||||
|
(1)
|
Audit Fee
. These are
fees for professional services for the audit of the Company's annual
financial statements, and for the review of the financial statements
included in the Company's filings on Form 10-Q, and for services that are
normally provided in connection with statutory and regulatory filings or
engagements.
|
|
(2)
|
Audit-Related Fee
.
These are fees for the assurance and related services reasonably related
to the performance of the audit or the review of the Company's financial
statements.
|
|
(3)
|
Tax Fees
. These are
fees for professional services with respect to tax compliance, tax advice,
and tax planning.
|
|
(4)
|
All Other Fees
. These
are fees for permissible work that does not fall within any of the other
fee categories, i.e., Audit Fees, Audit-Related Fees, or Tax
Fees.
|
Pre-Approval
Policy for Audit and Non-Audit Services
The
Company implemented pre-approval policies and procedures related to the
provision of audit and non-audit services. Under these procedures, our Board of
Directors, performing the duties of the Audit Committee, reviews all audit and
non-audit related fees at least annually. The Board of Directors as the Audit
Committee pre-approved all audit related services in the year ended December 31,
2009.
(a)
(1) Financial Statements
See
“Table of Contents to Consolidated Financial Statements” set forth on page
16.
(a)
(2) Financial Statement Schedules
None. The
financial statement schedules are omitted because they are inapplicable or the
requested information is shown in our financial statements or related notes
thereto.
(a)
(3) Exhibits
|
Exhibit
Number
|
Exhibit
Description
|
|
2.1
|
Share
Exchange Agreement by and among CWTD, Tsang, Uonlive, Tsun, Hui and Parure
Capital, dated March 28, 2008 (1)
|
|
2.2
|
Sale
and Purchase Agreement among CWTD, Top Speed Technologies Ltd and Tsang,
dated March 28, 2008 (1)
|
|
3.1
|
Articles
of Incorporation of the Company(2)
|
|
3.2
|
By-laws
of the Company (2)
|
|
14.1
|
Code
of Ethics (3)
|
|
21.1
|
List
of Subsidiaries
|
|
Parure
Capital Limited, a corporation organized and existing under the laws of
the British Virgin Islands
|
|
|
Uonlive
Limited, a corporation organized and existing under the laws of Hong Kong
SAR of the People’s Republic of China
|
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(4)
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(4)
|
|
32
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (4)
|
|
(1)
|
Included
as an exhibit to our Form 8-K filed with the Commission on April 4,
2008.
|
|
(2)
|
Incorporated
by reference from Exhibit 3.1 to CWTD’s Registration Statement on Form
10-SB filed with the Commission on May 18,
1999.
|
|
(3)
|
Incorporated
by reference from Exhibit 14.1 to our Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2005.
|
|
(4)
|
Filed
herewith.
|
In
accordance with the Section 13 or 15(d) of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
|
UONLIVE
CORPORATION
|
|||
|
Date:
March 29, 2010
|
By:
|
/
s/ Tsun Sin Man
Samuel
|
|
|
Tsun
Sin Man Samuel
|
|||
|
Chief
Executive Officer
|
|||
Pursuant
to the requirements of the Exchange Act, this report has been signed by the
following persons on behalf of the Registrant and in the capacities and on the
date indicated.
|
Signature
|
Title
|
Date
|
|
|
/s/ Tsun Sin Man Samuel
|
Chairman,
Chief Executive Officer and Director
|
March
29, 2009
|
|
|
Tsun
Sin Man Samuel
|
|||
|
/s/ Hui Chi Kit
|
Chief
Financial Officer
|
March
29, 2009
|
|
|
Hui
Chi Kit
|
|||
|
/s/ Wong Kin Yu Beta
|
Chief
Operating Officer and Director
|
March
29, 2009
|
|
|
Wong
Kin Yu Beta
|
|||
|
/s/ Carol Kwok
|
Director
|
March
29, 2009
|
|
|
Carol
Kwok
|
|||
|
/s/ Zeng Yang
|
Director
|
March
29, 2009
|
|
|
Zeng
Yang
|
|||
41
TABLE OF CONTENTS
Part IItem 1. BusinessItem 2. PropertiesItem 3. Legal ProceedingsItem 4. (removed and Reserved)Part IIItem 5. Market For Registrant S Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity SecuritiesItem 6. Selected Financial DataItem 7. Management's Discussion and Analysis Of Financial Condition and Results Of OperationsItem 7A. Quantitative and Qualitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPart IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accounting Fees and ServicesItem 15. Exhibits, Financial Statement Schedules and Reports on Form 8-k