Cautionary Statements
This Quarterly Report on Form 10-Q (this "Quarterly Report") contains
forward-looking statements, including, without limitation, in the sections
captioned "Management's Discussion and Analysis of Financial Condition and
Results of Operations," and elsewhere. Any and all statements contained in this
Quarterly Report that are not statements of historical fact may be deemed
forward-looking statements. Terms such as "may," "might," "would," "should,"
"could," "project," "estimate," "pro-forma," "predict," "potential," "strategy,"
"anticipate," "attempt," "develop," "plan," "help," "believe," "continue,"
"intend," "expect," "future" and terms of similar import (including the negative
of any of the foregoing) may be intended to identify forward-looking statements.
However, not all forward-looking statements may contain one or more of these
identifying terms.
Forward-looking statements in this Quarterly Report may include, without
limitation, statements regarding (i) the plans and objectives of management for
future operations, including plans or objectives relating to the growth of tea
polyphenol sales and development of our tea polyphenol-based products, (ii) the
plans or objectives relating to our future business acquisitions, if any, (iii)
a projection of income (including income/loss), earnings (including
earnings/loss) per share, capital expenditures, dividends, capital structure or
other financial items, (iv) our future financial performance, including any such
statement contained in a discussion and analysis of financial condition by
management or in the results of operations included pursuant to the rules and
regulations of the Securities and Exchange Commission, or the SEC, and (v) the
assumptions underlying or relating to any statement described in points (i),
(ii), (iii) or (iv) above.
The forward-looking statements are not meant to predict or guarantee actual
results, performance, events or circumstances and may not be realized because
they are based upon our current projections, plans, objectives, beliefs,
expectations, estimates and assumptions and are subject to a number of risks and
uncertainties and other influences, many of which we have no control over.
Actual results and the timing of certain events and circumstances may differ
materially from those described by the forward-looking statements as a result of
these risks and uncertainties. Factors that may influence or contribute to the
inaccuracy of the forward-looking statements or cause actual results to differ
materially from expected or desired results may include, without limitation:
? volatility or decline of our stock price;
? potential fluctuation of quarterly results;
? continued failure to earn revenues or profits;
? inadequate capital to continue or expand our business, and inability to raise
additional capital or financing to implement our business plans;
? decline in demand for our products and services;
? rapid adverse changes in markets;
? litigation with or legal claims and allegations by outside parties against us;
? insufficient revenues to cover operating costs; and
? estimates of our future revenue, expenses, capital requirements and our need
for additional financing;
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Because the statements are subject to risks and uncertainties, actual results
may differ materially from those expressed or implied by the forward-looking
statements. ICGL cautions you not to place undue reliance on the statements,
which speak only as of the date of this Quarterly Report. The cautionary
statements contained or referred to in this section should be considered in
connection with any subsequent written or oral forward-looking statements that
ICGL or persons acting on its behalf may issue. ICGL does not undertake any
obligation to review or confirm analysts' expectations or estimates or to
release publicly any revisions to any forward-looking statements to reflect
events or circumstances after the date of this Quarterly Report, or to reflect
the occurrence of unanticipated events, except as required by law.
Overview
Image Chain Group Limited, Inc. (formerly Have Gun Will Travel Entertainment,
Inc.) was incorporated under the laws of Nevada on December 18, 2013, and
initially sought to create reality television programming. References in this
Quarterly Report to "ICGL", "Image Chain", the "Company", the "Registrant",
"we", "our" or "us" are to Image Chain Group Limited, Inc.
On May 5, 2015, ICGL entered into a share exchange agreement (the "FDHG Exchange
Agreement") with Fortune Delight Holdings Group Ltd ("FDHG") and Wu Jun Rui, on
behalf of himself and certain other individuals who were to receive shares of
ICGL pursuant to the FDHG Exchange Agreement (the "FDGH Shareholders"). On the
terms and subject to the conditions set forth in the FDHG Exchange Agreement, on
May 5, 2015, Wu Jun Rui transferred all 50,000 shares of FDHG common stock,
consisting of all of the issued and outstanding shares of FDHG, to ICGL in
exchange for the issuance to the stockholders of FDHG of 59,620,000 shares of
the Company's common stock, par value $.001 per share ("Common Stock") and
5,000,000 shares of the Company's preferred stock, par value $.001 per share
("Preferred Stock").
As a result of the closing of the FDHG Exchange Agreement, FDHG became the
Company's wholly owned subsidiary. FDHG, through its subsidiaries, manufactured
and sold "Image Tea"-branded tea products from its tea garden in Yunnan
Province.
On June 11, 2015, the Company amended its Articles of Incorporation in order to
change its name to Image Chain Group Limited, Inc. and to increase the
authorized shares of Common Stock from 70,000,000 to 400,000,000. The name
change was undertaken in order to more closely align with the operations of the
Company's wholly-owned subsidiary. The increase in authorized Common Stock was
undertaken to allow the Company to utilize the newly available shares to raise
capital.
On or about November 15, 2016, FDHG disposed of its ownership of all operating
assets, and as a result ICGL became a shell company, as defined by Rule 12b-2
under the Exchange Act (the "Disposition Event"). The Disposition Event is
evidenced by a bought and sold note stamped by the Inland Revenue Department of
Hong Kong, which we believe is a legally binding document.
On February 13, 2017, the Company filed with the Secretary of State of the State
of Nevada a Certificate of Correction (the "Certificate of Correction") to
correct a mistake made in the Company's original Articles of Incorporation with
regard to the Preferred Stock issued in connection with the FDHG Exchange
Agreement. As a result, ICGL had 395,000,000 shares of Common Stock and
5,000,000 shares of Preferred Stock issued and outstanding. The Company
subsequently entered into an agreement pursuant to which the holder of the
Preferred Stock agreed to retire the Preferred Stock in exchange for receiving
an equal number of shares of Common Stock of the Company.As of the date of this
Quarterly Report, that exchange of Preferred Stock for Common Stock has not yet
occurred.
On May 1, 2017, upon recommendation of the Board of Directors, a majority of
Image Chain's common stockholders consented in writing to amendment of Image
Chain's Articles of Incorporation to (i) effect a reverse stock split on a 1 for
100 stock split basis from 400,000,000 authorized shares with a par value of
$0.001 per share to 4,000,000 authorized shares with a par value of $0.001, and
(ii) after the reverse stock split, to increase the authorized shares of Common
Stock from 3,950,000 to 2,000,000,000 shares with a par value of $0.001 per
share, and to decrease the authorized shares of Preferred Stock from 50,000 to
zero (0). As of the date of this Quarterly Report, the reverse stock split and
increase in authorized shares have been completed, and the decrease in shares of
Preferred Stock is still in process, as a result 50,000 shares of Preferred
Stock are authorized and outstanding.
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Image P2P Trading Group Limited ("Image P2P"), a company organized under the
laws of the British Virgin Islands, was incorporated on April 21, 2015. Asia
Grand Will Limited ("AGWL") was incorporated on March 18, 2017 in the Hong Kong
SAR. AGWL wholly owns Fuzhi Yuan (Shenzhen) Holdings Limited ("FYSZ") which was
established on June 20, 2017 in the PRC. FYSZ is a wholly owned foreign entity
under PRC law. FYSZ wholly owns Jiangxi Fuzhiyuan Biotechnology Limited
("Fuzhiyuan Biotechnology"), which was established on January 5, 2013 in the
PRC. FYSZ acquired Fuzhiyuan Biotechnology on July 14, 2017. AGWL and FYSZ are
intermediary holding companies. Image P2P conducts its operations through
Fuzhiyuan Biotechnology. Image P2P acquired AGWL on Jul 28, 2017.
The reorganization of Image P2P and its subsidiaries via the acquisitions
detailed above, by and amongst Image P2P and AGWL, FYSZ, and Fuzhiyuan
Biotechnology, have been accounted for under US GAAP as business combinations
under common control.
On November 14, 2017, Image Chain entered into a share exchange agreement (the
"Exchange Agreement") with Image P2P and the shareholders of Image P2P (the
"Sellers"). Pursuant to the Exchange Agreement, the Sellers transferred all
50,000 shares of Image P2P outstanding common stock to the Company in exchange
for 500,000,000 shares of Common Stock (the "Share Exchange"). As a result of
the Share Exchange, Image P2P became the Company's wholly-owned subsidiary.
Image P2P, through its subsidiaries, is engaged in producing, marketing and
selling tea polyphenol products, and is developing for production tea
polyphenol-based products. Image P2P is located in the PRC.
The Share Exchange has been accounted for as a reverse- merger and
recapitalization of Image Chain where Image Chain (the legal acquirer) is
considered the accounting acquiree and Image P2P (the acquiree) is considered
the accounting acquirer. As a result of this transaction, the Company is deemed
to be a continuation of the business of Image P2P.
On November 28, 2018, the Company entered into a Business Transfer Agreement and
Share Exchange Agreement (the "Agreements") with a group of the original
shareholders of Image P2P (the "Image P2P Shareholding Group"), Image P2P and
its subsidiaries. Pursuant to the Agreements, the Image P2P Shareholding Group
exchanged 200,000 common shares of the Company for the one common share of Asia
Grand Will Limited held by Image P2P. Asia Grand Will Limited is the holding
company for the Company's operations in the PRC. Also pursuant to the
Agreements, the Image P2P Shareholding Group, Image P2P and Image P2P's
subsidiaries transferred to the Company (i) all of its right, title and interest
to the intellectual property, including copyrights, patents, trademarks, process
technology and production know-how, of Image P2P and its subsidiaries, (ii) the
exclusive distribution rights in the PRC and worldwide for all products of Image
P2P and its subsidiaries, (iii) the exclusive right to all intellectual property
developed by Image P2P and its subsidiaries in the future and (iv) the exclusive
distribution rights in the PRC and worldwide for all products of Image P2P and
its subsidiaries developed in the future.
The 200,000 common shares of the Company returned to Image P2P are recognized as
common stock in treasury since Image P2P is a wholly owned subsidiary of the
Company and measured at cost which is the fair value of the common stocks as of
the date of the disposal of subsidiaries.
The subsidiaries disposed are presented as discontinued operations in this
report. Comparatives are reclassified to conform with the presentation.
Our principal executive office is located at No. 6, 6-1, 6-2, Jalan BS 10/6,
Taman Bukit Serdang, 43300 Seri Kembangan, Selangor, Malaysia. Our telephone
number is (852) 3188-2700. We do not have a corporate website. Our periodic and
current reports with the SEC can be obtained from the SEC website, www.sec.gov.
Company Overview
On November 28, 2018, the Company disposed of Asia Grand Will Limited and its
subsidiaries and hence have terminated the business of tea polyphenol products
production and sales.
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Currently, since the Sino-US trade war may affect the enterprises operating in
China in 2018, the Company has gradually shifted its market target to Malaysia.
It is seeking to develop business in healthy Halal food.
While we expect to focus on our efforts in the Halal Food License area, we will
continue to seek new business opportunities with established business entities
for merger with or acquisition of a target business in order to best protect our
shareholder interests. In certain instances, a target business may wish to
become our subsidiary or may wish to contribute assets to us rather than merge.
We have not yet begun negotiations or entered into any definitive agreements in
the Halal Food License business, or for any other potential new business
opportunities, and there can be no assurance that we will be able to enter into
any definitive agreements.
We anticipate that the selection of a business opportunity in which to
participate will be complex and without certainty of success. Business
opportunities may be available in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Business opportunities that we believe are in the best interests of
our company may be scarce, or we may be unable to obtain the ones that we want.
We can provide no assurance that we will be able to locate compatible business
opportunities.
Currently, we do not have a source of revenue. We are not able to fund our cash
requirements through our current operations. We have been reliant on loans by
affiliated and non-affiliated parties to provide financial contributions and
services to keep our company operating. Further, we believe that our company may
have difficulties raising capital from other sources until we locate a
prospective merger candidate through which we can pursue our plan of operation.
If we are unable to secure adequate capital to continue our acquisition efforts,
our shareholders may lose some or all of their investment and our business may
fail. We currently have no written or oral agreement from our majority
shareholder to continue to provide financial contributions.
COVID-19 Outbreak
It is worth highlighting that, on March 16, 2020, Malaysia Prime Minister
announced the implementation of Movement Control Order ("MCO") under Control of
Infectious Diseases Act 1988 and the Police Act 1967 to contain the spread of
coronavirus disease 2019 ("COVID-19"). Pursuant to the declaration, initial
phase of the MCO effectively take place from March 18, 2020 to March 31, 2020
for a period of 14 days, and subsequently extended to May 12, 2020 with three
14-day MCO extensions declared by Malaysia Prime Minister.
Pursuant to the MCO, all government and private premises except those involved
in essential supply of goods and services such as water, electricity, energy,
telecommunications, postal, transportation, irrigation, oil, gas, fuel,
lubricants, broadcasting, finance, banking, health, pharmacy, fire, prison,
port, airport, safety, defense, cleaning, retail and food supply should be
closed.
On May 1, 2020, Malaysia Prime Minister announced that Conditional Movement
Control Order ("CMCO"), a relaxation of MCO will replaced existing MCO on May 4,
2020 onwards and scheduled to expire on original 4th MCO expiration date, May
12, 2020. On May 10, 2020, Malaysia Prime Minister announced that the CMCO will
be extended for a period of 4 weeks from May 13, 2020 until June 9, 2020.
Pursuant to CMCO, most economic sectors and activities are allowed to operate
while observing the business standard operation procedures such as in our case
social distancing and recording the names and telephone numbers of customers and
the dates of their visit.
On June 7, 2020, Malaysia Prime Minister announced that Recovery Movement
Control Order ("RMCO") would take place from June 10, 2020 to August 31, 2020,
while preserving previous allowable economic activity, interstate travelling is
now permissible. On 28 August, Malaysia Prime Minister announced the extension
of the RMCO by a further 4 months until 31 December 2020.
On October 14, 2020, the National Security Council announced that Selangor,
Kuala Lumpur and Putrajaya will be placed under CMCO for a period of 14 days to
October 27, 2020.
On January 1, 2021, RMCO has been extended until March 31, 2021, following the
risk assessment conducted by the Ministry of Health of Malaysia.
An official statement was released by the Prime Minister's office on 28 May
2021, announcing the implementation of the Phase 1 FMCO (Full MCO, also known as
'total lockdown') nationwide for a period of 14 days from June 1 to 14, 2021.
Throughout this duration, all economic sectors are not allowed to operate with
the exception of essential economic and service sectors. On June 11, 2021, it
was announced that the FMCO will be extended for two more weeks, which scheduled
to end on 28 June 2021. On June 27, 2021, Malaysia Prime Minister announced that
MCO 3.0 initially scheduled to end on 28 June will be further extended as long
as the number of cases remains high. As per the 4-phase National Recovery Plan,
Phase 1 of MCO 3.0 will remain in place until these criteria are fulfilled:
? < 4000 daily infection cases
? ICU wards start operating at a moderate level
? Nation vaccination rate reaches 10% of the population
Kuala Lumpur transition from Phase 1 to Phase 2 of the National Recovery Plan
effective on September 10, 2021.
During the MCO, CMCO, RMCO and FMCO period, we have minimized the operations and
have stopped to seek new business opportunities with established business
entities for merger with or acquisition of a target business. We expect the
business activities will be resumed gradually.
Results of Operations
Three months ended September 30, 2021 compared to three months ended September
30, 2020.
Three months ended September 30,
2021 2020
Revenue - -
Operating expenses
General and administrative expenses 49,118 2,836
Total operating expenses 49,118 2,836
Loss Before Income Taxes (49,118 ) (2,836 )
Provision for Income Taxes - -
Net Loss (49,118 ) (2,836 )
Other Comprehensive Income
Foreign currency translation gain - -
Total Comprehensive loss (49,118 ) (2,836 )
Loss per share
Basic and Diluted Loss per Common Share (0.00 ) (0.00 )
Basic and Diluted Weighted Average Common Shares
Outstanding 508,539,882 508,539,882
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Operating Expenses
Our general and administrative expenses increased from $2,836 for the three
months ended September 30, 2020 to $49,118 for the three months ended September
30, 2021. The increase was mainly attributed to the consulting fee in the
current year.
Net Loss
Our net loss increased from $2,836 for the three months ended September 30, 2020
to $49,118 for the three months ended September 30, 2021. The increase was
mainly attributed to the consulting fee in the current year.
Nine months ended September 30, 2021 compared to nine months ended September 30,
2020.
Nine months ended September 30,
2021 2020
Revenue - -
Operating expenses
General and administrative expenses 147,448 35,046
Total operating expenses 147,448 35,046
Loss Before Income Taxes (147,448 ) (35,046 )
Provision for Income Taxes - -
Net Loss (147,448 ) (35,046 )
Other Comprehensive Income
Foreign currency translation gain - -
Total Comprehensive loss (147,448 ) (35,046 )
Loss per share
Basic and Diluted Loss per Common Share (0.00 ) (0.00 )
Basic and Diluted Weighted Average Common Shares
Outstanding 508,539,882 508,539,882
Operating Expenses
Our general and administrative expenses increased from $35,046 for the nine
months ended September 30, 2020 to $147,448 for the nine months ended September
30, 2021. The increase was mainly attributed to the consulting fee in the
current year.
Net Loss
Our net loss increased from $35,046 for the nine months ended September 30, 2020
to $147,448 for the nine months ended September 30, 2021. The increase was
mainly attributed to the consulting fee in the current year.
Liquidity and Capital Resources
Since the inception of the Company, we have incurred significant net losses and
negative cash flows from operations. During the nine months ended September 30,
2021 and the nine months ended September 30, 2020, we had net losses of $147,448
and $35,046, respectively. As of September 30, 2021, we had an accumulated
deficit of $9,590,105. As discussed in our financial statements for the nine
months ended September 30, 2021, these factors raise substantial doubt about our
ability to continue as a going concern.
To date, we have financed our operations principally through borrowings from our
related parties. Depending on our future operational results, we may need to
conduct one or more equity or debt financings within the next 12 months.
We could potentially need our available financial resources sooner than we
currently expect, and we may incur additional indebtedness to meet future
financing needs. Adequate additional funding may not be available to us on
acceptable terms or at all. In addition, although we anticipate being able to
obtain additional financing through non-dilutive means, we may be unable to do
so. Our failure to raise capital as and when needed could have significant
negative consequences for our business, financial condition and results of
operations. Our future capital requirements and the adequacy of available funds
will depend on many factors, many of which are beyond our control.
Related Party Loans
See "Related Party Transactions" in Note 6 of Notes to the Financial Statements.
These unsecured loans do not bear interest or fixed dates for repayment.
Cash flows
The following table summarizes our cash flows for the periods presented:
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