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MarketScreener Homepage  >  Equities  >  OTC Bulletin Board - Other OTC  >  Success Entertainment Group Intl Inc    SEGN


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Success Entertainment Intl : GROUP INTERNATIONAL INC. Management's Discussion and Analysis of Financial Condition or Plan of Operation (form 10-Q)

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08/14/2019 | 11:54am EDT

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

Unless otherwise specified in this quarterly report, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to shares of our common stock.

As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Success Entertainment Group International Inc., unless otherwise indicated.

Corporate History

Our Company was incorporated in the State of Nevada on January 30, 2013 (Inception) under the name Altimo Group Corp., initially to engage in the sale of frozen yogurt machines.

In 2014, Marek Tomaszewski, our then majority shareholder, issued and sold 8,000,000 shares of our common stock, representing 77% of our outstanding common shares, to Success Holding Group Corp. USA, a Nevada corporation ("Success Holding"). Also, in 2014, we changed our name to "Success Entertainment Group International Inc.", and the Company shifted its focus to the production and development of internet videos and training videos.

The Company signed several memorandums of understanding ("MOU") for acquisitions in 2018:


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    ·   On May 22, 2018, the Company signed an MOU with Magic Skin Technologies
        Company Ltd, acquiring a 20% interest; Magic Skin focuses on
        AI-car-detailing and data accumulation.

    ·   On June 29, 2018, the Company signed an MOU with Harvest (Shanghai)
        Technologies Co., a company that focuses on data accumulation through a
        large database of customers as well as utilizing AI in on-line

    ·   On July 23, 2018, signed an MOU with Beijing ZhongJu HuaDa Ltd., a company
        that would help establish a College of Commerce to utilize AI and
        education throughout Asia.

    ·   On August 14, 2018, the Company signed an MOU with Taiwan EverLive
        Telomerase Ltd. with the objective of obtaining more patent rights for the

    ·   On September 19, 2018, the Company signed an MOU with Tai Fu Artificial
        Intelligence Co, Ltd., a large AI company located in Shenzen.

    ·   On October 31, 2018, the Company signed an MOU with Taipei Artificial
        Intelligence (AI) Wallet Technology Co., a company focusing on a platform
        that allows use of virtual currencies and multi-cash in exchanges.

On February 5, 2019, the Company announced a new MOU with a Beijing AI company to establish a joint venture in Shanghai. None of the above described MOUs went into effect as of June 30, 219.

None of the MOUs described above have gone into effect as of June 30, 2019.

Current Business

Our operations are divided into three main categories. First is the "Know How" video sharing platform, which combines artificial intelligence ("AI"), short videos, social interaction, and education. Second is the production of Internet videos in China, for distribution in China, and on-line and off-line seminars conducted by Steve Chen. Specifically, we seek to produce commentary videos that will fit in internet mobile applications. In addition, we seek to sell distribution rights for these videos, and to develop and sell promotional and other products related to these videos throughout the world. Third, we are continuously seeking to make additional investments in other ventures that focus on AI and big data. Big data refers to the accumulation and analysis of large amounts of data.

Currently, our management is seeking and evaluating opportunities for our company to produce an internet video or participate in the production of an internet video as a financial partner, development partner, or production partner. In that regard we are seeking and evaluating video concepts, screenplays, financing opportunities, branding opportunities, and prospective creative and financial partners. We anticipate an operational budget of between $300,000 to $1,000,000 depending on the nature of our involvement, production costs, and available funding.

Results of Operations

Three months ended in June 30, 2019 compared to the three months ended in June 30, 2018.

Our operating revenue and expenses for the three-month periods ended June 30, 2019 and 2018 are outlined in the table below:

                                       Three months       Three months
                                          ended              ended
                                         June 30,           June 30,
                                           2019               2018
Revenues                              $       82,384$      327,000
Cost of Revenues                      $       82,858$       50,000
General and administrative expenses   $      229,859$      107,951
Net Income (Loss)                     $     (228,846 )$      169,049


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For the three months ended June 30, 2019, we recorded $82,384 in revenues. During the same three-month period in 2018, we recorded $327,000 in revenue. The decrease in revenue was mainly due to a severe slowdown of economy in China, coupled with tightened control by the government particularly impacting seminar related industries which began late fourth quarter of 2018.and and into first half of 2019.

Cost of Revenues

For the three months ended June 30, 2019, we recorded $82,858 in cost of revenues. During the same three-month period in 2018, we recorded $50,000 in cost of revenue. The increase in cost of revenues was mainly due to additional costs of developing "Know-How" video sharing platform.

Operating Expenses and Net Loss

We had a net loss of $228,846 for the three months ended June 30, 2019. This is compared with net income of $169,049 for the same period in 2018. Operating expenses for the three months ended June 30, 2019 were $229,859 compared with $107,951 for the three months ended June 30, 2018. Our operating expenses during both periods consist primarily of general and administrative expenses which include professional fees (legal, accounting, audit), filing fees associated with the electronic filing of our public disclosure documents, travel expense, communications expenses (telephone, internet), and incidental office expenses (mail, courier, etc.). The increase in general and administrative expenses during the second three months in 2019 is mainly due to a series of business development trips in New York and San Francisco, transfer of staff from our sister company, Success Holding Group International, Inc., due to its dissolution, and change of commission structure which did not exist in 2018.

Liquidity and Capital Resources

Working Capital

                        As at           As at
                      June 30,       December 31,
                        2019             2018
Current Assets        $ 909,696$    1,997,913
Current Liabilities   $ 691,454$    1,455,792
Working Capital       $ 218,242$      542,121

Cash Flows

                                                       Six Months       Six Months
                                                         Ended            Ended
                                                        June 30,         June 30
                                                          2019             2018
Net cash used in operating activities                 $    472,072$     64,488

Net cash used in investing activities                 $          -     $          -

Net cash provided by (used in) financing activities $ (4,776 )$ 12,694

Net decrease in cash                                  $    476,848$     51,794


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As of June 30, 2019, our total assets and liabilities were $909,696 and $691,454 compared to $1,997,913 and $1,455,792 as at December 31, 2018. Increase in cash used in operating activities for the six months ended June 30, 2019 is due to net loss and decrease in accounts payable.

As of June 30, 2019, we had working capital of $218,242 compared with working capital of $542,121 as of December 31, 2018. The decrease in our working capital is primarily due to much lower cash and accounts receivable.

Cashflow from Operating Activities

During the six months ended June 30, 2019, we used cash for operating activities of $472,072 compared to $64,488 during the six months ended Jun 30, 2018. This increase in cash used in operating expenses is primarily due to net loss and decrease in accounts payable.

Cashflow from Investing Activities

During the three months ended June 30, 2019, and 2018, we did not have any cash flow from investing activities.

Cashflow from Financing Activities

During the six months ended June 30, 2019, we repaid $4,776 for loans from related parties. During the six months ended June 30, 2018, we received proceeds of $12,694 from financing activities from related party loans.

Off-Balance Sheet Arrangements

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

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.

Critical Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.


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Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. The Company had $43,923 and $520,772 of cash as of June 30, 2019 and December 31, 2018, respectively.

The Company's bank accounts are deposited in insured institutions. The funds are insured up to $250,000 each account. At June 30, 2019, and December 31, 2018, the Company's bank deposits individually did not exceed the insured amounts.

Fair Value of Financial Instruments

ASC 820 "Fair Value Measurements and Disclosures" establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

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.

The Company's financial instruments consist of cash, a related party loan and note payable related party. The carrying amount of these financial instruments approximates fair value due their short-term maturity.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Revenue Recognition

The Company will recognize revenue in accordance with ASC-605, "Revenue Recognition". ASC-605 requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.


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Basic and diluted Income (Loss)

Per Share Basic income (loss) per share is calculated by dividing the Company's net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company's net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. Diluted earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company.

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 our financial condition or the results of its operations.

Recently Issued Accounting Pronouncements

Our company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and our company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

© Edgar Online, source Glimpses

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Success Entertainment Group Intl Inc Technical Analysis Chart | MarketScreener
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Chi-Jui Hong Chief Executive Officer & Director
Brian K. Kistler President, Secretary & Director
Steve Andrew Chen Chairman
Shi-Hao Chang Chief Operating Officer
Frank Tseng Chief Financial Officer & Treasurer