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