FORWARD-LOOKING STATEMENTS
This quarterly report contains forward-looking statements relating to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may", "should", "intends",
"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 which may cause our or our industry's
actual results, levels of activity or performance to be materially different
from any future results, levels of activity or performance 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 or performance. You should not place undue reliance on these
statements, which speak only as of the date that they were made. These
cautionary statements should be considered with any written or oral
forward-looking statements that we may issue in the future. 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, later events or circumstances or to reflect the
occurrence of unanticipated events.
In this report unless otherwise specified, all dollar amounts are expressed in
United States dollars and all references to "common shares" refer to the common
shares of our capital stock.
The management's discussion and analysis of our financial condition and results
of operations are based upon our financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America ("GAAP").
As used in this quarterly report, the terms "we", "us", "our", and "our company"
means Cloudweb, Inc., unless otherwise indicated.
General Overview
Our company was incorporated on May 25, 2014 under the name "Formigli, Inc.
Our headquarters are located at 12A, Greenhill Street, Dept. 106, Stratford Upon
Avon, Warwickshire, United Kingdom CV37 6LF. We do not have a corporate website.
Our company was originally formed with the intent to engage in the worldwide
distribution of custom handmade Italian road bikes, made by Renzo Formigli.
On December 3, 2015, we filed Articles of Amendment to our Articles of
Incorporation with the Florida Department of State whereby we amended our
Articles of Incorporation by (i) changing our name to "Cloudweb, Inc.", (ii)
increasing our company's authorized number of shares of common stock from 100
million to 500 million, and (iii) increasing our total issued and outstanding
shares of common stock by conducting a forward split of such shares at the rate
of 100 shares for every one (1) share currently issued and outstanding and made
submission to FINRA with respect to the corporate action and requested a change
of ticker symbol to "CLOU". Our common stock is quoted on the Pink Sheets of the
OTC Markets, under the symbol "CLOW", and first traded on the OTC Markets in
November 2015.
On January 28, 2016, our company concluded a Share Exchange Agreement ("Share
Exchange Agreement") entered into with Zhi De Liao ("Mr. Liao"), whereby our
company issued 2,500,000 shares of common stock to Mr. Liao in exchange for 100%
of the issued and outstanding equity interests of Data Cloud Inc. a Nevada
corporation ("Data Cloud"). Data Cloud owned 100% of the issued and outstanding
equity interests of Web Hosting Solutions Ltd., a United Kingdom company
("WHS"), which it purchased from James Holland for US$72,000 (GBP 47,000) on
November 25, 2015.
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At the time WHS had been providing web hosting solutions for approximately ten
(10) years and became a UK private limited company in 2012. In connection with
the Share Exchange Agreement, the Company elected to enter into the web hosting
industry and discontinue its former business operations.
As a result of the Share Exchange Agreement, Mr. Liao became our sole executive
officer and sole member of the Board of Directors. Concurrently, Mr. Liao,
through his controlled entity, Letterston Investments Ltd., acquired 250,000,000
shares of common stock from our former sole officer and director Ms. Amy Chaffe.
As a result, on the transaction date, Mr. Liao effectively controlled
approximately 81% of our company's issued and outstanding shares of common
stock.
On November 4, 2016, we filed Articles of Amendment to our Articles of
Incorporation with the Florida Department of State whereby we amended our
Articles of Incorporation by changing our name to "Data Backup Solutions, Inc."
On November 10, 2016, we filed Articles of Amendment to our Articles of
Incorporation with the Florida Department of State whereby we amended our
Articles of Incorporation by decreasing our company's total issued and
outstanding shares of common stock by conducting a reverse split of such shares
at the rate of 1 share for each one hundred shares (100) shares then currently
issued and outstanding. The submission of the change of name to Data Backup
Solutions, Inc. and the reverse stock split was not completed and the submission
was closed.
On April 1, 2017, our company, entered into a Purchase Agreement (the " Purchase
Agreement") with Yui Daing, an individual residing in Kuala Lumpur, Malaysia
(the "Purchaser"), Data Cloud Inc., a Nevada corporation (hereinafter referred
to as ("Data Cloud"), and Web Hosting Solutions Ltd., a United Kingdom private
company limited by shares (hereinafter referred to as "WHS"). The transactions
under the Purchase Agreement were completed on April 1, 2017 (hereinafter
referred to as the "Closing"). Prior to the Closing, Data Backup owned 100% of
the issued and outstanding equity interests of Data Cloud which owns 100% of the
issued and outstanding equity interests of Web Hosting Solutions Ltd. ("WHS"), a
United Kingdom private company limited by shares ("WHS"). Due to the continued
consolidated losses experienced by our company as the result of the losses of
our company's indirect wholly-owned subsidiary, WHS, which included $50,083 USD
for the fiscal year ended December 31, 2016 and $21,818 USD for the first three
(3) months ended March 31, 2017, our company entered into the Purchase Agreement
and transferred 100% of the issued and outstanding equity interests of Data
Cloud to a third party for nominal consideration in return.
The Purchase Agreement was approved by the shareholders of our company owning a
majority of the voting stock of our company on April 1, 2017. The Closing of the
Purchase Agreement occurred on April 1, 2017. As a result of the transactions
under the Purchase Agreement, our company discontinued the web hosting business.
On October 1, 2017, a majority of stockholders of our company and the board of
directors approved a change of name of our company from Data Backup Solutions,
Inc. to the previous name, Cloudweb, Inc. Articles of Amendment to the Articles
of Incorporation to change the name were filed with the Florida Secretary of
State on October 18, 2017.
On October 27, 2017, a majority of stockholders of our company and board of
directors approved a reverse stock split of our issued and outstanding shares of
common stock on a basis of up to four hundred (400) old shares for one (1) new
share of common stock. On November 30, 2017, FINRA approved the reverse stock
split. The outstanding shares have been restated retroactively.
On March 29, 2018, our Board of Directors elected Mr. Chen Shi Rong as a member
of our Board of Directors and also appointed him as Chief Operating Officer of
our company.
Other than as set out herein, we have not been involved in any bankruptcy,
receivership or similar proceedings, nor have we been a party to any material
reclassification, merger, consolidation or purchase or sale of a significant
amount of assets not in the ordinary course of our business.
Our Current Business
We launched in third quarter of 2020 three new websites in the web hosting
industry. Namely, Hostwizer.com, W8hosting.com and Jeycloud.com. We will seek to
build a marketing strategy in order to advertise our new sites and bring in
revenues.
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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.
Results of Operations
The following summary of our operations should be read in conjunction with our
unaudited financial statements for the nine months ended September 30, 2020 and
2019.
Three months ended September 30, 2020 compared to three months ended September
30, 2019
Three Months Ended
September 30,
2020 2019 Changes %
Operating Expenses
Professional fees $ 5,550 $ 5,531 $ 19 0 %
Stock Based Compensation 11,625,000 - 11,625,000 -
Web development cost 10,030 - 10,030 -
Total operating expenses 11,640,580 5,531 11,635,049 210,361 %
Other expenses 16,368 9,048 7,320 81 %
Net Loss $ 11,656,948 $ 14,579 $ 11,642,369 79,857 %
We had no revenue for the three months ended September 30, 2020 and 2019.
Our net loss for the three months ended September 30, 2020 was $11,656,948
compared with net loss of $14,579 for the three months ended September 30, 2019
due to the increase in operation expenses. During the three months ended
September 30, 2020, we incurred stock based compensation of $11,625,000
attributed to shares issued for Chief Executive Officer's third quarter portion
of the year 2020 salary and web development cost of $10,030
Nine months ended September 30, 2020 compared to nine months ended September 30,
2019
Nine Months Ended
September 30,
2020 2019 Changes %
Operating expenses
Professional fees $ 18,957 $ 16,786 $ 2,171 13 %
Stock based compensation 34,875,000 - 34,875,000 -
Web development cost 10,030 - 10,030 -
Total operating expenses 34,903,987 16,786 34,887,201 207835 %
Other expenses 67,568 32,009 35,559 111 %
Net Loss $ 34,971,555 $ 48,795 $ 34,922,760 71570 %
We had no revenue for the nine months ended September 30, 2020 and 2019.
Our net loss for the nine months ended September 30, 2020 was $34,971,555
compared with net loss of $48,795 for the nine months ended September 30, 2019
due to the increase in operation expenses. During the nine months ended
September 30, 2020, we incurred stock-based compensation of $34,875,000
attributed to shares issued for Chief Executive Officer's first three quarters
portion of the year 2020 salary and web development cost of $10,030
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Liquidity and Capital
Working Capital
As of As of
September 30, December 31,
2020 2019 Changes %
Current Assets $ - $ - $ -
Current Liabilities $ 191,442 $ 158,625 $ 32,817 21 %
Working Capital Deficiency $ (191,442 ) $ (158,625 ) $ (32,817 ) 21 %
As at September 30, 2020 and December 31, 2019, our company had no cash and
assets.
As at September 30, 2020, our company had total liabilities of $370,584, of
which included convertible notes payable of $145,724, accrued interest of
$99,015, promissory notes payable of $69,486 and accounts payable and accrued
liabilities of $56,359. As at December 31, 2019, our company had total
liabilities of $335,967, of which included convertible notes payable of
$110,016, accrued interest of $76,155, promissory note payable of $86,519 and
accounts payable and accrued liabilities of $63,277.
As at September 30, 2020, our company had a working capital deficiency of
$191,442 compared with a working capital deficiency of $158,625 as at December
31, 2019. The increase in working capital deficit was primarily due to an
increase in convertible notes payable and accrued interest.
Cash Flows
Nine Months Ended
September 30,
2020 2019 Changes %
Cash flows used in operating activities $ (25,875 ) $ (21,336 ) $ (4,539 ) 21 %
Cash flows used in investing activities
- - - n/a
Cash flows provided by financing activities 25,875 21,336 4,539 21 %
Net changes in cash
$ - $ - $ - n/a
Cash Flow from Operating Activities
We have not generated positive cash flow from operating activities. During the
nine months ended September 30, 2020, net cash used in operating activities was
$25,875 compared to $21,336 used during the nine months ended September 30,
2019. Cash flows used in operating activities during the nine months ended
September 30, 2020, comprised of a net loss of $34,971,555, which was reduced by
non-cash expenses of $34,875,000 for stock based compensation, $44,707 for
amortization of debt discount, $10,030 for web development cost and a net change
in working capital of $15,943. Cash flows used in operating activities during
the nine months ended September 30, 2019, comprised of a net loss from of
$48,795, which was reduced by non-cash expenses of $9,000 for amortization of
debt discount and a net change in working capital of $18,459.
Cash Flow from Investing Activities
During the nine months ended September 30, 2020 and 2019, our company did not
have any investing activities.
Cash Flow from Financing Activities
During the nine months ended September 30, 2020, net cash provided by financing
activities was $25,875 compared to $21,336 during the nine months ended
September 30, 2019. During the nine months ended September 30, 2020, the Company
received $25,875 for proceeds from issuance of convertible notes. During the
nine months ended September 30, 2019, the Company received $21,336 for proceeds
from issuance of promissory notes.
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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.
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CLOUDWEB, INC. 
