Quarterly Report (10-q)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

x Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2018

 

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 333-209903

 

GSG GROUP INC.

(Exact name of small business issuer as specified in its charter)

 

Nevada		2750		37-1769300
State or other jurisdiction of incorporation or organization		Primary Standard Industrial Classification Number		IRS Employer Identification Number

 

18/F Canadia Bank Tower, No. 315, Ang Doung St, Corner Monivong Blve, Phnom Penh, Cambodia.

Tel: [phone]

(Address and telephone number of principal executive offices)

 

____________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

 

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 such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer	¨	Non-accelerated filer	¨
Large accelerated filer	¨	Smaller reporting company	x
		Emerging growth company	x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 30,300,000 common shares issued and outstanding as of February 28, 2019.

 

 

GSG GROUP INC.

 

QUARTERLY REPORT ON FORM 10-Q

 

TABLE OF CONTENTS

 

			Page
PART I FINANCIAL INFORMATION:
Item 1.	Financial Statements (Unaudited)		3
	Balance Sheets as of June 30, 2018 (Unaudited) and December 31, 2017		4
	Statements of Operations for the Three and Six Months Ended June 30, 2018 and 2017 (unaudited)		5
	Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017 (unaudited)		6
	Notes to the Unaudited Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		10
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		14
Item 4.	Controls and Procedures		14
PART II OTHER INFORMATION:
Item 1.	Legal Proceedings		15
Item 1A.	Risk Factors		15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		15
Item 3.	Defaults Upon Senior Securities		15
Item 4.	Submission of Matters to a Vote of Securities Holders		15
Item 5.	Other Information		15
Item 6.	Exhibits		15
	Signatures		16

 

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PART 1 – FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

The accompanying interim financial statements of GSG Group Inc. (formerly known as Wike Corp.) (“the Company”, “we”, “us” or “our”), have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted principles have been condensed or omitted pursuant to such rules and regulations.

 

The interim financial statements are condensed and should be read in conjunction with the company’s latest annual financial statements.

 

In the opinion of management, the financial statements contain all material adjustments, consisting only of normal adjustments considered necessary to present fairly the financial condition, results of operations, and cash flows of the Company for the interim periods presented.

 

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GSG GROUP INC.

 

BALANCE SHEETS

 

		June 30, 2018				December 31, 2017
		(Unaudited)				(Audited)
ASSETS
Current Assets
Cash		$	200			$	5,369
Inventory			-				-
Prepaid expenses			-				149
Total Current Assets			200				5,518
Property and equipment, net			-				-
Total Assets		$	200			$	5,518
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Liabilities
Current Liabilities
Accrued expenses and other payables		$	851			$	72,380
Due to related parties			80,623				-
Total Current Liabilities			81,474				72,380
Total Liabilities			81,474				72,380
Stockholders’ Equity (Deficit)
Common stock - par value $0.001; 75,000,000 shares authorized, 30,300,000 shares issued and outstanding as of June 30, 2018 and December 31, 2017			30,300				30,300
Additional paid-in capital			3,086				3,086
Accumulated deficit			(114,660	)			(100,248	)
Total Stockholders’ Equity (Deficit)			(81,274	)			(66,862	)
Total Liabilities and Stockholders’ Equity (Deficit)		$	200			$	5,518

 

The accompanying notes are an integral part of these unaudited financial statements.

  

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GSG GROUP INC.

 

STATEMENTS OF OPERATIONS

(Unaudited)

 

		For the 3 Months Ended June 30,								For the 6 Months Ended June 30,
		2018				2017				2018				2017
Revenues		$	-			$	-				-			$	3,800
Cost of goods sold			-				-				-				(339	)
Gross profit			-				-				-				3,461
Operating expenses:
General and administrative expenses			(893	)			(12,329	)			(14,412	)			(38,915	)
Total operating expenses			(893	)			(12,329	)			(14,412	)			(38,915	)
Loss before provision for income taxes			(893	)			(12,329	)			(14,412	)			(35,454	)
Provision for income taxes			-				-				-				-
Net loss		$	(893	)		$	(12,329	)		$	(14,412	)		$	(35,454	)
Net loss per share
Basic and diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Weighted average shares outstanding
Basic and diluted			30,300,000				6,060,000				30,300,000				6,060,000

 

The accompanying notes are an integral part of these unaudited financial statements.

 

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GSG GROUP INC.

 

STATEMENTS OF CASH FLOWS

(Unaudited)

 

		6 Months Ended June 30, 2018				6 Months Ended June 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period		$	(14,412	)		$	(35,454	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense			-				459
Changes in operating assets and liabilities:
Inventory			-				339
Prepaid expenses & deposits			149				(5,546	)
Accrued expenses and other payables			(71,529)				18,476
Accounts payable			-				-
CASH FLOWS USED IN OPERATING ACTIVITIES			(85,792	)			(21,726	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sales of common stock			-				-
Proceeds from related parties			85,991				21,996
Repayments to related parties			(5,368	)			(103)
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES			80,623				21,893
NET INCREASE IN CASH			(5,169)				167
Cash, beginning of period			5,369				853
Cash, end of period		$	200			$	1020
NON-CASH TRANSACTIONS:
Expenses paid by related party		$	-			$	-
Forgiveness of net liabilities by former shareholder		$	-			$	-
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid		$	-			$	-
Income taxes paid		$	-			$	-

 

The accompanying notes are an integral part of these unaudited financial statements.

 

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GSG GROUP INC.

 

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

June 30, 2018

 

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

 

GSG Group Inc. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on November 11, 2014. Initially we were a development-stage company in a business of printing on ornamental ribbons. Our initial office was located at Via Lodovico Berti, 40131, Bologna, Italy .

 

On April 6, 2017, Corina Safaler, the Company’s former Director and CEO, completed a transaction with Wentao Zhao, by which Mr. Zhao acquired 4,500,000 shares of common stock, representing 74% ownership of the Company. On the same date, the shareholders of the Company voted Sreyneang Jin as Director and CEO, and Gim Hooi Ooi as CFO. The new management decided to cease the existing business of printing ornamental ribbons and explore new business plan that will generate sufficient cash flows and profits to the Company. The Company has leased its office at 18/F Canadia Bank Tower, No. 315, Ang Doung St, Corner Monivong Blve, Phnom Penh, Cambodia for future business.

 

On August 17, 2017, the Board of Directors of the Company approved that the Company changed its name to GSG Group Inc. and the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Nevada Secretary of State. The name change was approved by the Financial Industry Regulatory Authority ("FINRA") on September 15, 2017.

 

On November 22, 2017 Mr. Zhao and Mr. Xin Chen had entered into an agreements whereas Mr. Chen would purchase from Mr. Zhao 3,900,000 shares of the common stock of Company against a cash payment of $260,000, the shares representing 65% of all Company´s common stock and a further 600,000 shares purchased by two non-notifiable buyers. At the time all transfers were affected on the share register on February 28, 2018, the forward split had been implemented, giving Mr. Chen a position of 19,500,000 shares, or 65%. Mr Chen then disposed of further 200,000 shares, leaving him with 19,300,000 shares representing 64% of control over the Company as per.

 

On May 15, 2018 Mr. Chen and Comindus Finance Corp entered into an agreement whereas Comindus Finance was to purchase 19,300,000 shares of Company´s common stock from Mr. Chen. While the shares were transferred to Comindus Finance Corp. as per July 31, 2018, the transaction was cancelled and unwound shortly thereafter, so that Mr. Chen remained throughout the entire time and still remains at the date of this document, the rightful owner of these 19,300,000 shares. The transfer agent has been instructed to re-enter Mr. Chen on the share register accordingly, the process of which has not yet been completed.

 

On May 21, 2018, Ms. Jin Sreyneang rendered her resignation as director of the company in anticipation of the new controlling shareholder wishing to appoint director(s) as per his choosing. However, following the unwinding of the control block transfer, no new directors have been appointed. The resignation of Ms. Sreyneang was confirmed by shareholder vote on December 04, 2018. In that same meeting shareholders agreed to make Mr. Ooi the new President, CEO and Treasurer of the Company.

 

NOTE 2 – GOING CONCERN

 

The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company had limited revenues for the six months ended June 30, 2018 and incurred recurring losses. In addition, the Company had a negative working capital and generated negative cash flows from operating activities for the six months ended June 30, 2018, and has not completed its efforts to establish a stable source of revenues sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about the Company’s ability to continue as a going concern.

 

Management anticipates that the Company will be dependent, for the near future, on borrowings from related party to fund operating expenses. In light of management’s efforts, there are no assurances that the Company will be successful in any of its endeavors or become financially viable and continue as a going concern. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

 

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NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for financial information and with the instructions to Form 10-Q. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2017 included in the Company’s Form 10-K filed with the Securities and Exchange Commission. The unaudited interim financial statements should be read in conjunction with those financial statements included in the Form 10-K. In the opinion of Management, all adjustments considered necessary for a fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018.

 

Use of Estimates

 

The preparation of the 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 of the financial statements and the reported amount of revenues and expenses during the reporting period. The management makes its best estimate of the outcome for these items based on information available when the financial statements are prepared. Actual results could differ from those estimates.

 

 

Fair Value of Financial Instruments

 

ASC topic 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 carrying amounts of cash, prepaid expenses and accrued expenses and other payables approximate their fair value due to their relatively short-term maturity.

 

Related Party Transaction

 

A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business.

 

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

 

Revenue Recognition

 

The Company will recognize revenue in accordance with ASC topic 605 “Revenue Recognition”. Revenue is recognized when the four basic criteria of revenue recognition are met: (1) a contractual agreement exists; (2) transfer of rights has been completed; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.

 

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NOTE 4 – RELATED PARTY TRANSACTIONS

 

During the six months ended June 30, 2018, the Company borrowed cash of $51,611 from the directors for operating purpose and repaid in the amount of $49,903. During the six months ended June 30, 2018, the directors paid operating expenses of $44,381 on behalf of the Company. The borrowings from and expenses paid by the directors are unsecured, non-interest bearing and due on demand.

 

On May 12, 2017, Great Strength Global Limited (“GSGL”), a company registered in British Virgin Island and 100% owned by Gim Hooi Ooi, CFO of the Company, entered into a lease agreement for an online virtual office located in Phnom Penh, Cambodia, currently solely utilized by the Company. The lease covered the period from May 1, 2017 to April 30, 2018. Monthly rent for the office is $164 with consumption tax included and is paid by the Company.

 

 

NOTE 5 – COMMITMENTS AND CONTINGENCIES

 

In May 2017, the Company leased an online virtual office in Cambodia with monthly payment of $164 including consumption tax through GSGL. See Note 4 for details.

 

NOTE 6 – SUBSEQUENT EVENTS

 

On May 21, 2018, Ms. Jin Sreyneang rendered her resignation as director, which was confirmed by shareholder vote on December 04, 2018. In that same meeting shareholders agreed to have Mr. Ooi appointed the new President, CEO and Treasurer of the Company.

 

On November 29, 2018, the Company entered into a Share Exchange Agreement under which it seeks to acquire 100% of the shares of a US-based private company that holds certain rights and contracts in the area of medical devices. Under the agreement Company will issue a certain number of new shares to the shareholders of the target company against receipt of their shares in the target company. While the agreement has been executed and adopted by shareholder vote on December 04, 2018, both parties are currently working on the deliverables to affect closing. The parties have agreed confidentiality over the details of the agreement until closing has occurred.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Forward looking statement notice

 

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

 

Financial information contained in this quarterly report and in our unaudited interim financial statements is stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

 

General

 

GSG Group Inc. was incorporated in the State of Nevada on November 11, 2014 and established a fiscal year end of December 31. We have generated limited revenues, have minimal assets and have incurred losses since inception. We were formed to commence operations in ornamental ribbons production, such as printing on ribbons. Effective September 6, 2017, the Company changed its name from WIKE Corp. to GSG Group Inc.. The change of name had been approved by Financial Industry Regulatory Authority on September 15, 2017.

 

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On April 6, 2017, Corina Safaler, the Company’s former Director and CEO, completed a transaction with Wentao Zhao, by which Mr. Zhao acquired 4,500,000 shares of common stock, representing 74% ownership of the Company for $305,000 in cash. On the same date, the shareholders of the Corporation voted Ms. Sreyneang Jin as Director, and CEO, and Mr. Gim Hooi Ooi as CFO. The new management decided to cease the existing business of printing ornamental ribbons, and will explore new business plan that will generate sufficient cash flow and profits to the Company.

 

The Company has a new office at 18/F Canadia Bank Tower, No. 315, Ang Doung St, Corner Monivong Blve, Phnom Penh, Cambodia as our new office for the future business after change of management. The lease was signed by Great Strength Global Limted, a company which is 100% owned by Gim Hooi Ooi, CFO of the Company. The office is, however, 100% used by the Company. All rent expenses have been paid by the Company.

 

Product

 

Originally, our products included ribbons, notebooks, plastic items and other printed goods of that kind, where we specialized mostly on ribbons printing.

 

Following the change of control and management on April 6, 2017 the Company ceased the existing business and started exploring new businesses to generate revenue.

 

Target market

 

Operating from our Cambodia head office, management has begun moving into the business consulting space for inbound Cambodia investors and local businesses. From our presence on the ground in Cambodia, we are exposed to and increasingly connected to the local business world and in an excellent position to identify special opportunities and demand for goods or services.

 

Potential target areas are in the tourism industry, real estate development and general public and private infrastructure as well as in telecoms, technology and transportation.

 

Industry analysis

 

Cambodia has existed in long time relative political isolation and, following the more open approach to inbound investments since about 5-7 years, sees much increased interest from neighboring countries in Asia, but also internationally. Cambodia has good growth rates and substantial momentum, specifically in the areas just mentioned above in our target markets. The relative investment backlog combined with increased trust in the Cambodian government and ministries makes for a very good general business environment we intend to profit from. 

 

Marketing

 

We are marketing our services mostly on a mouth to mouth basis, which is possible due to our long built network to all relevant business owners, industry leaders and decision makers locally. We intend to increase our online presences and to utilize alternative marketing tools in the future to further increase our exposure and recognition with our target clients.

 

We believe that our marketing campaign shall attract many clients and develop a strong reputation of quality, diligent and efficient service provider. Hopefully, our clients will continue to readily recommend us to others.

 

Competition

 

The level of competition in our target line of business is still lower than in other further developed countries and we rely on our targeted performance benchmarks in result driven, competent consulting that we can offer at a competitive fee level due to our still lean structure and organization.

 

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Insurance

 

We do not maintain any insurance, but will decided on a case by case basis if professional indemnity cover would be advisable, depending largely on the size and subject matter of our advisory mandates. If we were made a party of a products liability action and, in the case would not have arranged for insurance cover, we may not have sufficient funds to defend the litigation. If that occurs a judgment could be rendered against us that could cause us to cease operations.

 

Employees

 

We are a development stage company and currently have no employees, other than our officers and directors.

 

Offices

 

The phone number is [phone]. The office is located at 18/F Canadia Bank Tower, No. 315, Ang Doung St, Corner Monivong Blve, Phnom Penh, Cambodia.

 

Government Regulation

 

We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to consulting firms and operation of any facility in any jurisdiction which we would conduct activities. We do not believe that regulation will have a material impact on the way we conduct our business. We do not need to receive any government approvals necessary to conduct our business; however we will have to comply with all applicable export and import regulations.

 

Results of operations

 

The following comparative analysis on results of operations was based primarily on the comparative financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report.

 

Comparison of the three and six months ended June 30, 2018 and June 30, 2017

 

Revenues

 

The Company generated revenues of $0 and $0 for the three months ended June 30, 2018 and 2017, respectively. For the six months ended June 30, 2018 we have generated revenues of $0 and revenues were $3,800 for the six months ended June 30, 2017. The decrease in revenue was mainly to the reason that the Company ceased its operation in commercial printing when the new management took charge on April 6, 2017.

 

Operating Expenses

 

The operating expenses were $893 and $12,329 for the three months ended June 30, 2018 and 2017, respectively. For the six months June 30, 2018 and 2017, the Company incurred operating expenses of $14,412 and $38,915, respectively. The decrease in operation expenses is mainly due to the higher regulatory filing fee when the Company applied for OTC markets trading at the beginning of the year 2017, as well as that the company paid salary to the CFO and monthly retainer fees to attorneys after new management was appointed – both main cost factors abolished in 2018.

 

Liquidity and capital resources

 

We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. The Company will be relying on borrowings from related party to sustain its daily operations.

 

As at June 30, 2018, we had assets for the amount of $200, of which the cash balance was $200. As of December 31, 2017, our total assets were $5,518 which included cash of $5,369.

 

As at June 30, 2018 and December 31, 2017, our current liabilities were $81,474 and $72,380, respectively. The stockholders’ deficit was $81,274 as of June 30, 2018 and the stockholders’ equity was $66,862 as of December 31, 2017.

 

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CASH FLOWS FROM OPERATING ACTIVITIES

 

We have not generated positive cash flows from operating activities. Net cash flows used in operating activities was -$14,412 for the six months ended June 30, 2018 and -$35,454 for the same period in 2017.

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

For the six months ended June 30, 2018 and 2017, we did not have any cash flows used in or provided by investing activities.

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

For the six months ended June 30, 2018 net cash flows provided by financing activities was $80,623. The net cash flows provided by financial activities were $21,893 for the six months ended June 30, 2017. During the six months ended June 30, 2018, the Company borrowed cash of $85,991from related parties. The Company borrowed cash of $21,966 during the six months ended June 30, 2017. The Company repaid cash of $5,368 to related parties in the six months ended September 31, 2018 and $103 during the six months ended June 30, 2017.

 

Management’s discussion and analysis

 

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should review the “Risk Factors” section of this prospectus for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

 

We qualify as an “emerging growth company” under the JOBS Act. As a result, we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

 

	·	Have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
	·	Provide an auditor attestation with respect to management’s report on the effectiveness of our internal controls over financial reporting;
	·	Comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
	·	Submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and
	·	Disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

 

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

  

We will remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our total annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, which would occur if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. Even if we no longer qualify for the exemptions for an emerging growth company, we may still be, in certain circumstances, subject to scaled disclosure requirements as a smaller reporting company. For example, smaller reporting companies, like emerging growth companies, are not required to provide a compensation discussion and analysis under Item 402(b) of Regulation S-K or auditor attestation of internal controls over financial reporting.

 

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There is a substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have generated only limited revenues to date and had recurring losses and negative cash flows from operating activities.

 

If we need additional cash and cannot raise it, we will either have to suspend operations until we do raise the cash, or cease operations entirely.

 

Plan of operation

 

Initially the Company intended to commence operations in the business of ornamental ribbons production. Our business was printing items on different kind of ribbons, such as printing logos, wishes, names and others. We generated limited revenues and, following the switch of the business model to consulting our principal business activities to date consisted in creating a business plan, developing models of our business card and booklet and setting up our web site.

 

Management continues to look for consulting opportunities in our several target business areas in Cambodia.

 

 

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.

 

Limited operating history; need for additional capital

 

There is no historical financial information about us upon which to base an evaluation of our performance. We are in start-up stage operations and have generated limited revenues to the date. We cannot guarantee we will be successful in our business operations. We are exploring new business opportunities.

 

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholder.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

None

 

ITEM 4. CONTROLS AND PROCEDURES

 

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal or person performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

  

An evaluation was conducted under the supervision and with the participation of our management on the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation, our management concluded that our disclosure controls and procedures were not effective due to the material weaknesses identified as follows: (i) inadequate segregation of duties; (ii) lack of sufficient and adequate finance personnel with appropriate understanding of U.S. GAAP and SEC reporting requirements; (iii) lack of well-established procedures to identify, approve and report related party transactions. As a result, material weaknesses on internal control over financial reporting exist.

 

Our independent auditors have not audited and are not required to audit this assessment of our internal control over financial reporting for the period covered by this report.

 

Changes in Internal Controls over Financial Reporting

 

There was no change in the Company’s internal control over financial reporting during the most recent three-month period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

 

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PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We know of no material, existing or pending legal proceedings against our Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

 

ITEM 1A. RISK FACTORS

 

None

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None

 

ITEM 3. DEFAULTS UPON SENIOR SECURITES

 

None

 

ITEM 4. SUBMISSION OF MATTERS TO A VOITE OF SECURITIES HOLDERS

 

None

 

ITEM 5. OTHER INFORMATION

 

None

  

ITEM 6. EXHIBITS

 

The following exhibits are included as part of this report by reference:

 

31.1		Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32		Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	GSG Group Inc.
Date: April 16, 2019	By:
		Gim Hooi OOI
		President and Treasurer
		(Principal Chief Executive and Principal Financial and Accounting Officer)

 

 

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