So you have answered your own question. The circuit design is fine, you have just wired it up wrong.
Well, I did make a PCB for this (stupid me
Have you tried measuring the voltages directly on the pins of the IC?
Not yet, but I'll do that continuity test and sniff test first
anyway I'll do it tonight.
For now I would just bypass the regulator setup and just use the 5volt from the board.
I did that, but the same result, I power the logic input from Arduino 5V and I didn't do that for long time, because I was afraid it will kill my Arduino board.
Thanks again for all the help.