Nevada | 30-0873246 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer | Accelerated filer | ||
Non-accelerated filer | Smaller reporting company | ||
Emerging Growth Company |
| 3 |
| 4 |
| 5 |
High | Low | |||||||
Year ended December 31, 2022 | ||||||||
1st Quarter | $ | 6.50 | $ | 6.50 | ||||
2nd Quarter | $ | 6.50 | $ | 6.50 | ||||
3rd Quarter | $ | 7.01 | $ | 6.50 | ||||
4th Quarter | $ | 10.01 | $ | 7.01 | ||||
Year ended December 31, 2021 | ||||||||
1st Quarter | $ | 4.21 | $ | 3.75 | ||||
2nd Quarter | $ | 18.00 | $ | 2.25 | ||||
3rd Quarter | $ | 1.01 | $ | 1.01 | ||||
4th Quarter | $ | 25.00 | $ | 25.00 | ||||
| 6 |
High | Low | |||||||
Year ended December 31, 2021 | ||||||||
1st Quarter | $ | 4.21 | $ | 3.75 | ||||
2nd Quarter | $ | 18.00 | $ | 2.25 | ||||
3rd Quarter | $ | 1.01 | $ | 1.01 | ||||
4th Quarter | $ | 25.00 | $ | 25.00 | ||||
Year ended December 31, 2020 | ||||||||
1st Quarter | $ | 1.00 | $ | 1.00 | ||||
2nd Quarter | $ | 1.50 | $ | 1.50 | ||||
3rd Quarter | $ | 1.50 | $ | 1.50 | ||||
4th Quarter | $ | 3.25 | $ | 3.25 | ||||
| 7 |
| 8 |
1. | Our ability to attract and retain management and key employees; |
2. | Our ability to generate customer demand for our products; |
3. | The intensity of competition; and |
4. | General economic conditions. |
| 9 |
| 10 |
| 11 |
| 12 |
For the year ended December 31, 2021: | ||||
Nutrition supplement | $ | 68,840 | ||
Water purifier machine | 107,826 | |||
Automobile carbon reduction machine | 305,868 | |||
Software | 35,953 | |||
Total | $ | 518,487 |
For the year ended December 31, 2020: | ||||
Nutrition supplement | $ | 73,317 | ||
Water purifier machine | 1,376,795 | |||
Automobile carbon reduction machine | 400,061 | |||
Software | 87,613 | |||
Total | $ | 1,937,786 |
For the year ended December 31, 2021: | ||||
Asia Pacific | $ | 518,487 | ||
Total | $ | 518,487 |
For the year ended December 31, 2020: | ||||
Asia Pacific | $ | 1,937,786 | ||
Total | $ | 1,937,786 | ||
| 13 |
| 14 |
Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available. | ||
Customer | Net sales for the year ended December 31, 2021 | Accounts receivable balance as of December 31, 2021 | ||||||
A | $ | 290,749 | $ | 382,189 | ||||
B | $ | 204,018 | $ | 134,655 | ||||
Customer | Net sales for the year ended December 31, 2020 | Accounts receivable balance as of December, 2020 | ||||||
A | $ | 1,714,737 | $ | 1,054,412 | ||||
Supplier | Net purchase for the year ended December 31, 2021 | Accounts payable balance as of December 31, 2021 | ||||||
A | $ | - | $ | - | ||||
B | $ | 32,876 | $ | - | ||||
C | $ | - | $ | - | ||||
D | $ | - | $ | - | ||||
E | $ | 71,505 | $ | - | ||||
F | $ | 12,893 | $ | - | ||||
Supplier | Net purchase for the year ended December 31, 2020 | Accounts payable balance as of December 31, 2020 | ||||||
A | $ | 182,634 | $ | - | ||||
B | $ | 108,404 | $ | 18,079 | ||||
C | $ | 50,927 | $ | - | ||||
D | $ | 49,230 | $ | - | ||||
| 15 |
| 16 |
| 17 |
/s/ Onestop Assurance PAC |
December 31, 2022 | December 31, 2021 | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | 18,169 | 24,141 | ||||||
Accounts receivable | 160,253 | 548,201 | ||||||
Inventory, net | 46,196 | 29,573 | ||||||
Advances to suppliers | 166,594 | 280,224 | ||||||
Security deposits | 6,608 | 1,127,989 | ||||||
Prepaid expenses and other current assets | 28,096 | 27,773 | ||||||
Total Current Assets | 425,916 | 2,037,901 | ||||||
Non-Current Assets | ||||||||
Property, plant and equipment, net | 4,692 | 6,739 | ||||||
Operating lease right of use asset | 115,884 | 85,419 | ||||||
Total Non-Current Assets | 120,576 | 92,158 | ||||||
Total Assets | 546,492 | 2,130,059 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | - | - | ||||||
Other payable and accrued expenses | 73,352 | 88,040 | ||||||
Due to shareholders | 277,080 | 30,858 | ||||||
Income taxes payable | 49,074 | 55,394 | ||||||
Other current liabilities | 750,000 | 500,000 | ||||||
Operating lease liabilities - current | 48,231 | 37,779 | ||||||
Current portion of long-term loan payables | 68,497 | 80,047 | ||||||
Total Current Liabilities | 1,266,234 | 792,118 | ||||||
Non-Current Liabilities | ||||||||
Long-term loan payables | 116,012 | 204,133 | ||||||
Operating lease liabilities - non-current | 80,538 | 47,640 | ||||||
Total Non-Current Liabilities | 196,550 | 251,773 | ||||||
Total Liabilities | 1,462,784 | 1,043,891 | ||||||
Commitments and Contingencies | - | - | ||||||
Shareholders’ Equity | ||||||||
Preferred stock ($0.001 par value, 5,000,000 shares authorized, 1,500,000 shares issued and outstanding as of December 31, 2022 and 2021, respectively) | 1,500 | 1,500 | ||||||
Common stock ($0.001 par value; 575,000,000 shares authorized, 183,781,560 and 180,065,254 shares issued and outstanding as of December 31, 2022 and 2021, respectively) | 183,781 | 180,065 | ||||||
Additional paid in capital | 67,249 | 29,060 | ||||||
Deferred stock compensation | (40,674 | ) | - | |||||
Accumulated income (loss) | (1,165,665 | ) | 722,925 | |||||
Accumulated other comprehensive loss | 42,964 | 133,056 | ||||||
Total equity attributable to EOS, Inc. | (910,845 | ) | 1,066,606 | |||||
Non-controlling interest | (5,447 | ) | 19,562 | |||||
Total Equity | (916,292 | ) | 1,086,168 | |||||
Total Liabilities and Shareholders’ Equity | 546,492 | 2,130,059 | ||||||
December 31, 2021 | December 31, 2020 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 24,141 | $ | 122,482 | ||||
Accounts receivable | 548,201 | 1,116,310 | ||||||
Inventory, net | 29,573 | 214,539 | ||||||
Advance to suppliers | 280,224 | 191,633 | ||||||
Security deposits | 1,127,989 | 1,113,010 | ||||||
Prepaid expenses and other current assets | 27,773 | 26,459 | ||||||
Total current assets | 2,037,901 | 2,784,433 | ||||||
Non-current Assets | ||||||||
Property and equipment, net | 6,739 | 8,175 | ||||||
Operating lease right of use asset, net | 85,419 | 1,914 | ||||||
Total non-current assets | 92,158 | 10,089 | ||||||
Total assets | $ | 2,130,059 | $ | 2,794,522 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 0 | $ | 18,415 | ||||
Other payable and accrued expenses | 88,040 | 81,360 | ||||||
Due to shareholders | 30,858 | 107,791 | ||||||
Income tax payable | 55,394 | 26,169 | ||||||
Other current liabilities | 500,000 | 250,000 | ||||||
Operating lease liabilities - current | 37,779 | 838 | ||||||
Short-term loan | 80,047 | 44,457 | ||||||
Total current liabilities | 792,118 | 529,030 | ||||||
Non-current liabilities | ||||||||
Long-term loan | 204,133 | 122,528 | ||||||
Operating lease liabilities – noncurrent | 47,640 | 1,076 | ||||||
Total non-current liabilities | 251,773 | 123,604 | ||||||
Total liabilities | 1,043,891 | 652,634 | ||||||
Commitments and Contingencies | 0- | 0- | ||||||
Shareholders’ Equity | ||||||||
Preferred stock ($0.001 par value, 5,000,000 shares authorized, 1,500,000 and 0 shares issued and outstanding as at December 31, 2021 and 2020, respectively) | 1,500 | 0- | ||||||
Common stock ($0.001 par value, 575,000,000 shares authorized, 180,065,254 and 74,123 shares issued and outstanding as at December 31, 2021 and 2020, respectively) | 180,065 | 74 | ||||||
Additional paid in capital | 29,060 | 186,474 | ||||||
Accumulated income | 722,925 | 1,803,259 | ||||||
Other comprehensive income | 133,056 | 111,776 | ||||||
Total shareholders’ equity | 1,066,606 | 2,101,583 | ||||||
Non-controlling interest | 19,562 | 40,305 | ||||||
Total Equity | 1,086,168 | 2,141,888 | ||||||
Total liabilities and shareholders’ equity | $ | 2,130,059 | $ | 2,794,522 | ||||
| F-3 |
EOS, INC. AND SUBSIDIARIES C For the Years Ended December 31, 2022,and 202 1
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EOS, INC. AND SUBSIDIARIES For the Years Ended December 31, 2022 and 2021
EOS, INC. AND SUBSIDIARIES
For the Years Ended December 31, 2022 and 2021
EOS, INC. AND SUBSIDIARIES
Note 1. NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES Organization EOS Inc. was incorporated on April 3, 2015 in the State of Nevada. The Company’s business plan is to market and distribute skin care products, including masks and serums. On November 18, 2016, the Company Emperor Star International Trade Co., Ltd., (“Emperor Star”), was incorporated on November 16, 2015 under the laws of Taiwan. Emperor Star is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers. On May 3, 2017, the Company entered into and closed a Share Purchase and Sale Agreement (the “Purchase Agreement”) with Emperor Star and the shareholder of Emperor Star to acquire all issued and outstanding shares of Emperor Star in consideration of $30,562 in cash. As a result of the Purchase Agreement, Emperor Star On September 20, 2018, the Company set up another wholly-owned subsidiary, EOS International Inc. (“EOS(BVI)”), under the laws of British Virgin Islands. EOS(BVI) is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers. On March 1, 2019, EOS(BVI) set up a wholly-owned subsidiary, Shanghai Maosong Co., Ltd (“Maosong”), under the laws of People’s Republic of China. Maosong is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers in China. As of the date of this report, Maosong has a registered capital of USD $100,000, but no capital has actually been paid into Maosong. On June 2, 2020, EOS(BVI) 83.33% owner, and Shanghai Qifan Qiye Management Co., Ltd. (“Qifan”) 16.67% owner of Maosong resolute to change the registered capital of Maosong to RMB 1,200,000,000 (1.2 billion) and that EOS to contribute certain Intellectual Property as registered capital of Shanghai Maosong. Intellectual Property owned by EOS International Inc was valued at RMB 1,000,000,000 On July 13, 2021, EOS(BVI), MaoSong, and Qifan entered into a Shareholder Agreement where Qifan (i) delegate its 16.67% equity voting rights, powers, or benefits in Maosong to EOS(BVI); (ii) grant EOS(BVI) an irrevocable, unconditional, exclusive option to purchase Maosong’s equity interest; (iii) the right to receive any proceeds from the Maosong’s Equity Interest; (iv) pledge its existing or any prospective Maosong equity interest to EOS Int’l; as a result EOS(BVI) retains 100 % control of MaoSong and the 16.67% noncontrolling interest are consolidated.Principles of Consolidation The accompanying consolidated financial statements, including the accounts of EOS Inc. and its wholly owned subsidiaries in Taiwan, British Virgin Islands, and People’s Republic of China, have been prepared in conformity with accounting principles generally accepted in the United States of America. Since the Company and Emperor Star are entities under common control prior to the acquisition of Emperor Star, the transaction is accounted for as a restructuring transaction. All assets and liabilities of Emperor Star were transferred to the Company at their respective carrying amounts on the date of transaction. The Company has recast prior period financial statements to reflect the conveyance of Emperor Star’s common shares as if the restructuring transaction had occurred as of the earliest date of the consolidated financial statements. All material intercompany accounts, transactions, and profits have been eliminated in consolidation. The nature of and effects on earnings per share (EPS) of non-recurring intra-entity transactions involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast to include the earnings (or losses) of the transferred net assets.
The functional currency of the subsidiaries in Taiwan is the New Taiwan dollars and the subsidiary in People’s Republic of China is the Chinese Yuan, or Renminbi; however, the accompanying consolidated financial statements have been translated and presented in United States Dollars ($). In the accompanying consolidated financial statements and notes, “$”, “US$” and “U.S. dollars” mean United States dollars, “NT$” and “NT dollars” mean New Taiwan dollars, and “RMB” means Chinese Yuan, or Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America, 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 amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less. Accounts Receivable Accounts receivable are stated at carrying value less estimates made for doubtful receivables. An allowance for impairment of trade receivables is established if the collection of a receivable becomes doubtful. Such receivable becomes doubtful when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Inventory Inventory is stated at the lower of cost and net realizable value. Net realizable value (NRV) is defined as estimated selling prices less costs of completion, disposal, and transportation. Inventory consists mainly of finished goods held for resale. Cost is determined on a weighted average cost method. The Company periodically reviews the age and turnover of its inventory to determine whether any inventory has become obsolete or has declined in value, and incurs a charge to operations for known and anticipated inventory obsolescence. Property and Equipment Property and equipment for the years ended December 31, 2022 and 2021, respectively. Impairment loss was $17,381 and
Impairment of Long-Lived Assets The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve breakeven operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell.Impairment loss on property and equipment was $17,381 and $nil for the years ended December 31, 2022 and 2021, Revenue Recognition Pursuant to ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines is within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customers. At inception of the contract, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the a mount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.Merchandise sales: The Company recognizes sales revenues from merchandise sales when customers obtain control of the Company’s products, which typically occurs upon delivery to customer. Merchandise sales revenues are recorded at the sales price, or “transaction price”. Software sales: The Company does not develop the software products on its own. When the Company receives a purchase order from the customer, the Company would engage with the third-party software company to customize and develop the software products. The Company recognizes software revenues upon completion of the installation and testing, and transfer the control of the software products to the customer. Software revenues are recorded at the fixed sales price, or “transaction price”, pursuant to the sales contracts. The Company may also charge the customer maintenance service fees on a straight-line basis over the service period pursuant to the sales contract. The Company concluded that the performance obligation for the maintenance service is distinct. Therefore, such maintenance service revenue can be separated from other elements in the arrangement. Trade discount and allowances: The Company generally does not provide invoice discounts on product sales to its customers for prompt payment. Product returns: The Company generally does not provide customers with the right to return a product for a full or partial refund, a credit , or an exchange for another product.To date, product allowance and returns have been minimal and, based on its experience, the Company believes that returns of its products will continue to be minimal. Since COVID-19 pandemic hit globally in 2020 and throughout first three quarters of financial year ended December 31, 2021, management assessed that the market conditions that it operated in was worsening. Credit risk on customers was determined to have deteriorated significantly as the majority of its customers were located in the PRC. Accordingly, management took the position that revenue would only be recognized when the consideration is received as to satisfy revenue recognition criteria related to reasonable certainty of collections.
During the fourth quarter of financial year ended December 31, 2021, the Covid pandemic was effectively controlled in the PRC. Management re-assessed the market conditions and determined that the overall market conditions were improving, and the Company’s collection history in the prior three quarters was positive, and in fourth quarter of 2021 reached sustainable recovery rate comparable to pre-COVID-19 environment. Accordingly, management decided that due to the improved conditions collection is now reasonably certain, and revenue is now recognized when risk and rewards are transferred to its customers. The following tables provide details of revenue by major products and by geography. Revenue by Major Products
Revenue by Geography
Leases The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) using the modified retrospective approach, electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, the Company presented the disclosures which were required under ASC 842. The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. The Company’s future minimum based payments used to determine the Company’s lease liabilities mainly include minimum based rent payments. As most of Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
In addition, the adoption of the standard did not have a material impact on the Company’s results of operations or cash flows. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in Selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur. Advertising Costs Advertising costs are expensed at the time such advertising commences. Advertising expenses were and for the Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation (“ASC 718”). Under the fair value recognition provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as compensation expense on a straight-line basis over the requisite service period, based on the terms of the awards. The Company calculates the fair value of option grants utilizing the Black-Scholes pricing model and estimates the fair value of the stock based upon the estimated fair value of the common stock. In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 expands the guidance in ASC 718 to include share-based payments for goods and services to non-employees and generally aligns it with the guidance for share-based payments to employees. In accordance with ASU 2018-07, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the underlying equity instrument. The fair value of the equity instrument is charged directly to compensation expense and additional-paid-in capital over the period during which services are rendered. Post-retirement and Post-employment Benefits The Company’s subsidiaries in Taiwan adopted the government mandated defined contribution plan pursuant to the Taiwan Labor Pension Act (the “Act”). Such labor regulations require that the rate of contribution made by an employer to the Labor Pension Fund per month shall not be less than 6% of the worker’s monthly salaries. Pursuant to the Act, the Company makes monthly contribution equal to 6% of employees’ salaries to the employees’ pension fund. The Company has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which were expensed as incurred, were and Fair Value Measurements FASB ASC 820, “Fair Value Measurements” defines fair value for certain financial and Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available. Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability. The carrying values of certain assets and liabilities of the Company, such as cash and cash equivalents, accounts receivable, inventory, advance to suppliers, prepaid expenses, accounts payable, accrued expenses, and due to shareholders, approximate fair value because of to their relatively short maturities. Basic per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted For the years ended December 31, 2022 and 2021, warrants were excluded as dilutive shares as the Company incurred a net loss. Income Taxes The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.
Foreign-currency Transactions Foreign-currency transactions are recorded in New Taiwan dollars (“NTD”) and Renminbi (“RMB”) at the rates of exchange in effect when the transactions occur. Gains or losses resulting from the application of different foreign exchange rates when cash in foreign currency is converted into New Taiwan dollars and Renminbi, or when foreign-currency receivables or payables are settled, are credited or charged to income in the year of conversion or settlement. On the balance sheet dates, the balances of foreign-currency assets and liabilities are restated at the prevailing exchange rates and the resulting differences are charged to current income except for those foreign currencies denominated investments in shares of stock where such differences are accounted for as translation adjustments under stockholders’ equity.
Translation Adjustment The accounts of the Company’s subsidiaries were maintained, and their financial statements were expressed in New Taiwan Dollar (“NTD”) and Chinese Yuan, or Renminbi (“RMB”). Such financial statements were translated into U.S. Dollars (“$” or “USD”) in accordance ASC 830, “Foreign Currency Matters”, with the NTD and RMB as the functional currency. According to the Statement, all assets and liabilities are translated at the current exchange rate, common stock and additional paid-in capital are translated at the historical rates, and income statement items are translated at an average exchange rate for the period. The resulting translation adjustments are reported under accumulated other comprehensive income (loss) as a component of stockholders’ equity. Comprehensive Income (loss) Comprehensive income (loss) includes accumulated foreign currency translation gains and losses. The Company has reported the components of comprehensive income (loss) on its consolidated statements of operations and other comprehensive income (loss). Concentration of Credit Risk Cash and cash equivalents : The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions in Taiwan, but these investments may be in excess of the insurance limits of Taiwan Central Deposit Insurance Corporation (the “TCDIC”). The Company does not enter into financial instruments for hedging, trading or speculative purposes. Concentration of credit risk with respect to trade and notes receivables is limited due to the wide variety of customers and markets in which the Company transacts business, as well as their dispersion across many geographical areas. As of December 31, 2022 and 2021, the Company had approximately $nil and $nil in excess of TCDIC insured limits. The Company has not experienced any losses in such accounts. Customers : The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral. For the year ended December 31, 2022, three customers accounted for more than 10% of the Company’s total revenues.
For the year ended December 31, 2021, two customers accounted for more than 10% of the Company’s total revenues.
Suppliers : The Company’s inventory is purchased from various suppliers .
For the year ended December 31, 2022, two suppliers accounted for more than 10% of the Company’s total net purchase :
For the year ended December 31, 2021, three suppliers accounted for more than 10% of the Company’s total net purchase :
Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL), the revised effective date is January 2023. Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements. Note 2. LEASE As of December 31, for its car with remaining lease terms of . Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on its lease term in Taiwan which is approximately 2.44%.
Operating lease expenses were $64,972 and $54,482 The components of lease expense and supplemental cash flow information related to leases for the year ended are as follows:
The supplemental balance sheet information related to leases for the period is as follows:
The
NOTE 3 – GOING CONCERN The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.
The Company’s cash position may not be sufficient to support the Company’s daily operations. Management has financed its operating costs with loans from director and officers. The Company intends to generate sufficient revenue and raise additional funds to support its operations, however there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further generate sufficient revenue and its ability to raise additional funds. The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Note 4 . SECURITY DEPOSITSOn November 21, 2019, the Company and Shuang Hua International Culture Media Co, Ltd. (“Shuang Hua”), a corporation formed under laws of Taiwan, entered into an exclusive copyright and distribution agreement (the “Agreement”), pursuant to which, subject to the terms and condition therein, Shuang Hua granted the Company an exclusive right to produce, market, distribute and sell the bilingual films and electronic books of which the copyrights are owned by Shuang Hua. In accordance to the agreement, the Company shall pay Shuang Hua a refundable deposit of in the aggregate amount of $2,894,000, before December 31, 2021. As of December 31, The amount paid has been fully impaired as of December 31, 2022.
Note 5 . RELATED PARTY TRANSACTIONSRelated parties of the Company during the
Due to shareholders The Company has advanced funds from its directors and shareholders Yu Cheng Yang for working capital purposes. As of December 31, On July 8, 2021, the Company issued the 90,000,000 shares of common stock to Mr. Yang advanced $433,300 to the Company as working capital, and the Company repaid $185,644to Mr. Yang for the year ended D ecem ber 31, 2022.Mr. Yang advanced $216,467 to the Company as working capital, and the Company repaid $294,508 to Mr. Yang for the year ended December 31, 2021. Note 6 . TERM LOANLoan from First Commercial Bank On September 30, 2020, TWD 3,000,000 (approximately $107,750) term loan was granted to the Company for working capital with repayment period of 60 months. The term loan is subject to an interest charge at 1% per annum for the first 9 months of the term loan; interest charges on the term loan from th to th is 3.5% per annum.On September 30, 2020, TWD 2,000,000 (approximately $71,833) term loan was granted to the Company for employee salary with repayment period of 30 months. The term loan is subject to an interest charge at 1.5% per annum for the first 9 months of the term loan; interest charges on the term loan from th to th is 1.845% per annum.Loan from Bank of Taiwan On May 7, 2021, TWD 4,000,000 (approximately $143,666) term loan was granted to the Company for employee salary with repayment period of 60 months. The term loan is subject to an interest charge at 1% per annum for the first 8 months of the term loan; interest charges on the term loan from th to th is 1.9% per annum.On May 7, 2021, TWD 1,000,000 (approximately $35,917) term loan was granted to the Company for employee salary with repayment period of 60 months. The term loan is subject to an interest charge at 1.5% per annum th to th is 2% per annum.As of December 31, 2022, the outstanding balance of the term loan is $184,509, of which $68,498 i s due within one year and classified as short term, and $116,012 is due after one year, and has classified as long term, respectively.
As of December 31, 2021, the outstanding balance of the term loan is $284,180, of which $80,047 is due within one year and classified as short term, and $204,133 is due after one year, and has classified as long term. Interest expenses were Note 7 . STOCKHOLDERS’ EQUITYPreferred Stock On July 8, 2021, the board of directors of the Company amended its stock designation and the Company is authorized to issue 5,000,000 shares of Series A Preferred Stock with par value $0.001. Each stock is entitled to 1,000 votes of common stock without dividend rights. On July 8, 2021, the Company issued 1,500,000 shares of Series A Preferred Stock to Co-Innovation Group Limited for proceeds of $1,500, the amount is recorded as a reduction to additional paid-in capital of $1,500. Common Stock On May 19, 2022, the Company issued 3,601,306 shares of restricted common stock to non-employees, the amount is recorded as deferred (unearned) compensation of $38,534, due to the service has not been started. On May 19, 2022, the Company issued 115,000 shares of restricted common stock to non-employees as compensation in the amount of $1,231. On August 18, 2021, the Company completed and closed a series of transactions to reorganize the Company’s structure and to develop its business by acquiring certain minority control interest of its subsidiary and intellectual properties. Pursuant to the Intellectual Property Transfer Agreement, the Company to issue 75,000,000 shares of Common Stock to the transferors for the intellectual properties in consideration of the transfer. Pursuant to the Shareholders’ Agreement of Shanghai Maosong Trading Co., Ltd and Equity Pledge Agreements, the Company to issue On July 8, 2021, the Company issued 75,000,000 shares of Common Stock at $0.001 per share to convert outstanding debt owed to Co-Innovation Group Limited in the amount of $75,000. On July 8, 2021, the Company issued 15,000,000 shares of Common Stock at $0.001 per share to convert outstanding debt owed to World Capital Holding Ltd in the amount of $15,000. On April 12, 2021, A-Best, and Mr. Ing-Ming Lai entered into a termination agreement (the “Termination Agreement”) to terminate the agreement of Strategic Alliance Agreement dated March 2, 2020. In the agreement, Ing-Ming Lai has proceeded to return a total of On March 31, 2021, the Company’s board of directors and stockholders authorized a reverse stock split of its outstanding common stock at a ratio of 1-for-1000 without any change in the par value per share which became effective on April 7, 2021 upon approval by FINRA. The number of shares and price per share in the financial statements have been retrospectively adjusted accordingly to reflect this reverse stock split. On March 16, 2021, the authorized shares of common stock were increased from 75,000,000 to 575,000,000 shares and the par value remains at $0.001.
Warrants On February 3, 2022, the Company granted the issuance of warrants to purchase 200,000 shares of the Company’s common stock at an exercise price of $2 per share with an expiration date of December 22, 2027 to a consultant or its designees as compensation. The warrants were fully vested upon issuance. A summary of warrant activities as follows:
Note 8 . STOCK BASED COMPENSATIONRestricted Stock On May 19, 2022, the Company issued 3,601,306 shares of restricted common stock to non-employees, the amount is recorded as deferred (unearned) compensation of $ 38,534 , due to the service has not been started. The fair value of the shares was determined based ona contemporaneous valuation report . On May 19, 2022, the Company issued 115,000 shares of restricted common stock to non-employees as compensation in the amount of $1,231. The shares were fully vested upon issuance as there were no other conditions required for the shares to vest. The fair value of the shares was determined based on a contemporaneous valuation report Warrants On February 3, 2022, the Company granted the issuance of warrants to purchase 200,000 shares of the Company’s common stock at an exercise price of $2 per share with an expiration date of December 22, 2027 to a consultant or its designees as compensation. The warrants were fully vested upon issuance as there were no other conditions required for the warrants to vest. In accordance to ASC 815-40, an equity-linked financial instrument can be classified in equity only if it (1) is indexed to the reporting entity’s own stock and (2) meets all other conditions for equity classification. The warrants are classified as equity instruments because a fixed amount of cash is exchanged for a fixed amount of equity. The fair value of the warrants was determined using the Black-Scholes option pricing model which requires the input of subjective assumptions, the expected life of the warrants, and the expected stock price volatility. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.
The assumptions used to determine the fair value of the Warrants as follows:
The expected life of the warrants was estimated using the “simplified method,” as the Company has no historical information to develop reasonable expectations about future exercise patterns for its warrant grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. The expected life of awards that vest immediately use the contractual maturity since they are vested when issued. For stock price volatility, the Company calculated its expected volatility based on historical closing price of its common stock, par value $0.001 per share. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the warrant at the grant-date. Stock based compensation were $1,231 and $nil for the years ended December, 2022 and 2021, respectively. Note 9 . INCOME TAXESUnited States EOS, Inc. is incorporated in the United States of America and is subject to United States federal taxation at tax rate of 21%. No provisions for income taxes have been made as the Company has no taxable income for the period. As of December 31, 2022, the Company had net operating loss carry forwards of $1,314,134 that may be available to reduce future years’ taxable income. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements as their realization is determined not likely to occur and, accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. No tax benefit has been realized since a 100% valuation allowance has offset deferred tax asset resulting from the net operating losses. British Virgin Islands EOS International Inc. is incorporated in British Virgin Islands and are not required to pay income tax. Taiwan The subsidiary of EOS Inc. and Emperor Star is incorporated in Taiwan. According to the amendments to the “Taiwan Income Tax Act” enacted by the office of the President of Taiwan on February 7, 2018, statutory income tax rate increased from 17% to 20% and undistributed earning tax decreased from 10% to 5%, effective from January 1, 2018. People’s Republic of China (“PRC”) Under the Enterprise Income Tax (“EIT”) Law of the PRC, the standard EIT rate is 25%. The PRC subsidiary of the Company is subject to PRC income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which they operate. No provision for income taxes have been made as Maosong had no taxable income as of and for the year ended December 31, 2022.
Provision for income tax consists of the following:
The Company has an income tax benefit of $ 10,093 which was anadjustment of over estimated tax expense from prior year. The net loss before income taxes and its provision for income taxes as follows:
Significant components of the Company’s deferred taxes assets as follows:
Note 10 . COMMITMENTS AND CONTINGENCIESSales Collaboration Agreement On June 1, 2020, the Company and Fortune King entered into a sales collaboration agreement (the “Sales Collaboration Agreement”), pursuant to which, subject to the terms and condition therein, Fortune King agreed to provide promotional and marketing service of the Company’s products within six years from January 2020 to December 2025. Fortune King is obligated to perform such service regardless of whether the Company sells products to Fortune King during the designated period. In accordance with the Sales Collaboration Agreement and in consideration for the service provided by Fortune King, the Company shall issue 3,000,000 shares of common stock to Fortune King for the promotional and marketing service of $1,500,000. The 3,000,000 shares were issued on December 29, 2020.
The Company recognized the stock-based compensation of marketing expenses based on quarterly basis, with a quarterly marketing expense of $62,500. There are 24 quarters in total. Copyright and Distribution Agreement On November 21, 2019, the Company and Shuang Hua International Culture Media Co, Ltd. (“Shuang Hua”), a corporation formed under laws of Taiwan, entered into an exclusive copyright and distribution agreement (the “Agreement”), pursuant to which, subject to the terms and condition therein, Shuang Hua granted the Company an exclusive right to produce, market, distribute and sell the bilingual films and electronic books of which the copyrights owned by Shuang Hua. In accordance to the agreement, the Company shall pay Shuang Hua a refundable deposit of in the aggregate amount of $2,894,000, before December 31, 2021. As of December 31, 2022 and 2021, the Company has paid $1,013,541 and $1,030,000 to Shuang Hua, December 31, 2022 respectively, and . Note 1 . SUBSEQUENT EVENTSManagement has evaluated subsequent events through the date which the financial statements are available to be issued. All subsequent events requiring recognition as of December 31, None. We conducted an evaluation of the effectiveness of our “disclosure controls and procedures” (“Disclosure Controls”), as defined by Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of December 31, 2020, the end of the year covered by this annual report on Form 10-K. The Disclosure Controls evaluation was done under the supervision and with the participation of management, including our chief executive officer and chief financial officer, who is the same person. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon this evaluation, our chief executive officer and chief financial officer concluded that, due to our limited internal audit function and our very limited staff, our disclosure controls were not effective as of December 31, 2020, such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the chief executive officer/chief financial officer, as appropriate to allow timely decisions regarding disclosure. This Annual Report does not include an attestation report of the Company’s registered accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the SEC. Evaluation of Disclosure Controls and Procedures Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act. Our management is also required to assess and report on the effectiveness of our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”). Management assessed the effectiveness of our internal control over financial reporting as of July 31, 2018. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. During our assessment of the effectiveness of internal control over financial reporting as of December 31, Management has determined that our internal controls contain material weaknesses due to the absence of segregation of duties, as well as lack of qualified accounting personnel and excessive reliance on third party consultants for accounting, financial reporting and related activities. The lack of any separation of duties, with the same person, who is our only employee who serves as both chief executive officer and chief financial officer, and who does not have an accounting background and serves on a part-time basis, makes it unlikely that we will be able to implement effective internal controls over financial reporting in the near future. Due to our size and nature, segregation of all conflicting duties is not possible. However, to the extent possible, we plan to implement procedures to assure that the initiation of transactions, the custody of assets and the recording of transactions will be performed by separate individuals if and when we have sufficient income to enable us to hire such individuals, and we cannot give any assurance that we will be able to hire such personnel. Our financial condition makes it difficult for us to implement a system of internal controls over financial reporting. Until we generate significantly greater revenues and employ accounting personnel, it is doubtful that we will be able implement any system which provides us with any degree of internal controls over financial reporting. Due to the nature of this material weakness in our internal control over financial reporting, there is more than a remote likelihood that misstatements which could be material to our annual or interim financial statements could not be prevented or detected.
A material weakness (within the meaning of PCAOB Auditing Standard No. 5) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of our financial reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Attestation Report of the Independent Registered Public Accounting Firm This Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Our management’s report was not subject to attestation by our independent registered public accounting firm pursuant to the Dodd-Frank Act that permanently exempted smaller reporting companies from the auditor attestation requirement. None.
Director and Executive Officer of the Company The following table sets forth certain information regarding our current executive officers and directors as of March 27, 2023:
The term of office of each director of the Company ends at the next annual meeting of the Company’s stockholders or when such director’s successor is elected and qualifies. No date for the next annual meeting of stockholders is specified in the Company’s Bylaws or has been fixed by the Board of Directors. The term of office of each officer of the Company ends at the next annual meeting of stockholders, or when such officer’s successor is elected and qualifies. The following information sets forth the background and business experience of our directors and executive officers.
He-Siang Yang, CEO, Chief Financial Officer, President, Secretary, Treasurer and Director On April 3, 2017, Mr. Yang From 2009 through 2015, Mr. Yang served as the president of U-Power in Taipei, Taiwan. Mr. Yang performed those duties normally associated with a president, including, but not limited to business development, management and business oversight. From 2015 to the present, Mr. Yang has been the president of EOS Trading Company Limited, a Hong Kong company. From April 2021 to present, Mr. Yang has been the director of Co-Innovation Limited Inc., a British Virgin Island company. Both of these companies arein the business of trading of consumer products, including supplements, and green technology-related products. Mr. Yang obtained a Bachelor of Science degree in mathematics from the National Taiwan Ocean University in Taiwan. On April 3, 2017, Yu Cheng Yang, Director and General Manager From 2009 through 2015, Mr. Yang was on the board of directors of and employed In April, 2015, Mr. Yang became the President and sole director of the Company. On April 3, 2017, Mr. Yang resigned as President, Secretary and Treasurer of the Company. Mr. Yang is also the sole director of EITB. From 2018 through present, serves as the General Manager of Emperor Star International Trade Co., Ltd. Mr. Yang graduated from Jin Wen University of Science and Technology in 2003 with a bachelor’s degree in Hotel Management. Lai Chen Kwok, Director s . Kwok Company. From 2008 through 2015, Mr. Kwok served as a financial planner at Prudential Hong Kong Limited, a Hong Kong insurance company. s . Kwok Employment Agreements Term of Office The term of office of each director of the Company ends at the next annual meeting of the Company’s Family Relationships There are no family relationships between or among any of our Director Independence Our board of directors has reviewed the
Our board of directors has no separately designated committees and our board members carry out the functions of both an audit committee and a compensation committee. We do not have an audit committee financial expert serving on our board of directors. Due to our limited financial resources, we are not in a position to retain an independent director with the qualifications to serve as an audit committee financial expert at this time. Risk Oversight Our board of directors will oversee a company-wide approach to risk management. Our board of directors will determine the appropriate risk level for us generally, assess the specific risks faced by us and review the steps taken by management to manage those risks. While our board of directors will have ultimate oversight responsibility for the risk management process, its committees will oversee risk in certain specified areas. Until we have established our compensation committee of our board of directors, our board of directors will be responsible for overseeing the management of risks relating to our executive compensation plans and arrangements, and the incentives created by the compensation awards it administers. Until we have established our audit committee, our board of directors will oversee management of enterprise risks and financial risks, as well as potential conflicts of interests. Our board of directors will be responsible for overseeing the management of risks associated with the independence of our board of directors. Code of Ethics The Company has not adopted a Code of Ethics. Compensation Committee Interlocks and Insider Participation None of our executive officers currently serves, or in the past three years has served, as a member of the board of directors or compensation committee of another entity that has one or more executive officers serving on our board of directors or the compensation committee. No member of our compensation committee has any other business relationship or affiliation with us other than his or her service as a director. Nominations to the Board of Directors General — Our directors take a critical role in guiding our strategic direction and oversee the management of the Company. Our board of directors’ candidates are considered based upon various criteria, such as their broad-based business and professional skills and experiences, a global business and social perspective, concern for the long-term interests of the shareholders, diversity, and personal integrity and judgment. In addition, directors must have time available to devote to our board of directors’ activities and to enhance their knowledge of our business. Accordingly, we seek to attract and retain highly qualified directors who have sufficient time to attend to their substantial duties and responsibilities to our Company. No Compensation to Directors. No director has received any cash or other compensation for serving as a director, and we do not plan to pay any cash or other compensation to any person for serving as a director. Our directors are entitled to reimbursement for reasonable out-of-pocket expenses incurred in connection with our business. Our Board of Directors may award special remuneration to any director undertaking any special services on our behalf, other than services ordinarily required of a director. Code of Ethics; Financial Expert We do not have a Code of Ethics. We do not have a financial expert on our Board of Directors. Committees of the Board of Directors Concurrent with having sufficient members and resources, our Board of Directors will establish an audit committee and a compensation committee. The audit committee will review the results and scope of the audit and other services provided by the independent auditors and review and evaluate our system of internal controls. The compensation committee will manage any stock option plan we may establish and review and recommend compensation arrangements for our officers. No final determination has yet been made as to the memberships of these committees or when we will have sufficient members and resources to establish those committees.
Potential Conflicts of Interest As we do not have an audit committee or compensation committee comprised of independent directors, the functions that would have been performed by such committees are performed by our directors. Thus, there is a potential conflict of interest, in that our directors and officers have the authority to determine issues concerning management compensation and audit issues that may affect management decisions. We are not aware of any other conflicts of interest with any of our executive officers or directors. We plan to adopt a code of ethics that obligates our directors, officers and employees to disclose potential conflicts of interest and prohibits those persons from engaging in such transactions without our consent. Term of Office Each of our directors is appointed to hold office until the next annual meeting of our stockholders or until his or her respective successor is elected and qualified, or until he or she resigns or is removed in accordance with the applicable provisions of Nevada law. Our officers are appointed by our Board of Directors and hold office until removed by our Board of Directors or until their resignation. Audit Committee Financial Expert Our current directors act as our audit committee. The current directors are not independent. An informal search is under way to identify a suitable candidate for service on the Board of Directors as an independent director who would be qualified as an audit committee financial expert. Audit Committee We have not yet formed an audit committee, and all of our directors currently act as our audit committee. At the present time, we believe that our directors are capable of analyzing and evaluating our consolidated financial statements and understanding internal controls and procedures for financial reporting. The Company, however, recognizes the importance of good corporate governance and intends to add additional directors to the Board of Directors and appoint an audit committee comprised entirely of independent directors, including at least one financial expert. Section 16(a) Beneficial Ownership Reporting Compliance Under Section 16(a) of the Exchange Act, our directors and certain of our officers, and persons holding more than 10 percent of our common stock are required to file forms reporting their beneficial ownership of our common stock and subsequent changes in that ownership with the United States Securities and Exchange Commission. Based solely upon a review of copies of such forms filed on Forms 3, 4, and 5 furnished to us, we believe that during the year ended December 31, 2022, our executive officers and directors were not in compliance with all Section 16(a) filing requirements. Limitation on Liability and Indemnification of Directors and Officers Our articles of incorporation provide that no director or officer shall have any liability to the Company if that person acted in good faith and with the same degree of care and skill as a prudent person in similar circumstances. Our articles of incorporation and bylaws provide that we will indemnify our directors and officers and may indemnify our employees or agents to the fullest extent permitted by law against liabilities and expenses incurred in connection with litigation in which they may be involved because of their offices or positions with us. However, nothing in our articles of incorporation or bylaws protects or indemnifies a director, officer, employee or agent against any liability to which that person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of that person’s office or position. To the extent that a director has been successful in defense of any proceeding, the Nevada Revised Statutes provide that the director shall be indemnified against reasonable expenses incurred in connection with the proceeding. EXECUTIVE SUMMARY COMPENSATION TABLE BY THE COMPANY The following table sets forth the compensation paid or accrued by us to our Executive Officers for the fiscal years ended December 31, 2022 and 2021.
Equity Compensation Plans, Bonus Plans As of December 31, 2022, we had no equity incentive plans outstanding. We have no Compensation Committee. Pension Benefits As of December 31, 2022, we did not have any defined benefit pension plans. Nonqualified Deferred Compensation We do not maintain any nonqualified deferred compensation plans. Debt Securities We have no debt securities outstanding. Repurchase Programs There is currently no share repurchase program pending. Director Compensation The directors do not receive any compensation. Directors are reimbursed for reasonable expenses incurred in attending meetings and carrying out duties as board members.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following sets forth information as of March 27, 2023 regarding the number of shares of our Common Stock beneficially owned by (i) each person that we know beneficially owns more than 5% of our outstanding Common Stock, (ii) each of our directors and named executive officer and (iii) all of our directors and named executive officers as a group. The amounts and percentages of our Common Stock beneficially owned are reported on the basis of SEC rules governing the determination of beneficial ownership of securities. Under the SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to vote or to direct the voting of such security, or “investment power,” which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has the right to acquire beneficial ownership within 60 days through the exercise of any stock option, warrant or other right, and the conversion of preferred stock. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. Unless otherwise indicated, each of the shareholders named in the table below, or his or her family members, has sole voting and investment power with respect to such shares of our Common Stock. Except as otherwise indicated, the address of each of the shareholders listed below is: c/o EOS Inc, 4F-1, No.5, Qingdao E. Rd., Zhongzheng Dist., Taipei City 100008 Taiwan (Republic of China).
Beneficial ownership percentages are calculated based on shares of common stock issued and outstanding and is based on a total of 183,781,560 shares of common stock that were issued and outstanding as of March 27, 2023. Beneficial ownership is determined in accordance with Rule 13d-3 of the Exchange Act. The number of shares beneficially owned by a person includes shares of common stock underlying options or warrants held by that person that are currently exercisable or exercisable within 60 days of March 27, 2023 . The shares issuable pursuant to the exercise of those options or warrants are deemed outstanding for computing the percentage ownership of the person holding those options and warrants but are not deemed outstanding for the purposes of computing the percentage ownership of any other person. The persons and entities named in the table have sole voting and sole investment power with respect to the shares set forth opposite that person’s name, subject to community property laws, where applicable, unless otherwise noted in the applicable footnote. Related Party Transactions Related parties of the Company during the years ended December 31, 2022 and 2021 consist of the following:
The Company has advanced funds from its directors and shareholders Yu Cheng Yang for working capital purposes. As of December 31, 2022 and 2021, there were $277,080 and $30,858 advance outstanding, respectively. The Company has agreed that the outstanding balances bear 0% interest rate and are due upon demand after thirty days of written notice by the director and shareholder.
On July 8, 2021, the Company issued the 90,000,000 shares of common stock to convert $59,219 owed to Mr. Yang. Mr. Yang advanced $353 ,000 to the Company as working capital, and the Company repaid $106 ,778 to Mr. Yang for the years ended December 31, 2022. Mr. Yang advanced $216,467 to the Company as working capital, and the Company repaid $294,508 to Mr. Yang for the year ended December 31, 2021. Directors Independence Our Board of Directors is composed of three members, who do not qualify as independent directors in accordance with the published listing requirements of the NASDAQ rules. The NASDAQ independence definition includes a series of objective tests, such as that the director is not, and has not been for at least three years, one of our employees and that neither the directors, not any of his or her family members has engaged in various types of business dealings with us. In addition, our Board of Directors has not made a subjective determination as to each director that no relationships exist which, in the opinion of our Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, though such subjective determination is required by the NASDAQ rules. If our Board of Directors made these determinations, our Board of Directors would have reviewed and discussed information provided by the directors and us with regard to each director’s business and personal activities and relationships as they may relate to us and our management.
Summary of Principal Accounting Fees for Professional Services Rendered The Company’s Board of Directors reviews and approves audit and permissible non-audit services performed by its independent registered public accounting firm, as well as the fees charged for such services. In its review of non-audit service and its appointment of Onestop Assurance PAC as our independent registered public accounting firm, the Board considered whether the provision of such services is compatible with maintaining independence. The following table
The SEC requires that before our independent registered public accounting firm is engaged by us to render any auditing or permitted non-audit related service, the engagement be either: (i) approved by our audit committee or (ii) entered into pursuant to pre-approval policies and procedures established by the audit committee, provided that the policies and procedures are detailed as to the particular service, the audit committee is informed of each service, and such policies and procedures do not include delegation of the audit committee’s responsibilities to management. We do not have an audit committee. Our Board pre-approves all services provided by our independent
The following exhibits are included herewith:
Not applicable. Pursuant to the requirements of Section 13 or 15(d) 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.
In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacities and on the dates indicated.
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