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 April 30, 2019January 31, 2024
or
[ ] ☐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 333-228847
MU GLOBAL HOLDING LIMITED
(Exact name of registrant issuer as specified in its charter)
Nevada | ||
(State or other jurisdiction of
| (I.R.S. Employer
|
5F-1.Rm. 5, 7F., No. 106, Chang’an W.296, Sec. 4, Xinyi Rd., DatongDa’an Dist.,
Taipei City 103 106427, Taiwan (R.O.C.)
(Address of principal executive offices, including zip code)
Registrant’s phone number, including area code+886905153139886905153139
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 (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).
YES [ ] ☐ NO [X] ☒
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.
Large Accelerated Filer [ ]☐ Accelerated Filer [ ] ☐ Non-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 [ ]☐ No [X]☒
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Common Stock | MUGH | The OTC Market – Pink Sheets |
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has fled all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes [ ] ☐ No [X] ☒
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class | Outstanding at | January 31, 2024 | |
Common Stock, |
TABLE OF CONTENTS
2 |
PART I FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
F-1 |
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF APRIL 30, 2019JANUARY 31, 2024 AND JULY 31, 20182023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
As of | As of | As of | As of | |||||||||||||
April 30, 2019 | July 31, 2018 | January 31, 2024 | July 31, 2023 | |||||||||||||
Unaudited | Audited | Unaudited | Audited | |||||||||||||
ASSETS | ||||||||||||||||
NON CURRENT ASSETS | ||||||||||||||||
NON-CURRENT ASSETS | ||||||||||||||||
Property, plant and equipment | $ | 287,159 | $ | - | $ | - | $ | - | ||||||||
Leased asset – Right of use | 3,848 | 6,407 | ||||||||||||||
287,159 | - | |||||||||||||||
Total non-current assets, excluding intangible assets | 3,848 | 6,407 | ||||||||||||||
INTANGIBLE ASSET | ||||||||||||||||
Patent and trademark | $ | - | $ | - | ||||||||||||
Total non-current assets | 3,848 | 6,407 | ||||||||||||||
CURRENT ASSETS | ||||||||||||||||
Prepayments and deposits | $ | 4,610 | $ | 9,264 | ||||||||||||
Amount due from related party | - | 2,112 | ||||||||||||||
Inventories | 1,334 | 1,333 | ||||||||||||||
Cash and cash equivalents | $ | 895,442 | $ | 106,417 | 556 | 4,425 | ||||||||||
Other receivables | 8,524 | - | ||||||||||||||
Prepayments and deposits | 105,305 | 7,954 | ||||||||||||||
Subscription receivables | - | 800,000 | ||||||||||||||
Total Current Assets | $ | 1,009,271 | $ | 914,371 | ||||||||||||
Total current assets | 6,500 | 17,134 | ||||||||||||||
TOTAL ASSETS | 1,296,430 | 914,371 | $ | 10,348 | $ | 23,541 | ||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||
NON-CURRENT LIABILITIES | ||||||||||||||||
Leased liabilities | $ | - | $ | 976 | ||||||||||||
Loan from director | 113,534 | 110,985 | ||||||||||||||
Loan from third party | 115,039 | 95,988 | ||||||||||||||
Loan from related party | 115,039 | 95,988 | ||||||||||||||
Total non-current liabilities | $ | 228,573 | $ | 207,949 | ||||||||||||
CURRENT LIABILITIES | ||||||||||||||||
Other payables and accrued liabilities | $ | 62,633 | $ | 9,000 | $ | 47,880 | $ | 65,454 | ||||||||
Amount due to related parties | 88,101 | 28,682 | 98,269 | 93,176 | ||||||||||||
Convertible promissory notes | 779,125 | - | ||||||||||||||
Deposit from franchisees | 24,939 | 27,774 | ||||||||||||||
Deposit from customers | 37,173 | 37,135 | ||||||||||||||
Loan from director | 198,439 | 170,805 | ||||||||||||||
Leased liabilities | 3,864 | 5,223 | ||||||||||||||
Total Current Liabilities | $ | 929,859 | $ | 37,682 | ||||||||||||
Total current liabilities | 410,564 | 399,567 | ||||||||||||||
TOTAL LIABILITIES | $ | 929,859 | $ | 37,682 | $ | 639,137 | $ | 607,516 | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||||||
Preferred stock, $0.0001 par value; 200,000,000 shares authorized; None issued and outstanding | - | - | ||||||||||||||
Common Shares, par value $0.0001; 600,000,000 shares authorized, 58,505,000 shares issued and outstanding as of April 30, 2019 and July 31, 2018 | $ | 5,851 | $ | 5,851 | ||||||||||||
Additional paid in capital | 900,554 | 900,554 | ||||||||||||||
Preferred stock, $ par value, shares authorized, issued and outstanding | $ | - | $ | - | ||||||||||||
Common stock, $ par value, shares authorized, shares issued and outstanding as of January 31, 2024 and July 31, 2023 respectively | 5,943 | 5,943 | ||||||||||||||
Additional paid-in capital | 1,830,300 | 1,830,300 | ||||||||||||||
Foreign currency adjustment | 23,862 | - | 37,215 | 37,790 | ||||||||||||
Accumulated deficit | (563,696 | ) | (29,716 | ) | (2,502,247 | ) | (2,458,008 | ) | ||||||||
TOTAL STOCKHOLDERS’ EQUITY | $ | 366,571 | $ | 876,689 | ||||||||||||
Total stockholders’ equity | (628,789 | ) | (583,975 | ) | ||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,296,430 | $ | 914,371 | $ | 10,348 | $ | 23,541 |
See accompanying notes to condensed consolidated financial statements.
F-2 |
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSESLOSS
FOR THE NINETHREE AND SIX MONTHS ENDED APRIL 30, 2019JANUARY 31, 2024 and 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)(UNAUDITED)
2024 | 2023 | 2024 | 2023 | |||||||||||||||||
Nine Months Ended April 30, 2019 | Three Months Ended January 31 | Six Months Ended January 31 | ||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||
REVENUE | $ | 19,226 | $ | 343 | $ | 7,247 | $ | 343 | $ | 128,241 | ||||||||||
COST OF REVENUE | (8,073 | ) | - | - | - | (108,844 | ) | |||||||||||||
GROSS PROFIT | $ | 11,153 | $ | 343 | $ | 7,247 | $ | 343 | $ | 19,397 | ||||||||||
REALISED GAIN ON FOREIGN EXCHANGE | - | |||||||||||||||||||
UNREALISED LOSS ON FOREIGN EXCHANGE | - | |||||||||||||||||||
OTHER INCOME | 78 | 1,686 | 617 | 6,205 | 2,358 | |||||||||||||||
SELLING, GENERAL AND ADMINISTRATIVE AND OPERATING EXPENSES | (545,211 | ) | ||||||||||||||||||
SELLING AND MARKETING EXPENSES | (198 | ) | (3 | ) | (915 | ) | (278 | ) | ||||||||||||
GENERAL AND ADMINISTRATIVE EXPENSES | (20,818 | ) | (26,200 | ) | (49,872 | ) | (72,628 | ) | ||||||||||||
LOSS BEFORE INCOME TAX | $ | (533,980 | ) | $ | (18,987 | ) | $ | (18,339 | ) | $ | (44,239 | ) | $ | (51,151 | ) | |||||
(533,980 | ) | |||||||||||||||||||
TAXES PROVISION | - | |||||||||||||||||||
INCOME TAX PROVISION | - | - | - | - | ||||||||||||||||
NET LOSS | $ | (533,980 | ) | $ | (18,987 | ) | $ | (18,339 | ) | $ | (44,239 | ) | $ | (51,151 | ) | |||||
Other comprehensive income: | ||||||||||||||||||||
- Foreign currency translation adjustment | - | |||||||||||||||||||
Other comprehensive loss: | ||||||||||||||||||||
- Foreign currency translation loss | (7,020 | ) | (24,678 | ) | (575 | ) | (265 | ) | ||||||||||||
TOTAL COMPREHENSIVE LOSS | $ | (533,980 | ) | $ | (26,007 | ) | $ | (43,017 | ) | $ | (44,814 | ) | (51,416 | ) | ||||||
Net loss per share- Basic and diluted | (0.00 | ) | ) | ) | ) | ) | ||||||||||||||
Weighted average number of common shares outstanding - Basic and diluted | 58,505,000 |
See accompanying notes to condensed consolidated financial statements.
F-3 |
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSCHANGES IN STOCKHOLDERS’ EQUITY
FOR THE NINESIX MONTHS ENDED APRIL 30, 2019JANUARY 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)(UNAUDITED)
Nine months ended April 30, 2019 | ||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net loss | $ | (533,980 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation | 46,891 | |||
Changes in operating assets and liabilities: | ||||
Accounts receivables | (8,524 | ) | ||
Deposit & Prepayment | (97,352 | ) | ||
Other payables and accrued liabilities | 53,633 | |||
Amount due to director | 257 | |||
Amount due to related party | 59,162 | |||
Net cash provided by/(used in) operating activities | $ | (479,913 | ) | |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchase of property, plant and equipment | $ | (334,049 | ) | |
Net cash used in investing activities | $ | (334,049 | ) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Convertible promissory note | 779,125 | |||
Subscription receivables | 800,000 | |||
Net cash provided by financing activities | 1,579,125 | |||
Effect of exchange rate changes on cash and cash equivalents | 23,862 | |||
Net change in cash and cash equivalents | 789,025 | |||
Cash and cash equivalents, beginning of period | 106,417 | |||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 895,442 | ||
SUPPLEMENTAL CASH FLOWS INFORMATION | ||||
Income taxes paid | $ | - | ||
Interest paid | $ | - |
Six months ended January 31, 2024 | ||||||||||||||||||||||||
Common Stock | Additional | Accumulated Other | ||||||||||||||||||||||
Number of Shares | Amount | Paid-In Capital | Comprehensive Income | Accumulated Deficit | Total Equity | |||||||||||||||||||
Balance as of August 1, 2023 | 59,434,838 | $ | 5,943 | $ | 1,830,300 | $ | 37,790 | $ | (2,458,008 | ) | $ | (583,975 | ) | |||||||||||
Net loss for the period | - | - | - | - | (25,252 | ) | (25,252 | ) | ||||||||||||||||
Foreign currency translation adjustment | - | - | - | 6,445 | - | 6,445 | ||||||||||||||||||
Balance as of October 31, 2023 | 59,434,838 | $ | 5,943 | $ | 1,830,300 | $ | 44,235 | $ | (2,483,260 | ) | $ | (602,782 | ) | |||||||||||
Net loss for the period | - | - | - | - | (18,987 | ) | (18,987 | ) | ||||||||||||||||
Foreign currency translation adjustment | - | - | - | (7,020 | ) | - | (7,020 | ) | ||||||||||||||||
Balance as of January 31, 2024 | 59,434,838 | $ | 5,943 | $ | 1,830,300 | 37,215 | (2,502,247 | ) | (628,789 | ) |
Six months ended January 31, 2023 | ||||||||||||||||||||||||
Common Stock | Additional | Accumulated Other | ||||||||||||||||||||||
Number of Shares | Amount | Paid-In Capital | Comprehensive Income | Accumulated Deficit | Total Equity | |||||||||||||||||||
Balance as of August 1, 2022 | 59,434,838 | $ | 5,943 | $ | 1,830,300 | $ | 19,574 | $ | (2,389,181 | ) | $ | (533,364 | ) | |||||||||||
Net loss for the period | - | - | - | - | (32,812 | ) | (32,812 | ) | ||||||||||||||||
Foreign currency translation adjustment | - | - | - | 24,413 | - | 24,413 | ||||||||||||||||||
Balance as of October 31, 2022 | 59,434,838 | $ | 5,943 | $ | 1,830,300 | $ | 43,987 | $ | (2,421,993 | ) | $ | (541,763 | ) | |||||||||||
Balance | 59,434,838 | $ | 5,943 | $ | 1,830,300 | $ | 43,987 | $ | (2,421,993 | ) | $ | (541,763 | ) | |||||||||||
Net loss for the period | - | - | - | - | (18,339 | ) | (18,339 | ) | ||||||||||||||||
Foreign currency translation adjustment | - | - | - | (24,678 | ) | - | (24,678 | ) | ||||||||||||||||
Balance as of January 31, 2023 | 59,434,838 | $ | 5,943 | $ | 1,830,300 | 19,309 | (2,440,332 | ) | (584,780 | ) | ||||||||||||||
Balance | 59,434,838 | $ | 5,943 | $ | 1,830,300 | 19,309 | (2,440,332 | ) | (584,780 | ) |
See accompanying notes to condensed consolidated financial statements.
F-4 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIALCONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINESIX MONTHS ENDED APRIL 30, 2018JANUARY 31, 2024 AND 2023
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
2024 | 2023 | |||||||
Six months ended January 31 | ||||||||
2024 | 2023 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (44,239 | ) | $ | (51,151 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Amortization | 2,536 | 2,419 | ||||||
Impairment | (1,051 | ) | 3,584 | |||||
Reversal of asset written off | - | (6 | ) | |||||
Lease interest | 113 | 117 | ||||||
Interest expense | 4,656 | 5,289 | ||||||
Gain on disposal | (3,012 | ) | (108 | ) | ||||
Gain on discounting of long-term loan | (2,227 | ) | - | |||||
Changes in operating assets and liabilities: | ||||||||
Prepayments and deposits | 4,656 | 2,041 | ||||||
Other payables and accrued liabilities | (17,614 | ) | (16,597 | ) | ||||
Amount due to related party | 1,756 | 8,193 | ||||||
Lease liabilities | (2,455 | ) | (2,587 | ) | ||||
Amount due from related party | 5,449 | 11,295 | ||||||
Deposit from franchisee | (2,862 | ) | - | |||||
Deposit from customers | - | 8,882 | ||||||
Net cash used in operating activities | $ | (54,294 | ) | $ | (28,629 | ) | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchase of patent and trademark | (2,466 | ) | (3,584 | ) | ||||
Proceed on disposal | 6,529 | 114 | ||||||
Net cash generated from / (used in) investing activities | $ | 4,063 | $ | (3,470 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Loan from director | $ | 27,634 | $ | 23,400 | ||||
Loan from related party | - | (3,035 | ) | |||||
Loan from third party | 18,937 | 17,087 | ||||||
Net cash generated from financing activities | $ | 46,571 | $ | 37,452 | ||||
Effect of foreign exchange translation | (209 | ) | (477 | ) | ||||
Net change in cash and cash equivalents | (3,869 | ) | 4,876 | |||||
Cash and cash equivalents, beginning of period | 4,425 | 2,909 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 556 | $ | 7,785 |
See accompanying notes to condensed consolidated financial statements.
F-5 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JANUARY 31, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
1. DESCRIPTION OF BUSINESS AND ORGANIZATION
MU Global Holding Limited is organized as a Nevada limited liability company, incorporated on June 4, 2018. For purposes of consolidated financial statement presentation, MU Global Holding Limited and its subsidiary are herein referred to as “the Company” or “we”. The Company business of which planned principal operations are to provide wellness and beauty services to customers via Company owned outlets, franchised outlets or distribution of our product to third party wellness and beauty salon.
On June 29, 2018, the Company acquired 100%100% interest in MU Worldwide Group Limited, a private limited liability company incorporated in Seychelles and its subsidiary MU Global Holding Limited, a private limited liability company incorporated in Hong Kong. On August 16, 2018, MU Global Holding Limited incorporated a wholly owned subsidiary in Shanghai, People Republic of China under the Hong Kong Company incorporatedname of MU Global Health Management (Shanghai) Limited, a wholly owned subsidiary of which incorporated in Shanghai, People Republic of China.Limited.
Details of the Company’s subsidiary:
SCHEDULE OF COMPANY’S SUBSIDIARY
Company name | Place and date of incorporation | Particulars of issued capital | Principal activities | ||||
1. | MU Worldwide Group Limited | Seychelles, June 7, 2018 | 100 | Investment holding | |||
2. | MU Global Holding Limited | Hong Kong, January 30, 2018 | 1 ordinary share of | ||||
| Providing SPA and Wellness service in Hong Kong | ||||||
3. | MU Global Health Management (Shanghai) Limited | Shanghai, August 16, 2018 | RMB 7,405,866 | Providing SPA and Wellness service in China |
F-6 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINESIX MONTHS ENDED APRIL 30, 2019JANUARY 31, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited condensed consolidated financial statements areas of and for the six months ended January 31, 2024, and 2023, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted accounting principles in the United States of America (“US GAAP”). have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended January 31, 2024, are not necessarily indicative of the results that may be expected for the year ending July 31, 2024. The Condensed Consolidated Balance Sheets information as of January 31, 2024, was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended July 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC on October 30, 2023. These financial statements should be read in conjunction with that report.
The Company has adopted its fiscal year-end to be July 31.
Basis of consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated upon consolidation.
Use of estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Revenue recognition
In accordance with Financial Accounting Standards Board (“FASB”)The Company follows the guidance of Accounting Standards Codification (“ASC”) Topic 605,“(ASC) 606, Revenue Recognition”,from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company recognizes revenue from sales of goods whenwill collect the following four revenue criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) selling priceconsideration it is fixed or determinable; and (4) collectability is reasonably assured.entitled to in exchange for the services it transfers to its clients.
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue. The Company derives its revenue from provision of wellness and beauty services to customers via Company owned outlets, franchised outlets or distribution of our product to third party wellness and beauty salon.
Cost of revenue
Cost of revenue includes the cost of services and product incurred to provide wellness and beauty services and purchase of products.
Cash and cash equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
Property, Plantplant and equipment
Property, Plantplant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational:
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT ESTIMATED LIFE
Estimated useful life | ||
Computer hardware and software | 3 years | |
Office equipment | 3 years | |
Outlet design fee and equipment | 3 years | |
Application development fee | 3 years |
Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the statementconsolidated statements of operations.operations and comprehensive loss.
F-7 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINESIX MONTHS ENDED APRIL 30, 2019JANUARY 31, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Impairment of long-live assets
Long-lived assets primarily include trademark of the Company. In accordance with the provision of ASC Topic 360, Impairment or Disposal of Long-Lived Assets, the Company generally conducts its annual impairment evaluation to its long-lived assets, usually in the fourth quarter of each fiscal year, or more frequently if indicators of impairment exist, such as significant sustained change in the business climate. The recoverability of long-lived assets is measured at the lowest level group. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset.
Leases
The Company recognizes lease payments for its short-term lease on a straight-line basis over the lease term in accordance with ASC 842.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.
In determining the present value of the unpaid lease payments, ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate for the lease. The Company incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments.
Inventories
Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Consolidated Statements of Operations and Comprehensive Loss.
Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
The Company conducts major businesses in China and is subject to tax in this jurisdiction. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.
Going concern
The accompanying financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
For the period ended January 31, 2024, the Company incurred a net loss of $44,239. As of January 31, 2024, the Company suffered an accumulated deficit of $2,502,247, capital deficiency of $628,789 and negative operating cash flows of $54,294. The Company’s ability to continue as a going concern is dependent upon improving the profitability and the continuing financial support from its shareholders and director. Management believes the existing shareholders, director or external financing will provide the additional cash to meet the Company’s obligations as they become due.
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.
F-8 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINESIX MONTHS ENDED APRIL 30, 2019JANUARY 31, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
The Company calculates net loss per share in accordance with ASC Topic 260 “Earnings Per Share”. Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the Condensed Consolidated Statements of Operations and Comprehensive Income.loss.
The functional currency of the parent Company is United States dollar and the functional currency of the subsidiaries MU Worldwide Group Limited (Seychelles) and MU Global Holding Limited (Hong Kong) is United States dollar. MU Global Health Management (Shanghai) Limited is in Renminbi.
The reporting currency of the Company and its subsidiary is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$.
In general, for consolidation purposes, assets and liabilities of its subsidiarysubsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial StatementStatement””, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive incomeloss within the statements of shareholders’stockholders’ equity.
Foreign currencies translation (cont’d)
Translation of amounts from RMB and HK$ into US$1 has been made at the following exchange rates for the respective periods:
SCHEDULE OF FOREIGN EXCHANGE RATES TRANSLATION
As of and for the nine months ended April 30 | As of and for the six months ended January 31 | |||||||||||||||
2019 | 2018 | 2024 | 2023 | |||||||||||||
Period-end RMB : US$1 exchange rate | 6.74 | 6.33 | 7.13 | 6.75 | ||||||||||||
Period-average RMB : US$1 exchange rate | 6.82 | 6.49 | 7.21 | 6.99 | ||||||||||||
Period-end HKD$ : US$1 exchange rate | 7.84 | 7.85 | ||||||||||||||
Period-average HKD$ : US$1 exchange rate | 7.84 | 7.82 | ||||||||||||||
Period-end HK$ : US$1 exchange rate | 7.82 | 7.84 | ||||||||||||||
Period-average HK$ : US$1 exchange rate | 7.82 | 7.83 | ||||||||||||||
Period-end TWD : US$1 exchange rate | 31.18 | 30.04 | ||||||||||||||
Period-average TWD : US$1 exchange rate | 31.74 | 30.96 |
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
F-9 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINESIX MONTHS ENDED APRIL 30, 2019JANUARY 31, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Fair value of financial instruments:instruments:
The carrying value of the Company’s financial instruments: cash and cash equivalents, account receivables, amount due to a director, and accounts payable and approximate at their fair values because of the short-term nature of these financial instruments.
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
Level 1: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Recent accounting pronouncements
FASB issues variousRecently adopted Accounting Standards Updates relating to
In June 2016, the treatment and recording of certain accounting transactions. On June 10, 2014, the Financial Accounting Standards BoardFASB issued Accounting Standards Update (ASU) No. 2014-10,Development Stage Entities(2016-13, Financial Instruments – Credit Losses (Topics 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. In November 2019, the FASB issued ASU 2019-10 highlighted the adoption timeline. For smaller reporting entities, Topic 915) Elimination326 is effective for annual periods beginning after December 15, 2022, including interim period within those fiscal years, of Certain Financial Reporting Requirements, including an Amendment to Variable Interest Entities Guidance in Topic 810,Consolidation, which eliminatesis effective for the concept of a development stage entity (DSE) entirely fromCompany on January 1, 2023.
Credit loss rate is determined by historical collection based on aging schedule, adjusted for current accounting guidance. The Company has elected adoption of this standard, which eliminatesconditions using reasonable and supportable forecast. Based on the designation of DSEsaging categorization and the requirement to disclose results of operations and cash flows since inception.adjusted loss per category, an allowance for credit losses is calculated by multiplying the adjusted loss rate with the amortized cost in the respective age category.
Recent accounting pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
F-10 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINESIX MONTHS ENDED APRIL 30, 2019JANUARY 31, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of April 30, 2019January 31, 2024 are summarized below:
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT
As of April 30, 2019 (Unaudited) | ||||
Leasehold improvement | 152,984 | |||
Computer hardware and software | 132,774 | |||
Office equipment | 11,611 | |||
1Outlet Design Fee and Equipment | 16,647 | |||
2App Development Fee | 21,343 | |||
Total | 335,359 | |||
Accumulated depreciation | $ | (46,962 | ) | |
Foreign currency translation adjustment | (1,238 | ) | ||
Property, plant and equipment, net | $ | 287,159 |
As of January 31, 2024 | As of July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Computer hardware and software | $ | 129,301 | $ | 129,301 | ||||
Outlet equipment | 120,569 | 120,569 | ||||||
Leasable equipment | 212,072 | 216,378 | ||||||
Outlet design fee and equipment | 16,763 | 16,763 | ||||||
App development fee | 37,413 | 37,413 | ||||||
Total | 516,118 | 520,424 | ||||||
Accumulated depreciation1 | $ | (394,351 | ) | $ | (395,140 | ) | ||
Impairment | (139,665 | ) | (143,182 | ) | ||||
Foreign currency translation adjustment | 17,898 | 17,898 | ||||||
Property, plant and equipment, net | $ | - | $ | - |
1 | For the period ended January 31, 2024 and January 31, 2023, depreciation expense was $0 and $0 respectively. |
1Outlet design fee is fee incurred for the outlet design concept to be follow by all the outlets or shops underDISPOSAL OF PROPERTY, PLANT AND EQUIPMENT
SCHEDULE OF DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT
As of January 31, 2024 | As of July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Proceed from disposal of property, plant and equipment | $ | 6,529 | $ | 20,514 | ||||
Disposal of equipment written off at net book value | - | (6 | ) | |||||
Disposal of equipment impaired at net book value | (3,517 | ) | (6,364 | ) | ||||
Total gain on disposal | $ | 3,012 | $ | 14,144 |
4. LEASE
As of November 6, 2021, the Company so to be a signage outletsrecognized approximately US$11,581 lease liability as well as right-of-use asset for all leases at the commencement date. Lease liabilities are measured at present value of the company. sum of remaining rental payments as of November 6, 2021, with discounted rate of 4.35% adopted from “Zhao Shang bank” of China as a reference for discount rate.
A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows.
The initial recognition of operating lease right and lease liability as follow:
SCHEDULE OF RECOGNITION OF OPERATING LEASE RIGHT AND LEASE LIABILITY
Gross lease payable | $ | 12,048 | ||
Less: Imputed interest | (467 | ) | ||
Initial recognition | $ | 11,581 | ||
Less: Remeasurement of existing lease | (843 | ) | ||
Balance | $ | 10,738 |
As of April 30, 2019, the outlet design has not yet completed, therefore no depreciation has been provided.
2App development fee is fee incurred for the design and development of the mobile App for the Company. As of April 30, 2019, the app development has not yet completed, therefore no depreciation has been provided.
Depreciation expense is arise from leasehold improvement, computer hardware and software and office equipment was $46,962 and $0 from August 1, 2018 to April 30, 2019 and from June 4, 2018 (date of inception) to JulyJanuary 31, 2018 respectively
4. PREPAYMENTS AND DEPOSITS
Prepayments and deposits consisted of the following at April 30, 20192024 and July 31, 2018:2023, the operating lease right of use asset as follow:
SCHEDULE OF OPERATING LEASE RIGHT OF USE ASSET
As of April 30, 2019 | As of July 31, 2018 | |||||||
Property, plant and equipment | $ | 72,217 | $ | - | ||||
Deposits | 16,386 | $ | 5,302 | |||||
Prepaid expenses | 16,702 | 2,652 | ||||||
Total prepaid expenses and deposits | $ | 105,305 | $ | 7,954 |
As of January 31, 2024 | As of July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Balance at beginning of the period/year | 6,407 | 6,267 | ||||||
Add: New operating lease liability | - | 5,223 | ||||||
Foreign exchange translation loss | (23 | ) | (246 | ) | ||||
Amortization | (2,536 | ) | (4,837 | ) | ||||
Balance at end of the period/year | $ | 3,848 | $ | 6,407 |
F-11 |
As of January 31, 2024 and July 31, 2023, the operating lease liability as follow:
SCHEDULE OF OPERATING LEASE LIABILITY
As of January 31, 2024 | As of July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
As of August 1 | $ | 6,199 | $ | 6,559 | ||||
Add: New operating lease liability | - | 5,223 | ||||||
Less: Gross repayment | (2,427 | ) | (5,509 | ) | ||||
Add: Imputed interest | 113 | 176 | ||||||
Foreign exchange translation loss | (21 | ) | (250 | ) | ||||
Balance end of the period/year | $ | 3,864 | $ | 6,199 |
For the period ended January 31, 2024, the amortization of the operating lease right of use asset was $2,536 while for the period ended January 31, 2023, the amortization of the operating lease right of use asset was $2,419.
Maturities of operating lease obligation as follow:
SCHEDULE OF MATURITIES OF OPERATING LEASE OBLIGATION
Year ending | ||||
July 31, 2024 (6 months) | $ | 3,375 | ||
October 31, 2024 (3 months) | 489 | |||
Total | $ | 3,864 |
Other information:
SCHEDULE OF OTHER INFORMATION
Six months ended | Six months ended | |||||||
January 31, 2024 | January 31, 2023 | |||||||
(Unaudited) | (Unaudited) | |||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flow from operating lease | $ | 2,455 | $ | 2,587 | ||||
Right-of-use assets obtained in exchange for operating lease liabilities | $ | 3,848 | $ | 3,754 | ||||
Remaining lease term for operating lease (years) | 0.75 | 0.75 | ||||||
Weighted average discount rate for operating lease | 4.35 | % | 4.35 | % |
Lease expenses were $113 and $117 during the period ended January 31, 2024 and January 31, 2023 respectively.
5. PATENT AND TRADEMARK
SCHEDULE OF PATENT AND TRADEMARK
As of | As of | |||||||
January 31, 2024 | July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Patent and trademark1 | $ | 38,454 | $ | 35,988 | ||||
Accumulated amortization | (6,986 | ) | (6,986 | ) | ||||
Impairment | (31,442 | ) | (28,976 | ) | ||||
Foreign currency translation adjustment | (26 | ) | (26 | ) | ||||
Patent and trademark, net | $ | - | $ | - |
1 | The patents and trademarks are held under the Company’s subsidiaries in Hong Kong and Shanghai, China. |
Amortization were $0 and $0 for the period ended January 31, 2024 and January 31, 2023 respectively.
6. PREPAYMENTS AND DEPOSITS
SCHEDULE OF PREPAYMENTS AND DEPOSITS
As of January 31, 2024 | As of July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Prepayments | $ | 1,828 | $ | 4,017 | ||||
Deposits | 2,782 | 5,247 | ||||||
Total prepayments and deposits | $ | 4,610 | $ | 9,264 |
7. AMOUNT DUE FROM RELATED PARTY
SCHEDULE OF DUE FROM RELATED PARTY
As of January 31, 2024 | As of July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Tien Mu International Co., Ltd1 | $ | - | $ | 2,112 | ||||
Total amount due from related party | $ | - | $ | 2,112 |
1 | Tien Mu International Co., Ltd is owned by Ms. Niu Yen-Yen, the Director and Chief Executive Officer of the Company. Tien Mu International Co., Ltd is an operating agent of the Company’s operation in Taiwan, which collects deposits from franchisees on behalf of the Company. |
F-12 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINESIX MONTHS ENDED APRIL 30, 2019JANUARY 31, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
5. COMMON STOCK8. INVENTORIES
SCHEDULE OF INVENTORIES
As of | As of | |||||||
January 31, 2024 | July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Finished goods, at cost | $ | 1,334 | $ | 1,333 | ||||
Total inventories | $ | 1,334 | $ | 1,333 |
On June 4, 2018, our Chief Executive Officer, Ms. Niu Yen-Yen purchased 100,000 shares of restricted common stock of the Company at par value of $0.0001 per share. The monies from this transaction, which totalled $10, went to the Company to be used as initial working capital.
On July 6, 2018, Ms. Niu Yen-Yen and Server Int’l Co., Ltd. purchased 25,000,000 and 11,000,000 restricted shares of common stock, respectively, of the Company, at par value of $0.0001 per share. The monies from these transactions, which totalled $3,600, went to the Company to be used as initial working capital. Server Int’l Co., Ltd. is controlled entirely by Ms. Niu Yen-Yen.
On July 7, 2018, Chang Chun-Ying and Chang Su-Fen purchased 4,300,000 and 5,000,000 restricted shares of common stock, respectively, of the Company, at par value of $0.0001 per share. The monies from these transactions, which totalled $930, went to the Company to be used as initial working capital.
On July 9, 2018, GreenPro Asia Strategic SPC and GreenPro Venture Capital Limited, purchased 2,835,000 and 2,165,000 restricted shares of common stock of the Company, respectively, at par value of $0.0001 per share. The monies from these transactions, which totalled $500, went to the Company to be used as initial working capital.
From July 9, 2018 to July 10, 2018 the Company sold a total of 2,150,000 shares of restricted common stock to three non-US residents. Shares were sold at par value, $0.0001 per share. Total proceeds from these shares totalled $215 and went to the Company to be used as initial working capital.
On July 11, 2018 the Company sold a total of 710,000 shares of restricted common stock to two non-US residents at a price of $0.03 per share. Total proceeds from these sales of shares totalled $21,300 and went to the Company to be used as initial working capital.
On July 25, 2018 the Company sold a total of 995,000 shares of restricted common stock to ten non-US residents at a price of $0.03 per share. Total proceeds from these sales of shares totalled $29,850 and went to the Company to be used as initial working capital.
On July 26, 2018 the Company sold 250,000 shares of restricted common stock to one non-US resident at a price of $0.20 per share. Total proceeds from these sales of shares totalled $50,000 and went to the Company to be used as initial working capital.
On July 31, 2018 Dezign Format Pte Ltd and Cheng Young-Chien each purchased 2,000,000 restricted shares of common stock of the Company, at $0.20 per share, for total consideration of $800,000. Proceeds went to the Company to be used as initial working capital.
On July 10, 2018, Server Int’l Co., Ltd, a Company solely controlled and owned by the CEO has transferred 1,500,000 shares of common stock to 8 non-US residents.
From August 1, 2018 to December 13, 2018, Ms. Niu Yen-Yen, the CEO of the Company has transferred 1,557,800 shares of common stock to 16 non-US residents.
As of April 30, 2019, MU Global Holding Limited has an issued and outstanding common share of 58,505,000.
6. 9. OTHER PAYABLES AND ACCRUED LIABILITIES
SCHEDULE OF OTHER PAYABLES AND ACCRUED LIABILITIES
As of January 31, 2024 | As of July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Other payables | $ | 41,880 | $ | 40,854 | ||||
Accrued audit fees | - | 15,000 | ||||||
Accrued professional fees | 6,000 | 9,600 | ||||||
Total other payables and accrued liabilities | $ | 47,880 | $ | 65,454 |
Other payables and accrued liabilities consisted of the following at April 30, 2019 and July 31, 2018:
As of April 30, 2019 | As of July 31, 2018 | |||||||
Accrued audit fees | $ | - | $ | 9,000 | ||||
Accrued professional fees | 4,213 | - | ||||||
Other payable and accrued liabilities | 58,420 | - | ||||||
Total payables and accrued liabilities | $ | 62,633 | $ | 9,000 |
F-13 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINESIX MONTHS ENDED APRIL 30, 2019JANUARY 31, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
7.10. AMOUNT DUE TO RELATED PARTIES
SCHEDULE OF DUE TO RELATED PARTIES
As of April 30, 2019 (Unaudited) | As of July 31, 2018 (Audited) | |||||||
Wu, Chun-Teh1 | $ | 79,844 | $ | 20,682 | ||||
Niu, Yen-Yen2 | 8,257 | 8,000 | ||||||
$ | 88,101 | $ | 28,682 |
As of January 31, 2024 | As of July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Hsieh, Chang-Chung1 | $ | 93,176 | $ | 93,176 | ||||
Tien Mu International Co., Ltd2 | 5,093 | - | ||||||
$ | 98,269 | $ | 93,176 |
1 | Hsieh, Chang-Chung, one of the current shareholders of the Company, served as Chief Financial Officer (“Principal Financial Officer”, “Principal Accounting Officer”) of the Company during the period from June 5, 2018 to October 31, 2022. The amount due represents salary expenses accrued to Mr. Hsieh. He resigned as Chief Financial Officer of the Company with effective from November 1, 2022. |
2 | Tien Mu International Co., Ltd is owned by Ms. Niu Yen-Yen, the Director and Chief Executive Officer of the Company. The amount due represents general and administrative expenses paid on behalf by the related party. |
As of April 30, 2019, the balance $79,844 represented an outstanding payable to 1 related party.
1Wu, Chun-theis a shareholder of the Company, at the same time providing consultation services to the Company and also staff of the company have paid company operation expenses such as renovation cost, rental and staff salaries on behalf of Company.
2Niu, Yen-Yen areChief Executive Officer (“Principal Executive Officer”), President, Secretary, Treasurer and Director of the Company, and has paid the Company’s professional fee on behalf of the Company ..
The amountsamount due to related parties are unsecured, interest-free with no fixed repayment term, for working capital purpose.
11. LOAN FROM THIRD PARTY
SCHEDULE OF LOAN FROM THIRD PARTY
As of January 31, 2024 | As of July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Shang Hai Shi Ba Enterprise Management Centre | $ | 115,039 | $ | 95,988 | ||||
Total loan from third party | $ | 115,039 | $ | 95,988 |
The loan is unsecured, interest-free and repayable in year 2024 and year 2025. The loan is further extended to repayment in year 2026 with a loan agreement entered on August 2, 2023.
12. LOAN FROM DIRECTOR
SCHEDULE OF LOAN FROM DIRECTOR
As of January 31, 2024 | As of July 31, 2023 | |||||||
(Unaudited) | (Audited) | |||||||
Current | $ | 198,439 | $ | 170,805 | ||||
Non-current | 113,534 | 110,985 | ||||||
Total loan from Director | $ | 311,973 | $ | 281,790 |
Current portion of the loan provided by director Niu Yen-Yen is unsecured, interest-free and repayable upon demand.
The long-term loan provided by director Niu Yen-Yen is unsecured, interest-free and repayable in year 2024, for working capital purpose. The long-term loan is further extended to repayment in year 2026 with a loan agreement entered on August 2, 2023.
F-14 |
8.
13. INCOME TAXES
For the ninesix months ended April 30, 2019,January 31, 2024 and January 31, 2023, the local (United States) and foreign components of income/(loss) before income taxes were comprised of the following:
SCHEDULE OF LOSS BEFORE INCOME TAX
Nine months ended April 30, 2019 (Unaudited) | For the period ended July 31, 2018 (Audited) | Six months ended January 31 | ||||||||||||||
2024 | 2023 | |||||||||||||||
Tax jurisdictions from: | ||||||||||||||||
Local | $ | (111,563 | ) | $ | (17,000 | ) | $ | (22,144 | ) | $ | (20,945 | ) | ||||
Foreign, representing | ||||||||||||||||
- Seychelles | - | - | - | (1,600 | ) | |||||||||||
- Hong Kong | $ | (105,781 | ) | $ | (12,716 | ) | 1,372 | (6,462 | ) | |||||||
- Shanghai | $ | (316,636 | ) | - | (23,467 | ) | (22,144 | ) | ||||||||
Loss before income tax | $ | (533,980 | ) | $ | (29,716 | ) | $ | (44,239 | ) | $ | (51,151 | ) |
The provision for income taxes consisted of the following:
SCHEDULE OF PROVISION FOR INCOME TAXES
For the period ended
| For the
| |||||||
Current: | ||||||||
- Local | $ | - | $ | - | ||||
- Foreign | - | - | ||||||
Deferred: | ||||||||
- Local | - | - | ||||||
- Foreign | - | - | ||||||
Income tax expense | $ | - | $ | - |
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States Seychelles, Hong Kong and Shanghai, PRC that are subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of April 30, 2019,January 31, 2024, the operations in the United States of America incurred $128,563$515,378 of cumulative net operating losses which can be carried forward indefinitely to offset a maximum of 80% future taxable income. The net operating loss carryforwards begin to expire in 2038, if unutilized. The Company has provided for a full valuation allowance of $22,549$412,302 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.
Seychelles
Under the current laws of the Seychelles, MU Worldwide Group Limited is registered as an international business company which governs by the International Business Companies Act of Seychelles and there is no income tax charged in Seychelles.
Hong Kong
MU Global Holding Limited is subject to Hong Kong Profits Tax, which is charged at the statutory income tax rate of 16.5%16.5% on its assessable income.
Shanghai
MU Global Health Management (Shanghai) Limited are operating in the People’s Republic of China (PRC) subject to the Corporate Income Tax governed by the Income Tax Law of the PRC with a unified statutory income tax rate of 25%25%.
F-15 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINESIX MONTHS ENDED APRIL 30, 2019JANUARY 31, 2024
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
9. CONVERTIBLE PROMISSORY NOTES14. COMMON STOCK
Between February 26, 2019On June 4, 2018, our Chief Executive Officer, Ms. Niu Yen-Yen subscribed 10, went to the Company to be used as initial working capital. shares of restricted common stock of the Company at par value of $ per share. The monies from this transaction, which totalled $
On July 6, 2018, Ms. Niu Yen-Yen and April 30, 2019,Server Int’l Co., Ltd. subscribed and restricted shares of common stock, respectively, of the Company, at par value of $ per share. The monies from these transactions, which totalled $3,600, went to the Company to be used as initial working capital. Server Int’l Co., Ltd. is controlled entirely by Ms. Niu Yen-Yen.
On July 7, 2018, Chang Chun-Ying and Chang Su-Fen subscribed 930, went to the Company to be used as initial working capital. and restricted shares of common stock, respectively, of the Company, at par value of $ per share. The monies from these transactions, which totalled $
On July 9, 2018, GreenPro Asia Strategic SPC and GreenPro Venture Capital Limited, subscribed 500, went to the Company to be used as initial working capital. and restricted shares of common stock of the Company, respectively, at par value of $ per share. The monies from these transactions, which totalled $
From July 9, 2018 to July 10, 2018 the Company issued a total of 215 and went to the Company to be used as initial working capital. shares of restricted common stock to three non-US residents. Shares were sold at par value, $ per share. Total proceeds from these shares totalled $
On July 10, 2018, Server Int’l Co., Ltd, a Company solely controlled and owned by the CEO has transferred shares of common stock to 8 non-US residents.
On July 11, 2018 the Company issued a total of 21,300 and went to the Company to be used as initial working capital. shares of restricted common stock to two non-US residents at a price of $ per share. Total proceeds from these sales of shares totalled $
On July 25, 2018 the Company issued a total of 29,850 and went to the Company to be used as initial working capital. shares of restricted common stock to ten non-US residents at a price of $ per share. Total proceeds from these sales of shares totalled $
On July 26, 2018 the Company issued 50,000 and went to the Company to be used as initial working capital. shares of restricted common stock to one non-US resident at a price of $ per share. Total proceeds from these sales of shares totalled $
On July 31, 2018 Dezign Format Pte Ltd and Cheng Young-Chien each subscribed 800,000. Proceeds went to the Company to be used as initial working capital. restricted shares of common stock of the Company, at $ per share, for total consideration of $
F-16 |
From August 1, 2018 to December 13, 2018, Ms. Niu Yen-Yen, the CEO of the Company has transferred shares of common stock to 16 non-US residents.
On May 7, 2019, the convertible promissory notes (collectivelynote issued by the “Convertible Notes”)Company amounted $779,125 to 45 accredited investors who reside in an aggregated principal amount of $779,125. The Convertible Notes bear no interestTaiwan with a maturity date due in December 31, 2019 (with an extended maturity date on June 30, 2020 in the circumstances this Registration Statement not yet effective). The principal is payable in a lump sum at maturity. The conversion price of $1 per share have been converted to common stock of the notes is $1per share. The notes are convertible intocompany after the S-1 registration statement was declared effective on May 6, 2019.
From May 14, 2019 to July 31, 2019, the company issued shares of common stock at a price of $ per share through the Initial Public Offering (IPO) to 36 non-US residents.
From August 1, 2020 to July 31, 2021, Ms. Niu Yen-Yen, the CEO of the Company, had shares of common stock transferred from 3 non-US residents and had sold shares of common stock to 20 non-US residents.
From August 1, 2021 to July 31, 2022, Ms. Niu Yen-Yen, the CEO of the Company, had shares of common stock transferred from 2 non-US residents and had sold shares of common stock to 3 non-US residents.
From August 1, 2022 to July 31, 2023, Ms. Niu Yen-Yen had sold shares of common stock to 5 non-US residents.
As of January 31, 2024, MU Global Holding Limited has an issued and outstanding common share of .
15. CONCENTRATIONS OF RISK
(a) Major customers
For the three months period ended January 31, 2024 and 2023, the customers who accounted for 10% or more of the Company’s common stock either 1)revenues and its trade receivable balance at period-end are presented as follows:
SCHEDULE OF CONCENTRATION OF RISK
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Revenue | Percentage of revenue | Trade receivable | ||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
Customer A | $ | 343 | $ | - | 100 | % | - | % | $ | - | $ | - | ||||||||||||
Customer B | - | 7,155 | - | % | 99 | % | - | - | ||||||||||||||||
$ | 343 | $ | 7,155 | 100 | % | 99 | % | $ | - | $ | - |
For the optionsix months period ended January 31, 2024 and 2023, the customers who accounted for 10% or more of the holders, or 2) uponCompany’s revenues and its trade receivable balance at period-end are presented as follows:
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Revenue | Percentage of revenue | Trade receivable | ||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
Customer A | $ | 343 | $ | - | 100 | % | - | % | $ | - | $ | - | ||||||||||||
Customer B | - | 120,938 | - | % | 94 | % | - | - | ||||||||||||||||
$ | 343 | $ | 120,938 | 100 | % | 94 | % | $ | - | $ | - |
(b) Major vendors
For the effectiveness of this S-1 Registration Statement.
Agreement Date | Maturity Date | Number of investors | Principal Amount | Conversion price | ||||||||||||||||
2/26/2019 | 12/31/2019 | 1 | 2,000 | 1.00 | ||||||||||||||||
3/4/2019 | 12/31/2019 | 1 | 100,000 | 1.00 | ||||||||||||||||
3/7/2019 | 12/31/2019 | 1 | 30,000 | 1.00 | ||||||||||||||||
3/12/2019 | 12/31/2019 | 3 | 115,000 | 1.00 | ||||||||||||||||
3/14/2019 | 12/31/2019 | 3 | 8,025 | 1.00 | ||||||||||||||||
3/20/2019 | 12/31/2019 | 2 | 51,000 | 1.00 | ||||||||||||||||
3/21/2019 | 12/31/2019 | 2 | 203,000 | 1.00 | ||||||||||||||||
3/25/2019 | 12/31/2019 | 2 | 17,000 | 1.00 | ||||||||||||||||
3/26/2019 | 12/31/2019 | 1 | 2,000 | 1.00 | ||||||||||||||||
3/27/2019 | 12/31/2019 | 1 | 5,000 | 1.00 | ||||||||||||||||
3/29/2019 | 12/31/2019 | 1 | 50,000 | 1.00 | ||||||||||||||||
4/1/2019 | 12/31/2019 | 2 | 18,000 | 1.00 | ||||||||||||||||
4/8/2019 | 12/31/2019 | 3 | 15,000 | 1.00 | ||||||||||||||||
4/9/2019 | 12/31/2019 | 3 | 103,000 | 1.00 | ||||||||||||||||
4/10/2019 | 12/31/2019 | 5 | 19,500 | 1.00 | ||||||||||||||||
4/11/2019 | 12/31/2019 | 6 | 23,800 | 1.00 | ||||||||||||||||
4/12/2019 | 12/31/2019 | 8 | 16,800 | 1.00 | ||||||||||||||||
Total | 45 | 779,125 | 1.00 |
10. CONCENTRATIONS OF RISK
Exchange rate risk
The Company cannot guarantee that the current exchange rate will remain stable, thereforethree months period ended January 31, 2024 and 2023, there is a possibility that the Company could post the same amount of incomeno vendor who accounted for two comparable periods and because10% or more of the fluctuating exchange rate actually post higher or lower income depending on exchange rate of RMB converted into US$ on that date. The exchange rate could fluctuate depending on changes in politicalCompany’s purchases and economic environments without notice.its trade payable balance at period-end.
F-17 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2019For the six months period ended January 31, 2024 and 2023, the vendors who accounted for 10% or more of the Company’s purchases and its trade payable balance at period-end are presented as follows:
(Currency expressed
2024 | 2023 | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
Purchases | Percentage of purchases | Trade payable | ||||||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
Vendor A | $ | - | $ | 108,844 | - | % | 100 | % | $ | - | $ | - | ||||||||||||
$ | - | $ | 108,844 | - | % | 100 | % | $ | - | $ | - |
(c) Exchange rate risk
The operation of the Company’s subsidiaries in United States Dollars (“US$”)international markets results in exposure to movements in currency exchange rates. We have experienced foreign currency gains and losses due to the strengthening and weakening of the U.S. dollar. The potential of volatile foreign exchange rate fluctuations in the future could have a significant effect on our results of operations. The Company has not historically used financial instruments to hedge its foreign currency exchange rate risks.
The currencies that create a majority of the Company’s exchange rate exposure are RMB, HK$, except for numberand TWD. The Company translates all assets and liabilities at the rate of shares)exchange in effect at the balance sheet date and income and expense activity at the approximate rate of exchange at the transaction date.
(UNAUDITED)
11. 16. COMMITMENTS AND CONTINGENCIES
On October 10, 2018,November 6, 2021, the Company has to enterentered into a contract rental agreement to rent the outletoffice in Shanghai for a period of 5 yearsone year commencing October 15, 2018 amounted to $4,860on November 6, 2021 with tri-monthly payments in the amount of RMB 3,500 per month over the course of the lease and paymentan entitlement of 1 month rent free period as relief upon rented the premise for full 11 months. The Company has an option to be conductedrenew after the end of the agreement. On October 18, 2022, the Company has renewed the tenancy agreement for 12 months with tri-monthly payments in advance on bi monthly basis.the amount of RMB 3,500 per month over the course of the lease from November 6, 2022 to November 5, 2023 and is entitled for 1 month rent free period as relief upon rented the premise for full 11 months. The Company has an option to renew after the end of the agreement. On August 7, 2023, the Company has further renewed the tenancy agreement for 12 months with tri-monthly payments in the amount of RMB 3,500 per month over the course of the lease from November 6, 2023 to November 5, 2024 and is entitled for 1 month rent free period as relief upon rented the premise for full 11 months.
As of April 30, 2019,January 31, 2024, the Company has the aggregate minimal rent payments due in the next 5two years as follows:
SCHEDULE OF AGGREGATE MINIMAL RENT PAYMENTS
Year ending July, 31 | ||||
2019 | $ | 41,395 | ||
2020 | $ | 57,702 | ||
2021 | $ | 57,702 | ||
2022 | $ | 57,702 | ||
2023 | $ | 57,702 |
Year ending July 31 | ||||
2024 | $ | 3,375 | ||
2025 | 489 | |||
Total | $ | 3,864 |
On December 19, 2018, the company entered into a contract with supplier for the development of Mobile App which have not been completed during the nine month ended April 30, 2019 with a capital commitment as follows:
| ||||
12. 17. RELATED PARTY TRANSACTIONS
For the period ended April 30, 2019January 31, 2024 the Company has following outstanding payable totransactions with related party:parties:
SCHEDULE OF OUTSTANDING PAYABLE TO RELATED PARTY
For the period ended April 30, 2019 (Unaudited) | For the period ended July 31, 2018 (Audited) | For the period ended January 31, 2024 (Unaudited) | For the year ended July 31, 2023 (Audited) | |||||||||||||
Professional fee paid: | ||||||||||||||||
Professional fee: | ||||||||||||||||
- Related party A | $ | 107,500 | $ | 8,000 | $ | 5,000 | $ | 16,080 | ||||||||
Consultation fee paid: | ||||||||||||||||
Consultation fee: | ||||||||||||||||
- Related party B | $ | 49,750 | $ | 4,105 | $ | - | $ | 8,100 | ||||||||
- Related party C | $ | 49,750 | $ | 3,372 | ||||||||||||
Total | $ | 207,000 | $ | 15,477 | $ | 5,000 | $ | 24,180 |
Related party A is the fellow subsidiaries of a corporate shareholder of the Company. Related party B is the employee and C are the shareholdersshareholder of the Company.
DuringFor the nine months period ended April 30, 2019,January 31, 2024, the Company incurred professional fees of $107,500$5,000 due to related party A. Related party B
F-18 |
18. SEGMENT INFORMATION
ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and C aremajor customers in financial statements. In accordance with the employees“Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes.
The Company and have provided consultancy servicehad no inter-segment sales for business operation.the years presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
SCHEDULE OF SEGMENT REPORTING INFORMATION
The related party transactions are generally transacted in an arm-length basis at the current market value in the normal course of business.By Geography:
Nevada | Seychelles | Hong Kong | China | Total | ||||||||||||||||
For the period ended January 31, 2024 | ||||||||||||||||||||
Nevada | Seychelles | Hong Kong | China | Total | ||||||||||||||||
Revenue | $ | - | $ | - | $ | - | $ | 343 | $ | 343 | ||||||||||
Cost of revenue | - | - | - | - | - | |||||||||||||||
Other income | - | - | 3,013 | 3,192 | 6,205 | |||||||||||||||
Selling and marketing expenses | - | - | - | (915 | ) | (915 | ) | |||||||||||||
General and administrative expenses | (22,144 | ) | - | (1,641 | ) | (26,087 | ) | (49,872 | ) | |||||||||||
Net (loss) / profit before taxation | (22,144 | ) | - | 1,372 | (23,467 | ) | (44,239 | ) | ||||||||||||
Total assets | $ | 1,050 | $ | 1 | $ | 1,953 | $ | 7,345 | $ | 10,348 |
Nevada | Seychelles | Hong Kong | China | Total | ||||||||||||||||
For the period ended January 31, 2023 | ||||||||||||||||||||
Nevada | Seychelles | Hong Kong | China | Total | ||||||||||||||||
Revenue | $ | - | $ | - | $ | 120,938 | $ | 7,303 | $ | 128,241 | ||||||||||
Cost of revenue | - | - | (108,844 | ) | - | (108,844 | ) | |||||||||||||
Other income | - | - | 2 | 2,356 | 2,358 | |||||||||||||||
Selling and marketing expenses | - | - | (200 | ) | (78 | ) | (278 | ) | ||||||||||||
General and administrative expenses | (20,945 | ) | (1,600 | ) | (18,358 | ) | (31,725 | ) | (72,628 | ) | ||||||||||
Net loss before taxation | (20,945 | ) | (1,600 | ) | (6,462 | ) | (22,144 | ) | (51,151 | ) | ||||||||||
Total assets | $ | 875 | $ | 1 | $ | 3,936 | $ | 66,176 | $ | 70,988 |
13.19. SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”“Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all subsequent events or transactions that occurred after April 30, 2019 up through the filing date June 10, 2019 wasof this Form 10-K with the Company presented these audited consolidatedSEC, to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of January 31, 2024, and events which occurred subsequently but were not recognized in the financial statements. During the period, there was no subsequent event that required recognition or disclosure.
On May 7, 2019 , the convertible note received by the Company amount of $779,125 of convertible promissory notes from 45 accredited investors who reside in Taiwan with conversion price of the convertible notes at $1 per share have converted to common stock of the company after the S-1 registration statement effective on May 6, 2019.
F-19 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Annual Report on Form S-1 Amendment No.3, dated April 30, 2019,10-K for the year ended JanuaryJuly 31, 20192023 filed with the Securities and Exchange Commission on October 30, 2023 (the “Form 10-K”) and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form S-1.10-K/A. The following discussion and analysis also should be read together with our consolidated financial statements and the notes to the consolidated financial statements included elsewhere in this Form 10-Q.
The following discussion contains certainCertain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”constitute forward-looking statements. These forward-looking statements are not guarantees of future performance andinclude statements, which involve risks and uncertainties, regarding, among other things, (a) our projected sales, profitability, and requirementscash flows, (b) our growth strategy, (c) anticipated trends in our industry, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or the negative of these words or other variations on these words or comparable terminology. In light of these risks and uncertainties, there can be no assurance that are difficult to predict or are beyond our control. Forward-lookingthe forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.
The forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements. We strongly encourage investorsstatements to carefully readreflect events or circumstances after the factors described in our Form S-1 Amendment No.3, dated April 30, 2019, indate on which the section entitled “Risk Factors” for a descriptionstatements are made or to reflect the occurrence of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this transition report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.unanticipated events.
Company Overview
MU Global Holding Limited, the US Company, operates through its wholly owned subsidiary, MU Worldwide Group Limited, a Seychelles Company; which operates through its wholly owned subsidiary, MU Global Holding Limited, a Hong Kong Company; which operates through its wholly owned subsidiary, MU Global Health Management (Shanghai) Limited, a Shanghai Company. The US, Seychelles and Hong Kong Companies act solely for holding purposes whereas all current and future operations in China are planned to be carried out via MU Global Health Management (Shanghai) Limited, the Shanghai Company. The purpose of the Hong Kong Company is to function as the current regional hub of the Company.
At present, we have a physical office in Shanghai with an address of A310, No. 2633, Yan’an West Road, Changning District, Shanghai City, 200050 People Republic China, in which renovation has completed in October 2018 and the Company has commenced business operations from the office. In addition, we also have a physical outlet in Shanghai with address of 203, No. 193 Luo Jin Hui SouthRoom 1510, Building 5, Ark Times Square, 3148 Chengliu Middle Road, MinhangJiading District, Shanghai City, 201103, People Republic China in which renovation completed in January 2019 and we have started to provide our services to customers in Shanghai.. In the future, we do not have definitive plans for which markets intend to expand to, but we base our operations out of ourin Shanghai, location, as we prepare for future unidentified expansion efforts.
All of the previous entities share the same exact business plan with the goal of developing and providing wellness and beauty services to our future clients. We aim to promote improved overall health and beauty in our clients through a holistic detoxification method. We will, at least initially, primarily focus our efforts on attracting customers in China. We have intentions, but no definitive plans or timelines, to expand to Singapore, Malaysia, Hong Kong, and Middle Eastern countries in the coming years, and subsequently we intend to make efforts to expand throughout Asia. We anticipate spending a substantial amount in marketing and advertising in the coming year.
3 |
Results of Operation
For the ninesix months ended April 30, 2019January 31, 2024 and 2023
Revenues
For ninethe six months ended April 30, 2019,January 31, 2024 and 2023, the Company has generated revenue of $19,226.$343 and $128,241 respectively. The revenue represented income from wellness and beauty services provided to customers, and sales of products via shanghai outlets.and sharing of revenue from leasable equipment with business alliance and franchisee.
Cost of Revenue and Gross Margin
For the ninesix months ended AprilJanuary 31, 2019,2024 and 2023, cost incurred arise in providing wellness and beauty services and selling of essential oil is $8,073$0 and $108,844 respectively, and generate a Gross profitsgross profit the for the ninesix months ended April 30, 2019, were $11,153 as the company start the outlet operation in the monthJanuary 31, 2024 and 2023 of April 30, 2019.$343 and $19,397.
Selling and marketing expenses
For the ninesix months ended April 30, 2019,January 31, 2024 and 2023, we had incurred marketing expenses in the amount of $38,100. These expenses$915 and $278 respectively. The expense comprised of advertisementtravelling expenses, on Wechat, mobile appscourier and public research on the market.transportation expenses, internet and website expenses.
General and administrative expenses
For the ninesix months ended April 30, 2019,January 31, 2024 and 2023, we had incurred general and administrative expenses in the amount of $507,111.These$49,872 and $72,628 respectively. These expenses are comprised of salary, allowance, professional fees, consultancy fee for IT and system management, office and outlet operation expensesexpenses.
Other Income
The Company recorded an amount of $6,205 and depreciation.$2,358 as other income for the six months ended January 31, 2024 and 2023. This income is derived from the interest income, foreign exchange gain, gain on disposal and gain on measurement of long-term liabilities.
Net Loss
Our net loss for ninesix months ended April 30, 2019January 31, 2024 and 2023 were $533,980.$44,239 and $51,151. The net loss mainly derived from the general and administrative expenses incurred. The decrease in net loss of $6,912 as a result of reduction of general and administrative expenses incurred during the period ended January 31, 2024.
4 |
Liquidity and Capital Resources
As of April 30, 2019,January 31, 2024 and 2023, we had cash and cash equivalents of $895,442.$556 and $7,785 respectively. We expect increased levels of operations going forward will result in more significant cash flow and in turn working.
We depend substantially on financing activities to provide us with the liquidity and capital resources we need to meet our working capital requirements and to make capital investments in connection with ongoing operations. During the nine month period ended April 30, 2019, we haveJanuary 31, 2024, the Company had met these requirements primarily from the receipt of subscription for convertible promissory note.financial support from director and third party company.
Cash Used Inin Operating Activities
For the ninesix months ended April 30, 2018,January 31, 2024, net cash used in operating activities was $479,913. $54,294 as compared to net cash used in operating activities of $28,629 for the six months ended January 31, 2023. The cash used in operating activities was mainly for payment of general and administrative expenses.
Cash Provided InGenerated from Financing Activities
For the ninesix months ended April 30, 2019, noJanuary 31, 2024 and 2023, net cash provided bygenerated from financing activities was $1,579,125. $46,571 and $37,452 respectively. The financing cash flow performance primarily reflects the issuance of convertible promissory notes.loan from director and third party.
Cash Provided InGenerated from / (Used in) Investing Activities
For the ninesix months ended April 30, 2019,January 31, 2024 and 2023, the net cash generated from investing activities was $4,063 and net cash used in investing activities was $334,049. $3,470. The investing cash flow performance primarily reflects the purchase of property, plant and equipment and trademark and disposal of property, plant and equipment.
Credit Facilities
We do not have any credit facilities or other access to bank credit.
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of April 30, 2019.January 31, 2024.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
5 |
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
ITEM 4 CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of April 30, 2019.January 31, 2024. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of April 30, 2019,January 31, 2024, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness 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 the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of April 30, 2019,January 31, 2024, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ended April 30, 2019,January 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
6 |
PART II — OTHER INFORMATION
We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Between February 26, 2019 and April 30, 2019, the Company issued convertible promissory notes (collectively the “Convertible Notes”) to 45 accredited investors in an aggregated principal amount of $779,125. The Convertible Notes bear no interest with a maturity date due in December 31, 2019 (with an extended maturity date on June 30, 2020 in the circumstances this Registration Statement not yet effective). The principal is payable in a lump sum at maturity. The conversion price of the notes is $1per share. The notes are convertible into shares of the Company’s common stock either 1) at the option of the holders, or 2) upon the effectiveness of this S-1 Registration Statement. Shares pursuant to the convertible notes are not being registered for resale pursuant to this registration statement.None
Agreement Date | Maturity Date | Number of investors | Principal Amount | Conversion price | ||||||||||||||||
2/26/2019 | 12/31/2019 | 1 | 2,000 | 1.00 | ||||||||||||||||
3/4/2019 | 12/31/2019 | 1 | 100,000 | 1.00 | ||||||||||||||||
3/7/2019 | 12/31/2019 | 1 | 30,000 | 1.00 | ||||||||||||||||
3/12/2019 | 12/31/2019 | 3 | 115,000 | 1.00 | ||||||||||||||||
3/14/2019 | 12/31/2019 | 3 | 8,025 | 1.00 | ||||||||||||||||
3/20/2019 | 12/31/2019 | 2 | 51,000 | 1.00 | ||||||||||||||||
3/21/2019 | 12/31/2019 | 2 | 203,000 | 1.00 | ||||||||||||||||
3/25/2019 | 12/31/2019 | 2 | 17,000 | 1.00 | ||||||||||||||||
3/26/2019 | 12/31/2019 | 1 | 2,000 | 1.00 | ||||||||||||||||
3/27/2019 | 12/31/2019 | 1 | 5,000 | 1.00 | ||||||||||||||||
3/29/2019 | 12/31/2019 | 1 | 50,000 | 1.00 | ||||||||||||||||
4/1/2019 | 12/31/2019 | 2 | 18,000 | 1.00 | ||||||||||||||||
4/8/2019 | 12/31/2019 | 3 | 15,000 | 1.00 | ||||||||||||||||
4/9/2019 | 12/31/2019 | 3 | 103,000 | 1.00 | ||||||||||||||||
4/10/2019 | 12/31/2019 | 5 | 19,500 | 1.00 | ||||||||||||||||
4/11/2019 | 12/31/2019 | 6 | 23,800 | 1.00 | ||||||||||||||||
4/12/2019 | 12/31/2019 | 8 | 16,800 | 1.00 | ||||||||||||||||
Total | - | - | 45 | 779,125 | - |
The company S-1 registration statement have effective on May 6, 2019 and the aforesaid Convertible Notes have been converted to 779,125 common stock with each share price at $1.00 on May 7, 2019
In regards to all of the above transactions we claim an exemption from registration afforded by Section 4(2) and/or Regulation S of the Securities Act of 1933, as amended (“Regulation S”) for the above sales of the Convertible Notes since the sales of the Convertible Notes were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
None
7 |
Exhibit No. | Description | |
31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer* | |
Section 1350 Certification of principal executive officer * | ||
101.INS | Inline XBRL Instance Document* | |
101.SCH | Inline XBRL Schema Document* | |
101.CAL | Inline XBRL Calculation Linkbase Document* | |
101.DEF | Inline XBRL Definition Linkbase Document* | |
101.LAB | Inline XBRL Label Linkbase Document* | |
101.PRE | Inline XBRL Presentation Linkbase Document* | |
Cover Page Interactive Data File (embedded within the Inline XBRL | ||
* Filed herewith.
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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.
MU Global Holding Limited | |||
(Name of Registrant) | |||
Date: | By: | ||
/s/ NIU YEN YEN | |||
Title: | Chief Executive Officer, Chief Financial Officer, President, Director, Secretary and Treasurer | ||
(Principal Executive |
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