Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2021 | |
Document Information Line Items | |||
Entity Registrant Name | Microalliance Group Inc. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Common Stock, Shares Outstanding | 609,316,077 | ||
Entity Public Float | $ 6,034,500 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001309251 | ||
Entity Current Reporting Status | No | ||
Entity Voluntary Filers | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 333-123774 | ||
Entity Incorporation, State or Country Code | NV | ||
Entity Tax Identification Number | 86-1098668 | ||
Entity Address, Address Line One | Room 601, Bldg. E | ||
Entity Address, Address Line Two | No. 1, Huabao Fubao China Street | ||
Entity Address, Address Line Three | Futian District | ||
Entity Address, City or Town | Shenzhen City | ||
Entity Address, Country | BB | ||
Entity Address, Postal Zip Code | 518000 | ||
City Area Code | +86 | ||
Local Phone Number | 185 6676 1769 | ||
Entity Interactive Data Current | Yes | ||
Auditor Firm ID | 6732 | ||
Auditor Name | Onestop Assurance Pac | ||
Auditor Location | Singapore |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 1,190,465 | $ 61,517 |
Accounts receivable | 3,012,256 | |
Other receivables | 227,359 | 101,432 |
Inventories | 14,166,929 | 66,037 |
Prepayment | 28,370 | 133,646 |
Advance to suppliers | 11,676,326 | |
Amount due from related parties | 81,690 | 142,450 |
Total current assets | 30,383,395 | 505,082 |
Non-current assets: | ||
Leasehold improvements and equipment, net | 429,500 | 87,333 |
Intangible assets | 95,461 | |
Operating lease right-of-use assets | 83,957 | 383,203 |
Total non-current assets | 608,918 | 470,536 |
Total assets | 30,992,313 | 975,618 |
Current liabilities: | ||
Accounts payable | 29,048 | 134,842 |
Income tax payables | 1,334,679 | 31,774 |
Other payables and accruals | 481,258 | 336,604 |
Advance from customers | 737,515 | 27,648 |
Amount due to related parties | 79,849 | 1,097,152 |
Current operating lease liabilities | 69,259 | 319,697 |
Total current liabilities | 2,731,608 | 1,947,717 |
Non-current liabilities: | ||
Non-current operating lease liabilities | 14,698 | 63,506 |
Total non-current liabilities | 14,698 | 63,506 |
Total liabilities | 2,746,306 | 2,011,223 |
COMMITMENTS AND CONTINGENCIES | ||
EQUITY (DEFICIT) | ||
Share capital (750,000,000 shares of Common Stock, par value $0.00001 per share, authorized, of which 609,316,077 and 600,034,500 shares are issued and outstanding as of December 31, 2021 and 2020, respectively; and 100,000,000 shares of Series A Preferred Stock, par value $0.00001 per share, of which all 100,000,000 shares are issued and outstanding) | ||
Series A Preferred Stock | 1,000 | 1,000 |
Common Stock | 6,093 | 6,000 |
Additional paid in capital | 10,215,427 | (15,146) |
Foreign currency translation reserves | 225,508 | (54,091) |
Statutory reserves | 3,041,397 | 6,894 |
Retained earnings (Accumulated deficit) | 14,756,582 | (980,262) |
Total equity (deficit) | 28,246,007 | (1,035,605) |
Total liabilities and equity (deficit) | $ 30,992,313 | $ 975,618 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common Stock, shares authorized | 750,000,000 | 750,000,000 |
Common Stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Common Stock, shares issued | 609,316,077 | 600,034,500 |
Common Stock, shares outstanding | 609,316,077 | 600,034,500 |
Series A Preferred Stock | ||
Series A Preferred Stock, shares authorized | 100,000,000 | 100,000,000 |
Series A Preferred Stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Series A preferred Stock, shares issued | 100,000,000 | 100,000,000 |
Series A preferred Stock, shares outstanding | 100,000,000 | 100,000,000 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Revenue | $ 37,393,802 | $ 1,194,427 |
Cost of revenue | (10,422,569) | (176,393) |
Gross profit | 26,971,233 | 1,018,034 |
Selling and marketing expenses | (586,228) | (108,364) |
General and administrative expense | (1,525,321) | (1,519,552) |
Total operating expenses | (2,111,549) | (1,627,916) |
Operating income (loss) | 24,859,684 | (609,882) |
Other income, net | 4,551 | 1,705 |
Income (Loss) before income taxes | 24,864,235 | (608,177) |
Income taxes | (6,188,688) | (19,693) |
Net income (loss) for the year | 18,675,547 | (627,870) |
Foreign currency translation differences | 279,599 | (58,638) |
Total comprehensive income (loss) for the year | $ 18,955,146 | $ (686,508) |
Earnings (Loss) per share: | ||
- Basic (in Dollars per share) | $ 0.031 | $ (0.001) |
- Diluted (in Dollars per share) | $ 0.027 | $ (0.001) |
Weighted average number of shares used in computation: | ||
- Basic (in Shares) | 603,518,270 | 600,034,500 |
- Diluted (in Shares) | 703,518,270 | 700,034,500 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity (Deficit) - USD ($) | Series A preferred Stock | Common Stock | Additional paid in Capital | Foreign Currency Translation Reserve | (Accumulated Deficit) Unrestricted | (Accumulated Deficit) Statutory Reserves | Total |
Balance at Dec. 31, 2019 | $ 1,000 | $ 6,000 | $ (15,146) | $ 4,547 | $ (352,392) | $ 6,894 | $ (349,097) |
Income (loss) for the year | (627,870) | (627,870) | |||||
Other comprehensive income | (58,638) | (58,638) | |||||
Balance at Dec. 31, 2020 | 1,000 | 6,000 | (15,146) | (54,091) | (980,262) | 6,894 | (1,035,605) |
Business combination under common control | 93 | 10,230,573 | 95,800 | 10,326,466 | |||
Income (loss) for the year | 15,736,844 | 2,938,703 | 18,675,547 | ||||
Other comprehensive income | 279,599 | 279,599 | |||||
Balance at Dec. 31, 2021 | $ 1,000 | $ 6,093 | $ 10,215,427 | $ 225,508 | $ 14,756,582 | $ 3,041,397 | $ 28,246,007 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 18,675,548 | $ (627,870) |
Adjustments for: | ||
Depreciation and amortization | 104,192 | 25,559 |
Impairment of intangible assets | 77,264 | |
Changes in: | ||
Accounts receivable | (1,693,208) | |
Other receivables | (91,537) | (16,876) |
Inventories | (9,283,784) | 7,672 |
Prepayment | 107,284 | 4,616 |
Advance to suppliers | (3,919,042) | |
Accounts payable | (1,928,315) | (4,864) |
Income tax payables | (132,221) | 24,208 |
Other payables and accruals | 44,542 | 119,498 |
Advance from customers | 396,139 | (436,297) |
Amount due from/to related parties | (991,065) | 864,845 |
Net cash provided by operating activities | 1,288,533 | 37,755 |
Cash flows from investing activities: | ||
Additions to leasehold improvements and equipment | (117,812) | (2,800) |
Additions to intangible assets | (108,490) | |
Cash acquired from business combination | 48,689 | |
Net cash used in investing activities | (177,613) | (2,800) |
Effect of exchange rate changes on cash and cash equivalents | 18,028 | 3,516 |
Net increase in cash and cash equivalents | 1,128,948 | 38,471 |
Cash and cash equivalents at the beginning of year | 61,517 | 23,046 |
Cash and cash equivalents at the end of the year | 1,190,465 | 61,517 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for operating lease obligations | $ 94,486 | $ 383,203 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS | 1. DESCRIPTION OF BUSINESS Microalliance Group Inc. (the “Company” or “FHAI”) was incorporated under the laws of the State of Nevada on February 25, 2004 with the original company name of Celtic Cross Ltd., initially for the purpose of acquiring timeshare entities and additional like entities. For unknown reasons, FHAI was later abandoned and ceased filings with the Nevada Secretary of State for more than ten years following December 2, 2008. Thereafter, on April 2019, the district court in Nevada appointed Custodian Ventures, LLC (“Custodian”) as the custodian of FHAI upon an application for appointment of custodian filed by the Custodian. The Custodian brought FHAI into active status with the State of Nevada, appointed directors and officers of FHAI, and took control of FHAI. Until February 2, 2021, FHAI has not engaged in any business, and has been a shell company. The Company filed a Certificate of Amendment to Articles of Incorporation with the Secretary of State of the State of Nevada on February 7, 2022 to change its corporate name from Fountain Healthy Aging, Inc. to Microalliance Group Inc. On February 1, 2021, FHAI entered into a Share Exchange Agreement (the “Exchange Agreement”), with Wei Lian Jin Meng Group Limited, a limited liability company incorporated in the Cayman Islands (“WLJM Cayman” and together with its subsidiaries, the “WLJM Subsidiaries Group”), and shareholders who together own shares constituting 100% of the issued and outstanding shares of WLJM Cayman (the “Sellers”). Pursuant to the terms of the Exchange Agreement, the Sellers transferred to FHAI all of their shares of WLJM Cayman in exchange for the issuance of 600,000,000 shares (the “Shares”) of FHAI’s common stock (the “Acquisition”). The Acquisition has been accounted for as a recapitalization of FHAI, whereby WLJM Cayman is the accounting acquirer. As a result of the Acquisition, FHAI is now a holding company, is engaged in providing products and services in the food and beverage industry, including producing and selling “coffee tea” products, black coffee products and other coffee products. Immediately after completion of the Acquisition on February 1, 2020 (the “Closing Date”), FHAI’s capital stock consisted of: (i) 750,000,000 shares of common stock, par value $0.00001 per share (“Common Stock”), authorized, of which 600,034,500 shares are issued and outstanding; and (ii) 100,000,000 shares of preferred stock, par value $0.00001 per share, of which all 100,000,000 shares are designated Series A Preferred Stock (“Series A Preferred Stock”), of which all 100,000,000 shares are issued and outstanding. As a result of the Acquisition, as of the Closing Date the Company has ceased to fall under the definition of shell company as defined in Rule 12b-2 under the Exchange Act of 1934, as amended (the “Exchange Act”) and WLJM Cayman is now a wholly owned subsidiary. For accounting purposes, the Share Exchange was treated as a reverse acquisition with WLJM Cayman as the acquirer and the Company as the acquired party. WLJM Cayman was incorporated in the Cayman Islands under the Cayman Islands Companies Law on June 30, 2020. The Company does not conduct any substantive operations on its own but instead conducts its business operations through its subsidiaries in in the Peoples’ Republic of China (the “PRC”). Wei Lian Jin Meng (Hong Kong) Co., Ltd. (“WLJM HK”) was incorporated in Hong Kong under the Hong Kong Companies’ Ordinance (Chapter 622), on August 5, 2020. WLJM HK is a 100% owned subsidiary of WLJM Cayman. Jin You Wei Meng (Shenzhen) Consulting Co., Ltd. (“JYWM WFOE”) was incorporated in the Peoples’ Republic of China (the “PRC”) on November 24, 2020. JYWM WFOE is a 100% owned subsidiary of WLJM HK. Shenzhen Wei Lian Jin Meng Electronic Commerce Limited (“Shenzhen Wei Lian”) was incorporated in the Peoples’ Republic of China (the “PRC”) on October 17, 2017. Shenzhen Wei Lian is a 100% owned subsidiary of JYWM WFOE. Shenzhen Wei Lian wholesales “coffee tea” products to retail partners and corporate customers. Dongguan Dishi Coffee Limited (“Dongguan Dishi”) was incorporated in the Peoples’ Republic of China (the “PRC”) on October 25, 2018. Dongguan Dishi is a 100% owned subsidiary of Shenzhen Wei Lian. Dongguan Dishi merchandizes “coffee tea” products for Shenzhen Wei Lian. Shenzhen Nainiang Coffee Art Museum Limited (“Shenzhen Nainiang”) was incorporated in the Peoples’ Republic of China (the “PRC”) on June 20, 2019. Shenzhen Nainiang is a 100% owned subsidiary of Shenzhen Wei Lian. Shenzhen Nainiang starts generating revenues in the fiscal year 2020. Currently, Shenzhen Nainiang sells “coffee tea” products to individual consumers and provides pre-opening assistance to retail partners to operate coffee stores. Shenzhen Nainiang plans to operate their self-owned retailed stores to sell “coffee tea” products and to serve cups of freshly brewed “coffee tea”. The Company is evaluating the number of stores to be opened subsequent to December 31, 2021, given the Covid-19 situation. The reorganization of WLJM Cayman and its subsidiaries was completed on December 24, 2020. On June 2, 2021, FHAI’s wholly-owned subsidiary Shenzhen Wei Lian Jin Meng Electronic Commerce Limited (“Shenzhen Wei Lian”) entered into an equity transfer agreement with the owners (the “Sellers”) of Shenzhen Nainiang Liquor Industrial Co., Ltd. (“Nainiang Liquor”), under which Shenzhen Wei Lian agreed to acquire 99% ownership of Nainiang Liquor in exchange for causing FHAI to issue shares of its common stock to the Sellers at a later date (the “PRC Transaction”). The PRC Transaction closed on June 3, 2021. Among the Sellers is Ms. Zhu Hong, who is the sole officer and director of FHAI and the majority shareholder of FHAI. On August 16, 2021, FHAI entered into a Share Exchange Agreement with Nainiang Liquor and the Sellers pursuant to which FHAI agreed to issue 9,281,577 shares of its common stock (the “Exchange Shares”) to the Sellers (the “US Transaction,” and together with the PRC Transaction, the “Nainiang Liquor Transaction”). The US Transaction closed on August 16, 2021, and the Exchange Shares were issued to the Sellers. For more information about the Nainiang Liquor Transaction, please refer to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 16, 2021. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation The accompanying financial statements include the balances and results of operations of the Company have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchanges Commission (“SEC”) and in conformity with generally accepted accounting principles in the U.S. (“US GAAP”). The accompanying financial statements are presented on the basis that the Company is a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. (b) Basis of Consolidation Pursuant to the reorganization, WLJM Cayman became the holding company of WLJM Subsidiaries Group, which were under the common control of the controlling shareholder before and after the reorganization. And as a result of the acquisition with FHAI, accordingly, FHAI and its subsidiaries’ (collectively referred to as the “Company”) financial statements have been prepared on a consolidated basis by applying the predecessor value method as if the reorganization had been completed at the beginning of the earliest reporting period. The consolidated statements of profit or loss and other comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows of the Company for the relevant periods include the results and cash flows of all companies now comprising the Company from the earliest date presented or since the date when the subsidiaries and/or businesses first came under the common control of the controlling shareholders, wherever the period is shorter. The consolidated balance sheets of the Company as of December 31, 2021 and 2020 have been prepared to present the assets and liabilities of the subsidiaries using the existing book values from the controlling shareholders’ perspective. No adjustments are made to reflect fair values, or to recognize any new assets or liabilities as a result of the reorganization. All intra-group and inter-company transactions and balances have been eliminated on consolidation. (c) Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent liabilities at the balance sheet date, and revenue and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s financial statements include the valuation allowance for deferred tax assets, economic lives and impairment of leasehold improvements and equipment, allowance for doubtful accounts, etc. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods. (d) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. All cash and cash equivalents relate to cash on hand and cash at bank at December 31, 2021 and 2020. The Renminbi is not freely convertible into foreign currencies. Under the PRC Foreign Exchange Control Regulations and Administration of Settlement, Sales and Payment of Foreign Exchange Regulations, the Company is permitted to exchange Renminbi for foreign currencies through banks that are authorized to conduct foreign exchange business. (e) Leasehold Improvement and Equipment An item of leasehold improvement and equipment is stated at cost less any accumulated depreciation and any accumulated allowance for decrease in value (if any). The cost of an item of leasehold improvement and equipment comprises its purchase price, import duties and non-refundable purchase taxes (after deducting trade discounts and rebates) and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. These can include the initial estimate of costs of dismantling and removing the item, and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period. The cost of replacing part of leasehold improvement and equipment is included in the carrying amount of the asset when it is probable that future economic benefits will flow to the Company and the carrying amount of those replaced parts is derecognized. Repairs and maintenance are charged to the statement of profit or loss during the financial period in which they are incurred. Depreciation is calculated on the straight-line basis to write off the cost of each asset to its residual value over the estimated useful life as follows: Leasehold improvement Shorter of the lease term or estimated useful life Equipment 5 years Machinery 10 years Computer equipment and software 3 years Motor vehicle 4 years The assets’ residual value, useful lives, and depreciation method are regularly reviewed. (f) Impairment of long-lived assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. Whenever there is an indication showing a permanent decrease in the amount of leasehold improvement and equipment; such as an evidence of obsolescence or physical damage of an asset, significant changes in the manner in which an asset is used or is expected to be used, the Company shall recognize loss on decrease in value of leasehold improvement and equipment in the statement of profit or loss where the carrying amount of asset is higher than the recoverable amount. The Company measures impairment by comparing the carrying value of the long-lived assets to the estimated discounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected discounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the fair value of the assets. The Company recorded an impairment loss on intangible assets of $ nil (g) Revenue Recognition The Company’s revenues primarily include Company sales, franchise fees and income and revenues from transactions with franchisees. Product sales Product sales represents the sale of “coffee tea” and wine products. Such revenue is recognized net of value-added taxes, upon delivery at such time that title passes to the customers. Franchise fees and income Franchise fees and income primarily include upfront franchise fees, such as initial fees, pre-opening assistance to operate wine stores, subsequent training provided to franchisees and renewal fees. The Company has determined that the services provided in exchange for upfront franchise fees are highly interrelated with the franchise rights. The franchise rights are accounted for as rights to access the Company’s symbolic intellectual property in accordance with ASC 606, and the Company recognizes upfront franchise fees received from a franchisee as revenue when performance obligations are satisfied in accordance with the franchise agreement or the renewal agreement. The franchise agreement term is typically 3 years. Revenues from transactions with franchisees Revenues from transactions with franchisees consist primarily of sales of wine products. The Company sells and delivers wine products to the franchisees. The performance obligations arising from such transactions are considered distinct from the franchise agreement as they are not highly dependent on the franchise agreement and the customer can benefit from the procurement service on its own. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the franchisees. In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount; however, the timing of recognition does not require significant judgment, as it is based on either the franchise term or the date of product shipment, none of which require estimation. The Company does not incur a significant amount of contract acquisition costs in conducting its franchising activities. The Company believes its franchising arrangements do not contain a significant financing component. The Company’s revenue recognition policy is compliant with ASC 606, Revenue from Contracts with Customers, and revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the goods and services in the contract; (ii) determination of whether the goods and services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or service being rendered. For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules. (h) Accounts Receivable Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company assesses the probability of collection from each customer at the outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness. If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed. Management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade receivables. In the analysis, management primarily considers the age of the customer’s receivable, and also considers the creditworthiness of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability. Accounts receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. No allowance for doubtful accounts was made for the years ended December 31, 2021 and 2020. The following customers had an accounts receivable balance greater than 10% of total accounts receivable at December 31, 2021. Amount % Customer A $ 1,540,197 51 % Customer B 1,472,059 49 % $ 3,012,256 100 % (i) Advance to suppliers Advance to suppliers relate to refundable deposits paid to suppliers under secured supplies agreements in exchange for timely and sufficient supplies of products. (j) Research and Development Costs Research and development costs are expensed as incurred. Research and development costs included in general and administrative expenses for the years ended December 31, 2021 and 2020 was $44,396 and $98,892, respectively. (k) Operating leases The Company determines if an arrangement contains a lease at inception. The Company elected the practical expedient, for all asset classes, to account for each lease component of a contract and its associated non-lease components as a single lease component, rather than allocating a standalone value to each component of a lease. For purposes of calculating operating lease obligations under the standard, the Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company’s leases do not contain material residual value guarantees or material restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease terms. The discount rate used to measure a lease obligation is usually the rate implicit in the lease; however, the Company’s operating leases generally do not provide an implicit rate. Accordingly, the Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate is an entity-specific rate which represents the rate of interest a lessee would pay to borrow on a collateralized basis over a similar term with similar payments. (l) Foreign Currency Translation The Company’s reporting currency is the U.S. dollar and the functional currency is the Chinese Renminbi (“RMB”). All assets and liabilities are translated at exchange rates at the balance sheet date and revenue and expenses are translated at the average yearly exchange rates and equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of equity. Transactions in currencies other than the functional currencies during the year are converted into the applicable functional currencies at the applicable rates of exchange prevailing at the dates of the transactions. Exchange gains and losses are recognized in the statements of operations. The exchange rates utilized as follows: 2021 2020 Year-end RMB exchange rate 6.36 6.53 Annual average RMB exchange rate 6.45 6.90 No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation. (m) Foreign Currency Risk The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of the RMB into other currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. All the Company’s cash and cash equivalents are in RMB. (n) Economic and Political Risks The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. (o) Concentration of credit risk Financial instruments that potentially expose the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, other receivables, inventory and advance to suppliers. As of December 31, 2021 and 2020, substantially all of the Company’s cash and cash equivalents were deposited with financial institutions with high-credit ratings and quality. The Company did not have any customers constituting 10% or more of the net revenues in the years of 2021 and 2020. (p) Fair Value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when valuing the asset or liability. Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. (q) Fair Value of financial instruments The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivables, other receivables, accounts payable, other payables and advance from customers. The carrying amounts of these balances approximate their fair values due to the short-term maturities of these instruments. (r) Inventories Inventories primarily consist of packing materials and finished goods, which are stated at the lower of cost, determined on a weighted average basis, or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale. When inventories are sold, their carrying amount is charged to expense in the period in which the revenue is recognized. Write-downs for declines in net realizable value or for losses of inventories are recognized as an expense in the period the impairment or loss occurs. For the years ended December 31, 2021 and 2020, the Company has not recorded any allowance for obsolete inventories. (s) Earnings Per Share The Company reports earnings per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of a basic and diluted earnings per share shall be adjusted retroactively for all periods presented to reflect that change in capital structure. The Company’s basic earnings per share is computed by dividing the net income available to holders by the weighted average number of the Company’s ordinary shares outstanding. Diluted earnings per share reflects the amount of net income available to each ordinary share outstanding during the period plus the number of additional shares that would have been outstanding if potentially dilutive securities had been issued. Series A Preferred Stock was included in the dilutive ordinary shares as of December 31, 2021 and 2020. (t) Income Taxes Income tax expense comprises current and deferred taxation and is recognized in profit or loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it is recognized directly in other comprehensive income or equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable with respect to previous periods. The Company accounts for income taxes using the asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax basis of assets and liabilities, net of operating loss carry forwards and credits, by applying enacted tax rates that will be in effect for the period in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in the statements of operations in the period of change. The Company accounts for uncertain tax positions by reporting a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. Tax benefits are recognized from uncertain tax positions when the Company believes that it is more likely than not that the tax position will be sustained on examination by the tax authorities based on the technical merits of the position. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expenses. (u) Comprehensive income Comprehensive income includes net income and foreign currency translation adjustments. Comprehensive income is reported in the statements of comprehensive income. (v) Recent accounting pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual rights to receive cash. For smaller public business entities, the amendments in this Update are effective for fiscal years beginning after January 1, 2023, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company is in the process of evaluating the impact of the adoption of this pronouncement on its consolidated financial statements. The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s financial statements. |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
BUSINESS COMBINATION | 3. BUSINESS COMBINATION On June 2, 2021, Shenzhen Wei Lian entered into an equity transfer agreement relating to the acquisition of 99% of the equity of Nainiang Liquor in exchange for agreeing to cause the Company to issue 9,281,577 shares of its common stock to the Sellers. To determine the amount of shares that the Company issued to the Sellers, the Company converted the net asset value of Nainiang Liquor as of June 3, 2021 to US Dollars, and then used a price per share for the Company’s common stock of US$1.10. The PRC Acquisition closed on June 3, 2021 and the results of operations of Nainiang Liquor are included in the Company’s consolidated financial statements beginning on June 3, 2021. The operational control of Nainiang Liquor passed to FHAI and all assets of Nainiang Liquor were acquired by FHAI effective June 3, 2021, the date that 99% of the outstanding equity of Nainiang Liquor was transferred to Shenzhen Wei Lian. FHAI does not account for the remaining 1% non-controlling interest held by Ms. Zhu Hong, as Ms. Zhu Hong is the common controlling shareholder for both the acquirer and the acquiree. Accordingly, the acquisition has been accounted for in accordance with ASC 805 guidelines, whereby FHAI recognized the assets and liabilities of Nainiang Liquor transferred at their carrying amounts with a carry-over basis. The following represents the purchase price allocation at the dates of the acquisition: June 3, Cash and cash equivalents $ 48,689 Other current assets 13,666,168 Property, plant and equipment 310,631 Current liabilities (3,697,772 ) Total purchase price $ 10,327,716 |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2021 | |
Revenue [Abstract] | |
REVENUE | 4. REVENUE For the years ended Revenue 2021 2020 Product sales $ 11,381,616 $ 1,194,427 Franchise fees and income 848,429 - Revenues from transactions with franchisees 25,163,757 - $ 37,393,802 $ 1,194,427 As of Contract liabilities 2021 2020 Deferred revenue related to prepaid coffee and wine products $ 20,881 $ 27,648 Deferred revenue related to upfront franchise fees 716,634 - $ 737,515 $ 27,648 Contract liabilities primarily consist of deferred revenue related to prepaid coffee and wine products and upfront franchise fees. Deferred revenue related to prepaid wine products represents advance from franchisees for future supply of products which is expected to recognize as revenue in the next 12 months. Deferred revenue related to upfront franchise fees represents the training service to be delivered over the term of franchise agreement that as of December 31, 2021, the Company expects to recognize as revenue of $221,831 within the next 12 months. The Company has elected, as a practical expedient, not to disclose the value of remaining performance obligations associated with the franchise agreement in exchange for franchise right and related training services. The remaining duration of the performance obligation is the remaining contractual term of each franchise agreement. Revenue from training services provided to franchisees is recognized upon the conduct and delivery of training. |
Other Receivables
Other Receivables | 12 Months Ended |
Dec. 31, 2021 | |
Other Receivables [Abstract] | |
OTHER RECEIVABLES | 5. OTHER RECEIVABLES As of December 31, 2021 and 2020, other receivables mainly consist of employees advance to be spent for company purposes and refundable rental deposits. The balances are unsecured, non-interest bearing and repayable on demand. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | 6. INVENTORIES As of 2021 2020 Raw materials (1) $ 14,000,162 $ 51,521 Finished goods 61,684 14,516 Goods in transit 105,083 - $ 14,166,929 $ 66,037 (1) Raw materials mainly consist of unprocessed coffee beans, unprocessed wine and packaging materials |
Prepayment
Prepayment | 12 Months Ended |
Dec. 31, 2021 | |
Prepayment [Abstract] | |
PREPAYMENT | 7. PREPAYMENT As of December 31, 2021 and 2020, prepayment mainly consists of prepaid administrative expenses that has been utilized subsequently. |
Leasehold Improvement and Equip
Leasehold Improvement and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Leasehold Improvement and Equipment, Net [Abstract] | |
LEASEHOLD IMPROVEMENT AND EQUIPMENT, NET | 8. LEASEHOLD IMPROVEMENT AND EQUIPMENT, NET As of 2021 2020 Leasehold improvement $ 65,944 $ 64,191 Equipment 21,079 16,653 Machinery 34,087 32,563 Computer equipment and software 46,228 20,355 Motor vehicles 469,114 7,245 $ 636,452 $ 141,007 Less: accumulated depreciation (206,952 ) (53,673 ) $ 429,500 $ 87,333 The Company’s additions of motor vehicles, equipment, computer equipment and software during the year ended December 31, 2021 were primarily from the business acquisition of Nainiang Liquor. Depreciation expense for the years ended December 31, 2021 and 2020 was $89,727 and $25,559 respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2021 | |
Intangible Assets [Abstract] | |
INTANGIBLE ASSETS | 9. INTANGIBLE ASSETS As of 2021 2020 APP Platforms $ 110,148 $ - Less: accumulated amortization (14,687 ) - $ 95,461 $ - Amortization expense for the years ended December 31, 2021 and 2020 was $14,465 and $ nil As of December 31, 2021, cost of intangible assets included a platform amount to approximately $16,000 (RMB100,000) acquired by the Company during the year which was in the testing phase, no amortization was recorded until that platform was fully operational in 2022. |
Other Payables and Accruals
Other Payables and Accruals | 12 Months Ended |
Dec. 31, 2021 | |
Other Payables and Accruals [Abstract] | |
OTHER PAYABLES AND ACCRUALS | 10. OTHER PAYABLES AND ACCRUALS As of 2021 2020 Accrued payroll and welfare payable $ 178,706 $ 180,878 VAT and other taxes payable 192,563 92,608 Others (1) 109,989 63,118 $ 481,258 $ 336,604 (1) As of December 31, 2021 and 2020, others mainly consist of the outstanding refundable balance upon termination of the cooperative agreement with one customer and payables for rental expenses. |
Advance from Customers
Advance from Customers | 12 Months Ended |
Dec. 31, 2021 | |
Advance from Customers [Abstract] | |
ADVANCE FROM CUSTOMERS | 11. ADVANCE FROM CUSTOMERS The Company requires retail partners to sign cooperative agreement and to pay in advance for the supply of goods. Such advance is appropriated against future sales orders. These advances are interest free, unsecured and short-term in nature. The balance represents the Company’s contractual liabilities in connection with the deferred revenue to be recognized in future periods. (Note 4). |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 12. INCOME TAXES FHAI was incorporated in the State of Nevada. FHAI is an U.S. entity and is subject to the United States federal income tax. No provision for income taxes in the United States has been made as FHAI had no United States taxable income for the years ended December 31, 2021 and 2020. WLJM Cayman was incorporated in Cayman Islands. Under the current tax laws of Cayman Islands, WLJM Cayman is not subject to tax on their income or capital gains. In addition, upon of dividends by WLJM Cayman to its shareholders, no Cayman Islands withholding tax will be imposed. WLJM HK was incorporated in Hong Kong and is subject to an income tax rate of 16.5% for taxable income generated from operations in Hong Kong. JYWM WFOE, Shenzhen Wei Lian, Dongguan Dishi, Shenzhen Nainiang and Nainiang Liquor were incorporated in the PRC and they are subject to profits tax rate at 25% for income generated and operation in the country. The full realization of the tax benefit associated with the losses carried forward depends predominantly upon the Company’s ability to generate taxable income during the carry forward period. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The Company did not record deferred tax assets as of December 31, 2021 and 2020. Income tax expense (benefits) For the years ended 2021 2020 Current tax expense $ 6,188,688 $ 19,693 Deferred tax expense - - $ 6,188,688 $ 19,693 The Company operates its business through the subsidiaries incorporated in PRC which is subject to a corporate income tax rate of 25%. A reconciliation of the effective tax rates from 25% statutory tax rates for the years ended December 31, 2021 and 2020 is as follows: For the years ended 2021 2020 Income (Loss) before tax $ 24,864,235 $ (608,177 ) Tax benefit calculated at statutory tax rate 25 % 25 % Computed expected expense (benefits) 6,216,059 (152,044 ) Movement in valuation allowance (27,371 ) 171,737 $ 6,188,688 $ 19,693 |
Operating Lease Righ-of-Use Ass
Operating Lease Righ-of-Use Assets | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
OPERATING LEASE RIGH-OF-USE ASSETS | 13. OPERATING LEASE RIGH-OF-USE ASSETS The Company has leases for the office, factory and warehouse in the PRC, under operating leases expiring on various dates through September 2023, which is classified as operating leases. There are no residual value guarantees and no restrictions or covenants imposed by the leases. Lease liabilities are measured at present value of the sum of remaining rental payments as of December 31, 2021, with discounted rate of 4.75%. 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. Rent expense for the years ended December 31, 2021 and 2020 were $323,356 and $268,120, respectively. The Company’s future minimum payments under long-term non-cancelable operating leases are as follows: 2021 Within 1 year $ 81,998 After 1 year but within 5 years 16,778 Total lease payments $ 98,776 Less: imputed interest (14,819 ) Total lease obligations 83,957 Less: current obligations (69,259 ) Long-term lease obligations $ 14,698 Other information: For the years ended 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow from operating leases $ 323,356 $ 268,120 Right-of-use assets obtained in exchange for operating lease liabilities 94,486 383,203 Remaining lease term for operating leases (years) 0.88 1.88 Weighted average discount rate for operating leases 4.75 % 4.75 % |
Related Parties Transactions
Related Parties Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES TRANSACTIONS | 14. RELATED PARTIES TRANSACTIONS The Company had the following balances with related parties: (a) Amount due from related parties As of Relationship 2021 2020 Ye Aiyun Shareholder of the Company $ - $ 142,450 Shenzhen Weilian Jin Meng Culture Spreading Limited Zhu Hong is the shareholder 81,690 - Total $ 81,690 $ 142,450 The balances represent cash advance to related parties. The balances are unsecured, non-interest bearing and repayable on demand. The Company paid certain operating expenses for Shenzhen Weilian Jin Meng Culture Spreading Limited (“WLJM Culture Spreading”) in 2021 and WLJM Culture Spreading paid certain operating expenses for the Company in 2020. The Company is winding down such transactions. (b) Amount due to related parties As of Relationship 2021 2020 Zhu Hong Shareholder of the Company $ 79,849 $ 1,059,853 Zhu Jian Yong Shareholder of the Company - 1,731 Shenzhen Weilian Jin Meng Culture Spreading Limited Zhu Hong is the shareholder - 24,800 Shenzhen Nainiang Liquor Industrial Co., Ltd.* Zhu Hong is the shareholder - 10,768 Total $ 79,849 $ 1,097,152 The balances represent Company’s expenses paid on behalf by the related parties. The balances are unsecured, non-interest bearing and repayable on demand. * Shenzhen Nainiang Liquor Industrial Co., Ltd. became the wholly owned subsidiary of the Company after the acquisition transaction which was closed on August 16, 2021. All intra-company transactions and balances have been eliminated on consolidation. (c) Transactions For the years ended 2021 2020 Cash advance from related parties Shenzhen Nainiang Liquor Industrial Co., Ltd.* $ - $ 66,683 Shenzhen Weilian Jin Meng Culture Spreading Limited - 29,282 Total $ - $ 95,965 For the years ended 2021 2020 Cash advance to related parties Zhu Hong - 200,876 Ye Aiyun - 76,830 Shenzhen Weilian Jin Meng Culture Spreading Limited 81,690 6,204 Shenzhen Nainiang Liquor Industrial Co., Ltd.* - 56,492 Total $ 81,690 $ 340,402 For the years ended 2021 2020 Cash repayment from related parties Ye Aiyun 142,450 - Zhu Hong - 1,093,131 Total $ 142,450 $ 1,093,131 For the years ended 2021 2020 Cash repayment to related parties Zhu Hong 980,004 - Shenzhen Weilian Jin Meng Culture Spreading Limited 24,800 - Zhu Jian Yong 1,731 - Total $ 1,006,535 $ - For the years ended 2021 2020 Expense paid on behalf by related parties Zhu Hong - 15,758 Total $ - $ 15,758 * Shenzhen Nainiang Liquor Industrial Co., Ltd. became the wholly owned subsidiary of the Company after the acquisition transaction which was closed on August 16, 2021. All intra-company transactions and balances have been eliminated on consolidation. |
Reserves
Reserves | 12 Months Ended |
Dec. 31, 2021 | |
Reserves [Abstract] | |
RESERVES | 15. RESERVES (a) Statutory reserve Pursuant to the laws applicable to the PRC’s Foreign Investment Enterprises, the Company must make appropriations from after-tax profit to non-distributable reserve funds. Subject to certain cumulative limits, the general reserve requires annual appropriations of 10% of after-tax profits as determined under the PRC laws and regulations at each year-end until the balance reaches 50% of the PRC entity registered capital; the other reserve appropriations are at the Company’s discretion. These reserves can only be used for specific purposes of enterprise expansion and are not distributable as cash dividends. During the years ended December 31, 2021 and 2020, the Company accrued statutory reserve of $3,041,397 and 6,894, respectively. (b) Currency translation reserve The currency translation reserve represents translation differences arising from translation of foreign currency financial statements into the Company’s reporting currency. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 16. COMMITMENTS AND CONTINGENCIES Commitment consist of a non-cancelable consultancy service agreement entered into with a third-party for the provision of services related to the US listing with a contract sum of $1,200,000. The outstanding committed contract amount is $120,000. The terms of the agreement are for various milestones stages to be completed within two years through 2021 which has extended to 2022. Future commitments within one year as of December 31, 2021 was $120,000. No future commitments more than one year as of December 31, 2021. Except the above commitments and the operating lease commitment as disclosed at Note 6, there are no material commitments. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 17. SUBSEQUENT EVENTS There are no subsequent events have occurred that would require recognition or disclosure in the financial statements. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (a) Basis of Presentation The accompanying financial statements include the balances and results of operations of the Company have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchanges Commission (“SEC”) and in conformity with generally accepted accounting principles in the U.S. (“US GAAP”). The accompanying financial statements are presented on the basis that the Company is a going concern. The going concern assumption contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. |
Basis of Consolidation | (b) Basis of Consolidation Pursuant to the reorganization, WLJM Cayman became the holding company of WLJM Subsidiaries Group, which were under the common control of the controlling shareholder before and after the reorganization. And as a result of the acquisition with FHAI, accordingly, FHAI and its subsidiaries’ (collectively referred to as the “Company”) financial statements have been prepared on a consolidated basis by applying the predecessor value method as if the reorganization had been completed at the beginning of the earliest reporting period. The consolidated statements of profit or loss and other comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows of the Company for the relevant periods include the results and cash flows of all companies now comprising the Company from the earliest date presented or since the date when the subsidiaries and/or businesses first came under the common control of the controlling shareholders, wherever the period is shorter. The consolidated balance sheets of the Company as of December 31, 2021 and 2020 have been prepared to present the assets and liabilities of the subsidiaries using the existing book values from the controlling shareholders’ perspective. No adjustments are made to reflect fair values, or to recognize any new assets or liabilities as a result of the reorganization. All intra-group and inter-company transactions and balances have been eliminated on consolidation. |
Use of estimates | (c) Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent liabilities at the balance sheet date, and revenue and expenses in the financial statements and accompanying notes. Significant accounting estimates reflected in the Company’s financial statements include the valuation allowance for deferred tax assets, economic lives and impairment of leasehold improvements and equipment, allowance for doubtful accounts, etc. Actual results could differ from those estimates and such differences could affect the results of operations reported in future periods. |
Cash and Cash Equivalents | (d) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. All cash and cash equivalents relate to cash on hand and cash at bank at December 31, 2021 and 2020. The Renminbi is not freely convertible into foreign currencies. Under the PRC Foreign Exchange Control Regulations and Administration of Settlement, Sales and Payment of Foreign Exchange Regulations, the Company is permitted to exchange Renminbi for foreign currencies through banks that are authorized to conduct foreign exchange business. |
Leasehold Improvement and Equipment | (e) Leasehold Improvement and Equipment An item of leasehold improvement and equipment is stated at cost less any accumulated depreciation and any accumulated allowance for decrease in value (if any). The cost of an item of leasehold improvement and equipment comprises its purchase price, import duties and non-refundable purchase taxes (after deducting trade discounts and rebates) and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. These can include the initial estimate of costs of dismantling and removing the item, and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during a particular period. The cost of replacing part of leasehold improvement and equipment is included in the carrying amount of the asset when it is probable that future economic benefits will flow to the Company and the carrying amount of those replaced parts is derecognized. Repairs and maintenance are charged to the statement of profit or loss during the financial period in which they are incurred. Depreciation is calculated on the straight-line basis to write off the cost of each asset to its residual value over the estimated useful life as follows: Leasehold improvement Shorter of the lease term or estimated useful life Equipment 5 years Machinery 10 years Computer equipment and software 3 years Motor vehicle 4 years The assets’ residual value, useful lives, and depreciation method are regularly reviewed. |
Impairment of long-lived assets | (f) Impairment of long-lived assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. Whenever there is an indication showing a permanent decrease in the amount of leasehold improvement and equipment; such as an evidence of obsolescence or physical damage of an asset, significant changes in the manner in which an asset is used or is expected to be used, the Company shall recognize loss on decrease in value of leasehold improvement and equipment in the statement of profit or loss where the carrying amount of asset is higher than the recoverable amount. The Company measures impairment by comparing the carrying value of the long-lived assets to the estimated discounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected discounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss based on the fair value of the assets. The Company recorded an impairment loss on intangible assets of $ nil |
Revenue Recognition | (g) Revenue Recognition The Company’s revenues primarily include Company sales, franchise fees and income and revenues from transactions with franchisees. Product sales Product sales represents the sale of “coffee tea” and wine products. Such revenue is recognized net of value-added taxes, upon delivery at such time that title passes to the customers. Franchise fees and income Franchise fees and income primarily include upfront franchise fees, such as initial fees, pre-opening assistance to operate wine stores, subsequent training provided to franchisees and renewal fees. The Company has determined that the services provided in exchange for upfront franchise fees are highly interrelated with the franchise rights. The franchise rights are accounted for as rights to access the Company’s symbolic intellectual property in accordance with ASC 606, and the Company recognizes upfront franchise fees received from a franchisee as revenue when performance obligations are satisfied in accordance with the franchise agreement or the renewal agreement. The franchise agreement term is typically 3 years. Revenues from transactions with franchisees Revenues from transactions with franchisees consist primarily of sales of wine products. The Company sells and delivers wine products to the franchisees. The performance obligations arising from such transactions are considered distinct from the franchise agreement as they are not highly dependent on the franchise agreement and the customer can benefit from the procurement service on its own. Revenue is recognized upon transfer of control over ordered items, generally upon delivery to the franchisees. In determining the amount and timing of revenue from contracts with customers, the Company exercises significant judgment with respect to collectability of the amount; however, the timing of recognition does not require significant judgment, as it is based on either the franchise term or the date of product shipment, none of which require estimation. The Company does not incur a significant amount of contract acquisition costs in conducting its franchising activities. The Company believes its franchising arrangements do not contain a significant financing component. The Company’s revenue recognition policy is compliant with ASC 606, Revenue from Contracts with Customers, and revenue is recognized when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the goods and services in the contract; (ii) determination of whether the goods and services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. Generally, the Company’s performance obligations are transferred to customers at a point in time, typically upon delivery or service being rendered. For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules. |
Accounts Receivable | (h) Accounts Receivable Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company assesses the probability of collection from each customer at the outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness. If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed. Management performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade receivables. In the analysis, management primarily considers the age of the customer’s receivable, and also considers the creditworthiness of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates, which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability. Accounts receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. No allowance for doubtful accounts was made for the years ended December 31, 2021 and 2020. The following customers had an accounts receivable balance greater than 10% of total accounts receivable at December 31, 2021. |
Advance to suppliers | (i) Advance to suppliers Advance to suppliers relate to refundable deposits paid to suppliers under secured supplies agreements in exchange for timely and sufficient supplies of products. |
Research and Development Costs | (j) Research and Development Costs Research and development costs are expensed as incurred. Research and development costs included in general and administrative expenses for the years ended December 31, 2021 and 2020 was $44,396 and $98,892, respectively. |
Operating leases | (k) Operating leases The Company determines if an arrangement contains a lease at inception. The Company elected the practical expedient, for all asset classes, to account for each lease component of a contract and its associated non-lease components as a single lease component, rather than allocating a standalone value to each component of a lease. For purposes of calculating operating lease obligations under the standard, the Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such option. The Company’s leases do not contain material residual value guarantees or material restrictive covenants. Operating lease expense is recognized on a straight-line basis over the lease terms. The discount rate used to measure a lease obligation is usually the rate implicit in the lease; however, the Company’s operating leases generally do not provide an implicit rate. Accordingly, the Company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate is an entity-specific rate which represents the rate of interest a lessee would pay to borrow on a collateralized basis over a similar term with similar payments. |
Foreign Currency Translation | (l) Foreign Currency Translation The Company’s reporting currency is the U.S. dollar and the functional currency is the Chinese Renminbi (“RMB”). All assets and liabilities are translated at exchange rates at the balance sheet date and revenue and expenses are translated at the average yearly exchange rates and equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of equity. Transactions in currencies other than the functional currencies during the year are converted into the applicable functional currencies at the applicable rates of exchange prevailing at the dates of the transactions. Exchange gains and losses are recognized in the statements of operations. The exchange rates utilized as follows: 2021 2020 Year-end RMB exchange rate 6.36 6.53 Annual average RMB exchange rate 6.45 6.90 No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation. |
Foreign Currency Risk | (m) Foreign Currency Risk The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of the RMB into other currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. All the Company’s cash and cash equivalents are in RMB. |
Economic and Political Risks | (n) Economic and Political Risks The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. |
Concentration of credit risk | (o) Concentration of credit risk Financial instruments that potentially expose the Company to significant concentration of credit risk consist primarily of cash and cash equivalents, accounts receivable, other receivables, inventory and advance to suppliers. As of December 31, 2021 and 2020, substantially all of the Company’s cash and cash equivalents were deposited with financial institutions with high-credit ratings and quality. The Company did not have any customers constituting 10% or more of the net revenues in the years of 2021 and 2020. |
Fair Value | (p) Fair Value Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when valuing the asset or liability. Authoritative literature provides a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The level in the hierarchy within which the fair value measurement in its entirety falls is based upon the lowest level of input that is significant to the fair value measurement as follows: Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
Fair Value of financial instruments | (q) Fair Value of financial instruments The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivables, other receivables, accounts payable, other payables and advance from customers. The carrying amounts of these balances approximate their fair values due to the short-term maturities of these instruments. |
Inventories | (r) Inventories Inventories primarily consist of packing materials and finished goods, which are stated at the lower of cost, determined on a weighted average basis, or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale. When inventories are sold, their carrying amount is charged to expense in the period in which the revenue is recognized. Write-downs for declines in net realizable value or for losses of inventories are recognized as an expense in the period the impairment or loss occurs. For the years ended December 31, 2021 and 2020, the Company has not recorded any allowance for obsolete inventories. |
Earnings Per Share | (s) Earnings Per Share The Company reports earnings per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of a basic and diluted earnings per share shall be adjusted retroactively for all periods presented to reflect that change in capital structure. The Company’s basic earnings per share is computed by dividing the net income available to holders by the weighted average number of the Company’s ordinary shares outstanding. Diluted earnings per share reflects the amount of net income available to each ordinary share outstanding during the period plus the number of additional shares that would have been outstanding if potentially dilutive securities had been issued. Series A Preferred Stock was included in the dilutive ordinary shares as of December 31, 2021 and 2020. |
Income Taxes | (t) Income Taxes Income tax expense comprises current and deferred taxation and is recognized in profit or loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it is recognized directly in other comprehensive income or equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable with respect to previous periods. The Company accounts for income taxes using the asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax basis of assets and liabilities, net of operating loss carry forwards and credits, by applying enacted tax rates that will be in effect for the period in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in the statements of operations in the period of change. The Company accounts for uncertain tax positions by reporting a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. Tax benefits are recognized from uncertain tax positions when the Company believes that it is more likely than not that the tax position will be sustained on examination by the tax authorities based on the technical merits of the position. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expenses. |
Comprehensive income | (u) Comprehensive income Comprehensive income includes net income and foreign currency translation adjustments. Comprehensive income is reported in the statements of comprehensive income. |
Recent accounting pronouncements | (v) Recent accounting pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Statements. This ASU requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual rights to receive cash. For smaller public business entities, the amendments in this Update are effective for fiscal years beginning after January 1, 2023, including interim periods within those fiscal years. All entities may adopt the amendments in this Update through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). The Company is in the process of evaluating the impact of the adoption of this pronouncement on its consolidated financial statements. The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful life | Leasehold improvement Shorter of the lease term or estimated useful life Equipment 5 years Machinery 10 years Computer equipment and software 3 years Motor vehicle 4 years |
Schedule of accounts receivable | Amount % Customer A $ 1,540,197 51 % Customer B 1,472,059 49 % $ 3,012,256 100 % |
Schedule of exchange rates | 2021 2020 Year-end RMB exchange rate 6.36 6.53 Annual average RMB exchange rate 6.45 6.90 |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of represents the purchase price allocation | June 3, Cash and cash equivalents $ 48,689 Other current assets 13,666,168 Property, plant and equipment 310,631 Current liabilities (3,697,772 ) Total purchase price $ 10,327,716 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue [Abstract] | |
Schedule of revenue | For the years ended Revenue 2021 2020 Product sales $ 11,381,616 $ 1,194,427 Franchise fees and income 848,429 - Revenues from transactions with franchisees 25,163,757 - $ 37,393,802 $ 1,194,427 |
Schedule of contract liabilities | As of Contract liabilities 2021 2020 Deferred revenue related to prepaid coffee and wine products $ 20,881 $ 27,648 Deferred revenue related to upfront franchise fees 716,634 - $ 737,515 $ 27,648 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | As of 2021 2020 Raw materials (1) $ 14,000,162 $ 51,521 Finished goods 61,684 14,516 Goods in transit 105,083 - $ 14,166,929 $ 66,037 (1) Raw materials mainly consist of unprocessed coffee beans, unprocessed wine and packaging materials |
Leasehold Improvement and Equ_2
Leasehold Improvement and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leasehold Improvement and Equipment, Net [Abstract] | |
Schedule of leasehold improvement and equipment, net | As of 2021 2020 Leasehold improvement $ 65,944 $ 64,191 Equipment 21,079 16,653 Machinery 34,087 32,563 Computer equipment and software 46,228 20,355 Motor vehicles 469,114 7,245 $ 636,452 $ 141,007 Less: accumulated depreciation (206,952 ) (53,673 ) $ 429,500 $ 87,333 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Intangible Assets [Abstract] | |
Schedule of intangible assets | As of 2021 2020 APP Platforms $ 110,148 $ - Less: accumulated amortization (14,687 ) - $ 95,461 $ - |
Other Payables and Accruals (Ta
Other Payables and Accruals (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Payables and Accruals [Abstract] | |
Schedule of other payables and accruals | As of 2021 2020 Accrued payroll and welfare payable $ 178,706 $ 180,878 VAT and other taxes payable 192,563 92,608 Others (1) 109,989 63,118 $ 481,258 $ 336,604 (1) As of December 31, 2021 and 2020, others mainly consist of the outstanding refundable balance upon termination of the cooperative agreement with one customer and payables for rental expenses. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense (benefits) | For the years ended 2021 2020 Current tax expense $ 6,188,688 $ 19,693 Deferred tax expense - - $ 6,188,688 $ 19,693 |
Schedule of statutory tax rates | For the years ended 2021 2020 Income (Loss) before tax $ 24,864,235 $ (608,177 ) Tax benefit calculated at statutory tax rate 25 % 25 % Computed expected expense (benefits) 6,216,059 (152,044 ) Movement in valuation allowance (27,371 ) 171,737 $ 6,188,688 $ 19,693 |
Operating Lease Righ-of-Use A_2
Operating Lease Righ-of-Use Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of future minimum payments under long-term non-cancelable operating leases | 2021 Within 1 year $ 81,998 After 1 year but within 5 years 16,778 Total lease payments $ 98,776 Less: imputed interest (14,819 ) Total lease obligations 83,957 Less: current obligations (69,259 ) Long-term lease obligations $ 14,698 |
Schedule of other information | For the years ended 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flow from operating leases $ 323,356 $ 268,120 Right-of-use assets obtained in exchange for operating lease liabilities 94,486 383,203 Remaining lease term for operating leases (years) 0.88 1.88 Weighted average discount rate for operating leases 4.75 % 4.75 % |
Related Parties Transactions (T
Related Parties Transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of amount due from related parties | As of Relationship 2021 2020 Ye Aiyun Shareholder of the Company $ - $ 142,450 Shenzhen Weilian Jin Meng Culture Spreading Limited Zhu Hong is the shareholder 81,690 - Total $ 81,690 $ 142,450 |
Schedule of amount due to related parties | As of Relationship 2021 2020 Zhu Hong Shareholder of the Company $ 79,849 $ 1,059,853 Zhu Jian Yong Shareholder of the Company - 1,731 Shenzhen Weilian Jin Meng Culture Spreading Limited Zhu Hong is the shareholder - 24,800 Shenzhen Nainiang Liquor Industrial Co., Ltd.* Zhu Hong is the shareholder - 10,768 Total $ 79,849 $ 1,097,152 * Shenzhen Nainiang Liquor Industrial Co., Ltd. became the wholly owned subsidiary of the Company after the acquisition transaction which was closed on August 16, 2021. All intra-company transactions and balances have been eliminated on consolidation. |
Schedule of transactions | For the years ended 2021 2020 Cash advance from related parties Shenzhen Nainiang Liquor Industrial Co., Ltd.* $ - $ 66,683 Shenzhen Weilian Jin Meng Culture Spreading Limited - 29,282 Total $ - $ 95,965 For the years ended 2021 2020 Cash advance to related parties Zhu Hong - 200,876 Ye Aiyun - 76,830 Shenzhen Weilian Jin Meng Culture Spreading Limited 81,690 6,204 Shenzhen Nainiang Liquor Industrial Co., Ltd.* - 56,492 Total $ 81,690 $ 340,402 For the years ended 2021 2020 Cash repayment from related parties Ye Aiyun 142,450 - Zhu Hong - 1,093,131 Total $ 142,450 $ 1,093,131 For the years ended 2021 2020 Cash repayment to related parties Zhu Hong 980,004 - Shenzhen Weilian Jin Meng Culture Spreading Limited 24,800 - Zhu Jian Yong 1,731 - Total $ 1,006,535 $ - For the years ended 2021 2020 Expense paid on behalf by related parties Zhu Hong - 15,758 Total $ - $ 15,758 * Shenzhen Nainiang Liquor Industrial Co., Ltd. became the wholly owned subsidiary of the Company after the acquisition transaction which was closed on August 16, 2021. All intra-company transactions and balances have been eliminated on consolidation. |
Description of Business (Detail
Description of Business (Details) - shares | Aug. 16, 2021 | Jun. 02, 2021 | Feb. 01, 2021 | Nov. 24, 2020 | Aug. 05, 2020 | Feb. 01, 2020 | Jun. 20, 2019 | Oct. 25, 2018 | Oct. 17, 2017 |
Description of Business (Details) [Line Items] | |||||||||
Capital stock transaction description | (i) 750,000,000 shares of common stock, par value $0.00001 per share (“Common Stock”), authorized, of which 600,034,500 shares are issued and outstanding; and (ii) 100,000,000 shares of preferred stock, par value $0.00001 per share, of which all 100,000,000 shares are designated Series A Preferred Stock (“Series A Preferred Stock”), of which all 100,000,000 shares are issued and outstanding. | ||||||||
FHAI [Member] | |||||||||
Description of Business (Details) [Line Items] | |||||||||
Shares issued (in Shares) | 9,281,577 | ||||||||
WLJM Cayman [Member] | |||||||||
Description of Business (Details) [Line Items] | |||||||||
Issued and outstanding percentage | 100.00% | ||||||||
Shares issued (in Shares) | 600,000,000 | ||||||||
Wei Lian Jin Meng (Hong Kong) Co., Ltd. [Member] | |||||||||
Description of Business (Details) [Line Items] | |||||||||
Owned subsidiary percentage | 100.00% | ||||||||
Jin You Wei Meng (Shenzhen) Consulting Co., Ltd. [Member] | |||||||||
Description of Business (Details) [Line Items] | |||||||||
Owned subsidiary percentage | 100.00% | ||||||||
Shenzhen Wei Lian Jin Meng Electronic Commerce Limited [Member] | |||||||||
Description of Business (Details) [Line Items] | |||||||||
Owned subsidiary percentage | 100.00% | ||||||||
Dongguan Dishi Coffee Limited [Member] | |||||||||
Description of Business (Details) [Line Items] | |||||||||
Owned subsidiary percentage | 100.00% | ||||||||
Shenzhen Nainiang Coffee Art Museum Limited [Member] | |||||||||
Description of Business (Details) [Line Items] | |||||||||
Owned subsidiary percentage | 100.00% | ||||||||
Shenzhen Wei Lian [Member] | |||||||||
Description of Business (Details) [Line Items] | |||||||||
Percentage of ownership | 99.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | ||
Impairment of intangible assets, finite-lived | $ 77,264 | |
Agreement term | 3 years | |
Percentage of accounts receivable | 10.00% | |
General and administrative expenses | $ 44,396 | $ 98,892 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of estimated useful life | 12 Months Ended |
Dec. 31, 2021 | |
Machinery [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Shorter of the lease term or estimated useful life | 10 years |
Computer equipment and software [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Shorter of the lease term or estimated useful life | 3 years |
Motor vehicle [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Shorter of the lease term or estimated useful life | 4 years |
Equipment [Member] | |
Public Utility, Property, Plant and Equipment [Line Items] | |
Shorter of the lease term or estimated useful life | 5 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of accounts receivable | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Accounts receivable amount | $ 3,012,256 |
Accounts receivable percentage | 100.00% |
Customer A [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Accounts receivable amount | $ 1,540,197 |
Accounts receivable percentage | 51.00% |
Customer B [Member] | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
Accounts receivable amount | $ 1,472,059 |
Accounts receivable percentage | 49.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of exchange rates | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of exchange rates [Abstract] | ||
Year-end RMB exchange rate | 6.36 | 6.53 |
Annual average RMB exchange rate | 6.45 | 6.9 |
Business Combination (Details)
Business Combination (Details) - Business Acquisition [Member] | Jun. 02, 2021$ / sharesshares |
Business Combination (Details) [Line Items] | |
Percentage of acquisition | 99.00% |
Shares issued (in Shares) | shares | 9,281,577 |
Common stock price per share (in Dollars per share) | $ / shares | $ 1.1 |
Shenzhen Wei Lian [Member] | |
Business Combination (Details) [Line Items] | |
Outstanding equity percentage | 99.00% |
Ms. Zhu Hong, as Ms. Zhu Hong [Member] | |
Business Combination (Details) [Line Items] | |
Non-controlling interest percentage | 1.00% |
Business Combination (Details)
Business Combination (Details) - Schedule of represents the purchase price allocation | Jun. 03, 2021USD ($) |
Schedule of represents the purchase price allocation [Abstract] | |
Cash and cash equivalents | $ 48,689 |
Other current assets | 13,666,168 |
Property, plant and equipment | 310,631 |
Current liabilities | (3,697,772) |
Total purchase price | $ 10,327,716 |
Revenue (Details)
Revenue (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Revenue [Abstract] | |
Expected recognize revenue term | 12 months |
Expect to recognize revenue amount | $ 221,831 |
Revenue (Details) - Schedule of
Revenue (Details) - Schedule of revenue - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of revenue [Abstract] | ||
Product sales | $ 11,381,616 | $ 1,194,427 |
Franchise fees and income | 848,429 | |
Revenues from transactions with franchisees | 25,163,757 | |
Revenue | $ 37,393,802 | $ 1,194,427 |
Revenue (Details) - Schedule _2
Revenue (Details) - Schedule of contract liabilities - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of contract liabilities [Abstract] | ||
Deferred revenue related to prepaid coffee and wine products | $ 20,881 | $ 27,648 |
Deferred revenue related to upfront franchise fees | 716,634 | |
Contract liabilities | $ 737,515 | $ 27,648 |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventories - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of inventories [Abstract] | |||
Raw materials | [1] | $ 14,000,162 | $ 51,521 |
Finished goods | 61,684 | 14,516 | |
Goods in transit | 105,083 | ||
Inventory, total | $ 14,166,929 | $ 66,037 | |
[1] | Raw materials mainly consist of unprocessed coffee beans, unprocessed wine and packaging materials |
Leasehold Improvement and Equ_3
Leasehold Improvement and Equipment, Net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leasehold Improvement and Equipment, Net [Abstract] | ||
Depreciation expense | $ 89,727 | $ 25,559 |
Leasehold Improvement and Equ_4
Leasehold Improvement and Equipment, Net (Details) - Schedule of leasehold improvement and equipment, net - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Leasehold improvement and equipment, gross | $ 636,452 | $ 141,007 |
Less: accumulated depreciation | (206,952) | (53,673) |
Leasehold improvement and equipment, net | 429,500 | 87,333 |
Leasehold improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Leasehold improvement and equipment, gross | 65,944 | 64,191 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Leasehold improvement and equipment, gross | 21,079 | 16,653 |
Machinery [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Leasehold improvement and equipment, gross | 34,087 | 32,563 |
Computer equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Leasehold improvement and equipment, gross | 46,228 | 20,355 |
Motor vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Leasehold improvement and equipment, gross | $ 469,114 | $ 7,245 |
Intangible Assets (Details)
Intangible Assets (Details) | 12 Months Ended | ||
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2021CNY (¥) | |
Intangible Assets [Abstract] | |||
Amortization expense | $ 14,465 | ||
Impairment loss on intangible assets | $ 77,264 | ||
Intangible assets, amortization | $ 16,000 | ¥ 100,000 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of intangible assets [Abstract] | ||
APP Platforms | $ 110,148 | |
Less: accumulated amortization | (14,687) | |
Intangible assets, net | $ 95,461 |
Other Payables and Accruals (De
Other Payables and Accruals (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Other Payables and Accruals [Abstract] | ||
Number of customers | 1 | 1 |
Other Payables and Accruals (_2
Other Payables and Accruals (Details) - Schedule of other payables and accruals - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of other payables and accruals [Abstract] | |||
Accrued payroll and welfare payable | $ 178,706 | $ 180,878 | |
VAT and other taxes payable | 192,563 | 92,608 | |
Others | [1] | 109,989 | 63,118 |
Other payables and accruals | $ 481,258 | $ 336,604 | |
[1] | As of December 31, 2021 and 2020, others mainly consist of the outstanding refundable balance upon termination of the cooperative agreement with one customer and payables for rental expenses. |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Taxes (Details) [Line Items] | ||
Income tax rate | 25.00% | |
Statutory tax rates | 25.00% | 25.00% |
Hong Kong [Member] | ||
Income Taxes (Details) [Line Items] | ||
Income tax rate | 16.50% | |
PRC [Member] | ||
Income Taxes (Details) [Line Items] | ||
Subject to profits tax rate | 25.00% |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of income tax expense (benefits) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of income tax expense (benefits) [Abstract] | ||
Current tax expense | $ 6,188,688 | $ 19,693 |
Deferred tax expense | ||
Income tax expense (benefits) | $ 6,188,688 | $ 19,693 |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of statutory tax rates - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of statutory tax rates [Abstract] | ||
Income (Loss) before tax | $ 24,864,235 | $ (608,177) |
Tax benefit calculated at statutory tax rate | 25.00% | 25.00% |
Computed expected expense (benefits) | $ 6,216,059 | $ (152,044) |
Movement in valuation allowance | (27,371) | 171,737 |
Income tax expense (benefits) | $ 6,188,688 | $ 19,693 |
Operating Lease Righ-of-Use A_3
Operating Lease Righ-of-Use Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Debt Instrument, Interest Rate, Effective Percentage | 4.75% | |
Rent expense | $ 323,356 | $ 268,120 |
Operating Lease Righ-of-Use A_4
Operating Lease Righ-of-Use Assets (Details) - Schedule of future minimum payments under long-term non-cancelable operating leases | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Schedule of future minimum payments under long-term non-cancelable operating leases [Abstract] | |
Within 1 year | $ 81,998 |
After 1 year but within 5 years | 16,778 |
Total lease payments | 98,776 |
Less: imputed interest | (14,819) |
Total lease obligations | 83,957 |
Less: current obligations | (69,259) |
Long-term lease obligations | $ 14,698 |
Operating Lease Righ-of-Use A_5
Operating Lease Righ-of-Use Assets (Details) - Schedule of other information - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flow from operating leases | $ 323,356 | $ 268,120 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 94,486 | $ 383,203 |
Remaining lease term for operating leases (years) | 10 months 17 days | 1 year 10 months 17 days |
Weighted average discount rate for operating leases | 4.75% | 4.75% |
Related Parties Transactions (D
Related Parties Transactions (Details) - Schedule of amount due from related parties - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Related Parties Transactions (Details) - Schedule of amount due from related parties [Line Items] | ||
Due to related parties | $ 81,690 | |
Total | $ 142,450 | |
Ye Aiyun [Member] | ||
Related Parties Transactions (Details) - Schedule of amount due from related parties [Line Items] | ||
Relationship, description | Shareholder of the Company | |
Due to related parties | ||
Total | 142,450 | |
Shenzhen Weilian Jin Meng Culture Spreading Limited [Member] | ||
Related Parties Transactions (Details) - Schedule of amount due from related parties [Line Items] | ||
Relationship, description | Zhu Hong is the shareholder | |
Due to related parties | $ 81,690 | |
Total |
Related Parties Transactions _2
Related Parties Transactions (Details) - Schedule of amount due to related parties - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Related Parties Transactions (Details) - Schedule of amount due to related parties [Line Items] | |||
Total | $ 79,849 | $ 1,097,152 | |
Zhu Hong [Member] | |||
Related Parties Transactions (Details) - Schedule of amount due to related parties [Line Items] | |||
Relationship, decription | Shareholder of the Company | ||
Total | $ 79,849 | 1,059,853 | |
Zhu Jian Yong [Member] | |||
Related Parties Transactions (Details) - Schedule of amount due to related parties [Line Items] | |||
Relationship, decription | Shareholder of the Company | ||
Total | 1,731 | ||
Shenzhen Weilian Jin Meng Culture Spreading Limited [Member] | |||
Related Parties Transactions (Details) - Schedule of amount due to related parties [Line Items] | |||
Relationship, decription | Zhu Hong is the shareholder | ||
Total | 24,800 | ||
Shenzhen Nainiang Liquor Industrial Co., Ltd [Member] | |||
Related Parties Transactions (Details) - Schedule of amount due to related parties [Line Items] | |||
Relationship, decription | [1] | Zhu Hong is the shareholder | |
Total | [1] | $ 10,768 | |
[1] | Shenzhen Nainiang Liquor Industrial Co., Ltd. became the wholly owned subsidiary of the Company after the acquisition transaction which was closed on August 16, 2021. All intra-company transactions and balances have been eliminated on consolidation. |
Related Parties Transactions _3
Related Parties Transactions (Details) - Schedule of transactions - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Cash advance from related parties | $ 95,965 | ||
Cash advance to related parties | 81,690 | 340,402 | |
Cash repayment from related parties | 142,450 | 1,093,131 | |
Cash repayment to related parties | 1,006,535 | ||
Expense paid on behalf by related parties | 15,758 | ||
Shenzhen Nainiang Wine Industrial Co., Ltd. [Member] | |||
Related Party Transaction [Line Items] | |||
Cash advance from related parties | [1] | 66,683 | |
Cash advance to related parties | [1] | 56,492 | |
Shenzhen Weilian Jin Meng Culture Spreading Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Cash advance from related parties | 29,282 | ||
Cash advance to related parties | 81,690 | 6,204 | |
Cash repayment to related parties | 24,800 | ||
Zhu Hong [Member] | |||
Related Party Transaction [Line Items] | |||
Cash advance to related parties | 200,876 | ||
Cash repayment from related parties | 1,093,131 | ||
Cash repayment to related parties | 980,004 | ||
Expense paid on behalf by related parties | 15,758 | ||
Ye Aiyun [Member] | |||
Related Party Transaction [Line Items] | |||
Cash advance to related parties | 76,830 | ||
Cash repayment from related parties | 142,450 | ||
Zhu Jian Yong [Member] | |||
Related Party Transaction [Line Items] | |||
Cash repayment to related parties | $ 1,731 | ||
[1] | Shenzhen Nainiang Liquor Industrial Co., Ltd. became the wholly owned subsidiary of the Company after the acquisition transaction which was closed on August 16, 2021. All intra-company transactions and balances have been eliminated on consolidation. |
Reserves (Details)
Reserves (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reserves [Abstract] | ||
General reserve | 10.00% | |
Entity registered capital | 50.00% | |
Statutory reserve | $ 3,041,397 | $ 6,894 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies description | the US listing with a contract sum of $1,200,000. The outstanding committed contract amount is $120,000. The terms of the agreement are for various milestones stages to be completed within two years through 2021 which has extended to 2022. Future commitments within one year as of December 31, 2021 was $120,000. No future commitments more than one year as of December 31, 2021. |