Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | May 01, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | MAKINGORG, INC. | ||
Entity Central Index Key | 0001569083 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Common Stock Shares Outstanding | 35,540,000 | ||
Entity Public Float | $ 42,035,834 | ||
Entity Interactive Data Current | No |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 94,211 | $ 57,372 |
Inventories (net of inventory reserve of $19,426 and $11,101) | 43,532 | 22,201 |
Prepaid expenses and other current assets | 34,358 | 4,500 |
Total Current Assets | 172,101 | 84,073 |
Right-of-use assets - operating leases | 5,588 | |
Deposit | 2,000 | |
Total Assets | 177,689 | 86,073 |
Current Liabilities | ||
Interest payable | 80,000 | 56,000 |
Accrued liabilities | 14,876 | 1,554 |
Customer deposit - Related Party | 6,676 | |
Lease liabilities - operating leases | 5,838 | |
Due to related party | 285,869 | 230,903 |
Convertible note payable, net of discount $36,267 and $26,667 | 163,733 | 173,333 |
Total Current Liabilities | 556,992 | 461,790 |
Long-Term Liabilities | ||
Deferred rent | 625 | |
TOTAL LIABILITIES | 556,992 | 462,415 |
Stockholders' Deficit | ||
Preferred stock, par value $0.001; 50,000,000 shares authorized, zero shares issued and outstanding | ||
Common stock, par value $0.001; 150,000,000 shares authorized, 35,540,000 and 35,430,000 shares issued and outstanding as of December 31, 2019 and 2018, respectively | 35,540 | 35,430 |
Additional paid-in capital | 583,882 | 67,592 |
Accumulated other comprehensive income (loss) | (2,882) | (713) |
Accumulated deficit | (995,843) | (478,651) |
Total Stockholders' Deficit | (379,303) | (376,342) |
Total Liabilities and Stockholders' Deficit | $ 177,689 | $ 86,073 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Inventory reserve | $ 19,426 | $ 11,101 |
Current Liabilities | ||
Debt discount of convertible note payable | $ 36,267 | $ 26,667 |
Stockholders' Deficit | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 35,540,000 | 35,430,000 |
Common stock, shares outstanding | 35,540,000 | 35,430,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
Net Sales-Related Party | $ 375,251 | |
Cost of Sales | 200,182 | |
Gross Profit | 175,069 | |
OPERATING EXPENSES | ||
Selling, general and administrative | 49,097 | 33,373 |
Professional fees | 560,171 | 89,932 |
TOTAL OPERATING EXPENSES | 609,268 | 123,305 |
LOSS FROM OPERATIONS | (434,199) | (123,305) |
OTHER INCOME (EXPENSE) | ||
Interest income | 152 | 80 |
Interest expense | (68,800) | (50,286) |
Other income | 27 | |
Loss on inventory write-down | (8,325) | (21,767) |
TOTAL OTHER INCOME (EXPENSE) | (76,946) | (71,973) |
LOSS BEFORE INCOME TAX | (511,145) | (195,278) |
Income tax | 6,047 | 800 |
NET LOSS | (517,192) | (196,078) |
OTHER COMPREHENSIVE ITEM: | ||
Foreign currency translation income (loss) | (2,169) | (1,640) |
TOTAL COMPREHENSIVE LOSS | $ (519,361) | $ (197,718) |
NET LOSS PER COMMON SHARE: BASIC AND DILUTED | $ (0.015) | $ (0.006) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC AND DILUTED | 35,540,000 | 35,430,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated other comprehensive Income | Accumulated Deficit |
Balance, shares at Dec. 31, 2017 | 35,430,000 | ||||
Balance, amount at Dec. 31, 2017 | $ (218,624) | $ 35,430 | $ 27,592 | $ 927 | $ (282,573) |
Foreign currency translation loss | (1,640) | (1,640) | |||
Issuance of promissory note | 40,000 | 40,000 | |||
Net loss | (196,078) | (196,078) | |||
Balance, shares at Dec. 31, 2018 | 35,430,000 | ||||
Balance, amount at Dec. 31, 2018 | (376,342) | $ 35,430 | 67,592 | (713) | (478,651) |
Foreign currency translation loss | (2,169) | (2,169) | |||
Issuance of promissory note | 54,400 | 54,400 | |||
Net loss | (517,192) | (517,192) | |||
Common stock issued for service, shares | 110,000 | ||||
Common stock issued for service, amount | 462,000 | $ 110 | 461,890 | ||
Balance, shares at Dec. 31, 2019 | 35,540,000 | ||||
Balance, amount at Dec. 31, 2019 | $ (379,303) | $ 35,540 | $ 583,882 | $ (2,882) | $ (995,843) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (517,192) | $ (196,078) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss on inventories write-down | 8,325 | 21,767 |
Shares issued for compensation | 462,000 | |
Amortization expense | 513 | |
Amortization of debt discount | 44,800 | 26,286 |
Amortization of Right-of-use assets | (375) | |
Changes in assets and liabilities: | ||
Accounts receivable | 50,145 | |
Inventories | (29,949) | (11,813) |
Prepaid expenses and other current assets | (28,076) | 12,676 |
Depsoit | (2,000) | |
Accounts payable | (627) | |
Interest payable | 24,000 | |
Accrued liabilities | 13,346 | 14,208 |
Customer deposit - related party | 6,734 | |
Deferred rent | 625 | |
CASH FLOWS USED IN OPERATING ACTIVITIES | (16,387) | (84,298) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Loan from related party | 54,966 | 105,124 |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 54,966 | 105,124 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (1,740) | (1,059) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 36,839 | 19,767 |
Cash and cash equivalents, beginning of period | 57,372 | 37,605 |
Cash and cash equivalents, end of period | 94,211 | 57,372 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest paid | ||
Income taxes paid | 5,247 | 2,111 |
NON-CASH TRANSACTION: | ||
Deferred consulting fee paid in common stock | 462,000 | |
Beneficial conversion feature recognition | $ 54,400 | $ (40,000) |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2019 | |
ORGANIZATION AND NATURE OF BUSINESS | |
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS | MakingORG, Inc. (“MakingORG”) was incorporated under the laws of the State of Nevada on August 10, 2012. The trading symbol is “CQCQ” and the fiscal year end is December 31. On October 20, 2016, MakingORG filed documents registering its intention to transact interstate business in the state of California. On November 29, 2016, MakingORG incorporated HK Feng Wang Group Limited (“HKFW”) under the laws of Hong Kong. On August 22, 2017, HKFW incorporated Chongqing Beauty Kenner Biotechnology Co., Ltd (“CBKB”) under the laws of the People’s Republic of China (“PRC”). MaingORG, Inc. and subsidiaries (“the Company”) purchase Acer truncatum bunge seed oil from China, outsource to third party to manufacture Acer truncatum bunge related health product, and sell to end user and distributor in the United States and PRC. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2019 | |
GOING CONCERN | |
NOTE 2 - GOING CONCERN | Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these consolidated financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. The Company currently suffered recurring loss from operations, generated negative cash flow from operating activities and has an accumulated deficit and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt as to its ability to continue as a going concern. These consolidated financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company may seek additional funding through additional issuance of common stock and/or borrowings from financial institutions or the majority shareholder to support its normal business operations. In light of management’s efforts, there is no assurance that the Company will be successful in this or any of its endeavors or become financially viable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation The Company’s consolidated financial statements refer to MakingORG, Inc. and its subsidiaries. All intercompany transactions and balances were eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Company’s consolidated financial statement date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are reported realizable value, net of allowance for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded. Accounts receivable consists principally of receivables from distributor or end user, arising from the sale of the Company’s product. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Management evaluated that there was no allowance for doubtful accounts as of December 31, 2019 and 2018, respectively. Inventories Inventories consist of (a) packing materials (b) raw materials and (b) finished goods, which are stated at the lower of cost or net realizable value under the first-in-first-out method. The Company reviews its inventories periodically for possible excess and obsolescence to determine if any reserves are necessary. As of December 31, 2019 and 2018, inventory reserve amounted to $19,426 and $11,101, respectively. Revenue Recognition Effective January 1, 2018, the Company adopted Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption. In general, the Company’s performance obligation is to transfer it products to its end user or distributor. Revenues from product sales are recognized when the customer obtains control of the Company’s finished goods product, which occurs at a point in time, typically upon delivery to the customer. The Company's revenue mainly generates from sale of acer truncatum bunge related health products, such as Nervonic Acid Oil, coffee and tea. The Company evaluated its product sales contracts and determined that those contracts are generally capable of being distinct and accounted for as separate performance obligations. Performance obligation is satisfied when the finished goods product delivered to the customer. During the years ended December 31, 2019 and 2018, the Company recognized revenue from sale of acer truncatum bunge related health products in an amount of $375,251 and $nil, respectively. Advertising Expenses Advertising costs are expensed as incurred. Advertising expenses incurred for the years ended December 31, 2019 and 2018 totaled $4,456 and $7,555, respectively. Research and Development Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statement of operations and totaled $nil for the years ended December 31, 2019 and 2018, respectively. Income Taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are using enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, if more likely than not that the company will not realize tax assets through future operation. On December 22, 2017, the U.S. enacted the 2017 Tax Cuts and Jobs Act which contains several key tax provisions that affect the Company, including, but not limited to, a one-time mandatory transition tax on accumulated foreign earnings, changes in the sourcing and calculation of foreign income, and a reduction of the corporate income tax rate to 21% effective January 1, 2018. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring its U.S. deferred tax assets and liabilities as well as reassessing the net realizability of its deferred tax assets and liabilities. Basic Income (Loss) Per Share Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Foreign Currency Transactions The functional currency for MakingORG and HKFW is the US dollar. The functional currency for the China subsidiary (CBKB) is the Renminbi (RMB). Assets and liabilities of the China operation are translated from RMB into U.S. dollars at period-end rates, while the statements of operations and cash flows are translated at the weighted-average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income/(loss) within shareholders’ deficit. The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from RMB into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for financial statements are as follows: Average Rate for the Twelve Months Ended December 31, 2019 2018 China yuan (RMB) RMB 6.907209 RMB 6.614642 United States dollar ($) $ 1.000000 $ 1.000000 Exchange Rate at December 31, 2019 December 31, 2018 China yuan (RMB) RMB 6.966764 RMB 6.876443 United States dollar ($) $ 1.000000 $ 1.000000 Related Parties The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. Lease Prior to the adoption of ASC 842 on January 1, 2019: Leases, mainly leases of offices, where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Payments made under operating leases are recognized as an expense on a straight-line basis over the lease term. The Company had no finance leases for any of the periods stated herein. Upon and thereafter the adoption of ASC 842 on January 1, 2019: The Company determines if an arrangement is or contains a lease at inception. Operating leases with lease terms of more than 12 months are included in operating lease assets, accrued and other current liabilities, and long-term operating lease liabilities on its consolidated balance sheet. Operating lease assets represent its right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments over the lease term. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using its incremental borrowing rate. Lease expense is recognized on a straight-line basis over the lease term. Segment Reporting The Company follows FASB ASC Topic 280, “ Segment Reporting Fair Value of Financial Instruments Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including the Company’s own credit risk. In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The carrying amounts of financial assets and liabilities in the consolidated balance sheets for cash and cash equivalents, accrued expenses and due to related party approximate their fair value due to the short-term duration of those instruments. Notes payable are recorded at agreed values. Recent Adopted Accounting Pronouncements In June 2018, the FASB issued ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“Topic 842”) (as subsequently amended by ASU 2018-01, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01) which requires a lessee to recognize assets and liabilities on the balance sheet for those leases classified as operating leases under previous guidance. Based on a preliminary assessment, the Company expect that its operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use (“ROU”) assets upon adoption, resulting in a significant increase in the assets and liabilities on its consolidated balance sheets. There was no change in its leasing activities as a result of adoption. Upon adoption, as of January 1, 2019, the Company recognized operating lease liabilities of $14,079 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases, as well as corresponding ROU assets of $13,454, the $625 difference attributable to the offset of the deferred rent existing as of January 1, 2019. See Note 9 for further details. Recently Issued Accounting Pronouncement Not Yet Adopted In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects the adoption will have on its consolidated financial statements. In December 2019, FASB issued ASU ASU 2019-12 "Income Taxes," which provides for certain updates to reduce complexity in the accounting for income taxes, including the utilization of the incremental approach for intra-period tax allocation, among others. The amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company does not expect the implementation of ASU 2019-12 to have a material effect on its consolidated financial statements. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES | |
NOTE 4 - INVENTORIES | The components of the Company’s inventories were packaging materials, raw materials and finished goods. Inventories consisted of the following as of December 31, 2019 and 2018: December 31, 2019 2018 Raw materials $ 34,112 $ - Finished goods 28,846 33,302 Inventory reserve (19,426 ) (11,101 ) Total inventories $ 43,532 $ 22,201 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
NOTE 5 - PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets include primarily prepaid consulting fee, deposit for packaging materials and security deposit for rent. As of December 31, 2019 and 2018, prepaid expenses and other current assets was $34,358 and $4,500, respectively. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
NOTE 6 - RELATED PARTY TRANSACTIONS | Due to Related Party During the years ended December 31, 2019 and 2018, the Company’s sole officer loaned the Company $54,966 and $105,124, respectively. As of December 31, 2019, and 2018, the Company was obligated to the officer, for an unsecured, non-interest bearing demand loan with a balance of $285,869 and $230,903, respectively. Sales to Related Party The Company sells its product to its related party, an entity in which CBKB’s supervisor is a shareholder. During the years ended December 31, 2019 and 2018, the Company consolidated net sales to the related party was $375,251 and $nil, respectively. As of December 31, 2019 and 2018, the Company consolidated customer deposit – related party was $6,676 and $nil, respectively. Consulting Agreement On January 4, 2019, the Company entered into a Consulting Agreement with a related party, legal person of CBKB. The agreement term is from January 4, 2019 to January 3, 2020. Pursuant to the Consulting Agreement, the Company agreed to issue 110,000 shares with a fair value of the Company’s common stock to the related party to devote appropriate time and attention to providing advice to the Company in regards to sales and marketing for China; or such other services as the Company and the related party may agree. The Company consulting fees was $462,000 for the year ended December 31, 2019. |
BUSINES CONCENTRATION AND RISKS
BUSINES CONCENTRATION AND RISKS | 12 Months Ended |
Dec. 31, 2019 | |
BUSINES CONCENTRATION AND RISKS | |
NOTE 7 - BUSINES CONCENTRATION AND RISKS | Concentration of Risk The Company maintains cash with banks in the USA, People’s Republic of China (“PRC” or “China”), and Hong Kong. Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts. In China, a depositor has up to RMB500,000 insured by the People’s Bank of China Financial Stability Bureau (“FSD”). In Hong Kong, a depositor has up to HKD500,000 insured by Hong Kong Deposit Protection Board (“DPB”). In the United States, the standard insurance amount is $250,000 per depositor in a bank insured by the Federal Deposit Insurance Corporation (“FDIC”). Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents. As of December 31, 2019 and 2018, $93,656 and $57,372 of the Company’s cash and cash equivalents, was insured, and the remaining balance of approximately $555 and $0, was not insured. With respect to accounts receivable, the Company generally does not require collateral and does not have an allowance for doubtful accounts. Major customer For the years ended December 31, 2019 and 2018, the Company’s revenues from one major customer was: Twelve Months Ended December 31, 2019 2018 Amount % of Total Revenue Amount % of Total Revenue Customer A $ 375,251 100 % $ - - % Major vendor For the years ended December 31, 2019 and 2018, the Company’s purchase from one major vendor was: Twelve Months Ended December 31, 2019 2018 Amount % of Total Purchase Amount % of Total Purchase Vendor A $ 265,577 96 % $ - - % |
CONVERTIBLE NOTE PAYABLE
CONVERTIBLE NOTE PAYABLE | 12 Months Ended |
Dec. 31, 2019 | |
CONVERTIBLE NOTE PAYABLE | |
NOTE 8 - CONVERTIBLE NOTE PAYABLE | On September 1, 2016, the Company entered into a Convertible Note Agreement in the principal amount of $200,000 with an unrelated party. The note bears interest at 12% per annum and the holder is able to convert all unpaid interest and principal into common shares at $3.50 per share. The note matures on September 1, 2018. The Company recognized a discount on the note of $38,857 at the agreement date. The interest expense was due every six months commencing on March 1, 2017 until the principal amount of this convertible note is paid in full. On September 1, 2018, the Company entered into an Amended and Restated 12% Convertible Promissory Note. Pursuant to an Amended and Restated 12% Convertible Promissory Note, both parties agreed to extend a Convertible Note Agreement to September 1, 2019 with no additional consideration. The Company recognized a discount on the note of $40,000 at the amended agreement date. On September 1, 2019, the Company entered into an amended and restated 12% convertible promissory note. Pursuant to the amended convertible promissory note, both parties agreed to extend the convertible note agreement to September 1, 2020 with no additional consideration. The Company recognized a discount on the note of $54,400 at the amended agreement date. Since the conversion feature of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. The Company recognized interest expense related to the convertible note of $68,800 and $50,286, respectively, for the years ended December 31, 2019 and 2018, respectively. The unamortized debt discount at December 31, 2019 and 2018 was $36,267 and $26,667, respectively. As of December 31, 2019, and 2018, net balance of the convertible note amounted to $163,733 and $173,333, respectively. |
LEASE
LEASE | 12 Months Ended |
Dec. 31, 2019 | |
LEASE | |
NOTE 9 - LEASE | The Company has an operating lease for its office space from a third party. The Company determined if an arrangement is a lease inception of the contract and whether a contract is or contains a lease by determining whether it conveys the right to control the use of identified asset for a period of time. The contact provides the right to substantially all the economic benefits from the use of the identified asset and the right to direct use of the identified asset, we consider it to be, or contain, a lease. Leases is classified as operating at inception of the lease. Operating leases result in the recognition of ROU assets and lease liabilities on the balance sheet. ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term as of the commencement date. Because the leases do not provide an explicit or implicit rate of return, the Company determines incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments on an individual lease basis. The incremental borrowing rate for a lease is the rate of interest the Company would have to pay on a collateralized basis to borrow an amount equal to the lease payments for the asset under similar term, which is 7.33%. Lease expense for the lease is recognized on a straight-line basis over the lease term. The Company’s leases do not contain any residual value guarantees or material restrictive covenants. Leases with a lease term of 12 months or less are not recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. The remaining term as of December 31, 2019 is 8 months. The Company currently has no finance leases. During the year ended December 31, 2019, cash paid for amounts included in the measurement of lease liabilities- operating cash flows from operating lease was $8,625. The components of lease expense consist of the following: Classification Year Ended December 31, 2019 Operating lease cost S, G&A expense $ 8,625 Net lease cost $ 8,625 Balance sheet information related to leases consists of the following: Assets Classification December 31, 2019 Operating lease ROU assets Right-of-use assets $ 5,588 Total leased assets $ 5,588 Liabilities Current portion Operating lease liabilities Current maturities of operating lease liabilities $ 5,838 Non-current portion Operating lease liabilities Long-term portion of operating lease liabilities - Total lease liabilities $ 5,838 Weighted average remaining lease term Operating leases 0.67 Weighted average discount rate Operating leases 7.33 % Cash flow information related to leases consists of the following: Twelve Months Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 8,241 Right-of-use assets obtained in exchange for lease obligations: Operating leases 7,866 As previously discussed, the Company adopted Topic 842 by applying the guidance at adoption date, January 1,2019. As required, the following disclosure is provided for periods prior to adoption, which continue to be presented in accordance with ASC 840. Future minimum lease payment under non-cancellable lease as of December 31, 2019 are as follows: Ending December 31, Operating Leases 2020 $ 6,000 2021 - Total lease payments 6,000 Less: Interest (162 ) Present value of lease liabilities $ 5,838 |
STOCKHOLDERS DEFICIT
STOCKHOLDERS DEFICIT | 12 Months Ended |
Dec. 31, 2019 | |
STOCKHOLDERS DEFICIT | |
NOTE 10 - STOCKHOLDERS DEFICIT | Common Stock On January 4, 2019, the Company issued 110,000 shares of common stock with a fair value of $462,000 for consulting service. During the year ended, the Company incurred non-cash stock compensation expense for this consulting fee of $462,000. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
NOTE 11 - INCOME TAXES | The Company accounts for income taxes under ASC 740, “Income Taxes”. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company is subject to taxation in the United States and certain state jurisdictions. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 21% to the net loss before provision for income taxes. HKFW in Hong Kong are governed by the Inland Revenue Ordinance Tax Law of Hong Kong, and are generally subject to a profits tax at the rate of 16.5% on the estimated assessable profits. CBNB in the PRC is governed by the Income Tax Law of the PRC concerning the private enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriated adjustments. PRC also give tax discount to small enterprise whose annual taxable income exceeding 1 million but not exceeding 3 million. The following table reconciles the Company’s statutory tax rates to effective tax rates for the years ended December 31, 2019 and 2018: Twelve Months Ended December 31, 2019 2018 US statutory rate 21 % 21 % Tax rate difference (1 )% 1 % PRC tax discount 4 % - % Loss not subject to income tax (25 )% (22 )% Effective tax rate (1 )% - % The Company’s income tax expense is mainly contributed by its subsidiary in PRC. In addition, the 2017 Tax Act also creates a new requirement that certain income (i.e., Global Intangible Low-Taxed Income (“GILTI”)) earned by controlled foreign corporations (“CFCs”) must be included currently in the gross income of the CFCs’ U.S. shareholder income. GILTI is the excess of the shareholder’s net CFC tested income over the net deemed tangible income return, which is currently defined as the excess of (1) 10 percent of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. The Company has elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. For the years ended December 31, 2019 and 2018, no GILTI tax obligation existed and the GILTI tax expense was nil. Provision (benefit) for income tax for the year ended December 31, 2019 consisted of: Year ended December 31, 2019 Federal State Foreign Total Current $ - $ 800 $ 5,247 $ 6,047 Deferred - - - - Total $ - $ 800 $ 5,247 $ 6,047 Provision (benefit) for income tax for the year ended December 31, 2018 consisted of: Year ended December 31, 2018 Federal State Foreign Total Current $ - $ 800 $ - $ 800 Deferred - - - - Total $ - $ 800 $ - $ 800 Net deferred tax assets consist of the following components as of: December 31, 2019 2018 Deferred tax asset: Net operating loss carry forwards $ 269,052 $ 92,639 Valuation allowance (269,052 ) (92,639 ) Net deferred tax asset $ - $ - Due to the change in ownership provisions of the Income Tax laws of United States of America, net operating loss carry forwards of approximately $860,000, which expires in 2032, for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years. Tax filings for the Company for the years after 2014 and 2015 are available for examination by state tax jurisdictions and federal tax purposes. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT REPORTING | |
NOTE 12 - SEGMENT REPORTING | The geographical distributions of the Company’s financial information for the year ended December 31, 2019 and 2018 were as follows: For the Years ended December 31, Geographic Areas 2019 2018 Revenue PRC 375,251 - USA - - Total Revenue $ 375,251 $ - Income (Loss) from Operations PRC $ 142,035 $ (15,085 ) USA (576,234 ) (108,220 ) Total Income (Loss) from operations $ (434,199 ) $ (123,305) Net Income (Loss) PRC $ 136,967 $ (15,006 ) USA (654,159 ) (181,072 ) Total Net Income (Loss) $ (517,192 ) $ (196,078 ) The geographical distribution of the Company’s financial information as of December 31, 2019 and 2018 were as follows: For the Years ended December 31, Geographic Areas 2019 2018 Reportable Assets PRC 167,774 26,009 USA 35,672 85,821 Elimination Adjustment (25,757 ) (25,757 ) Total Reportable Assets $ 177,689 $ 86,073 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2019 | |
SUBSEQUENT EVENT | |
NOTE 13 - SUBSEQUENT EVENT | The Company has evaluated all subsequent events through the date the consolidated financial statements were issued and determine that there were no subsequent events or transactions that require recognition or disclosures in the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | The Company’s consolidated financial statements refer to MakingORG, Inc. and its subsidiaries. All intercompany transactions and balances were eliminated in consolidation. |
Use of Estimates | The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Company’s consolidated financial statement date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable are reported realizable value, net of allowance for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded. Accounts receivable consists principally of receivables from distributor or end user, arising from the sale of the Company’s product. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Management evaluated that there was no allowance for doubtful accounts as of December 31, 2019 and 2018, respectively. |
Inventories | Inventories consist of (a) packing materials (b) raw materials and (b) finished goods, which are stated at the lower of cost or net realizable value under the first-in-first-out method. The Company reviews its inventories periodically for possible excess and obsolescence to determine if any reserves are necessary. As of December 31, 2019 and 2018, inventory reserve amounted to $19,426 and $11,101, respectively. |
Revenue Recognition | Effective January 1, 2018, the Company adopted Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption. In general, the Company’s performance obligation is to transfer it products to its end user or distributor. Revenues from product sales are recognized when the customer obtains control of the Company’s finished goods product, which occurs at a point in time, typically upon delivery to the customer. The Company's revenue mainly generates from sale of acer truncatum bunge related health products, such as Nervonic Acid Oil, coffee and tea. The Company evaluated its product sales contracts and determined that those contracts are generally capable of being distinct and accounted for as separate performance obligations. Performance obligation is satisfied when the finished goods product delivered to the customer. During the years ended December 31, 2019 and 2018, the Company recognized revenue from sale of acer truncatum bunge related health products in an amount of $375,251 and $nil, respectively. |
Advertising Expenses | Advertising costs are expensed as incurred. Advertising expenses incurred for the years ended December 31, 2019 and 2018 totaled $4,456 and $7,555, respectively. |
Research and Development | Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statement of operations and totaled $nil for the years ended December 31, 2019 and 2018, respectively. |
Income Taxes | Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are using enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, if more likely than not that the company will not realize tax assets through future operation. On December 22, 2017, the U.S. enacted the 2017 Tax Cuts and Jobs Act which contains several key tax provisions that affect the Company, including, but not limited to, a one-time mandatory transition tax on accumulated foreign earnings, changes in the sourcing and calculation of foreign income, and a reduction of the corporate income tax rate to 21% effective January 1, 2018. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring its U.S. deferred tax assets and liabilities as well as reassessing the net realizability of its deferred tax assets and liabilities. |
Basic Income (Loss) Per Share | Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. |
Foreign Currency Transactions | The functional currency for MakingORG and HKFW is the US dollar. The functional currency for the China subsidiary (CBKB) is the Renminbi (RMB). Assets and liabilities of the China operation are translated from RMB into U.S. dollars at period-end rates, while the statements of operations and cash flows are translated at the weighted-average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income/(loss) within shareholders’ deficit. The Company translates the assets and liabilities into U.S. dollars using the rate of exchange prevailing at the balance sheet date and the statements of operations and cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation from RMB into U.S. dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. The exchange rates used for financial statements are as follows: Average Rate for the Twelve Months Ended December 31, 2019 2018 China yuan (RMB) RMB 6.907209 RMB 6.614642 United States dollar ($) $ 1.000000 $ 1.000000 Exchange Rate at December 31, 2019 December 31, 2018 China yuan (RMB) RMB 6.966764 RMB 6.876443 United States dollar ($) $ 1.000000 $ 1.000000 |
Related Parties | The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. |
Lease | Prior to the adoption of ASC 842 on January 1, 2019: Leases, mainly leases of offices, where substantially all the rewards and risks of ownership of assets remain with the lessor are accounted for as operating leases. Payments made under operating leases are recognized as an expense on a straight-line basis over the lease term. The Company had no finance leases for any of the periods stated herein. Upon and thereafter the adoption of ASC 842 on January 1, 2019: The Company determines if an arrangement is or contains a lease at inception. Operating leases with lease terms of more than 12 months are included in operating lease assets, accrued and other current liabilities, and long-term operating lease liabilities on its consolidated balance sheet. Operating lease assets represent its right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments over the lease term. Operating lease assets and liabilities are recognized based on the present value of the remaining lease payments discounted using its incremental borrowing rate. Lease expense is recognized on a straight-line basis over the lease term. |
Segment Reporting | The Company follows FASB ASC Topic 280, “ Segment Reporting |
Fair Value of Financial Instruments | Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including the Company’s own credit risk. In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The carrying amounts of financial assets and liabilities in the consolidated balance sheets for cash and cash equivalents, accrued expenses and due to related party approximate their fair value due to the short-term duration of those instruments. Notes payable are recorded at agreed values. |
Recent Adopted Accounting Pronouncements | In June 2018, the FASB issued ASU 2018-07, Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which simplifies the accounting for share-based payments granted to nonemployees for goods and services and aligns most of the guidance on such payments to nonemployees with the requirements for share-based payments granted to employees. ASU 2018-07 is effective on January 1, 2019. Early adoption is permitted. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“Topic 842”) (as subsequently amended by ASU 2018-01, ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01) which requires a lessee to recognize assets and liabilities on the balance sheet for those leases classified as operating leases under previous guidance. Based on a preliminary assessment, the Company expect that its operating lease commitments will be subject to the new guidance and recognized as operating lease liabilities and right-of-use (“ROU”) assets upon adoption, resulting in a significant increase in the assets and liabilities on its consolidated balance sheets. There was no change in its leasing activities as a result of adoption. Upon adoption, as of January 1, 2019, the Company recognized operating lease liabilities of $14,079 based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases, as well as corresponding ROU assets of $13,454, the $625 difference attributable to the offset of the deferred rent existing as of January 1, 2019. See Note 9 for further details. |
Recently Issued Accounting Pronouncement Not Yet Adopted | In June 2016, FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses (Topic 326) and Leases (Topic 842) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842), which amends the effective date of the original pronouncement for smaller reporting companies. ASU 2016-13 and its amendments will be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects the adoption will have on its consolidated financial statements. In December 2019, FASB issued ASU ASU 2019-12 "Income Taxes," which provides for certain updates to reduce complexity in the accounting for income taxes, including the utilization of the incremental approach for intra-period tax allocation, among others. The amendments in ASU 2019-12 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company does not expect the implementation of ASU 2019-12 to have a material effect on its consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Foreign Currency Transactions | Average Rate for the Twelve Months Ended December 31, 2019 2018 China yuan (RMB) RMB 6.907209 RMB 6.614642 United States dollar ($) $ 1.000000 $ 1.000000 Exchange Rate at December 31, 2019 December 31, 2018 China yuan (RMB) RMB 6.966764 RMB 6.876443 United States dollar ($) $ 1.000000 $ 1.000000 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES | |
Schedule of Inventories | December 31, 2019 2018 Raw materials $ 34,112 $ - Finished goods 28,846 33,302 Inventory reserve (19,426 ) (11,101 ) Total inventories $ 43,532 $ 22,201 |
BUSINES CONCENTRATION AND RIS_2
BUSINES CONCENTRATION AND RISKS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
BUSINES CONCENTRATION AND RISKS (Tables) | |
Schedule of Major customer | Twelve Months Ended December 31, 2019 2018 Amount % of Total Revenue Amount % of Total Revenue Customer A $ 375,251 100 % $ - - % |
Schedule of major vendor | Twelve Months Ended December 31, 2019 2018 Amount % of Total Purchase Amount % of Total Purchase Vendor A $ 265,577 96 % $ - - % |
LEASE (Tables)
LEASE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LEASE | |
Schedule of components of lease expense | Classification Year Ended December 31, 2019 Operating lease cost S, G&A expense $ 8,625 Net lease cost $ 8,625 |
Schedule of balance sheet information related to leases | Assets Classification December 31, 2019 Operating lease ROU assets Right-of-use assets $ 5,588 Total leased assets $ 5,588 Liabilities Current portion Operating lease liabilities Current maturities of operating lease liabilities $ 5,838 Non-current portion Operating lease liabilities Long-term portion of operating lease liabilities - Total lease liabilities $ 5,838 Weighted average remaining lease term Operating leases 0.67 Weighted average discount rate Operating leases 7.33 % |
Schedule of cash flow information related to leases | Twelve Months Ended December 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 8,241 Right-of-use assets obtained in exchange for lease obligations: Operating leases 7,866 |
Schedule of future minimum lease payment | Ending December 31, Operating Leases 2020 $ 6,000 2021 - Total lease payments 6,000 Less: Interest (162 ) Present value of lease liabilities $ 5,838 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Schedule of statutory tax rates to effective tax rates | Twelve Months Ended December 31, 2019 2018 US statutory rate 21 % 21 % Tax rate difference (1 )% 1 % PRC tax discount 4 % - % Loss not subject to income tax (25 )% (22 )% Effective tax rate (1 )% - % |
Provision (benefit) for income tax | Year ended December 31, 2019 Federal State Foreign Total Current $ - $ 800 $ 5,247 $ 6,047 Deferred - - - - Total $ - $ 800 $ 5,247 $ 6,047 Year ended December 31, 2018 Federal State Foreign Total Current $ - $ 800 $ - $ 800 Deferred - - - - Total $ - $ 800 $ - $ 800 |
Net deferred tax assets | December 31, 2019 2018 Deferred tax asset: Net operating loss carry forwards $ 269,052 $ 92,639 Valuation allowance (269,052 ) (92,639 ) Net deferred tax asset $ - $ - |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT REPORTING | |
Schedule of segment reporting information | For the Years ended December 31, Geographic Areas 2019 2018 Revenue PRC 375,251 - USA - - Total Revenue $ 375,251 $ - Income (Loss) from Operations PRC $ 142,035 $ (15,085 ) USA (576,234 ) (108,220 ) Total Income (Loss) from operations $ (434,199 ) $ (123,305 ) Net Income (Loss) PRC $ 136,967 $ (15,006 ) USA (654,159 ) (181,072 ) Total Net Income (Loss) $ (517,192 ) $ (196,078 ) |
Schedule of segment reporting financial information | For the Years ended December 31, Geographic Areas 2019 2018 Reportable Assets PRC 167,774 26,009 USA 35,672 85,821 Elimination Adjustment (25,757 ) (25,757 ) Total Reportable Assets $ 177,689 $ 86,073 |
ORGANIZATION AND NATURE OF BU_2
ORGANIZATION AND NATURE OF BUSINESS (Details Narrative) | 12 Months Ended |
Dec. 31, 2019 | |
ORGANIZATION AND NATURE OF BUSINESS | |
State of incorporation | Nevada |
Date of incorporation | Aug. 10, 2012 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Average Rate China yuan (RMB) | $ 6.907209 | $ 6.614642 |
Average Rate United States dollar | 1 | 1 |
Exchange Rate China yuan (RMB) | 6.966764 | 6.876443 |
Exchange Rate United States dollar | $ 1 | $ 1 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Dec. 22, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||
Net Sales | $ 375,251 | |||
Inventory reserve amount | 19,426 | 11,101 | ||
Advertising expenses | 4,456 | 7,555 | ||
Research and development costs | $ 0 | $ 0 | ||
Statutory federal income tax rate | 21.00% | 21.00% | 21.00% | |
Right-of-use assets - operating leases | $ 5,588 | $ 14,079 | ||
Right-of-use assets | 13,454 | |||
Difference attributable to offset deferred rent | $ 625 | $ 625 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
INVENTORIES | ||
Raw materials | $ 34,112 | |
Finished goods | 28,846 | 33,302 |
Inventory reserve | (19,426) | (11,101) |
Total inventories | $ 43,532 | $ 22,201 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details Narrative) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Prepaid expenses and other current assets | $ 34,358 | $ 4,500 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Customer deposit-Related party | $ 6,676 | $ 0 |
Net Sales-Related Party | 375,251 | |
Due to related party | 285,869 | 230,903 |
Loan from related party | 54,966 | 105,124 |
Officer [Member] | ||
Due to related party | 285,869 | 230,903 |
Loan from related party | $ 54,966 | $ 105,124 |
Director [Member] | On January 4, 2019 [Member] | Consulting Agreement [Member] | ||
Shares issue | 110,000 | |
Agreement term description | The agreement term is from January 4, 2019 to January 3, 2020. | |
Consulting fees | $ 462,000 |
BUSINES CONCENTRATION AND RIS_3
BUSINES CONCENTRATION AND RISKS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Net Sales-Related Party | $ 375,251 | |
Customer A [Member] | Revenue [Member] | ||
Concentration risk percentage | 100.00% | 0.00% |
Net Sales-Related Party | $ 375,251 | |
Vendor A [Member] | Revenue [Member] | ||
Concentration risk percentage | 96.00% | 0.00% |
Net Sales-Related Party | $ 265,577 |
BUSINES CONCENTRATION AND RIS_4
BUSINES CONCENTRATION AND RISKS (Details Narrative) | Dec. 31, 2019USD ($) | Dec. 31, 2019HKD ($) | Dec. 31, 2019CNY (¥) | Dec. 31, 2018USD ($) |
FDIC limit | $ 250,000 | |||
Cash and cash equivalents insured amount | 93,656 | $ 57,372 | ||
Cash and cash equivalents uninsured amount | $ 555 | $ 0 | ||
HKD [Member] | ||||
FDIC limit | $ 500,000 | |||
RMB [Member] | ||||
FDIC limit | ¥ | ¥ 500,000 |
CONVERTIBLE NOTE PAYABLE (Detai
CONVERTIBLE NOTE PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Sep. 01, 2019 | Sep. 01, 2018 | Sep. 01, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest expense | $ 68,800 | $ 50,286 | |||
Unamortized debt discount | 36,267 | 26,667 | |||
Convertible note payable, net of discount current | $ 163,733 | $ 173,333 | |||
Convertible Note Agreement [Member] | |||||
Principal amount | $ 200,000 | ||||
Interest rate | 12.00% | ||||
Share price | $ 3.50 | ||||
Maturity date | Sep. 1, 2018 | ||||
Discount on convertible note payable | $ 38,857 | ||||
Amended Agreement [Member] | |||||
Convertible note payable, net of discount current | $ 54,400 | $ 40,000 | |||
Amended agreement description | On September 1, 2019, the Company entered into an amended and restated 12% convertible promissory note. Pursuant to the amended convertible promissory note, both parties agreed to extend the convertible note agreement to September 1, 2020 with no additional consideration. | On September 1, 2018, the Company entered into an Amended and Restated 12% Convertible Promissory Note. Pursuant to an Amended and Restated 12% Convertible Promissory Note, both parties agreed to extend a Convertible Note Agreement to September 1, 2019 with no additional consideration. |
LEASE (Details)
LEASE (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
LEASE | |
Operating lease cost | $ 8,625 |
Net lease cost | $ 8,625 |
LEASE (Details 1)
LEASE (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Assets | |||
Operating lease ROU assets | $ 5,588 | $ 14,079 | |
Total leased assets | 5,588 | ||
Current portion | |||
Operating lease liabilities | 5,838 | ||
Non-current portion | |||
Operating lease liabilities | |||
Total lease liabilities | $ 5,838 | ||
Weighted average remaining lease term Operating leases | 8 months 1 day | ||
Weighted average discount rate Operating leases | 7.33% |
LEASE (Details 2)
LEASE (Details 2) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 8,241 |
Right-of-use assets obtained in exchange for lease obligations: | |
Operating leases | $ 7,866 |
LEASE (Details 3)
LEASE (Details 3) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Leases | ||
2020 | $ 6,000 | |
2021 | ||
Total lease payments | 6,000 | |
Less: Interest | (162) | |
Present value of lease liabilities | $ 5,838 |
LEASE (Details Narrative)
LEASE (Details Narrative) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
LEASE | |
Lease liabilities- operating cash flows from operating lease | $ 8,625 |
Borrowing rate of lease | 7.33% |
Weighted average remaining lease term Operating leases | 8 months |
STOCKHOLDERS DEFICIT (Details N
STOCKHOLDERS DEFICIT (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 04, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
STOCKHOLDERS DEFICIT | |||
Common stock issued for service, Shares | 110,000 | ||
Common stock issued for service, Amount | $ 462,000 | $ 462,000 | |
Non-cash stock compensation expense | $ 462,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 1 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
INCOME TAXES | |||
US statutory rate | 21.00% | 21.00% | 21.00% |
Tax rate difference | (1.00%) | (1.00%) | |
PRC tax discount | 4.00% | 0.00% | |
Loss not subject to income tax | (25.00%) | (22.00%) | |
Effective tax rate | (1.00%) | 0.00% |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current | $ 6,047 | $ 800 |
Deferred | ||
Total | 6,047 | 800 |
Deferred | 625 | |
Federal [Member] | ||
Current | ||
Total | ||
Deferred | ||
State [Member] | ||
Current | 800 | 800 |
Total | 800 | 800 |
Deferred | ||
Foreign [Member] | ||
Current | 5,247 | |
Total | 5,247 | |
Deferred |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax asset: | ||
Net operating loss carry forwards | $ 269,052 | $ 92,639 |
Valuation allowance | 269,052 | 92,639 |
Net deferred tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statutory federal income tax rate | 21.00% | 21.00% | 21.00% |
Operating loss carry forwards | $ (860,000) | ||
Operating loss carry forwards expiration year | 2032 | ||
Hong Kong [Member] | |||
Statutory federal income tax rate | 16.50% | ||
PRC [Member] | |||
Statutory federal income tax rate | 25.00% | ||
Statutory federal income tax description | PRC also give tax discount to small enterprise whose annual taxable income exceeding 1 million but not exceeding 3 million. |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Net Sales-Related Party | $ 375,251 | |
Income (Loss) from Operations | (434,199) | (123,305) |
Net loss | (517,192) | (196,078) |
PRC [Member] | ||
Net Sales-Related Party | 375,251 | |
Income (Loss) from Operations | (15,085) | |
Net loss | (15,006) | |
Total [Member] | ||
Net Sales-Related Party | 375,251 | |
Income (Loss) from Operations | (434,199) | (123,305) |
Net loss | (517,192) | (196,078) |
USA [Member] | ||
Net Sales-Related Party | ||
Income (Loss) from Operations | (108,220) | |
Net loss | $ (181,072) |
SEGMENT REPORTING (Details 1)
SEGMENT REPORTING (Details 1) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total Reportable Assets | $ 177,689 | $ 86,073 |
PRC [Member] | ||
Total Reportable Assets | 167,774 | 26,009 |
USA [Member] | ||
Total Reportable Assets | 35,672 | 85,821 |
Eliminiation Adjustment [Member] | ||
Total Reportable Assets | $ (25,757) | $ (25,757) |