Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2020shares | |
Document And Entity Information | |
Entity Registrant Name | Hudson Capital Inc. |
Entity Central Index Key | 0001687542 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2020 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filer | No |
Entity's Reporting Status Current | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 6,406,146 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2020 |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 3,274,287 | $ 13,567 |
Accounts receivable, net | 7,264 | |
Other receivables | 105,149 | 646,690 |
Loans to third parties, net | 4,800,000 | |
Prepayments | 9,470 | 17,047 |
Due from related parties | 81,756 | 76,466 |
Total Current Assets | 3,470,662 | 5,561,034 |
Non-current assets | ||
Property and Equipment, net | 108,467 | 1,503 |
Intangible assets, net | 806 | 1,940 |
Long-term prepayment | 3,031 | 4,580 |
Goodwill | ||
Deferred Tax Assets | ||
Total Assets | 3,582,966 | 5,569,057 |
Current liabilities | ||
Accrued payroll | 168,016 | 621,483 |
Advance from customers | ||
Other payables and accruals | 244,370 | 201,469 |
Due to related party | 358,241 | 279,925 |
Taxes payable | 1,053,249 | 986,195 |
Total Current Liabilities | 1,823,876 | 2,089,072 |
Provision of other liabilities | 1,127,945 | 959,881 |
Deferred tax liabilities | ||
Total Liabilities | 2,951,821 | 3,048,953 |
Shareholders' equity | ||
Common Stock ($0.005* par value, unlimited shares authorized, 6,406,146 and 4,422,837* shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively) | 32,031 | 22,114 |
Additional paid in capital | 32,931,128 | 28,441,045 |
Statutory reserve | 3,032,854 | 2,949,930 |
Retained earnings | (34,537,976) | (25,379,699) |
Accumulated other comprehensive loss | (826,892) | (3,513,286) |
Total Shareholders' Equity | 631,145 | 2,520,104 |
Total Liabilities and Shareholders' Equity | $ 3,582,966 | $ 5,569,057 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | |||
Statement of Financial Position [Abstract] | ||||
Common stock, par value | [1] | $ 0.005 | $ 0.005 | |
Common stock, shares authorized | Unlimited | Unlimited | ||
Common stock, shares issued | 6,406,146 | 4,422,837 | [1] | |
Common stock, shares outstanding | 6,406,146 | 4,422,837 | [1] | |
[1] | The number of shares outstanding was adjusted retroactively for all period presented to reflect the 5 to 1 reverse stock split change which was effective on October 29, 2020. |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||
Revenue | |||||
Total revenue | $ 618 | $ 1,366,417 | $ 14,402,329 | ||
Cost of revenues | 123 | 654,979 | |||
Gross profit | 618 | 1,366,294 | 13,747,350 | ||
Operating expenses | |||||
Selling and marketing expenses | 10,748 | 100,460 | 576,526 | ||
General and administrative expenses | 4,123,108 | 1,893,499 | 11,664,394 | ||
Research & Development Expense | 3,512,512 | ||||
Donation expenses | |||||
Total Operating expenses | 4,133,856 | 1,993,959 | 15,753,432 | ||
(Loss) income from operations | (4,133,238) | (627,665) | (2,006,082) | ||
Other income (expenses) | |||||
Interest income on bank deposit | 14 | 666 | 16,182 | ||
Loss on disposal of a subsidiary | (2,062,155) | ||||
Other income (expenses) | 38,870 | (5,611,484) | (510,200) | ||
Interest income from loans to third parties | 365,000 | 2,191,631 | 6,465,042 | ||
Impairment loss on loans to third parties and property and equipment | (5,345,999) | (57,941,663) | (7,423,651) | ||
Total other (expenses) income, net | (4,942,115) | (61,360,850) | (3,514,782) | ||
(Loss) Income before income tax expenses | (9,075,353) | (61,988,515) | (5,520,864) | ||
Income tax (benefit) expenses | 7,243 | (1,702,127) | |||
Net (loss) income | (9,075,353) | (61,995,758) | (3,818,737) | ||
Other comprehensive (loss) income | |||||
Foreign currency translation (loss) gain | 2,686,394 | (365,258) | (2,415,919) | ||
Comprehensive (loss) Income | $ (6,388,959) | $ (62,361,016) | $ (6,234,656) | ||
Weighted average number of shares, basic and diluted | 6,406,146 | 4,422,837 | [1] | 4,422,837 | [1] |
Basic and diluted (loss) earnings per share | $ (1.42) | $ (14.02) | [1] | $ (0.85) | [1] |
Third Parties [Member] | |||||
Revenue | |||||
Total revenue | $ 618 | $ 1,366,417 | $ 14,402,329 | ||
Related Parties [Member] | |||||
Revenue | |||||
Total revenue | |||||
[1] | The number of shares outstanding was adjusted retroactively for all period presented to reflect the 5 to 1 reverse stock split change which was effective on October 29, 2020. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income | $ (9,075,353) | $ (61,995,758) | $ (3,818,737) |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 1,179 | 62,358 | 59,907 |
Deferred taxes | 1,790,260 | (1,733,152) | |
Loss on disposal of a subsidiary | 2,062,155 | ||
Impairment loss on loans to third parties | 4,800,000 | 56,242,596 | 7,346,903 |
Impairment loss on fixed assets | 76,748 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | 7,264 | (1,450,857) | (13,327,901) |
Other receivables | 541,541 | 2,782,583 | (3,055,473) |
Prepayments | 7,577 | 23,842 | 254,879 |
Due from related parties | 73,026 | 389,337 | (191,832) |
Long-term office rental deposit | 669,888 | ||
Accrued payroll | (453,467) | 80,431 | (454,552) |
Other payables and accruals | 42,901 | (78,971) | (381,174) |
Tax payable | 67,054 | 202,515 | (4,780,002) |
Accounts Payable | (70,242) | ||
Other Assets | |||
Long-term prepayment | 1,549 | 3,705 | |
Estimated Liabilities | 168,064 | 971,268 | |
Advance from customers | (94,688) | 76,203 | |
Net cash (used in)/provided by operating activities | (3,818,665) | (1,071,379) | (17,266,382) |
Cash flows from investing activities: | |||
Purchases of property and equipment | (108,095) | (175,972) | |
Loans to third parties | (200,000) | (39,417,810) | |
Collection of loans to third parties | 31,870,523 | ||
Net cash (used in)/provided by investing activities | (108,095) | (200,000) | (7,723,259) |
Cash flows from financing activities: | |||
Proceeds from related party | (31,201) | ||
Repayment to a related party | (128,407) | ||
Proceeds from shares placement (net of offering cost of $222,000) | 4,278,000 | ||
Net cash provided by/ (used in) financing activities | 4,278,000 | (31,201) | (128,407) |
Effect of exchange rate changes on cash | 2,909,480 | (262,681) | (468,386) |
Net increase (decrease) in cash | 3,260,720 | (1,565,261) | (25,586,434) |
Cash at beginning of year | 13,567 | 1,578,828 | 27,165,262 |
Cash at end of year | 3,274,287 | 13,567 | 1,578,828 |
Supplemental disclosure of cash flow information | |||
Interest paid | |||
Income taxes paid | 2,503,688 | ||
Non- cash investing activities | |||
Net assets from acquisition of Anytrust | |||
Deferred offering costs |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Statement of Cash Flows [Abstract] | |
Stock issuance cost | $ 222,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Statutory Reserve [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Total | |
Balance at Dec. 31, 2017 | $ 22,114 | $ 28,441,045 | $ 1,828,601 | $ 41,556,125 | $ (732,109) | $ 71,115,776 | |
Balance, shares at Dec. 31, 2017 | [1] | 4,422,837 | |||||
Net (loss) income | (3,818,737) | (3,818,737) | |||||
Appropriations of statutory reserves | 1,083,928 | (1,083,928) | |||||
Foreign currency translation gain (loss) | (2,415,919) | (2,415,919) | |||||
Balance at Dec. 31, 2018 | $ 22,114 | 28,441,045 | 2,912,529 | 36,653,460 | (3,148,028) | 64,881,120 | |
Balance, shares at Dec. 31, 2018 | [1] | 4,422,837 | |||||
Net (loss) income | (61,995,758) | (61,995,758) | |||||
Appropriations of statutory reserves | 37,401 | (37,401) | |||||
Foreign currency translation gain (loss) | (365,258) | (365,258) | |||||
Balance at Dec. 31, 2019 | $ 22,114 | 28,441,045 | 2,949,930 | (25,379,699) | (3,513,286) | 2,520,104 | |
Balance, shares at Dec. 31, 2019 | [1] | 4,422,837 | |||||
Net (loss) income | (9,075,353) | (9,075,353) | |||||
Appropriations of statutory reserves | 82,924 | (82,924) | |||||
Proceeds from issuance of common stock | $ 6,353 | 4,493,647 | 4,500,000 | ||||
Proceeds from issuance of common stock, shares | [1] | 1,983,309 | |||||
Reverse split adjustments | $ 3,564 | (3,564) | |||||
Reverse split adjustments, shares | |||||||
Foreign currency translation gain (loss) | 2,686,394 | 2,686,394 | |||||
Balance at Dec. 31, 2020 | $ 32,031 | $ 32,931,128 | $ 3,032,854 | $ (32,537,976) | $ (826,892) | $ 631,145 | |
Balance, shares at Dec. 31, 2020 | 6,406,146 | ||||||
[1] | The number of shares outstanding was adjusted retroactively for all period presented to reflect the 5 to 1 reverse stock split change which was effective on October 29, 2020. |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Principal Activities | NOTE 1. ORGANIZATION AND PRINCIPAL ACTIVITIES Hudson Capital Inc. (“HUSN” or the “Company”), formerly known as China Internet Nationwide Financial Services, Inc., incorporated in the British Virgin Islands (the “BVI”) on September 28, 2015, is engaged in the business of providing financial advisory services to meet the financial and capital needs of its clients, which comprise largely of small-to-medium sized enterprises, through the Company’s wholly-owned subsidiaries. On April 10, 2020, the board of directors of China Internet Nationwide Financial Services, Inc. (“CIFS”) resolved to change the Company’s name to “Hudson Capital Inc.” to re-brand the Company and better reflect the plans for its next phase of growth. The name change was effected with the British Virgin Islands Registrar of Corporate Affairs on April 23, 2020 and its name change and new ticker symbol on the Nasdaq was changed to HUSN with effect from May 8, 2020. The Company offers commercial payment advisory services, international corporate financing advisory services, intermediary bank loan advisory services and technical services. The Company’s wholly owned subsidiaries include: Hongkong Internet Financial Services Limited, (“HKIFS’) which was established in HongKong on October 7, 2015, and Beijing Yingxin Yijia Internet Technology Co., Ltd., (“Yingxin Yijia”) which was established on December 31, 2015 in Beijing, China by HKIFS. On September 2, 2019, Hong kong Shengqi technology limited(“HKSQ”) company became a shareholder of Beijing Yingxin Yijia. HKSQ was incorporated in Hong Kong on August 29, 2019. Mr. Lin Jianxin is a shareholder of HKSQ. On September 26, 2019, a series of agreements were entered into among HKIFS, HK Shengqi and its shareholders (the “VIE Agreements”). As a result of the VIE Agreements, HK become the primary beneficiary of HKSQ. HUSN is able to exercise control over Sheng Ying Xin and was entitled to substantially all of the economic benefits of Ying Xin Yi Jia through HKSQ, and HUSN treats Ying Xin Yi Jia as its variable interest entity (“VIE”) under U.S. GAAP. As a result, the results of operations, assets and liabilities of Ying Xin Yi Jia and its subsidiary (collectively “VIEs”) have been included in the accompanying consolidated financial statements. Beijing Sheng Ying Xin Management Consulting Co., Ltd. (“Sheng Ying Xin”) was incorporated in Beijing, China on September 16, 2014. On December 29, 2016, Sheng Ying Xin incorporated Kashgar Sheng Yingxin Enterprise Consulting Co., Ltd. (“Kashgar SYX”) in the People’s Republic of China with registered capital of RMB5,000,000 (approximately $726,600), which capital has to be contributed in full by December 31, 2026. The legal representative of Kashgar SYX is Mr. Shaoyong Huang, who is also a 1% equity shareholder of Sheng Ying Xin. HUSN is 60.22% owned by Mr. Jianxin Lin, who also owned 99% of Sheng Ying Xin directly and 1% of Sheng Ying Xin indirectly since its inception, September 16, 2014; Mr. Jianxin Lin is the former chief executive officer of both HUSN and Sheng Ying Xin. So HUSN and Sheng Ying Xin were considered to be under common control since September 28, 2015. On April 26, 2016, a series of agreements were entered into among Yingxin Yijia, Sheng Ying Xin and its shareholders (the “VIE Agreements”). As a result of the VIE Agreements, Yingxin Yijia become the primary beneficiary of Sheng Ying Xin. HUSN is able to exercise control over Sheng Ying Xin and was entitled to substantially all of the economic benefits of Sheng Ying Xin through Yingxin Yijia, and HUSN treats Sheng Ying Xin as its variable interest entity (“VIE”) under U.S. GAAP. As a result, the results of operations, assets and liabilities of Sheng Ying Xin and its subsidiary (collectively “VIEs”) have been included in the accompanying consolidated financial statements. Since HUSN and its subsidiaries were formed in 2015 and did not have significant operations since inception as well as HUSN and Sheng Ying Xin are under common control, the VIE Agreements dated April 26, 2016 were considered a capital transaction in substance. Accordingly, the consolidated balance sheets as of December 31, 2019 and 2018 include the accounts and balances of HUSN and its subsidiaries, Sheng Ying Xin and its subsidiaries at their respective carrying values. The consolidated statements of income and comprehensive income for the period from inception through September 28, 2015 were the historical operations of Sheng Ying Xin. On July 28, 2017, HUSN completed its initial public offering (“IPO”) and issued 2,023,146 shares of common stock to investors at a price of $10.00 per share for a total of $20,231,460 before underwriting discounts and commissions and offering expenses of $1,262,562 and deferred issuing cost of $763,365. According to the underwriting agreement signed on May 9,2017, the Company issued warrants to the underwriter to purchase 91,042 ordinary shares upon the successful completion of the IPO at an exercise price of 120% of the IPO price, namely $12 dollars per share, and exercisable for two years. On November 21, 2017 the underwriter exercised all the warrants in connection with the IPO to purchase 91,042 shares. As of December 31, 2017 the number of shares issued and outstanding is 22,114,188. On March 10, 2017, Sheng Ying Xin set up a wholly owned subsidiary Fu Hui (Shenzhen) Commercial Factoring Co., Ltd (“FuhuiSZ”) which mainly provides supply chain financing to commercial enterprises. On September 19, 2017 Sheng Ying Xin set up another wholly owned subsidiary Yingda Xincheng (Beijing) Insurance Broker Co., Ltd (“Yin Da Xin Cheng”) which mainly provides insurance brokerage services. On November 23, 2017, Sheng Ying Xin acquired a 100% equity interest in Beijing Anytrust Information Technology Co., Ltd (“Anytrust”) which mainly provides enterprise financial data services, including system management, application development, business intelligence and maintenance services. On September 25, 2019, Yin Da Xin Cheng carried out industrial and commercial deregistration. On May 25, 2018, HKIFS set up a wholly owned subsidiary CIFS (Xiamen) Fianncial leasing company which mainly provides financial leasing services to commercial enterprises. Also on May 25, 2018, Sheng Yin Xin set up another wholly owned subsidiary Fuhui (Xiamen) Commercial Factoring Co., Ltd which mainly provides factoring services to commercial enterprises. On July 11, 2018 Sheng Ying Xin set up another wholly owned subsidiary Zhizhen Investment & Research (Beijing) Information Consulting Co., Ltd which mainly provides investment research services. On July 25, 2018, Sheng Ying Xin set up a wholly-owned subsidiary Hangzhou Yuchuang Investment Partnership (Limited Partnership) which is an investment vehicle for our strategic investing activities. On December 30, 2018, Sheng Yin Xin disposed Anytrust and transferred its equity interest in Anytrust to Mr. Jainxin Lin, the Company’s Chief Executive Officer and Chairman of the Board, with no consideration and incurred approximate loss of $2,062,000. On September 2, 2019, Hongkong Shengqi Technology Limited (“HKSQ”) became a shareholder of WFOE. HKSQ was incorporated in Hong Kong on August 29, 2019. Mr. Jianxin Lin is the sole shareholder of HKSQ. On September 26, 2019, a series of agreements were entered into among HKIFS, HKSQ and its shareholder (the “HKSQ VIE Agreements”). As a result of the HKSQ VIE Agreements, HKIFS become the primary beneficiary of HKSQ. The contractual agreements among HKSQ, WFOE and Sheng Ying Xin essentially confer control and management as well as the economic benefits of Sheng Ying Xin onto WFOE. In spite of the shareholder change in WFOE, we are able to retain full control and management over Sheng Ying Xin and are still entitled to substantially all of the economic benefits of WFOE through the HKSQ VIE Agreements. Accordingly, the results of operations, assets and liabilities of HKSQ, WFOE and Sheng Ying Xin have been included in the accompanying consolidated financial statements. On April 9, 2020, we incorporated a New York subsidiary, Hudson Capital USA Inc. On September 9, 2020, we incorporated a Delaware subsidiary, Hudson Capital Merger Sub I Inc. On September 9, 2020, we incorporated a Delaware subsidiary, Hudson Capital Merger Sub II Inc. As of December 31, 2020, the Company’s corporate structure is set forth below : The following is a summary of the VIE agreements: Exclusive Business Cooperation Agreement Pursuant to the terms of the certain Exclusive Business Cooperation Agreement dated April 26, 2016, between Sheng Ying Xin and Yingxin Yijia (the “Exclusive Business Cooperation Agreement”), Yingxin Yijia is the exclusive technology services and consultancy service provider to Sheng Ying Xin. Sheng Ying Xin agreed to pay Yingxin Yijia all fees payable for technology services and consultancy service, the amount of which equals 100% of the net profit of Sheng Ying Xin. Any payment from Sheng Ying Xin to Yingxin Yijia must comply with applicable Chinese laws. Yingxin Yijia is also obligated to bears all losses of Sheng Ying Xin. Further, the parties agreed that Yingxin Yijia shall retain sole ownership of all intellectual property developed in connection with providing technology services to Sheng Ying Xin. The Exclusive Business Cooperation Agreement has a ten-year term. The term of these agreements may be extended if confirmed in writing by Yingxin Yijia, prior to the expiration of the term. The extended term shall be determined by Yingxin Yijia, and Sheng Ying Xin shall accept such extended term unconditionally. Pursuant to the terms of the certain Exclusive Business Cooperation Agreement dated September 26, 2019, between HKIFS and HKSQ (the “Exclusive Business Cooperation Agreement”), HKIFS is the exclusive technology services and consultancy service provider to HKSQ. HKSQ agreed to pay HKIFS all fees payable for technology services and consultancy service, the amount of which equals 100% of the net profit of HKSQ. Any payment from HKSQ to HKIFS must comply with applicable Chinese laws. HKIFS is also obligated to bears all losses of HKSQ. Further, the parties agreed that HKIFS shall retain sole ownership of all intellectual property developed in connection with providing technology services to HKSQ. The Exclusive Business Cooperation Agreement has a ten-year term. The term of these agreements may be extended if confirmed in writing by HKIFS, prior to the expiration of the term. The extended term shall be determined by HKIFS, and HKSQ shall accept such extended term unconditionally. Power of Attorney Pursuant to the terms of a certain Power of Attorney Agreement dated April 26, 2016, among Yingxin Yijia and the shareholders of Sheng Ying Xin (the “Power of Attorney”), each of the shareholders of Sheng Ying Xin irrevocably appointed Yingxin Yijia as their proxy to exercise on each of such shareholder’s behalf all of their voting rights as shareholders pursuant to PRC law and the Articles of Association of Sheng Ying Xin, including the appointment and election of directors of Sheng Ying Xin. The term of the Power of Attorney is valid so long as such shareholder is a shareholder of Sheng Ying Xin. Pursuant to the terms of a certain Power of Attorney Agreement dated September 26, 2019, among HKIFS and the shareholders of HKSQ (the “Power of Attorney”), each of the shareholders of HKSQ irrevocably appointed HIIFS as their proxy to exercise on each of such shareholder’s behalf all of their voting rights as shareholders pursuant to PRC law and the Articles of Association of HKSQ, including the appointment and election of directors of HKSQ. The term of the Power of Attorney is valid so long as such shareholder is a shareholder of HKSQ. The contractual agreements between WFOE and Sheng Ying Xin essentially confer control and management as well as the economic benefits of Sheng Ying Xin onto WFOE. In spite of the shareholder change in WFOE, we are able to retain full control and management over Sheng Ying Xin and are still entitled to substantially all of the economic benefits of WFOE through the HKSQ VIE Agreements. Exclusive Option Agreement Pursuant to the terms of a certain Exclusive Option Agreement dated April 26, 2016, among Yingxin Yijia, Sheng Ying Xin and the shareholders of Sheng Ying Xin (the “Exclusive Option Agreement”), the shareholders of Sheng Ying Xin granted Yingxin Yijia an irrevocable and exclusive purchase option (the “Option”) to acquire Sheng Ying Xin’s equity interests and/or remaining assets, but only to the extent that the acquisition does not violate limitations imposed by PRC law on such transactions. Accordingly, the Option is exercisable at any time at Yingxin Yijia’s discretion so long as such exercise and subsequent acquisition of Sheng Ying Xin does not violate PRC law. The consideration for the exercise of the Option is RMB 1 in total. To the extent Sheng Ying Xin shareholders receive any of such consideration, the Option requires Sheng Ying Xin shareholders to transfer (and not retain) the same to Sheng Ying Xin or Yingxin Yijia. The Exclusive Option Agreement has a ten-year term. The term of these agreements may be extended if confirmed in writing by Yingxin Yijia, and if no written confirmation was obtained from Yingxin Yijia, the Exclusive Option Agreement will be automatically renewed, the term of the renewed agreement will be determined till Yingxin Yijia’s written confirmation. Pursuant to the terms of a certain Exclusive Option Agreement dated September 26, 2019, among HKIFS, HKSQ and the shareholders of HKSQ (the “Exclusive Option Agreement”), the shareholders of HKSQ granted HKIFS an irrevocable and exclusive purchase option (the “Option”) to acquire HKSQ’s equity interests and/or remaining assets, but only to the extent that the acquisition does not violate limitations imposed by PRC law on such transactions. Accordingly, the Option is exercisable at any time at HKIFS’s discretion so long as such exercise and subsequent acquisition of HKSQ does not violate PRC law. The consideration for the exercise of the Option is RMB 1 in total. To the extent HKSQ shareholders receive any of such consideration, the Option requires HKSQ shareholders to transfer (and not retain) the same to Sheng HKSQ or HKIFS. The Exclusive Option Agreement has a ten-year term. The term of these agreements may be extended if confirmed in writing by HKIFS, and if no written confirmation was obtained from HKIFS, the Exclusive Option Agreement will be automatically renewed, the term of the renewed agreement will be determined till HKIFS’s written confirmation. Share Pledge Agreement Pursuant to the terms of a certain Share Pledge Agreement dated April 26, 2016 among Yingxin Yijia and the shareholders of Sheng Ying Xin (the “Share Pledge Agreement”), the shareholders of Sheng Ying Xin pledged all of their equity interests in Sheng Ying Xin, including the proceeds thereof, to guarantee all of Yingxin Yijia’s rights and benefits under the Exclusive Business Cooperation agreement, the Power of Attorney and the Exclusive Option Agreement. Prior to termination of the Share Pledge Agreement, the pledged equity interests cannot be transferred without Yingxin Yijia’s prior written consent. All of the equity interest pledges with respect to the equity interests of Sheng Ying Xin according to the Share Pledge Agreement have been registered with the relevant office of the Administration for Industry and Commerce in China. The Share Pledge Agreement will be valid until all the payments related to the services provided by Yingxin Yijia to Sheng Ying Xin due under the Exclusive Business Cooperation Agreements have been fulfilled. Therefore, the Share Pledge Agreement shall only be terminated when the payments related to the ten-year Exclusive Business Cooperation Agreement are paid in full and Yingxin Yijia does not intend to extend the term of the Exclusive Business Cooperation Agreement. Summarized below is the information related to the combined VIEs’ assets and liabilities as of December 31, 2020 and 2019, respectively: As of As of Current assets $ 48,287,298 $ 45,180,787 Plant and equipment, net 373 1,503 Other noncurrent assets 3,836 6,520 Total assets 48,291,507 45,188,810 Total liabilities (48,851,480 ) (45,964,142 ) Net assets (liabilities) $ (559,973 ) $ (775,332 ) Summarized below is the information related to the financial performance of the VIEs reported in the Company’s consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2020, 2019 and 2018, respectively: Year ended Year ended 2019 Year ended 2018 Revenues $ 618 $ 1,366,417 $ 14,402,329 Cost of revenues $ - $ 123 $ 654,979 Total operating expenses $ 102,135 $ 784,840 $ 12,329,417 Net loss $ 248,314 $ 53,859,306 $ 1,530,958 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). (b) Principles of Consolidation The consolidated financial statements include the financial statements of all the subsidiaries and VIEs of the Company. All transactions and balances between the Company and its subsidiaries and VIEs have been eliminated upon consolidation (c) Foreign currency translation and transactions The functional currency of HUSN, Hudson Capital USA Inc., Hudson Capital Merger Sub I Inc., Hudson Capital Merger Sub II Inc., HKIFS and HKSQ are in United States dollars (“US$” or “$”). The functional currency of Yingxin Yijia, CIFS (Xiamen) Financial Leasing, Sheng Ying Xin and its subsidiaries are Renminbi (“RMB”), and the PRC is the primary economic environment in which the Company operates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange differences are included in the determination of net income (loss) for the respective periods. For financial reporting purposes, the financial statements of the Company’s PRC subsidiary and the financial statements of the VIEs are prepared using RMB and are translated into the Company’s reporting currency, the US$. Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and Shareholders’ equity is translated at historical exchange rates except for the change in retained earnings during the year which is the result of the net income (loss). The cumulative translation adjustments are recorded in accumulated other comprehensive income (loss) in the accompanying consolidated statements of shareholders’ equity. The exchange rates used are as follows: December 31, 2020 December 31, 2019 RMB exchange rate at balance sheets dates, 6.5249 6.9762 Year Ended December 31, 2020 2019 2018 Average exchange rate for each year 6.9010 6.8944 6.6174 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. The source of the exchange rates is generated from the People’s Bank of China. (d) Use of estimates The preparation of these consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosures of contingent assets and liabilities. Management makes its estimates based on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s consolidated financial statements mainly include the allowance for doubtful accounts, the valuation allowance of deferred tax assets, the estimated useful lives of long-lived assets, the impairment assessment of goodwill, intangibles and other long-lived assets, and the fair value of identifiable assets and liabilities acquired through business combination. (e) Cash Cash and cash equivalents consist of cash on hand, cash on deposit and other highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. The Company maintains cash with various financial institutions mainly in the PRC. As of December 31, 2020 and 2019, the Company had no cash equivalents. (f) Accounts receivable and loans to third parties Accounts receivable and loans to third parties are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts as needed. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable and loans receivable. The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Based on management’s assessment of the collectability of the accounts receivable and loans to third party, allowance for loans to third party was $41,782,173 as of December 31, 2020, allowance for loans to third party was $39,402,683 as of December 31, 2019, and, allowance for loans to third party was $7,119,594 as of December 31, 2018. The value-added tax receivable from customers included in the accounts receivable in the balance sheet were $0, and $97,287 as of December 31, 2020 and 2019, respectively. The accounts receivable, except for the principal of factoring as of December 31, 2019 were 0.07% collected as of March 31, 2020. (g) Property and Equipment The Company records equipment at cost less accumulated depreciation. The Company computes depreciation using the straight-line method over the estimated useful lives of the assets with a 5% residual value for electronic equipment, and a 5% residual value for furniture and a 0% residual value for leasehold improvement. Estimated useful lives of property and equipment: Useful Life Furniture 10 years Electronic equipment 3 years Motor vehicle 5 years Leasehold improvements Shorter of life of asset or lease The Company eliminates the cost and related accumulated depreciation of assets sold or otherwise retired from the accounts and includes any gain or loss in the statement of operations. The Company charges maintenance, repairs and minor renewals directly to expense as incurred. (h) Intangible Assets Intangible assets, comprising accounting software and big data platform, which are separable from the property and equipment, are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets. (i) Impairment of Long-lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. For the year ended December 31, 2020, the Company did not recognize any impairment loss of its long-lived assets. For the year ended December 31, 2019, the Company did not recognize any impairment loss of its long-lived assets. For the year ended December 31, 2018, the Company recognized $73,999 impairment loss of its long-lived assets. (j) Statutory Reserve The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve is required to be at least 10% of the after tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities’ registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of Board of Directors. (k) Revenue recognition The Company adopted ASC Topic 606, “Revenue from Contracts with Customers” effective January 1, 2019, applying the modified retrospective method. In accordance with ASC Topic 606, revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. In determining when and how much revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company’s services include commercial payment advisory services, intermediary bank loan advisory services, international corporate financing advisory services, technical services and factoring services. For commercial payment advisory service after signing contracts with the client, the Company starts to identify and select banks and financial products and coordinates with banks to structure financing solutions for the client. Then the client prepares application materials and sends them to the bank. When approved by the bank, the client will deposit cash with the bank or purchases wealth management products sold by the bank. After this step, the bank will issue a letter of guarantee, which the client will pledge as security for the acceptance bills. The letter of guarantee is a document that the bank provides certifying itself as guarantor. The Company’s service fee is a percentage of the amount of cash deposited with or wealth management products purchased from the bank by the client. The Company recognizes revenue after the client receives a credit contract from the bank and when the Company receives a contract completion confirmation from the client. For intermediary bank loan advisory services, the Company matches small-to-medium sized enterprises (“SMEs”) with financing sources. The Company charges borrowers an introduction fee which is calculated at a percentage of the loan. The Company recognizes revenue after the client receives a bank credit contract from the bank and when the Company receives a contract completion confirmation from the client. The Company typically receives the contract completion confirmation when the client receives the bank financing and signs off on the contract completion confirmation. For international corporate financing advisory services, the Company works with overseas banks to structure and provide clients with financing solutions to obtain facilities from overseas banks for the clients’ offshore affiliates. After signing the contract with the client, the Company will identify overseas banks and domestic banks, structure financing solutions and facilitate application processes. After the client provides security to the domestic bank, the domestic bank will issue a letter of guarantee to the overseas bank. The overseas bank will provide credit to the affiliate designated by the client. The Company’s service fee is a percentage of credit granted by the overseas bank to the offshore affiliate. The Company recognizes revenue after the offshore affiliate receives credit approval notice from the offshore bank and when the Company receives a contract completion confirmation from the client. The Company typically receives the contract completion confirmation when the affiliate receives the bank financing and the client signs off on the contract completion confirmation. For technical services, after signing the contract, the Company provides the clients with the technical services and charges a fee for the technical service. The Company recognizes revenue when the services are rendered. For factoring services, generally after we checked the documents such as client information, contracts, invoices supporting the client’s credit worth, authenticity of the business contracts and the collectability of receivables, we will sign the factoring service contract with client. Upon signing the contract, we request the client to pay us the management fee which we record as revenue upon receipt. After signing the factoring contract, we will wire the factored amount to the client’s designated party, generally its suppliers, and will collect the amount over the contact period. At each month end we will record the factoring service revenue based on the service fee ratio and the amount we factored. There is no claw back provisions or other guarantees. Full services fees are due upon the contract completion confirmation from the client. (l) Taxation The Company follows the guidance of ASC Topic 740 “Income taxes” and uses the assets and liability method to account for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets, if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in statement of operations and comprehensive income (loss) in the period that includes the enactment date. The Company follows a more likely than not threshold and a two-step approach for the measurement of tax positions and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including the resolution of related appeals or litigation process, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company has elected to classify interest related to an uncertain tax position (if and when required) to interest expense, and classify penalties related to an uncertain tax position (if and when required) as part of other expense in the consolidated statements of operations and comprehensive income (loss). The tax authority of the PRC government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises had completed their relevant tax filings, hence the Company’s tax filings may not be finalized. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings which may lead to additional tax liabilities. The tax returns of the Company’s PRC subsidiaries and VIEs are subject to examination by the relevant tax authorities. According to the PRC Tax Administration Law on the Levying and Collection of Taxes, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB100,000. In the case of transfer pricing issues, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The Company did not have any material interest or penalties associated with tax positions for the years ended December 31, 2020, 2019, and 2018 and did not have any significant unrecognized uncertain tax positions as of December 31, 2020, 2019, and 2018. The Company does not expect that the position of unrecognized tax benefits will significantly increase or decrease within 12 months of December 31, 2020. (m) Cost of revenues The Company’s cost of revenues mainly consists of revenue-generating staff costs. (n) Research and development expenses The Company accounts for expenses for the enhancement, maintenance and technical support for the Company’s Internet platforms and intellectual property that are used in its daily operations as research and development expenses. Research and development costs are charged to expense when incurred. Expenses for research and development for the years ended December 31, 2020, 2019 and 2018 were approximately nil and nil and US$3,512,512, respectively. (o) Comprehensive income (loss) The Company presents comprehensive income (loss) in accordance with ASC 220, “Comprehensive Income” (p) Earnings (loss) per Share Earnings (loss) per share (“EPS”) are calculated in accordance with ASC Topic 260, “Earnings Per Share”. Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common stock. The dilutive effect of outstanding common share warrants and options are reflected in the diluted earnings per share by application of the treasury stock method when the impact is dilutive. Potential common shares that have an anti-dilutive effect are excluded from the calculation of diluted EPS. There is no dilutive effect for the years ended December 31, 2020, 2019 and 2018. (q) Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable, other receivable and short term loans approximate their fair values because of the short-term nature of these instruments. (r) Goodwill Goodwill is the excess of the consideration transferred over the fair value of the acquired assets and assumed liabilities in a business combination. The Company tests goodwill for impairment at the reporting unit level on an annual basis and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. The Company first has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the company decides, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. (s) Jobs Act accounting election The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows the Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, the financial statements may not be comparable to companies that comply with public company effective dates. (t) Recently issued accounting standards In June 2016, the FASB issued ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”, which will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. The standard did not have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles — Goodwill and Other (Topic 350): simplifying the test for goodwill impairment”, the guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not the difference between the fair value and carrying amount of goodwill which was the step 2 test before. The ASU should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The standard did not have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Changes to the Disclosure Requirements for Fair Value Measurement.” This standard eliminates the current requirement to disclose the amount or reason for transfers between level 1 and level 2 of the fair value hierarchy and the requirement to disclose the valuation methodology for level 3 fair value measurements. The standard includes additional disclosure requirements for level 3 fair value measurements, including the requirement to disclose the changes in unrealized gains and losses in other comprehensive income during the period and permits the disclosure of other relevant quantitative information for certain unobservable inputs. The new guidance is effective for interim and annual periods beginning after December 15, 2019. The standard did not have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Internal-Use Software — Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement.” This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement service contract with the guidance to capitalize implementation costs of internal use software. The ASU also requires that the costs for implementation activities during the application development phase be capitalized in a hosting arrangement service contract, and costs during the preliminary and post implementation phase are expensed. The new guidance is effective for interim and annual periods beginning after December 15, 2019. The standard did not have a material impact on our consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, (“ASU 2018-17”). ASU 2018-17 requires reporting entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety for determining whether a decision-making fee is a variable interest. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. Entities are required to apply the amendments in ASU 2018-17 retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The standard did not have a material impact on our consolidated financial statements In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, (“ASU 2019-04”). ASU 2019-04 clarifies and improves areas of guidance related to the recently issued standards on credit losses (ASU 2016-13), hedging (ASU 2017-12), and recognition and measurement of financial instruments (ASU 2016-01). The amendments generally have the same effective dates as their related standards. If already adopted, the amendments of ASU 2016-01 and ASU 2016-13 are effective for fiscal years beginning after December 15, 2019 and the amendments of ASU 2017-12 are effective as of the beginning of the Company’s next annual reporting period; early adoption is permitted. The standard did not have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. ASU 2019-12 will be effective for the Company in the first quarter of 2021. The Company does not expect the adoption of the new accounting rules to have a material impact on the Company’s financial condition, results of operations, cash flows or disclosures. In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, (“ASU 2020-03”). ASU 2020-03 improves various financial instruments topics, including the CECL Standard. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments related to Issue 1, Issue 2, Issue 4 and Issue 5 were effective upon issuance of ASU 2020-03. The amendments related to Issue 3, Issue 6 and Issue 7 were effective for the Company beginning on January 1, 2020. The Company does not anticipate that the adoption of the new standard will have a material effect on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. The amendments in this standard can be applied anytime between the first quarter of 2020 and the fourth quarter of 2022. The Company is currently in the process of evaluating the impact of adoption of the new rules on the Company’s financial condition, results of operations, cash flows and disclosures. Other than the above, management does not believe that any of the recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. (u) Going Concern The Company has suffered from losses from operation and significant accumulated deficits. It’s net loss for the year ended December 31, 2020 and 2019 were $9,075,353 and $61,995,758, respectively, and turned the retained earnings as of December 31, 2018 to 2019 from $36,653,460 to (25,379,698). As of December 31, 2020 and 2019, the Company has cash and cash equivalents of $3,274,287 and $13,567, respectively and net cash used in operating activities during the year ended December 31, 2020 and 2019 were $3,818,665 and $1,071,378, respectively. The Company comes to have insufficient cash flows generated from operations and provided for development. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The management determines that additional effort will be required to improve the operation so that the Company may generate more profits to sustain its continuous. The Company may explore the channels to raise additional capital or any opportunities to improve the cash flow in the years to come. The Company had raised $4.278,000 from share placement to improve the financial position and cash flow as of December 31, 2020. |
Cash
Cash | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Cash | NOTE 3. CASH Cash consisted of the following: As of December 31, 2020 As of December 31, 2019 Cash on hand $ - $ - Cash in banks 3,247,287 13,567 Total cash $ 3,247,287 $ 13,567 |
Other Receivables
Other Receivables | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Other Receivables | NOTE 4. OTHER RECEIVABLES Other receivables consisted of the following: As of December 31, 2020 As of December 31, 2019 Interest receivable $ - $ 570,862 Others 105,149 75,828 Total $ 105,149 $ 646,690 Interest receivable represents interest income earned on loans to third parties (See Note 5). |
Loans to Third Parties
Loans to Third Parties | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Loans to Third Parties | NOTE 5. LOANS TO THIRD PARTIES The Company lends their own funds to eligible third parties occasionally and receives interest income to better utilize the Company’s cash. Loans to third parties consisted of direct loans and entrusted loan as follows: As of December 31, As of December 31, Direct loans to third parties $ 12,200,000 $ 12,200,000 Entrusted loans to third parties 36,782,173 34,402,684 Impairment on uncollectable loans (48,982,173 ) (41,802,684 ) Total loans to third parties $ - $ 4,800,000 Direct loans The Company lends their own funds directly to third parties. Due to the COVID-19 pandemic, the Company has agreed to extend the due dates of the loans and the detailed direct loan information as of December 31, 2020 is as follows: Borrower Amount Annual Interest rate Due dates (after extension) A $ 4,000,000 5 % Feb 7, 2021 B 5,000,000 15 % Jan 28, 2019 C 3,000,000 5 % Jan 6, 2021 C 200,000 5 % Jun 26, 2021 Total $ 12,200,000 All the above loans were fully impaired as at December 31, 2020 and no extension agreements were executed for them and are overdue. The Company lends their own funds directly to third parties. The detailed direct loan information as of December 31, 2019 is as follows: Borrower Amount Annual Interest rate Due dates A $ 4,000,000 5 % Aug 7, 2020 B 5,000,000 15 % Jan 28, 2019 C 3,000,000 5 % Jul 6, 2020 C 200,000 5 % Dec 26, 2020 Total $ 12,200,000 The detailed direct loan information as of December 31, 2018 is as follows: Borrower Amount Annual Interest rate Due dates A $ 4,000,000 5 % August 6, 2019 B 5,000,000 15 % January 28, 2019 C 3,000,000 5 % July 6, 2019 Total $ 12,000,000 Management assessed the collectability of loans to third parties and determined that an impairment of $12,200,000 was required as of December 31, 2020. The interest income from such direct loans was $365,000, $422,284 and $1,133,407 for the years ended December 31, 2020, 2019 and 2018, respectively. Entrusted loans The Company also deposits (“entrust”) its funds in trust accounts with certain bank lenders, who will, in turn, make loans to borrowers. The balance of entrusted loans as of December 31, 2020 was $36,782,173 to four borrowers. The detailed entrusted loan information as of December 31, 2020 is as follows: Borrower Amount Annual Interest rate Due dates A $ 3,065,181 16 % October 23, 2018 A 6,130,362 16 % December 26, 2018 B 4,597,772 16 % May 30, 2019 B 5,364,067 16 % July 27, 2019 C 7,662,953 16 % June 9, 2019 C 6,130,362 16 % July 9, 2019 D 3,831,476 16 % September 7, 2019 Total $ 36,782,173 The balance of entrusted loans as of December 31, 2019 was $34,402,684 to four borrowers. The detailed entrusted loan information as of December 31, 2019 is as follows: Borrower Amount Annual Interest rate Due dates A $ 2,866,890 16 % October 23, 2018 A 5,733,781 16 % December 26, 2018 B 4,300,335 16 % May 30, 2019 B 5,017,058 16 % July 27, 2019 C 7,167,225 16 % June 9, 2019 C 5,733,781 16 % July 9, 2019 D 3,583,614 16 % September 7, 2019 Total $ 34,402,684 The balance of entrusted loans as of December 31, 2018 was $34,969,111 to four borrowers. The detailed entrusted loan information as of December 31, 2018 is as follows: Borrower Amount Annual Interest rate Due dates A $ 2,914,093 16 % October 23, 2018 A 5,828,185 16 % December 26, 2018 B 4,371,139 16 % May 30, 2019 B 5,099,662 16 % July 27, 2019 C 7,285,231 16 % June 5, 2019 C 5,828,185 16 % July 9, 2019 D 3,642,616 16 % September 7, 2019 Total $ 34,969,111 $34,402,684 of the entrusted loan balance as of December 31, 2019 due from all borrower was not collected subsequently. Management assessed the collectability of these entrusted loans and determined that an impairment of $34,402,684 was required as of December 31, 2019. The interest income from such entrusted loans was $0, $2,043,124 and $5,109,237 for the years ended December 31, 2020, 2019 and 2018. |
Due from Related Parties
Due from Related Parties | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Due from Related Parties | NOTE 6. DUE FROM RELATED PARTIES Due from related party consists of the following: As of December 31, As of December 31, Sheng Ying Xin (Beijing) Film Industry Co., Ltd. $ 46,416 $ 43,412 Beijing ZhipingScience and Technology Development Co., Ltd. 30,214 28,259 Anytrust Information Technology Co., Ltd 5,126 4,795 Total due from related party $ 81,756 $ 76,466 As of December 31, 2020, the Company has related party receivable of $81,756, due to advances made on behalf of these related parties. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | NOTE 7. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: As of December 31, As of December 31, Furniture $ 460 $ 430 Electronic equipment 15,931 7,329 Motor vehicle 100,000 7,329 Leasehold improvement - - Total property and equipment 116,391 7,759 Less: accumulated depreciation (7,924 ) (6,256 ) Less: impairment - - Property and equipment, net $ 108,467 $ 1,503 Depreciation expense was $703, $60,910 and $58,369, respectively for the years ended December 31, 2020, 2019, and 2018. |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | NOTE 8. INTANGIBLE ASSETS, NET The intangible assets consisted of the following: As of December 31, As of December 31, Accounting software $ 7,650 $ 7,155 Less: accumulated amortization (6,844 ) (5,215 ) Intangible assets, net $ 806 $ 1,940 Amortization expense was $476, $1,448 and $1,538, respectively, for the years ended December 31, 2020, 2019, 2018. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 9. RELATED PARTY TRANSACTIONS For the year ended December 31, 2020, the Company has entered into sublease agreement with PX Capital USA Inc. (“PX Capital”) for payment of rental of $68,000 for the period from April 1, 2020 to December 31, 2020. The Company has also entered into consultant agreement with PX Capital for the consultancy services rendered by PX Capital of $80,000 for the period from April 1, 2020 to December 31, 2020. The Company and PX Capital have common chief executive officer, Mr. Warren Wang. Due from related parties: As of December 31, 2020, the Company has related party receivables of $81,756, due to advances made on behalf of related parties, including $46,416 due from Sheng Ying Xin (Beijing) Film Industry Co., Ltd., $30,214 from Beijing Zhiping Science. As of December 31, 2019, the Company has related party receivables of $76,467, due to advances made on behalf of related parties, including $43,414 due from Sheng Ying Xin (Beijing) Film Industry Co., Ltd., $28,259 from Beijing Zhiping Science. Due to related party: As of December 31, 2020 and 2019, the Company has related party payables of $358,241 and $279,925, respectively, due to Mr. Jianxin Lin the Company’s founder, former chairman of the board of directors and former chief executive officer and Mr Jinchi Xu the Company’s former director and chief financial officer, who lend funds for the Company’s operations. The payables are unsecured, non-interest bearing and due on demand. |
Employee Defined Contribution P
Employee Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2020 | |
Employee Defined Contribution Plan | |
Employee Defined Contribution Plan | NOTE 10. EMPLOYEE DEFINED CONTRIBUTION PLAN Full time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to employees. Chinese labor regulations require that the PRC subsidiaries and VIEs of the Company make contributions to the government for these benefits based on certain percentages of the employees’ salaries. The employee benefits were expensed as contribution was made. The Company has no legal obligation for the benefits beyond the contributions made. The total amounts for such contributions were approximately $0, $140,149 and $1,317,484 for the years ended December 31, 2020, 2019 and 2018, respectively. |
Taxation
Taxation | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Taxation | NOTE 11. Taxation a) Corporate Income Taxes HUSN is incorporated in the BVI. Under the current law of the BVI, HUSN is not subject to tax on income or capital gains. Additionally, if dividends are paid by HUSN to its shareholders, no BVI withholding tax will be imposed. Hudson Capital USA Inc., Hudson Capital Merger Sub I Inc. and Hudson Capital Merger Sub II Inc. were incorporated in the United States and are subject to taxes in the United States. They have evaluated their respective income tax positions and have determined that they do not have any uncertain tax positions. They will recognize interest and penalties related to any uncertain tax positions through their income tax expense. Hudson Capital Merger Sub I Inc. and Hudson Capital Merger Sub II Inc. are subject to franchise tax filing requirements in the State of Delaware. HKIFS and HKSQ were incorporated in Hong Kong and does not conduct any substantial operations of its own. No provision for Hong Kong profits tax has been made in the financial statements as HKFS and HKSQ has no assessable profits for the years ended December 31, 2020, 2019 and 2018. The HUSN’s PRC subsidiary, Yingxin Yijia, CIFS (Xiamen) Financial Leasing and its variable interest entities, Sheng Ying Xin and its subsidiaries being incorporated in the PRC, are governed by the income tax law of the PRC and are subject to PRC enterprise income tax (“EIT”). Effective from January 1, 2008, the EIT rate of PRC is 25%, and applies to both domestic and foreign invested enterprises. Kashgar Sheng Ying Xin, which was incorporated in Kashgar City, Xinjiang Autonomous Region in People’s Republic of China, is exempted from income tax from its inception to December 31, 2020 and is subject to a tax rate of 25% after December 31, 2020. The components of the income tax expense are as follows: Year ended December 31, Year ended December 31, 2019 Year ended December 31, 2018 Current $ - $ 7,243 $ 151,153 Deferred - - (1,853,280 ) Total $ - $ 7,243 $ (1,702,127 ) Reconciliation of the income tax expenses at the PRC statutory EIT rate of 25% for the years ended December 31, 2020, 2019 and 2018 and the Company’s effective income tax expenses is as follows: Year ended December 31, 2020 Year ended December 31, 2019 Year ended December 31, 2018 (Loss) before income taxes $ (9,075,353 ) $ (61,988,515 ) $ (5,520,864 ) PRC statutory EIT rate 25 % 25 % 25 % Income tax (benefit) computed at statutory EIT rate (2,268,838 ) (15,497,129 ) (1,380,216 ) Reconciling items: Valuation allowance - 1,798,398 - Effect of tax holidays 109,630 93,455 (2,209,107 ) Temporary difference 2,133,790 13,369,701 1,586,726 Permanent difference 25,418 242,818 300,470 Income tax (benefit) expense $ - $ 7,243 $ (1,702,127 ) b) Deferred Taxes Deferred income tax was measured using the enacted income tax rates for the periods in which they are expected to be reversed. Significant components of the Company’s deferred income tax assets and liabilities consist of follows: As of December 31, As of December 31, Deferred income tax assets Net operating loss carry forwards $ - $ 1,798,398 Total Deferred income tax assets - 1,798,398 Less: Valuation allowance - (1,798,398 ) Net deferred income tax assets $ - $ - As of December 31, As of Deferred income tax liabilities Intangible assets from business combination $ - $ - Total deferred income tax liabilities $ - $ - The Company’s NOL was mainly from the Company’s VIE and subsidiaries’ cumulative net operating losses (“NOL”) of approximately $252,483 as of December 31, 2020. Management considers projected future losses outweighs other factors and made a full allowance of related deferred tax assets.” c) Taxes Payable Yingxin Yijia, CIFS (Xiamen) Financial Leasing and its variable interest entities, Sheng Ying Xin and its subsidiaries, who provided services in China and therefore are subject to Chinese value-added tax (“VAT”). Sales revenue represents the invoiced value of services, net of the VAT. Since August 1, 2015, Sheng Ying Xin was classified as a general taxpayer with VAT of 6%. Kashgar Sheng Ying Xin is subject VAT of 4.5% (75% of general taxpayer’s rate of 6%), which is a tax holiday for enterprises established in Kashgar. Both FuhuiSZ and Anytrust are general taxpayers and subject to a 6% VAT rate. Yingda Xincheng was classified as a small-scale taxpayer and the VAT is at 3%. Furthermore, VAT payable of these four companies are subject to a 12% surtax, which includes urban maintenance and construction taxes and additional education fees. Taxes payable consisted of the following: As of December 31, As of December 31, Corporate income tax payable $ 805,117 $ 423,563 Value added tax payable 202,395 548,276 Other surtaxes payable 45,737 14,356 Total $ 1,053,249 $ 986,195 |
(Loss) Earnings Per Share
(Loss) Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
(Loss) Earnings Per Share | NOTE 12. (LOSS) EARNINGS PER SHARE The following table presents a reconciliation of basic and diluted earnings per share: For the years ended December, 31 2020 2019 2018 Numerator: Net (loss) $ (9,075,353 ) $ (61,995,758 ) $ (3,818,737 ) Denominator: Weighted average number of common stock outstanding-basic and diluted 6,406,146 4,422,837 * 4,422,837 * (Loss) per share – Basic and diluted: $ (1.42 ) $ (14.02 )* $ (0.85 )* * - The computation of basic and diluted share and EPS data was adjusted retroactively for all period presented to reflect the 5 to 1 reverse stock split change which was effective on October 29, 2020. On October 26, 2020, we filed Amended and Restated Memorandum and Articles of Association with the Registrar of Corporate Affairs of the British Virgins Islands to effect a 5-for-1 reverse stock split (the “Reverse Split”) of our ordinary shares. As a result of the Reverse Split, every five (5) ordinary shares were automatically combined into one (1) ordinary share. In connection with the Reverse Split, our par value per share was increased from $0.001 to $0.005. The number of common stock outstanding has been changed accordingly. |
Concentration of Risk
Concentration of Risk | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | NOTE 13. CONCENTRATION OF RISK Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. As of December 31, 2019 and 2018, substantially all of the Company’s cash and cash equivalents were held by major financial institutions located in Mainland China and Hongkong, which management believes are of high credit quality. Under PRC law, it is generally required that a commercial bank in the PRC that holds third party cash deposits protect the depositors’ rights over and interests in their deposited money. PRC banks are subject to a series of risk control regulatory standards, and PRC bank regulatory authorities are empowered to take over the operation and management of any PRC bank that faces a material credit crisis. Currency convertibility risk The significant part of the Company’s businesses is transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts. These exchange control measures imposed by the PRC government authorities may restrict the ability of the Company’s PRC subsidiary and VIEs to transfer its net assets to the Company through loans, advances or cash dividends. Concentration of customers There was only one customer of total revenue for the year ended December 31, 2020, which was prepaid revenue recognised in 2020. No customers have outstanding accounts receivable balances as of December 31, 2020. There was no customer whose revenue accounts for more than 10% of total revenue for the year ended December 31, 2019. Three customers have outstanding accounts receivable balances that accounts for 44.01%, 19.38% and 17.95% of the total accounts receivable balance as of December 31, 2019, respectively. There was no customer whose revenue accounts for more than 10% of total revenue for the year ended December 31, 2018. Three customers have outstanding accounts receivable balances that accounts for 20.88%, 19.34% and 11.63% of the total accounts receivable balance as of December 31, 2018, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 14. COMMITMENTS AND CONTINGENCIES The following table sets forth the Company’s office lease commitment as of December 31, 2020: Office Rental Year ending December 31, 2021 $ 34,000 Total $ 34,000 For the years ended December 31, 2020, 2019 and 2018, rental expenses under operating leases were approximately $82,670, $258,476 and $2,516,053, respectively. For the year ended December 31, 2020, the Company has written back an accrued payroll for the Company’s VIEs amounting to $475,943 (RMB3,105,476). There has been no claims from the relevant employees for over 2 years. Clause 27 of the Labor Dispute Mediation and Arbitration Law of the People’s Republic of China provides that a claimant has the right to claim his outstanding salaries within one year after termination of the employment. Notwithstanding the foregoing, the Company cannot assure that the claimants have not lodged their claim(s) and such claim(s) has/have been delivered to our VIEs. Accordingly, the Company may have be a potential claim for $475,943 (RMB3,105,476). In the ordinary course of business, the Company may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Company records contingent liabilities resulting from such claims, when a loss is assessed to be probable and the amount of the loss is reasonably estimable. The company is not currently involved in any such claims. |
Restricted Net Assets
Restricted Net Assets | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Restricted Net Assets | NOTE 15. RESTRICTED NET ASSETS Relevant PRC statutory laws and regulations permit payments of dividends by the Company’s PRC subsidiary and VIEs only from their retained earnings, if any, determined in accordance with PRC GAAP. In addition, the Company’s subsidiary and VIEs in China are required to make annual appropriations of 10% of after-tax profits to a general reserve fund or statutory reserve fund until such reserve has reached 50% of its registered capital based on the enterprise’s PRC statutory accounts. Paid in capital of the PRC subsidiary and VIEs included in the Company’s consolidated net assets are also non-distributable for dividend purposes. As a result of these PRC laws and regulations, the Company’s PRC subsidiary and VIEs are restricted in their abilities to transfer net assets to the Company in the form of dividends, loans or advances. As of December 31, 2020 and 2019, net assets restricted in the aggregate, which include paid-in capital and statutory reserve funds of the Company’s PRC subsidiary and VIEs that are included in the Company’s consolidated balance sheets, were $11,353,962 and $11,316,561, respectively. Even though the Company currently does not require any such dividends, loans or advances from the PRC subsidiary and VIEs for working capital and other funding purposes, the Company may in the future require additional cash resources from its PRC subsidiary and VIEs due to changes in business conditions, to fund future acquisitions and developments, or merely declare and pay dividends to or distributions to the Company’s shareholders. The ability of our PRC subsidiaries to make dividends and other payments to us may also be restricted by changes in applicable foreign exchange and other laws and regulations. Foreign currency exchange regulation in China is primarily governed by the following rules: ● Foreign Exchange Administration Rules (1996), as amended in August 2008, or the Exchange Rules; ● Administration Rules of the Settlement, Sale and Payment of Foreign Exchange (1996), or the Administration Rules. As of December 31, 2020 and 2019 there were approximately $16,976,571 and $14,744,086 accumulated losses in the aggregate, respectively, which were generated by our PRC subsidiaries and VIEs in Renminbi included in our consolidated balance sheets, aside from $11,353,962 and $11,316,561of the paid-in capital and statutory reserve funds as of December 31, 2020 and 2019, that may be affected by increased restrictions on currency exchanges in the future and accordingly may further limit our PRC subsidiaries’ or VIEs’ ability to make dividends or other payments in U.S. dollars to us, in addition to the restricted net assets as of December 31, 2020 and 2019, respectively, as discussed above. |
Reverse Stock Split
Reverse Stock Split | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Reverse Stock Split | NOTE 16. REVERSE STOCK SPLIT On October 13, 2020, our board of directors approved a 5:1 reverse split of our ordinary shares, which began trading on a split adjusted basis on October 29, 2020. As a result of the reverse share split, each five (5) pre-split shares automatically combined into one (1) ordinary share without any action on the part of the holders, and the number of outstanding ordinary shares was be reduced from 32,022,685 to 6,406,146. No fractional shares will be issued as a result of the reverse share split. Shareholders who otherwise would be entitled to a fractional share because they hold a number of ordinary shares not evenly divisible by the one (1) for five (5) reverse split ratio, will automatically be entitled to receive an additional fractional share to round up to the next whole share. On October 29, 2020, the Company effected a reverse stock split of its common stock, pursuant to which every FIVE (5) shares of common stock outstanding before the reverse split were converted into ONE (1) share of common stock after the reverse split. According to ASC 260-10-55-12 the computation of basic and diluted share and earnings per share amounts for all periods presented herein was adjusted retroactively to reflect the reverse split change as if it had occurred at the beginning of the year 2018. |
Significant Events
Significant Events | 12 Months Ended |
Dec. 31, 2020 | |
Significant Events | |
Significant Events | NOTE 17. SIGNIFICANT EVENTS In December 2019, there was an outbreak of the novel coronavirus (COVID-19) in China that has since spread to many other regions of the world. The outbreak was subsequently labeled as a global pandemic by the World Health Organization in March 2020. It is anticipated that the COVID-19 outbreak may ultimately have a material adverse impact on the Company’s results of operations, financial position and cash flow in 2020 including, but not limited to: Transportation delays and cost increases, more extensive travel restrictions, closures or disruptions of businesses and facilities or social, economic, political or labor instability in the affected areas, may impact the Company’s customers’ operations. Customers may not be able to repay their loans on time due to lack of capital. The extent of the impact of COVID-19 on the Company’s operations and financial results depends on future developments and is highly uncertain due to the unknown duration and severity of the outbreak. The situation is changing rapidly and future impacts may materialize that are not yet known. The Company continues to monitor the situation closely and may implement further measures to provide additional financial flexibility and improve the Company’s cash position and liquidity. On April 9, 2020, the Company entered into subscription agreements with three accredited investors for the sale and issuance of two million shares (2,000,000) ordinary shares of the Company, $0.001 par value per share (“Ordinary Shares”) at a per-share price of $0.40 for aggregate gross proceeds of $800,000 (the “Private Placement). The subscription agreements contain customary representations, warranties and agreements by the Company and customary conditions to closing. The Company closed the Private Placement on May 12, 2020 and intend to use the funds for working capital. No brokers or placement agents was involved. Our Private Placement is exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) thereof and/or Rule 506 of Regulation D and Regulation S thereunder, each as promulgated by the Securities and Exchange Commission (the “Commission”). In keeping with our plan to diversity our operations and rebrand ourselves, our corporate name was changed to “Hudson Capital Inc.” on April 23, 2020 and we began to trade under our new symbol, “HUSN” on May 8, 2020. On April 9, 2020, we incorporated a New York subsidiary, Hudson Capital USA Inc. Our securities were transferred to the Capital Market at the opening of business on July 16, 2020. On August 20, 2020, Mr. Jinchi Xu tendered his resignation as Chief our Financial Officer and director and on the same day, we appointed Mr. Hon Man Yun to succeed Mr. Xu as Chief Financial Officer and director. On September 9, 2020, we incorporated Hudson Capital Merger Sub I Inc. in Delaware, which in turn incorporated Hudson Capital Merger Sub I Inc. in Delaware as a wholly-owned subsidiary. On October 26, 2020, we filed Amended and Restated Memorandum and Articles of Association with the Registrar of Corporate Affairs of the British Virgins Islands to effect a 5-for-1 reverse stock split (the “Reverse Split”) of our ordinary shares. As a result of the Reverse Split, every five (5) ordinary shares were automatically combined into one (1) ordinary share. In connection with the Reverse Split, our par value per share was increased from $0.001 to $0.005. On June 23, 2020 and July 31, 2020, we closed on two registered direct offerings for the purchase and sale of 4,352,941 of the Company’s ordinary shares, at a purchase price of $0.85 per share, for an aggregate purchase price of approximately $3.7 million and the purchase and sale of 3,555,556 of the Company’s ordinary shares, at a purchase price of $0.45 per share, for an aggregate purchase price of approximately $1.6 million, respectively. Chardan Capital Markets LLC acted as placement agent in both offerings. The net proceeds to the Company from the offerings, after deducting placement agent fees and estimated offering expenses, were approximately $3.328 million and $1.39 million, respectively. In a bid to strategically adjust our business to diversify into new business opportunities, on October 10, 2020, we entered into an Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”), with Hudson Capital Merger Sub I, Inc., a Delaware corporation and our wholly-owned subsidiary (“Merger Sub I”), Hudson Capital Merger Sub II, Inc., a Delaware corporation and Merger Sub I’s wholly-owned subsidiary, FreightHub, Inc., a Delaware corporation (“FreightHub”) and ATW Master Fund II, L.P., as the representative of the stockholders of FreightHub (the “Stockholders’ Representative”). Pursuant to the Merger Agreement, we would merge with and into Merger Sub I to redomesticate from the British Virgin Islands to Delaware, with Merger Sub I as the surviving corporation (the “Redomestication Merger”). Thereafter, Merger Sub II will merge with and into FreightHub, with FreightHub as the surviving corporation and wholly-owned subsidiary of Merger Sub I (the “Merger”). FreightHub is a transportation logistics platform company, focusing on truckload freight for domestic and cross-border markets in Mexico, the US and Canada. As an innovative digital freight marketplace, broker, transportation management system (TMS) and public API, FreightHub uses its proprietary technology platform to connect carriers and shippers that significantly improves matching and operation efficiency via innovative technologies such as live pricing and real-time tracking. For more information on the Redomestication Merger and Merger, please refer our Current Report on Form 6K filed with the Securities and Exchange Commission on October 15, 2020 and to the Registration Statement on Form S-4 of Merger Sub I filed with the Securities and Exchange Commission on November 12, 2020 and subsequent amendments thereto. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18. SUBSEQUENT EVENTS Subject to the structure of the Merger Agreement has been changed, the Merger Agreement has been revised and would be executed after confirmation and agreement by all parties. Up to the report date of the consolidated financial statements, the Merger Agreement is still under revision. Except for the above mentioned matter, no other material events are required to be adjusted or disclosed as of the report date of the consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | (a) Basis of presentation The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principles of Consolidation | (b) Principles of Consolidation The consolidated financial statements include the financial statements of all the subsidiaries and VIEs of the Company. All transactions and balances between the Company and its subsidiaries and VIEs have been eliminated upon consolidation |
Foreign Currency Translation and Transactions | (c) Foreign currency translation and transactions The functional currency of HUSN, Hudson Capital USA Inc., Hudson Capital Merger Sub I Inc., Hudson Capital Merger Sub II Inc., HKIFS and HKSQ are in United States dollars (“US$” or “$”). The functional currency of Yingxin Yijia, CIFS (Xiamen) Financial Leasing, Sheng Ying Xin and its subsidiaries are Renminbi (“RMB”), and the PRC is the primary economic environment in which the Company operates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. The resulting exchange differences are included in the determination of net income (loss) for the respective periods. For financial reporting purposes, the financial statements of the Company’s PRC subsidiary and the financial statements of the VIEs are prepared using RMB and are translated into the Company’s reporting currency, the US$. Assets and liabilities are translated using the exchange rate at each balance sheet date. Revenue and expenses are translated using average rates prevailing during each reporting period, and Shareholders’ equity is translated at historical exchange rates except for the change in retained earnings during the year which is the result of the net income (loss). The cumulative translation adjustments are recorded in accumulated other comprehensive income (loss) in the accompanying consolidated statements of shareholders’ equity. The exchange rates used are as follows: December 31, 2020 December 31, 2019 RMB exchange rate at balance sheets dates, 6.5249 6.9762 Year Ended December 31, 2020 2019 2018 Average exchange rate for each year 6.9010 6.8944 6.6174 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. The source of the exchange rates is generated from the People’s Bank of China. |
Use of Estimates | (d) Use of estimates The preparation of these consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosures of contingent assets and liabilities. Management makes its estimates based on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. Significant accounting estimates reflected in the Company’s consolidated financial statements mainly include the allowance for doubtful accounts, the valuation allowance of deferred tax assets, the estimated useful lives of long-lived assets, the impairment assessment of goodwill, intangibles and other long-lived assets, and the fair value of identifiable assets and liabilities acquired through business combination. |
Cash | (e) Cash Cash and cash equivalents consist of cash on hand, cash on deposit and other highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when purchased. The Company maintains cash with various financial institutions mainly in the PRC. As of December 31, 2020 and 2019, the Company had no cash equivalents. |
Accounts Receivable and Loans to Third Parties | (f) Accounts receivable and loans to third parties Accounts receivable and loans to third parties are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible accounts as needed. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable and loans receivable. The Company determines the allowance based on aging data, historical collection experience, customer specific facts and economic conditions. Based on management’s assessment of the collectability of the accounts receivable and loans to third party, allowance for loans to third party was $41,782,173 as of December 31, 2020, allowance for loans to third party was $39,402,683 as of December 31, 2019, and, allowance for loans to third party was $7,119,594 as of December 31, 2018. The value-added tax receivable from customers included in the accounts receivable in the balance sheet were $0, and $97,287 as of December 31, 2020 and 2019, respectively. The accounts receivable, except for the principal of factoring as of December 31, 2019 were 0.07% collected as of March 31, 2020. |
Property and Equipment | (g) Property and Equipment The Company records equipment at cost less accumulated depreciation. The Company computes depreciation using the straight-line method over the estimated useful lives of the assets with a 5% residual value for electronic equipment, and a 5% residual value for furniture and a 0% residual value for leasehold improvement. Estimated useful lives of property and equipment: Useful Life Furniture 10 years Electronic equipment 3 years Motor vehicle 5 years Leasehold improvements Shorter of life of asset or lease The Company eliminates the cost and related accumulated depreciation of assets sold or otherwise retired from the accounts and includes any gain or loss in the statement of operations. The Company charges maintenance, repairs and minor renewals directly to expense as incurred. |
Intangible Assets | (h) Intangible Assets Intangible assets, comprising accounting software and big data platform, which are separable from the property and equipment, are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets. |
Impairment of Long-Lived Assets | (i) Impairment of Long-lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. For the year ended December 31, 2020, the Company did not recognize any impairment loss of its long-lived assets. For the year ended December 31, 2019, the Company did not recognize any impairment loss of its long-lived assets. For the year ended December 31, 2018, the Company recognized $73,999 impairment loss of its long-lived assets. |
Statutory Reserve | (j) Statutory Reserve The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve is required to be at least 10% of the after tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entities’ registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of Board of Directors. |
Revenue Recognition | (k) Revenue recognition The Company adopted ASC Topic 606, “Revenue from Contracts with Customers” effective January 1, 2019, applying the modified retrospective method. In accordance with ASC Topic 606, revenues are recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. In determining when and how much revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company’s services include commercial payment advisory services, intermediary bank loan advisory services, international corporate financing advisory services, technical services and factoring services. For commercial payment advisory service after signing contracts with the client, the Company starts to identify and select banks and financial products and coordinates with banks to structure financing solutions for the client. Then the client prepares application materials and sends them to the bank. When approved by the bank, the client will deposit cash with the bank or purchases wealth management products sold by the bank. After this step, the bank will issue a letter of guarantee, which the client will pledge as security for the acceptance bills. The letter of guarantee is a document that the bank provides certifying itself as guarantor. The Company’s service fee is a percentage of the amount of cash deposited with or wealth management products purchased from the bank by the client. The Company recognizes revenue after the client receives a credit contract from the bank and when the Company receives a contract completion confirmation from the client. For intermediary bank loan advisory services, the Company matches small-to-medium sized enterprises (“SMEs”) with financing sources. The Company charges borrowers an introduction fee which is calculated at a percentage of the loan. The Company recognizes revenue after the client receives a bank credit contract from the bank and when the Company receives a contract completion confirmation from the client. The Company typically receives the contract completion confirmation when the client receives the bank financing and signs off on the contract completion confirmation. For international corporate financing advisory services, the Company works with overseas banks to structure and provide clients with financing solutions to obtain facilities from overseas banks for the clients’ offshore affiliates. After signing the contract with the client, the Company will identify overseas banks and domestic banks, structure financing solutions and facilitate application processes. After the client provides security to the domestic bank, the domestic bank will issue a letter of guarantee to the overseas bank. The overseas bank will provide credit to the affiliate designated by the client. The Company’s service fee is a percentage of credit granted by the overseas bank to the offshore affiliate. The Company recognizes revenue after the offshore affiliate receives credit approval notice from the offshore bank and when the Company receives a contract completion confirmation from the client. The Company typically receives the contract completion confirmation when the affiliate receives the bank financing and the client signs off on the contract completion confirmation. For technical services, after signing the contract, the Company provides the clients with the technical services and charges a fee for the technical service. The Company recognizes revenue when the services are rendered. For factoring services, generally after we checked the documents such as client information, contracts, invoices supporting the client’s credit worth, authenticity of the business contracts and the collectability of receivables, we will sign the factoring service contract with client. Upon signing the contract, we request the client to pay us the management fee which we record as revenue upon receipt. After signing the factoring contract, we will wire the factored amount to the client’s designated party, generally its suppliers, and will collect the amount over the contact period. At each month end we will record the factoring service revenue based on the service fee ratio and the amount we factored. There is no claw back provisions or other guarantees. Full services fees are due upon the contract completion confirmation from the client. |
Taxation | (l) Taxation The Company follows the guidance of ASC Topic 740 “Income taxes” and uses the assets and liability method to account for income taxes. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets, if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized in statement of operations and comprehensive income (loss) in the period that includes the enactment date. The Company follows a more likely than not threshold and a two-step approach for the measurement of tax positions and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including the resolution of related appeals or litigation process, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company has elected to classify interest related to an uncertain tax position (if and when required) to interest expense, and classify penalties related to an uncertain tax position (if and when required) as part of other expense in the consolidated statements of operations and comprehensive income (loss). The tax authority of the PRC government conducts periodic and ad hoc tax filing reviews on business enterprises operating in the PRC after those enterprises had completed their relevant tax filings, hence the Company’s tax filings may not be finalized. It is therefore uncertain as to whether the PRC tax authority may take different views about the Company’s tax filings which may lead to additional tax liabilities. The tax returns of the Company’s PRC subsidiaries and VIEs are subject to examination by the relevant tax authorities. According to the PRC Tax Administration Law on the Levying and Collection of Taxes, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB100,000. In the case of transfer pricing issues, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion. The Company did not have any material interest or penalties associated with tax positions for the years ended December 31, 2020, 2019, and 2018 and did not have any significant unrecognized uncertain tax positions as of December 31, 2020, 2019, and 2018. The Company does not expect that the position of unrecognized tax benefits will significantly increase or decrease within 12 months of December 31, 2020. |
Cost of Revenues | (m) Cost of revenues The Company’s cost of revenues mainly consists of revenue-generating staff costs. |
Research and Development Expenses | (n) Research and development expenses The Company accounts for expenses for the enhancement, maintenance and technical support for the Company’s Internet platforms and intellectual property that are used in its daily operations as research and development expenses. Research and development costs are charged to expense when incurred. Expenses for research and development for the years ended December 31, 2020, 2019 and 2018 were approximately nil and nil and US$3,512,512, respectively. |
Comprehensive Income (Loss) | (o) Comprehensive income (loss) The Company presents comprehensive income (loss) in accordance with ASC 220, “Comprehensive Income” |
Earnings (Loss) Per Share | (p) Earnings (loss) per Share Earnings (loss) per share (“EPS”) are calculated in accordance with ASC Topic 260, “Earnings Per Share”. Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common stock. The dilutive effect of outstanding common share warrants and options are reflected in the diluted earnings per share by application of the treasury stock method when the impact is dilutive. Potential common shares that have an anti-dilutive effect are excluded from the calculation of diluted EPS. There is no dilutive effect for the years ended December 31, 2020, 2019 and 2018. |
Fair Value of Financial Instruments | (q) Fair Value of Financial Instruments The carrying value of cash and cash equivalents, accounts receivable, other receivable and short term loans approximate their fair values because of the short-term nature of these instruments. |
Goodwill | (r) Goodwill Goodwill is the excess of the consideration transferred over the fair value of the acquired assets and assumed liabilities in a business combination. The Company tests goodwill for impairment at the reporting unit level on an annual basis and between annual tests when an event occurs or circumstances change that could indicate that the asset might be impaired. The Company first has the option to assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the company decides, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is mandatory. Otherwise, no further testing is required. |
Jobs Act Accounting Election | (s) Jobs Act accounting election The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows the Company to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, the financial statements may not be comparable to companies that comply with public company effective dates. |
Recently Issued Accounting Standards | (t) Recently issued accounting standards In June 2016, the FASB issued ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”, which will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. The standard did not have a material impact on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, “Intangibles — Goodwill and Other (Topic 350): simplifying the test for goodwill impairment”, the guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not the difference between the fair value and carrying amount of goodwill which was the step 2 test before. The ASU should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The standard did not have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, “Changes to the Disclosure Requirements for Fair Value Measurement.” This standard eliminates the current requirement to disclose the amount or reason for transfers between level 1 and level 2 of the fair value hierarchy and the requirement to disclose the valuation methodology for level 3 fair value measurements. The standard includes additional disclosure requirements for level 3 fair value measurements, including the requirement to disclose the changes in unrealized gains and losses in other comprehensive income during the period and permits the disclosure of other relevant quantitative information for certain unobservable inputs. The new guidance is effective for interim and annual periods beginning after December 15, 2019. The standard did not have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, “Internal-Use Software — Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement.” This ASU aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement service contract with the guidance to capitalize implementation costs of internal use software. The ASU also requires that the costs for implementation activities during the application development phase be capitalized in a hosting arrangement service contract, and costs during the preliminary and post implementation phase are expensed. The new guidance is effective for interim and annual periods beginning after December 15, 2019. The standard did not have a material impact on our consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities, (“ASU 2018-17”). ASU 2018-17 requires reporting entities to consider indirect interests held through related parties under common control on a proportional basis rather than as the equivalent of a direct interest in its entirety for determining whether a decision-making fee is a variable interest. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. Entities are required to apply the amendments in ASU 2018-17 retrospectively with a cumulative-effect adjustment to retained earnings at the beginning of the earliest period presented. The standard did not have a material impact on our consolidated financial statements In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, (“ASU 2019-04”). ASU 2019-04 clarifies and improves areas of guidance related to the recently issued standards on credit losses (ASU 2016-13), hedging (ASU 2017-12), and recognition and measurement of financial instruments (ASU 2016-01). The amendments generally have the same effective dates as their related standards. If already adopted, the amendments of ASU 2016-01 and ASU 2016-13 are effective for fiscal years beginning after December 15, 2019 and the amendments of ASU 2017-12 are effective as of the beginning of the Company’s next annual reporting period; early adoption is permitted. The standard did not have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. ASU 2019-12 will be effective for the Company in the first quarter of 2021. The Company does not expect the adoption of the new accounting rules to have a material impact on the Company’s financial condition, results of operations, cash flows or disclosures. In March 2020, the FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, (“ASU 2020-03”). ASU 2020-03 improves various financial instruments topics, including the CECL Standard. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments related to Issue 1, Issue 2, Issue 4 and Issue 5 were effective upon issuance of ASU 2020-03. The amendments related to Issue 3, Issue 6 and Issue 7 were effective for the Company beginning on January 1, 2020. The Company does not anticipate that the adoption of the new standard will have a material effect on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. The amendments in this standard can be applied anytime between the first quarter of 2020 and the fourth quarter of 2022. The Company is currently in the process of evaluating the impact of adoption of the new rules on the Company’s financial condition, results of operations, cash flows and disclosures. Other than the above, management does not believe that any of the recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. |
Going Concern | (u) Going Concern The Company has suffered from losses from operation and significant accumulated deficits. It’s net loss for the year ended December 31, 2020 and 2019 were $9,075,353 and $61,995,758, respectively, and turned the retained earnings as of December 31, 2018 to 2019 from $36,653,460 to (25,379,698). As of December 31, 2020 and 2019, the Company has cash and cash equivalents of $3,274,287 and $13,567, respectively and net cash used in operating activities during the year ended December 31, 2020 and 2019 were $3,818,665 and $1,071,378, respectively. The Company comes to have insufficient cash flows generated from operations and provided for development. In addition, the Company continues to experience negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The management determines that additional effort will be required to improve the operation so that the Company may generate more profits to sustain its continuous. The Company may explore the channels to raise additional capital or any opportunities to improve the cash flow in the years to come. The Company had raised $4.278,000 from share placement to improve the financial position and cash flow as of December 31, 2020. |
Organization and Principal Ac_2
Organization and Principal Activities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of VIEs' Assets and Liabilities | Summarized below is the information related to the combined VIEs’ assets and liabilities as of December 31, 2020 and 2019, respectively: As of As of Current assets $ 48,287,298 $ 45,180,787 Plant and equipment, net 373 1,503 Other noncurrent assets 3,836 6,520 Total assets 48,291,507 45,188,810 Total liabilities (48,851,480 ) (45,964,142 ) Net assets (liabilities) $ (559,973 ) $ (775,332 ) |
Schedule of VIEs' Reported Consolidated Statements of Operations and Comprehensive Income | Summarized below is the information related to the financial performance of the VIEs reported in the Company’s consolidated statements of operations and comprehensive income (loss) for the years ended December 31, 2020, 2019 and 2018, respectively: Year ended Year ended 2019 Year ended 2018 Revenues $ 618 $ 1,366,417 $ 14,402,329 Cost of revenues $ - $ 123 $ 654,979 Total operating expenses $ 102,135 $ 784,840 $ 12,329,417 Net loss $ 248,314 $ 53,859,306 $ 1,530,958 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Exchange Rates Applied for Foreign Currency | The exchange rates used are as follows: December 31, 2020 December 31, 2019 RMB exchange rate at balance sheets dates, 6.5249 6.9762 Year Ended December 31, 2020 2019 2018 Average exchange rate for each year 6.9010 6.8944 6.6174 |
Schedule of Estimated Useful Lives of Property and Equipment | Estimated useful lives of property and equipment: Useful Life Furniture 10 years Electronic equipment 3 years Motor vehicle 5 years Leasehold improvements Shorter of life of asset or lease |
Cash (Tables)
Cash (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash | Cash consisted of the following: As of December 31, 2020 As of December 31, 2019 Cash on hand $ - $ - Cash in banks 3,247,287 13,567 Total cash $ 3,247,287 $ 13,567 |
Other Receivables (Tables)
Other Receivables (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Other Receivables | Other receivables consisted of the following: As of December 31, 2020 As of December 31, 2019 Interest receivable $ - $ 570,862 Others 105,149 75,828 Total $ 105,149 $ 646,690 |
Loans to Third Parties (Tables)
Loans to Third Parties (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Loans to Third Parties | Loans to third parties consisted of direct loans and entrusted loan as follows: As of December 31, As of December 31, Direct loans to third parties $ 12,200,000 $ 12,200,000 Entrusted loans to third parties 36,782,173 34,402,684 Impairment on uncollectable loans (48,982,173 ) (41,802,684 ) Total loans to third parties $ - $ 4,800,000 |
Schedule of Direct Loan Information | The Company lends their own funds directly to third parties. Due to the COVID-19 pandemic, the Company has agreed to extend the due dates of the loans and the detailed direct loan information as of December 31, 2020 is as follows: Borrower Amount Annual Interest rate Due dates (after extension) A $ 4,000,000 5 % Feb 7, 2021 B 5,000,000 15 % Jan 28, 2019 C 3,000,000 5 % Jan 6, 2021 C 200,000 5 % Jun 26, 2021 Total $ 12,200,000 All the above loans were fully impaired as at December 31, 2020 and no extension agreements were executed for them and are overdue. The Company lends their own funds directly to third parties. The detailed direct loan information as of December 31, 2019 is as follows: Borrower Amount Annual Interest rate Due dates A $ 4,000,000 5 % Aug 7, 2020 B 5,000,000 15 % Jan 28, 2019 C 3,000,000 5 % Jul 6, 2020 C 200,000 5 % Dec 26, 2020 Total $ 12,200,000 The detailed direct loan information as of December 31, 2018 is as follows: Borrower Amount Annual Interest rate Due dates A $ 4,000,000 5 % August 6, 2019 B 5,000,000 15 % January 28, 2019 C 3,000,000 5 % July 6, 2019 Total $ 12,000,000 |
Schedule of Entrusted Loan Information | The balance of entrusted loans as of December 31, 2020 was $36,782,173 to four borrowers. The detailed entrusted loan information as of December 31, 2020 is as follows: Borrower Amount Annual Interest rate Due dates A $ 3,065,181 16 % October 23, 2018 A 6,130,362 16 % December 26, 2018 B 4,597,772 16 % May 30, 2019 B 5,364,067 16 % July 27, 2019 C 7,662,953 16 % June 9, 2019 C 6,130,362 16 % July 9, 2019 D 3,831,476 16 % September 7, 2019 Total $ 36,782,173 The balance of entrusted loans as of December 31, 2019 was $34,402,684 to four borrowers. The detailed entrusted loan information as of December 31, 2019 is as follows: Borrower Amount Annual Interest rate Due dates A $ 2,866,890 16 % October 23, 2018 A 5,733,781 16 % December 26, 2018 B 4,300,335 16 % May 30, 2019 B 5,017,058 16 % July 27, 2019 C 7,167,225 16 % June 9, 2019 C 5,733,781 16 % July 9, 2019 D 3,583,614 16 % September 7, 2019 Total $ 34,402,684 The balance of entrusted loans as of December 31, 2018 was $34,969,111 to four borrowers. The detailed entrusted loan information as of December 31, 2018 is as follows: Borrower Amount Annual Interest rate Due dates A $ 2,914,093 16 % October 23, 2018 A 5,828,185 16 % December 26, 2018 B 4,371,139 16 % May 30, 2019 B 5,099,662 16 % July 27, 2019 C 7,285,231 16 % June 5, 2019 C 5,828,185 16 % July 9, 2019 D 3,642,616 16 % September 7, 2019 Total $ 34,969,111 |
Due from Related Parties (Table
Due from Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Due from Related Party | Due from related party consists of the following: As of December 31, As of December 31, Sheng Ying Xin (Beijing) Film Industry Co., Ltd. $ 46,416 $ 43,412 Beijing ZhipingScience and Technology Development Co., Ltd. 30,214 28,259 Anytrust Information Technology Co., Ltd 5,126 4,795 Total due from related party $ 81,756 $ 76,466 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | Property and equipment consisted of the following: As of December 31, As of December 31, Furniture $ 460 $ 430 Electronic equipment 15,931 7,329 Motor vehicle 100,000 7,329 Leasehold improvement - - Total property and equipment 116,391 7,759 Less: accumulated depreciation (7,924 ) (6,256 ) Less: impairment - - Property and equipment, net $ 108,467 $ 1,503 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The intangible assets consisted of the following: As of December 31, As of December 31, Accounting software $ 7,650 $ 7,155 Less: accumulated amortization (6,844 ) (5,215 ) Intangible assets, net $ 806 $ 1,940 |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense | The components of the income tax expense are as follows: Year ended December 31, Year ended December 31, 2019 Year ended December 31, 2018 Current $ - $ 7,243 $ 151,153 Deferred - - (1,853,280 ) Total $ - $ 7,243 $ (1,702,127 ) |
Schedule of Income Tax Reconciliation | Reconciliation of the income tax expenses at the PRC statutory EIT rate of 25% for the years ended December 31, 2020, 2019 and 2018 and the Company’s effective income tax expenses is as follows: Year ended December 31, 2020 Year ended December 31, 2019 Year ended December 31, 2018 (Loss) before income taxes $ (9,075,353 ) $ (61,988,515 ) $ (5,520,864 ) PRC statutory EIT rate 25 % 25 % 25 % Income tax (benefit) computed at statutory EIT rate (2,268,838 ) (15,497,129 ) (1,380,216 ) Reconciling items: Valuation allowance - 1,798,398 - Effect of tax holidays 109,630 93,455 (2,209,107 ) Temporary difference 2,133,790 13,369,701 1,586,726 Permanent difference 25,418 242,818 300,470 Income tax (benefit) expense $ - $ 7,243 $ (1,702,127 ) |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred income tax assets and liabilities consist of follows: As of December 31, As of December 31, Deferred income tax assets Net operating loss carry forwards $ - $ 1,798,398 Total Deferred income tax assets - 1,798,398 Less: Valuation allowance - (1,798,398 ) Net deferred income tax assets $ - $ - As of December 31, As of Deferred income tax liabilities Intangible assets from business combination $ - $ - Total deferred income tax liabilities $ - $ - |
Schedule of Tax Payable | Taxes payable consisted of the following: As of December 31, As of December 31, Corporate income tax payable $ 805,117 $ 423,563 Value added tax payable 202,395 548,276 Other surtaxes payable 45,737 14,356 Total $ 1,053,249 $ 986,195 |
(Loss) Earnings Per Share (Tabl
(Loss) Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents a reconciliation of basic and diluted earnings per share: For the years ended December, 31 2020 2019 2018 Numerator: Net (loss) $ (9,075,353 ) $ (61,995,758 ) $ (3,818,737 ) Denominator: Weighted average number of common stock outstanding-basic and diluted 6,406,146 4,422,837 * 4,422,837 * (Loss) per share – Basic and diluted: $ (1.42 ) $ (14.02 )* $ (0.85 )* * - The computation of basic and diluted share and EPS data was adjusted retroactively for all period presented to reflect the 5 to 1 reverse stock split change which was effective on October 29, 2020. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Payments for Operating Leases | The following table sets forth the Company’s office lease commitment as of December 31, 2020: Office Rental Year ending December 31, 2021 $ 34,000 Total $ 34,000 |
Organization and Principal Ac_3
Organization and Principal Activities (Details Narrative) | Jul. 31, 2020USD ($)$ / sharesshares | Jun. 23, 2020USD ($)$ / sharesshares | Sep. 26, 2019CNY (¥) | Dec. 30, 2018USD ($) | Jul. 28, 2017USD ($)$ / sharesshares | May 09, 2017$ / sharesshares | Apr. 26, 2016CNY (¥) | Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($) | Oct. 13, 2020shares | Oct. 12, 2020shares | Dec. 31, 2017shares | Nov. 23, 2017 | Nov. 21, 2017shares | Dec. 29, 2016USD ($) | Dec. 29, 2016CNY (¥) | Sep. 16, 2015 | |
Number of new shares issued | shares | 3,555,556 | 4,352,941 | |||||||||||||||||
Shares issued price per share | $ / shares | $ 0.45 | $ 0.85 | |||||||||||||||||
New shares issued, value | $ 1,600,000 | $ 3,700,000 | |||||||||||||||||
Offering expenses | $ 222,000 | ||||||||||||||||||
Common stock, shares issued | shares | 6,406,146 | 4,422,837 | [1] | 22,114,188 | |||||||||||||||
Common stock, shares outstanding | shares | 6,406,146 | 4,422,837 | [1] | 6,406,146 | 32,022,685 | 22,114,188 | |||||||||||||
Net (loss) income | $ (9,075,353) | $ (61,995,758) | $ (3,818,737) | ||||||||||||||||
Exclusive Option Agreement [Member] | |||||||||||||||||||
Agreement term | 10 years | 10 years | |||||||||||||||||
Sheng Ying Xin [Member] | |||||||||||||||||||
Percentage of ownership of subsidiary | 100.00% | ||||||||||||||||||
Sheng Ying Xin [Member] | Exclusive Business Cooperation Agreement [Member] | |||||||||||||||||||
Percentage of net profit | 100.00% | ||||||||||||||||||
Agreement term | 10 years | ||||||||||||||||||
Jianxin Lin [Member] | |||||||||||||||||||
Net (loss) income | $ 2,062,000 | ||||||||||||||||||
IPO [Member] | |||||||||||||||||||
Warrants issued to purchase shares | shares | 91,042 | 91,042 | |||||||||||||||||
Warrant exercise price, percentage | 120.00% | ||||||||||||||||||
Warrant exercise price | $ / shares | $ 12 | ||||||||||||||||||
Warrant exercisable term | 2 years | ||||||||||||||||||
IPO [Member] | New Investors [Member] | |||||||||||||||||||
Number of new shares issued | shares | 2,023,146 | ||||||||||||||||||
Shares issued price per share | $ / shares | $ 10 | ||||||||||||||||||
New shares issued, value | $ 20,231,460 | ||||||||||||||||||
Offering expenses | 1,262,562 | ||||||||||||||||||
Deferred issuing cost | $ 763,365 | ||||||||||||||||||
RMB [Member] | Exclusive Option Agreement [Member] | |||||||||||||||||||
Consideration for exercise option | ¥ | ¥ 1 | ¥ 1 | |||||||||||||||||
Sheng Ying Xin [Member] | |||||||||||||||||||
Registered capital | $ 726,600 | ||||||||||||||||||
Percentage of ownership of subsidiary | 1.00% | 1.00% | |||||||||||||||||
Direct ownership percentage | 99.00% | ||||||||||||||||||
Indirect ownership percentage | 1.00% | ||||||||||||||||||
Sheng Ying Xin [Member] | RMB [Member] | |||||||||||||||||||
Registered capital | ¥ | ¥ 5,000,000 | ||||||||||||||||||
Mr. Jianxin Lin [Member] | |||||||||||||||||||
Percentage of ownership of subsidiary | 60.22% | ||||||||||||||||||
[1] | The number of shares outstanding was adjusted retroactively for all period presented to reflect the 5 to 1 reverse stock split change which was effective on October 29, 2020. |
Organization and Principal Ac_4
Organization and Principal Activities - Schedule of VIEs' Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | $ 3,470,662 | $ 5,561,034 |
Plant and equipment, net | 108,467 | 1,503 |
Total assets | 3,582,966 | 5,569,057 |
Total liabilities | (2,951,821) | (3,048,953) |
Variable Interest Entity [Member] | ||
Current assets | 48,287,298 | 45,180,787 |
Plant and equipment, net | 373 | 1,503 |
Other noncurrent assets | 3,836 | 6,520 |
Total assets | 48,291,507 | 45,188,810 |
Total liabilities | (48,851,480) | (45,964,142) |
Net assets (liabilities) | $ (559,973) | $ (775,332) |
Organization and Principal Ac_5
Organization and Principal Activities - Schedule of VIEs' Reported Consolidated Statements of Operations and Comprehensive Income (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cost of revenues | $ 123 | $ 654,979 | |
Total operating expenses | 4,133,856 | 1,993,959 | 15,753,432 |
Net loss | (9,075,353) | (61,995,758) | (3,818,737) |
Variable Interest Entity [Member] | |||
Revenues | 618 | 1,366,417 | 14,402,329 |
Cost of revenues | 123 | 654,979 | |
Total operating expenses | 102,135 | 784,840 | 12,329,417 |
Net loss | $ 248,314 | $ 53,859,306 | $ 1,530,958 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 12 Months Ended | ||||||
Dec. 31, 2020USD ($)shares | Dec. 31, 2019USD ($)shares | Dec. 31, 2018USD ($)shares | Dec. 31, 2020CNY (¥) | Mar. 31, 2020 | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Cash equivalents | |||||||
Value-added tax receivable from customers | 0 | 97,287 | |||||
Accounts receivable, except for the principle of factoring as percentage collected | 0.07% | ||||||
Impairment of long-lived assets | 73,999 | ||||||
Interest and penalties | |||||||
Unrecognized uncertain tax positions | |||||||
Research and development expenses | $ 3,512,512 | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | |||||||
Deferred offering cost | $ 312,202 | ||||||
Deferred issuing costs | $ 864,673 | ||||||
Net loss | (9,075,353) | $ (61,995,758) | $ (3,818,737) | ||||
Retained earnings | (34,537,976) | (25,379,699) | 36,653,460 | ||||
Cash and cash equivalents | 3,274,287 | 13,567 | |||||
Net cash used in operating activities | (3,818,665) | (1,071,379) | (17,266,382) | ||||
Proceeds from issuance of privateplacement | $ 4,278,000 | ||||||
RMB [Member] | |||||||
Payment of income tax | ¥ | ¥ 100,000 | ||||||
Minimum [Member] | |||||||
Percentage of statutory surplus reserve after tax net income | 10.00% | ||||||
Maximum [Member] | |||||||
Percentage of statutory surplus reserve after tax net income | 50.00% | ||||||
Electronic Equipment [Member] | |||||||
Percentage of residual value | 5.00% | 5.00% | |||||
Furniture [Member] | |||||||
Percentage of residual value | 5.00% | 5.00% | |||||
Leasehold Improvements [Member] | |||||||
Percentage of residual value | 0.00% | 0.00% | |||||
Third Parties [Member] | |||||||
Allowance for loans to third party | $ 41,782,173 | $ 39,402,683 | $ 7,119,594 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Exchange Rates Applied for Foreign Currency (Details) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | |||
RMB exchange rate at balance sheets dates, | 6.5249 | 6.9762 | |
Average exchange rate for each year | 6.9010 | 6.8944 | 6.6174 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Furniture [Member] | |
Estimated useful lives | 10 years |
Electronic Equipment [Member] | |
Estimated useful lives | 3 years |
Motor vehicle [Member] | |
Estimated useful lives | 5 years |
Leasehold Improvements [Member] | |
Estimated useful lives, description | Shorter of life of asset or lease |
Cash - Schedule of Cash (Detail
Cash - Schedule of Cash (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Cash and Cash Equivalents [Abstract] | ||
Cash on hand | ||
Cash in banks | 3,247,287 | 13,567 |
Total cash | $ 3,274,287 | $ 13,567 |
Other Receivables - Schedule of
Other Receivables - Schedule of Other Receivables (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
Interest receivable | $ 570,862 | |
Others | 105,149 | 75,828 |
Total | $ 105,149 | $ 646,690 |
Loans to Third Parties (Details
Loans to Third Parties (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Collectability of loans to third parties | $ 12,200,000 | ||
Impairment of entrusted loans | $ 34,402,684 | ||
Direct Loans [Member] | |||
Interest income | 365,000 | 422,284 | $ 1,133,407 |
Entrusted Loan [Member] | |||
Entrusted loans to third parties | 36,782,173 | 34,402,684 | 34,969,111 |
Entrusted loans from third parties | 34,402,684 | ||
Entrusted Loan [Member] | Borrower A [Member] | |||
Interest income | $ 0 | $ 2,043,124 | $ 5,109,237 |
Loans to Third Parties - Schedu
Loans to Third Parties - Schedule of Loans to Third Parties (Details) - Third Parties [Member] - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Direct loans to third parties | $ 12,200,000 | $ 12,200,000 |
Entrusted loans to third parties | 36,782,173 | 34,402,684 |
Impairment on uncollectable loans | (48,982,173) | (41,802,684) |
Total loans to third parties | $ 4,800,000 |
Loans to Third Parties - Sche_2
Loans to Third Parties - Schedule of Direct Loan Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Direct Loans [Member] | |||
Direct loan to third parties | $ 12,200,000 | $ 12,200,000 | |
Borrower A [Member] | Direct Loans [Member] | |||
Direct loan to third parties | $ 4,000,000 | $ 4,000,000 | $ 4,000,000 |
Annual Interest rate | 5.00% | 5.00% | 5.00% |
Due date | Feb. 7, 2021 | Jun. 26, 2021 | Aug. 6, 2019 |
Borrower B [Member] | Direct Loans [Member] | |||
Direct loan to third parties | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 |
Annual Interest rate | 15.00% | 15.00% | 15.00% |
Due date | Jan. 28, 2019 | Jan. 28, 2019 | Jan. 28, 2019 |
Borrower C [Member] | |||
Direct loan to third parties | $ 12,000,000 | ||
Borrower C [Member] | Direct Loans [Member] | |||
Direct loan to third parties | $ 3,000,000 | $ 3,000,000 | $ 3,000,000 |
Annual Interest rate | 5.00% | 5.00% | 5.00% |
Due date | Jul. 6, 2020 | Jul. 6, 2019 | Jul. 6, 2019 |
Borrower C [Member] | Direct Loans [Member] | |||
Direct loan to third parties | $ 200,000 | $ 200,000 | |
Annual Interest rate | 5.00% | 5.00% | |
Due date | Jan. 6, 2021 | Dec. 26, 2020 |
Loans to Third Parties - Sche_3
Loans to Third Parties - Schedule of Entrusted Loan Information (Details) - Entrusted Loan [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Entrusted loans to third parties | $ 36,782,173 | $ 34,402,684 | $ 34,969,111 |
Borrower A [Member] | |||
Entrusted loans to third parties | $ 3,065,181 | $ 2,866,890 | $ 2,914,093 |
Annual Interest rate | 16.00% | 16.00% | 16.00% |
Due date | Oct. 23, 2018 | Oct. 23, 2018 | Oct. 23, 2018 |
Borrower A [Member] | |||
Entrusted loans to third parties | $ 6,130,362 | $ 5,733,781 | $ 5,828,185 |
Annual Interest rate | 16.00% | 16.00% | 16.00% |
Due date | Dec. 26, 2018 | Dec. 26, 2018 | Dec. 26, 2018 |
Borrower B [Member] | |||
Entrusted loans to third parties | $ 4,597,772 | $ 4,300,335 | $ 4,371,139 |
Annual Interest rate | 16.00% | 16.00% | 16.00% |
Due date | May 30, 2019 | May 30, 2019 | May 30, 2019 |
Borrower B [Member] | |||
Entrusted loans to third parties | $ 5,364,067 | $ 5,017,058 | $ 5,099,662 |
Annual Interest rate | 16.00% | 16.00% | 16.00% |
Due date | Jul. 27, 2019 | Jul. 27, 2019 | Jul. 27, 2019 |
Borrower C [Member] | |||
Entrusted loans to third parties | $ 7,662,953 | $ 7,167,225 | $ 7,285,231 |
Annual Interest rate | 16.00% | 16.00% | 16.00% |
Due date | Jun. 9, 2019 | Jun. 9, 2019 | Jun. 5, 2019 |
Borrower C [Member] | |||
Entrusted loans to third parties | $ 6,130,362 | $ 5,733,781 | $ 5,828,185 |
Annual Interest rate | 16.00% | 16.00% | 16.00% |
Due date | Jul. 9, 2019 | Jul. 9, 2019 | Jul. 9, 2019 |
Borrower D [Member] | |||
Entrusted loans to third parties | $ 3,831,476 | $ 3,583,614 | $ 3,642,616 |
Annual Interest rate | 16.00% | 16.00% | 16.00% |
Due date | Sep. 7, 2019 | Sep. 7, 2019 | Sep. 7, 2019 |
Due from Related Parties (Detai
Due from Related Parties (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Related Party Transactions [Abstract] | ||
Due from related parties | $ 81,756 | $ 76,466 |
Due from Related Parties - Sche
Due from Related Parties - Schedule of Due from Related Party (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Total due from related party | $ 81,756 | $ 76,466 |
Sheng Ying Xin (Beijing) Film Industry Co., Ltd., [Member] | ||
Total due from related party | 46,416 | 43,412 |
Beijing ZhipingScience and Technology Development Co., Ltd [Member] | ||
Total due from related party | 30,214 | 28,259 |
Anytrust Information Technology Co., Ltd [Member] | ||
Total due from related party | $ 5,126 | $ 4,795 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 703 | $ 60,910 | $ 58,369 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total property and equipment | $ 116,391 | $ 7,759 | |
Less: accumulated depreciation | (7,924) | (6,256) | |
Less: impairment | $ (73,999) | ||
Property and equipment, net | 108,467 | 1,503 | |
Furniture [Member] | |||
Total property and equipment | 460 | 430 | |
Electronic Equipment [Member] | |||
Total property and equipment | 15,931 | 7,329 | |
Motor vehicle [Member] | |||
Total property and equipment | 100,000 | 7,329 | |
Leasehold Improvements [Member] | |||
Total property and equipment |
Intangible Assets, Net (Details
Intangible Assets, Net (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 476 | $ 1,448 | $ 1,538 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Less: accumulated amortization | $ (6,844) | $ (5,215) |
Intangible assets, net | 806 | 1,940 |
Accounting Software [Member] | ||
Intangible asset, gross | $ 7,650 | $ 7,155 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Payment of rental | $ 82,670 | $ 258,476 | $ 2,516,053 | |
Related party receivables | $ 81,756 | 81,756 | 76,466 | |
Related party payables | 358,241 | 358,241 | 279,925 | |
Sheng Ying Xin (Beijing) Film Industry Co., Ltd., [Member] | ||||
Related party receivables | 46,416 | 46,416 | 43,414 | |
Beijing ZhipingScience and Technology Development Co., Ltd [Member] | ||||
Related party receivables | 30,214 | $ 30,214 | $ 28,259 | |
Sublease Agreement [Member] | PX Capital [Member] | ||||
Payment of rental | 68,000 | |||
Consultant Agreement [Member] | PX Capital [Member] | ||||
Consultancy services fees | $ 80,000 |
Employee Defined Contribution_2
Employee Defined Contribution Plan (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Employee Defined Contribution Plan | |||
Total employee defined contribution | $ 0 | $ 140,149 | $ 1,317,484 |
Taxation (Details Narrative)
Taxation (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effective income tax rate | 25.00% | 25.00% | 25.00% |
Net operating losses carryforwards | $ 252,483 | ||
Income tax, description | Since August 1, 2015, Sheng Ying Xin was classified as a general taxpayer with VAT of 6%. Kashgar Sheng Ying Xin is subject VAT of 4.5% (75% of general taxpayer’s rate of 6%), which is a tax holiday for enterprises established in Kashgar. Both FuhuiSZ and Anytrust are general taxpayers and subject to a 6% VAT rate. Yingda Xincheng was classified as a small-scale taxpayer and the VAT is at 3%. Furthermore, VAT payable of these four companies are subject to a 12% surtax, which includes urban maintenance and construction taxes and additional education fees. | ||
December 31, 2020 [Member] | |||
Effective income tax rate | 25.00% | ||
PRC [Member] | |||
Effective income tax rate | 25.00% |
Taxation - Schedule of Componen
Taxation - Schedule of Components of Income Tax Expense (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current income tax expense | $ 7,243 | $ 151,153 | |
Deferred income tax expense | (1,853,280) | ||
Income tax benefit, total | $ 7,243 | $ (1,702,127) |
Taxation - Schedule of Income T
Taxation - Schedule of Income Tax Reconciliation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
(Loss) before income taxes | $ (9,075,353) | $ (61,988,515) | $ (5,520,864) |
PRC statutory EIT rate | 25.00% | 25.00% | 25.00% |
Income tax (benefit) computed at statutory EIT rate | $ (2,268,838) | $ (15,497,129) | $ (1,380,216) |
Valuation allowance | 1,798,398 | ||
Effect of tax holidays | 109,630 | 93,455 | (2,209,107) |
Temporary difference | 2,133,790 | 13,369,701 | 1,586,726 |
Permanent difference | 25,418 | 242,818 | 300,470 |
Income tax (benefit) expense | $ 7,243 | $ (1,702,127) |
Taxation - Schedule of Deferred
Taxation - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred income tax assets, net operating loss carry forwards | $ 1,798,398 | |
Total Deferred income tax assets | 1,798,398 | |
Less: Valuation allowance | (1,798,398) | |
Net deferred income tax assets | ||
Deferred income tax liabilities, Intangible assets from business combination | ||
Total deferred income tax liabilities |
Taxation - Schedule of Tax Paya
Taxation - Schedule of Tax Payable (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Corporate income tax payable | $ 805,117 | $ 423,563 |
Value added tax payable | 202,395 | 548,276 |
Other surtaxes payable | 45,737 | 14,356 |
Total tax payable | $ 1,053,249 | $ 986,195 |
(Loss) Earnings Per Share (Deta
(Loss) Earnings Per Share (Details Narrative) | Oct. 29, 2020 | Oct. 26, 2020 | Oct. 13, 2020 |
Earnings Per Share [Abstract] | |||
Reverse stock split | The Company effected a reverse stock split of its common stock, pursuant to which every FIVE (5) shares of common stock outstanding before the reverse split were converted into ONE (1) share of common stock after the reverse split. | Affairs of the British Virgins Islands to effect a 5-for-1 reverse stock split (the “Reverse Split”) of our ordinary shares. As a result of the Reverse Split, every five (5) ordinary shares were automatically combined into one (1) ordinary share. In connection with the Reverse Split, our par value per share was increased from $0.001 to $0.005. The number of common stock outstanding has been changed accordingly. | Our board of directors approved a 5:1 reverse split of our ordinary shares, which began trading on a split adjusted basis on October 29, 2020. As a result of the reverse share split, each five (5) pre-split shares automatically combined into one (1) ordinary share without any action on the part of the holders, and the number of outstanding ordinary shares was be reduced from 32,022,685 to 6,406,146. |
(Loss) Earnings Per Share - Sch
(Loss) Earnings Per Share - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |||
Earnings Per Share [Abstract] | |||||
Net (loss) | $ (9,075,353) | $ (61,995,758) | $ (3,818,737) | ||
Weighted average number of common stock outstanding-basic and diluted | 6,406,146 | 4,422,837 | [1] | 4,422,837 | [1] |
(Loss) per share - Basic and diluted: | $ (1.42) | $ (14.02) | [1] | $ (0.85) | [1] |
[1] | The number of shares outstanding was adjusted retroactively for all period presented to reflect the 5 to 1 reverse stock split change which was effective on October 29, 2020. |
Concentration of Risk (Details
Concentration of Risk (Details Narrative) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Sales Revenue, Net [Member] | Minimum [Member] | ||
Concentration credit risk percentage | 10.00% | 10.00% |
Accounts Receivable [Member] | Customer 1 [Member] | ||
Concentration credit risk percentage | 44.01% | 20.88% |
Accounts Receivable [Member] | Customer 2 [Member] | ||
Concentration credit risk percentage | 19.38% | 19.34% |
Accounts Receivable [Member] | Customer 3 [Member] | ||
Concentration credit risk percentage | 17.95% | 11.63% |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | 12 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2020CNY (¥) | |
Operating lease rental expenses | $ 82,670 | $ 258,476 | $ 2,516,053 | |
Variable Interest Entity [Member] | ||||
Accrued payroll | 475,943 | |||
Claims | $ 475,943 | |||
Variable Interest Entity [Member] | RMB [Member] | ||||
Accrued payroll | ¥ | ¥ 105,476 | |||
Claims | ¥ | ¥ 105,476 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Payments for Operating Leases (Details) - Office Rental [Member] | Dec. 31, 2020USD ($) |
2021 | $ 34,000 |
Total | $ 34,000 |
Restricted Net Assets (Details
Restricted Net Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accumulated losses | $ (826,892) | $ (3,513,286) |
PRC subsidiaries and VIEs in Renminbi [Member] | ||
Restricted net assets | 11,353,962 | 11,316,561 |
Accumulated losses | 16,976,571 | 14,744,086 |
Consolidated net assets | $ 11,353,962 | $ 11,316,561 |
Minimum [Member] | ||
Percentage of statutory surplus reserve after tax net income | 10.00% | |
Maximum [Member] | ||
Percentage of statutory surplus reserve after tax net income | 50.00% |
Reverse Stock Split (Details Na
Reverse Stock Split (Details Narrative) - shares | Oct. 29, 2020 | Oct. 26, 2020 | Oct. 13, 2020 | Dec. 31, 2020 | Oct. 12, 2020 | Dec. 31, 2019 | [1] | Dec. 31, 2017 |
Equity [Abstract] | ||||||||
Reverse share split description | The Company effected a reverse stock split of its common stock, pursuant to which every FIVE (5) shares of common stock outstanding before the reverse split were converted into ONE (1) share of common stock after the reverse split. | Affairs of the British Virgins Islands to effect a 5-for-1 reverse stock split (the “Reverse Split”) of our ordinary shares. As a result of the Reverse Split, every five (5) ordinary shares were automatically combined into one (1) ordinary share. In connection with the Reverse Split, our par value per share was increased from $0.001 to $0.005. The number of common stock outstanding has been changed accordingly. | Our board of directors approved a 5:1 reverse split of our ordinary shares, which began trading on a split adjusted basis on October 29, 2020. As a result of the reverse share split, each five (5) pre-split shares automatically combined into one (1) ordinary share without any action on the part of the holders, and the number of outstanding ordinary shares was be reduced from 32,022,685 to 6,406,146. | |||||
Common stock, shares outstanding | 6,406,146 | 6,406,146 | 32,022,685 | 4,422,837 | 22,114,188 | |||
[1] | The number of shares outstanding was adjusted retroactively for all period presented to reflect the 5 to 1 reverse stock split change which was effective on October 29, 2020. |
Significant Events (Details Nar
Significant Events (Details Narrative) - USD ($) | Oct. 26, 2020 | Jul. 31, 2020 | Jun. 23, 2020 | Apr. 09, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Number of shares issued | 3,555,556 | 4,352,941 | |||||
Stock par value | [1] | $ 0.005 | $ 0.005 | ||||
Shares issued price per share | $ 0.45 | $ 0.85 | |||||
Proceeds from issuance of stock | $ 1,390,000 | $ 3,328,000 | |||||
Reverse stock split | Affairs of the British Virgins Islands to effect a 5-for-1 reverse stock split (the “Reverse Split”) of our ordinary shares. As a result of the Reverse Split, every five (5) ordinary shares were automatically combined into one (1) ordinary share. In connection with the Reverse Split, our par value per share was increased from $0.001 to $0.005. | ||||||
Number of shares issued, shares | $ 1,600,000 | $ 3,700,000 | |||||
Subscription Agreements [Member] | Accredited Investors [Member] | |||||||
Number of shares issued | 2,000,000 | ||||||
Stock par value | $ 0.001 | ||||||
Shares issued price per share | $ 0.40 | ||||||
Proceeds from issuance of stock | $ 800,000 | ||||||
[1] | The number of shares outstanding was adjusted retroactively for all period presented to reflect the 5 to 1 reverse stock split change which was effective on October 29, 2020. |