Cover
Cover | 12 Months Ended |
Dec. 31, 2021 | |
Cover [Abstract] | |
Document Type | S-1 |
Amendment Flag | false |
Entity Registrant Name | Nocera, Inc. |
Entity Central Index Key | 0001756180 |
Entity Tax Identification Number | 16-1626611 |
Entity Address, Address Line One | 3F (Building B) |
Entity Address, Address Line Two | No. 185, Sec. 1 |
Entity Address, Address Line Three | Datong Rd., Xizhi Dist. |
Entity Address, City or Town | New Taipei City |
Entity Address, State or Province | NV |
Entity Address, Postal Zip Code | 221 |
City Area Code | 886 |
Local Phone Number | 910-163-358 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 2,444,009 | $ 1,023,531 |
Accounts receivable, net | 699,555 | 432,309 |
Inventories, net | 1,488,681 | 1,723,674 |
Advance to suppliers | 42,969 | 1,732 |
Prepaid expenses and other assets, net | 107,444 | 3,161 |
Due from related parties | 1,615,217 | 896,876 |
Total current assets | 6,397,875 | 4,081,283 |
Retention receivables | 69,489 | 458,392 |
Deferred tax assets, net | 0 | 2,300 |
Property and equipment, net | 71,245 | 50,926 |
Goodwill | 332,040 | 332,040 |
Total assets | 6,870,649 | 4,924,941 |
Current liabilities | ||
Notes payable | 92,112 | 187,447 |
Accounts payable | 17,442 | 18,798 |
Other payables and accrued liabilities | 142,426 | 56,836 |
Advance receipts | 1,051,121 | 1,285,777 |
Due to related parties | 39,341 | 7,681 |
Warrant liability | 312,320 | 0 |
Dividend payable | 6,312 | 0 |
Income tax payable | 387,319 | 285,186 |
Bank borrowing | 52,292 | 532,824 |
Total current liabilities | 2,100,685 | 2,374,549 |
Deferred tax liabilities, net | 0 | 0 |
Total liabilities | 2,100,685 | 2,374,549 |
Commitments and contingencies | ||
Equity | ||
Common stock ($0.001 par value; authorized 200,000,000 shares; 10,607,150 shares and 9,131,786 shares issued and outstanding as of December 31, 2021 and 2020, respectively) | 10,607 | 9,132 |
Preferred stock ($0.001 par value; authorized 10,000,000 shares; Series A Preferred Stock, 2,000,000 authorized, 80,000 shares and nil shares, issued and outstanding as of December 31, 2021 and 2020, respectively) | 80 | 0 |
Additional paid-in capital | 14,472,705 | 2,692,973 |
Statutory and other reserves | 191,219 | 191,219 |
(Accumulated losses) retained earnings | (9,918,553) | (293,162) |
Accumulated other comprehensive loss | 13,906 | (49,770) |
Total Nocera, Inc.’s stockholders’ equity | 4,769,964 | 2,550,392 |
Non-controlling interests | 0 | 0 |
Total equity | 4,769,964 | 2,550,392 |
Total liabilities and equity | $ 6,870,649 | $ 4,924,941 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 10,607,150 | 9,131,786 |
Common stock, shares outstanding | 10,607,150 | 9,131,786 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Shares Authorized | 2,000,000 | 2,000,000 |
Preferred Stock, Shares Issued | 80,000 | |
Preferred Stock, Shares Outstanding | 80,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 9,945,325 | $ 1,170,156 |
Cost of sales | (9,000,733) | (526,343) |
Gross profit | 944,592 | 643,813 |
Operating expenses | ||
General and administrative expenses | (10,419,684) | (1,325,696) |
Total operating expenses | (10,419,684) | (1,325,696) |
Loss from operations | (9,475,092) | (681,883) |
Other income (expense) | (4,055) | 36 |
Loss before income taxes | (9,479,147) | (681,847) |
Income tax benefit | (139,932) | 42,777 |
Net loss | (9,619,079) | (639,070) |
Less: Net loss attributable to non-controlling interests | 0 | (6,705) |
Net loss attributable to the company | (9,619,079) | (632,365) |
Comprehensive loss | ||
Net loss | (9,619,079) | (639,070) |
Foreign currency translation loss | 63,248 | 31,081 |
Total comprehensive loss | (9,555,831) | (607,989) |
Less: Net loss attributable to non-controlling interest | 0 | (6,705) |
Less: Foreign currency translation loss attributable to non-controlling interest | 0 | (499) |
Comprehensive loss attributable to the Company | $ (9,555,831) | $ (600,785) |
Loss per share | ||
Basic | $ (1.0500) | $ (0.0538) |
Diluted | $ (1.0500) | $ (0.0538) |
Weighted average number of common shares outstanding | ||
Basic | 9,160,862 | 11,752,447 |
Diluted | 9,160,862 | 11,752,447 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Common Stock [Member] | Preferred Stock [Member] | Additional Paid-in Capital [Member] | Statutory And Other Reserves [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total Nocera Stockholders Equity [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 12,354 | $ 271,915 | $ 191,219 | $ 339,203 | $ (81,350) | $ 733,341 | $ 29,072 | $ 762,413 | |
Beginning balance, shares at Dec. 31, 2019 | 12,354,200 | ||||||||
Consultancy services settled by equities | 0 | ||||||||
Termination of VIE agreements with GZWFH | $ (4,750) | (4,750) | (21,868) | (26,618) | |||||
Termination of VIE agreements with GZWFH, shares | (4,750,000) | ||||||||
Foreign currency translation Adjustments | 31,580 | 31,580 | (499) | 31,081 | |||||
Issuance of new shares | $ 1,528 | 2,154,472 | 2,156,000 | 2,156,000 | |||||
Issuance of new shares, shares | 1,527,586 | ||||||||
Share-based compensation | 266,586 | 266,586 | 266,586 | ||||||
Net loss | (632,365) | (632,365) | (6,705) | (639,070) | |||||
Ending balance, value at Dec. 31, 2020 | $ 9,132 | 2,692,973 | 191,219 | (293,162) | (49,770) | 2,550,392 | 2,550,392 | ||
Ending balance, shares at Dec. 31, 2020 | 9,131,786 | ||||||||
Common stock and warrant issuance | $ 48 | 2,832 | 2,880 | 2,880 | |||||
Common stock and warrant issuance, shares | 48,000 | ||||||||
Preferred stock and warrant issuance | $ 80 | 29,520 | 29,600 | 29,600 | |||||
Preferred stock and warrant issuance, shares | 80,000 | ||||||||
Changes in fair value of warranty liabilities | (24,800) | (24,800) | (24,800) | ||||||
Issuance of new shares upon private placement | $ 836 | 2,089,164 | 2,090,000 | 2,090,000 | |||||
Issuance of new shares upon private placement, shares | 836,000 | ||||||||
Consultancy services settled by equities | $ 505 | 3,044,645 | 3,045,150 | 3,045,150 | |||||
Consultancy services settled by equities, shares | 505,000 | ||||||||
Foreign currency translation Adjustments | 63,676 | 63,676 | 63,676 | ||||||
Preferred stock dividend | (6,312) | (6,312) | (6,312) | ||||||
Share-based compensation | $ 86 | 6,638,371 | 6,638,457 | 6,638,457 | |||||
Share based compensation, shares | 86,364 | ||||||||
Net loss | (9,619,079) | (9,619,079) | (9,619,079) | ||||||
Ending balance, value at Dec. 31, 2021 | $ 10,607 | $ 80 | $ 14,472,705 | $ 191,219 | $ (9,918,553) | $ 13,906 | $ 4,769,964 | $ 4,769,964 | |
Ending balance, shares at Dec. 31, 2021 | 10,607,150 | 80,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (9,619,079) | $ (639,070) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation expenses | 6,127 | 74,958 |
Amortization | 0 | 53,156 |
Impairment of GZWFH | 0 | 522,291 |
Deferred income tax | 2,258 | 73,150 |
Changes in fair value of warranty liabilities | 24,800 | 0 |
Consultancy services settled by equities | 3,045,150 | 0 |
Share-based compensation | 6,638,371 | 265,758 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (252,338) | 1,406,867 |
Inventories | 278,100 | 268,285 |
Advance to suppliers | (40,563) | 824 |
Prepaid expenses and other assets, net | (66,232) | 61,987 |
Retention receivables | 395,579 | 24,894 |
Notes payable | (99,106) | (10,180) |
Accounts payable | 10,092 | (236,137) |
Advance from customers | 0 | (395,751) |
Other payables and accrued liabilities | 103,599 | (299,345) |
Income tax payable | 92,346 | (629,676) |
Deferred revenue | 0 | (593,445) |
Operating lease liability | 0 | (8,563) |
Advance receipts | (267,375) | (69,827) |
Net cash provided by (used in) operating activities | 251,729 | (129,824) |
Cash flows from investing activities | ||
Purchase of property and equipment | (25,067) | (57,153) |
Purchase of intangible assets | 0 | (25,360) |
Disposal of GZ WFH | 0 | (4,099) |
Cash acquired from merger | 0 | 857,555 |
Net cash (used in) provided by investing activities | (25,067) | 770,943 |
Cash flows from financing activities: | ||
Proceeds from related parties | (718,341) | 664,454 |
Repayment to related parties | 0 | (402,531) |
Proceeds from common stock and warrant issuance | 120,000 | 0 |
Proceeds from preferred stock and warrant issuance | 200,000 | 0 |
Proceeds from issuance of common stock | 2,090,000 | 0 |
Repayment of short-term bank loan | (487,826) | (44,444) |
Net cash provided by financing activities | 1,203,833 | 217,479 |
Effect of exchange rate changes on cash and cash equivalents | (10,017) | 136,394 |
Net increase in cash and cash equivalents | 1,420,478 | 994,992 |
Cash and cash equivalents at beginning of year | 1,023,531 | 28,539 |
Cash and cash equivalents at end of year | 2,444,009 | 1,023,531 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest expenses | 0 | 0 |
Cash paid for Income taxes | $ 0 | $ 0 |
PRINCIPAL ACTIVITIES AND ORGANI
PRINCIPAL ACTIVITIES AND ORGANIZATION | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
PRINCIPAL ACTIVITIES AND ORGANIZATION | Note 1 PRINCIPAL ACTIVITIES AND ORGANIZATION The consolidated financial statements include the financial statements of Nocera, Inc. (“Nocera” or the “Company”) and its subsidiaries, Grand Smooth Inc. Limited (“GSI”) and Guizhou Grand Smooth Technology Ltd. (“GZ GST” or “WFOE”), and Xin Feng Construction Co., Ltd. (“XFC”) that is controlled through contractual arrangements. The Company, GSI, GZ GST and XFC are collectively referred to as the “Company”. Nocera was incorporated in the State of Nevada on February 1, 2002 and is based in New Taipei City, Taiwan (R.O.C.). It did not engage in any operations and was dormant from its inception until its reverse merger of GSI on December 31, 2018. Reverse merger Effective December 31, 2018, Nocera completed a reverse merger transaction (the “Transaction”) pursuant to an Agreement and Plan of Merger (the “Agreement”), with (i) GSI, (ii) GSI’s stockholders, Yin-Chieh Cheng and Zhang Bi, who together owned shares constituting 100% of the issued and outstanding ordinary shares of GSI (the “GSI Shares”) and (iii) GSI Acquisition Corp. Under the terms of the Agreement, the GSI Stockholders transferred to Nocera all of the GSI Shares in exchange for the issuance of 10,000,000 shares (the “Shares”) of Nocera’s common stock (the “Share Exchange”). As a result of the reverse merger, GSI became Nocera’s wholly-owned subsidiary and Yin-Chieh Cheng and Zhang Bi, the former stockholders of GSI, became Nocera’s controlling stockholders. The share exchange transaction with GSI was treated as a reverse merger, with GSI as the accounting acquirer and Nocera as the acquired party. GSI is a limited company established under the laws and regulations of Hong Kong on August 1, 2014, and is a holding company without any operation. GZ WFH was incorporated in Xingyi City, Guizhou Province, People’s Republic of China (PRC) on October 25, 2017, and is engaged in providing fish farming containers service, which integrates sales, installments, and maintenance of aquaculture equipment. The registered capital of GZ WFH is RMB$5,000,000 (equal to US$733,138). On November 13, 2018, GSI incorporated GZ GST in PRC with registered capital of US$15,000. Divestiture On September 21, 2020, the Company filed a Current Report on Form 8-K outlining the lack of communication that led to the termination by Nocera, Inc. of its relationship with Guizhou Wan Feng Hu Intelligent Aquatic Technology Co. Limited (“GZ WFH”) and its management, and termination of the Variable Interest Entity agreements between the parties. Subsequently on October 8, 2020, Zhang Bi and GZ WFH entered into a Settlement Agreement and Release with Nocera, Inc. wherein all claims as to GZ WFH’s debt (claim to shares in Nocera, Inc. or GZ GST) were compromised, settled, and otherwise resolved as to any and all claims or causes of action whatsoever against Nocera for any matter, action, or representation as to Nocera, and any debt to ownership of Nocera or GZ GST up to the date of the agreement. The consideration for the agreement was mutual waiver of any and all claims against each other and GZ GST, and GZ WFH (including Zhang Bi) waives any claims to Nocera stock, meaning the 4,750,000 shares of common stock of Nocera owned by Zhang Bi were cancelled as part of the agreement. The Settlement Agreement and Release is attached hereto as Exhibit 10.8. The VIE Agreements On December 31, 2020, Nocera and XFC, a domestic funded limited liability company registered in Taiwan (R.O.C), entered into a series of contractual agreements (“VIE Agreements”) whereby Nocera, Inc. agreed to provide technical consulting and related services to XFC. As a result, Nocera has been determined to be the primary beneficiary of XFC and XFC became a VIE (Variable Interest Entity) of Nocera. On December 31, 2020, Nocera exchanged 700,000 The VIE structure was adopted mainly because we engage in business in an industry that prohibits foreign investment (e.g., construction) and of which requires special licenses in Taiwan. We are not currently planning to engage in business in mainland China or Hong Kong, and as a result, we are not currently required to obtain any special licenses in mainland China or Hong Kong. The Company has entered into the following contractual arrangements with a stockholders of XFC, that enable the Company to (1) have the power to direct the activities that most significantly affects the economic performance of XFC, and (2) receive the economic benefits of XFC that could be significant to XFC. The Company is fully and exclusively responsible for the management of XFC, assumes all of the risk of losses of XFC and has the exclusive right to exercise all voting rights of XFC’s stockholders. Therefore, in accordance with ASC 810 “Consolidation”, the Company is considered the primary beneficiary of XFC and has consolidated XFC’s assets, liabilities, results of operations, and cash flows in the accompanying consolidated financial statements. (1) Voting Rights Proxy Agreement & Power of Attorney. (2) Exclusive Business Cooperation Agreement. (3) Equity Pledge Agreement. (4) Exclusive Call Option Agreement. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | Note 2 GOING CONCERN The Company had net loss of $ 9.6 a) The Company started its business operation in 2018 and is continuing to focus on its business development and ultimately to attain profitable operations. XFC, the Company’s VIE in Taiwan, continuously receives orders from its customers. The Company expects XFC to generate $5 million of revenue in the coming twelve months. Moreover, NTB, the Company’s Taiwan branch, will keep engaged in the fish brokerage business, which is expected to generate $5 million of revenue in the coming twelve months. b) The Company obtained a financial support letter from Mr. Yin-Chieh Cheng, the chief executive officer, also the Chairman of the Board and a principal shareholder of the Company. However, the Company continues to have ongoing obligations and it expects that it will require additional capital in order to execute its longer-term business plan. If the Company encounters unforeseen circumstances that place constraints on its capital resources, management will be required to take various measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing the Company’s business development activities, suspending the pursuit of its business plan, controlling overhead expenses and seeking to further dispose of non-core assets. Management cannot provide any assurance that the Company will raise additional capital if needed. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICY | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICY | Note 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICY Change of Reporting Entity and Basis of Presentation As a result of the Share Exchange on December 31, 2018, GSI became a wholly owned subsidiary of Nocera, Inc. The former GSI’s stockholders owned a majority of the common stock of the Company. The Transaction was regarded as a reverse merger whereby GSI was considered to be the accounting acquirer as its stockholders retained control of the Company after the Share Exchange, although Nocera, Inc. is the legal parent company. The Share Exchange was treated as a recapitalization of the Company. As a result, the assets and liabilities and the historical operations that will be reflected in the Nocera’s financial statements after consummation of the Transaction will be those of GSI and will be recorded at the historical cost basis of GSI. Nocera’s assets, liabilities and results of operations will be consolidated with the assets, liabilities and results of operations of GSI upon consummation of the Transaction. As such, GSI is the continuing entity for financial reporting purpose. In a reverse merger, the historical stockholder’s equity of the accounting acquirer prior to the merger is retroactively reclassified (a recapitalization) for the equivalent number of shares received in the merger after giving effect to any difference in par value of the registrant’s and the accounting acquirer’s stock by an offset in paid-in-capital. Therefore, the financial statements have been prepared as if GSI had always been the reporting company and then on the share exchange date, had changed its name and reorganized its capital stock. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. The consolidated financial statements included the financial statements of all subsidiaries and the VIE of the Company. All transactions and balances between the Company and its subsidiary and VIE have been eliminated in consolidation. Reclassification Certain prior period amounts have been reclassified to conform with current year presentation. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the allowance for doubtful receivables; the useful lives of property and equipment and intangible assets; impairment of long-lived assets; recoverability of the carrying amount of inventory; fair value of financial instruments; provisional amounts based on reasonable estimates for certain income tax effects of the Tax Act and the assessment of deferred tax assets or liabilities. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates. Concentrations of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of accounts receivable. The Company conducts credit evaluations of its customers and suppliers, and generally does not require collateral or other security from them. The Company evaluates its collection experience and long outstanding balances to determine the need for an allowance for doubtful accounts. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. There was one customer who represented 58.22 96.44 The following table sets forth a summary of single customers who represent 10% or more of the Company’s total accounts receivable, net: Concentrations of credit risk December 31, December 31, Percentage of the Company’s accounts receivable Customer A 16.37 26.33 Customer B 59.53 73.67 Customer C 16.30 – 92.20 100.00 The following table sets forth a summary of single suppliers who represent 10% or more of the Company’s total purchase: For the years ended December 31, 2021 2020 Percentage of the Company’s purchase Supplier A 48.76 100 Supplier B 15.14 – Supplier C 14.26 – 78.16 100 Fair Value Measurement The Company applies ASC Topic 820, Fair Value Measurements and Disclosures which defines fair value, establishes a framework for measuring fair value and expands financial statement disclosure requirements for fair value measurements. ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Unobservable inputs are valuation technique inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Management of the Company is responsible for determining the assets acquired, liabilities assumed and intangibles identified as of the acquisition date and considered a number of factors including valuations from an independent appraiser. When available, the Company uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Company measures fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. As of December 31, 2021 and 2020, there are no Cash and Cash Equivalents Cash and cash equivalents include all cash on hand and cash in bank with no restrictions. The balance of cash as of December 31, 2021 and 2020 were $ 2,444,009 1,023,531 Accounts Receivable, Net Accounts receivable are stated at the original amount less an allowance for doubtful accounts, if any, based on a review of all outstanding amounts at period end. An allowance is also made when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. The Company analyzes the aging of the customer accounts, coverage of credit insurance, customer concentrations, customer credit-worthiness, historical and current economic trends and changes in its customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts. Prepaid Expenses and Other Assets, Net Prepaid expense and other assets, net consist of receivable from investment, prepaid rent and etc. Management reviews its receivable balance each reporting period to determine if an allowance for doubtful accounts is required. An allowance for doubtful account is recorded in the period in which loss is determined to be probable based on an assessment of specific evidence indicating doubtful collection, historical experience, account balance aging, and prevailing economic conditions. Bad debts are written off against the allowance after all collection efforts have ceased. Inventories, net Inventories are stated at lower of cost or net realizable value. Cost is determined using the weighted average method. Inventories include raw materials, work in progress and finished goods. The variable production overhead is allocated to each unit of product on the basis of the actual use of the production facilities. The allocation of fixed production overhead to the costs of conversion is based on the normal capacity of the production facilities. Where there is evidence that the utility of inventories, in their disposal in the ordinary course of business, will be less than cost, whether due to physical deterioration, obsolescence, changes in price levels, or other causes, the inventories are written down to net realizable value. Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs, and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Depreciation of property and equipment is provided using the straight-line method over their estimated useful lives, which are shown as follows. Property and Equipment Useful Lives Useful life Leasehold improvements Shorter of the remaining lease terms and estimated useful lives Furniture and fixture 5 years Equipment 3 years Vehicle 5 years Upon sale or disposal, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income. Goodwill and Intangible Assets We recognize goodwill in accordance with ASC 350, Intangibles—Goodwill and Other We recognize intangibles assets in accordance with ASC 350, Intangibles—Goodwill and Other The estimates of fair value are based on the best information available as of the date of the assessment, which primarily incorporates management assumptions about expected future cash flows. Although these assets are not currently impaired, there can be no Share-Based Compensation We determine our share-based compensation in accordance with ASC 718, Compensation—Stock Compensation (ASC 718), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees based on the grant date fair value of the award. Determining the appropriate fair value model and calculating the fair value of phantom award grants requires the input of subjective assumptions. We use the Black-Scholes pricing model to value our phantom awards. Share-based compensation expense is calculated using our best estimates, which involve inherent uncertainties and the application of management’s judgment. Significant estimates include our expected volatility. If different estimates and assumptions had been used, our phantom unit valuations could be significantly different and related share-based compensation expense may be materially impacted. The Black-Scholes pricing model requires inputs such as the risk-free interest rate, expected term, expected volatility and expected dividend yield. We base the risk-free interest rate that we use in the Black-Scholes pricing model on zero coupon U.S. Treasury instruments with maturities similar to the expected term of the award being valued. The expected term of phantom awards is estimated from the vesting period of the award and represents the weighted average period that our phantom awards are expected to be outstanding. We estimated the volatility based on the historic volatility of our guideline companies, which we feel best represent our Company. We have never paid and do not anticipate paying any cash dividends in the foreseeable future and, therefore, we use an expected dividend yield of zero in the pricing model. We account for forfeitures as they occur. Impairment of Long-lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets. Commitments and Contingencies In the normal course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of its business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter. Revenue Recognition The Company has early adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and all subsequent ASUs that modified ASC 606 on January 1, 2017. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company applies the following steps: · Step 1: Identify the contract (s) with a customer · Step 2: Identify the performance obligations in the contract · Step 3: Determine the transaction price · Step 4: Allocate the transaction price to the performance obligation in the contract · Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Company considered revenue is recognized when (or as) the Company satisfies performance obligations by transferring a promised goods and provide maintenance service to a customer. Revenue is measured at the transaction price which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised goods and providing maintenance service to the customer. Contracts with customers are comprised of invoices and written contracts. The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to services resale by customers. The Company has no sales incentive programs. The Company provides goods, maintenance service warranties for the goods sold with a period varying from 18 months to 72 months, which majority are 18 months, and exclusive sales agency license to its customers. For performance obligation related to providing products, the Company expects to recognize the revenue according to the delivery of products. For performance obligation related to maintenance service warranties, the Company expects to recognize the revenue on a ratable basis using a time-based output method. The performance obligations are typically satisfied as services are rendered on a straight-line basis over the contract term, which is generally for 18 months as majority of the maintenance service warranties periods provided are 18 months. For performance obligation related to exclusive agency license, the Company recognizes the revenue ratably upon the satisfaction over the estimated economic life of the license. The Company does not have amounts of contract assets since revenue is recognized as control of goods is transferred. The contract liabilities consist of advance payments from customers and deferred revenue. Advance payments from customer are expected to be recognized as revenue within 12 months. Deferred revenue is expected to be recognized as revenue within 12 months. Cost of Sales Cost of sales consists primarily of material costs, labor costs, depreciation, and related expenses, which are directly attributable to the production of the product. Write-down of inventories to lower of cost or net realizable value is also recorded in cost of sales. Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Leases In February 2016, the FASB issued ASU 2016-12, Leases (ASC Topic 842), which amends the leases requirements in ASC Topic 840, Leases. Under the new lease accounting standard, a lessee will be required to recognize a right-of-use asset and lease liability for most leases on the balance sheet. The new standard also modifies the classification criteria and accounting for sales-type and direct financing leases, and enhances the disclosure requirements. Leases will continue to be classified as either finance or operating leases. The Company adopted ASC Topic 842 using the modified retrospective transition method effective January 1, 2019. There was no cumulative effect of initially applying ASC Topic 842 that required an adjustment to the opening retained earnings on the adoption date nor revision of the balances in comparative periods. As a result of the adoption, The Company recognized a lease liability and right-of-use asset for each of our existing lease arrangement. The adoption of the new lease standard does not have a material impact on our consolidated income statement or our consolidated statement of cash flow. Uncertain Tax Positions The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. 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 on audit, including resolution of related appeals or litigation processes, 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. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. According to the PRC Tax Administration and Collection Law, 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 RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. The Company records interest and penalties on uncertain tax provisions as income tax expense. There are no uncertain tax positions as of December 31, 2021 and 2020, and the Company has no accrued interest or penalties related to uncertain tax positions. The company does not believe that the unrecognized tax benefits will change over the next twelve months. Comprehensive (Loss) Income Comprehensive income or loss is comprised of the Company’s net (loss) income and other comprehensive income or loss. The component of other comprehensive income or loss consists solely of foreign currency translation adjustments, net of the income tax effect. Foreign Currency Translation and Transactions The Company’s reporting currency is the U.S. dollar (“US$”). The functional currency of the Company’s subsidiary and the consolidated VIE is RMB. In the consolidated financial statements, the financial information of the Company’s subsidiary and the consolidated VIE has been translated into US$. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, except for changes in accumulated deficit during the year which is the result of income statement translation process, and revenue, expense, gains or losses are translated using the average exchange rate during the year. Translation adjustments are reported as foreign currency translation adjustments and are shown as a separate component of other comprehensive income or loss in the consolidated statements of changes in equity and comprehensive (loss) income. The exchange rates as of December 31, 2021 and 2020 are 6.4854 6.5249 6.3700 6.8996 (Loss) Earnings per Share Basic (loss) earnings per share is computed by dividing net (loss) income attributable to holders of common stock by the weighted average number of common shares outstanding during the year. 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 shares. Recent Accounting Pronouncements Recently Adopted Accounting Standards Adoption of ASC Topic 606, “Revenue from Contracts with Customers ASU 2018-13. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this update is to improve the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by GAAP that is most important to users of each entity’s financial statements. The amendments in this update apply to all entities that are required, under existing GAAP, to make disclosures about recurring or nonrecurring fair value measurements. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. There was no impact of the standard on the Company’s consolidated financial statements. Accounting Pronouncements Issued But Not Yet Adopted ASU 2019-12. On December 18, 2019, the FASB issued ASU No. 2019-12, Income taxes (Topic 740), Simplifying the Accounting for Income Taxes. This guidance amends ASC Topic 740 and addresses several aspects including 1) evaluation of step-up tax basis of goodwill when there is not a business combination, 2) policy election to not allocate consolidated taxes on a separate entity basis to entities not subject to income tax, 3) accounting for tax law changes or rates during interim periods, 4) ownership changes from equity method investment to subsidiary or vice versa, 5) elimination of exception to intraperiod allocation when there is gain in discontinued operations and a loss from continuing operations, 6) treatment of franchise taxes that are partially based on income. The guidance is effective for calendar year-end public entities on January 1, 2021 and other entities on January 1, 2022. The Company is evaluating the impact of this guidance on its consolidated financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. |
ACCOUNTS RECEIVABLE, NET
ACCOUNTS RECEIVABLE, NET | 12 Months Ended |
Dec. 31, 2021 | |
Credit Loss [Abstract] | |
ACCOUNTS RECEIVABLE, NET | Note 4 ACCOUNTS RECEIVABLE, NET As of December 31, 2021 and 2020, accounts receivable consisted of the following: Schedule of accounts receivable December 31, December 31, $ $ Accounts receivable 699,555 432,309 Less: Allowance for doubtful accounts – – Total 699,555 432,309 For the years ended December 31, 2021 and 2020, the Company has recorded provision for doubtful accounts of 0 0 |
INVENTORIES, NET
INVENTORIES, NET | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | Note 5 INVENTORIES, NET As of December 31, 2021 and 2020, inventories consisted of the following: Schedule of inventory December 31, December 31, $ $ Raw materials 97,163 115,373 Work in process 1,391,518 1,608,301 Total 1,488,681 1,723,674 The inventory write downs were $nil 0 0 |
ADVANCE TO SUPPLIERS
ADVANCE TO SUPPLIERS | 12 Months Ended |
Dec. 31, 2021 | |
Advance To Suppliers | |
ADVANCE TO SUPPLIERS | Note 6 ADVANCE TO SUPPLIERS Balances of advances to suppliers were $ 42,969 1,732 |
PREPAID EXPENSES AND OTHER ASSE
PREPAID EXPENSES AND OTHER ASSETS, NET | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
PREPAID EXPENSES AND OTHER ASSETS, NET | Note 7 PREPAID EXPENSES AND OTHER ASSETS, NET Schedule of prepaid expenses and other assets December 31, December 31, $ $ Other receivables from third party 107,444 3,161 Others – – 107,444 3,161 Less: Allowance for doubtful accounts – – Prepaid expenses and other assets, net 107,444 3,161 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | Note 8 PROPERTY AND EQUIPMENT, NET As of December 31, 2021 and December 31, 2020, property and equipment consisted of the following: Schedule of property and equipment December 31, December 31, $ $ Furniture and fixtures – – Equipment 78,802 51,287 Leasehold improvement – – Vehicle – – 78,802 51,287 Less: Accumulated depreciation (7,557 ) (361 ) Property and equipment, net 71,245 50,926 Depreciation expenses for the years ended December 31, 2021 and 2020 were $ 6,127 74,958 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 9 Goodwill As of December 31, 2021 and December 31, 2020, goodwill consisted of the followings: Schedule of goodwill December 31, December 31, $ $ Goodwill - XFC 332,040 332,040 Accumulated amortization – – Balance at end of year 332,040 332,040 |
WARRANTS
WARRANTS | 12 Months Ended |
Dec. 31, 2021 | |
Guarantees and Product Warranties [Abstract] | |
WARRANTS | Note 10 WARRANTS On April 1, 2021, the Company entered in a securities purchase agreement with certain investors for an aggregate of 80,000 shares of its preferred stock at a per share purchase price of $2.50. As part of the transaction, the investors received one Class C warrant and one Class D warrant for the subscription of each preferred share. The Class C warrants consist of the right to purchase up to 80,000 shares of the Company’s common stock at an exercise price of $2.50 per share exercisable for 36 months from the date of inception. The Class D warrants consist of the right to purchase up to 80,000 shares of the Company’s common stock at an exercise price of $5.00 per share exercisable for 36 months from the date of inception. The subscription was completed on August 10, 2021. On September 27, 2021 the Company entered into another securities purchase agreement with the same investors, pursuant to which the Company issued in a registered direct offering, an aggregate of 48,000 shares of common stock of the Company at a per share purchase price of $2.50. In addition, the investors also received one Class C warrant and one Class D warrant for the subscription of each preferred share. The Class C warrants consist of the right to purchase up to 80,000 shares of the Company’s common stock at an exercise price of $2.50 per share exercisable for 36 months from the date of inception. The Class D warrants consist of the right to purchase up to 80,000 shares of the Company’s common stock at an exercise price of $5.00 per share exercisable for 36 months from the Schedule Assumption used Appraisal Date (Inception Date) C Warrant 2021 D Warrant 2021 (Unaudited) (Unaudited) $ $ Market price per share (USD/share) 1.47 0.66 Exercise price (USD/price) 2.50 5.00 Risk free rate 0.14 % 0.14 % Dividend yield 0.00 % 0.00 % Expected term/ Contractual life (years) 1.39 1.39 Expected volatility 56.36 % 56.36 % Appraisal Date (Inception Date) C Warrant D Warrant (Unaudited) $ $ Market price per share (USD/share) 1.71 0.73 Exercise price (USD/price) 2.50 5.00 Risk free rate 0.15 % 0.15 % Dividend yield 0.00 % 0.00 % Expected term/ Contractual life (years) 1.26 1.26 Expected volatility 52.93 % 52.93 % The following is a reconciliation of the beginning and ending balances of warrants liability measured at fair value on a recurring basis using Level 3 inputs: Schedule of Warranty Liability December 31, December 31, $ $ Balance at the beginning of period – – Warrants issued to investors 287,520 – Warrants redeemed – – Fair value change of warrants included in earnings 24,800 – Total 312,320 – The following is a summary of the warrant activity: Schedule of warrant activity Number of Warrants Average Exercise Price Weighted Average Remaining Contractual Term in Years Outstanding at January 1, 2021 – – – Exercisable at January 1, 2021 – – – Granted 256,000 3.75 3.00 Exercised / surrendered – – – Expired – – – Outstanding at December 31, 2021 256,000 3.75 2.66 Exercisable at December 31, 2021 256,000 3.75 2.66 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
LEASES | Note 11 LEASES The Company has two non-cancelable lease agreements for certain office and accommodation as well as fish farming containers for research and develop advanced technology for water circulation applying in fishery with original lease periods expiring between 2022 and 2023. The lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. The Company recognizes rental expense on a straight-line basis over the lease term. The components of lease expenses for the year ended December 31, 2021 and December 31, 2020 were as follows: Components of lease expenses Statement of Income Location For the year ended December 31, 2021 For the year ended December 31, 2020 $ $ Lease Costs Operating lease expense General and administrative expenses 4,424 26,224 Total net lease costs 4,424 26,224 Maturity of lease liabilities under our non-cancelable operating leases as of December 31, 2021 and December 31, 2020 are US$ nil. |
OTHER PAYABLES AND ACCRUED LIAB
OTHER PAYABLES AND ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
OTHER PAYABLES AND ACCRUED LIABILITIES | Note 12 OTHER PAYABLES AND ACCRUED LIABILITIES Schedule of payables December 31, December 31, $ $ VAT payable 40,023 12,235 Salary payable 89,775 920 Others 12,628 43,681 Total 142,426 56,836 |
TAXATION
TAXATION | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
TAXATION | Note 13 TAXATION The Company and its subsidiary, and the consolidated VIE file tax returns separately. 1) Value-added tax (“VAT”) PRC Pursuant to the Provisional Regulation of the PRC on VAT and the related implementing rules, all entities and individuals (“taxpayers”) that are engaged in the sale of products in the PRC are generally required to pay VAT, at a rate of which was changed from 16 13 Taiwan Pursuant to the Value-added and Non-value-added Business Tax Act and the related implementing rules, all entities and individuals ("taxpayers") that are engaged in the sale of products in the Taiwan are generally required to pay VAT, at a rate of 5%. 2) Income tax United States On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into legislation. The 2017 Tax Act significantly revises the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 34% to 21%, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to provide guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. The Company has completed the assessment of the income tax effect of the Tax Act and there were no adjustments recorded to the provisional amounts. The Coronavirus Aid, Relief and Economy Security (CARES) Act (the “CARES Act, H.R. 748”) was signed into law on 27 March 2020. The CARES Act temporarily eliminates the 80% taxable income limitation (as enacted under the Tax Cuts and Jobs Act of 2017) for NOL deductions for 2018-2020 tax years and reinstated NOL carrybacks for the 2018-2020 tax years. Moreover, the CARES Act also temporarily increases the business interest deduction limitations from 30% to 50% of adjusted taxable income for the 2019 and 2020 taxable year. Lastly, the Tax Act technical correction classifies qualified improvement property as 15-year recovery period, allowing the bonus depreciation deduction to be claimed for such property retroactively as if it was included in the Tax Act at the time of enactment. The Company does not anticipate a significant tax impact on its financial statements and will continue to examine the impact the CARES Act may have on its business. The Company evaluated the Global Intangible Low Taxed Income (“GILTI”) inclusion on current earnings and profits of greater than 10% owned foreign controlled corporations. The Company has evaluated whether it has additional provision amount resulted by the GILTI inclusion on current earnings and profits of its foreign controlled corporations. The law also provides that corporate taxpayers may benefit from a 50% reduction in the GILTI inclusion, which effectively reduces the 21 10.5 152,829 The reverse merger was completed on December 31, 2018 and the tax losses of US subsidiary was not in the scope as of December 31, 2018. As of December 31, 2019, net operating loss carried forward which was available to offset future taxable income for the Company in the United States was $ 99,817 Taiwan The Company’s loss before income taxes is primarily derived from the operations in Taiwan and income tax expense is primarily incurred in Taiwan. As a result of amendments to the “Taiwan Income Tax Act” enacted by the Office of the President of Taiwan on February 7, 2018, the statutory income tax rate increased from 17% to 20% and the undistributed earning tax, or a surtax, decreased from 10% to 5% effective from January 1, 2018. As a result, the statutory income tax rate in Taiwan is 20% for the years ended August 31, 2021 and 2020. An additional surtax, of which rate was reduced from 10% to 5% being applied to the Company starting from September 1, 2018, is assessed on undistributed income for the entities in Taiwan, but only to the extent such income is not distributed or set aside as a legal reserve before the end of the following year. The 5% surtax is recorded in the period the income is earned, and the reduction in the surtax liability is recognized in the period the distribution to stockholders or the setting aside of legal reserve is finalized in the following year. Hong Kong The HK tax reform has introduced two-tiered profits tax rates for corporations. Under the two-tiered profits tax rates regime, the profits tax rate for the first HK$2 million (approximately $257,931) of assessable profits will be lowered to 8.25 As of December 31, 2021, The Company’s subsidiary in Hong Kong had net operating loss carry forwards available to offset future taxable income. The net operating losses will be carryforward indefinitely under Hong Kong Profits Tax regulation. There is a full valuation allowance applied against these loss carry forward as management determined it was not more likely than not that these net operating losses would be utilized in the foreseeable future. PRC WFOE and the consolidated VIE established in the PRC are subject to the PRC statutory income tax rate of 25 In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to income taxes within the PRC at the applicable tax rate on taxable income. All the PRC subsidiaries were subject to income tax at a rate of 25% for the year ended December 31, 2021 and 2020. According to PRC tax regulations, the PRC net operating loss can generally carry forward for no longer than five years starting from the year subsequent to the year in which the loss was incurred. The components of the income tax (benefit) expense are: Income tax components For the years ended December 31, 2021 2020 $ $ Current 139,932 – Deferred – (42,777 ) Total income tax expense (benefit) 139,932 (42,777 ) The reconciliation of income taxes expenses computed at the TW statutory tax rate (2020: at PRC statutory tax rate) applicable to income tax expense is as follows: Reconciliation of income tax expense For the years ended December 31, 2021 2020 Taiwan (2020 - PRC) income tax statutory rate 20.00 25.00 Tax effect of non-deductible expense ( 6.78 ) – Tax effect of stock-based compensation ( 14.71 ) – Tax effect of non-taxable income – – Tax effect of different tax rates in other jurisdictions 1.07 – GILTI Tax impact – – Changes in valuation allowance ( 1.01 ) ( 18.73 ) Effective tax rate ( 1.43 ) 6.27 3) Deferred tax assets (liabilities), net The tax effects of temporary differences representing deferred income tax assets and liabilities result principally from the following: Schedule of deferred income taxes December 31, 2021 December 31, 2020 $ $ Deferred tax assets Tax loss carried forward – 2,300 Allowance for doubtful receivables – – Total deferred tax assets – 2,300 Valuation allowance – – Total deferred tax assets, net – 2,300 Deferred tax liabilities Property and equipment, difference in depreciation – – Deferred tax liabilities, net – – The valuation allowance as of December 31, 2021 and 2020 was primarily provided for the deferred income tax assets if it is more likely than not that these items will expire before the Company is able to realize its benefits, or that the future deductibility is uncertain. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible or utilizable. Management considers projected future taxable income and tax planning strategies in making this assessment. The movement for the valuation allowance is as following. Movement in valuation allowance December 31, 2021 December 31, 2020 $ $ Balance at beginning of the year – (304,418 ) Additions of valuation allowance 95,844 – Reductions of valuation allowance – 304,418 Balance at the end of the year 95,844 – PRC Withholding Tax on Dividends The current PRC Enterprise Income Tax Law imposes a 10% withholding income tax for dividends distributed by foreign-invested enterprises to their immediate holding companies outside the PRC. A lower withholding tax rate will be applied if there is a tax treaty arrangement between the PRC and the jurisdiction of the foreign holding company. Distributions to holding companies in Hong Kong that satisfy certain requirements specified by PRC tax authorities, for example, will be subject to a 5% withholding tax rate. As of December 31, 2021 and 2020, the Company had not recorded any withholding tax on the retained earnings of its foreign-invested enterprises in the PRC, since the Company intends to reinvest its earnings to potentially continue its business in mainland China, namely the manufacturing of the RASs through GZ GST, and its foreign-invested enterprises do not intend to declare dividends to their immediate foreign holding companies. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY BALANCES AND TRANSACTIONS | Note 14 RELATED PARTY BALANCES AND TRANSACTIONS Due to related parties The balance due to related parties was as following: Schedule of related party transactions December 31, December 31, $ $ Mountain Share Transfer, LLC (2) 39,341 7,681 Due from a related party The balance due from a related party was as following: December 31, December 31, $ $ Mr. Yin-Chieh Cheng (1) – 19,067 Taisi Electrical & Plumbing Co. Pte Ltd. (3) 1,615,217 877,809 Total 1,615,217 896,876 Note: (1) Mr. Yin-Chieh Cheng (“Mr. Cheng”) is the chairman the Company, and he holds 42.5% shares of the Company. The balance due to Mr. Cheng as of December 31, 2020 mainly represented the amount paid by Mr. Cheng on behalf of the Company. In September 2019, Mr. Cheng took over the receivable amount of the concert the Company invested in November 2018, and assumed the liability of $551,457 related to such receivable to the Company. In September 2019, Mr. Cheng collected the payment of $1,000,000 from JCD, our exclusive sales agent in Asia Pacific, on behalf of the Company. As agreed between Mr. Cheng and the Company, the due from balance was netted off by due to balances. (2) Mountain Share Transfer, LLC is company 100% controlled by Erik S. Nelson, the corporate secretary and director of the Company. The balances represented the amount paid on behalf of the Company for its daily operation purpose. (3) Mr. Tsai Wen-Chih is the director of XFC and has control power over Taisi Electrical & Plumbing Co. Pte Ltd. The Company took over the receivable amount of $877,809 from acquisition of XFC in December 2020. None of the receivables have been impaired and it is expected that the full contractual amounts can be collected. Related party transactions The details of the related party transactions were as follows: For the years ended December 31, 2021 2020 $ $ Paid on behalf of the Company Mr. Zhang Bi (1) – 3,455 Mr. Yin-Chieh Cheng (1) – 86,320 Mountain Share Transfer, LLC (1) – 7,000 Repayment to related party Mr. Yin-Chieh Cheng – 665,000 Note: (1) The transactions represent the amount paid by Mr. Zhang Bi, Mr. Yin-Chieh Cheng, and Mountain Share Transfer, LLC on behalf of the Company for its daily operation. |
COMMON STOCK
COMMON STOCK | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
COMMON STOCK | Note 15 COMMON STOCK The Company’s authorized number of common stock is 200,000,000 0.001 10,607,150 9,131,786 All number of shares, share amounts and per share data presented in the accompanying consolidated financial statements and related notes have been retroactively restated to reflect the reverse merger transaction and subsequent issuance of shares stated above, except for authorized common shares, which were not affected. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | Note 16 SHARE-BASED COMPENSATION On December 27, 2018, Nocera granted Mr. Yin-Chieh Cheng quarterly option awards of 250,000 5,000,000 0.50 On June 1, 2020, Nocera granted Mr. Shun-Chih Chuang and Mr. Hsien-Wen Yu 50,000 60,000 0.50 50,000 0.50 On June 1, 2020, Nocera granted Mr. Michael A. Littman 50,000 0.50 50,000 1.00 50,000 50,000 On December 1, 2021, Nocera granted Mr. Shun-Chih Chuang and Mr. Hsien-Wen Yu 75,000 60,000 0.50 70,000 0.50 On December 31, 2021, the Company issued an aggregate of 505,000 The estimated fair value of share-based compensation for employees is recognized as a charge against income on a ratable basis over the requisite service period, which is generally the vesting period of the award. The fair value of stock option grant was estimated on the date of grant using the Black-Scholes option pricing model under the following assumptions: Assumptions used December 31, December 31, Dividend yield N/A N/A Risk-free interest rate 1.16 0.20 Expected term (in years) 4.31 2.88 Volatility 48.15 407.00 The Company estimated the grant date fair value of time-based stock option awards using the Black-Scholes option valuation model, which requires assumptions involving an estimate of the fair value of the underlying common stock on the date of grant, the expected term of the options, volatility, discount rate and dividend yield. The Company calculated expected option terms based on the “simplified” method for “plain vanilla” options due to the limited exercise information. The “simplified method” calculates the expected term as the average of the vesting term and the original contractual term of the options. The Company calculated volatility using the average adjusted volatility of quick companies feature of Capital IQ for a period of time reflective of the expected option term, while the discount rate was estimated using the interest rate for a treasury note with the same contractual term as the options granted. Dividend yield is estimated at our current dividend rate, which adjustments for any known future changes in the rate. For the years ended December 31, 2021 and December 31, 2020, $ 6,638,371 266,586 As of December 31, 2021, total unrecognized compensation cost related to unvested share-based compensation awards was $ 11,114,097 1.99 |
PREFERRED STOCK
PREFERRED STOCK | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
PREFERRED STOCK | Note 17 PREFERRED STOCK In August 2021, the Company issued 80,000 1.00 2.50 |
(LOSS) EARNINGS PER SHARE
(LOSS) EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
(LOSS) EARNINGS PER SHARE | Note 18 (LOSS) EARNINGS PER SHARE The following table sets forth the computation of basic and diluted (loss) earnings per common share for the years ended December 31, 2021 and 2020. Schedule of earnings (loss) per share For the years ended December 31, 2021 2020 $ $ Numerator: Net loss attributable to the Company (9,619,079 ) (632,365 ) Denominator: Weighted-average shares outstanding - Basic 9,160,862 11,752,447 - Diluted 9,160,862 11,752,447 Earnings (loss) per share: - Basic (1.0500 ) (0.0538 ) - Diluted (1.0500 ) (0.0538 ) Basic net (loss) income per common share is computed using the weighted average number of the common shares outstanding during the period. Diluted (loss) income per share is computed using the weighted average number of ordinary shares and ordinary equivalent shares outstanding which include 5,473,636 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 19 COMMITMENTS AND CONTINGENCIES Capital commitments As of December 31, 2021 and 2020, the Company’s capital commitments contracted but not yet reflected in the consolidated financial statements amounted to $nil. 0 Contingencies In the ordinary course of business, the Company may be subject to legal proceeding 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 has no significant pending litigation for the year ended December 31, 2021 and 2020. |
BUSINESS COMBINATION
BUSINESS COMBINATION | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATION | NOTE 20 BUSINESS COMBINATION Xin Feng Construction Co., Ltd. On December 31, 2020, the Company acquired substantially all of the assets of XFC. The fair values of assets acquired and liabilities assumed were as follows: Schedule of assets acquired and liabilities assumed Cash and bank balance $ 857,555 Trade receivables 318,487 Inventory 1,608,301 Prepaid expenses and other current assets 877,809 Plant and equipment, net 50,567 Other non-current assets 458,392 Notes payable (187,447 ) Bank borrowing (532,824 ) Other payables and accrued liabilities (55,917 ) Income tax payable (285,186 ) Advance receipts (1,285,777 ) Goodwill 332,040 Net assets acquired $ 2,156,000 Guizhou Wan Feng Hu Intelligent Aquatic Technology Co. Limited. On October 8, 2020, the Company terminated the VIE agreements with and settled all debt claims as to GZ WFH. The fair values of assets and liabilities of GZ WFH were as follows: Schedule of assets acquired and liabilities assumed Cash and bank balance $ 3,974 Trade receivables 1,534,961 Inventory 295,960 Prepaid expenses and other current assets 143,819 Plant and equipment, net 703,412 Advance to suppliers 3,996 Deferred tax assets, net 121,675 Accounts payable (264,622 ) Other payables and accrued liabilities (312,562 ) Advance from customers (637,455 ) Income tax payable (629,666 ) Due to related parties (414,583 ) Net assets acquired 548,909 Consideration received (4,750 ) Non-controlling interest (21,868 ) Cumulative exchange difference from translation of foreign operations (62,174 ) Loss on disposal of subsidiary $ 460,117 |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENT | Note 21 SUBSEQUENT EVENT Consulting Agreements On January 3, 2022, the Company entered into a consulting agreement with a consultant. The term the consulting agreement is from January 3, 2022 to January 2, 2025. In consideration for services rendered under the consulting agreement, the Company agreed to issue the consultant 60,000 Class A warrants, vesting in three equal installments commencing on the first anniversary date of the consulting agreement. Each Class A warrant is exercisable to purchase one share of common stock for $0.50 per share from the date of vesting until April 23, 2026. On January 3, 2022, the Company entered into two consulting agreements with two consultants. The term of each consulting agreement is from January 3, 2022 to January 2, 2025. In consideration for services rendered under the consulting agreements, the Company agreed to issue the consultants an aggregate of 90,000 Class C Warrants, vesting in three equal installments commencing on the first anniversary date of the consulting agreements. Each Class C Warrant is exercisable to purchase one share of common stock for $2.50 per share from the date of vesting in each installment until the third anniversary date of the date of vesting. The foregoing securities were issued in reliance on the exclusion from registration provided by Rule 903 of Regulation S under the Securities Act due to the fact that such persons was a non-U.S. Person (as defined under Rule 902 Section (k)(2)(i) of Regulation S). Gerald H. Lindberg’s Employment Agreement On January 3, 2022, the Company agreed to issue 60,000 Class C Warrants to Gerald H. Lindberg in connection with the Employment Agreement, dated January 3, 2022, between the Company and Mr. Lindberg, as more fully described under Item 5.02 of the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on January 5, 2022. The Class C Warrants issued to Mr. Lindberg vest in three equal installments over a three-year period, commencing on the first-year anniversary date of Mr. Lindberg’s employment agreement. Each Class C Warrant will be exercisable to purchase one share of common stock for $2.50 per share from the vesting date until the third anniversary of such vesting date. The Company agreed to issue the foregoing Class C Warrants to Mr. Lindberg pursuant to the exemption from the registration requirements of the Securities Act of 1933 available under Section 4(a)(2) promulgated thereunder due to the fact that the issuance did not involve a public offering of securities. Issuance of Common Stock to CARMEL, MILAZZO & FEIL LLP On January 28, 2022, the Company issued 100,000 common shares as consideration to CARMEL, MILAZZO & FEIL LLP, which has served as the Company’s legal counsel since November 2021, according to the engagement letter signed by mutual parties. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICY (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Change of Reporting Entity and Basis of Presentation | Change of Reporting Entity and Basis of Presentation As a result of the Share Exchange on December 31, 2018, GSI became a wholly owned subsidiary of Nocera, Inc. The former GSI’s stockholders owned a majority of the common stock of the Company. The Transaction was regarded as a reverse merger whereby GSI was considered to be the accounting acquirer as its stockholders retained control of the Company after the Share Exchange, although Nocera, Inc. is the legal parent company. The Share Exchange was treated as a recapitalization of the Company. As a result, the assets and liabilities and the historical operations that will be reflected in the Nocera’s financial statements after consummation of the Transaction will be those of GSI and will be recorded at the historical cost basis of GSI. Nocera’s assets, liabilities and results of operations will be consolidated with the assets, liabilities and results of operations of GSI upon consummation of the Transaction. As such, GSI is the continuing entity for financial reporting purpose. In a reverse merger, the historical stockholder’s equity of the accounting acquirer prior to the merger is retroactively reclassified (a recapitalization) for the equivalent number of shares received in the merger after giving effect to any difference in par value of the registrant’s and the accounting acquirer’s stock by an offset in paid-in-capital. Therefore, the financial statements have been prepared as if GSI had always been the reporting company and then on the share exchange date, had changed its name and reorganized its capital stock. The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. The consolidated financial statements included the financial statements of all subsidiaries and the VIE of the Company. All transactions and balances between the Company and its subsidiary and VIE have been eliminated in consolidation. |
Reclassification | Reclassification Certain prior period amounts have been reclassified to conform with current year presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include, but are not limited to, the allowance for doubtful receivables; the useful lives of property and equipment and intangible assets; impairment of long-lived assets; recoverability of the carrying amount of inventory; fair value of financial instruments; provisional amounts based on reasonable estimates for certain income tax effects of the Tax Act and the assessment of deferred tax assets or liabilities. These estimates are often based on complex judgments and assumptions that management believes to be reasonable but are inherently uncertain and unpredictable. Actual results could differ from these estimates. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of accounts receivable. The Company conducts credit evaluations of its customers and suppliers, and generally does not require collateral or other security from them. The Company evaluates its collection experience and long outstanding balances to determine the need for an allowance for doubtful accounts. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable. There was one customer who represented 58.22 96.44 The following table sets forth a summary of single customers who represent 10% or more of the Company’s total accounts receivable, net: Concentrations of credit risk December 31, December 31, Percentage of the Company’s accounts receivable Customer A 16.37 26.33 Customer B 59.53 73.67 Customer C 16.30 – 92.20 100.00 The following table sets forth a summary of single suppliers who represent 10% or more of the Company’s total purchase: For the years ended December 31, 2021 2020 Percentage of the Company’s purchase Supplier A 48.76 100 Supplier B 15.14 – Supplier C 14.26 – 78.16 100 |
Fair Value Measurement | Fair Value Measurement The Company applies ASC Topic 820, Fair Value Measurements and Disclosures which defines fair value, establishes a framework for measuring fair value and expands financial statement disclosure requirements for fair value measurements. ASC Topic 820 defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability (an exit price) on the measurement date in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. ASC Topic 820 specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Unobservable inputs are valuation technique inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Management of the Company is responsible for determining the assets acquired, liabilities assumed and intangibles identified as of the acquisition date and considered a number of factors including valuations from an independent appraiser. When available, the Company uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Company measures fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. As of December 31, 2021 and 2020, there are no |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all cash on hand and cash in bank with no restrictions. The balance of cash as of December 31, 2021 and 2020 were $ 2,444,009 1,023,531 |
Accounts Receivable, Net | Accounts Receivable, Net Accounts receivable are stated at the original amount less an allowance for doubtful accounts, if any, based on a review of all outstanding amounts at period end. An allowance is also made when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. The Company analyzes the aging of the customer accounts, coverage of credit insurance, customer concentrations, customer credit-worthiness, historical and current economic trends and changes in its customer payment patterns when evaluating the adequacy of the allowance for doubtful accounts. |
Prepaid Expenses and Other Assets, Net | Prepaid Expenses and Other Assets, Net Prepaid expense and other assets, net consist of receivable from investment, prepaid rent and etc. Management reviews its receivable balance each reporting period to determine if an allowance for doubtful accounts is required. An allowance for doubtful account is recorded in the period in which loss is determined to be probable based on an assessment of specific evidence indicating doubtful collection, historical experience, account balance aging, and prevailing economic conditions. Bad debts are written off against the allowance after all collection efforts have ceased. |
Inventories, net | Inventories, net Inventories are stated at lower of cost or net realizable value. Cost is determined using the weighted average method. Inventories include raw materials, work in progress and finished goods. The variable production overhead is allocated to each unit of product on the basis of the actual use of the production facilities. The allocation of fixed production overhead to the costs of conversion is based on the normal capacity of the production facilities. Where there is evidence that the utility of inventories, in their disposal in the ordinary course of business, will be less than cost, whether due to physical deterioration, obsolescence, changes in price levels, or other causes, the inventories are written down to net realizable value. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its existing use. Maintenance, repairs, and betterments, including replacement of minor items, are charged to expense; major additions to physical properties are capitalized. Depreciation of property and equipment is provided using the straight-line method over their estimated useful lives, which are shown as follows. Property and Equipment Useful Lives Useful life Leasehold improvements Shorter of the remaining lease terms and estimated useful lives Furniture and fixture 5 years Equipment 3 years Vehicle 5 years Upon sale or disposal, the applicable amounts of asset cost and accumulated depreciation are removed from the accounts and the net amount less proceeds from disposal is charged or credited to income. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets We recognize goodwill in accordance with ASC 350, Intangibles—Goodwill and Other We recognize intangibles assets in accordance with ASC 350, Intangibles—Goodwill and Other The estimates of fair value are based on the best information available as of the date of the assessment, which primarily incorporates management assumptions about expected future cash flows. Although these assets are not currently impaired, there can be no |
Share-Based Compensation | Share-Based Compensation We determine our share-based compensation in accordance with ASC 718, Compensation—Stock Compensation (ASC 718), which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees based on the grant date fair value of the award. Determining the appropriate fair value model and calculating the fair value of phantom award grants requires the input of subjective assumptions. We use the Black-Scholes pricing model to value our phantom awards. Share-based compensation expense is calculated using our best estimates, which involve inherent uncertainties and the application of management’s judgment. Significant estimates include our expected volatility. If different estimates and assumptions had been used, our phantom unit valuations could be significantly different and related share-based compensation expense may be materially impacted. The Black-Scholes pricing model requires inputs such as the risk-free interest rate, expected term, expected volatility and expected dividend yield. We base the risk-free interest rate that we use in the Black-Scholes pricing model on zero coupon U.S. Treasury instruments with maturities similar to the expected term of the award being valued. The expected term of phantom awards is estimated from the vesting period of the award and represents the weighted average period that our phantom awards are expected to be outstanding. We estimated the volatility based on the historic volatility of our guideline companies, which we feel best represent our Company. We have never paid and do not anticipate paying any cash dividends in the foreseeable future and, therefore, we use an expected dividend yield of zero in the pricing model. We account for forfeitures as they occur. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of carrying amount over the fair value of the assets. |
Commitments and Contingencies | Commitments and Contingencies In the normal course of business, the Company is subject to contingencies, including legal proceedings and claims arising out of its business that relate to a wide range of matters, such as government investigations and tax matters. The Company recognizes a liability for such contingency if it determines it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Company may consider many factors in making these assessments including historical and the specific facts and circumstances of each matter. |
Revenue Recognition | Revenue Recognition The Company has early adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and all subsequent ASUs that modified ASC 606 on January 1, 2017. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company applies the following steps: · Step 1: Identify the contract (s) with a customer · Step 2: Identify the performance obligations in the contract · Step 3: Determine the transaction price · Step 4: Allocate the transaction price to the performance obligation in the contract · Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Company considered revenue is recognized when (or as) the Company satisfies performance obligations by transferring a promised goods and provide maintenance service to a customer. Revenue is measured at the transaction price which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised goods and providing maintenance service to the customer. Contracts with customers are comprised of invoices and written contracts. The Company does not have arrangements for returns from customers and does not have any future obligations directly or indirectly related to services resale by customers. The Company has no sales incentive programs. The Company provides goods, maintenance service warranties for the goods sold with a period varying from 18 months to 72 months, which majority are 18 months, and exclusive sales agency license to its customers. For performance obligation related to providing products, the Company expects to recognize the revenue according to the delivery of products. For performance obligation related to maintenance service warranties, the Company expects to recognize the revenue on a ratable basis using a time-based output method. The performance obligations are typically satisfied as services are rendered on a straight-line basis over the contract term, which is generally for 18 months as majority of the maintenance service warranties periods provided are 18 months. For performance obligation related to exclusive agency license, the Company recognizes the revenue ratably upon the satisfaction over the estimated economic life of the license. The Company does not have amounts of contract assets since revenue is recognized as control of goods is transferred. The contract liabilities consist of advance payments from customers and deferred revenue. Advance payments from customer are expected to be recognized as revenue within 12 months. Deferred revenue is expected to be recognized as revenue within 12 months. |
Cost of Sales | Cost of Sales Cost of sales consists primarily of material costs, labor costs, depreciation, and related expenses, which are directly attributable to the production of the product. Write-down of inventories to lower of cost or net realizable value is also recorded in cost of sales. |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. |
Leases | Leases In February 2016, the FASB issued ASU 2016-12, Leases (ASC Topic 842), which amends the leases requirements in ASC Topic 840, Leases. Under the new lease accounting standard, a lessee will be required to recognize a right-of-use asset and lease liability for most leases on the balance sheet. The new standard also modifies the classification criteria and accounting for sales-type and direct financing leases, and enhances the disclosure requirements. Leases will continue to be classified as either finance or operating leases. The Company adopted ASC Topic 842 using the modified retrospective transition method effective January 1, 2019. There was no cumulative effect of initially applying ASC Topic 842 that required an adjustment to the opening retained earnings on the adoption date nor revision of the balances in comparative periods. As a result of the adoption, The Company recognized a lease liability and right-of-use asset for each of our existing lease arrangement. The adoption of the new lease standard does not have a material impact on our consolidated income statement or our consolidated statement of cash flow. |
Uncertain Tax Positions | Uncertain Tax Positions The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. 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 on audit, including resolution of related appeals or litigation processes, 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. Interest and penalties related to uncertain tax positions are recognized and recorded as necessary in the provision for income taxes. According to the PRC Tax Administration and Collection Law, 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 RMB 100,000. In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. The Company records interest and penalties on uncertain tax provisions as income tax expense. There are no uncertain tax positions as of December 31, 2021 and 2020, and the Company has no accrued interest or penalties related to uncertain tax positions. The company does not believe that the unrecognized tax benefits will change over the next twelve months. |
Comprehensive (Loss) Income | Comprehensive (Loss) Income Comprehensive income or loss is comprised of the Company’s net (loss) income and other comprehensive income or loss. The component of other comprehensive income or loss consists solely of foreign currency translation adjustments, net of the income tax effect. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The Company’s reporting currency is the U.S. dollar (“US$”). The functional currency of the Company’s subsidiary and the consolidated VIE is RMB. In the consolidated financial statements, the financial information of the Company’s subsidiary and the consolidated VIE has been translated into US$. Assets and liabilities are translated at the exchange rates on the balance sheet date, equity amounts are translated at historical exchange rates, except for changes in accumulated deficit during the year which is the result of income statement translation process, and revenue, expense, gains or losses are translated using the average exchange rate during the year. Translation adjustments are reported as foreign currency translation adjustments and are shown as a separate component of other comprehensive income or loss in the consolidated statements of changes in equity and comprehensive (loss) income. The exchange rates as of December 31, 2021 and 2020 are 6.4854 6.5249 6.3700 6.8996 |
(Loss) Earnings per Share | (Loss) Earnings per Share Basic (loss) earnings per share is computed by dividing net (loss) income attributable to holders of common stock by the weighted average number of common shares outstanding during the year. 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 shares. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Standards Adoption of ASC Topic 606, “Revenue from Contracts with Customers ASU 2018-13. In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments in this update is to improve the effectiveness of disclosures in the notes to the financial statements by facilitating clear communication of the information required by GAAP that is most important to users of each entity’s financial statements. The amendments in this update apply to all entities that are required, under existing GAAP, to make disclosures about recurring or nonrecurring fair value measurements. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. There was no impact of the standard on the Company’s consolidated financial statements. Accounting Pronouncements Issued But Not Yet Adopted ASU 2019-12. On December 18, 2019, the FASB issued ASU No. 2019-12, Income taxes (Topic 740), Simplifying the Accounting for Income Taxes. This guidance amends ASC Topic 740 and addresses several aspects including 1) evaluation of step-up tax basis of goodwill when there is not a business combination, 2) policy election to not allocate consolidated taxes on a separate entity basis to entities not subject to income tax, 3) accounting for tax law changes or rates during interim periods, 4) ownership changes from equity method investment to subsidiary or vice versa, 5) elimination of exception to intraperiod allocation when there is gain in discontinued operations and a loss from continuing operations, 6) treatment of franchise taxes that are partially based on income. The guidance is effective for calendar year-end public entities on January 1, 2021 and other entities on January 1, 2022. The Company is evaluating the impact of this guidance on its consolidated financial statements. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Concentrations of credit risk | Concentrations of credit risk December 31, December 31, Percentage of the Company’s accounts receivable Customer A 16.37 26.33 Customer B 59.53 73.67 Customer C 16.30 – 92.20 100.00 The following table sets forth a summary of single suppliers who represent 10% or more of the Company’s total purchase: For the years ended December 31, 2021 2020 Percentage of the Company’s purchase Supplier A 48.76 100 Supplier B 15.14 – Supplier C 14.26 – 78.16 100 |
Property and Equipment Useful Lives | Property and Equipment Useful Lives Useful life Leasehold improvements Shorter of the remaining lease terms and estimated useful lives Furniture and fixture 5 years Equipment 3 years Vehicle 5 years |
ACCOUNTS RECEIVABLE, NET (Table
ACCOUNTS RECEIVABLE, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Credit Loss [Abstract] | |
Schedule of accounts receivable | Schedule of accounts receivable December 31, December 31, $ $ Accounts receivable 699,555 432,309 Less: Allowance for doubtful accounts – – Total 699,555 432,309 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Schedule of inventory December 31, December 31, $ $ Raw materials 97,163 115,373 Work in process 1,391,518 1,608,301 Total 1,488,681 1,723,674 |
PREPAID EXPENSES AND OTHER AS_2
PREPAID EXPENSES AND OTHER ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses and other assets | Schedule of prepaid expenses and other assets December 31, December 31, $ $ Other receivables from third party 107,444 3,161 Others – – 107,444 3,161 Less: Allowance for doubtful accounts – – Prepaid expenses and other assets, net 107,444 3,161 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment December 31, December 31, $ $ Furniture and fixtures – – Equipment 78,802 51,287 Leasehold improvement – – Vehicle – – 78,802 51,287 Less: Accumulated depreciation (7,557 ) (361 ) Property and equipment, net 71,245 50,926 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | Schedule of goodwill December 31, December 31, $ $ Goodwill - XFC 332,040 332,040 Accumulated amortization – – Balance at end of year 332,040 332,040 |
WARRANTS (Tables)
WARRANTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Guarantees and Product Warranties [Abstract] | |
Schedule Assumption used | Schedule Assumption used Appraisal Date (Inception Date) C Warrant 2021 D Warrant 2021 (Unaudited) (Unaudited) $ $ Market price per share (USD/share) 1.47 0.66 Exercise price (USD/price) 2.50 5.00 Risk free rate 0.14 % 0.14 % Dividend yield 0.00 % 0.00 % Expected term/ Contractual life (years) 1.39 1.39 Expected volatility 56.36 % 56.36 % Appraisal Date (Inception Date) C Warrant D Warrant (Unaudited) $ $ Market price per share (USD/share) 1.71 0.73 Exercise price (USD/price) 2.50 5.00 Risk free rate 0.15 % 0.15 % Dividend yield 0.00 % 0.00 % Expected term/ Contractual life (years) 1.26 1.26 Expected volatility 52.93 % 52.93 % |
Schedule of Warranty Liability | Schedule of Warranty Liability December 31, December 31, $ $ Balance at the beginning of period – – Warrants issued to investors 287,520 – Warrants redeemed – – Fair value change of warrants included in earnings 24,800 – Total 312,320 – |
Schedule of warrant activity | Schedule of warrant activity Number of Warrants Average Exercise Price Weighted Average Remaining Contractual Term in Years Outstanding at January 1, 2021 – – – Exercisable at January 1, 2021 – – – Granted 256,000 3.75 3.00 Exercised / surrendered – – – Expired – – – Outstanding at December 31, 2021 256,000 3.75 2.66 Exercisable at December 31, 2021 256,000 3.75 2.66 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Components of lease expenses | Components of lease expenses Statement of Income Location For the year ended December 31, 2021 For the year ended December 31, 2020 $ $ Lease Costs Operating lease expense General and administrative expenses 4,424 26,224 Total net lease costs 4,424 26,224 |
OTHER PAYABLES AND ACCRUED LI_2
OTHER PAYABLES AND ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of payables | Schedule of payables December 31, December 31, $ $ VAT payable 40,023 12,235 Salary payable 89,775 920 Others 12,628 43,681 Total 142,426 56,836 |
TAXATION (Tables)
TAXATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income tax components | Income tax components For the years ended December 31, 2021 2020 $ $ Current 139,932 – Deferred – (42,777 ) Total income tax expense (benefit) 139,932 (42,777 ) |
Reconciliation of income tax expense | Reconciliation of income tax expense For the years ended December 31, 2021 2020 Taiwan (2020 - PRC) income tax statutory rate 20.00 25.00 Tax effect of non-deductible expense ( 6.78 ) – Tax effect of stock-based compensation ( 14.71 ) – Tax effect of non-taxable income – – Tax effect of different tax rates in other jurisdictions 1.07 – GILTI Tax impact – – Changes in valuation allowance ( 1.01 ) ( 18.73 ) Effective tax rate ( 1.43 ) 6.27 |
Schedule of deferred income taxes | Schedule of deferred income taxes December 31, 2021 December 31, 2020 $ $ Deferred tax assets Tax loss carried forward – 2,300 Allowance for doubtful receivables – – Total deferred tax assets – 2,300 Valuation allowance – – Total deferred tax assets, net – 2,300 Deferred tax liabilities Property and equipment, difference in depreciation – – Deferred tax liabilities, net – – |
Movement in valuation allowance | Movement in valuation allowance December 31, 2021 December 31, 2020 $ $ Balance at beginning of the year – (304,418 ) Additions of valuation allowance 95,844 – Reductions of valuation allowance – 304,418 Balance at the end of the year 95,844 – |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Schedule of related party transactions December 31, December 31, $ $ Mountain Share Transfer, LLC (2) 39,341 7,681 Due from a related party The balance due from a related party was as following: December 31, December 31, $ $ Mr. Yin-Chieh Cheng (1) – 19,067 Taisi Electrical & Plumbing Co. Pte Ltd. (3) 1,615,217 877,809 Total 1,615,217 896,876 Note: (1) Mr. Yin-Chieh Cheng (“Mr. Cheng”) is the chairman the Company, and he holds 42.5% shares of the Company. The balance due to Mr. Cheng as of December 31, 2020 mainly represented the amount paid by Mr. Cheng on behalf of the Company. In September 2019, Mr. Cheng took over the receivable amount of the concert the Company invested in November 2018, and assumed the liability of $551,457 related to such receivable to the Company. In September 2019, Mr. Cheng collected the payment of $1,000,000 from JCD, our exclusive sales agent in Asia Pacific, on behalf of the Company. As agreed between Mr. Cheng and the Company, the due from balance was netted off by due to balances. (2) Mountain Share Transfer, LLC is company 100% controlled by Erik S. Nelson, the corporate secretary and director of the Company. The balances represented the amount paid on behalf of the Company for its daily operation purpose. (3) Mr. Tsai Wen-Chih is the director of XFC and has control power over Taisi Electrical & Plumbing Co. Pte Ltd. The Company took over the receivable amount of $877,809 from acquisition of XFC in December 2020. None of the receivables have been impaired and it is expected that the full contractual amounts can be collected. Related party transactions The details of the related party transactions were as follows: For the years ended December 31, 2021 2020 $ $ Paid on behalf of the Company Mr. Zhang Bi (1) – 3,455 Mr. Yin-Chieh Cheng (1) – 86,320 Mountain Share Transfer, LLC (1) – 7,000 Repayment to related party Mr. Yin-Chieh Cheng – 665,000 Note: (1) The transactions represent the amount paid by Mr. Zhang Bi, Mr. Yin-Chieh Cheng, and Mountain Share Transfer, LLC on behalf of the Company for its daily operation. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Assumptions used | Assumptions used December 31, December 31, Dividend yield N/A N/A Risk-free interest rate 1.16 0.20 Expected term (in years) 4.31 2.88 Volatility 48.15 407.00 |
(LOSS) EARNINGS PER SHARE (Tabl
(LOSS) EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of earnings (loss) per share | Schedule of earnings (loss) per share For the years ended December 31, 2021 2020 $ $ Numerator: Net loss attributable to the Company (9,619,079 ) (632,365 ) Denominator: Weighted-average shares outstanding - Basic 9,160,862 11,752,447 - Diluted 9,160,862 11,752,447 Earnings (loss) per share: - Basic (1.0500 ) (0.0538 ) - Diluted (1.0500 ) (0.0538 ) |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Xin Feng Construction Co Ltd [Member] | |
Business Acquisition [Line Items] | |
Schedule of assets acquired and liabilities assumed | Schedule of assets acquired and liabilities assumed Cash and bank balance $ 857,555 Trade receivables 318,487 Inventory 1,608,301 Prepaid expenses and other current assets 877,809 Plant and equipment, net 50,567 Other non-current assets 458,392 Notes payable (187,447 ) Bank borrowing (532,824 ) Other payables and accrued liabilities (55,917 ) Income tax payable (285,186 ) Advance receipts (1,285,777 ) Goodwill 332,040 Net assets acquired $ 2,156,000 |
Guizhou Wan Feng Hu Intelligent Aquatic Technology Co Limited [Member] | |
Business Acquisition [Line Items] | |
Schedule of assets acquired and liabilities assumed | Schedule of assets acquired and liabilities assumed Cash and bank balance $ 3,974 Trade receivables 1,534,961 Inventory 295,960 Prepaid expenses and other current assets 143,819 Plant and equipment, net 703,412 Advance to suppliers 3,996 Deferred tax assets, net 121,675 Accounts payable (264,622 ) Other payables and accrued liabilities (312,562 ) Advance from customers (637,455 ) Income tax payable (629,666 ) Due to related parties (414,583 ) Net assets acquired 548,909 Consideration received (4,750 ) Non-controlling interest (21,868 ) Cumulative exchange difference from translation of foreign operations (62,174 ) Loss on disposal of subsidiary $ 460,117 |
PRINCIPAL ACTIVITIES AND ORGA_2
PRINCIPAL ACTIVITIES AND ORGANIZATION (Details Narrative) | 12 Months Ended |
Dec. 31, 2020shares | |
Shareholders | |
Defined Benefit Plan Disclosure [Line Items] | |
Shares exchanged | 700,000 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Net loss | $ 9,600 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICY (Details - Concentrations) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member] | ||
Product Information [Line Items] | ||
Concentration percentage | 16.37% | 26.33% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member] | ||
Product Information [Line Items] | ||
Concentration percentage | 59.53% | 73.67% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member] | ||
Product Information [Line Items] | ||
Concentration percentage | 16.30% | 0.00% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | All Customers [Member] | ||
Product Information [Line Items] | ||
Concentration percentage | 92.20% | 100.00% |
Purchases [Member] | Product Concentration Risk [Member] | Supplier A [Member] | ||
Product Information [Line Items] | ||
Concentration percentage | 48.76% | 100.00% |
Purchases [Member] | Product Concentration Risk [Member] | Supplier B [Member] | ||
Product Information [Line Items] | ||
Concentration percentage | 15.14% | 0.00% |
Purchases [Member] | Product Concentration Risk [Member] | Supplier C [Member] | ||
Product Information [Line Items] | ||
Concentration percentage | 14.26% | 0.00% |
Purchases [Member] | Product Concentration Risk [Member] | All Suppliers [Member] | ||
Product Information [Line Items] | ||
Concentration percentage | 78.16% | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICY (Details - Property useful lives) | 12 Months Ended |
Dec. 31, 2021 | |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property useful lives | Shorter of the remaining lease terms and estimated useful lives |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property useful lives | 5 years |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property useful lives | 3 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Property useful lives | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICY (Details Narrative) | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | |
Product Information [Line Items] | ||
Assets at fair value | $ 0 | $ 0 |
Liabilities at fair value | 0 | 0 |
Cash | 2,444,009 | 1,023,531 |
Goodwill impairment | $ 0 | $ 0 |
Exchange rates at end of period | 6.4854 | 6.5249 |
Annual average exchange rates | 6.3700 | 6.8996 |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||
Product Information [Line Items] | ||
Concentration risk | 58.22% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Customers [Member] | ||
Product Information [Line Items] | ||
Concentration risk | 96.44% |
ACCOUNTS RECEIVABLE, NET (Detai
ACCOUNTS RECEIVABLE, NET (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Credit Loss [Abstract] | ||
Accounts receivable | $ 699,555 | $ 432,309 |
Less: Allowance for doubtful accounts | 0 | 0 |
Total | $ 699,555 | $ 432,309 |
ACCOUNTS RECEIVABLE, NET (Det_2
ACCOUNTS RECEIVABLE, NET (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Credit Loss [Abstract] | ||
Provision for doubtful accounts | $ 0 | $ 0 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 97,163 | $ 115,373 |
Work in process | 1,391,518 | 1,608,301 |
Total | $ 1,488,681 | $ 1,723,674 |
INVENTORIES, NET (Details Narra
INVENTORIES, NET (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | ||
Inventory write down | $ 0 | $ 0 |
ADVANCE TO SUPPLIERS (Details N
ADVANCE TO SUPPLIERS (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Advance To Suppliers | ||
Advances to suppliers | $ 42,969 | $ 1,732 |
PREPAID EXPENSES AND OTHER AS_3
PREPAID EXPENSES AND OTHER ASSETS, NET (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid expenses, gross | $ 107,444 | $ 3,161 |
Allowance for doubtful accounts | 0 | 0 |
Prepaid expenses | 107,444 | 3,161 |
Other Receivables [Member] | ||
Prepaid expenses, gross | 107,444 | 3,161 |
Other Prepaids [Member] | ||
Prepaid expenses, gross | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 78,802 | $ 51,287 |
Accumulated depreciation | (7,557) | (361) |
Property and equipment, net | 71,245 | 50,926 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 0 | 0 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 78,802 | 51,287 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 0 | 0 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 0 | $ 0 |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 6,127 | $ 74,958 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill | $ 332,040 | $ 332,040 |
Xin Feng Construction Co Ltd [Member] | ||
Goodwill | 332,040 | 332,040 |
Accumulated amortization | $ 0 | $ 0 |
WARRANT (Details - Assumptions
WARRANT (Details - Assumptions used) - $ / shares | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Aug. 10, 2021 | Sep. 27, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 02, 2021 | Jun. 01, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Exercise price (USD/price) | $ 0.50 | $ 0.50 | ||||
Risk free rate | 1.16% | 0.20% | ||||
Expected term/ Contractual life (years) | 4 years 3 months 21 days | 2 years 10 months 17 days | ||||
Expected volatility | 48.15% | 407.00% | ||||
C Warrant [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Market price per share (USD/share) | $ 1.47 | $ 1.71 | ||||
Exercise price (USD/price) | $ 2.50 | $ 2.50 | ||||
Risk free rate | 0.14% | 0.15% | ||||
Dividend yield | 0.00% | 0.00% | ||||
Expected term/ Contractual life (years) | 1 year 4 months 20 days | 1 year 3 months 3 days | ||||
Expected volatility | 56.36% | 52.93% | ||||
D Warrant [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Market price per share (USD/share) | $ 0.66 | $ 0.73 | ||||
Exercise price (USD/price) | $ 5 | $ 5 | ||||
Risk free rate | 0.14% | 0.15% | ||||
Dividend yield | 0.00% | 0.00% | ||||
Expected term/ Contractual life (years) | 1 year 4 months 20 days | 1 year 3 months 3 days | ||||
Expected volatility | 56.36% | 52.93% |
WARRANT (Details - Warrant Liab
WARRANT (Details - Warrant Liability) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Guarantees and Product Warranties [Abstract] | ||
Balance at the beginning of period | $ 0 | $ 0 |
Warrants issued to investors | 287,520 | 0 |
Warrants redeemed | 0 | 0 |
Fair value change of warrants included in earnings | 24,800 | 0 |
Balance at the end of period | $ 312,320 | $ 0 |
WARRANT (Details - Warrant Acti
WARRANT (Details - Warrant Activity) - Warrant [Member] | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants outstanding, beginning balance | shares | 0 |
Average exercise price, outstanding beginning | $ / shares | |
Warrants exercisable beginning | shares | 0 |
Average exercise price, exerciasable beginning | $ / shares | |
Warrants Granted | shares | 256,000 |
Average exercise price, granted | $ / shares | $ 3.75 |
Weighted Average Remaining Contractual Term, granted | 3 years |
Warrants Exercised / surrendered | shares | 0 |
Average exercise price, exercised / surrendered | $ / shares | |
Warrants expired | shares | 0 |
Average exercise price, expired | $ / shares | |
Warrants outstanding, ending balance | shares | 256,000 |
Average exercise price, outstanding ending | $ / shares | $ 3.75 |
Weighted Average Remaining Contractual Term, outsanding | 2 years 7 months 28 days |
Warrants exercisable at ending | shares | 256,000 |
Average exercise price, exerciasable ending | $ / shares | $ 3.75 |
Weighted Average Remaining Contractual Term, exercisable | 2 years 7 months 28 days |
LEASES (Details - Lease costs)
LEASES (Details - Lease costs) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases [Abstract] | ||
Operating lease expense | $ 4,424 | $ 26,224 |
Total net lease costs | $ 4,424 | $ 26,224 |
OTHER PAYABLES AND ACCRUED LI_3
OTHER PAYABLES AND ACCRUED LIABILITIES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
VAT payable | $ 40,023 | $ 12,235 |
Salary payable | 89,775 | 920 |
Others | 12,628 | 43,681 |
Total | $ 142,426 | $ 56,836 |
TAXATION (Details - Income tax
TAXATION (Details - Income tax expense) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Current | $ 139,932 | $ 0 |
Deferred | 0 | (42,777) |
Total income tax expense (benefit) | $ 139,932 | $ (42,777) |
TAXATION (Details - Reconcilati
TAXATION (Details - Reconcilation of income tax) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
PRC income tax statutory rate | 20.00% | 25.00% |
Tax effect of non-deductible expense | 6.78% | 0.00% |
Tax effect of stock-based compensation | 14.71% | 0.00% |
Tax effect of non-deductible income | 0.00% | 0.00% |
Tax effect of different tax rates in other jurisdictions | 1.07% | 0.00% |
GILTI Tax Impact | 0.00% | 0.00% |
Changes in valuation allowance | 1.01% | 18.73% |
Effective tax rate | 1.43% | 6.27% |
TAXATION (Details - Deferred ta
TAXATION (Details - Deferred taxes) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||
Tax loss carried forward | $ 0 | $ 2,300 |
Allowance for doubtful receivables | 0 | 0 |
Total deferred tax assets | 0 | 2,300 |
Valuation allowance | 0 | 0 |
Total deferred tax assets, net | 0 | 2,300 |
Deferred tax liabilities | ||
Property and equipment, difference in depreciation | 0 | 0 |
Deferred tax liabilities, net | $ 0 | $ 0 |
TAXATION (Details - Valuation A
TAXATION (Details - Valuation Allowance) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Valuation allowance, beginning | $ 0 | $ (304,418) |
Additions to valuation allowance | 95,844 | 0 |
Reductions in valuation allowance | 0 | 304,418 |
Valuation allowance, ending balance | $ 95,844 | $ 0 |
TAXATION (Details Narrative)
TAXATION (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
Value added tax rate | 13.00% | 16.00% | |
Global Intangible Low Taxed Income | $ 152,829 | ||
UNITED STATES | |||
Operating Loss Carryforwards [Line Items] | |||
Effective income tax rate | 21.00% | 10.50% | |
Net operating loss carryforwards | $ 99,817 | ||
HONG KONG | |||
Operating Loss Carryforwards [Line Items] | |||
Effective income tax rate | 8.25% | ||
PRC Enterprise Income Tax [Member] | |||
Operating Loss Carryforwards [Line Items] | |||
Effective income tax rate | 25.00% |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS (Details - Due to related parties) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | ||
Related Party Transaction [Line Items] | |||
Due to related parties | $ 39,341 | $ 7,681 | |
Due from related parties | 1,615,217 | 896,876 | |
Repayment to related party | 0 | 402,531 | |
Mountain Share Transfer [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties | 39,341 | 7,681 | |
Proceeds from related party | [1] | 0 | 7,000 |
Yin Chieh Cheng [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | [2] | 0 | 19,067 |
Proceeds from related party | [1] | 0 | 86,320 |
Repayment to related party | 665,000 | ||
Taisi Electric [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | 1,615,217 | 877,809 | |
Zhang Bi [Member] | |||
Related Party Transaction [Line Items] | |||
Proceeds from related party | [1] | $ 0 | $ 3,455 |
[1] | The transactions represent the amount paid by Mr. Zhang Bi, Mr. Yin-Chieh Cheng, and Mountain Share Transfer, LLC on behalf of the Company for its daily operation. | ||
[2] | Mr. Yin-Chieh Cheng (“Mr. Cheng”) is the chairman the Company, and he holds 42.5% shares of the Company. The balance due to Mr. Cheng as of December 31, 2020 mainly represented the amount paid by Mr. Cheng on behalf of the Company. In September 2019, Mr. Cheng took over the receivable amount of the concert the Company invested in November 2018, and assumed the liability of $551,457 related to such receivable to the Company. In September 2019, Mr. Cheng collected the payment of $1,000,000 from JCD, our exclusive sales agent in Asia Pacific, on behalf of the Company. As agreed between Mr. Cheng and the Company, the due from balance was netted off by due to balances. |
COMMON STOCK (Details Narrative
COMMON STOCK (Details Narrative) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Equity [Abstract] | ||
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 10,607,150 | 9,131,786 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details - assumptions) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | ||
Risk-free interest rate | 1.16% | 0.20% |
Expected term (in years) | 4 years 3 months 21 days | 2 years 10 months 17 days |
Volatility | 48.15% | 407.00% |
SHARE-BASED COMPENSATION (Det_2
SHARE-BASED COMPENSATION (Details Narrative) - USD ($) | Dec. 02, 2021 | Aug. 11, 2021 | Jun. 01, 2020 | Dec. 31, 2021 | Dec. 27, 2018 | Dec. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants exercise price | $ 0.50 | $ 0.50 | |||||
Reverse merger recapitalization | $ 6,638,371 | $ 266,586 | |||||
Unrecognized compensation costs | $ 11,114,097 | $ 11,114,097 | |||||
Unrecognized compensation cost amortization period | 1 year 11 months 26 days | ||||||
Series A Warrant [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants granted | 5,000,000 | ||||||
Warrants exercise price | $ 0.50 | ||||||
Class A Warrant [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants granted | 70,000 | 50,000 | |||||
Warrants exercise price | $ 0.50 | $ 0.50 | |||||
Yin Chieh Cheng [Member] | Series A Warrant [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants granted | 250,000 | ||||||
Shun Chih Chuang [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Issued for services | 505,000 | ||||||
Shun Chih Chuang [Member] | Class A Warrant [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants granted | 75,000 | 50,000 | |||||
Hsien Wen Yu [Member] | Class A Warrant [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants granted | 60,000 | 60,000 | |||||
Michael A Littman [Member] | Class A Warrant [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants granted | 50,000 | 50,000 | |||||
Warrants exercise price | $ 0.50 | ||||||
Michael A Littman [Member] | Class B Warrant [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrants granted | 50,000 | 50,000 | |||||
Warrants exercise price | $ 1 |
PREFERRED STOCK (Details Narrat
PREFERRED STOCK (Details Narrative) - $ / shares | Dec. 31, 2021 | Aug. 01, 2021 |
Class of Stock [Line Items] | ||
Sale of stock, price | $ 1 | |
Shares issued, price | $ 2.50 | |
Series A Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Preferred Stock, Shares Issued | 80,000 |
(LOSS) EARNINGS PER SHARE (Deta
(LOSS) EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net loss attributable to the Company | $ (9,619,079) | $ (632,365) |
Weighted-average shares outstanding | ||
- Basic | 9,160,862 | 11,752,447 |
- Diluted | 9,160,862 | 11,752,447 |
Earnings (loss) per share: | ||
- Basic | $ (1.0500) | $ (0.0538) |
- Diluted | $ (1.0500) | $ (0.0538) |
(LOSS) EARNINGS PER SHARE (De_2
(LOSS) EARNINGS PER SHARE (Details Narrative) | 12 Months Ended |
Dec. 31, 2021shares | |
Earnings Per Share [Abstract] | |
Antidilutive shares | 5,473,636 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments | $ 0 | $ 0 |
BUSINESS COMBINATION (Details -
BUSINESS COMBINATION (Details - XFC) - Xin Feng Construction Co Ltd [Member] | Dec. 31, 2020USD ($) |
Business Acquisition [Line Items] | |
Cash and bank balance | $ 857,555 |
Trade receivables | 318,487 |
Inventory | 1,608,301 |
Prepaid expenses and other current assets | 877,809 |
Plant and equipment, net | 50,567 |
Other non-current assets | 458,392 |
Notes payable | (187,447) |
Bank borrowing | (532,824) |
Other payables and accrued liabilities | (55,917) |
Income tax payable | (285,186) |
Advance receipts | (1,285,777) |
Goodwill | 332,040 |
Net assets acquired | $ 2,156,000 |
BUSINESS COMBINATION Business C
BUSINESS COMBINATION Business Combination (Details - GZ WFH) - Guizhou Wan Feng Hu Intelligent Aquatic Technology Co Limited [Member] | Oct. 08, 2020USD ($) |
Business Acquisition [Line Items] | |
Cash and bank balance | $ 3,974 |
Trade receivables | 1,534,961 |
Inventory | 295,960 |
Prepaid expenses and other current assets | 143,819 |
Plant and equipment, net | 703,412 |
Advance to suppliers | 3,996 |
Deferred tax assets, net | 121,675 |
Accounts payable | (264,622) |
Other payables and accrued liabilities | (312,562) |
Advance from customers | (637,455) |
Income tax payable | (629,666) |
Due to related parties | (414,583) |
Net assets acquired | 548,909 |
Consideration received | (4,750) |
Non-controlling interest | (21,868) |
Cumulative exchange difference from translation of foreign operations | (62,174) |
Loss on disposal of subsidiary | $ 460,117 |