Cover
Cover | 12 Months Ended |
Dec. 31, 2020shares | |
Cover [Abstract] | |
Document Type | 20-F/A |
Amendment Flag | true |
Amendment description | This Amendment No. 1 to the Annual Report on Form 20-F of Infobird Co., Ltd for the fiscal year ended December 31, 2020 (the “Form 20-F”) is being filed solely for purposes of including the XBRL exhibits which were inadvertently stripped from the Form 20-F when the Form 20-F was transmitted to the Securities and Exchange Commission. No other changes have been made to the Form 20-F. |
Document Period End Date | Dec. 31, 2020 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2020 |
Current Fiscal Year End Date | --12-31 |
Entity Registrant Name | Infobird Co., Ltd |
Entity Central Index Key | 0001815566 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 19,000,000 |
Entity Incorporation, State or Country Code | E9 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash | $ 1,682,526 | $ 3,509,420 |
Accounts receivable, net | 4,118,502 | 2,303,942 |
Other receivables, net | 72,255 | 61,928 |
Prepayments | 1,412,570 | 68,964 |
Total current assets | 7,285,853 | 5,944,254 |
OTHER ASSETS | ||
Property and equipment, net | 2,193,189 | 2,017,057 |
Long-term deposits, net | 107,260 | 138,286 |
Intangible assets, net | 5,247,752 | 2,198,430 |
Deferred tax assets | 389,893 | 461,461 |
Deferred offering cost | 730,586 | 379,738 |
Total other assets | 8,668,680 | 5,194,972 |
Total assets | 15,954,533 | 11,139,226 |
CURRENT LIABILITIES | ||
Accounts payable | 552,540 | 1,160,125 |
Short-term loan- bank | 3,065,134 | 2,872,820 |
Interest payable- related party | 574,065 | 538,047 |
Other payables and accrued liabilities | 687,702 | 644,590 |
Deferred revenue | 1,755,967 | 1,453,690 |
Taxes payable | 865,795 | 673,792 |
Total current liabilities | 7,501,203 | 7,343,064 |
DEFERRED TAX LIABILITIES | 322,035 | 201,607 |
Total liabilities | 7,823,238 | 7,544,671 |
SHAREHOLDERS' EQUITY | ||
Ordinary shares,$0.001 par value, 50,000,000 shares authorized, 19,000,000 issued and outstanding as of December 31, 2020, and 2019* | 19,000 | 19,000 |
Additional paid-in capital | 5,852,089 | 5,852,089 |
Statutory reserves | 437,549 | 31,778 |
Retained earnings (Accumulated deficits) | 1,084,383 | (2,508,120) |
Accumulated other comprehensive income | 494,046 | 29,325 |
Total shareholders' equity attributable to Infobird Co., Ltd | 7,887,067 | 3,424,072 |
Noncontrolling interests | 244,228 | 170,483 |
Total equity | 8,131,295 | 3,594,555 |
Total liabilities and equity | $ 15,954,533 | $ 11,139,226 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 19,000,000 | 19,000,000 |
Common stock, shares outstanding | 19,000,000 | 19,000,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
REVENUES | $ 14,532,941 | $ 18,248,289 | $ 18,789,550 |
COST OF REVENUES | 4,718,093 | 7,987,146 | 9,303,803 |
GROSS PROFIT | 9,814,848 | 10,261,143 | 9,485,747 |
OPERATING EXPENSES: | |||
Selling | 1,837,768 | 1,533,255 | 1,918,418 |
General and administrative | 1,712,034 | 1,192,429 | 1,488,802 |
Research and development | 1,897,349 | 1,496,579 | 3,010,859 |
Total operating expenses | 5,447,151 | 4,222,263 | 6,418,079 |
INCOME FROM OPERATIONS | 4,367,697 | 6,038,880 | 3,067,668 |
OTHER INCOME (EXPENSE) | |||
Interest income | 6,989 | 8,823 | 5,432 |
Interest expense | (208,506) | (411,298) | (497,057) |
Other income, net | 180,051 | 138,457 | 11,595 |
Total other expense, net | (21,466) | (264,018) | (480,030) |
INCOME BEFORE INCOME TAXES | 4,346,231 | 5,774,862 | 2,587,638 |
PROVISION FOR INCOME TAXES | 286,071 | 673,034 | 145,263 |
NET INCOME | 4,060,160 | 5,101,828 | 2,442,375 |
Less: Net income (loss) attributable to noncontrolling interest | 61,886 | 254,471 | (162,212) |
NET INCOME ATTRIBUTABLE TO INFOBIRD CO., LTD | 3,998,274 | 4,847,357 | 2,604,587 |
NET INCOME | 4,060,160 | 5,101,828 | 2,442,375 |
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | 476,580 | (29,392) | 24,083 |
TOTAL COMPREHENSIVE INCOME | 4,536,740 | 5,072,436 | 2,466,458 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 73,745 | 253,876 | (160,932) |
COMPREHENSIVE INCOME ATTRIBUTABLE TO INFOBIRD CO., LTD | $ 4,462,995 | $ 4,818,560 | $ 2,627,390 |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | |||
Basic and diluted* | 19,000,000 | 19,000,000 | 19,000,000 |
EARNINGS PER SHARE | |||
Basic and diluted* | $ 0.21 | $ 0.26 | $ 0.14 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) | Ordinary shares | Additional Paid-In Capital | Statutory reserves | Unrestricted | Accumulated Other Comprehensive Income | Noncontrolling Interest | Total |
Balance at beginning, shares at Dec. 31, 2017 | 19,000,000 | ||||||
Balance at beginning, value at Dec. 31, 2017 | $ 19,000 | $ 7,335,139 | $ (9,928,286) | $ 35,319 | $ 181,589 | $ (2,357,239) | |
Capital contribution from shareholders | 202,104 | (202,104) | |||||
Net income | 2,604,587 | 2,604,587 | |||||
Net income attributable to noncontrolling interests | (162,212) | (162,212) | |||||
Foreign currency translation adjustment | 22,803 | 1,280 | 24,083 | ||||
Balance at ending, shares at Dec. 31, 2018 | 19,000,000 | ||||||
Balance at ending, value at Dec. 31, 2018 | $ 19,000 | 7,537,243 | (7,323,699) | 58,122 | 20,657 | 311,323 | |
Capital contribution from shareholders | |||||||
Acquisition of additional noncontrolling interest | (1,685,154) | (104,050) | (1,789,204) | ||||
Net income | 4,847,357 | 4,847,357 | |||||
Net income attributable to noncontrolling interests | 254,471 | 254,471 | |||||
Statutory reserve | 31,778 | (31,778) | |||||
Foreign currency translation adjustment | (28,797) | (595) | (29,392) | ||||
Balance at ending, shares at Dec. 31, 2019 | 19,000,000 | ||||||
Balance at ending, value at Dec. 31, 2019 | $ 19,000 | 5,852,089 | 31,778 | (2,508,120) | 29,325 | 170,483 | 3,594,555 |
Capital contribution from shareholders | |||||||
Net income | 3,998,274 | 3,998,274 | |||||
Net income attributable to noncontrolling interests | 61,886 | 61,886 | |||||
Statutory reserve | 405,771 | (405,771) | |||||
Foreign currency translation adjustment | 464,721 | 11,859 | 476,580 | ||||
Balance at ending, shares at Dec. 31, 2020 | 19,000,000 | ||||||
Balance at ending, value at Dec. 31, 2020 | $ 19,000 | $ 5,852,089 | $ 437,549 | $ 1,084,383 | $ 494,046 | $ 244,228 | $ 8,131,295 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOW - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 4,060,160 | $ 5,101,828 | $ 2,442,375 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 84,249 | 119,461 | 113,324 |
Amortization | 397,744 | 84,068 | 228,604 |
Provision for doubtful accounts | 193,980 | 15,250 | 67,634 |
Loss on disposal of equipment | 305 | 1,833 | |
Deferred taxes expense | 197,892 | 356,092 | (112,739) |
Change in operating assets and liabilities | |||
Accounts receivable | (1,666,678) | 1,352,268 | (162,502) |
Other receivables | (47,206) | 16,564 | 22,987 |
Prepayments | (1,276,881) | 30,575 | 83,886 |
Long-term deposits | (20,154) | 58,263 | 25,238 |
Accounts payable | (650,176) | (90,441) | (1,721,261) |
Deferred revenue | 193,707 | (781,716) | (270,674) |
Other payables and accrued liabilities | (74,769) | (63,302) | (2,165,802) |
Taxes payable | 138,830 | 122,012 | 284,299 |
Net cash provided by (used in) operating activities | 1,530,698 | 6,321,227 | (1,162,798) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of equipment | (105,391) | (95,082) | (169,888) |
Purchase of intangible assets | (1,366,411) | ||
Payments for construction in progress | (471,810) | ||
Costs to obtain and develop software | (1,770,762) | (1,487,391) | (474,594) |
Proceeds from sales of equipment | 539 | 567 | |
Repayment from related party | 16,380 | 588,591 | |
Net cash used in investing activities | (3,242,564) | (2,037,364) | (55,324) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Capital contribution from shareholders | 202,104 | ||
Payments of deferred offering costs | (233,382) | (382,690) | |
Proceeds from short term loan - bank | 2,896,792 | 2,895,152 | 3,026,176 |
Repayment for short term loan - bank | (2,896,792) | (2,895,152) | |
Proceed from short term loan - related party | 75,654 | ||
Repayment for short term loan - related party | (1,273,867) | (872,850) | |
Payment of acquisition of non controlling interest | (1,789,204) | ||
Net cash (used in) provided by financing activities | (233,382) | (3,445,761) | 2,431,084 |
EFFECT OF EXCHANGE RATE CHANGES | 118,354 | (40,048) | (123,997) |
NET CHANGE IN CASH | (1,826,894) | 798,054 | 1,088,965 |
CASH, beginning of year | 3,509,420 | 2,711,366 | 1,622,401 |
CASH, end of year | 1,682,526 | 3,509,420 | 2,711,366 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash paid for income tax | 60,518 | 251,083 | 36,581 |
Cash paid for interest | 209,821 | 377,937 | 270,187 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Purchase of equipment with prepayment | $ 17,705 |
Nature of business and organiza
Nature of business and organization | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Nature of business and organization | Note 1 – Nature of business and organization Infobird Co., Ltd (“Infobird Cayman” or the “Company”) is a holding company incorporated on March 26, 2020 under the laws of the Cayman Islands. The Company has no substantive operations other than holding all of the outstanding share capital of Infobird International Limited (“Infobird HK”) established under the laws of Hong Kong on April 21, 2020. Infobird HK is also a holding company holding all of the outstanding equity of Infobird Digital Technology (Beijing) Co., Ltd (“Infobird WFOE”) which was established on May 20, 2020 under the laws of the People’s Republic of China (“PRC” or “China”). The Company, through its variable interest entity (“VIE”), Beijing Infobird Software Co., Ltd (“Infobird Beijing”), a PRC limited liability company established on October 26, 2001, and through its subsidiaries, is a software-as-a-service (“SaaS”) provider of innovative AI-powered (artificial intelligence enabled) customer engagement solutions in China. The Company primarily provides standard and customized customer relationship management cloud-based services, such as SaaS, and business process outsourcing (“BPO”), services to its clients. On October 17, 2013, Infobird Beijing established its 90.18% owned subsidiary, Guiyang Infobird Cloud Computing Co., Ltd (“Infobird Guiyang”), a PRC limited liability company. Infobird Guiyang also engages in software development and mainly provides BPO services to its customers. On June 20, 2012, Infobird Beijing established a 99.95% owned subsidiary, Anhui Infobird Software Information Technology Co., Ltd (“Infobird Anhui”), a PRC limited liability company. Infobird Anhui also engages in software development and mainly provides cloud services and technology solutions to customers. On May 27, 2020, Infobird Cayman completed a reorganization of entities under common control of its then existing shareholders, who collectively owned all of the equity interests of Infobird Cayman prior to the reorganization. Infobird Cayman and Infobird HK were established as the holding companies of Infobird WFOE. Infobird WFOE is the primary beneficiary of Infobird Beijing and its subsidiaries. All of these entities are under common control which results in the consolidation of Infobird Beijing and subsidiaries which have been accounted for as a reorganization of entities under common control at carrying value. The consolidated financial statements are prepared on the basis as if the reorganization became effective as of the beginning of the first period presented in the accompanying consolidated financial statements of Infobird Cayman. The accompanying consolidated financial statements reflect the activities of Infobird Cayman and each of the following entities: Name Background Ownership Infobird ● A Hong Kong company 100% owned by Infobird Cayman Infobird Digital Technology (Beijing) Co., Ltd (“Infobird WFOE”) ● A PRC limited liability company and deemed a wholly foreign 100% owned by Infobird HK Beijing Infobird Software Co., Ltd (“Infobird Beijing”) ● A PRC limited liability company VIE of Infobird WFOE Guiyang Infobird Cloud Computing Co., Ltd ● A PRC limited liability company 90.18% owned by Infobird Beijing Anhui Infobird Software Information Technology Co., Ltd (“Infobird Anhui”) ● A PRC limited liability company 99.95% owned by Infobird Beijing Contractual Arrangements Due to legal restrictions on foreign ownership and investment in, among other areas, the development and operation of information technology in China, including cloud computing and big data analytics, the Company operates its businesses in which foreign investment is restricted or prohibited in the PRC through certain PRC domestic companies. Neither the Company nor its subsidiaries own any equity interest in Infobird Beijing. As such, Infobird Beijing is controlled through contractual arrangements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of three agreements, along with shareholders’ powers of attorney (“POAs”) and spousal consent letters (collectively the “Contractual Arrangements”, which were signed on May 27, 2020). The significant terms of the Contractual Arrangements are as follows: Exclusive Business Cooperation Agreement Pursuant to the exclusive business cooperation agreement between Infobird WFOE and Infobird Beijing, Infobird WFOE has the exclusive right to provide Infobird Beijing with technical support services, consulting services and other services, including technical support and training, business management consultation, consultation, collection and research of technology and market information, marketing and promotion services, customer order management and customer services, lease equipment or properties, provide legitimate rights to use software license, provide deployment, maintenances and upgrade of software, design installation, daily management, maintenance and updating network system, hardware and database, and other services requested by Infobird Beijing from time to time to the extent permitted under PRC law. In exchange, Infobird WFOE is entitled to a service fee that equals to all of the consolidated net income. The service fee may be adjusted by Infobird WFOE based on the actual scope of services rendered by Infobird WFOE and the operational needs and expanding demands of Infobird Beijing. Pursuant to the exclusive business cooperation agreement, the service fees may be adjusted based on the actual scope of services rendered by Infobird WFOE and the operational needs of Infobird Beijing. The exclusive business cooperation agreement remains in effect unless terminated in accordance with the following provision of the agreement or terminated in writing by Infobird WFOE. During the term of the exclusive business cooperation agreement, Infobird WFOE and Infobird Beijing shall renew the operation term prior to the expiration thereof so as to enable the exclusive business cooperation agreement to remain effective. The exclusive business cooperation agreement shall be terminated upon the expiration of the operation term of either Infobird WFOE or Infobird Beijing if the application for renewal of the operation term is not approved by relevant government authorities. If an application for renewal of the operation term is not approved, according to the PRC Company Law, the expiration of the operation term may lead to the dissolution and cancellation of such PRC company. Exclusive Option Agreements Pursuant to the exclusive option agreements among Infobird WFOE, Infobird Beijing and the shareholders who collectively owned all of Infobird Beijing, such shareholders jointly and severally grant Infobird WFOE an option to purchase their equity interests in Infobird Beijing. The purchase price shall be the lowest price then permitted under applicable PRC laws. Infobird WFOE or its designated person may exercise such option at any time to purchase all or part of the equity interests in Infobird Beijing until it has acquired all equity interests of Infobird Beijing, which is irrevocable during the term of the agreements. The exclusive option agreements remains in effect until all equity interest held by shareholders in Infobird Beijing has been transferred or assigned to Infobird WFOE and/or any other person designated by the Infobird WFOE in accordance with such agreement. Equity Interest Pledge Agreements Pursuant to the equity interest pledge agreements, among Infobird WFOE, Infobird Beijing, and the shareholders who collectively owned all of Infobird Beijing, such shareholders pledge all of the equity interests in Infobird Beijing to Infobird WFOE as collateral to secure the obligations of Infobird Beijing under the exclusive business cooperation agreement and exclusive option agreements. These shareholders are prohibited from transferring the pledged equity interests without the prior consent of Infobird WFOE unless transferring the equity interests to Infobird WFOE or its designated person in accordance to the exclusive option agreements. The equity interest pledge agreements shall come into force the date on which the pledged interests are recorded, which is within three (3) days after signing of the agreements on May 27, 2020, under Infobird Beijing’s register of shareholders and are registered with the competent Administration for Market Regulation of Infobird Beijing until all of the obligations to Infobird WFOE have been fulfilled completely by Infobird Beijing. Infobird Beijing intends to register the pledges of equity interest of shareholders with the competent Administration for Market Regulation in accordance with the PRC Property Rights Law. Shareholders’ Powers of Attorney (“POAs”) Pursuant to the shareholders’ POAs, the shareholders of Infobird Beijing give Infobird WFOE an irrevocable proxy to act on their behalf on all matters pertaining to Infobird Beijing and to exercise all of their rights as shareholders of Infobird Beijing, including the (i) right to attend shareholders meeting; (ii) to exercise voting rights and all of the other rights including but not limited to the sale or transfer or pledge or disposition of the shares held in part or in whole; and (iii) designate and appoint on behalf of the shareholder the legal representative, the directors, supervisors, the chief executive officer and other senior management members of Infobird Beijing, and to sign transfer documents and any other documents in relation to the fulfillment of the obligations under the exclusive option agreements and the equity interest pledge agreements. The shareholders’ POAs shall remain in effect while the shareholders of Infobird Beijing hold the equity interests in Infobird Beijing. Spousal Consent Letters Pursuant to the spousal consent letters, the spouses of the shareholders of Infobird Beijing commit that they have no right to make any assertions in connection with the equity interests of Infobird Beijing, which are held by the shareholders. In the event that the spouses obtain any equity interests of Infobird Beijing, which are held by the shareholders, for any reasons, the spouses of the shareholders shall be bound by the exclusive option agreement, the equity interest pledge agreement, the shareholder POA and the exclusive business cooperation agreement and comply with the obligations thereunder as a shareholder of Infobird Beijing. The letters are irrevocable and shall not be withdrawn without the consent of Infobird WFOE. Based on the foregoing contractual arrangements, which grant Infobird WFOE effective control of Infobird Beijing and subsidiaries and enable Infobird WFOE to receive all of their expected residual returns, the Company accounts for Infobird Beijing as a VIE. Accordingly, the Company consolidates the accounts of Infobird Beijing and subsidiaries for the periods presented herein, in accordance with Regulation S-X-3A-02 promulgated by the Securities Exchange Commission (“SEC”), and Accounting Standards Codification (“ASC”) 810-10, Consolidation. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Note 2 – Summary of significant accounting policies Liquidity In assessing liquidity, the Company monitors and analyzes cash on-hand and operating expenditure commitments. The Company’s liquidity needs are to meet working capital requirements and operating expense obligations. To date, the Company financed its operations primarily through cash flows from operations and short-term borrowing from banks and related parties. The Company’s major customer, China Guangfa Bank, accounted for 34.8% and 77.3% of the Company’s total revenues for the years ended December 31, 2020 and 2019, respectively, of which the Company collected approximately $6.9 million and approximately $16.4 million in cash, respectively. The loss of the major customer or a reduction in usage by the major customer would adversely impact the Company’s liquidity. Historically, the Company finances its operations through internally generated cash, short-term loans and payable from related parties. As of December 31, 2020, the Company had approximately $1.7 million in cash which primarily consists of cash on hand and bank deposits, which are unrestricted as to withdrawal and use and are deposited with banks in China. The Company’s working capital deficit was approximately $0.2 million at December 31, 2020, approximately $1.8 million of which was deferred revenue which the Company expects to realize and the Company does not expect to make any significant refund based on historical experience. Therefore, the Company’s working capital deficit excluding deferred revenue was approximately $1.5 million. The Company will require a minimum of approximately $4.0 million over the next twelve months to operate at its current level, either from revenues or funding. If the Company is unable to realize its assets within the normal operating cycle of a twelve (12) month period, the Company may have to consider supplementing its available sources of funds through the following sources: ● other available sources of financing from PRC banks and other financial institutions; and ● financial support from the Company’s related parties and shareholders. In February 2021, the company obtained two line of credits from BOC Fullerton Bank and Shanghai Pudong Development Bank in the amount of RMB 2,000,000 (approximately $0.3 million) and RMB 3,000,000 (approximately $0.5 million) to be due in February 2024 and 2022, respectively. Based on the above considerations, the Company’s management is of the opinion that it has sufficient funds to meet the Company’s working capital requirements and debt obligations as they become due over the next twelve (12) months. Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the SEC. Principles of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries, which include the wholly-foreign owned enterprise (“WFOE”) and VIE and its subsidiaries (“VIEs”) over which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. Use of estimates and assumptions The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of property and equipment and intangible assets, software development costs, impairment of long-lived assets, allowance for doubtful accounts, revenue recognition, allowance for deferred tax assets and uncertain tax position. The inputs into the Company’s judgments and estimates consider the economic implications of COVID-19 on the Company’s critical and significant accounting estimates. Actual results could differ from these estimates. Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the noon buying rate in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive income (loss) amounted to $494,046 and $29,325 as of December 31, 2020 and 2019, respectively. The balance sheet amounts, with the exception of equity at December 31, 2020 and 2019 were translated at 6.5250 RMB and 6.9618 RMB, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the years ended December 31, 2020, 2019, and 2018 were 6.9042 RMB, 6.9081 RMB, and 6.6090 RMB to $1.00, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Cash Cash consists of cash on hand, demand deposits and time deposits placed with banks or other financial institutions and have original maturities of less than three (3) months. Accounts receivable, net Accounts receivable include trade accounts due from customers. Accounts are considered overdue after thirty (30) days from payment due date. In establishing the required allowance for doubtful accounts, management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and the credit history and financial conditions of the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Other receivables, net Other receivables primarily include advances to employees and other deposits. Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of December 31, 2020 and 2019, provision for doubtful accounts were $40,437 and $0, respectively. Prepayments Prepayments are cash deposited or advanced to suppliers for future service rendering. The amounts are refundable and bear no interest. For any advances to suppliers determined by management that such advances will not be in receipts or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2020 and 2019, no allowance for the doubtful accounts were deemed necessary. Long-term deposits Long-term deposits primarily included rental deposits, and deposits made by the company to customers to secure the service contract. The deposits are generally more than one year and the amounts are refundable and bear no interest. For any deposits determined by management that such deposit will not be in receipts or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews the long- term deposits on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2020 and 2019, provision for doubtful accounts were $61,609 and $0, respectively. Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Useful Life Leasehold improvements Shorter of the remaining lease Electronic devices 3-5 years Office equipment, fixtures and furniture 3-5 years Automobile 3-5 years Computer and network equipment 3-5 years The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Construction-in-progress represents contractor and labor costs, design fees and inspection fees in connection with the construction of the Company’s building for a cloud computing facility in Guiyang, China, which is expected to be completed in late 2022. No depreciation is provided for construction-in-progress until it is completed and placed into service. Intangible assets The Company’s intangible assets with definite useful lives primarily consist of licensed software, capitalized development costs, platform system, and land-use rights. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives. Intangible assets are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Useful Life Licensed software 5 years Capitalized development cost 5 years Platform development 5 years Land use right 40 years Capitalized development costs The Company follows the provisions of ASC 350-40, “Internal Use Software”, to capitalize certain direct development costs associated with internal-used software. ASC 350-40 provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the application are capitalized if it is determined that these upgrades or enhancements add additional functionality to the application. Development costs cease capitalization upon completion of all substantial testing when the software is substantially complete and ready for its intended use and are amortized on a straight-line basis over the estimated useful life, which is generally five years. Amortization of internal-use software begins when the software is ready for its intended use. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. If, after the development of internal-use software is completed, the Company decides to market the software, proceeds received from the license of the computer software, net of direct incremental costs of marketing, such as commissions, software reproduction costs, warranty and service obligations, and installation costs, shall be applied against the carrying amount of that software. For the years ended December 31, 2020, 2019, and 2018, the Company applied nil against carrying amount of capitalized software that was subsequently sold to customers as the software were fully amortized. Land use rights All land in the PRC is owned by the government. However, the government grants “land use rights.” This land use rights are for 40 years and expire in 2055. The Company amortizes the land use rights over the forty-year term of the land use rights on a straight-line basis. The carrying value of the land use rights was reduced by government grant received when the conditions stipulated under the grant were fulfilled. Impairment for long-lived assets Long-lived assets, including property and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2020 and 2019, no impairment of long-lived assets was recognized. Fair value measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: ● 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. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Deferred offering costs Deferred offering costs consist primarily of expenses paid to attorneys, consultants, underwriters, and other parties related to the Company’s initial public offering. The balance will be offset with the proceeds received after the close of the offering. Government Grants Government grants primarily consist of financial grants received from local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. There are no defined rules and regulations to govern the criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the relevant government authorities. Government grants of non-operating nature and with no further conditions to be met are recorded as non-operating income in “Other income, net” when received. The government grants are related to acquisition of assets. The grants are recorded as “deferred government grants” included in the accrued expenses and other current liabilities line item in the consolidated balance sheets when received. Once the Company fulfills the conditions stipulated under the grant, the grant amount is deducted from the carrying amount of the asset with a corresponding reduction in the deferred government grant balance. Noncontrolling Interests The Company’s noncontrolling interests represent the minority shareholders’ ownership interests related to the Company’s subsidiaries, including 0.05% for Infobird Anhui for the years ended December 31, 2020 and 2019, and 9.82% for Infobird Guiyang for the years ended December 31, 2020 and 2019. The Company repurchased 18.18% of noncontrolling interests in Infobird Guiyang in 2019, resulting in noncontrolling interests of 9.82% for Infobird Guiyang for the year ended December 31, 2019. Excess of payment made to noncontrolling shareholders over carrying value of the entity is recorded as reduction in additional paid in capital. The noncontrolling interests are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Noncontrolling interests in the results of the Company are presented on the consolidated statement of operations as allocations of the total income or loss for the year between noncontrolling interests holders and the shareholders of the Company. Noncontrolling interests consist of the following: December 31, December 31, 2020 2019 Infobird Guiyang $ 245,009 $ 170,623 Infobird Anhui (781 ) (140 ) Total $ 244,228 $ 170,483 Revenue recognition The Company recognized its revenue under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606). The Company recognizes revenue which represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when control of goods and services are provided to customers. The Company’s contracts with customers generally do not include a general right of return relative to the delivered products or services. The Company applied practical expedient when sales taxes were collected from customers, meaning sales tax is recorded net of revenue, instead of cost of revenue, which are subsequently remitted to governmental authorities and are excluded from the transaction price. Revenues are generated from (1) customized cloud-based services, (2) standard cloud-based services, (3) BPO services, (4) software development, and (5) professional services and other. (1) Revenue from customized cloud-based services The Company derives its customized cloud-based revenues from subscription services which are comprised of subscription fee from granting customers’ access to the customized SaaS, voice/data plan, which includes telecommunication usage such as telephone calls and messaging that our customers can subscribe for, and technical support. The provision of customized SaaS, voice/data plan and technical support is considered as one performance obligation as the services provided are not distinct within the context of the contract whereas the customer can only obtain benefit when the services are provided together. The Company uses monthly utilization records based on number of user accounts subscribed by customers, an output measure, to recognize revenue over time as there is simultaneous consumption and delivery of services. The Company has entered into contracts with China Guangfa Bank where the amounts charged per user account were fixed and determinable, and the specific terms of the contracts were agreed to by the Company and China Guangfa Bank. Contract performance periods are generally fifteen months, and payment terms are generally a specified percentage prepaid based on estimated usage, and the remaining to be billed monthly based on actual usage. Contracts generally do not contain significant financing components or variable consideration. (2) Revenue from standard cloud-based services The Company also derives its standard cloud-based revenues from subscription services which are comprised of subscription fee from granting customers access to its software through the internet. The Company’s standard cloud-based solutions represent a series of services such as calling, voice recording and technical support. These services are made available to the customer continuously throughout the contractual period, however, the extent to which the customer uses the services may vary at the customers’ discretion. The standard cloud-based services are considered to have one single performance obligation. The Company uses monthly utilization records based on number of user accounts subscribed by customers, an output measure, to recognize revenue over time as there is simultaneous consumption and delivery of services. The Company also enters into contracts with customers where the customers pay a fixed fee to access a fixed number of user accounts over the subscription period as specified in the contracts; therefore, the customers receive and consume the benefits of the cloud services throughout the subscription period so revenue is recognized ratably over the contractual subscription period that the services are delivered, beginning on the date the service is made available to the customers. Contract performance periods generally are one year, and pursuant to the contracts, full payments are generally collected in advance, with payment to be made within three months after execution of the contract. Contracts generally do not contain significant financing components or variable consideration. (3) Revenue from BPO services The Company provides BPO services to operate the call centers for its customers. Customers using these services are not permitted to take possession of the Company’s software and the contract term is for a defined period, where customers pay a monthly service fee. These services are considered as one performance obligation as the customers do not obtain benefit for each separate service. Revenues are recognized over time over contractual period using the time elapsed output method as BPO services are provided. Contract performance periods generally are one year, and pursuant to the contracts, full payments for several months of services are generally collected in advance. Contracts generally do not contain significant financing components or variable consideration. (4) Revenue from software development The Company also generates revenue from development and sale of software license including (1) standard software and (2) customized software developed per customers’ specifications. Contract terms from each software development contract generally do not contain significant financing components or variable consideration. Standard software are developed and offered as standard cloud-based services. The Company sold the license for standard software because some customers show obvious preference of software licensing over software-as-a-service, for reasons such as concerns about the safety of cloud-based services and potential higher price of subscription in total compared with one-time on-premise fee. Therefore, as part of the Company’s sales and market strategy, it offers licenses for its standard software to allow the customers to first start utilizing its products in their daily operation and then aim to evolve them to become subscribers with its standard cloud-based services to enjoy benefits of software upgrades and continued services. Licenses for standard software provide the customer with a right to use the software. Standard software licenses are typically made available to customers with immediate access to the software. The Company recognizes revenue for these standard software licenses at the point in time when the customer has access and thus control over the software. Customized software are software developed catering to the needs of specific customers who require initial customization or development of new solutions before subscription to our cloud-based services. For example, the Company has entered into a two-stage agreement to provide services to a municipal government agency to first develop an information technology system and customize and configure its cloud call center into the IT system, and then provide cloud-based services and charge subscription fees. Because the customized software the Company developed are to solve certain business pain points in a certain scenario within or across industries, once developed, it plans to further apply them in serving other customers that share similar needs and business models. The Company aims to replicate its initial customization and development and achieve economies of scale after it delivers its products to more customers within the same industry. Contract terms are generally less than one year. The design, development, installation of the customized software are considered as one performance obligation as these promises are not separately identifiable as the customers do not obtain benefits from these services on its own. The Company’s software development service contracts are generally recognized at a point in time when customer accepted the customized software with satisfactory testing result. Some of the contracts may require the Company to provide post contract services (“PCS”) which include upgrades, maintenance and technical support. The provision of upgrades, maintenance and technical support is considered one performance obligation because they are not distinct within the context of the contract. The nature of the promise is to stand ready to provide a single continuous integrated service throughout the contract term. As such the Company allocates the contract price between sale of software and provision of PCS using the expected cost plus margin approach which requires the Company to forecast its expected costs of satisfying the performance obligation and then add a reasonable margin for that good or service. Revenue allocated to PCS is deferred and recognized on a straight-line basis over the estimated period they are expected to be provided. For the years ended December 31, 2020, 2019 and 2018, approximately $0.3 million, $0 and $0 were allocated to PCS, respectively. (5) Professional services and other revenues The Company also generates revenue from data analysis services and other professional services where a separate contract is entered into with the customer when the customer needs the product or services. The service revenue from data analysis service is recognized based on the service performed, an output measure, over the contractual period. Other professional services consists primarily of technical consulting services. The Company recognizes revenue ratably over the contractual period as the customer simultaneously receives and consumes the benefits as the Company performs. Contract performance periods generally range from month to month, completion of service to one year, and payment terms are generally prepaid to 30 days. Contracts generally do not contain significant financing components or variable consideration. Contract balances The Company records receivables related to revenue when it has an unconditional right to invoice and receive payment. The Company invoices its customers for its services on a monthly basis. Deferred revenue consists primarily of customer billings made in advance of performance obligations being satisfied and revenue being recognized. The Company’s disaggregated revenue streams are summarized and disclosed in Note 14. Cost of revenues Cost of revenues consists primarily of personnel costs (including salaries, social insurance and benefits) for employees involved with the Company’s operations and product support; third party service fee including cloud and data usage, hosting fees and amortization and depreciation expenses associated with capitalized software, platform system and hardware. In addition, cost of revenues also include outsourcing contracted customer service representatives, customer surveys, contracted software development costs and allocated shared costs, primarily including facilities, information technology and security costs. Advertising costs Advertising costs amounted to $65,059, $62,501, and 174,924 for the years ended December 31, 2020, 2019, and 2018, respectively. Advertising costs are expensed as incurred and included in selling expenses. Operating leases The Company leases office building at various locations. A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating leases. The Company records the total expenses on a straight-line basis over the lease term. Research and development Research and development expenses include salaries and other compensation-related expenses to the Company’s research and product development personnel, as well as office rental, depreciation, amortization and related expenses for the Company’s research and product development team. The Company recognizes software development costs in accordance with ASC 350-40 “Software—internal use software”. The Company expenses all costs that are incurred in connection with the planning and implementation phases of development, and costs that are associated with maintenance of the existing websites or software for internal use. Certain costs associated with developing internal-use software are capitalized when such costs are incurred within the application development stage of software development. The Company also follows the provisions of FASB ASC 985-20, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed (“ASC 985-20”). ASC 985-20 requires that software development costs incurred in conjunction with product development be charged to research and development expense until technological feasibility is established using either the detail design approach or working model approach. Thereafter, until the product is released for sale, software development costs should be capitalized and reported at the lower of unamortized cost or net realizable value of the related product. For the years ended December 31, 2020, 2019, and 2018, the company incurred approximately $0.1 million $0, and $0 in development cost that need to be expensed before technological feasibility achieved, respectively. Value added taxes Revenue represents the invoiced value of service, net of value added tax (“VAT”). The VAT is based on gross sales price and VAT rates range up to 6%, depending on the type of service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in tax payable. All of the VAT returns filed by the Company’s subsidiaries in China have been and remain subject to examination by the tax authorities for five years from the date of filing. Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that h |
Variable interest entity
Variable interest entity | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable interest entity | Note 3 – Variable interest entity On May 27, 2020, Infobird WFOE entered into the Contractual Arrangements with Infobird Beijing. The significant terms of these Contractual Arrangements are summarized in “Note 1 – Nature of business and organization” above. As a result, the Company classifies Infobird Beijing as a VIE which should be consolidated based on the structure as described in Note 1. A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Infobird WFOE is deemed to have a controlling financial interest and be the primary beneficiary of Infobird Beijing because it has both of the following characteristics: (1) The power to direct activities at Infobird Beijing that most significantly impact such entity’s economic performance, and (2) The right to receive benefits from Infobird Beijing that could potentially be significant to such entity. Pursuant to the Contractual Arrangements, Infobird Beijing pays service fees equal to all of its net income to Infobird WFOE. The Contractual Arrangements are designed so that Infobird Beijing operates for the benefit of Infobird WFOE and ultimately, the Company. Under the Contractual Arrangements, the Company has the power to direct activities of the VIEs and can have assets transferred out of the VIEs. Therefore, the Company considers that there is no asset in the VIEs that can be used only to settle obligations of the VIEs, except for registered capital and PRC statutory reserves, if any. As the VIEs are incorporated as limited liability companies under the Company Law of the PRC, creditors of the VIEs do not have recourse to the general credit of the Company for any of the liabilities of the VIEs. Accordingly, the accounts of Infobird Beijing are consolidated in the accompanying consolidated financial statements. In addition, its financial positions and results of operations are included in the Company’s consolidated financial statements. The carrying amount of the VIEs’ consolidated assets and liabilities are as follows: December 31, 2020 December 31, Current assets $ 7,285,853 $ 5,944,254 Other assets 8,668,680 5,194,972 Total assets 15,954,533 11,139,226 Total liabilities (7,823,238 ) (7,544,671 ) Net assets $ 8,131,295 $ 3,594,555 December 31, 2020 December 31, 2019 Current liabilities: Accounts payable $ 552,540 $ 1,160,125 Short-term loans – bank 3,065,134 2,872,820 Interest payable – related party 574,065 538,047 Other payables and accrued liabilities 687,702 644,590 Deferred revenue 1,755,967 1,453,690 Taxes payable 865,795 673,792 Total current liabilities 7,501,203 7,343,064 Deferred tax liabilities 322,035 201,607 Total liabilities $ 7,823,238 $ 7,544,671 The summarized operating results of the VIEs are as follows: For the year ended December 31, 2020 For the year ended December 31, 2019 For the year ended December 31, 2018 Operating revenues $ 14,532,941 $ 18,248,289 $ 18,789,550 Gross profit 9,814,848 10,261,143 9,485,747 Income from operations 4,367,697 6,038,880 3,067,668 Net income $ 4,060,160 $ 5,101,828 $ 2,442,375 |
Accounts receivable, net
Accounts receivable, net | 12 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
Accounts receivable, net | Note 4 – Accounts receivable, net Accounts receivable, net consist of the following: December 31, 2020 December 31, Accounts receivable $ 4,242,392 $ 2,323,328 Allowance for doubtful accounts (123,890 ) (19,386 ) Total accounts receivable, net $ 4,118,502 $ 2,303,942 Movements of allowance for doubtful accounts are as follows: December 31, 2020 December 31, Beginning balance $ 19,386 $ 12,635 Addition 97,538 15,250 Write off — (8,289 ) Exchange rate effect 6,966 (210 ) Ending balance $ 123,890 $ 19,386 |
Property and equipment, net
Property and equipment, net | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Note 5 – Property and equipment, net Property and equipment consist of the following: December 31, 2020 December 31, Electronic devices $ 161,571 $ 123,697 Office equipment, fixtures and furniture 83,380 78,148 Automobile 58,943 55,244 Computer and network equipment 369,654 322,209 Leasehold improvement 346,478 302,521 Construction in progress 1,971,568 1,799,997 Subtotal 2,991,594 2,681,816 Less: accumulated depreciation and amortization (798,405 ) (664,759 ) Total $ 2,193,189 $ 2,017,057 Depreciation expense for the years ended December 31, 2020, 2019, and 2018 amounted to $84,249, $119,461, and $113,324, respectively. In 2020, the Company did not dispose of any equipment. In 2019, the Company disposed of $28,142 of electronic equipment with accumulated depreciation of $27,298 for gross proceeds of $539 resulting in a loss on disposal of equipment of $305. In 2018, the Company disposed of $22,439 of electronic equipment with accumulated depreciation of $20,039 for gross proceeds of $567 resulting in a loss on disposal of equipment of $1,833. Construction-in-progress consists of the following as of December 31, 2020: Construction-in-progress description Value Estimated Estimated Guiyang Longdongbao Project (cloud computing facility in Guiyang) $ 12,260,536 August 2022 Approximately $10 million The Company completed the initial stage of the project, which included demolition, underground structure and design and permits. The Company is currently in negotiation with various contractors for the construction of the facility. As such, no significant contractual obligation regarding this project existed as of December 31, 2020. The Company obtained the Guiyang Provincial Enterprise Investment Project Filing Certificate in June 2020. The Company expects to start construction in the second half of 2021 and the project is estimated to be completed by the end of 2022. |
Intangible assets, net
Intangible assets, net | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, net | Note 6 – Intangible assets, net The Company’s intangible assets with definite useful lives primarily consist of licensed software, capitalized development costs, platform system, and land use rights. The following table summarizes the components of acquired intangible asset balances as of December 31, 2020 and 2019: December 31, 2020 December 31, Licensed software $ 2,822,063 $ 1,289,897 Capitalized development costs 3,932,617 1,929,767 Platform system 43,831 41,081 Land use rights* 435,315 411,307 Less: accumulated amortization (1,986,074 ) (1,473,622 ) Intangible assets, net $ 5,247,752 $ 2,198,430 *On June 3, 2015, Infobird Guiyang signed a cloud computing development agreement with the local Guiyang government to promote development of the local cloud computing industry. See construction in progress in Note 5. The Company obtained land use rights in Guiyang, China for 9,760.8 square meters of land for approximately $4.7 million (RMB 32,532,746) through public bidding. The land is for building of technology related infrastructure only. In return, the Guiyang government will subsidize the cost of land through a form of cash grant in the amount of approximately $4.5 million (RMB 31,068,626). The Company received such grant in 2015. The grant was given to promote the local cloud computing industry, there are no services to perform on the part of the Company and the grant was given without restriction. The only condition is that the land use right acquired was to be used for the cloud computing industry only. The Company recorded the grant as a reduction of the related land use rights. Amortization expense for the years ended December 31, 2020, 2019, and 2018 amounted to $397,744, $84,068, and $228,604, respectively. Amortization expense of capitalized development costs was $361,353, $77,119, and $0 during the years ended December 31, 2020, 2019, and 2018, respectively. The carrying value of capitalized development costs at December 31, 2020, 2019, and 2018 was $3,468,617, $1,852,648, and $456,199, respectively. No impairment of capitalized development costs were recognized as of December 31, 2020, 2019. The estimated amortization is as follows: Twelve months ending December 31, Estimated 2021 $ 1,091,791 2022 1,091,791 2023 1,089,615 2024 991,361 2025 734,608 Thereafter 248,586 Total $ 5,247,752 |
Other payables and accrued liab
Other payables and accrued liabilities | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Other payables and accrued liabilities | Note 7 – Other payables and accrued liabilities Other payables and accrued liabilities consist of the following: December 31, 2020 December 31, Salary payables $ 563,334 $ 606,056 Employee reimbursement and benefit payables 38,167 24,284 Professional fees payable 78,482 — Other miscellaneous payables 7,719 14,250 Total other payables and accrued liabilities $ 687,702 $ 644,590 |
Short-term loans - bank
Short-term loans - bank | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Short-term loans - bank | Note 8 – Short-term loans - bank Outstanding balances on short-term loans - bank consisted of the following: Bank Name Maturities Interest rate Collateral/Guarantee December 31, 2020 December 31, 2019 Bank of Beijing Matured in May, June, and July 2019 (1) and April 2020 (2) and matures in March and April 2021 (3) and matures in February and March 2022 (4) 4.8% - 5.7% Guarantee by Beijing SMEs Credit Re-guarantee Co., Ltd* $ 3,065,134 $ 2,872,820 *Beijing SMEs Credit Re-guarantee Co., Ltd is a financial services company and provides credit re-guarantee business and short-term capital operation to small and medium enterprises. The Company incurred approximately 67,000 and $72,000 of guarantee fees during the years ended December 31, 2020 and 2019. In addition, Qing Tang, the spouse of Yimin Wu, the Company’s Chairman of the Board of Directors and Chief Executive Officer, has provided real estate property as collateral of approximately $3.2 million (RMB 22,000,000) with Beijing SMEs Credit Re-guarantee Co., Ltd to secure the guarantee with Bank of Beijing. (1) In May 2018, Infobird Beijing entered into a two-year line of credit agreement with Bank of Beijing pursuant to which Infobird Beijing may borrow up to approximately $2.9 million (RMB 20,000,000) for operation purposes. The line of credit entitles Infobird Beijing to enter into separate loan contracts under the line of credit. From May 2018 to July 2018, Infobird Beijing signed two loan contracts with Bank of Beijing to obtain loans in a total amount of approximately $2.9 million (RMB 20,000,000) for operation purposes. The loans bore an interest rate of 5.7% with the maturity dates in May, June, and July 2019. The Company fully repaid the loans in March 2019. (2) In April 2019, Infobird Beijing renewed two loan contracts with Bank of Beijing to obtain loans in a total amount of approximately $2.9 million (RMB 20,000,000) for operation purposes. The loans bore an interest rate of 5.2% with the maturity date in April 2020 and were renewed as stated below. (3) In March 2020, Infobird Beijing renewed the line of credit for a two-year period. In March and April 2020, Infobird Beijing renewed the two loan contracts with Bank of Beijing to obtain loans in a total amount of approximately $3.1 million (RMB 20,000,000) for operation purposes. The loans bear interest rates ranging from 4.8% to 5.0% with the maturity dates in March and April 2021 and were renewed as stated below. (4) In February and March 2021, Infobird Beijing renewed the two loan contracts with Bank of Beijing to obtain loans in a total amount of approximately $3.1 million (RMB 20,000,000) for operation purposes. The loans bear interest rate of 4.8% with the maturity dates in February and March 2022. Interest expense pertaining to the above short-term loans - bank for the years ended December 31, 2020, 2019, and 2018 amounted to $141,880, $162,566, and $89,725 respectively. |
Related party balances and tran
Related party balances and transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related party balances and transactions | Note 9 – Related party balances and transactions Interest payable – related party Name of Related Party Relationship Nature December 31, 2020 December 31, 2019 Qing Tang Spouse of Yimin Wu Interest payable -Interest incurred from loan described below $ 574,065 $ 538,047 In July 2016, Infobird Beijing signed two loan contracts with a related party, Qing Tang, the spouse of Yimin Wu, to obtain loans for a total of approximately $1.3 million (RMB 8,800,000) for operation purposes. The loans bore a 1.5% monthly interest rate (18% annual interest rate) and were due on demand. By October 2019, the principal of the loans were fully repaid. Interest expense pertaining to the above short-term loan - related party for the years ended December 31, 2020, 2019, and 2018 amounted to $0, $176,354, and $365,100, respectively. Loan Guarantee – related party Qing Tang, the spouse of Yimin Wu, has provided real estate property as collateral of approximately $3.2 million (RMB 22,000,000) with Beijing SMEs Credit Re-guarantee Co., Ltd to secure a guarantee with Bank of Beijing for the line of credit in the amount of approximately $2.9 million (RMB 20,000,000). See Note 8 for more details. |
Taxes
Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Taxes | Note 10 – Taxes Income tax Cayman Islands Under the current laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed. Hong Kong Infobird HK is incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, Infobird HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. PRC Infobird WFOE, Infobird Beijing, Infobird Anhui, and Infobird Guiyang are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. EIT grants preferential tax treatment to certain High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Infobird Beijing and Infobird Guiyang obtained the “high-tech enterprise” tax status in October 2017 and November 2016, respectively, which reduced their statutory income tax rate to 15% for a three year period. Infobird Beijing applied to renew the “high-tech enterprise” tax status in July 2020, and the status was approved by local authorities on December 2020. In November 2019, Infobird Guiyang’s “high-tech enterprise” tax status expired, and the Company has not renewed such “high-tech enterprise” tax status as of the date of this annual report as Infobird Guiyang also qualifies for 15% preferential income tax rate for enterprises whose core business is one of the industrial projects listed in the Catalogue of Encouraged Industries in western regions of China. In addition, 75% of research and development expenses of Infobird Beijing, Infobird Anhui, and Infobird Guiyang are subject to additional deduction from pre-tax income while such deduction cannot exceed the total amount of pre-tax income. Tax savings for the years ended, 2020, 2019 and 2018 amounted to $825,784, $814,256, and $543,404, respectively, with the 10% preferential tax rate reduction and additional deduction of 75% of research and development expenses. The Company’s basic and diluted earnings per shares would have been lower by $0.04, $0.04, and 0.03 per share for the years ended December 31, 2020, 2019, and 2018, respectively, without the preferential tax rate reduction and research and development expenses reduction. Income tax expenses for the years ended December 31, 2020, 2019 and 2018 amounted to $286,071, $673,034, and $145,263, respectively. Significant components of the provision for income taxes are as follows: For the year ended December 31, 2020 For the year ended December 31, 2019 For the year ended December 31, 2018 Current $ 88,179 $ 316,944 $ 258,724 Deferred 197,892 356,090 (113,461 ) Provision for income taxes $ 286,071 $ 673,034 $ 145,263 The following table reconciles China statutory rates to the Company’s effective tax rate: For the year ended For the year ended For the year ended December 31, 2020 December 31, 2019 December 31, 2018 China statutory income tax rate 25 % 25 % 25 % Preferential tax rate reduction (9.7 )% (6.9 )% (10.1 )% 75% of research and development expenses deduction (9.3 )% (7.2 )% (10.9 )% Permanent difference 0.6 % 0.8 % 1.6 % Effective tax rate 6.6 % 11.7 % 5.6 % Deferred tax assets and liabilities – China Significant components of deferred tax assets and liabilities were as follows: December 31, December 31, Deferred tax assets: 2020 2019 Allowance for doubtful account $ 34,003 $ 2,908 Net operating loss carryforward 579,108 542,773 Deferred tax assets, net 613,111 545,681 Deferred tax liabilities: Capitalized development costs (545,253 ) (285,827 ) Deferred tax assets, net $ 67,938 $ 259,854 Noncurrent deferred tax assets $ 389,893 $ 461,461 Noncurrent deferred tax liabilities (322,035 ) (201,607 ) Deferred tax assets, net $ 67,858 $ 259,854 As of December 31, 2020 and 2019, the Company had net operating loss (NOL) carryforward of approximately $ $3.6 million, respectively, from the Company’s PRC subsidiary, Infobird Guiyang, which was operating at a loss prior to the year ended December 31, 2018. The NOL will expire by December 31, 2023. Infobird Guiyang expects to continue generate positive taxable income in the coming years, and believes it is more likely than not that its PRC operations will be able to fully utilize its deferred tax assets related to the net operating loss carryforwards in the PRC. In addition, the Company had $225,936 and $19,386 of allowance for doubtful accounts held at its profitable PRC VIEs as of December 31, 2020 and 2019, respectively. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets for the profitable PRC VIEs as of December 31, 2020 and 2019. Thus, there were no valuation allowances as of December 31, 2020 and 2019 in respect to the deferred tax assets on allowance for doubtful accounts. The Company recognized deferred tax liabilities related to the excess of the intangible assets reporting basis over its income tax basis as a result of capitalized development costs. The deferred tax liabilities will reverse as the intangible assets are amortized for financial statement reporting purposes. Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of December 31, 2020 and 2019, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur interest and penalties tax for the years ended December 31, 2020, 2019, and 2018. The Company does not anticipate any significant increases or decreases in unrecognized tax benefits in the next twelve (12) months from December 31, 2020. Value added tax All of the Company’s service revenues that are earned and received in the PRC are subject to a Chinese VAT at a rate of 6% of the gross proceeds or at a rate approved by the Chinese local government. Taxes payable consisted of the following: December 31, 2020 December 31, VAT taxes payable $ 530,269 $ 376,738 Income taxes payable 324,048 276,284 Other taxes payable 11,478 20,770 Total $ 865,795 $ 673,792 |
Concentration of risk
Concentration of risk | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration of risk | Note 11 – Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash in bank. As of December 31, 2020 and 2019, $1,679,934 and $3,507,217 were deposited with financial institutions located in the PRC, respectively. Deposit insurance system in China only insured each depositor at one bank for a maximum of approximately $77,000 (RMB 500,000). As of December 31, 2020 and 2019, $1,326,797 and $3,220,710 are over the China deposit insurance limit which is not covered by insurance, respectively. The Company is also exposed to risk from its accounts receivable and other receivables. These assets are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment. A majority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance. The Company’s functional currency is the RMB, and its financial statements are presented in U.S. dollars. The RMB appreciated by 6.3% from December 31, 2019 to December 31, 2020. It is difficult to predict how market forces or PRC or U.S. government policy may impact the exchange rate between the RMB and the U.S. dollar in the future. The change in the value of the RMB relative to the U.S. dollar may affect the Company’s financial results reported in the U.S. dollar terms without giving effect to any underlying changes in its business or results of operations. Currently, the Company’s assets, liabilities, revenues and costs are denominated in RMB. To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of U.S. dollar against RMB would have a negative effect on the U.S. dollar amount available to the Company. Customer concentration risk For the year ended December 31, 2020, two customers accounted for 34.8% and 13.2% of the Company’s total revenues. For the year ended December 31, 2019, China Guangfa Bank accounted for 77.3% of the Company’s total revenues. For the year ended December 31, 2018, China Guangfa Bank accounted for 76.7% of the Company’s total revenues. As of December 31, 2020, three customers accounted for 50.8%, 19.9%, and 10.9% of the total balance of accounts receivable. As of December 31, 2019, China Guangfa Bank accounted for 77.6% and another customer accounted for 10.4% of the total balance of accounts receivable. Vendor concentration risk For the year ended December 31, 2020, two vendors accounted for 19.1% and 10.9% of the Company’s total purchases. For the year ended December 31, 2019, three vendors accounted for 16.0%, 13.1% and 10.3% of the Company’s total purchases, respectively. For the year ended December 31, 2018, three vendors accounted for 21.6%, 12.4% and 11.2% of the Company’s total purchases, respectively. As of December 31, 2020, three vendors accounted for 38.7%, 22.1% and 14.7% of the total balance of accounts payable, respectively. As of December 31, 2019, three vendors accounted for 18.6%, 12.9% and 12.3% of the total balance of accounts payable, respectively. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Equity | Note 12 – Equity Ordinary shares Infobird Cayman was established under the laws of the Cayman Islands on March 26, 2020. The authorized number of ordinary shares is 50,000,000 shares with a par value of $0.001 per ordinary share, and 19,000,000 ordinary shares were issued on March 26, 2020. The Company has retroactively restated all shares and per share data for all the periods presented pursuant to ASC 260. As a result, the Company had 50,000,000 authorized ordinary shares, par value $0.001 per share, of which 19,000,000 were issued and outstanding as of December 31, 2020 and 2019. Capital contributions For the years ended December 31, 2020, 2019 and 2018, the Company’s shareholders made capital contributions of $0, $0 and $202,104 to the Company, respectively. Acquisition of noncontrolling interests In August 2019, Infobird Beijing acquired an additional 18.18% of noncontrolling interests in Infobird Guiyang for approximately $1.8 million (RMB 12,360,000). The acquisition increased Infobird Beijing’s controlling interest in Infobird Guiyang from 72.00% to 90.18%. The excess of the price paid over the carrying value of noncontrolling interests, $1,685,154, was recorded as a reduction of the Company’s paid-in capital. Restricted assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by Infobird WFOE, Infobird Beijing, Infobird Anhui, and Infobird Guiyang (collectively “Infobird PRC entities”) only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Infobird PRC entities. Infobird PRC entities are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Infobird PRC entities may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. Infobird PRC entities may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange. As a result of the foregoing restrictions, Infobird PRC entities are restricted in their ability to transfer their assets to the Company. Foreign exchange and other regulation in the PRC may further restrict Infobird PRC entities from transferring funds to the Company in the form of dividends, loans and advances. As of December 31, 2020 and 2019, amounts restricted are the paid-in-capital, registered capital and statutory reserves of Infobird PRC entities, which amounted to $6,308,638, and $5,902,867, respectively. Statutory reserves During the years ended December 31, 2020, 2019 and 2018, Infobird PRC entities collectively attributed $405,771, 31,778, and nil of retained earnings for their statutory reserves, respectively. |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 13 – Commitments and contingencies Lease commitments The Company entered into several non-cancellable operating lease agreements for offices and employee dormitories for the year ended December 31, 2020. The Company’s commitment for minimum lease payments under the remaining operating leases as of December 31, 2020 for the next five years is as follows: Twelve months ending December 31, Minimum lease payment 2021 $ 431,467 2022 98,082 Thereafter — Total minimum payments required $ 529,549 Contingencies From time to time, the Company is party to certain legal proceedings, as well as certain asserted and un-asserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the consolidated financial statements. On July 20, 2012, Infobird Anhui signed a leasing agreement with Hefei Shushan Economic Development District Management Committee (the “Plaintiff”) to lease certain properties in the industry park managed by the Plaintiff. A supplemental agreement was subsequently signed on August 6, 2012 which amended the term of the lease and provided certain incentives and subsidies to Infobird Anhui. In June 2019, the Plaintiff filed a lawsuit in Shushan District People’s Court against Infobird Anhui claiming the incentives and subsidy provided to Infobird Anhui was indeed a loan and Infobird Anhui was in default of loan contract of approximately $0.9 million (RMB 6,400,000). On August 1, 2019, Shushan District People’s Court issued a civil judgment against the Plaintiff. The Plaintiff subsequently filed an appeal in Anhui Province Hefei City Intermediary People’s Court. The Court ruled against the Plaintiff on December 3, 2019. The case was concluded and no contingent loss was recorded on the Company’s financial statements. Variable interest entity structure In the opinion of management, (i) the corporate structure of the Company is in compliance with existing PRC laws and regulations; (ii) the Contractual Arrangements are valid and binding, and do not result in any violation of PRC laws or regulations currently in effect; and (iii) the business operations of Infobird WFOE and the VIEs are in compliance with existing PRC laws and regulations in all material respects. However, there are substantial uncertainties regarding the interpretation and application of current and future PRC laws and regulations. Accordingly, the Company cannot be assured that PRC regulatory authorities will not ultimately take a contrary view to the foregoing opinion of its management. If the current corporate structure of the Company or the Contractual Arrangements is found to be in violation of any existing or future PRC laws and regulations, the Company may be required to restructure its corporate structure and operations in the PRC to comply with changing and new PRC laws and regulations. In the opinion of management, the likelihood of loss in respect of the Company’s current corporate structure or the Contractual Arrangements is remote based on current facts and circumstances. COVID-19 In March 2020, the World Health Organization declared COVID-19 a pandemic. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and facilities in China and elsewhere. |
Segment information and revenue
Segment information and revenue analysis | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Segment information and revenue analysis | Note 14 – Segment information and revenue analysis The Company follows ASC 280, Segment Reporting, which requires that companies disclose segment data based on how management makes decisions about allocating resources to each segment and evaluating their performances. The Company has one reporting segment. The Company’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company and hence the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company’s long-lived assets are substantially all located in the PRC and all of the Company’s revenues are derived from the PRC. Disaggregated information of revenues by business lines are as follows: For the year ended December 31, 2020 2019 2018 Standard cloud-based services $ 1,400,857 $ 2,018,919 $ 2,064,669 Customized cloud-based services 5,005,080 12,865,074 12,663,985 BPO services 1,747,310 2,007,919 1,994,501 Software development 5,404,262 27,754 — Other revenues 975,432 1,328,623 2,066,395 Total revenues $ 14,532,941 $ 18,248,289 $ 18,789,550 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15– Subsequent Events On February 5, 2021, the Company obtained a line of credit in the amount of RMB 2,000,000 (approximately $0.3 million) from BOC Fullerton Community Bank with an annual interest rate of 8.5% to be due on February 4, 2024. On February 5, 2021, the Company obtained a line of credit in the amount of RMB 3,000,000 (approximately $0.5 million) from Shanghai Pudong Development Bank On April 22, 2021 the Company completed its initial public offering (“IPO”) of 6,250,000 ordinary shares at a public offering price of $4.00 per share, par value $0.001 per share, resulting in net proceeds to the Company of approximately $21.8 million after deducting underwriting discounts and commissions and other expenses. In connection with the IPO, the Company’s ordinary shares began trading on The Nasdaq Capital Market on April 20, 2021 under the symbol “IFBD”. |
Condensed financial information
Condensed financial information of the parent company (unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed financial information of the parent company (unaudited) | Note 16 – Condensed financial information of the parent company (unaudited) The Company performed a test on the restricted net assets of consolidated subsidiary in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08(e)(3), “General Notes to Financial Statements” and concluded that it was applicable for the Company to disclose the financial statements for Infobird Co., Ltd, the parent company. The subsidiary did not pay any dividend to the Company for the years presented. For the purpose of presenting parent only financial information, the Company records its investment in its subsidiary under the equity method of accounting. Such investment is presented on the separate condensed balance sheets of the Company as “Investment in subsidiary” and the income of the subsidiary is presented as “share of income of subsidiary”. Certain information and footnote disclosures generally included in financial statements prepared in accordance with U.S. GAAP have been condensed and omitted. The Company did not have significant capital and other commitments, long-term obligations, or guarantees as of December 31, 2020 and 2019. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Liquidity | Liquidity In assessing liquidity, the Company monitors and analyzes cash on-hand and operating expenditure commitments. The Company’s liquidity needs are to meet working capital requirements and operating expense obligations. To date, the Company financed its operations primarily through cash flows from operations and short-term borrowing from banks and related parties. The Company’s major customer, China Guangfa Bank, accounted for 34.8% and 77.3% of the Company’s total revenues for the years ended December 31, 2020 and 2019, respectively, of which the Company collected approximately $6.9 million and approximately $16.4 million in cash, respectively. The loss of the major customer or a reduction in usage by the major customer would adversely impact the Company’s liquidity. Historically, the Company finances its operations through internally generated cash, short-term loans and payable from related parties. As of December 31, 2020, the Company had approximately $1.7 million in cash which primarily consists of cash on hand and bank deposits, which are unrestricted as to withdrawal and use and are deposited with banks in China. The Company’s working capital deficit was approximately $0.2 million at December 31, 2020, approximately $1.8 million of which was deferred revenue which the Company expects to realize and the Company does not expect to make any significant refund based on historical experience. Therefore, the Company’s working capital deficit excluding deferred revenue was approximately $1.6 million. The Company will require a minimum of approximately $4.0 million over the next twelve months to operate at its current level, either from revenues or funding. If the Company is unable to realize its assets within the normal operating cycle of a twelve (12) month period, the Company may have to consider supplementing its available sources of funds through the following sources: ● other available sources of financing from PRC banks and other financial institutions; and ● financial support from the Company’s related parties and shareholders. In February 2021, the company obtained two line of credits from BOC Fullerton Bank and Shanghai Pudong Development Bank in the amount of RMB 2,000,000 (approximately $0.3 million) and RMB 3,000,000 (approximately $0.5 million) to be due in February 2024 and 2022, respectively. Based on the above considerations, the Company’s management is of the opinion that it has sufficient funds to meet the Company’s working capital requirements and debt obligations as they become due over the next twelve (12) months. |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the SEC. |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries, which include the wholly-foreign owned enterprise (“WFOE”) and VIE and its subsidiaries (“VIEs”) over which the Company exercises control and, when applicable, entities for which the Company has a controlling financial interest or is the primary beneficiary. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives of property and equipment and intangible assets, software development costs, impairment of long-lived assets, allowance for doubtful accounts, revenue recognition, allowance for deferred tax assets and uncertain tax position. The inputs into the Company’s judgments and estimates consider the economic implications of COVID-19 on the Company’s critical and significant accounting estimates. Actual results could differ from these estimates. |
Foreign currency translation and transaction | Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the noon buying rate in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive income (loss) amounted to $494,046 and $29,325 as of December 31, 2020 and 2019, respectively. The balance sheet amounts, with the exception of equity at December 31, 2020 and 2019 were translated at 6.5250 RMB and 6.9618 RMB, respectively. The equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the years ended December 31, 2020, 2019, and 2018 were 6.9042 RMB, 6.9081 RMB, and 6.6090 RMB to $1.00, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. |
Cash | Cash Cash consists of cash on hand, demand deposits and time deposits placed with banks or other financial institutions and have original maturities of less than three (3) months. |
Accounts receivable, net | Accounts receivable, net Accounts receivable include trade accounts due from customers. Accounts are considered overdue after thirty (30) days from payment due date. In establishing the required allowance for doubtful accounts, management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and the credit history and financial conditions of the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. |
Other receivables, net | Other receivables, net Other receivables primarily include advances to employees and other deposits. Management regularly reviews the aging of receivables and changes in payment trends and records allowances when management believes collection of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of December 31, 2020 and 2019, provision for doubtful accounts were $40,437 and $0, respectively. |
Prepayments | Prepayments Prepayments are cash deposited or advanced to suppliers for future service rendering. The amounts are refundable and bear no interest. For any advances to suppliers determined by management that such advances will not be in receipts or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2020 and 2019, no allowance for the doubtful accounts were deemed necessary. |
Long-term deposits | Long-term deposits Long-term deposits primarily included rental deposits, and deposits made by the company to customers to secure the service contract. The deposits are generally more than one year and the amounts are refundable and bear no interest. For any deposits determined by management that such deposit will not be in receipts or refundable, the Company will recognize an allowance account to reserve such balances. Management reviews the long- term deposits on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of December 31, 2020 and 2019, provision for doubtful accounts were $61,609 and $0, respectively. |
Property and equipment, net | Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Useful Life Leasehold improvements Shorter of the remaining lease Electronic devices 3-5 years Office equipment, fixtures and furniture 3-5 years Automobile 3-5 years Computer and network equipment 3-5 years The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Construction-in-progress represents contractor and labor costs, design fees and inspection fees in connection with the construction of the Company’s building for a cloud computing facility in Guiyang, China, which is expected to be completed in late 2022. No depreciation is provided for construction-in-progress until it is completed and placed into service. |
Intangible assets | Intangible assets The Company’s intangible assets with definite useful lives primarily consist of licensed software, capitalized development costs, platform system, and land-use rights. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives. Intangible assets are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Useful Life Licensed software 5 years Capitalized development cost 5 years Platform development 5 years Land use right 40 years Capitalized development costs The Company follows the provisions of ASC 350-40, “Internal Use Software”, to capitalize certain direct development costs associated with internal-used software. ASC 350-40 provides guidance on capitalization of the costs incurred for computer software developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of its development, and capitalizes costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the application are capitalized if it is determined that these upgrades or enhancements add additional functionality to the application. Development costs cease capitalization upon completion of all substantial testing when the software is substantially complete and ready for its intended use and are amortized on a straight-line basis over the estimated useful life, which is generally five years. Amortization of internal-use software begins when the software is ready for its intended use. Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. If, after the development of internal-use software is completed, the Company decides to market the software, proceeds received from the license of the computer software, net of direct incremental costs of marketing, such as commissions, software reproduction costs, warranty and service obligations, and installation costs, shall be applied against the carrying amount of that software. For the years ended December 31, 2020, 2019, and 2018, the Company applied nil against carrying amount of capitalized software that was subsequently sold to customers as the software were fully amortized. Land use rights All land in the PRC is owned by the government. However, the government grants “land use rights.” This land use rights are for 40 years and expire in 2055. The Company amortizes the land use rights over the forty-year term of the land use rights on a straight-line basis. The carrying value of the land use rights was reduced by government grant received when the conditions stipulated under the grant were fulfilled. |
Impairment for long-lived assets | Impairment for long-lived assets Long-lived assets, including property and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. As of December 31, 2020 and 2019, no impairment of long-lived assets was recognized. |
Fair value measurement | Fair value measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: ● 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. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. |
Deferred offering costs | Deferred offering costs Deferred offering costs consist primarily of expenses paid to attorneys, consultants, underwriters, and other parties related to the Company’s initial public offering. The balance will be offset with the proceeds received after the close of the offering. |
Government Grants | Government Grants Government grants primarily consist of financial grants received from local governments for operating a business in their jurisdictions and compliance with specific policies promoted by the local governments. There are no defined rules and regulations to govern the criteria necessary for companies to receive such benefits, and the amount of financial subsidy is determined at the discretion of the relevant government authorities. Government grants of non-operating nature and with no further conditions to be met are recorded as non-operating income in “Other income, net” when received. The government grants are related to acquisition of assets. The grants are recorded as “deferred government grants” included in the accrued expenses and other current liabilities line item in the consolidated balance sheets when received. Once the Company fulfills the conditions stipulated under the grant, the grant amount is deducted from the carrying amount of the asset with a corresponding reduction in the deferred government grant balance. |
Noncontrolling Interests | Noncontrolling Interests The Company’s noncontrolling interests represent the minority shareholders’ ownership interests related to the Company’s subsidiaries, including 0.05% for Infobird Anhui for the years ended December 31, 2020 and 2019, and 9.82% for Infobird Guiyang for the years ended December 31, 2020 and 2019. The Company repurchased 18.18% of noncontrolling interests in Infobird Guiyang in 2019, resulting in noncontrolling interests of 9.82% for Infobird Guiyang for the year ended December 31, 2019. Excess of payment made to noncontrolling shareholders over carrying value of the entity is recorded as reduction in additional paid in capital. The noncontrolling interests are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Noncontrolling interests in the results of the Company are presented on the consolidated statement of operations as allocations of the total income or loss for the year between noncontrolling interests holders and the shareholders of the Company. Noncontrolling interests consist of the following: December 31, December 31, 2020 2019 Infobird Guiyang $ 245,009 $ 170,623 Infobird Anhui (781 ) (140 ) Total $ 244,228 $ 170,483 |
Revenue recognition | Revenue recognition The Company recognized its revenue under Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers (ASC 606). The Company recognizes revenue which represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when control of goods and services are provided to customers. The Company’s contracts with customers generally do not include a general right of return relative to the delivered products or services. The Company applied practical expedient when sales taxes were collected from customers, meaning sales tax is recorded net of revenue, instead of cost of revenue, which are subsequently remitted to governmental authorities and are excluded from the transaction price. Revenues are generated from (1) customized cloud-based services, (2) standard cloud-based services, (3) BPO services, (4) software development, and (5) professional services and other. (1) Revenue from customized cloud-based services The Company derives its customized cloud-based revenues from subscription services which are comprised of subscription fee from granting customers’ access to the customized SaaS, voice/data plan, which includes telecommunication usage such as telephone calls and messaging that our customers can subscribe for, and technical support. The provision of customized SaaS, voice/data plan and technical support is considered as one performance obligation as the services provided are not distinct within the context of the contract whereas the customer can only obtain benefit when the services are provided together. The Company uses monthly utilization records based on number of user accounts subscribed by customers, an output measure, to recognize revenue over time as there is simultaneous consumption and delivery of services. The Company has entered into contracts with China Guangfa Bank where the amounts charged per user account were fixed and determinable, and the specific terms of the contracts were agreed to by the Company and China Guangfa Bank. Contract performance periods are generally fifteen months, and payment terms are generally a specified percentage prepaid based on estimated usage, and the remaining to be billed monthly based on actual usage. Contracts generally do not contain significant financing components or variable consideration. (2) Revenue from standard cloud-based services The Company also derives its standard cloud-based revenues from subscription services which are comprised of subscription fee from granting customers access to its software through the internet. The Company’s standard cloud-based solutions represent a series of services such as calling, voice recording and technical support. These services are made available to the customer continuously throughout the contractual period, however, the extent to which the customer uses the services may vary at the customers’ discretion. The standard cloud-based services are considered to have one single performance obligation. The Company uses monthly utilization records based on number of user accounts subscribed by customers, an output measure, to recognize revenue over time as there is simultaneous consumption and delivery of services. The Company also enters into contracts with customers where the customers pay a fixed fee to access a fixed number of user accounts over the subscription period as specified in the contracts; therefore, the customers receive and consume the benefits of the cloud services throughout the subscription period so revenue is recognized ratably over the contractual subscription period that the services are delivered, beginning on the date the service is made available to the customers. Contract performance periods generally are one year, and pursuant to the contracts, full payments are generally collected in advance, with payment to be made within three months after execution of the contract. Contracts generally do not contain significant financing components or variable consideration. (3) Revenue from BPO services The Company provides BPO services to operate the call centers for its customers. Customers using these services are not permitted to take possession of the Company’s software and the contract term is for a defined period, where customers pay a monthly service fee. These services are considered as one performance obligation as the customers do not obtain benefit for each separate service. Revenues are recognized over time over contractual period using the time elapsed output method as BPO services are provided. Contract performance periods generally are one year, and pursuant to the contracts, full payments for several months of services are generally collected in advance. Contracts generally do not contain significant financing components or variable consideration. (4) Revenue from software development The Company also generates revenue from development and sale of software license including (1) standard software and (2) customized software developed per customers’ specifications. Contract terms from each software development contract generally do not contain significant financing components or variable consideration. Standard software are developed and offered as standard cloud-based services. The Company sold the license for standard software because some customers show obvious preference of software licensing over software-as-a-service, for reasons such as concerns about the safety of cloud-based services and potential higher price of subscription in total compared with one-time on-premise fee. Therefore, as part of the Company’s sales and market strategy, it offers licenses for its standard software to allow the customers to first start utilizing its products in their daily operation and then aim to evolve them to become subscribers with its standard cloud-based services to enjoy benefits of software upgrades and continued services. Licenses for standard software provide the customer with a right to use the software. Standard software licenses are typically made available to customers with immediate access to the software. The Company recognizes revenue for these standard software licenses at the point in time when the customer has access and thus control over the software. Customized software are software developed catering to the needs of specific customers who require initial customization or development of new solutions before subscription to our cloud-based services. For example, the Company has entered into a two-stage agreement to provide services to a municipal government agency to first develop an information technology system and customize and configure its cloud call center into the IT system, and then provide cloud-based services and charge subscription fees. Because the customized software the Company developed are to solve certain business pain points in a certain scenario within or across industries, once developed, it plans to further apply them in serving other customers that share similar needs and business models. The Company aims to replicate its initial customization and development and achieve economies of scale after it delivers its products to more customers within the same industry. Contract terms are generally less than one year. The design, development, installation of the customized software are considered as one performance obligation as these promises are not separately identifiable as the customers do not obtain benefits from these services on its own. The Company’s software development service contracts are generally recognized at a point in time when customer accepted the customized software with satisfactory testing result. Some of the contracts may require the Company to provide post contract services (“PCS”) which include upgrades, maintenance and technical support. The provision of upgrades, maintenance and technical support is considered one performance obligation because they are not distinct within the context of the contract. The nature of the promise is to stand ready to provide a single continuous integrated service throughout the contract term. As such the Company allocates the contract price between sale of software and provision of PCS using the expected cost plus margin approach which requires the Company to forecast its expected costs of satisfying the performance obligation and then add a reasonable margin for that good or service. Revenue allocated to PCS is deferred and recognized on a straight-line basis over the estimated period they are expected to be provided. For the years ended December 31, 2020, 2019 and 2018, approximately $0.3 million, $0 and $0 were allocated to PCS, respectively. (5) Professional services and other revenues The Company also generates revenue from data analysis services and other professional services where a separate contract is entered into with the customer when the customer needs the product or services. The service revenue from data analysis service is recognized based on the service performed, an output measure, over the contractual period. Other professional services consists primarily of technical consulting services. The Company recognizes revenue ratably over the contractual period as the customer simultaneously receives and consumes the benefits as the Company performs. Contract performance periods generally range from month to month, completion of service to one year, and payment terms are generally prepaid to 30 days. Contracts generally do not contain significant financing components or variable consideration. Contract balances The Company records receivables related to revenue when it has an unconditional right to invoice and receive payment. The Company invoices its customers for its services on a monthly basis. Deferred revenue consists primarily of customer billings made in advance of performance obligations being satisfied and revenue being recognized. The Company’s disaggregated revenue streams are summarized and disclosed in Note 14. |
Cost of revenues | Cost of revenues Cost of revenues consists primarily of personnel costs (including salaries, social insurance and benefits) for employees involved with the Company’s operations and product support; third party service fee including cloud and data usage, hosting fees and amortization and depreciation expenses associated with capitalized software, platform system and hardware. In addition, cost of revenues also include outsourcing contracted customer service representatives, customer surveys, contracted software development costs and allocated shared costs, primarily including facilities, information technology and security costs. |
Advertising costs | Advertising costs Advertising costs amounted to $65,059, $62,501, and 174,924 for the years ended December 31, 2020, 2019, and 2018, respectively. Advertising costs are expensed as incurred and included in selling expenses. |
Operating leases | Operating leases The Company leases office building at various locations. A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lessee as an operating lease. All leases of the Company are currently classified as operating leases. The Company records the total expenses on a straight-line basis over the lease term. |
Research and development | Research and development Research and development expenses include salaries and other compensation-related expenses to the Company’s research and product development personnel, as well as office rental, depreciation, amortization and related expenses for the Company’s research and product development team. The Company recognizes software development costs in accordance with ASC 350-40 “Software—internal use software”. The Company expenses all costs that are incurred in connection with the planning and implementation phases of development, and costs that are associated with maintenance of the existing websites or software for internal use. Certain costs associated with developing internal-use software are capitalized when such costs are incurred within the application development stage of software development. The Company also follows the provisions of FASB ASC 985-20, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed (“ASC 985-20”). ASC 985-20 requires that software development costs incurred in conjunction with product development be charged to research and development expense until technological feasibility is established using either the detail design approach or working model approach. Thereafter, until the product is released for sale, software development costs should be capitalized and reported at the lower of unamortized cost or net realizable value of the related product. For the years ended December 31, 2020, 2019, and 2018, the company incurred approximately $0.1 million $0, and $0 in development cost that need to be expensed before technological feasibility achieved, respectively. |
Value added taxes | Value added taxes Revenue represents the invoiced value of service, net of value added tax (“VAT”). The VAT is based on gross sales price and VAT rates range up to 6%, depending on the type of service provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in tax payable. All of the VAT returns filed by the Company’s subsidiaries in China have been and remain subject to examination by the tax authorities for five years from the date of filing. |
Income taxes | Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The Company presents deferred tax assets and liabilities as noncurrent in the balance sheet based on an analysis of each taxpaying component within a jurisdiction. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. PRC tax returns filed in 2020 and 2019 are subject to examination by any applicable tax authorities. |
Comprehensive income (loss) | Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies. |
Earnings per share | Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended December 31, 2020, 2019 and 2018, there were no dilutive shares. |
Employee benefits | Employee benefits The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are PRC government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $805,603, $918,696, and $1,182,328 for the years ended December 31, 2020, 2019 and 2018, respectively. |
Statutory reserves | Statutory reserves Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss. |
Segment reporting | Segment reporting ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to increase the transparency and comparability about leases among entities. The new guidance requires lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and requires a modified retrospective approach to adoption assuming the Company will remain an emerging growth company at that date. Early adoption is permitted. In September 2017, the FASB issued ASU No. 2017-13, which to clarify effective dates that public business entities and other entities were required to adopt ASC Topic 842 for annual reporting. A public business entity that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filing with the SEC adopting ASC Topic 842 for annual reporting periods beginning after December 15, 2020, and interim reporting periods within annual reporting periods beginning after December 15, 2021. ASU No. 2017-13 also amended that all components of a leveraged lease be recalculated from inception of the lease based on the revised after tax cash flows arising from the change in the tax law, including revised tax rates. The difference between the amounts originally recorded and the recalculated amounts must be included in income of the year in which the tax law is enacted. The Company has not early adopted this update and it will become effective on January 1, 2022 after FASB delayed the effective date for non-public companies with ASU 2020-05. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures. In July 2017, the FASB Issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815). The amendments in Part I of the Update change the reclassification analysis of certain equity-lined financial instruments (or embedded features) with down round features. The amendments in Part II of this Update re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company has adopted this ASU on January 1, 2020 and does not believe the adoption of this ASU would have a material effect on the Company’s consolidated financial statements. In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this ASU address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1, 2023 after FASB delayed the effective date for non-public companies with ASU 2019-10. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption of the amendments is permitted, including adoption in any interim period for (i) public business entities for periods for which financial statements have not yet been issued and (ii) all other entities for periods for which financial statements have not yet been made available for issuance. An entity that elects to early adopt the amendments in an interim period should reflect any adjustments as of the beginning of the annual period that includes that interim period. Additionally, an entity that elects early adoption must adopt all the amendments in the same period. The Company is currently evaluating the impact of this new standard on Company’s consolidated financial statements and related disclosures. In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs”. The amendments in this Update represent changes to clarify the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. ASU 2020-08 is effective for the Company for annual and interim reporting periods beginning January 1, 2021. Early adoption was permitted, including adoption in an interim period. All entities should apply the amendments in this Update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. These amendments do not change the effective dates for Update 2017-08. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In October 2020, the FASB issued ASU 2020-10, “Codification Improvements to Subtopic 205-10, presentation of financial statements”. The amendments in this Update improve the codification by ensuring that all guidance that requires or provides an option for an entity to provide information in the notes to financial statements is codified in the disclosure section of the codification. That reduce the likelihood that the disclosure requirement would be missed. The amendments also clarify guidance so that an entity can apply the guidance more consistently. ASU 2020-10 is effective for the Company for annual and interim reporting periods beginning January 1, 2022. Early application of the amendments is permitted for any annual or interim period for which financial statements are available to be issued. The amendments in this Update should be applied retrospectively. An entity should apply the amendments at the beginning of the period that includes the adoption date. The Company is currently evaluating the impact of this new standard on Company’s consolidated financial statements and related disclosures. Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
Nature of business and organi_2
Nature of business and organization (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of consolidated financial statements | The accompanying consolidated financial statements reflect the activities of Infobird Cayman and each of the following entities: Name Background Ownership Infobird ● A Hong Kong company 100% owned by Infobird Cayman Infobird Digital Technology (Beijing) Co., Ltd (“Infobird WFOE”) ● A PRC limited liability company and deemed a wholly foreign 100% owned by Infobird HK Beijing Infobird Software Co., Ltd (“Infobird Beijing”) ● A PRC limited liability company VIE of Infobird WFOE Guiyang Infobird Cloud Computing Co., Ltd ● A PRC limited liability company 90.18% owned by Infobird Beijing Anhui Infobird Software Information Technology Co., Ltd (“Infobird Anhui”) ● A PRC limited liability company 99.95% owned by Infobird Beijing |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Property and equipment useful lives | The estimated useful lives are as follows: Useful Life Leasehold improvements Shorter of the remaining lease Electronic devices 3-5 years Office equipment, fixtures and furniture 3-5 years Automobile 3-5 years Computer and network equipment 3-5 years |
Schedule of Intangible assets useful lives | The estimated useful lives are as follows: Useful Life Licensed software 5 years Capitalized development cost 5 years Platform development 5 years Land use right 40 years |
Schedule of Noncontrolling interests | Noncontrolling interests consist of the following: December 31, December 31, 2020 2019 Infobird Guiyang $ 245,009 $ 170,623 Infobird Anhui (781 ) (140 ) Total $ 244,228 $ 170,483 |
Variable interest entity (Table
Variable interest entity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of VIEs’ consolidated assets and liabilities | The carrying amount of the VIEs’ consolidated assets and liabilities are as follows: December 31, 2020 December 31, Current assets $ 7,285,853 $ 5,944,254 Other assets 8,668,680 5,194,972 Total assets 15,954,533 11,139,226 Total liabilities (7,823,238 ) (7,544,671 ) Net assets $ 8,131,295 $ 3,594,555 December 31, 2020 December 31, 2019 Current liabilities: Accounts payable $ 552,540 $ 1,160,125 Short-term loans – bank 3,065,134 2,872,820 Interest payable – related party 574,065 538,047 Other payables and accrued liabilities 687,702 644,590 Deferred revenue 1,755,967 1,453,690 Taxes payable 865,795 673,792 Total current liabilities 7,501,203 7,343,064 Deferred tax liabilities 322,035 201,607 Total liabilities $ 7,823,238 $ 7,544,671 The summarized operating results of the VIEs are as follows: For the year ended December 31, 2020 For the year ended December 31, 2019 For the year ended December 31, 2018 Operating revenues $ 14,532,941 $ 18,248,289 $ 18,789,550 Gross profit 9,814,848 10,261,143 9,485,747 Income from operations 4,367,697 6,038,880 3,067,668 Net income $ 4,060,160 $ 5,101,828 $ 2,442,375 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
Schedule of Accounts receivable | Accounts receivable, net consist of the following: December 31, 2020 December 31, Accounts receivable $ 4,242,392 $ 2,323,328 Allowance for doubtful accounts (123,890 ) (19,386 ) Total accounts receivable, net $ 4,118,502 $ 2,303,942 |
Schedule of Movements of allowance for doubtful accounts | Movements of allowance for doubtful accounts are as follows: December 31, 2020 December 31, Beginning balance $ 19,386 $ 12,635 Addition 97,538 15,250 Write off — (8,289 ) Exchange rate effect 6,966 (210 ) Ending balance $ 123,890 $ 19,386 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and equipment | Property and equipment consist of the following: December 31, 2020 December 31, Electronic devices $ 161,571 $ 123,697 Office equipment, fixtures and furniture 83,380 78,148 Automobile 58,943 55,244 Computer and network equipment 369,654 322,209 Leasehold improvement 346,478 302,521 Construction in progress 1,971,568 1,799,997 Subtotal 2,991,594 2,681,816 Less: accumulated depreciation and amortization (798,405 ) (664,759 ) Total $ 2,193,189 $ 2,017,057 |
Schedule of Construction-in-progress | Construction-in-progress consists of the following as of December 31, 2020: Construction-in-progress description Value Estimated Estimated Guiyang Longdongbao Project (cloud computing facility in Guiyang) $ 12,260,536 August 2022 Approximately $10 million |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible assets | The following table summarizes the components of acquired intangible asset balances as of December 31, 2020 and 2019: December 31, 2020 December 31, Licensed software $ 2,822,063 $ 1,289,897 Capitalized development costs 3,932,617 1,929,767 Platform system 43,831 41,081 Land use rights* 435,315 411,307 Less: accumulated amortization (1,986,074 ) (1,473,622 ) Intangible assets, net $ 5,247,752 $ 2,198,430 |
Schedule of Intangible Assets Future Amortization Expense | The estimated amortization is as follows: Twelve months ending December 31, Estimated 2021 $ 1,091,791 2022 1,091,791 2023 1,089,615 2024 991,361 2025 734,608 Thereafter 248,586 Total $ 5,247,752 |
Other payables and accrued li_2
Other payables and accrued liabilities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Schedule of Other payables and accrued liabilities | Other payables and accrued liabilities consist of the following: December 31, 2020 December 31, Salary payables $ 563,334 $ 606,056 Employee reimbursement and benefit payables 38,167 24,284 Professional fees payable 78,482 — Other miscellaneous payables 7,719 14,250 Total other payables and accrued liabilities $ 687,702 $ 644,590 |
Short-term loans - bank (Tables
Short-term loans - bank (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Schedule of short-term loans - bank | Outstanding balances on short-term loans - bank consisted of the following: Bank Name Maturities Interest rate Collateral/Guarantee December 31, 2020 December 31, 2019 Bank of Beijing Matured in May, June, and July 2019 (1) and April 2020 (2) and matures in March and April 2021 (3) and matures in February and March 2022 (4) 4.8% - 5.7% Guarantee by Beijing SMEs Credit Re-guarantee Co., Ltd* $ 3,065,134 $ 2,872,820 |
Related party balances and tr_2
Related party balances and transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related party balances and transactions | Interest payable – related party Name of Related Party Relationship Nature December 31, 2020 December 31, 2019 Qing Tang Spouse of Yimin Wu Interest payable -Interest incurred from loan described below $ 574,065 $ 538,047 |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of provision for income taxes | Significant components of the provision for income taxes are as follows: For the year ended December 31, 2020 For the year ended December 31, 2019 For the year ended December 31, 2018 Current $ 88,179 $ 316,944 $ 258,724 Deferred 197,892 356,090 (113,461 ) Provision for income taxes $ 286,071 $ 673,034 $ 145,263 |
Schedule of statutory tax rates | The following table reconciles China statutory rates to the Company’s effective tax rate: For the year ended For the year ended For the year ended December 31, 2020 December 31, 2019 December 31, 2018 China statutory income tax rate 25 % 25 % 25 % Preferential tax rate reduction (9.7 )% (6.9 )% (10.1 )% 75% of research and development expenses deduction (9.3 )% (7.2 )% (10.9 )% Permanent difference 0.6 % 0.8 % 1.6 % Effective tax rate 6.6 % 11.7 % 5.6 % |
Schedule of deferred tax assets and liabilities | Significant components of deferred tax assets and liabilities were as follows: December 31, December 31, Deferred tax assets: 2020 2019 Allowance for doubtful account $ 34,003 $ 2,908 Net operating loss carryforward 579,108 542,773 Deferred tax assets, net 613,111 545,681 Deferred tax liabilities: Capitalized development costs (545,253 ) (285,827 ) Deferred tax assets, net $ 67,938 $ 259,854 Noncurrent deferred tax assets $ 389,893 $ 461,461 Noncurrent deferred tax liabilities (322,035 ) (201,607 ) Deferred tax assets, net $ 67,858 $ 259,854 |
Schedule of Taxes payable | Taxes payable consisted of the following: December 31, 2020 December 31, VAT taxes payable $ 530,269 $ 376,738 Income taxes payable 324,048 276,284 Other taxes payable 11,478 20,770 Total $ 865,795 $ 673,792 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum lease payments under the remaining operating leases | The Company’s commitment for minimum lease payments under the remaining operating leases as of December 31, 2020 for the next five years is as follows: Twelve months ending December 31, Minimum lease payment 2021 $ 431,467 2022 98,082 Thereafter — Total minimum payments required $ 529,549 |
Segment information and reven_2
Segment information and revenue analysis (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Notes to Financial Statements | |
Schedule of Disaggregated information of revenues | Disaggregated information of revenues by business lines are as follows: For the year ended December 31, 2020 2019 2018 Standard cloud-based services $ 1,400,857 $ 2,018,919 $ 2,064,669 Customized cloud-based services 5,005,080 12,865,074 12,663,985 BPO services 1,747,310 2,007,919 1,994,501 Software development 5,404,262 27,754 — Other revenues 975,432 1,328,623 2,066,395 Total revenues $ 14,532,941 $ 18,248,289 $ 18,789,550 |
Nature of business and organi_3
Nature of business and organization (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Infobird HK [Member] | |
Name | International Limited (“Infobird HK”) |
Background | ● A Hong Kong company ● Incorporated on April 21, 2020 ● A holding company |
Ownership | 100% owned by Infobird Cayman |
Infobird WFOE [Member] | |
Name | Infobird Digital Technology (Beijing) Co., Ltd (“Infobird WFOE”) |
Background | ● A PRC limited liability company and deemed a wholly foreign owned enterprise (“WFOE”) ● Incorporated on May 20, 2020 ● Registered capital of $15,000,000 (RMB 106,392,000) ● A holding company |
Ownership | 100% owned by Infobird HK |
Infobird Beijing [Member] | |
Name | Beijing Infobird Software Co., Ltd (“Infobird Beijing”) |
Background | ● A PRC limited liability company ● Incorporated on October 26, 2001 ● Registered capital of $2,417,947 (RMB 16,624,597) ● Software developing that provides software as a service (SaaS) |
Ownership | VIE of Infobird WFOE |
Infobird Guiyang [Member] | |
Name | Guiyang Infobird Cloud Computing Co., Ltd (“Infobird Guiyang”) |
Background | ● A PRC limited liability company ● Incorporated on October 17, 2013 ● Registered capital of $1,777,645 (RMB 12,222,200) ● Software developing that provides software as a service (SaaS) |
Ownership | 90.18% owned by Infobird Beijing |
Infobird Anhui [Member] | |
Name | Anhui Infobird Software Information Technology Co., Ltd (“Infobird Anhui”) |
Background | ● A PRC limited liability company ● Incorporated on June 20, 2012 ● Registered capital of $1,454,440 (RMB 10,000,000) ● Software developing that provides software as a service (SaaS) |
Ownership | 90.18% owned by Infobird Beijing 99.95% owned by Infobird Beijing |
Summary of significant accoun_4
Summary of significant accounting policies (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Leasehold improvements [Member] | |
Property, plant and equipment, estimated useful lives | Shorter of the remaining lease terms or estimated useful lives |
Electronic devices [Member] | |
Property, plant and equipment, estimated useful lives | 3-5 years |
Office equipment, fixtures and furniture [Member] | |
Property, plant and equipment, estimated useful lives | 3-5 years |
Automobiles [Member] | |
Property, plant and equipment, estimated useful lives | 3-5 years |
Computer and network equipment [Member] | |
Property, plant and equipment, estimated useful lives | 3-5 years |
Summary of significant accoun_5
Summary of significant accounting policies (Details 1) | 12 Months Ended |
Dec. 31, 2020 | |
Licensed software [Member] | |
Finite-lived intangible asset, useful life | 5 years |
Capitalized development cost [Member] | |
Finite-lived intangible asset, useful life | 5 years |
Platform development [Member] | |
Finite-lived intangible asset, useful life | 5 years |
Land use right [Member] | |
Finite-lived intangible asset, useful life | 40 years |
Summary of significant accoun_6
Summary of significant accounting policies (Details 2) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Noncontrolling interests | $ 244,228 | $ 170,483 |
Infobird Guiyang [Member] | ||
Noncontrolling interests | 245,009 | 170,623 |
Infobird Anhui [Member] | ||
Noncontrolling interests | $ (781) | $ (140) |
Summary of significant accoun_7
Summary of significant accounting policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash on hand | $ 1,700,000 | ||
Working capital deficit | 200,000 | ||
Deferred revenue | 1,755,967 | $ 1,453,690 | |
Accumulated other comprehensive income | 494,046 | 29,325 | |
Allowance for the doubtful accounts | 0 | 0 | |
Impairment of long-lived assets | 0 | 0 | |
Advertising costs | 65,059 | 62,501 | $ 174,924 |
Revenue allocated | 300,000 | 0 | 0 |
Development cost | 100,000 | 0 | 0 |
Employee benefits | $ 805,603 | $ 918,696 | $ 1,182,328 |
Accounts Receivable [Member] | China Guangfa [Member] | |||
Concentration risk, percentage | 34.80% | 34.80% | |
Total revenues[Member] | China Guangfa [Member] | |||
Concentration risk, percentage | 77.30% | 77.30% |
Variable interest entity (Detai
Variable interest entity (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets | $ 7,285,853 | $ 5,944,254 |
Other assets | 8,668,680 | 5,194,972 |
Total assets | 15,954,533 | 11,139,226 |
Total liabilities | (7,823,238) | (7,544,671) |
Net assets | 7,887,067 | 3,424,072 |
Current liabilities: | ||
Accounts payable | 552,540 | 1,160,125 |
Interest payable - related party | 574,065 | 538,047 |
Deferred revenue | 1,755,967 | 1,453,690 |
Taxes payable | 865,795 | 673,792 |
Total current liabilities | 7,501,203 | 7,343,064 |
Deferred tax liabilities | 322,035 | 201,607 |
VIEs [Member] | ||
Current assets | 7,285,853 | 5,944,254 |
Other assets | 8,668,680 | 5,194,972 |
Total assets | 15,954,533 | 11,139,226 |
Total liabilities | (7,823,238) | (7,544,671) |
Net assets | 8,131,295 | 3,594,555 |
Current liabilities: | ||
Accounts payable | 552,540 | 1,160,125 |
Short-term loans - bank | 3,065,134 | 2,872,820 |
Interest payable - related party | 574,065 | 538,047 |
Other payables and accrued liabilities | 687,702 | 644,590 |
Deferred revenue | 1,755,967 | 1,453,690 |
Taxes payable | 865,795 | 673,792 |
Total current liabilities | 7,501,203 | 7,343,064 |
Deferred tax liabilities | 322,035 | 201,607 |
Total liabilities | $ (7,823,238) | $ (7,544,671) |
Variable interest entity (Det_2
Variable interest entity (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating revenues | $ 14,532,941 | $ 18,248,289 | $ 18,789,550 |
Gross profit | 9,814,848 | 10,261,143 | 9,485,747 |
Income from operations | 4,367,697 | 6,038,880 | 3,067,668 |
Net income | 4,060,160 | 5,101,828 | 2,442,375 |
VIEs [Member] | |||
Operating revenues | 14,532,941 | 18,248,289 | 18,789,550 |
Gross profit | 9,814,848 | 10,261,143 | 9,485,747 |
Income from operations | 4,367,697 | 6,038,880 | 3,067,668 |
Net income | $ 4,060,160 | $ 5,101,828 | $ 2,442,375 |
Accounts receivable, net (Detai
Accounts receivable, net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Credit Loss [Abstract] | |||
Accounts receivable | $ 4,242,392 | $ 2,323,328 | |
Allowance for doubtful accounts | (123,890) | (19,386) | $ (12,635) |
Total accounts receivable, net | $ 4,118,502 | $ 2,303,942 |
Accounts receivable, net (Det_2
Accounts receivable, net (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Credit Loss [Abstract] | ||
Beginning balance | $ 19,386 | $ 12,635 |
Addition | 97,538 | 15,250 |
Write off | (8,289) | |
Exchange rate effect | 6,966 | (210) |
Ending balance | $ 123,890 | $ 19,386 |
Property and equipment, net (De
Property and equipment, net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Subtotal | $ 2,991,594 | $ 2,681,816 |
Less: accumulated depreciation and amortization | (798,405) | (664,759) |
Total | 2,193,189 | 2,017,057 |
Electronic devices [Member] | ||
Subtotal | 161,571 | 123,697 |
Office equipment, fixtures and furniture [Member] | ||
Subtotal | 83,380 | 78,148 |
Automobiles [Member] | ||
Subtotal | 58,943 | 55,244 |
Computer and network equipment [Member] | ||
Subtotal | 369,654 | 322,209 |
Leasehold improvements [Member] | ||
Subtotal | 346,478 | 302,521 |
Construction in Progress [Member] | ||
Subtotal | $ 1,971,568 | $ 1,799,997 |
Property and equipment, net (_2
Property and equipment, net (Details 1) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Property, Plant and Equipment [Abstract] | |
Construction-in-progress description | Guiyang Longdongbao Project (cloud computing facility in Guiyang) |
Value | $ 12,260,536 |
Estimated Completion date | Aug. 31, 2022 |
Estimated Additional Cost to Complete | $ 10,000,000 |
Property and equipment, net (_3
Property and equipment, net (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Depreciation expense | $ 84,249 | $ 119,461 | $ 113,324 |
Electronic equipment [Member] | |||
DIsposed equipment | 0 | 28,142 | 22,439 |
Accumulated depreciation | 0 | 27,298 | 20,039 |
Gross proceeds | 0 | 539 | 567 |
Loss on disposal of equipment | $ 0 | $ 305 | $ 1,833 |
Intangible assets, net (Details
Intangible assets, net (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible assets, net | $ 5,247,752 | $ 2,198,430 | |
Less: accumulated amortization | (1,986,074) | (1,473,622) | |
Licensed software [Member] | |||
Intangible assets, net | 2,822,063 | 1,289,897 | |
Capitalized development cost [Member] | |||
Intangible assets, net | 3,932,617 | 1,929,767 | |
Platform system [Member] | |||
Intangible assets, net | 43,831 | 41,081 | |
Land use rights [Member] | |||
Intangible assets, net | [1] | $ 435,315 | $ 411,307 |
[1] | *On June 3, 2015, Infobird Guiyang signed a cloud computing development agreement with the local Guiyang government to promote development of the local cloud computing industry. See construction in progress in Note 5. The Company obtained land use rights in Guiyang, China for 9,760.8 square meters of land for approximately $4.7 million (RMB 32,532,746) through public bidding. The land is for building of technology related infrastructure only. In return, the Guiyang government will subsidize the cost of land through a form of cash grant in the amount of approximately $4.5 million (RMB 31,068,626). The Company received such grant in 2015. The grant was given to promote the local cloud computing industry, there are no services to perform on the part of the Company and the grant was given without restriction. The only condition is that the land use right acquired was to be used for the cloud computing industry only. The Company recorded the grant as a reduction of the related land use rights. |
Intangible assets, net (Detai_2
Intangible assets, net (Details 1) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 1,091,791 | |
2022 | 1,091,791 | |
2023 | 1,089,615 | |
2024 | 991,361 | |
2025 | 734,608 | |
Thereafter | 248,586 | |
Total | $ 5,247,752 | $ 2,198,430 |
Intangible assets, net (Detai_3
Intangible assets, net (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Amortization expense | $ 397,744 | $ 84,068 | $ 228,604 |
Capitalized development cost [Member] | |||
Amortization expense | 361,353 | 77,119 | 0 |
Net of carrying value | $ 3,468,617 | $ 1,852,648 | $ 456,199 |
Other payables and accrued li_3
Other payables and accrued liabilities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Notes to Financial Statements | ||
Salary payables | $ 563,334 | $ 606,056 |
Employee reimbursement and benefit payables | 38,167 | 24,284 |
Professional fees payable | 78,482 | |
Other miscellaneous payables | 7,719 | 14,250 |
Total other payables and accrued liabilities | $ 687,702 | $ 644,590 |
Short-term loans - bank (Detail
Short-term loans - bank (Details) - Bank of Beijing [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Maturities | Matured in May, June, and July 2019 (1) and April 2020 (2) and matures in March and April 2021 (3) and matures in February and March 2022 (4) | |
Collateral/Guarantee | Guarantee by Beijing SMEs Credit Re-guarantee Co., Ltd* | |
Short-term loans - bank | $ 3,065,134 | $ 2,872,820 |
Minimum [Member] | ||
Interest rate | 4.80% | |
Maximum [Member] | ||
Interest rate | 5.70% |
Short-term loans - bank (Deta_2
Short-term loans - bank (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Apr. 30, 2019 | May 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest Rate | 18.00% | ||||||
Interest expense | $ 141,880 | $ 162,566 | $ 89,725 | ||||
Beijing SMEs Credit Re-guarantee [Member] | |||||||
Guarantee fees | $ 67,000 | $ 72,000 | |||||
Infobird Beijing [Member] | |||||||
Line of credit | $ 3,100,000 | $ 2,900,000 | |||||
Loan | $ 3,100,000 | $ 2,900,000 | $ 2,900,000 | ||||
Interest Rate | 4.80% | 5.20% | 5.70% | ||||
Infobird Beijing [Member] | Minimum [Member] | |||||||
Annual interest rate | 4.80% | ||||||
Infobird Beijing [Member] | Maximum [Member] | |||||||
Annual interest rate | 5.00% |
Related party balances and tr_3
Related party balances and transactions (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Interest payable - related party | $ 574,065 | $ 538,047 |
Qing Tang [Member] | ||
Interest payable - related party | $ 574,065 | $ 538,047 |
Related party balances and tr_4
Related party balances and transactions (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest expense | $ 0 | $ 176,354 | $ 365,100 |
Loans Payable | $ 1,300,000 | ||
Interest rate | 18.00% | ||
Bank of Beijing [Member] | |||
Line of credit | $ 2,900,000 |
Taxes (Details)
Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current | $ 88,179 | $ 316,944 | $ 258,724 |
Deferred | 197,892 | 356,090 | (113,461) |
Provision for income taxes | $ 286,071 | $ 673,034 | $ 145,263 |
Taxes (Details1)
Taxes (Details1) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
China statutory income tax rate | 25.00% | 25.00% | 25.00% |
Preferential tax rate reduction | (9.70%) | (6.90%) | (10.10%) |
75% of research and development expenses deduction | (9.30%) | (7.20%) | (10.90%) |
Permanent difference | 0.60% | 0.80% | 1.60% |
Effective tax rate | 6.60% | 11.70% | 5.60% |
Taxes (Details 2)
Taxes (Details 2) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Allowance for doubtful account | $ 34,003 | $ 2,908 |
Net operating loss carryforward | 579,108 | 542,773 |
Deferred tax assets, net | 613,111 | 545,681 |
Deferred tax liabilities: | ||
Capitalized development costs | (545,253) | (285,827) |
Deferred tax assets, net | 67,938 | 259,854 |
Noncurrent deferred tax assets | 389,893 | 461,461 |
Noncurrent deferred tax liabilities | (322,035) | (201,607) |
Deferred tax assets, net | $ 67,858 | $ 259,854 |
Taxes (Details 3)
Taxes (Details 3) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
VAT taxes payable | $ 530,269 | $ 376,738 |
Income taxes payable | 324,048 | 276,284 |
Other taxes payable | 11,478 | 20,770 |
Total | $ 865,795 | $ 673,792 |
Taxes (Details Narrative)
Taxes (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Tax savings | $ 825,784 | $ 814,256 | $ 543,404 |
Basic and diluted earnings per shares | $ 0.04 | $ 0.04 | $ 0.03 |
Income tax expenses | $ 286,071 | $ 673,034 | $ 145,263 |
Operating loss (NOL) carryforward | 3,600,000 | 3,600,000 | |
Allowance for doubtful accounts | $ 225,936 | $ 19,386 |
Concentration of risk (Details
Concentration of risk (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deposit | $ 1,679,934 | $ 3,507,217 | |
CDIC insured limit | $ 1,326,797 | $ 3,220,710 | |
Revenue Benchmark [Member] | First Customer [Member] | |||
Concentration Risk, Percentage | 34.80% | ||
Revenue Benchmark [Member] | Second Customer [Member] | |||
Concentration Risk, Percentage | 13.20% | ||
Revenue Benchmark [Member] | China Guangfa Bank [Member] | |||
Concentration Risk, Percentage | 77.30% | 76.70% | |
Accounts Receivable [Member] | First Customer [Member] | |||
Concentration Risk, Percentage | 50.80% | 77.60% | |
Accounts Receivable [Member] | Second Customer [Member] | |||
Concentration Risk, Percentage | 19.90% | 10.40% | |
Accounts Receivable [Member] | Third Customer [Member] | |||
Concentration Risk, Percentage | 10.90% | ||
Total Purchases [Member] | First Vendor [Member] | |||
Concentration Risk, Percentage | 19.10% | 16.00% | 21.60% |
Total Purchases [Member] | Second Vendors [Member] | |||
Concentration Risk, Percentage | 10.90% | 13.10% | 12.40% |
Total Purchases [Member] | Third Vendor [Member] | |||
Concentration Risk, Percentage | 10.30% | 11.20% | |
Accounts Payable [Member] | First Vendor [Member] | |||
Concentration Risk, Percentage | 38.70% | 18.60% | |
Accounts Payable [Member] | Second Vendors [Member] | |||
Concentration Risk, Percentage | 22.10% | 12.90% | |
Accounts Payable [Member] | Third Vendor [Member] | |||
Concentration Risk, Percentage | 14.70% | 12.30% |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | |||
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | |
Common stock, shares issued (in shares) | 19,000,000 | 19,000,000 | |
Common stock, shares outstanding (in shares) | 19,000,000 | 19,000,000 | |
Capital contributions | $ 0 | $ 0 | $ 202,104 |
Acquisition of noncontrolling interests description | Infobird Beijing acquired an additional 18.18% of noncontrolling interests in Infobird Guiyang for approximately $1.8 million (RMB 12,360,000). The acquisition increased Infobird Beijing’s controlling interest in Infobird Guiyang from 72.00% to 90.18%. | ||
Reduction in Paid-in capital | $ 1,685,154 | ||
Paid-in-capital, registered capital and statutory reserves | 6,308,638 | 5,902,867 | |
Statutory reserves | $ 437,549 | $ 31,778 | $ 0 |
Commitments and contingencies_2
Commitments and contingencies (Details) | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 431,467 |
2022 | 98,082 |
Thereafter | |
Total minimum payments required | $ 529,549 |
Commitments and contingencies_3
Commitments and contingencies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 437,814 | $ 398,563 | $ 521,671 |
Segment information and reven_3
Segment information and revenue analysis (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Total revenues | $ 14,532,941 | $ 18,248,289 | $ 18,789,550 |
Standard Cloud Based Services [Member] | |||
Total revenues | 1,400,857 | 2,018,919 | 2,064,669 |
Customized cloud-based services [Member] | |||
Total revenues | 5,005,080 | 12,865,074 | 12,663,985 |
BPO Services | |||
Total revenues | 1,747,310 | 2,007,919 | 1,994,501 |
Software Development | |||
Total revenues | 5,404,262 | 27,754 | |
Other Revenues | |||
Total revenues | $ 975,432 | $ 1,328,623 | $ 2,066,395 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Feb. 05, 2021 | Apr. 22, 2021 |
Number of shares issued | 6,250,000 | |
Public offering price | $ 4 | |
Proceeds from Issuance Public Offering | $ 21,800,000 | |
BOC Fullerton Community Bank | ||
Line of credit | $ 300,000 | |
Annual interest rate | 8.50% | |
Due date | Feb. 4, 2024 | |
Shanghai Pudong Development Bank | ||
Line of credit | $ 500,000 | |
Annual interest rate | 4.35% | |
Due date | Feb. 4, 2024 |
Condensed financial informati_2
Condensed financial information of the parent company (unaudited) (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
OTHER ASSETS | |||
Total assets | $ 15,954,533 | $ 11,139,226 | |
LIABILITIES AND EQUITY | |||
LIABILITIES | 7,823,238 | 7,544,671 | |
EQUITY | |||
Ordinary shares, $0.001 par value, 50,000,000 shares authorized, 19,000,000 shares issued and outstanding as of December 31, 2020 and 2019* | 19,000 | 19,000 | |
Additional paid-in capital | 5,852,089 | 5,852,089 | |
Statutory reserves | 437,549 | 31,778 | $ 0 |
Retained earnings (Accumulated deficit) | 1,084,383 | (2,508,120) | |
Accumulated other comprehensive income | 494,046 | 29,325 | |
Total equity | 7,887,067 | 3,424,072 | |
Total liabilities and equity | 15,954,533 | 11,139,226 | |
Parent Company [Member] | |||
OTHER ASSETS | |||
Investment in subsidiaries | 7,887,067 | 3,424,072 | |
Total assets | 7,887,067 | 3,424,072 | |
LIABILITIES AND EQUITY | |||
LIABILITIES | |||
EQUITY | |||
Ordinary shares, $0.001 par value, 50,000,000 shares authorized, 19,000,000 shares issued and outstanding as of December 31, 2020 and 2019* | 19,000 | 19,000 | |
Additional paid-in capital | 5,852,089 | 5,852,089 | |
Statutory reserves | 437,549 | 31,778 | |
Retained earnings (Accumulated deficit) | 1,084,383 | (2,508,120) | |
Accumulated other comprehensive income | 494,046 | 29,325 | |
Total equity | 7,887,067 | 3,424,072 | |
Total liabilities and equity | $ 7,887,067 | $ 3,424,072 |
Condensed financial informati_3
Condensed financial information of the parent company (unaudited) (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
NET INCOME | $ 4,060,160 | $ 5,101,828 | $ 2,442,375 |
COMPREHENSIVE INCOME | 4,536,740 | 5,072,436 | 2,466,458 |
Parent Company [Member] | |||
EQUITY INCOME OF SUBSIDIARIES AND VIES | 3,998,274 | 4,847,357 | 2,604,587 |
NET INCOME | 3,998,274 | 4,847,357 | 2,604,587 |
FOREIGN CURRENCY TRANSLATION ADJUSTMENT | 464,721 | (28,797) | 22,803 |
COMPREHENSIVE INCOME | $ 4,462,995 | $ 4,818,560 | $ 2,627,390 |
Condensed financial informati_4
Condensed financial information of the parent company (unaudited) (Details 2) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 4,060,160 | $ 5,101,828 | $ 2,442,375 |
Adjustments to reconcile net income to cash used in operating activities: | |||
Net cash used in operating activities | 1,530,698 | 6,321,227 | (1,162,798) |
CASH, beginning of year | 3,509,420 | ||
CASH, end of year | 1,682,526 | 3,509,420 | |
Parent Company [Member] | |||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | 3,998,274 | 4,847,357 | 2,604,587 |
Adjustments to reconcile net income to cash used in operating activities: | |||
Equity income of subsidiaries and VIEs | (3,998,274) | (4,847,357) | (2,604,587) |
Net cash used in operating activities | |||
CHANGES IN CASH | |||
CASH, beginning of year | |||
CASH, end of year |