10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Mark One

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to _______

Commission File No. 000-55260

MakingORG, Inc.  

(Exact name of registrant as specified in its charter)

Nevada	6770	39-2079723
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Number)	(IRS Employer Identification Number)

17800 Castleton St #386,

City of Industry, CA 91748

(213) 805-5799

(Address and telephone number of principal executive offices)

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ¨

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ¨ No x

Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years. N/A

Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes ¨ No x

Applicable Only to Corporate Registrants

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

Class	Outstanding as of July 27, 2018
Common Stock: $0.001	35,430,000

PART 1	FINANCIAL INFORMATION	3
Item 1	Financial Statements (Unaudited)	3
	Balance Sheets	3
	Statements of Operations	4
	Statements of Cash Flows	5
	Notes to the Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
PART II.	OTHER INFORMATION	17
Item 1	Legal Proceedings	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 3	Defaults Upon Senior Securities	17
Item 4	Mine safety disclosures	17
Item 5	Other Information	17
Item 6	Exhibits	18
	Signatures	19

2

PART I.

FINANCIAL INFORMATION

Item 1. Financial Statements.

MakingORG, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
	June 30, 2018			December 31, 2017
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	58,844		$	37,605
Accounts receivable		-			50,979
Inventories		42,724			32,155
Prepaid expenses and other current assets		9,642			17,176
Total Current Assets		111,210			137,915
Intangible assets		513			522
Total Assets	$	111,723		$	138,437
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable	$	-		$	638
Accrued liabilities		61,746			43,597
Due to related party		155,903			125,779
Convertible note payable, net of discount $3,239 and $12,953		196,761			187,047
TOTAL LIABILITIES		414,410			357,061
Commitments and Contingencies
Stockholders’ Deficit
Preferred stock, par value $0.001; 50,000,000 shares authorized,
zero shares issued and outstanding		-			-
Common stock, par value $0.001; 150,000,000 shares authorized,
35,430,000 shares issued and outstanding		35,430			35,430
Additional paid-in capital		27,592			27,592
Accumulated other comprehensive income		467			927
Accumulated deficit		(366,176	)		(282,573	)
Total Stockholders’ Deficit		(302,687	)		(218,624	)
Total Liabilities and Stockholders’ Deficit	$	111,723		$	138,437

See accompanying notes to unaudited condensed consolidated financial statements.

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MakingORG, Inc. and Subsidiaries
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
	For the three months ended June 30,						For the six months ended June 30,
	2018			2017			2018			2017
Net Sales	$	-		$	-		$	-		$	-
Cost of Sales		-			-			-			-
Gross Profit		-			-			-			-
OPERATING EXPENSES
Selling, general and administrative		9,548			3,395			14,548			23,829
Professional fees		23,070			26,964			46,570			45,505
TOTAL OPERATING EXPENSES		32,618			30,359			61,118			69,334
LOSS FROM OPERATIONS		(32,618	)		(30,359	)		(61,118	)		(69,334	)
		(32,618	)		(30,359	)		(61,118	)		(69,334	)
OTHER INCOME (EXPENSE)
Interest expense		(10,829	)		(10,857	)		(21,685	)		(21,714	)
TOTAL OTHER INCOME (EXPENSE)		(10,829	)		(10,857	)		(21,685	)		(21,714	)
LOSS BEFORE INCOME TAX		(43,447	)		(41,216	)		(82,803	)		(91,048	)
Income tax		800			800			800			800
NET LOSS	$	(44,247	)	$	(42,016	)	$	(83,603	)	$	(91,848	)
OTHER COMPREHENSIVE ITEM:
Foreign currency translation income		(1,935	)		-			(460	)		-
TOTAL COMPREHENSIVE LOSS	$	(46,182	)	$	(42,016	)	$	(84,063	)	$	(91,848	)
NET LOSS PER COMMON SHARE: BASIC AND DILUTED	$	(0.001	)	$	(0.001	)	$	(0.002	)	$	(0.003	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC AND DILUTED		35,430,000			35,430,000			35,430,000			35,430,000

See accompanying notes to unaudited condensed consolidated financial statements.

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MakingORG, Inc. and Subsidiaries
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the six months ended June 30,
	2018			2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(83,603	)	$	(91,848	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount		9,714			9,714
Changes in assets and liabilities:
Accounts receivable		52,099			-
Inventories		(10,591	)		(5,524	)
Prepaid expenses and other current assets		7,534			2,508
Accounts payable		(652	)		-
Accrued liabilities		18,134			14,200
CASH FLOWS USED IN OPERATING ACTIVITIES		(7,365	)		(70,950	)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from related party		30,124			600
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES		30,124			600
EFFECT OF EXCHANGE RATE CHANGES ON CASH		(1,520	)		-
NET CHANGE IN CASH AND CASH EQUIVALENTS		21,239			(70,350	)
Cash and cash equivalents, beginning of period		37,605			165,481
Cash and cash equivalents, end of period	$	58,844		$	95,131
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid	$	-		$	-
Income taxes paid	$	800		$	800

 

See accompanying notes to unaudited condensed consolidated financial statements.

5

MakingORG, Inc. and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

MakingORG, Inc. (“MakingORG”) was incorporated under the laws of the State of Nevada on August 10, 2012. The trading symbol is “CQCQ” and the fiscal year end is December 31. On October 20, 2016, MakingORG filed documents registering its intention to transact interstate business in the state of California. On November 29, 2016, MakingORG incorporated HK Feng Wang Group Limited (“HKFW”) under the laws of Hong Kong. On August 22, 2017, HKFW incorporated Chongqing Beauty Kenner Biotechnology Co., Ltd (“CBKB”) under the laws of the People’s Republic of China (“PRC”).

MaingORG, Inc. and subsidiaries (“the Company”) purchase Acer truncatum bunge seed oil from China, outsource to third party to manufacture Acer truncatum bunge related health product, and sell to end user and distributor in the United States and PRC.

NOTE 2 – GOING CONCERN

Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these unaudited consolidated financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The accompanying unaudited consolidated financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. The Company currently has an accumulated deficit and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt as to its ability to continue as a going concern. These unaudited consolidated financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company is in the process of initiating its profitable operations, so that it may be able to raise additional funds through its operations. In light of management’s efforts, there is no assurance that the Company will be successful in this or any of its endeavors or become financially viable to continue as a going concern.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

 

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Principles of Consolidation

The Company’s unaudited consolidated financial statements refer to MakingORG, Inc. and its subsidiaries. All intercompany transactions and balances were eliminated in consolidation. 

Use of Estimates

The preparation of unaudited consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Company’s unaudited consolidated financial statement date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are reported realizable value, net of allowance for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded. Accounts receivable consists principally of receivables from distributor or end user, arising from the sale of the Company’s product. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Management evaluated that there was no allowance for doubtful accounts as of June 30, 2018 and December 31, 2017, respectively.

Inventories

Inventories consist of (a) packing materials (b) raw materials and (b) finished goods, which are stated at the lower of cost or net realizable value under the first-in-first-out method. The Company reviews its inventories periodically for possible excess and obsolescence to determine if any reserves are necessary.

Revenue Recognition

Effective January 1, 2018, the Company adopted Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption.

In general, the Company’s performance obligation is to transfer it products to its end user or distributor. Revenues from product sales are recognized when the customer obtains control of the Company’s finished goods product, which occurs at a point in time, typically upon delivery to the customer.

The Company's revenue mainly generates from sale of acer truncatum bunge related health products, such as Nervonic Acid Oil, coffee and tea. The Company evaluated its product sales contracts and determined that those contracts are generally capable of being distinct and accounted for as separate performance obligations. Performance obligation is satisfied when the finished goods product delivered to the customer.

Shipping and handling costs paid by the Company are included in cost of sales.

During the six months ended June 30, 2018 and 2017, the Company recognized revenue from sale of acer truncatum bunge related health products in an amount of $nil.

Advertising Expenses

Advertising costs are expensed as incurred. Advertising expenses incurred for the six months ended June 30, 2018 and 2017 totaled $1,397 and $9,285, respectively.

 

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Research and Development

Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statement of operations and totaled $nil and $7,000 for the six months ended June 30, 2018 and 2017, respectively.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are using enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, if more likely than not that the company will not realize tax assets through future operation.

On December 22, 2017, the U.S. enacted the 2017 Tax Cuts and Jobs Act which contains several key tax provisions that affect the Company, including, but not limited to, a one-time mandatory transition tax on accumulated foreign earnings, changes in the sourcing and calculation of foreign income, and a reduction of the corporate income tax rate to 21% effective January 1, 2018. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring its U.S. deferred tax assets and liabilities as well as reassessing the net realizability of its deferred tax assets and liabilities.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

Foreign Currency Transactions

The functional currency for MakingORG and HKFW is the US dollar. The functional currency for the China subsidiary (CBKB) is the Renminbi (RMB). Assets and liabilities of the China operation are translated from RMB into U.S. dollars at period-end rates, while the statements of operations and cash flows are translated at the weighted-average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income/(loss) within shareholders’ deficit.

Related Parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.

Segment Reporting

The Company follows FASB ASC Topic 280, “Segment Reporting” for its segment reporting. The Company aggregates its operating segments into one reporting segment, as management believes that its operating segments have similar operating characteristics and similar long term operating performance.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including the Company’s own credit risk.

 

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In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The carrying amounts of financial assets and liabilities in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and due to related party approximate their fair value due to the short-term duration of those instruments. Notes payable are recorded at agreed values.

Recent Accounting Pronouncements

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments of this ASU allow companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted for as derivative liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company is currently evaluating the impact of adopting ASU 2017-11 on its consolidated financial statements.

In July 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-10, Codification Improvements to Topic 842, Leases, or ASU 2018-10. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued Accounting Standards Update No. 2016-02, Leases (Topic 842), or ASU 2016-02 and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2016-02 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. The Company is currently evaluating the effects the adoption of ASU 2016-02 will have on its consolidated financial statements, results of operations and cash flows.

 

9

NOTE 4 – INVENTORIES

The components of the Company’s inventories were packaging materials, raw materials and finished goods. Inventory consisted of the following as of June 30, 2018 and December 31, 2017:

	June 30, 2018		December 31, 2017
Packaging materials	$	5,524	$	10,020
Raw materials		-		22,135
Finished goods		37,200		-
Total inventory	$	42,724	$	32,155

NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets include primarily prepaid consulting fee, deposit for packaging materials and security deposit for rent. As of June 30, 2018, and December 31,2017 prepaid expenses and other current assets was $9,642 and $17,176, respectively.

NOTE 6 – DUE TO RELATED PARTY

During the six months ended June 30, 2018 and 2017, the Company’s sole officer loaned the Company $30,124 and $600, respectively. As of June 30, 2018 and December 31, 2017, the Company was obligated to the officer, for an unsecured, non-interest bearing demand loan with a balance of $155,903 and $125,779, respectively.

NOTE 7 – CONVERTIBLE NOTE PAYABLE

On September 1, 2016, the Company entered into a Convertible Note Agreement in the principal amount of $200,000 with an unrelated party. The note bears interest at 12% per annum and the holder is able to convert all unpaid interest and principal into common shares at $3.50 per share. The note matures on September 1, 2018. The Company recognized a discount on the note of $38,857 at the agreement date. The interest expense was due every six months commencing on March 1, 2017 until the principal amount of this convertible note is paid in full.

The Company recognized interest expense related to the convertible note of $21,685 and $21,714, respectively, for the six months ended June 30, 2018 and 2017. The Company recognized interest expense related to the convertible note of $10,829 and $10,857, respectively, for the three months ended June 30, 2018 and 2017. The unamortized debt discount at June 30, 2018 and December 31, 2017 was $3,239 and $12,953, respectively. As of June 30, 2018 and December 31, 2017, net balance of the convertible note amounted to $196,761 and $187,047, respectively.

NOTE 8 – COMMITMENTS

Operating Lease

The Company has operating leases for its office. Rental expenses for the six months ended June 30, 2018 and 2017 were $6,000 and $6,000, respectively. Rental expenses for the three months ended June 30, 2018 and 2017 were $3,000 and $3,000, respectively. As of June 30, 2018, total future minimum annual lease payments under operating lease was as follows, by years:

Twelve months ending June 30, 2019	$	3,000
Thereafter		-
Total	$	3,000

 

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NOTE 9 – INCOME TAXES

The Company accounts for income taxes under ASC 740, “Income Taxes”. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company is subject to taxation in the United States and certain state jurisdictions. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 21% to the net loss before provision for income taxes. HKFW in Hong Kong are governed by the Inland Revenue Ordinance Tax Law of Hong Kong, and are generally subject to a profits tax at the rate of 16.5% on the estimated assessable profits. CBNB in the PRC is governed by the Income Tax Law of the PRC concerning the private enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriated adjustments.

Provision (benefit) for income tax for the three months ended June 30, 2018 and 2017 totaled $800 and $800, respectively. Provision (benefit) for income tax for the six months ended June 30, 2018 and 2017 totaled $800 and $800, respectively.

Net deferred tax assets consist of the following components as of:

	June 30,
	2018			2017
Deferred tax asset:
Net operating loss carry forwards	$	89,766		$	77,354
Valuation allowance		(89,766	)		(77,354	)
Net deferred tax asset	$	-		$	-

Due to the change in ownership provisions of the Income Tax laws of United States of America, net operating loss carry forwards of approximately $360,000, which expires in 2032, for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years. Tax filings for the Company for the years 2013 and 2014 are available for examination by state tax jurisdictions and federal tax purposes.

NOTE 10 – SUBSEQUENT EVENT

The Company has evaluated all subsequent events through the date the unaudited consolidated financial statements were issued and determine that there were no subsequent events or transactions that require recognition or disclosures in the unaudited consolidated financial statements.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

As used in this Form 10-Q, references to “MakingORG”,” the “Company,” “we,” “our” or “us” refer to MakingORG, Inc. and subsidiaries unless the context otherwise indicates.

Forward-Looking Statements

The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws.

Plan of Operation

Our sole officer and director intends to sell Acer truncatum bunge related health product in the United States and PRC, we might just identify and negotiate with another company for the business combination or merger of that entity with and into our company. We would seek, investigate and, if such investigation warrants, acquire an interest in one or more business opportunities presented to it by persons or firms who or which desire to seek the perceived advantages of a publicly held corporation. At this time, we have no plan, proposal, agreement, understanding or arrangement to acquire or merge with any specific business or company, and the Company has not identified any specific business or company for investigation and evaluation. No member of management or promoter of the Company has had any material discussions with any other company with respect to any acquisition of that company.

We will not restrict our search for another target company to any specific business, industry or geographical location, and the Company may participate in a business venture of virtually any kind or nature. The discussion of the proposed plan of operation under this caption and throughout this Annual Report is purposefully general and is not meant to be restrictive of the Company’s virtually unlimited discretion to search for and enter into potential business opportunities.

The following discussion should be read in conjunction with the unaudited interim financial statements contained in this Report and in conjunction with the Company’s Form 10-K filed on April 17, 2018. Results for interim periods may not be indicative of results for the full year.

Critical Accounting Policies and Estimates

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of contracts to determine when and how revenue is recognized. The core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB deferred the effective date of ASU No. 2014-09 for all entities by one year to annual reporting periods beginning after December 15, 2017. The FASB has issued several updates subsequently, including implementation guidance on principal versus agent considerations, on how an entity should account for licensing arrangements with customers, and to improve guidance on assessing collectability, presentation of sales taxes, noncash consideration, and contract modifications and completed contracts at transition. In general, the Company’s performance obligation is to transfer it products to its end user or distributor. Revenues from product sales are recognized when the customer obtains control of the Company’s finished goods product, which occurs at a point in time, typically upon delivery to the customer.

 

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The preparation of unaudited consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the unaudited consolidated financial statements, and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

Results of Operations

For the three months ended June 30, 2018 and 2017

	Three Months Ended June 30,
	2018			2017			Change			Percent
Net Sales	$	-		$	-		$	-			-	%
Cost of Sales		-			-			-			-	%
Gross Profit		-			-			-			-	%
Operating expenses:
Selling, general and administrative		9,548			3,395			6,153			181	%
Professional fees		23,070			26,964			(3,894	)		-14	%
Total operating expenses		32,618			30,359			2,259			7	%
Loss from operations		(32,618	)		(30,359	)		2,259			7	%
Other income (expenses):
Interest expense		(10,829	)		(10,857	)		28			0	%
Total other income (expenses)		(10,829	)		(10,857	)		28			0	%
Loss before income taxes		(43,447	)		(41,216	)		(2,231	)		5	%
Income tax expense		800			800			-			-	%
Net loss	$	(44,247	)	$	(42,016	)	$	(2,231	)		5	%

Net sales

The Company did not generate any revenues during the three months ended June 30, 2018 and 2017.

Total operating expenses

During the three months ended June 30, 2018, total operating expenses were $32,618, which consisted of professional fees of $23,070, China salary and China office expense of $5,456 and rent expenses of $3,000. During the three months ended June 30, 2017, total operating expenses were $30,359, which consisted of professional fees of $26,965, and rent expenses of $3,000. Total operating expenses increased $2,259, or 7%, primarily as a result of the increase in China personnel fee in the three months ended June 30, 2018 from three months ended June 30, 2017.

Total other income (expenses)

During the three months ended June 30, 2018 and 2017, the Company had interest expense of $10,829 and $10,857, respectively.

 

13

Net loss

During the three months ended June 30, 2018, the Company had a net loss of $44,247, as compared with a net loss of $42,016 for the three months ended June 30, 2017.

For the six months ended June 30, 2018 and 2017

	Six Months Ended June 30,
	2018			2017			Change			Percent
Net Sales	$	-		$	-		$	-			-	%
Cost of Sales		-			-			-			-	%
Gross Profit		-			-			-			-	%
Operating expenses:
Selling, general and administrative		14,548			23,829			(9,281	)		-39	%
Professional fees		46,570			45,505			1,065			2	%
Total operating expenses		61,118			69,334			(8,216	)		-12	%
Loss from operations		(61,118	)		(69,334	)		8,216			-12	%
Other income (expenses):
Interest expense		(21,685	)		(21,714	)		29			0	%
Total other income (expenses)		(21,685	)		(21,714	)		29			0	%
Loss before income taxes		(82,803	)		(91,048	)		8,245			-9	%
Income tax expense		800			800			-			-	%
Net loss	$	(83,603	)	$	(91,848	)	$	8,245			-9	%

Net sales

The Company did not generate any revenues during the six months ended June 30, 2018 and 2017.

Total operating expenses

During the six months ended June 30, 2018, total operating expenses were $61,118, which consisted of professional fees of $46,570, China salary and China office expense of $5,777 and rent expenses of $6,000. During the six months ended June 30, 2017, total operating expenses were $69,334, which consisted of professional fees of $45,505, marketing and product exam expense of $10,275, research and development expense of $7,000, and rent expenses of $6,000. Total operating expenses decreased $8,216, or 12%, primarily as a result of the decrease in research and development expenses and marketing fee in the six months ended June 30, 2018 from three months ended June 30, 2017.

Total other income (expenses)

During the six months ended June 30, 2018 and 2017, the Company had interest expense of $21,685 and $21,714, respectively.

Net loss

During the six months ended June 30, 2018, the Company had a net loss of $83,603, as compared with a net loss of $91,848 for the six months ended June 30, 2017.

Liquidity and Capital Resources

As of June 30, 2018, the Company had cash and cash equivalents and total assets of $58,844 and $111,723, respectively. As of June 30, 2018, we have total liabilities of $414,410, of which $196,761 is due to convertible note payable and $155,903 is due to our sole officer and director as an unsecured, non-interest bearing demand loan. As of June 30, 2018 and December 31, 2017, the Company had working capital amount of $(303,200) and $(219,146), respectively.

 

14

Other than an oral agreement with Mrs. Cui to fund the expenses of the Company, we currently have no agreements, arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources. Since the Company has no such arrangements or plans currently in effect, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.

Cash Flows from Operating Activities

For the six months ended June 30, 2018, net cash flows used in operating activities was $7,365 resulting from a net loss of $83,603, a decrease in accounts receivable of $52,099, a decrease in prepaid expenses and other current assets of $7,534, an increase in inventory of $10,591, an increase in accrued liabilities of $18,134, and amortization of debt discount of $9,714. For the six months ended June 30, 2017, net cash flows used in operating activities was $70,950 resulting from a net loss of $91,848, a decrease in prepaid expenses and other current assets of $2,508, an increase in inventory of $5,524, an increase in accounts payable and accrued liabilities of $14,200, and amortization of debt discount of $9,714.

Cash Flows from Investing Activities

For the six months ended June 30, 2018 and 2017, the Company did not have any cash flow from investing activities.

Cash Flows from Financing Activities

For the six months ended June 30, 2018 and 2017, advances from the Company’s sole officer and director provided $30,124 and $600, respectively.

Going Concern Consideration

These unaudited consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to repay its debt obligations, to obtain necessary equity financing to continue operations, and the attainment of profitable operations. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company is in the process of initiating its profitable operations, so that it may be able to raise additional funds through its operations. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

The Company had no revenues and incurred a net loss of $83,603 for the six months ended June 301, 2018 and a net loss of $91,848 for the six months ended June 30, 2017. In addition, the Company had an accumulated deficit of $366,176 at June 30, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its ability to raise additional capital. The Company’s financial statements do not include any adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Convertible Note Payable

On September 1, 2016, the Company entered into a Convertible Note Agreement in the principal amount of $200,000 with an unrelated party. The note bears interest at 12% per annum and the holder is able to convert all unpaid interest and principal into common shares at $3.50 per share. The note matures on September 1, 2018. The Company recognized a discount on the note of $38,857 at the agreement date. The interest expense was due every six months commencing on March 1, 2017 until the principal amount of this convertible note is paid in full.

 

15

The Company recognized interest expense related to the convertible note of $21,685 and $21,714, respectively, for the six months ended June 30, 2018 and 2017. The Company recognized interest expense related to the convertible note of $10,829 and $10,857, respectively, for the three months ended June 30, 2018 and 2017. The unamortized debt discount at June 30, 2018 and December 31, 2017 was $3,239 and $12,953, respectively. As of June 30, 2018 and December 31, 2017, net balance of the convertible note amounted to $196,761 and $187,047, respectively.

Operating Lease

The Company has operating leases for its office. Rental expenses for the six months ended June 30, 2018 and 2017 were $6,000 and $6,000, respectively. Rental expenses for the three months ended June 30, 2018 and 2017 were $3,000 and $3,000, respectively. As of June 30, 2018, total future minimum annual lease payments under operating lease was as follows, by years:

Twelve months ending June 30, 2019	$	3,000
Thereafter		-
Total	$	3,000

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

As a smaller reporting company, we are not required to provide the information required by this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, including our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act as of the end of the period covered by this report. Our management does not expect that our disclosure controls and procedures will prevent all error and all fraud. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Based on that evaluation, as of June 30, 2018, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were ineffective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes that have affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act) during the period covered by this report. 

 

16

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

 Item 1A. Risk Factors.

As a smaller reporti0ng company, we are not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities

None.

Purchases of equity securities by the issuer and affiliated purchasers

None.

Use of Proceeds

None

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

 

17

Item 6. Exhibits

31.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act

101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

 

18

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	MakingORG, Inc.
Dated: August 9, 2018	By:	/s/ Juanzi Cui
	Name:	Juanzi Cui
		President, Chief Executive Officer and Chief Financial Officer (principal executive officer and principal financial and accounting officer)

 19

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL ACCOUNTING OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

I, Juanzi Cui, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of MakingORG, Inc. (the “Registrant”):
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
4.	The Registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a13a-15(f) and 15d-15(f)) for the Registrant and have:

a)	Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures; and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Dated: August 9, 2018	By:	/s/ Juanzi Cui
		Juanzi Cui
		Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U. S. C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of MakingOrg, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2018 (the “Report”), I, Juanzi Cui, Chief Executive Officer and Chief Financial Officer of the Company, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 9, 2018	By:	/s/ Juanzi Cui
		Juanzi Cui
		Chief Executive Officer Chief Financial Officer (Principal Executive Officer and Principal Accounting Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 27, 2018
Document And Entity Information
Entity Registrant Name	MAKINGORG, INC.
Entity Central Index Key	0001569083
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		35,430,000
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2018

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets
Cash and cash equivalents	$ 58,844	$ 37,605
Accounts receivable		50,979
Inventories	42,724	32,155
Prepaid expenses and other current assets	9,642	17,176
Total Current Assets	111,210	137,915
Intangible assets	513	522
Total Assets	111,723	138,437
Current Liabilities
Accounts payable		638
Accrued liabilities	61,746	43,597
Due to related party	155,903	125,779
Convertible note payable, net of discount $3,239 and $12,953	196,761	187,047
TOTAL LIABILITIES	414,410	357,061
Commitments and Contingencies
Stockholders' Deficit
Preferred stock, par value $0.001; 50,000,000 shares authorized, zero shares issued and outstanding
Common stock, par value $0.001; 150,000,000 shares authorized, 35,430,000 shares issued and outstanding	35,430	35,430
Additional paid-in capital	27,592	27,592
Accumulated other comprehensive income	467	927
Accumulated deficit	(366,176)	(282,573)
Total Stockholders' Deficit	(302,687)	(218,624)
Total Liabilities and Stockholders' Deficit	$ 111,723	$ 138,437

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Liabilities
Debt discount of convertible note payable	$ 3,239	$ 12,953
Stockholders' Deficit
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	35,430,000	35,430,000
Common stock, shares outstanding	35,430,000	35,430,000

XML

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Unaudited Condensed Consolidated Statements Of Operations And Comprehensive Loss
Net Sales
Cost of Sales
Gross Profit
OPERATING EXPENSES
Selling, general and administrative	9,548	3,395	14,548	23,829
Professional fees	23,070	26,964	46,570	45,505
TOTAL OPERATING EXPENSES	32,618	30,359	61,118	69,334
LOSS FROM OPERATIONS	(32,618)	(30,359)	(61,118)	(69,334)
OTHER INCOME (EXPENSE)
Interest expense	(10,829)	(10,857)	(21,685)	(21,714)
TOTAL OTHER INCOME (EXPENSE)	(10,829)	(10,857)	(21,685)	(21,714)
LOSS BEFORE INCOME TAX	(43,447)	(41,216)	(82,803)	(91,048)
Income tax	800	800	800	800
NET LOSS	(44,247)	(42,016)	(83,603)	(91,848)
OTHER COMPREHENSIVE ITEM:
Foreign currency translation income	(1,935)		(460)
TOTAL COMPREHENSIVE LOSS	$ (46,182)	$ (42,016)	$ (84,063)	$ (91,848)
NET LOSS PER COMMON SHARE: BASIC AND DILUTED	$ (0.001)	$ (0.001)	$ (0.002)	$ (0.003)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC AND DILUTED	35,430,000	35,430,000	35,430,000	35,430,000

XML

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (83,603)	$ (91,848)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount	9,714	9,714
Changes in assets and liabilities:
Accounts receivable	52,099
Inventory	(10,591)	(5,524)
Prepaid expenses and other current assets	7,534	2,508
Accounts payable	(652)
Accrued liabilities	18,134	14,200
CASH FLOWS USED IN OPERATING ACTIVITIES	(7,365)	(70,950)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan from related party	30,124	600
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES	30,124	600
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(1,520)
NET CHANGE IN CASH AND CASH EQUIVALENTS	21,239	(70,350)
Cash and cash equivalents, beginning of period	37,605	165,481
Cash and cash equivalents, end of period	58,844	95,131
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid
Income taxes paid	$ 800	$ 800

XML

ORGANIZATION AND NATURE OF BUSINESS

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

MakingORG, Inc. (“MakingORG”) was incorporated under the laws of the State of Nevada on August 10, 2012. The trading symbol is “CQCQ” and the fiscal year end is December 31. On October 20, 2016, MakingORG filed documents registering its intention to transact interstate business in the state of California. On November 29, 2016, MakingORG incorporated HK Feng Wang Group Limited (“HKFW”) under the laws of Hong Kong. On August 22, 2017, HKFW incorporated Chongqing Beauty Kenner Biotechnology Co., Ltd (“CBKB”) under the laws of the People’s Republic of China (“PRC”).

MaingORG, Inc. and subsidiaries (“the Company”) purchase Acer truncatum bunge seed oil from China, outsource to third party to manufacture Acer truncatum bunge related health product, and sell to end user and distributor in the United States and PRC.

XML

GOING CONCERN

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

NOTE 2 - GOING CONCERN

Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these unaudited consolidated financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The accompanying unaudited consolidated financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. The Company currently has an accumulated deficit and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt as to its ability to continue as a going concern. These unaudited consolidated financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company is in the process of initiating its profitable operations, so that it may be able to raise additional funds through its operations. In light of management’s efforts, there is no assurance that the Company will be successful in this or any of its endeavors or become financially viable to continue as a going concern.

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.

Principles of Consolidation

The Company’s unaudited consolidated financial statements refer to MakingORG, Inc. and its subsidiaries. All intercompany transactions and balances were eliminated in consolidation.

Use of Estimates

The preparation of unaudited consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Company’s unaudited consolidated financial statement date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are reported realizable value, net of allowance for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded. Accounts receivable consists principally of receivables from distributor or end user, arising from the sale of the Company’s product. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Management evaluated that there was no allowance for doubtful accounts as of June 30, 2018 and December 31, 2017, respectively.

Inventories

Inventories consist of (a) packing materials (b) raw materials and (b) finished goods, which are stated at the lower of cost or net realizable value under the first-in-first-out method. The Company reviews its inventories periodically for possible excess and obsolescence to determine if any reserves are necessary.

Revenue Recognition

Effective January 1, 2018, the Company adopted Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption.

In general, the Company’s performance obligation is to transfer it products to its end user or distributor. Revenues from product sales are recognized when the customer obtains control of the Company’s finished goods product, which occurs at a point in time, typically upon delivery to the customer.

The Company's revenue mainly generates from sale of acer truncatum bunge related health products, such as Nervonic Acid Oil, coffee and tea. The Company evaluated its product sales contracts and determined that those contracts are generally capable of being distinct and accounted for as separate performance obligations. Performance obligation is satisfied when the finished goods product delivered to the customer.

Shipping and handling costs paid by the Company are included in cost of sales.

During the six months ended June 30, 2018 and 2017, the Company recognized revenue from sale of acer truncatum bunge related health products in an amount of $nil.

Advertising Expenses

Advertising costs are expensed as incurred. Advertising expenses incurred for the six months ended June 30, 2018 and 2017 totaled $1,397 and $9,285, respectively.

Research and Development

Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statement of operations and totaled $nil and $7,000 for the six months ended June 30, 2018 and 2017, respectively.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are using enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, if more likely than not that the company will not realize tax assets through future operation.

On December 22, 2017, the U.S. enacted the 2017 Tax Cuts and Jobs Act which contains several key tax provisions that affect the Company, including, but not limited to, a one-time mandatory transition tax on accumulated foreign earnings, changes in the sourcing and calculation of foreign income, and a reduction of the corporate income tax rate to 21% effective January 1, 2018. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring its U.S. deferred tax assets and liabilities as well as reassessing the net realizability of its deferred tax assets and liabilities.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

Foreign Currency Transactions

The functional currency for MakingORG and HKFW is the US dollar. The functional currency for the China subsidiary (CBKB) is the Renminbi (RMB). Assets and liabilities of the China operation are translated from RMB into U.S. dollars at period-end rates, while the statements of operations and cash flows are translated at the weighted-average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income/(loss) within shareholders’ deficit.

Related Parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.

Segment Reporting

The Company follows FASB ASC Topic 280, “Segment Reporting” for its segment reporting. The Company aggregates its operating segments into one reporting segment, as management believes that its operating segments have similar operating characteristics and similar long term operating performance.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including the Company’s own credit risk.

In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The carrying amounts of financial assets and liabilities in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and due to related party approximate their fair value due to the short-term duration of those instruments. Notes payable are recorded at agreed values.

Recent Accounting Pronouncements

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments of this ASU allow companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted for as derivative liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company is currently evaluating the impact of adopting ASU 2017-11 on its consolidated financial statements.

In July 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-10, Codification Improvements to Topic 842, Leases, or ASU 2018-10. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued Accounting Standards Update No. 2016-02, Leases (Topic 842), or ASU 2016-02 and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2016-02 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. The Company is currently evaluating the effects the adoption of ASU 2016-02 will have on its consolidated financial statements, results of operations and cash flows.

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INVENTORIES

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

NOTE 4 - INVENTORIES

The components of the Company’s inventories were packaging materials, raw materials and finished goods. Inventory consisted of the following as of June 30, 2018 and December 31, 2017:

	June 30, 2018		December 31, 2017
Packaging materials	$	5,524	$	10,020
Raw materials		-		22,135
Finished goods		37,200		-
Total inventory	$	42,724	$	32,155

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PREPAID EXPENSES AND OTHER CURRENT ASSETS

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

NOTE 5 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets include primarily prepaid consulting fee, deposit for packaging materials and security deposit for rent. As of June 30, 2018, and December 31,2017 prepaid expenses and other current assets was $9,642 and $17,176, respectively.

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DUE TO RELATED PARTY

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

NOTE 6 - DUE TO RELATED PARTY

During the six months ended June 30, 2018 and 2017, the Company’s sole officer loaned the Company $30,124 and $600, respectively. As of June 30, 2018 and December 31, 2017, the Company was obligated to the officer, for an unsecured, non-interest bearing demand loan with a balance of $155,903 and $125,779, respectively.

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CONVERTIBLE NOTE PAYABLE

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

NOTE 7 - CONVERTIBLE NOTE PAYABLE

On September 1, 2016, the Company entered into a Convertible Note Agreement in the principal amount of $200,000 with an unrelated party. The note bears interest at 12% per annum and the holder is able to convert all unpaid interest and principal into common shares at $3.50 per share. The note matures on September 1, 2018. The Company recognized a discount on the note of $38,857 at the agreement date. The interest expense was due every six months commencing on March 1, 2017 until the principal amount of this convertible note is paid in full.

The Company recognized interest expense related to the convertible note of $21,685 and $21,714, respectively, for the six months ended June 30, 2018 and 2017. The Company recognized interest expense related to the convertible note of $10,829 and $10,857, respectively, for the three months ended June 30, 2018 and 2017. The unamortized debt discount at June 30, 2018 and December 31, 2017 was $3,239 and $12,953, respectively. As of June 30, 2018 and December 31, 2017, net balance of the convertible note amounted to $196,761 and $187,047, respectively.

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COMMITMENTS

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

NOTE 8 - COMMITMENTS

Operating Lease

The Company has operating leases for its office. Rental expenses for the six months ended June 30, 2018 and 2017 were $6,000 and $6,000, respectively. Rental expenses for the three months ended June 30, 2018 and 2017 were $3,000 and $3,000, respectively. As of June 30, 2018, total future minimum annual lease payments under operating lease was as follows, by years:

Twelve months ending June 30, 2019	$	3,000
Thereafter		-
Total	$	3,000

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INCOME TAXES

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

NOTE 9 - INCOME TAXES

The Company accounts for income taxes under ASC 740, “Income Taxes”. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company is subject to taxation in the United States and certain state jurisdictions. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 21% to the net loss before provision for income taxes. HKFW in Hong Kong are governed by the Inland Revenue Ordinance Tax Law of Hong Kong, and are generally subject to a profits tax at the rate of 16.5% on the estimated assessable profits. CBNB in the PRC is governed by the Income Tax Law of the PRC concerning the private enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriated adjustments.

Provision (benefit) for income tax for the three months ended June 30, 2018 and 2017 totaled $800 and $800, respectively. Provision (benefit) for income tax for the six months ended June 30, 2018 and 2017 totaled $800 and $800, respectively.

Net deferred tax assets consist of the following components as of:

	June 30,
	2018			2017
Deferred tax asset:
Net operating loss carry forwards	$	89,766		$	77,354
Valuation allowance		(89,766	)		(77,354	)
Net deferred tax asset	$	-		$	-

Due to the change in ownership provisions of the Income Tax laws of United States of America, net operating loss carry forwards of approximately $360,000, which expires in 2032, for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years. Tax filings for the Company for the years 2013 and 2014 are available for examination by state tax jurisdictions and federal tax purposes.

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SUBSEQUENT EVENT

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

NOTE 10 - SUBSEQUENT EVENT

The Company has evaluated all subsequent events through the date the unaudited consolidated financial statements were issued and determine that there were no subsequent events or transactions that require recognition or disclosures in the unaudited consolidated financial statements.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2018

Summary Of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted. 

Principles of Consolidation

The Company’s unaudited consolidated financial statements refer to MakingORG, Inc. and its subsidiaries. All intercompany transactions and balances were eliminated in consolidation. 

Use of Estimates

The preparation of unaudited consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Company’s unaudited consolidated financial statement date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are reported realizable value, net of allowance for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded. Accounts receivable consists principally of receivables from distributor or end user, arising from the sale of the Company’s product. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Management evaluated that there was no allowance for doubtful accounts as of June 30, 2018 and December 31, 2017, respectively.

Inventories

Inventories consist of (a) packing materials (b) raw materials and (b) finished goods, which are stated at the lower of cost or net realizable value under the first-in-first-out method. The Company reviews its inventories periodically for possible excess and obsolescence to determine if any reserves are necessary.

Revenue Recognition

Effective January 1, 2018, the Company adopted Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption.

In general, the Company’s performance obligation is to transfer it products to its end user or distributor. Revenues from product sales are recognized when the customer obtains control of the Company’s finished goods product, which occurs at a point in time, typically upon delivery to the customer.

The Company's revenue mainly generates from sale of acer truncatum bunge related health products, such as Nervonic Acid Oil, coffee and tea. The Company evaluated its product sales contracts and determined that those contracts are generally capable of being distinct and accounted for as separate performance obligations. Performance obligation is satisfied when the finished goods product delivered to the customer.

Shipping and handling costs paid by the Company are included in cost of sales.

During the six months ended June 30, 2018 and 2017, the Company recognized revenue from sale of acer truncatum bunge related health products in an amount of $nil.

Advertising Expenses

Advertising costs are expensed as incurred. Advertising expenses incurred for the six months ended June 30, 2018 and 2017 totaled $1,397 and $9,285, respectively. 

Research and Development

Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statement of operations and totaled $nil and $7,000 for the six months ended June 30, 2018 and 2017, respectively.

Income Taxes

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are using enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, if more likely than not that the company will not realize tax assets through future operation.

On December 22, 2017, the U.S. enacted the 2017 Tax Cuts and Jobs Act which contains several key tax provisions that affect the Company, including, but not limited to, a one-time mandatory transition tax on accumulated foreign earnings, changes in the sourcing and calculation of foreign income, and a reduction of the corporate income tax rate to 21% effective January 1, 2018. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring its U.S. deferred tax assets and liabilities as well as reassessing the net realizability of its deferred tax assets and liabilities.

Basic Income (Loss) Per Share

Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.

Foreign Currency Transactions

The functional currency for MakingORG and HKFW is the US dollar. The functional currency for the China subsidiary (CBKB) is the Renminbi (RMB). Assets and liabilities of the China operation are translated from RMB into U.S. dollars at period-end rates, while the statements of operations and cash flows are translated at the weighted-average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income/(loss) within shareholders’ deficit.

Related Parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.

Segment Reporting

The Company follows FASB ASC Topic 280, “Segment Reporting” for its segment reporting. The Company aggregates its operating segments into one reporting segment, as management believes that its operating segments have similar operating characteristics and similar long term operating performance.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including the Company’s own credit risk.

In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

The carrying amounts of financial assets and liabilities in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and due to related party approximate their fair value due to the short-term duration of those instruments. Notes payable are recorded at agreed values.

Recent Accounting Pronouncements

In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments of this ASU allow companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted for as derivative liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company is currently evaluating the impact of adopting ASU 2017-11 on its consolidated financial statements.

In July 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-10, Codification Improvements to Topic 842, Leases, or ASU 2018-10. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued Accounting Standards Update No. 2016-02, Leases (Topic 842), or ASU 2016-02 and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2016-02 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. The Company is currently evaluating the effects the adoption of ASU 2016-02 will have on its consolidated financial statements, results of operations and cash flows.

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INVENTORIES (Tables)

6 Months Ended

Jun. 30, 2018

Inventories Tables Abstract

Schedule of Inventories

	June 30, 2018		December 31, 2017
Packaging materials	$	5,524	$	10,020
Raw materials		-		22,135
Finished goods		37,200		-
Total inventory	$	42,724	$	32,155

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COMMITMENTS (Tables)

6 Months Ended

Jun. 30, 2018

Commitments

Schedule of Future Minimum Rental Payments for Operating Leases

Twelve months ending June 30, 2019	$	3,000
Thereafter		-
Total	$	3,000

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INCOME TAXES (Tables)

6 Months Ended

Jun. 30, 2018

Income Taxes Tables Abstract

Schedule of Deferred tax assets and liabilities

	June 30,
	2018			2017
Deferred tax asset:
Net operating loss carry forwards	$	89,766		$	77,354
Valuation allowance		(89,766	)		(77,354	)
Net deferred tax asset	$	-		$	-

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ORGANIZATION AND NATURE OF BUSINESS (Details Narrative)	6 Months Ended
	Jun. 30, 2018
Organization And Nature Of Business
State of incorporation	State of Nevada
Date of incorporation	Aug. 10, 2012

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	1 Months Ended	6 Months Ended
	Dec. 22, 2017	Jun. 30, 2018	Jun. 30, 2017
Summary Of Significant Accounting Policies Details Narrative Abstract
Advertising expenses		$ 1,397	$ 9,285
Research and development costs			$ 7,000
Statutory federal income tax rate	21.00%	21.00%

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INVENTORIES (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Inventories Details Abstract
Packaging materials	$ 5,524	$ 10,020
Raw materials		22,135
Finished goods	37,200
Total inventory	$ 42,724	$ 32,155

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PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details Narrative) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Prepaid Expenses And Other Current Assets
Prepaid expenses and other current assets	$ 9,642	$ 17,176

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DUE TO RELATED PARTY (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Due to related party	$ 155,903		$ 125,779
Loan from related party	30,124	$ 600
Officer [Member]
Due to related party	155,903		$ 125,779
Loan from related party	$ 30,124	$ 600

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CONVERTIBLE NOTE PAYABLE (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Sep. 01, 2016	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Interest expense		$ 10,829	$ 10,857	$ 21,685	$ 21,714
Unamortized debt discount		3,239		3,239		$ 12,953
Convertible note payable, net of discount current		196,761		196,761		$ 187,047
Convertible Note Agreement [Member]
Principal amount	$ 200,000
Interest rate	12.00%
Share price	$ 3.50
Maturity date	Sep. 01, 2018
Discount on convertible note payable	$ 38,857
Convertible Note [Member]
Interest expense		$ 10,829	$ 10,857	$ 21,685	$ 21,714

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COMMITMENTS (Details)	Jun. 30, 2018 USD ($)
Commitments Details Abstract
Twelve months ending June 30, 2019	$ 3,000
Thereafter
Total	$ 3,000

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COMMITMENTS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Commitments Details Narrative Abstract
Rental expenses	$ 3,000	$ 3,000	$ 6,000	$ 6,000

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INCOME TAXES (Details 1) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Deferred tax asset:
Net operating loss carry forwards	$ 89,766	$ 77,354
Valuation allowance	(89,766)	(77,354)
Net deferred tax asset

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INCOME TAXES (Detail Textuals) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 22, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Statutory federal income tax rate	21.00%			21.00%
Operating loss carry forwards		$ 360,000		$ 360,000
Federal income tax expire				2032
Provision (benefit) for income tax		$ 800	$ 800	$ 800	$ 800
Hong Kong [Member]
Statutory federal income tax rate						16.50%
PRC [Member]
Statutory federal income tax rate						25.00%