UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the Quarterly Period Ended
or
For the transition period from _________ to _________
Commission
File Number
(Exact name of registrant issuer as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, including zip code)
Registrant’s
phone number, including area code +
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” or an “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated Filer ☐ | Accelerated Filer ☐ |
| Smaller reporting company | |
| 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 check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ☐ Yes ☐ No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of May 10, 2022, there were shares, par value $0.0001, of the registrant’s common stock issued and outstanding.
TABLE OF CONTENTS
| 2 |
PART I – FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements.
GREENPRO CAPITAL CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2022 AND DECEMBER 31, 2021
(In U.S. dollars, except share and per share data)
| March 31, 2022 | December 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents (including $ | $ | $ | ||||||
| Accounts receivable, net of allowance of $ | ||||||||
| Prepaids and other current assets | ||||||||
| Due from related parties | ||||||||
| Deferred costs of revenue (including $ | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Real Estate investments: | ||||||||
| Real estate held for sale | ||||||||
| Real estate held for investment, net | ||||||||
| Intangible assets, net | ||||||||
| Goodwill | ||||||||
| Other investments (including $ | ||||||||
| Operating lease right-of-use assets, net | ||||||||
| Other non-current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Due to related parties | ||||||||
| Income tax payable | - | |||||||
| Operating lease liabilities, current portion | ||||||||
| Deferred revenue (including $ | ||||||||
| Derivative liabilities | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities, net of current portion | - | |||||||
| Total liabilities | ||||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, $ par value; shares authorized; shares issued and outstanding | - | - | ||||||
| Common stock, $ par value; shares authorized; shares issued and outstanding as of March 31, 2022 and December 31, 2021 | ||||||||
| Additional paid in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Greenpro Capital Corp. stockholders’ equity | ||||||||
| Noncontrolling interests in consolidated subsidiaries | ||||||||
| Total stockholders’ equity | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 3 |
GREENPRO CAPITAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(In U.S. dollars, except share and per share data)
(Unaudited)
| Three months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| REVENUES: | ||||||||
| Service revenue (including $ | $ | $ | ||||||
| Sale of real estate properties | - | |||||||
| Rental revenue | ||||||||
| Total revenues | ||||||||
| COST OF REVENUES: | ||||||||
| Cost of service revenue | ( | ) | ( | ) | ||||
| Cost of real estate properties sold | ( | ) | - | |||||
| Cost of rental revenue | ( | ) | ( | ) | ||||
| Total cost of revenues | ( | ) | ( | ) | ||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES: | ||||||||
| General and administrative (including $ | ( | ) | ( | ) | ||||
| Total operating expenses | ( | ) | ( | ) | ||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Other income | ||||||||
| Interest income | ||||||||
| Fair value gains (losses) of derivative liabilities associated with warrants | ( | ) | ||||||
| Fair value gains of options associated with convertible notes | - | |||||||
| Interest expense (including $ | - | ( | ) | |||||
| Impairment of other investment (including $ | ( | ) | - | |||||
| Total other expense | ( | ) | ( | ) | ||||
| LOSS BEFORE INCOME TAX | ( | ) | ( | ) | ||||
| Income tax expense | - | - | ||||||
| NET LOSS | ( | ) | ( | ) | ||||
| Net income attributable to noncontrolling interest | ( | ) | ( | ) | ||||
| NET LOSS ATTRIBUTED TO COMMON STOCKHOLDERS OF GREENPRO CAPITAL CORP. | ( | ) | ( | ) | ||||
| Other comprehensive loss: | ||||||||
| - Foreign currency translation loss | ( | ) | ( | ) | ||||
| COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | ||
| NET LOSS PER SHARE, BASIC AND DILUTED | $ | ( | ) | $ | ( | ) | ||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED | ||||||||
See accompanying notes to the condensed consolidated financial statements.
| 4 |
GREENPRO CAPITAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(In U.S. dollars, except share data)
(Unaudited)
| Three months ended March 31, 2022 | ||||||||||||||||||||||||||||
| Greenpro Capital Corp. Stockholders | ||||||||||||||||||||||||||||
| Common Stock | Additional | Accumulated Other | Non- | Total | ||||||||||||||||||||||||
| Number of shares | Amount | Paid-in Capital | Comprehensive Loss | Accumulated Deficit | Controlling Interest | Stockholders’ Equity | ||||||||||||||||||||||
| Balance as of December 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Foreign currency translation | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Net (loss) income | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||
| Balance as of March 31, 2022 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Three months ended March 31, 2021 | ||||||||||||||||||||||||||||
| Greenpro Capital Corp. Stockholders | ||||||||||||||||||||||||||||
| Common Stock | Additional | Accumulated Other | Non- | Total | ||||||||||||||||||||||||
| Number of shares | Amount | Paid-in Capital | Comprehensive Loss | Accumulated Deficit | Controlling Interest | Stockholders’ Equity | ||||||||||||||||||||||
| Balance as of December 31, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
| Fair value of shares issued for acquisition | - | - | - | |||||||||||||||||||||||||
| Foreign currency translation | - | - | - | ( | ) | - | - | ( | ) | |||||||||||||||||||
| Beneficial conversion feature related to convertible notes | - | - | - | - | - | |||||||||||||||||||||||
| Reclassification of conversion option related to a convertible note | - | - | - | - | - | |||||||||||||||||||||||
| Net (loss) income | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||
| Balance as of March 31, 2021 (Unaudited) | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
| 5 |
GREENPRO CAPITAL CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(In U.S. dollars)
(Unaudited)
| Three months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of right-of-use assets | ||||||||
| Amortization of discount on convertible notes | - | |||||||
| Amortization of debt issuance costs | - | |||||||
| Interest expense associated with accretion of convertible notes | - | |||||||
| Interest expense associated with conversion of notes | - | |||||||
| Interest expense due to non-fulfillment of use of proceeds requirements | - | |||||||
| Change in fair value of warrants | ( | ) | ||||||
| Change in fair value of options associated with convertible notes | - | ( | ) | |||||
| Loss on forfeiture of other investment | - | |||||||
| Provision for bad debts | - | |||||||
| Impairment of other investment | - | |||||||
| Gain on sale of real estate held for sale | ( | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | ( | ) | ||||||
| Prepaids and other current assets | ( | ) | ( | ) | ||||
| Deferred costs of revenue | ( | ) | ( | ) | ||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Income tax payable | ( | ) | - | |||||
| Deferred revenue | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of property and equipment | ( | ) | ( | ) | ||||
| Purchase of other investments | ( | ) | ( | ) | ||||
| Proceeds from real estate held for sale | - | |||||||
| Net cash provided by (used in) investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Principal payments of loans secured by real estate | - | ( | ) | |||||
| Advances to related parties | ( | ) | ( | ) | ||||
| Proceeds from convertible promissory notes, net | - | |||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Effect of exchange rate changes in cash and cash equivalents | ( | ) | ( | ) | ||||
| NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | ( | ) | ||||||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | ||||||||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for income tax | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Shares issued for other investments | $ | $ | ||||||
| Beneficial conversion feature associated with convertible notes payable | $ | $ | ||||||
| Reclassification of conversion option associated with convertible notes payable to additional paid in capital | $ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
| 6 |
GREENPRO CAPITAL CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021
(In U.S. dollars, except share and per share data)
(Unaudited)
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Greenpro Capital Corp. (the “Company” or “GRNQ”) was incorporated on July 19, 2013 in the state of Nevada. The Company currently provides a wide range of business consulting and corporate advisory services, including cross-border listing advisory services, tax planning, advisory and transaction services, record management services, and accounting outsourcing services. Our focus is on companies located in Asia and Southeast Asia, including Hong Kong, Malaysia, China, Thailand, and Singapore. As part of our business consulting and corporate advisory business segment, Greenpro Venture Capital Limited provides a business incubator for start-up companies and focuses on investments in select start-up and high growth potential companies. In addition to our business consulting and corporate advisory business segment, we operate another business segment that focuses on the acquisition and rental of real estate properties held for investment and the acquisition and sale of real estate properties held for sale.
Basis of presentation and principles of consolidation
The accompanying unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2022 and 2021, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The Condensed Consolidated Balance Sheet information as of December 31, 2021 was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2022. These financial statements should be read in conjunction with that report.
The
accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries
and majority-owned subsidiaries which the Company controls and entities for which the Company is the primary beneficiary. For those consolidated
subsidiaries where the Company’s ownership is less than
Going concern
The
accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement
of liabilities and commitments in the normal course of business. During the three months ended March 31, 2022, the Company incurred a
net loss of $
| 7 |
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its major shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. Despite the amount of funds that we have raised in the past, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
COVID-19 Pandemic
Our business, financial condition and results of operations may be materially adversely affected by global health epidemics, including the recent COVID-19 outbreak.
Outbreaks of epidemic, pandemic, or contagious diseases such as COVID-19, could have an adverse effect on our business, financial condition, and results of operations. The spread of COVID-19 from China to other countries has resulted in the World Health Organization declaring the outbreak of COVID-19 as a global pandemic. The international stock markets reflect the uncertainty associated with the slow-down in the global economy and the reduced levels of international travel experienced since the beginning of January 2020, large declines in oil prices and the significant decline in the Dow Industrial Average at the end of February and beginning of March 2020 was largely attributed to the effects of COVID-19.
More
specifically our business was affected to a large extent by a shut-down of operations both for ourselves and our clients for much of
the whole year of 2020. Total revenue for the three months ended March 31, 2022, was $
The full extent of the financial impact of the COVID-19 pandemic cannot be reasonably estimated at this time as the pandemic is still ongoing. The extent to which the COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and its variants and the actions taken globally to contain the coronavirus or treat its impact, the efficacy of vaccines on COVID-19 and its variants, among others. Existing insurance coverage may not provide protection for all costs that may arise from all such possible events.
Additionally, the COVID-19 pandemic may also affect our overall ability to react timely to mitigate the impact of this event and may hamper our efforts to contact our service providers and advisors and to provide our investors with timely information and comply with our filing obligations with the SEC, especially in the event of office closures, stay-in-place orders and a ban on travel or quarantines. We are still assessing our business operations and the impact COVID-19 may have on our results and financial condition in the future, but there can be no assurance that this analysis will enable us to avoid part or all of any impact from the spread of COVID-019 or its consequences, including downturns in business sentiment generally or in our sector in particular.
Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for doubtful accounts receivable, impairment analysis of real estate assets and other long-term assets including goodwill, valuation allowance on deferred income taxes, the assumptions used in the valuation of the derivative liability, and the accrual of potential liabilities. Actual results may differ from these estimates.
Cash, cash equivalents, and restricted cash
Cash consists of funds on hand and held in bank accounts. Cash equivalents includes demand deposits placed with banks or other financial institutions and all highly liquid investments with original maturities of three months or less, including money market funds. Restricted cash represents cash restricted for the loan collateral requirements as defined in a loan agreement and also the minimum paid-up share capital requirement for insurance brokers specified under the Insurance Ordinance of Hong Kong.
At March 31, 2022 and December 31, 2021, cash included funds held by employees of $142 and $0 respectively, and was held to facilitate payment of expenses in local currencies and to facilitate third-party online payment platforms in which the Company had not set up corporate accounts (WeChat Pay and Alipay).
| As of March 31, 2022 | As of December 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Cash, cash equivalents, and restricted cash | ||||||||
| Denominated in United States Dollars | $ | $ | ||||||
| Denominated in Hong Kong Dollars | ||||||||
| Denominated in Chinese Renminbi | ||||||||
| Denominated in Malaysian Ringgit | ||||||||
| Cash, cash equivalents, and restricted cash | $ | $ | ||||||
Revenue recognition
The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients (see Note 2).
| 8 |
Investments
Investments in equity securities
The
Company accounts for its investments that represent less than
At
March 31, 2022, the Company had eighteen investments in equity securities without readily determinable fair values of related parties
valued at $
At
December 31, 2021, the Company had seventeen investments in equity securities without readily determinable fair values of related parties
valued at $
Derivative financial instruments
Derivative financial instruments consist of financial instruments that contain a notional amount and one or more underlying variables such as interest rate, security price, variable conversion rate or other variables, require no initial net investment and permit net settlement. The derivative financial instruments may be free-standing or embedded in other financial instruments. The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company follows the provision of ASC 815, Derivatives and Hedging for derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. At each reporting date, the Company reviews its convertible securities to determine that their classification is appropriate.
Basic net loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period plus any potentially dilutive shares related to the issuance of shares from stock warrants. For the three months ended March 31, 2022 and 2021, the only outstanding common stock equivalents were warrants for potentially dilutive shares outstanding. These warrants have been excluded from the calculation of weighted average shares as the effect would have been anti-dilutive and therefore, basic and diluted net loss per share were the same.
Foreign currency translation
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company’s operating subsidiaries maintain their books and records in their respective functional currency, which consists of the Malaysian Ringgit (“MYR”), Chinese Renminbi (“RMB”), Hong Kong Dollars (“HK$”) and Australian Dollars (“AU$”).
In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not the US$, are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within stockholders’ equity.
Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:
| As of and for the three months ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Period-end MYR : US$1 exchange rate | ||||||||
| Period-average MYR : US$1 exchange rate | ||||||||
| Period-end RMB : US$1 exchange rate | ||||||||
| Period-average RMB : US$1 exchange rate | ||||||||
| Period-end HK$ : US$1 exchange rate | ||||||||
| Period-average HK$ : US$1 exchange rate | ||||||||
| 9 |
Fair value of financial instruments
The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
| ● | Level 1 : Observable inputs such as quoted prices in active markets; |
| ● | Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
| ● | Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions |
The Company believes the carrying amount reported in the balance sheet for cash and cash equivalents, accounts receivable, prepaids and other current assets, accounts payable and accrued liabilities, income tax payable, deferred costs of revenue, deferred revenue, and due to related parties, approximate their fair values because of the short-term nature of these financial instruments.
As
of March 31, 2022 and December 31, 2021, the Company’s balance sheet includes Level 3 liabilities comprised of the fair value of
derivative liabilities of $
| Derivative liability | ||||
| Fair value as of December 31, 2021 (Audited) | $ | |||
| Net change in the fair value of derivative liability associated with warrants | ( | ) | ||
| Fair value as of March 31, 2022 (Unaudited) | $ | |||
Concentrations of risks
For
the three months ended March 31, 2022, one customer accounted for
For
the three months ended March 31, 2022 and 2021, no vendor accounted for 10% or more of the Company’s cost of revenues. For the
three months ended March 31, 2022, three vendors accounted for
Economic and political risks
Substantially all the Company’s services are conducted in the Asian region, primarily in Hong Kong, Malaysia, and the People’s Republic of China (“PRC”). Among other risks, the Company’s operations in Malaysia are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations in Malaysia.
The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.
| 10 |
Recent accounting pronouncements
In August 2020, the FASB issued “ASU 2020-06, Debt with Conversion and Other Options (Subtopic 47020) and Derivatives and Hedging – Contracts in Equity’s Own Equity (Subtopic 815-40)” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. Update No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company is currently evaluating the potential on its financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
NOTE 2 – REVENUE FROM CONTRACTS WITH CUSTOMERS
The Company’s revenue consists of revenue from providing business consulting and corporate advisory services (“service revenue”), revenue from the sale of real estate properties, and revenue from the rental of real estate properties.
Revenue from services
For certain service contracts, we assist or provide advisory to clients in capital market listings (“Listing services”), our services provided to clients are considered as our performance obligations. Revenue and expenses are deferred until the performance obligation is complete and collectability of the consideration is probable. For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded as incurred and deferred revenue is recorded for any payments received on such yet to be completed performance obligations. On an ongoing basis, management monitors these contracts for profitability and when needed may record a liability if a determination is made that costs will exceed revenue.
For other services such as company secretarial, accounting, financial analysis and related services (“Non-Listing services”), the Company’s performance obligations are satisfied, and the related revenue is recognized, as services are rendered. For contracts in which we act as an agent, the Company reports revenue net of expenses paid.
The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract.
Revenue from the sale of real estate properties
The Company follows the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) in accounting for the sale of real estate properties. The Company records the sale based on completed performance obligations, which typically occurs upon the transfer of ownership of a real estate asset to the buyer. During the three months ended March 31, 2022, there was one unit of real estate property sold to an unrelated party.
Revenue from the rental of real estate properties
Rental revenue represents lease rental income from the Company’s tenants. The tenants pay monthly in accordance with lease agreements and the Company recognizes the income ratably over the lease term as this is the most representative of the pattern in which the benefit is expected to be derived from the underlying asset.
Cost of revenues
Cost of service revenue primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to the services rendered.
Cost of real estate properties sold primarily consists of the purchase price of property, legal fees, improvement costs to the building structure, and other acquisition costs. Selling and advertising costs are expensed as incurred.
Cost of rental revenue primarily includes costs associated with repairs and maintenance, property insurance, depreciation and other related administrative costs. Property management fees and utility expenses are paid directly by tenants.
| 11 |
The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area:
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenue by service lines: | ||||||||
| Corporate advisory – Non-listing services | $ | $ | ||||||
| Corporate advisory – Listing services | ||||||||
| Rental of real estate properties | ||||||||
| Sale of real estate properties | ||||||||
| Total revenue | $ | $ | ||||||
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Revenue by geographic area: | ||||||||
| Hong Kong | $ | $ | ||||||
| Malaysia | ||||||||
| China | ||||||||
| Total revenue | $ | $ | ||||||
Our contract balances include deferred costs of revenue and deferred revenue.
Deferred Revenue
For service contracts where the performance obligation is not completed, deferred revenue is recorded for any payments received in advance of the performance obligation. Changes in deferred revenue were as follows:
| Three Months Ended March 31, 2022 | ||||
| (Unaudited) | ||||
| Deferred revenue, January 1, 2022 | $ | |||
| New contract liabilities | ||||
| Performance obligations satisfied | - | |||
| Deferred revenue, March 31, 2022 | $ | |||
Deferred Costs of Revenue
For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded for any costs incurred in advance of the performance obligation.
Deferred revenue and deferred costs of revenue at March 31, 2022 and December 31, 2021 are classified as current assets or current liabilities and totaled:
| As of March 31, 2022 | As of December 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Deferred revenue | $ | $ | ||||||
| Deferred costs of revenue | $ | $ | ||||||
| 12 |
NOTE 3 - OTHER INVESTMENTS
| As of | As of | |||||||
| March 31, 2022 | December 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Investment in equity securities without readily determinable fair values of affiliates: | ||||||||
| (1) Greenpro Trust Limited (a related party) | $ | $ | ||||||
| (2) Other related parties | ||||||||
| Total | $ | $ | ||||||
Investment in equity securities without readily determinable fair values of affiliates (related parties):
Equity
securities without readily determinable fair values are investments in privately held companies without readily determinable market values.
The Company adopted the guidance of ASC 321, Investments - Equity Securities, which allows an entity to measure investments in equity
securities without a readily determinable fair value using a measurement alternative that measures these securities at cost minus impairment,
if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investment of
same issuer (the “Measurement Alternative”). The fair value of equity securities without readily determinable fair values
that have been re-measured due to impairment are classified within Level 3. Management assesses each of these investments on an individual
basis. Additionally, on a quarterly basis, management is required to make a qualitative assessment of whether the investment is impaired.
For the three months ended March 31, 2022, the Company recognized an impairment loss of $
In
addition, the Company held equity securities without readily determinable fair values that were recorded at cost. For these cost method
investments, we recorded as other investments in our condensed consolidated balance sheets. We reviewed all of our cost method investments
quarterly to determine if impairment indicators were present; however, we were not required to determine fair value of these investments
unless impairment indicators exist. When impairment indicators exist, we generally used discounted cash flow analyses to that the fair
values of our cost method investments approximated or exceeded their carrying values as of March 31, 2022. Our cost method investments
had a carrying value of $
(a) Agape ATP Corporation:
On
January 21, 2022, Greenpro Venture Capital Limited, a subsidiary of the Company (“GVCL”)
entered into a forfeiture agreement with Agape ATP Corporation (“Agape”). Pursuant to the agreement, GVCL agreed to transfer
shares out of its total invested shares of common stock of Agape to Agape for nil consideration. As a result, GVC
recognized a loss on forfeiture of other investment of $
(b) ACT Wealth Academy Inc.:
On
February 21, 2022, GVCL entered into a subscription agreement with ACT Wealth Academy Inc., a Nevada corporation, which provides training,
seminars, and events in the academic fields (“ACT Wealth”). Pursuant to the agreement, GVCL acquired shares of
common stock of ACT Wealth at a price of $
| 13 |
The
Company had cost method investments without readily determinable fair values with a carrying value of $
On March 31, 2022, and December 31, 2021, the carrying values of equity securities without readily determinable fair values are as follows:
| As of | As of | |||||||
| March 31, 2022 | December 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Original cost | $ | $ | ||||||
| Unrealized gains (losses) | ||||||||
| Provision for impairment or decline in value | ( | ) | ( | ) | ||||
| Forfeiture of partial investment | ( | ) | ||||||
| Equity securities without readily determinable fair values, net | $ | $ | ||||||
Impairment of other investments
For
the three months ended March 31, 2022, the Company recognized an impairment loss of $
NOTE 4 - OPERATING LEASES
The
Company has two separate operating lease agreements for one office space in Hong Kong with a term of
Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.
| 14 |
The components of operating lease cost and supplemental cash flow information related to leases are as follows:
| Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | |||||||
| (Unaudited) | (Unaudited) | |||||||
Lease Cost | ||||||||
| Operating lease costs included in the measurement of lease liabilities for the three months ended March 31, 2022 and 2021, respectively | $ | $ | ||||||
| Other Information | ||||||||
| Cash paid for amounts included in the measurement of lease liabilities for the three months ended March 31, 2022 and 2021, respectively | $ | $ | ||||||
| Weighted average remaining lease term – operating leases (in years) | ||||||||
| Average discount rate – operating leases | % | % | ||||||
The supplemental balance sheet information related to leases is as follows:
| As of March 31,2022 | As of December 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Operating leases | ||||||||
| Right-of-use assets | $ | $ | ||||||
| Short-term operating lease liabilities | $ | |||||||
| Long-term operating lease liabilities | ||||||||
| Total operating lease liabilities | $ | $ | ||||||
Maturities of the Company’s lease liabilities are as follows:
| Year Ending | Operating Leases | |||
| (Unaudited) | ||||
| 2022 (remaining 9 months) | ||||
| 2023 | ||||
| Total lease payments | ||||
| Less: Imputed interest/present value discount | ( | ) | ||
| Present value of lease liabilities | $ | |||
Total
lease costs included in the general and administrative expenses were $
| 15 |
NOTE 5 - DERIVATIVE LIABILITIES
At
March 31, 2022, the Company has outstanding warrants exercisable into
At
December 31, 2021, the balance of the derivative liabilities related to warrants was $
The derivative liabilities related to warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions:
| As of | As of | |||||||
| March 31, 2022 | December 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Risk-free interest rate | $ | % | $ | % | ||||
| Expected volatility | % | % | ||||||
| Contractual life (in years) | ||||||||
| Expected dividend yield | % | % | ||||||
| Fair value of warrants | $ | $ | ||||||
The
risk-free interest rate is based on the yield available on U.S. Treasury securities. The Company estimates volatility based on the historical
volatility of its common stock. The contractual life of the warrants is based on the expiration date of the warrants. The expected dividend
yield was based on the fact that the Company has not paid dividends to common shareholders in the past and does not expect to pay dividends
to common shareholders in the future. For the three months ended March 31, 2022, the Company recognized a gain of $
| 16 |
NOTE 6 - WARRANTS
In
2018, the Company issued warrants exercisable into
| Remaining | ||||||||||||
| Number | Contractual | |||||||||||
| of | Exercise | Life | ||||||||||
| Shares | Price | (in Years) | ||||||||||
| Warrants outstanding at December 31, 2021 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | ||||||||||||
| Expired | ||||||||||||
| Warrants outstanding at March 31, 2022 (Unaudited) | $ | |||||||||||
| Warrants exercisable at March 31, 2022 (Unaudited) | $ | |||||||||||
At March 31, 2022, the intrinsic value of outstanding warrants was .
NOTE 7 - RELATED PARTY TRANSACTIONS
| Due from related parties: | March 31, 2022 | December 31, 2021 | ||||||
| (Unaudited) | (Audited) | |||||||
| Accounts receivable from related parties | ||||||||
| - Related party A (net of allowance of $ | $ | $ | ||||||
| - Related party B (net of allowance of $ | ||||||||
| Total | $ | $ | ||||||
| Due from related parties | ||||||||
| - Related party B | ||||||||
| - Related party D | ||||||||
| - Related party G | ||||||||
| - Related party H | ||||||||
| Total | $ | $ | ||||||
The amounts due from related parties are interest-free, unsecured and have no fixed terms of repayment.
| Due to related parties: | March 31, 2022 | December 31, 2021 | ||||||
| (Unaudited) | (Audited) | |||||||
| Due to related parties | ||||||||
| - Related party A | $ | $ | ||||||
| - Related party B | ||||||||
| - Related party G | ||||||||
| - Related party I | ||||||||
| - Related party J | ||||||||
| - Related party K | ||||||||
| Total | $ | $ | ||||||
The amounts due to related parties are interest-free, unsecured and have no fixed terms of repayment.
| For the three months ended March 31, | ||||||||
| Related party revenue and expense transactions: | 2022 | 2021 | ||||||
| (Unaudited) | (Unaudited) | |||||||
| Service revenue from related parties | ||||||||
| - Related party A | $ | $ | ||||||
| - Related party B | ||||||||
| - Related party C | ||||||||
| - Related party E | ||||||||
| - Related party G | ||||||||
| - Related party I | ||||||||
| Total | $ | $ | ||||||
| General and administrative expenses to related parties | ||||||||
| - Related party A | $ | $ | ||||||
| - Related party B | ||||||||
| - Related party I | $ | |||||||
| - Related party K | ||||||||
| Total | $ | $ | ||||||
| Other expenses to related parties | ||||||||
| - Related party B | $ | $ | ||||||
| Total | $ | $ | ||||||
| 17 |
Related party A is under common control of Mr. Loke Che Chan Gilbert, the Company’s CFO and a major shareholder.
Related
party B represents companies where the Company owns a respective percentage ranging from
Related party C is controlled by a director of a wholly owned subsidiary of the Company.
Related party D represents companies that we have determined that we can significantly influence based on our common business relationships.
Related party E represents companies whose CEO is a consultant to the Company, and who is also a director of Aquarius Protection Fund, a shareholder in the Company.
Related party F represents a family member of Mr. Loke Che Chan Gilbert, the Company’s CFO and a major shareholder.
Related party G is under common control of Mr. Lee Chong Kuang, the Company’s CEO and a major shareholder.
Related
party H represents a company in which we currently have an approximate
Related party I is controlled by a family member of Mr. Lee Chong Kuang, the Company’s CEO and a major shareholder.
Related party J represents the noncontrolling interest in the Company’s subsidiary that owns its real estate held for sale. The amounts due to related party J are unsecured, bear no interest, are payable on demand, and related to the initial acquisition of the real estate held for sale.
Related party K represents shareholders and directors of the Company. Due to related party K represents expenses paid by the shareholders or directors to third parties on behalf of the Company, are non-interest bearing, and are due on demand.
| 18 |
NOTE 8 - SEGMENT INFORMATION
ASC
280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with
the Company’s internal organization structure as well as information about services categories, business segments and major customers
in financial statements. The Company has
| ● | Service business – provision of corporate advisory and business solution services |
| ● | Real estate business – leasing and trading of commercial real estate properties in Hong Kong and Malaysia |
The Company had no inter-segment sales for the periods presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
(a) By Categories
| For the three months ended March 31, 2022 (Unaudited) | ||||||||||||||||
| Real estate business | Service business | Corporate | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Impairment | ( | ) | ( | ) | ||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total assets | ||||||||||||||||
| Capital expenditures for long-lived assets | $ | $ | $ | $ | ||||||||||||
| For the three months ended March 31, 2021 (Unaudited) | ||||||||||||||||
| Real estate business | Service business | Corporate | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total assets | ||||||||||||||||
| Capital expenditures for long-lived assets | $ | $ | $ | $ | ||||||||||||
| 19 |
(b) By Geography*
| For the three months ended March 31, 2022 (Unaudited) | ||||||||||||||||
| Hong Kong | Malaysia | China | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Impairment | ( | ) | ( | ) | ||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total assets | ||||||||||||||||
| Capital expenditures for long-lived assets | $ | $ | $ | $ | ||||||||||||
| For the three months ended March 31, 2021 (Unaudited) | ||||||||||||||||
| Hong Kong | Malaysia | China | Total | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total assets | ||||||||||||||||
| Capital expenditures for long-lived assets | $ | $ | $ | $ | ||||||||||||
* |
| 20 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission on March 29, 2022 (the “Form 10-K”) and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.
The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guaranteed of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form 10-K in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.
Company Overview
Greenpro Capital Corp. (the “Company” or “Greenpro”), was incorporated in the State of Nevada on July 19, 2013. We provide cross-border business solutions and accounting outsourcing services to small and medium-size businesses located in Asia, with an initial focus on Hong Kong, Malaysia and China. Greenpro provides a range of services as a package solution to our clients, which we believe can assist our clients in reducing their business costs and improving their revenues.
In addition to our business solution services, we also operate a venture capital business through Greenpro Venture Capital Limited, an Anguilla corporation. One of our venture capital business segments is focused on (1) establishing a business incubator for start-ups and high growth companies to support such companies during critical growth periods, which will include education and support services, and (2) searching for investment opportunities in selected start-ups and high growth companies, which may generate significant returns to the Company. Our venture capital business is focused on companies located in Asia and Southeast Asia including Hong Kong, Malaysia, China, Thailand and Singapore. Another one of our venture capital business segments is focused on rental activities of commercial properties and the sale of investment properties.
Results of Operations
For information regarding our controls and procedures, see Part I, Item 4 - Controls and Procedures, of this Quarterly Report.
| 21 |
During the three months ended March 31, 2022 and 2021, we operated in three regions: Hong Kong, Malaysia and China. We derived revenues from the provision of services and sales or rental activities of our real estate properties.
Comparison of the three months ended March 31, 2022 and 2021
Total Revenue
Total revenue was $575,846 and $589,573 for the three months ended March 31, 2022 and 2021, respectively. The decrease revenue by $13,727 was primarily due to a decrease in the revenue of business services. We expect revenue from our business services segment will be improved in the next few months, as the effects of the COVID-19 pandemic wanes and stabilizes.
Service Business
Business service revenue
Revenue from the provision of business services was $355,033 and $559,335 for the three months ended March 31, 2022 and 2021, respectively. It was derived principally from the provision of business consulting and advisory services as well as company secretarial, accounting and financial analysis services. We experienced a decrease in service income as the performance obligations for some listing services have not been completed during the period ended March 31, 2022.
Real Estate Business
Sale of real estate properties
Revenue from the sale of real estate property was $186,873 for the three months ended March 31, 2022, which was derived from the sale of one unit of real estate property located in Hong Kong. There was no revenue generated from the sale of real estate property for the three months ended March 31, 2021.
Rental revenue
Revenue from rentals was $33,940 and $30,238 for the three months ended March 31, 2022 and 2021, respectively. It was derived principally from leasing properties in Malaysia and Hong Kong. We believe our rental income will be stable in the near future.
Total Operating Costs and Expenses
Total operating costs and expenses were $1,106,549 and $1,476,871 for the three months ended March 31, 2022 and 2021, respectively. They consist of cost of service revenue, cost of real estate properties sold, cost of rental revenue, and general and administrative expenses.
Loss from operations for the Company for the three months ended March 31, 2022 and 2021 was $530,703 and $887,298, respectively. The decrease in a loss from operations was mainly due to a decrease in general and administrative expenses of $477,115.
Cost of service revenue
Cost of revenue on provision of services was $64,276 and $83,802 for the three months ended March 31, 2022 and 2021, respectively. It primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to the services rendered.
Cost of real estate properties sold
Cost of revenue on real estate property sold was $127,341 for the three months ended March 31, 2022. It primarily consisted of the purchase price of property, legal fees, improvement costs to the building structure, and other acquisition costs. Selling and advertising costs are expensed as incurred. No sales of real estate property occurred for the three months ended March 31, 2021, hence no cost of real estate sold was recorded.
Cost of rental revenue
Cost of rental revenue was $10,793 and $11,815 for the three months ended March 31, 2022 and 2021, respectively. It includes the costs associated with governmental charges, building management fees, repairs and maintenance, property insurance, depreciation and other related administrative costs.
| 22 |
General and administrative expenses
General and administrative (“G&A”) expenses were $904,139 and $1,381,254 for the three months ended March 31, 2022 and 2021, respectively. For the three months ended March 31, 2022, G&A expenses consisted primarily of employees’ salaries and allowances of $346,736, directors’ salaries and compensation of $163,644, legal and other professional fees of $108,063, and consulting fees of $61,787. We expect our G&A expenses will continue to increase as we integrate our business acquisitions, expand our existing business and develop new markets in other regions.
Other Income or Expense
Net other expenses were $479,167 and $5,407,844 for the three months ended March 31, 2022 and 2021, respectively. Impairment of other investment was $536,400 for the three months ended March 31, 2022, but no such impairment was recorded during the same period in 2021. Gain on change in fair value of derivative liabilities associated with warrants was $5,902 for the three months ended March 31, 2022, while gain on change in fair value of derivative liabilities was $5,217,399, which was composed of a fair value gain associated with convertible notes of $5,236,920 and a fair value loss associated with warrants of $19,521 for the three months ended March 31, 2021. Interest expense was $0 for the three months ended March 31, 2022, while interest expense was $10,627,038, which mainly consisted of interest expense associated convertible notes of $10,607,711 for the three months ended March 31, 2021.
Interest expenses
Total interest expenses were $0 and $10,627,038 for the three months ended March 31, 2022 and 2021, respectively.
On October 13, 2020, the Company issued three unsecured promissory notes to Streeterville Capital, LLC, FirstFire Global Opportunities Fund, LLC and Granite Global Value Investments Ltd. (collectively, the “Investors”), respectively. The Company issued another unsecured promissory note to Streeterville Capital, LLC (“Streeterville”) on January 8, 2021 and February 11, 2021, respectively. Interest expenses related to the convertible promissory notes totaled $10,607,711 for the three months ended March 31, 2021, which included coupon interest expense of $139,692, amortization of discount on convertible notes of $70,796, amortization of debt issuance costs of $24,930, interest expense associated with conversion of notes of $705,597, interest expense associated with accretion of convertible notes payable of $8,561,440 and interest expense due to non-fulfillment of use of proceeds requirements of $1,105,256.
Net Loss
Net loss was $1,009,870 and $6,295,142 for the three months ended March 31, 2022 and 2021, respectively. The decrease in net loss was mainly due to a decrease of G&A expenses and no interest expenses were incurred in 2022.
Net Income or Loss Attributable to Noncontrolling Interest
We record net income or loss attributable to noncontrolling interest in the consolidated statements of operations for any noncontrolling interest of consolidated subsidiaries.
At March 31, 2022, the noncontrolling interest is related to the Company’s 60% ownership of Forward Win International Limited.
For the three months ended March 31, 2022 and 2021, we recorded net income attributable to a noncontrolling interest of $23,812 and $3,378, respectively.
| 23 |
There were no seasonal aspects that had a material effect on the financial condition or results of operations of the Company.
Other than as disclosed elsewhere in this Quarterly Report, we are not aware of any trends, uncertainties, demands, commitments or events for the three months ended March 31, 2022 that are reasonably likely to have a material adverse effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.
Off Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of March 31, 2022.
Contractual Obligations
As of March 31, 2022, one of our subsidiaries leased one office in Hong Kong under a non-cancellable operating lease, with a term of two years commencing from March 15, 2021 to March 14, 2023. Another subsidiary of the Company leased an office in Malaysia under a non-cancellable operating lease with a term of one year commencing from April 1, 2022 to March 31, 2023. As of March 31, 2022, the future minimum rental payments under these leases in the aggregate are approximately $103,791 and are due as follows: 2022: $80,716 and 2023: $23,075.
Related Party Transactions
Accounts receivable due from related parties was $548 and $41 as of March 31, 2022 and December 31, 2021, respectively. Other receivable due from related parties was $1,291,171 and $1,170,855 as of March 31, 2022 and December 31, 2021, respectively. The amounts due to related parties was $701,949 and $757,283 as of March 31, 2022 and December 31, 2021, respectively.
For the three months ended March 31, 2022 and 2021, related party service revenue totaled $59,085 and $288,471, respectively.
General and administrative (“G&A”) expenses to related parties were $18,511 and $5,524 for the three months ended March 31, 2022 and 2021, respectively. Impairment of investment in a related party was $536,400 for the three months ended March 31, 2022.
Our related parties are primarily those companies where we own a certain percentage of shares of such companies, and companies that we have determined that we can significantly influence based on our common business relationships. Refer to Note 7 to the Condensed Consolidated Financial Statements for additional details regarding the related party transactions.
Critical Accounting Policies and Estimates
Use of estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for doubtful accounts receivable, impairment analysis of real estate assets and other long-term assets including goodwill, valuation allowance on deferred income taxes, and the accrual of potential liabilities. Actual results may differ from these estimates.
Revenue recognition
The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
The Company’s revenue consists of revenue from providing business consulting and corporate advisory services (“service revenue”), revenue from the sale of real estate properties, and revenue from the rental of real estate properties.
Impairment of long-lived assets
Long-lived assets primarily include real estate held for investment, property and equipment, and intangible assets. In accordance with the provision of ASC 360, the Company generally conducts its annual impairment evaluation of its long-lived assets in the fourth quarter of each year, or more frequently if indicators of impairment exist, such as a significant sustained change in the business climate. The recoverability of long-lived assets is measured at the reporting unit level. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. In addition, for real estate held for sale, an impairment loss is the adjustment to fair value less estimated cost to dispose of the asset.
Goodwill
Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill. The Company’s policy is to perform its annual impairment testing for its reporting units on December 31, of each fiscal year.
| 24 |
Derivative financial instruments
Derivative financial instruments consist of financial instruments that contain a notional amount and one or more underlying variables such as interest rate, security price, variable conversion rate or other variables, require no initial net investment and permit net settlement. The derivative financial instruments may be free-standing or embedded in other financial instruments. The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company follows the provision of ASC 815, Derivatives and Hedging for derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. At each reporting date, the Company reviews its convertible securities to determine that their classification is appropriate.
Recent accounting pronouncements
Refer to Note 1 in the accompanying financial statements.
Liquidity and Capital Resources
Our cash balance at March 31, 2022 was $4,560,884 as compared to $5,338,571 at December 31, 2021. We estimate the Company currently has sufficient cash available to meet its anticipated working capital for the next twelve months.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the three months ended March 31, 2022, the Company incurred a net loss of $1,009,870 and net cash used in operations of $774,931. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2021 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its major shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due.
Despite the amount of funds that the Company has raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its shareholders, in the case of equity financing.
Operating activities
Net cash used in operating activities was $774,931 for the three months ended March 31, 2022 as compared to net cash used in operating activities of $788,464 for the three months ended March 31, 2021. The cash used in operating activities in 2022 was mainly from the net loss for the period of $1,009,870 and a decrease in accounts payable and accrued liabilities of $382,457 and offset by impairment of other investment of $536,400 and an increase in deferred revenue of $216,211. For the three months ended March 31, 2022, non-cash adjustments totaled $535,790, which was mostly composed of the non-cash expenses of impairment of other investment of $536,400.
| 25 |
Investing activities
Net cash provided by investing activities for the three months ended March 31, 2022 was $181,466 while net cash used in investing activities for the three months ended March 31, 2021 was $3,988.
Financing activities
Net cash used in financing activities for the three months ended March 31, 2022 was $172,568 while net cash provided by financing activities for the three months ended March 31, 2021 was $5,169,291.
The cash used in financing activities in 2022 was advances to related parties of $172,568.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”). Based on such evaluation, our principal executive officer and principal financial officer have concluded that the disclosure controls and procedures were effective as of March 31, 2022 to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the U.S. Securities and Exchange Commission’s (“SEC”) rules and forms, and to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting for the three months ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including each of our Chief Executive Officer and Chief Financial Officer, intends that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
| 26 |
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
On August 24, 2021, Plaintiff Millennium Fine Art Inc. (“MFAI”) filed a Complaint against the Company, alleging that on or about April 21, 2021, MFAI and the Company entered into a contract (the “Contract”), by which MFAI agreed to create 7,700 non-fungible tokens (“NFT”) in exchange for sixteen million dollars ($16,000,000) worth of shares of the Company. MFAI claims that the Company breached the Contract by refusing delivery of the NFTs and not delivering $16 million worth of shares to MFAI. The Complaint asserts causes of action for breach of contract, special damages and promissory estoppel, and seeks sixty-six million dollars ($66,000,000) in damages, specific performance by Company according to the terms of the Contract, and MFAI’s attorney’s fees and costs.
On October 18, 2021, the Company filed a motion, denying all the material allegations of the Complaint, and seeking to stay the case and compel arbitration pursuant to the purported Contract. In its motion, the Company only sought to enforce the terms of the Contract as it relates to arbitration, but otherwise denied the existence of a valid and binding contract. Over MFAI’s opposition, the Court granted the Company’s motion, and stayed the case, pending the resolution of the Parties’ arbitration of the dispute.
On or about April 1, 2022, MFAI filed a Request for Arbitration with JAMS dispute resolution services, the Company’s response to which is due by May 2, 2022. The Company intends to submit defenses to MFAI’s arbitration request and will continue to defend the matter vigorously.
On May 2, 2022, the Company filed the Statement of Defense to MFAI’s complaint and is waiting arbitrator to hold a pre-hearing conference to set a discovery schedule. This matter is pending scheduled by JAMS.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits
| Exhibit No. | Description | |
| 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer | |
| 31.2 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial officer | |
| 32.1 | Section 1350 Certification of principal executive officer | |
| 32.2 | Section 1350 Certification of principal financial officer and principal accounting officer | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit) |
| 27 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Greenpro Capital Corp. | ||
| Date: May 10, 2022 | By: | /s/ Lee Chong Kuang |
| Lee Chong Kuang | ||
| President and Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Date: May 10, 2022 | By: | /s/ Loke Che Chan, Gilbert |
| Loke Che Chan, Gilbert | ||
| Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
| 28 |
EXHIBIT 31.1
CERTIFICATION
I, LEE CHONG KUANG, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Greenpro Capital Corp. (the “Company”) for the quarter ended March 31, 2022;
2. Based on my knowledge, this quarterly 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 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 13a-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 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; |
5. The registrant’s other certifying officer 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. |
| Date: May 10, 2022 | ||
| By: | /s/ Lee Chong Kuang | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION
I, LOKE CHE CHAN, GILBERT, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Greenpro Capital Corp. (the “Company”) for the quarter ended March 31, 2022;
2. Based on my knowledge, this quarterly 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 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 13a-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 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; |
5. The registrant’s other certifying officer 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 |
| Date: May 10, 2022 | ||
| By: | /s/ Loke Che Chan, Gilbert | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
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 Greenpro Capital Corp. (the “Company”) on Form 10-Q for the period ending March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), The undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) 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 result of operations of the Company.
| Date: May 10, 2022 | ||
| By: | /s/ Lee Chong Kuang | |
| Title: | Chief Executive Officer | |
| (Principal Executive Officer) |
EXHIBIT 32.2
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 Greenpro Capital Corp. (the “Company”) on Form 10-Q for the period ending March 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), The undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) 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 result of operations of the Company.
| Date: May 10, 2022 | ||
| By: | /s/ Loke Che Chan, Gilbert | |
| Title: | Chief Financial Officer | |
| (Principal Financial and Principal Accounting Officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Restricted cash | $ 38,343 | $ 12,866 |
| Accounts receivable, allowance | 14,067 | 133,356 |
| Accounts Receivable, Related Parties, Current | 548 | 41 |
| Due from related parties, deferred costs of revenue | 11,640 | 11,640 |
| Related parties investments | 9,084,485 | 9,621,935 |
| Due from related parties, deferred revenue | $ 1,013,530 | $ 912,980 |
| Preferred stock, par value | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Preferred stock, shares outstanding | 0 | 0 |
| Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
| Common Stock, Shares Authorized | 500,000,000 | 500,000,000 |
| Common Stock, Shares, Issued | 78,671,688 | 78,671,688 |
| Common Stock, Shares, Outstanding | 78,671,688 | 78,671,688 |
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|||
| REVENUES: | ||||
| Total revenues | [1] | $ 575,846 | $ 589,573 | |
| COST OF REVENUES: | ||||
| Total cost of revenues | (202,410) | (95,617) | ||
| GROSS PROFIT | 373,436 | 493,956 | ||
| OPERATING EXPENSES: | ||||
| General and administrative (including $18,511 and $5,524 of general and administrative expense to related parties for the three months ended March 31, 2022 and 2021, respectively) | (904,139) | (1,381,254) | ||
| Total operating expenses | (904,139) | (1,381,254) | ||
| LOSS FROM OPERATIONS | (530,703) | (887,298) | ||
| OTHER INCOME (EXPENSE) | ||||
| Other income | 50,721 | 766 | ||
| Interest income | 610 | 1,029 | ||
| Fair value gains (losses) of derivative liabilities associated with warrants | 5,902 | (19,521) | ||
| Fair value gains of options associated with convertible notes | 5,236,920 | |||
| Interest expense (including $10,607,711 of interest expense related to convertible notes for the three months ended March 31, 2021) | (10,627,038) | |||
| Impairment of other investment (including $536,400 of related party investment for the three months ended March 31, 2022) | (536,400) | |||
| Total other expense | (479,167) | (5,407,844) | ||
| LOSS BEFORE INCOME TAX | (1,009,870) | (6,295,142) | ||
| Income tax expense | ||||
| NET LOSS | [1] | (1,009,870) | (6,295,142) | |
| Net income attributable to noncontrolling interest | (23,812) | (3,378) | ||
| NET LOSS ATTRIBUTED TO COMMON STOCKHOLDERS OF GREENPRO CAPITAL CORP. | (1,033,682) | (6,298,520) | ||
| Other comprehensive loss: | ||||
| - Foreign currency translation loss | (13,559) | (12,520) | ||
| COMPREHENSIVE LOSS | $ (1,047,241) | $ (6,311,040) | ||
| NET LOSS PER SHARE, BASIC AND DILUTED | $ (0.01) | $ (0.10) | ||
| WEIGHTED AVERAGE NUMBER OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED | 78,671,688 | 61,796,474 | ||
| Service [Member] | ||||
| REVENUES: | ||||
| Total revenues | $ 355,033 | $ 559,335 | ||
| COST OF REVENUES: | ||||
| Total cost of revenues | (64,276) | (83,802) | ||
| Real Estate [Member] | ||||
| REVENUES: | ||||
| Total revenues | 186,873 | |||
| COST OF REVENUES: | ||||
| Total cost of revenues | (127,341) | |||
| Rental Revenue [Member] | ||||
| REVENUES: | ||||
| Total revenues | 33,940 | 30,238 | ||
| COST OF REVENUES: | ||||
| Total cost of revenues | $ (10,793) | $ (11,815) | ||
| ||||
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) |
3 Months Ended |
|---|---|
|
Mar. 31, 2021
USD ($)
| |
| General and administrative expense, related parties | $ 5,524 |
| Convertible Notes [Member] | |
| Interest expense, related party | 10,607,711 |
| Service [Member] | |
| Service revenue from related parties | $ 288,471 |
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Comprehensive Income [Member] |
Retained Earnings [Member] |
Noncontrolling Interest [Member] |
Total |
|||
|---|---|---|---|---|---|---|---|---|---|
| Beginning balance, value at Dec. 31, 2020 | $ 6,178 | $ 25,135,738 | $ (26,863) | $ (16,922,452) | $ 203,001 | $ 8,395,602 | |||
| Beginning balance, shares at Dec. 31, 2020 | 61,764,562 | ||||||||
| Foreign currency translation | (12,520) | (12,520) | |||||||
| Net (loss) income | (6,298,520) | 3,378 | (6,295,142) | [1] | |||||
| Fair value of shares issued for acquisition | $ 34 | 924,966 | 925,000 | ||||||
| Fair value of shares issued for acquisition, shares | 342,592 | ||||||||
| Beneficial conversion feature related to convertible notes | 4,010,083 | 4,010,083 | |||||||
| Reclassification of conversion option related to a convertible note | 5,745,520 | 5,745,520 | |||||||
| Ending balance, value at Mar. 31, 2021 | $ 6,212 | 35,816,307 | (39,383) | (23,220,972) | 206,379 | 12,768,543 | |||
| Ending balance, shares at Mar. 31, 2021 | 62,107,154 | ||||||||
| Beginning balance, value at Dec. 31, 2021 | $ 7,867 | 50,102,738 | (26,863) | (31,271,808) | 226,500 | 19,038,434 | |||
| Beginning balance, shares at Dec. 31, 2021 | 78,671,688 | ||||||||
| Foreign currency translation | (13,559) | (13,559) | |||||||
| Net (loss) income | (1,033,682) | 23,812 | (1,009,870) | [1] | |||||
| Ending balance, value at Mar. 31, 2022 | $ 7,867 | $ 50,102,738 | $ (40,422) | $ (32,305,490) | $ 250,312 | $ 18,015,005 | |||
| Ending balance, shares at Mar. 31, 2022 | 78,671,688 | ||||||||
| |||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|||
| Cash flows from operating activities: | ||||
| Net loss | [1] | $ (1,009,870) | $ (6,295,142) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Depreciation and amortization | 42,630 | 42,664 | ||
| Amortization of right-of-use assets | 20,544 | 67,085 | ||
| Amortization of discount on convertible notes | 70,796 | |||
| Amortization of debt issuance costs | 24,930 | |||
| Interest expense associated with accretion of convertible notes | 8,561,440 | |||
| Interest expense associated with conversion of notes | 705,596 | |||
| Interest expense due to non-fulfillment of use of proceeds requirements | 1,105,256 | |||
| Change in fair value of warrants | (5,902) | 19,521 | ||
| Change in fair value of options associated with convertible notes | (5,236,920) | |||
| Loss on forfeiture of other investment | 1,650 | |||
| Provision for bad debts | 13,481 | |||
| Impairment of other investment | 536,400 | |||
| Gain on sale of real estate held for sale | (59,532) | |||
| Changes in operating assets and liabilities: | ||||
| Accounts receivable, net | (38,239) | 72,615 | ||
| Prepaids and other current assets | (51,277) | (140,326) | ||
| Deferred costs of revenue | (20,688) | (18,554) | ||
| Accounts payable and accrued liabilities | (382,457) | 63,540 | ||
| Operating lease liabilities | (22,059) | (64,509) | ||
| Income tax payable | (2,342) | |||
| Deferred revenue | 216,211 | 220,063 | ||
| Net cash used in operating activities | (774,931) | (788,464) | ||
| Cash flows from investing activities: | ||||
| Purchase of property and equipment | (2,495) | (688) | ||
| Purchase of other investments | (600) | (3,300) | ||
| Proceeds from real estate held for sale | 184,561 | |||
| Net cash provided by (used in) investing activities | 181,466 | (3,988) | ||
| Cash flows from financing activities: | ||||
| Principal payments of loans secured by real estate | (39,823) | |||
| Advances to related parties | (172,568) | (886) | ||
| Proceeds from convertible promissory notes, net | 5,210,000 | |||
| Net cash (used in) provided by financing activities | (172,568) | 5,169,291 | ||
| Effect of exchange rate changes in cash and cash equivalents | (11,654) | (6,938) | ||
| NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | (777,687) | 4,369,901 | ||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD | 5,338,571 | 1,086,753 | ||
| CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD | 4,560,884 | 5,456,654 | ||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
| Cash paid for income tax | 2,347 | |||
| Cash paid for interest | 19,326 | |||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||
| Shares issued for other investments | 925,000 | |||
| Beneficial conversion feature associated with convertible notes payable | 4,010,083 | |||
| Reclassification of conversion option associated with convertible notes payable to additional paid in capital | $ 5,745,520 | |||
| ||||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Greenpro Capital Corp. (the “Company” or “GRNQ”) was incorporated on July 19, 2013 in the state of Nevada. The Company currently provides a wide range of business consulting and corporate advisory services, including cross-border listing advisory services, tax planning, advisory and transaction services, record management services, and accounting outsourcing services. Our focus is on companies located in Asia and Southeast Asia, including Hong Kong, Malaysia, China, Thailand, and Singapore. As part of our business consulting and corporate advisory business segment, Greenpro Venture Capital Limited provides a business incubator for start-up companies and focuses on investments in select start-up and high growth potential companies. In addition to our business consulting and corporate advisory business segment, we operate another business segment that focuses on the acquisition and rental of real estate properties held for investment and the acquisition and sale of real estate properties held for sale.
Basis of presentation and principles of consolidation
The accompanying unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2022 and 2021, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The Condensed Consolidated Balance Sheet information as of December 31, 2021 was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2022. These financial statements should be read in conjunction with that report.
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and majority-owned subsidiaries which the Company controls and entities for which the Company is the primary beneficiary. For those consolidated subsidiaries where the Company’s ownership is less than 100%, the outside shareholders’ interests are shown as noncontrolling interests in equity. Acquired businesses are included in the consolidated financial statements from the date on which control is transferred to the Company. Subsidiaries are deconsolidated from the date that control ceases. All inter-company accounts and transactions have been eliminated in consolidation.
Going concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the three months ended March 31, 2022, the Company incurred a net loss of $1,009,870 and net cash used in operations of $774,931. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2021 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its major shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. Despite the amount of funds that we have raised in the past, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
COVID-19 Pandemic
Our business, financial condition and results of operations may be materially adversely affected by global health epidemics, including the recent COVID-19 outbreak.
Outbreaks of epidemic, pandemic, or contagious diseases such as COVID-19, could have an adverse effect on our business, financial condition, and results of operations. The spread of COVID-19 from China to other countries has resulted in the World Health Organization declaring the outbreak of COVID-19 as a global pandemic. The international stock markets reflect the uncertainty associated with the slow-down in the global economy and the reduced levels of international travel experienced since the beginning of January 2020, large declines in oil prices and the significant decline in the Dow Industrial Average at the end of February and beginning of March 2020 was largely attributed to the effects of COVID-19.
More specifically our business was affected to a large extent by a shut-down of operations both for ourselves and our clients for much of the whole year of 2020. Total revenue for the three months ended March 31, 2022, was $575,846 compared to $589,573 for the same period in 2021. The slight decrease in total revenue was mainly due to the decrease in orders for our business services during the first period of 2022. When nation-wide shutdowns were mandated the first half of 2020, there was a corresponding decline in demand for our business services. When business gradually resumed beginning the first half of 2021, we saw a corresponding increase in orders of our business services.
The full extent of the financial impact of the COVID-19 pandemic cannot be reasonably estimated at this time as the pandemic is still ongoing. The extent to which the COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and its variants and the actions taken globally to contain the coronavirus or treat its impact, the efficacy of vaccines on COVID-19 and its variants, among others. Existing insurance coverage may not provide protection for all costs that may arise from all such possible events.
Additionally, the COVID-19 pandemic may also affect our overall ability to react timely to mitigate the impact of this event and may hamper our efforts to contact our service providers and advisors and to provide our investors with timely information and comply with our filing obligations with the SEC, especially in the event of office closures, stay-in-place orders and a ban on travel or quarantines. We are still assessing our business operations and the impact COVID-19 may have on our results and financial condition in the future, but there can be no assurance that this analysis will enable us to avoid part or all of any impact from the spread of COVID-019 or its consequences, including downturns in business sentiment generally or in our sector in particular.
Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for doubtful accounts receivable, impairment analysis of real estate assets and other long-term assets including goodwill, valuation allowance on deferred income taxes, the assumptions used in the valuation of the derivative liability, and the accrual of potential liabilities. Actual results may differ from these estimates.
Cash, cash equivalents, and restricted cash
Cash consists of funds on hand and held in bank accounts. Cash equivalents includes demand deposits placed with banks or other financial institutions and all highly liquid investments with original maturities of three months or less, including money market funds. Restricted cash represents cash restricted for the loan collateral requirements as defined in a loan agreement and also the minimum paid-up share capital requirement for insurance brokers specified under the Insurance Ordinance of Hong Kong.
At March 31, 2022 and December 31, 2021, cash included funds held by employees of $142 and $0 respectively, and was held to facilitate payment of expenses in local currencies and to facilitate third-party online payment platforms in which the Company had not set up corporate accounts (WeChat Pay and Alipay).
Revenue recognition
The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients (see Note 2).
Investments
Investments in equity securities
The Company accounts for its investments that represent less than 20% ownership, and for which the Company does not have the ability to exercise significant influence, using ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The Company measure investments in equity securities without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis. Gains and losses on these securities are recognized in other income and expenses.
At March 31, 2022, the Company had eighteen investments in equity securities without readily determinable fair values of related parties valued at $9,084,485, and ten investments in equity securities without readily determinable fair values of related parties had been fully impaired with carrying value of $nil (see Note 3).
At December 31, 2021, the Company had seventeen investments in equity securities without readily determinable fair values of related parties valued at $9,621,935, and ten investments in equity securities without readily determinable fair values of related parties had been fully impaired with carrying value of $nil (see Note 3).
Derivative financial instruments
Derivative financial instruments consist of financial instruments that contain a notional amount and one or more underlying variables such as interest rate, security price, variable conversion rate or other variables, require no initial net investment and permit net settlement. The derivative financial instruments may be free-standing or embedded in other financial instruments. The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company follows the provision of ASC 815, Derivatives and Hedging for derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. At each reporting date, the Company reviews its convertible securities to determine that their classification is appropriate.
Basic net loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period plus any potentially dilutive shares related to the issuance of shares from stock warrants. For the three months ended March 31, 2022 and 2021, the only outstanding common stock equivalents were warrants for potentially dilutive shares outstanding. These warrants have been excluded from the calculation of weighted average shares as the effect would have been anti-dilutive and therefore, basic and diluted net loss per share were the same.
Foreign currency translation
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company’s operating subsidiaries maintain their books and records in their respective functional currency, which consists of the Malaysian Ringgit (“MYR”), Chinese Renminbi (“RMB”), Hong Kong Dollars (“HK$”) and Australian Dollars (“AU$”).
In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not the US$, are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within stockholders’ equity.
Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:
Fair value of financial instruments
The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
The Company believes the carrying amount reported in the balance sheet for cash and cash equivalents, accounts receivable, prepaids and other current assets, accounts payable and accrued liabilities, income tax payable, deferred costs of revenue, deferred revenue, and due to related parties, approximate their fair values because of the short-term nature of these financial instruments.
As of March 31, 2022 and December 31, 2021, the Company’s balance sheet includes Level 3 liabilities comprised of the fair value of derivative liabilities of $4,033 and $9,935, respectively (see Note 5). The following table sets forth a summary of the changes in the estimated fair value of our derivative during the period ended March 31, 2022.
Concentrations of risks
For the three months ended March 31, 2022, one customer accounted for 32% of revenues. For the three months ended March 31, 2021, one customer accounted for 35% of revenues. For the three months ended March 31, 2022, one customer accounted for 60% of accounts receivable at period-end. For the three months ended March 31, 2021, one customer accounted for 56% of accounts receivable at period-end.
For the three months ended March 31, 2022 and 2021, no vendor accounted for 10% or more of the Company’s cost of revenues. For the three months ended March 31, 2022, three vendors accounted for 65% (33%, 22% and 10%) of accounts payable at period-end. For the three months ended March 31, 2021, two vendors accounted for 69% (46% and 23%) of accounts payable at period-end.
Economic and political risks
Substantially all the Company’s services are conducted in the Asian region, primarily in Hong Kong, Malaysia, and the People’s Republic of China (“PRC”). Among other risks, the Company’s operations in Malaysia are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations in Malaysia.
The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.
Recent accounting pronouncements
In August 2020, the FASB issued “ASU 2020-06, Debt with Conversion and Other Options (Subtopic 47020) and Derivatives and Hedging – Contracts in Equity’s Own Equity (Subtopic 815-40)” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. Update No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company is currently evaluating the potential on its financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
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REVENUE FROM CONTRACTS WITH CUSTOMERS |
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| REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 2 – REVENUE FROM CONTRACTS WITH CUSTOMERS
The Company’s revenue consists of revenue from providing business consulting and corporate advisory services (“service revenue”), revenue from the sale of real estate properties, and revenue from the rental of real estate properties.
Revenue from services
For certain service contracts, we assist or provide advisory to clients in capital market listings (“Listing services”), our services provided to clients are considered as our performance obligations. Revenue and expenses are deferred until the performance obligation is complete and collectability of the consideration is probable. For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded as incurred and deferred revenue is recorded for any payments received on such yet to be completed performance obligations. On an ongoing basis, management monitors these contracts for profitability and when needed may record a liability if a determination is made that costs will exceed revenue.
For other services such as company secretarial, accounting, financial analysis and related services (“Non-Listing services”), the Company’s performance obligations are satisfied, and the related revenue is recognized, as services are rendered. For contracts in which we act as an agent, the Company reports revenue net of expenses paid.
The Company offers no discounts, rebates, rights of return, or other allowances to clients which would result in the establishment of reserves against service revenue. Additionally, to date, the Company has not incurred incremental costs in obtaining a client contract.
Revenue from the sale of real estate properties
The Company follows the guidance of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) in accounting for the sale of real estate properties. The Company records the sale based on completed performance obligations, which typically occurs upon the transfer of ownership of a real estate asset to the buyer. During the three months ended March 31, 2022, there was one unit of real estate property sold to an unrelated party.
Revenue from the rental of real estate properties
Rental revenue represents lease rental income from the Company’s tenants. The tenants pay monthly in accordance with lease agreements and the Company recognizes the income ratably over the lease term as this is the most representative of the pattern in which the benefit is expected to be derived from the underlying asset.
Cost of revenues
Cost of service revenue primarily consists of employee compensation and related payroll benefits, company formation costs, and other professional fees directly attributable to the services rendered.
Cost of real estate properties sold primarily consists of the purchase price of property, legal fees, improvement costs to the building structure, and other acquisition costs. Selling and advertising costs are expensed as incurred.
Cost of rental revenue primarily includes costs associated with repairs and maintenance, property insurance, depreciation and other related administrative costs. Property management fees and utility expenses are paid directly by tenants.
The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area:
Our contract balances include deferred costs of revenue and deferred revenue.
Deferred Revenue
For service contracts where the performance obligation is not completed, deferred revenue is recorded for any payments received in advance of the performance obligation. Changes in deferred revenue were as follows:
Deferred Costs of Revenue
For service contracts where the performance obligation is not completed, deferred costs of revenue are recorded for any costs incurred in advance of the performance obligation.
Deferred revenue and deferred costs of revenue at March 31, 2022 and December 31, 2021 are classified as current assets or current liabilities and totaled:
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OTHER INVESTMENTS |
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| OTHER INVESTMENTS | NOTE 3 - OTHER INVESTMENTS
Investment in equity securities without readily determinable fair values of affiliates (related parties):
Equity securities without readily determinable fair values are investments in privately held companies without readily determinable market values. The Company adopted the guidance of ASC 321, Investments - Equity Securities, which allows an entity to measure investments in equity securities without a readily determinable fair value using a measurement alternative that measures these securities at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investment of same issuer (the “Measurement Alternative”). The fair value of equity securities without readily determinable fair values that have been re-measured due to impairment are classified within Level 3. Management assesses each of these investments on an individual basis. Additionally, on a quarterly basis, management is required to make a qualitative assessment of whether the investment is impaired. For the three months ended March 31, 2022, the Company recognized an impairment loss of $536,400 for one of the equity securities without readily determinable fair values. During the year ended December 31, 2021, the Company recognized impairment of $5,349,600 for one of the investments in equity securities without readily determinable fair values.
In addition, the Company held equity securities without readily determinable fair values that were recorded at cost. For these cost method investments, we recorded as other investments in our condensed consolidated balance sheets. We reviewed all of our cost method investments quarterly to determine if impairment indicators were present; however, we were not required to determine fair value of these investments unless impairment indicators exist. When impairment indicators exist, we generally used discounted cash flow analyses to that the fair values of our cost method investments approximated or exceeded their carrying values as of March 31, 2022. Our cost method investments had a carrying value of $9,084,485 as of March 31, 2022.
(a) Agape ATP Corporation:
On January 21, 2022, Greenpro Venture Capital Limited, a subsidiary of the Company (“GVCL”) entered into a forfeiture agreement with Agape ATP Corporation (“Agape”). Pursuant to the agreement, GVCL agreed to transfer shares out of its total invested shares of common stock of Agape to Agape for nil consideration. As a result, GVC recognized a loss on forfeiture of other investment of $1,650. As of March 31, 2022, GVCL still owns 1,000,000 shares of common stock of Agape and recognized the investment under a historical cost of $ or $ per share.
(b) ACT Wealth Academy Inc.:
On February 21, 2022, GVCL entered into a subscription agreement with ACT Wealth Academy Inc., a Nevada corporation, which provides training, seminars, and events in the academic fields (“ACT Wealth”). Pursuant to the agreement, GVCL acquired shares of common stock of ACT Wealth at a price of $600 or $ per share. The investment was recognized at a historical cost of $600 under other investments.
The Company had cost method investments without readily determinable fair values with a carrying value of $9,084,485 and $9,621,935 as of March 31, 2022, and December 31, 2021, respectively.
On March 31, 2022, and December 31, 2021, the carrying values of equity securities without readily determinable fair values are as follows:
Impairment of other investments
For the three months ended March 31, 2022, the Company recognized an impairment loss of $536,400 of other investments. For the year ended December 31, 2021, the Company recognized an impairment loss of $5,349,600 of other investments.
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OPERATING LEASES |
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| OPERATING LEASES | NOTE 4 - OPERATING LEASES
The Company has two separate operating lease agreements for one office space in Hong Kong with a term of two years and one office space in Malaysia with a term of one year. The Company does not have any other leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its leases as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.
Operating lease right-of-use (“ROU”) assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Generally, the implicit rate of interest in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.
The components of operating lease cost and supplemental cash flow information related to leases are as follows:
The supplemental balance sheet information related to leases is as follows:
Maturities of the Company’s lease liabilities are as follows:
Total lease costs included in the general and administrative expenses were $27,904 and $77,644 during the three months ended March 31, 2022 and 2021, respectively.
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DERIVATIVE LIABILITIES |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE LIABILITIES | NOTE 5 - DERIVATIVE LIABILITIES
At March 31, 2022, the Company has outstanding warrants exercisable into 53,556 shares of the Company’s common stock. The strike price of warrants is denominated in US dollars. As a result, the warrants are not considered indexed to the Company’s own stock, and the Company characterized the fair value of the warrants as a derivative liability upon issuance. The derivative liability is re-measured at the end of every reporting period with the change in value reported in the statement of operations.
At December 31, 2021, the balance of the derivative liabilities related to warrants was $9,935. During the three months ended March 31, 2022, the Company recorded a decrease in fair value of derivatives of $5,902. At March 31, 2022, the balance of the derivative liabilities related to warrants was $4,033.
The derivative liabilities related to warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions:
The risk-free interest rate is based on the yield available on U.S. Treasury securities. The Company estimates volatility based on the historical volatility of its common stock. The contractual life of the warrants is based on the expiration date of the warrants. The expected dividend yield was based on the fact that the Company has not paid dividends to common shareholders in the past and does not expect to pay dividends to common shareholders in the future. For the three months ended March 31, 2022, the Company recognized a gain of $5,902 associated with the revaluation of above derivative liability.
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WARRANTS |
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| WARRANTS | NOTE 6 - WARRANTS
In 2018, the Company issued warrants exercisable into 53,556 shares of Common Stock. The warrants were fully vested when issued, have an exercise price of $7.20 per share, and expire in 2023. A summary of warrant activity during the three months ended March 31, 2022 is presented below:
At March 31, 2022, the intrinsic value of outstanding warrants was .
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RELATED PARTY TRANSACTIONS |
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| Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RELATED PARTY TRANSACTIONS | NOTE 7 - RELATED PARTY TRANSACTIONS
The amounts due from related parties are interest-free, unsecured and have no fixed terms of repayment.
The amounts due to related parties are interest-free, unsecured and have no fixed terms of repayment.
Related party A is under common control of Mr. Loke Che Chan Gilbert, the Company’s CFO and a major shareholder.
Related party B represents companies where the Company owns a respective percentage ranging from 1% to 18% interests in those companies.
Related party C is controlled by a director of a wholly owned subsidiary of the Company.
Related party D represents companies that we have determined that we can significantly influence based on our common business relationships.
Related party E represents companies whose CEO is a consultant to the Company, and who is also a director of Aquarius Protection Fund, a shareholder in the Company.
Related party F represents a family member of Mr. Loke Che Chan Gilbert, the Company’s CFO and a major shareholder.
Related party G is under common control of Mr. Lee Chong Kuang, the Company’s CEO and a major shareholder.
Related party H represents a company in which we currently have an approximate 48% equity-method investment. On March 31, 2022 and December 31, 2021, amounts due from related party H are unsecured, bear no interest, and are payable upon demand. During 2018, the Company acquired 49% of related party H for total consideration of $368,265. On December 31, 2018, the Company determined that its investments in related party H was impaired and recorded an impairment of other investments of $368,265.
Related party I is controlled by a family member of Mr. Lee Chong Kuang, the Company’s CEO and a major shareholder.
Related party J represents the noncontrolling interest in the Company’s subsidiary that owns its real estate held for sale. The amounts due to related party J are unsecured, bear no interest, are payable on demand, and related to the initial acquisition of the real estate held for sale.
Related party K represents shareholders and directors of the Company. Due to related party K represents expenses paid by the shareholders or directors to third parties on behalf of the Company, are non-interest bearing, and are due on demand.
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SEGMENT INFORMATION |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SEGMENT INFORMATION | NOTE 8 - SEGMENT INFORMATION
ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company has two reportable segments that are based on the following business units: service business and real estate business. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. The Company operates two reportable business segments:
The Company had no inter-segment sales for the periods presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
(a) By Categories
(b) By Geography*
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation
The accompanying unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2022 and 2021, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The Condensed Consolidated Balance Sheet information as of December 31, 2021 was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended December 31, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2022. These financial statements should be read in conjunction with that report.
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries and majority-owned subsidiaries which the Company controls and entities for which the Company is the primary beneficiary. For those consolidated subsidiaries where the Company’s ownership is less than 100%, the outside shareholders’ interests are shown as noncontrolling interests in equity. Acquired businesses are included in the consolidated financial statements from the date on which control is transferred to the Company. Subsidiaries are deconsolidated from the date that control ceases. All inter-company accounts and transactions have been eliminated in consolidation.
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| Going concern | Going concern
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the three months ended March 31, 2022, the Company incurred a net loss of $1,009,870 and net cash used in operations of $774,931. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2021 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its major shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. Despite the amount of funds that we have raised in the past, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.
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| COVID-19 Pandemic | COVID-19 Pandemic
Our business, financial condition and results of operations may be materially adversely affected by global health epidemics, including the recent COVID-19 outbreak.
Outbreaks of epidemic, pandemic, or contagious diseases such as COVID-19, could have an adverse effect on our business, financial condition, and results of operations. The spread of COVID-19 from China to other countries has resulted in the World Health Organization declaring the outbreak of COVID-19 as a global pandemic. The international stock markets reflect the uncertainty associated with the slow-down in the global economy and the reduced levels of international travel experienced since the beginning of January 2020, large declines in oil prices and the significant decline in the Dow Industrial Average at the end of February and beginning of March 2020 was largely attributed to the effects of COVID-19.
More specifically our business was affected to a large extent by a shut-down of operations both for ourselves and our clients for much of the whole year of 2020. Total revenue for the three months ended March 31, 2022, was $575,846 compared to $589,573 for the same period in 2021. The slight decrease in total revenue was mainly due to the decrease in orders for our business services during the first period of 2022. When nation-wide shutdowns were mandated the first half of 2020, there was a corresponding decline in demand for our business services. When business gradually resumed beginning the first half of 2021, we saw a corresponding increase in orders of our business services.
The full extent of the financial impact of the COVID-19 pandemic cannot be reasonably estimated at this time as the pandemic is still ongoing. The extent to which the COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and its variants and the actions taken globally to contain the coronavirus or treat its impact, the efficacy of vaccines on COVID-19 and its variants, among others. Existing insurance coverage may not provide protection for all costs that may arise from all such possible events.
Additionally, the COVID-19 pandemic may also affect our overall ability to react timely to mitigate the impact of this event and may hamper our efforts to contact our service providers and advisors and to provide our investors with timely information and comply with our filing obligations with the SEC, especially in the event of office closures, stay-in-place orders and a ban on travel or quarantines. We are still assessing our business operations and the impact COVID-19 may have on our results and financial condition in the future, but there can be no assurance that this analysis will enable us to avoid part or all of any impact from the spread of COVID-019 or its consequences, including downturns in business sentiment generally or in our sector in particular.
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| Use of estimates | Use of estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to, among others, the allowance for doubtful accounts receivable, impairment analysis of real estate assets and other long-term assets including goodwill, valuation allowance on deferred income taxes, the assumptions used in the valuation of the derivative liability, and the accrual of potential liabilities. Actual results may differ from these estimates.
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| Cash, cash equivalents, and restricted cash | Cash, cash equivalents, and restricted cash
Cash consists of funds on hand and held in bank accounts. Cash equivalents includes demand deposits placed with banks or other financial institutions and all highly liquid investments with original maturities of three months or less, including money market funds. Restricted cash represents cash restricted for the loan collateral requirements as defined in a loan agreement and also the minimum paid-up share capital requirement for insurance brokers specified under the Insurance Ordinance of Hong Kong.
At March 31, 2022 and December 31, 2021, cash included funds held by employees of $142 and $0 respectively, and was held to facilitate payment of expenses in local currencies and to facilitate third-party online payment platforms in which the Company had not set up corporate accounts (WeChat Pay and Alipay).
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| Revenue recognition | Revenue recognition
The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients (see Note 2).
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| Investments | Investments
Investments in equity securities
The Company accounts for its investments that represent less than 20% ownership, and for which the Company does not have the ability to exercise significant influence, using ASU 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. The Company measure investments in equity securities without a readily determinable fair value using a measurement alternative that measures these securities at the cost method minus impairment, if any, plus or minus changes resulting from observable price changes on a non-recurring basis. Gains and losses on these securities are recognized in other income and expenses.
At March 31, 2022, the Company had eighteen investments in equity securities without readily determinable fair values of related parties valued at $9,084,485, and ten investments in equity securities without readily determinable fair values of related parties had been fully impaired with carrying value of $nil (see Note 3).
At December 31, 2021, the Company had seventeen investments in equity securities without readily determinable fair values of related parties valued at $9,621,935, and ten investments in equity securities without readily determinable fair values of related parties had been fully impaired with carrying value of $nil (see Note 3).
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| Derivative financial instruments | Derivative financial instruments
Derivative financial instruments consist of financial instruments that contain a notional amount and one or more underlying variables such as interest rate, security price, variable conversion rate or other variables, require no initial net investment and permit net settlement. The derivative financial instruments may be free-standing or embedded in other financial instruments. The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company follows the provision of ASC 815, Derivatives and Hedging for derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. At each reporting date, the Company reviews its convertible securities to determine that their classification is appropriate.
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| Net loss per share |
Basic net loss per share is computed by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period plus any potentially dilutive shares related to the issuance of shares from stock warrants. For the three months ended March 31, 2022 and 2021, the only outstanding common stock equivalents were warrants for potentially dilutive shares outstanding. These warrants have been excluded from the calculation of weighted average shares as the effect would have been anti-dilutive and therefore, basic and diluted net loss per share were the same.
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| Foreign currency translation | Foreign currency translation
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company’s operating subsidiaries maintain their books and records in their respective functional currency, which consists of the Malaysian Ringgit (“MYR”), Chinese Renminbi (“RMB”), Hong Kong Dollars (“HK$”) and Australian Dollars (“AU$”).
In general, for consolidation purposes, assets and liabilities of the Company’s subsidiaries whose functional currency is not the US$, are translated into US$ using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of a foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within stockholders’ equity.
Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:
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| Fair value of financial instruments | Fair value of financial instruments
The Company follows the guidance of ASC 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
The Company believes the carrying amount reported in the balance sheet for cash and cash equivalents, accounts receivable, prepaids and other current assets, accounts payable and accrued liabilities, income tax payable, deferred costs of revenue, deferred revenue, and due to related parties, approximate their fair values because of the short-term nature of these financial instruments.
As of March 31, 2022 and December 31, 2021, the Company’s balance sheet includes Level 3 liabilities comprised of the fair value of derivative liabilities of $4,033 and $9,935, respectively (see Note 5). The following table sets forth a summary of the changes in the estimated fair value of our derivative during the period ended March 31, 2022.
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| Concentrations of risks | Concentrations of risks
For the three months ended March 31, 2022, one customer accounted for 32% of revenues. For the three months ended March 31, 2021, one customer accounted for 35% of revenues. For the three months ended March 31, 2022, one customer accounted for 60% of accounts receivable at period-end. For the three months ended March 31, 2021, one customer accounted for 56% of accounts receivable at period-end.
For the three months ended March 31, 2022 and 2021, no vendor accounted for 10% or more of the Company’s cost of revenues. For the three months ended March 31, 2022, three vendors accounted for 65% (33%, 22% and 10%) of accounts payable at period-end. For the three months ended March 31, 2021, two vendors accounted for 69% (46% and 23%) of accounts payable at period-end.
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| Economic and political risks | Economic and political risks
Substantially all the Company’s services are conducted in the Asian region, primarily in Hong Kong, Malaysia, and the People’s Republic of China (“PRC”). Among other risks, the Company’s operations in Malaysia are subject to the risks of restrictions on transfer of funds; export duties, quotas, and embargoes; domestic and international customs and tariffs; changing taxation policies; foreign exchange restrictions; and political conditions and governmental regulations in Malaysia.
The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation.
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| Recent accounting pronouncements | Recent accounting pronouncements
In August 2020, the FASB issued “ASU 2020-06, Debt with Conversion and Other Options (Subtopic 47020) and Derivatives and Hedging – Contracts in Equity’s Own Equity (Subtopic 815-40)” which simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. Update No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company is currently evaluating the potential on its financial statements.
In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2022. The Company is currently assessing the impact of adopting this standard on the Company’s financial statements and related disclosures.
Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
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ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH |
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| SCHEDULE OF FOREIGN CURRENCY TRANSACTION | Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:
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| SCHEDULE OF FAIR VALUE FINANCIAL INSTRUMENT |
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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) |
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF DISAGGREGATED REVENUE | The following table provides information about disaggregated revenue based on revenue by service lines and revenue by geographic area:
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| SCHEDULE OF CHANGES IN DEFERRED REVENUE | For service contracts where the performance obligation is not completed, deferred revenue is recorded for any payments received in advance of the performance obligation. Changes in deferred revenue were as follows:
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| SCHEDULE OF DEFERRED REVENUE COST | Deferred revenue and deferred costs of revenue at March 31, 2022 and December 31, 2021 are classified as current assets or current liabilities and totaled:
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OTHER INVESTMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF OTHER INVESTMENTS |
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| SCHEDULE OF CARRYING VALUES OF EQUITY SECURITIES WITHOUT READILY DETERMINABLE FAIR VALUES | On March 31, 2022, and December 31, 2021, the carrying values of equity securities without readily determinable fair values are as follows:
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OPERATING LEASES (Tables) |
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Mar. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Leases | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF COMPONENTS OF LEASE EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION | The components of operating lease cost and supplemental cash flow information related to leases are as follows:
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| SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES | The supplemental balance sheet information related to leases is as follows:
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| SCHEDULE OF MATURITIES OF LEASE LIABILITIES | Maturities of the Company’s lease liabilities are as follows:
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DERIVATIVE LIABILITIES (Tables) |
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Black-Scholes-Merton [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF ESTIMATED DERIVATIVE LIABILITIES AT FAIR VALUE ASSUMPTIONS | The derivative liabilities related to warrants were valued using the Black-Scholes-Merton valuation model with the following assumptions:
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WARRANTS (Tables) |
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| Warrants | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF WARRANTS ACTIVITY |
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RELATED PARTY TRANSACTIONS (Tables) |
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| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF DUE FROM RELATED PARTIES |
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| SCHEDULE OF DUE TO RELATED PARTIES | The amounts due from related parties are interest-free, unsecured and have no fixed terms of repayment.
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| SCHEDULE OF INCOME FROM OR EXPENSES TO RELATED PARTIES | The amounts due to related parties are interest-free, unsecured and have no fixed terms of repayment.
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SEGMENT INFORMATION (Tables) |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF SUMMARIZED FINANCIAL INFORMATION | The Company had no inter-segment sales for the periods presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
(a) By Categories
(b) By Geography*
|
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SCHEDULE OF CASH EQUIVALENTS AND RESTRICTED CASH (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
| Cash, cash equivalents, and restricted cash | $ 4,560,884 | $ 5,338,571 |
| United States Dollars [Member] | ||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
| Cash, cash equivalents, and restricted cash | 3,540,555 | 4,137,396 |
| Hong Kong Dollars [Member] | ||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
| Cash, cash equivalents, and restricted cash | 849,018 | 895,820 |
| Chinese Renminbi [Member] | ||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
| Cash, cash equivalents, and restricted cash | 85,410 | 151,311 |
| Malaysian Ringgit [Member] | ||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
| Cash, cash equivalents, and restricted cash | $ 85,901 | $ 154,044 |
SCHEDULE OF FOREIGN CURRENCY TRANSACTION (Details) |
Mar. 31, 2022 |
Mar. 31, 2021 |
|---|---|---|
| Period End Myr U S Dollar 1 Exchange Rate [Member] | ||
| Trading Activity, Gains and Losses, Net [Line Items] | ||
| Foreign currency exchange rate, translation | 4.20 | 4.14 |
| Period Average Myr Us Dollar 1 Exchange Rate [Member] | ||
| Trading Activity, Gains and Losses, Net [Line Items] | ||
| Foreign currency exchange rate, translation | 4.20 | 4.08 |
| Period End Rmb Us Dollar 1 Exchange Rate [Member] | ||
| Trading Activity, Gains and Losses, Net [Line Items] | ||
| Foreign currency exchange rate, translation | 6.34 | 6.57 |
| Period Average Rmb Us Dollar 1 Exchange Rate [Member] | ||
| Trading Activity, Gains and Losses, Net [Line Items] | ||
| Foreign currency exchange rate, translation | 6.34 | 6.49 |
| Period End Hk Dollar Us Dollar 1 Exchange Rate [Member] | ||
| Trading Activity, Gains and Losses, Net [Line Items] | ||
| Foreign currency exchange rate, translation | 7.83 | 7.77 |
| Period Average H K U S 1 Exchange Rate [Member] | ||
| Trading Activity, Gains and Losses, Net [Line Items] | ||
| Foreign currency exchange rate, translation | 7.81 | 7.76 |
SCHEDULE OF FAIR VALUE FINANCIAL INSTRUMENT (Details) |
Mar. 31, 2022
USD ($)
|
|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Fair value at beginning of period | $ 9,935 |
| Net change in the fair value of derivative liability associated with warrants | (5,902) |
| Fair value at end of period | $ 4,033 |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
3 Months Ended | ||||
|---|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|||
| Product Information [Line Items] | |||||
| Equity method investment, ownership percentage | 100.00% | ||||
| Net loss | [1] | $ 1,009,870 | $ 6,295,142 | ||
| Net cash used in operating activities | 774,931 | 788,464 | |||
| Total revenue | [1] | $ 575,846 | $ 589,573 | ||
| Ownership percentage investments | 20.00% | ||||
| Other investments | $ 9,084,485 | $ 9,621,935 | |||
| Derivative assets liabilities fair value | $ 4,033 | $ 9,935 | |||
| Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||||
| Product Information [Line Items] | |||||
| Concentration risk, percentage | 32.00% | ||||
| Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Customer [Member] | |||||
| Product Information [Line Items] | |||||
| Concentration risk, percentage | 35.00% | ||||
| Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||||
| Product Information [Line Items] | |||||
| Concentration risk, percentage | 60.00% | 56.00% | |||
| Accounts Payable [Member] | Supplier Concentration Risk [Member] | Three Vendors [Member] | |||||
| Product Information [Line Items] | |||||
| Concentration risk, percentage | 65.00% | ||||
| Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor One [Member] | |||||
| Product Information [Line Items] | |||||
| Concentration risk, percentage | 33.00% | 46.00% | |||
| Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor Two [Member] | |||||
| Product Information [Line Items] | |||||
| Concentration risk, percentage | 22.00% | 23.00% | |||
| Accounts Payable [Member] | Supplier Concentration Risk [Member] | Vendor Three [Member] | |||||
| Product Information [Line Items] | |||||
| Concentration risk, percentage | 10.00% | ||||
| Accounts Payable [Member] | Supplier Concentration Risk [Member] | Two Vendors [Member] | |||||
| Product Information [Line Items] | |||||
| Concentration risk, percentage | 69.00% | ||||
| Warrant [Member] | |||||
| Product Information [Line Items] | |||||
| Potentially antidilutive shares outstanding | 53,556 | 53,556 | |||
| |||||
SCHEDULE OF DISAGGREGATED REVENUE (Details) - USD ($) |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|||
| Disaggregation of Revenue [Line Items] | ||||
| Total revenue | [1] | $ 575,846 | $ 589,573 | |
| HONG KONG | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Total revenue | [1] | 426,128 | 378,163 | |
| MALAYSIA | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Total revenue | [1] | 111,585 | 135,901 | |
| CHINA | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Total revenue | [1] | 38,133 | 75,509 | |
| Corporate Advisory Non Listing Services [Member] | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Total revenue | 355,033 | 359,335 | ||
| Corporate Advisory - Listing Services [Member] | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Total revenue | 200,000 | |||
| Rental of Real Estate Properties [Member] | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Total revenue | 33,940 | 30,238 | ||
| Sales of Real Estate Properties [Member] | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Total revenue | $ 186,873 | |||
| ||||
SCHEDULE OF CHANGES IN DEFERRED REVENUE (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2022
USD ($)
| |
| Revenue from Contract with Customer [Abstract] | |
| Deferred revenue, January 1, 2022 | $ 2,006,696 |
| New contract liabilities | 216,211 |
| Performance obligations satisfied | |
| Deferred revenue, March 31, 2022 | $ 2,222,907 |
SCHEDULE OF DEFERRED REVENUE COST (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Revenue from Contract with Customer [Abstract] | ||
| Deferred revenue | $ 2,222,907 | $ 2,006,696 |
| Deferred costs of revenue | $ 143,981 | $ 123,293 |
SCHEDULE OF OTHER INVESTMENTS (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Total | $ 9,084,485 | $ 9,621,935 |
| Other Related Parties [Member] | ||
| Other related parties | 9,032,872 | 9,570,322 |
| Greenpro Trust Limited (a related party) [Member] | ||
| Investments | $ 51,613 | $ 51,613 |
SCHEDULE OF CARRYING VALUES OF EQUITY SECURITIES WITHOUT READILY DETERMINABLE FAIR VALUES (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2021 |
|
| Investments, Debt and Equity Securities [Abstract] | ||
| Original cost | $ 15,546,364 | $ 15,545,764 |
| Unrealized gains (losses) | ||
| Provision for impairment or decline in value | (6,460,229) | (5,923,829) |
| Forfeiture of partial investment | (1,650) | |
| Equity securities without readily determinable fair values, net | $ 9,084,485 | $ 9,621,935 |
OTHER INVESTMENTS (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended | |||
|---|---|---|---|---|---|
Feb. 21, 2022 |
Jan. 21, 2022 |
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
| Impairment loss | $ 536,400 | $ 5,349,600 | |||
| Cost method investments, carrying value | 9,084,485 | 9,621,935 | |||
| Other investments (including $9,084,485 and $9,621,935 of investments in related parties as of March 31, 2022 and December 31, 2021, respectively) | 9,084,485 | $ 9,621,935 | |||
| Stock acquired during period, value | $ 925,000 | ||||
| ACT Wealth Academy Inc [Member] | |||||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
| Other investments (including $9,084,485 and $9,621,935 of investments in related parties as of March 31, 2022 and December 31, 2021, respectively) | $ 600 | ||||
| Stock acquired during period, shares | 6,000,000 | ||||
| Stock acquired during period, value | $ 600 | ||||
| Shares Issued, Price Per Share | $ 0.0001 | ||||
| Forfeiture Agreement [Member] | Agape ATP Corporation [Member] | |||||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
| Shares transferred | 16,500,000 | ||||
| Investment | 17,500,000 | ||||
| Other investments (including $9,084,485 and $9,621,935 of investments in related parties as of March 31, 2022 and December 31, 2021, respectively) | $ 1,650 | ||||
| Shares owned through investment, shares | $ 1,000,000 | ||||
| Value of shares owned through investment | 100 | ||||
| Share Price | $ 0.0001 | ||||
SCHEDULE OF COMPONENTS OF LEASE EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
| Operating Leases | ||
| Operating lease cost (included in general and administrative expenses in the Company's unaudited condensed statement of operations) | $ 21,553 | $ 68,297 |
| Cash paid for amounts included in the measurement of lease liabilities | $ 23,039 | $ 65,711 |
| Operating lease, weighted average remaining lease term | 11 months 15 days | 1 year 8 months 4 days |
| Operating lease weighted average discount rate percent | 4.00% | 4.00% |
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Operating Leases | ||
| Right-of-use assets | $ 80,274 | $ 101,221 |
| Short-term operating lease liabilities | 85,933 | 89,636 |
| Long-term operating lease liabilities | 18,760 | |
| Total operating lease liabilities | $ 85,933 | $ 108,396 |
SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Operating Leases | ||
| 2022 (remaining 9 months) | $ 68,944 | |
| 2023 | 18,780 | |
| Total lease payments | 87,724 | |
| Less: Imputed interest/present value discount | (1,791) | |
| Present value of lease liabilities | $ 85,933 | $ 108,396 |
OPERATING LEASES (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
| Lessor, Operating Lease, Description | The Company does not have any other leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet | |
| General and Administrative Expense [Member] | ||
| Lease costs | $ 27,904 | $ 77,644 |
| Office Space [Member] | HONG KONG | ||
| Operating lease term | 2 years | |
| Office Space [Member] | MALAYSIA | ||
| Operating lease term | 1 year | |
SCHEDULE OF ESTIMATED DERIVATIVE LIABILITIES AT FAIR VALUE ASSUMPTIONS (Details) - Black-Scholes-Merton [Member] |
3 Months Ended | 12 Months Ended |
|---|---|---|
|
Mar. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Fair Value of warrants | $ 4,033 | $ 9,935 |
| Measurement Input, Risk Free Interest Rate [Member] | ||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Fair value assumptions, measurement input, percentage | 2.4 | 1.9 |
| Measurement Input, Price Volatility [Member] | ||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Fair value assumptions, measurement input, percentage | 172 | 174 |
| Measurement Input, Expected Term [Member] | ||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Derivative liability measurement input term | 1 year 2 months 12 days | 1 year 4 months 24 days |
| Measurement Input, Expected Dividend Rate [Member] | ||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Fair value assumptions, measurement input, percentage | 0.00 | 0.00 |
DERIVATIVE LIABILITIES (Details Narrative) - USD ($) |
3 Months Ended | |||
|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
Dec. 31, 2018 |
|
| Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
| Warrants exercisable into common shares | 53,556 | 53,556 | ||
| Decrease in fair value of derivative liability | $ 5,902 | |||
| Derivative, gain (loss) on derivative, net | 5,902 | $ (19,521) | ||
| Warrant [Member] | ||||
| Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||||
| Derivative Liability | $ 4,033 | $ 9,935 | ||
SUMMARY OF WARRANTS ACTIVITY (Details) |
3 Months Ended |
|---|---|
|
Mar. 31, 2022
$ / shares
shares
| |
| Warrants | |
| Number of Shares Warrants, Outstanding Beginning Balance | shares | 53,556 |
| Weighted Average Exercise Price, Outstanding, Beginning Balance | $ / shares | $ 7.20 |
| Number of Shares Warrants, Granted | shares | |
| Weighted Average Exercise Price, Granted | $ / shares | |
| Number of Shares Warrants, Exercised | shares | |
| Weighted Average Exercise Price, Exercised | $ / shares | |
| Number of Shares Warrants, Expired/Cancelled | shares | |
| Weighted Average Exercise Price, Expired/Cancelled | $ / shares | |
| Number of Shares Warrants, Outstanding Ending Balance | shares | 53,556 |
| Weighted Average Exercise Price, Outstanding, Ending Balance | $ / shares | $ 7.20 |
| Share based compensation arrangement by share based payment award non option remaining contractual life warrants outstanding ending balance | 1 year 2 months 12 days |
| Number of Shares Warrants, Exercisable Ending Balance | shares | 53,556 |
| Weighted Average Exercise Price,Exercisable, Ending Balance | $ / shares | $ 7.20 |
| Share based compensation arrangement by share based payment award non option remaining contractual life warrants outstanding ending balance | 1 year 2 months 12 days |
WARRANTS (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Dec. 31, 2018 |
|
| Warrants | ||
| Warrants exercisable into common shares | 53,556 | 53,556 |
| Warrants exercise price per share | $ 7.20 | |
| Warrant expiration date | expire in 2023 | |
| Non option equity instruments intrinsic value | $ 0 |
SCHEDULE OF DUE FROM RELATED PARTIES (Details) (Parenthetical) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Related Party Transaction [Line Items] | ||
| Accounts receivable, related parties | $ 548 | $ 41 |
| Related Party A [Member] | ||
| Related Party Transaction [Line Items] | ||
| Accounts receivable, related parties | 4 | |
| Related Party B [Member] | ||
| Related Party Transaction [Line Items] | ||
| Accounts receivable, related parties | $ 25 | $ 41 |
SCHEDULE OF DUE FROM RELATED PARTIES (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Related Party Transaction [Line Items] | ||
| Accounts receivable from related parties | $ 548 | $ 41 |
| Accounts receivable from related parties | 548 | 41 |
| Due from related parties | 1,291,171 | 1,170,855 |
| Related Party A [Member] | ||
| Related Party Transaction [Line Items] | ||
| Accounts receivable from related parties | 82 | |
| Accounts receivable from related parties | 4 | |
| Related Party B [Member] | ||
| Related Party Transaction [Line Items] | ||
| Accounts receivable from related parties | 466 | 41 |
| Accounts receivable from related parties | 25 | 41 |
| Due from related parties | 623,330 | 503,361 |
| Related Party D [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due from related parties | 606,428 | 606,430 |
| Related Party G [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due from related parties | 1,413 | 1,064 |
| Related Party H [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due from related parties | $ 60,000 | $ 60,000 |
SCHEDULE OF DUE TO RELATED PARTIES (Details) - USD ($) |
Mar. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Related Party Transaction [Line Items] | ||
| Due to related parties | $ 701,949 | $ 757,283 |
| Related Party A [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due to related parties | 33,484 | 29,512 |
| Related Party B [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due to related parties | 1,506 | 1,513 |
| Related Party G [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due to related parties | 582 | 780 |
| Related Party I [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due to related parties | 3,365 | 2,257 |
| Related Party J [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due to related parties | 622,024 | 701,781 |
| Related Party K [Member] | ||
| Related Party Transaction [Line Items] | ||
| Due to related parties | $ 40,988 | $ 21,440 |
SCHEDULE OF INCOME FROM OR EXPENSES TO RELATED PARTIES (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
| Related Party Transaction [Line Items] | ||
| General and administrative expenses to related parties | $ 18,511 | $ 5,524 |
| General and Administrative Expense [Member] | ||
| Related Party Transaction [Line Items] | ||
| General and administrative expenses to related parties | 18,511 | 5,524 |
| Other Expense [Member] | ||
| Related Party Transaction [Line Items] | ||
| Impairment of other investments with related parties | 536,400 | |
| Service [Member] | ||
| Related Party Transaction [Line Items] | ||
| Revenue from related parties | 59,085 | 288,471 |
| Related Party A [Member] | General and Administrative Expense [Member] | ||
| Related Party Transaction [Line Items] | ||
| General and administrative expenses to related parties | 1,375 | 4,558 |
| Related Party A [Member] | Service [Member] | ||
| Related Party Transaction [Line Items] | ||
| Revenue from related parties | 5,846 | 58,276 |
| Related Party B [Member] | General and Administrative Expense [Member] | ||
| Related Party Transaction [Line Items] | ||
| General and administrative expenses to related parties | 2,096 | 966 |
| Related Party B [Member] | Other Expense [Member] | ||
| Related Party Transaction [Line Items] | ||
| Impairment of other investments with related parties | 536,400 | |
| Related Party B [Member] | Service [Member] | ||
| Related Party Transaction [Line Items] | ||
| Revenue from related parties | 48,992 | 220,127 |
| Related Party C [Member] | Service [Member] | ||
| Related Party Transaction [Line Items] | ||
| Revenue from related parties | 115 | |
| Related Party E [Member] | Service [Member] | ||
| Related Party Transaction [Line Items] | ||
| Revenue from related parties | 3,794 | 3,819 |
| Related Party G [Member] | Service [Member] | ||
| Related Party Transaction [Line Items] | ||
| Revenue from related parties | 167 | 3,781 |
| Related Party I [Member] | General and Administrative Expense [Member] | ||
| Related Party Transaction [Line Items] | ||
| General and administrative expenses to related parties | 4,288 | |
| Related Party I [Member] | Service [Member] | ||
| Related Party Transaction [Line Items] | ||
| Revenue from related parties | 286 | 2,353 |
| Related Party K [Member] | General and Administrative Expense [Member] | ||
| Related Party Transaction [Line Items] | ||
| General and administrative expenses to related parties | $ 10,752 | |
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
12 Months Ended | |
|---|---|---|
Dec. 31, 2018 |
Mar. 31, 2022 |
|
| Related Party Transaction [Line Items] | ||
| Equity method investment, ownership percentage | 100.00% | |
| Related Party B [Member] | Minimum [Member] | ||
| Related Party Transaction [Line Items] | ||
| Equity method investment, ownership percentage | 1.00% | |
| Related Party B [Member] | Maximum [Member] | ||
| Related Party Transaction [Line Items] | ||
| Equity method investment, ownership percentage | 18.00% | |
| Related Party H [Member] | ||
| Related Party Transaction [Line Items] | ||
| Equity method investment, ownership percentage | 49.00% | 48.00% |
| Business combination, consideration transferred | $ 368,265 | |
| Impairment of other investment | $ 368,265 |
SCHEDULE OF SUMMARIZED FINANCIAL INFORMATION (Details) - USD ($) |
3 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
Dec. 31, 2021 |
|||||
| Segment Reporting Information [Line Items] | |||||||
| Revenues | [1] | $ 575,846 | $ 589,573 | ||||
| Cost of revenues | [1] | (202,410) | (95,617) | ||||
| Depreciation and amortization | [1] | (42,630) | (42,664) | ||||
| Impairment | [1] | (536,400) | |||||
| Net income (loss) | [1] | (1,009,870) | (6,295,142) | ||||
| Total assets | 21,434,965 | [1] | 20,190,387 | [1] | $ 22,710,681 | ||
| Capital expenditures for long-lived assets | [1] | 2,495 | 688 | ||||
| HONG KONG | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenues | [1] | 426,128 | 378,163 | ||||
| Cost of revenues | [1] | (136,492) | (30,390) | ||||
| Depreciation and amortization | [1] | (4,059) | (2,576) | ||||
| Impairment | [1] | (536,400) | |||||
| Net income (loss) | [1] | (815,203) | (6,233,251) | ||||
| Total assets | [1] | 17,329,728 | 15,983,599 | ||||
| Capital expenditures for long-lived assets | [1] | ||||||
| MALAYSIA | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenues | [1] | 111,585 | 135,901 | ||||
| Cost of revenues | [1] | (56,126) | (57,816) | ||||
| Depreciation and amortization | [1] | (8,232) | (8,390) | ||||
| Impairment | [1] | ||||||
| Net income (loss) | [1] | (52,518) | 76,036 | ||||
| Total assets | [1] | 1,174,789 | 963,633 | ||||
| Capital expenditures for long-lived assets | [1] | 1,284 | 688 | ||||
| CHINA | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenues | [1] | 38,133 | 75,509 | ||||
| Cost of revenues | [1] | (9,792) | (7,411) | ||||
| Depreciation and amortization | [1] | (30,339) | (31,698) | ||||
| Impairment | [1] | ||||||
| Net income (loss) | [1] | (142,149) | (137,927) | ||||
| Total assets | [1] | 2,930,448 | 3,243,155 | ||||
| Capital expenditures for long-lived assets | [1] | 1,211 | |||||
| Real Estate Business [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenues | 220,813 | 30,238 | |||||
| Cost of revenues | (138,134) | (11,815) | |||||
| Depreciation and amortization | (8,232) | (40,020) | |||||
| Impairment | |||||||
| Net income (loss) | 59,531 | 8,445 | |||||
| Total assets | 2,166,174 | 2,461,040 | |||||
| Capital expenditures for long-lived assets | |||||||
| Service business [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenues | 355,033 | 559,335 | |||||
| Cost of revenues | (64,276) | (83,802) | |||||
| Depreciation and amortization | (32,048) | (249) | |||||
| Impairment | |||||||
| Net income (loss) | (894,310) | (326,641) | |||||
| Total assets | 8,462,488 | 5,747,198 | |||||
| Capital expenditures for long-lived assets | 2,495 | 688 | |||||
| Corporate Segment [Member] | |||||||
| Segment Reporting Information [Line Items] | |||||||
| Revenues | |||||||
| Cost of revenues | |||||||
| Depreciation and amortization | (2,350) | (2,395) | |||||
| Impairment | (536,400) | (5,976,946) | |||||
| Net income (loss) | (175,091) | ||||||
| Total assets | 10,806,303 | 11,982,149 | |||||
| Capital expenditures for long-lived assets | |||||||
| |||||||
SEGMENT INFORMATION (Details Narrative) |
3 Months Ended |
|---|---|
|
Mar. 31, 2022
Integer
| |
| Segment Reporting [Abstract] | |
| Number of reportable operating segments | 2 |
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