10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q 

(Mark One)

☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: September 30, 2021
☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

FOR THE TRANSITION PERIOD FROM __________ TO __________

COMMISSION FILE NUMBER 000-55661

EOS Inc.

(Exact name of registrant as specified in its charter)

Nevada	30-0873246
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7F.-1, No. 162, Sec. 2, Zhongshan N. Rd., Zhongshan District

Taipei City 10452, Taiwan

(Address of principal executive offices, Zip Code)

+886-2-2586-8300

(Registrant’s telephone number, including area code)

_____________________________________________

(Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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. Yes ☒     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒     No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-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 ☐     No ☒

The number of shares of registrant’s common stock outstanding, as of November 13, 2021 is 180,065,254.

Securities registered pursuant to Section 12(b) of the Act: None.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	F-1
	Consolidated Balance Sheets	F-2
	Consolidated Statements of Operations and Comprehensive Income (Loss)	F-3
	Consolidated Statements of Stockholders’ Equity	F-4
	Consolidated Statements of Cash Flows	F-5
	Notes to Consolidated Financial Statements	F-6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	3
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	18
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 3.	Defaults Upon Senior Securities	19
Item 4.	Mine Safety Disclosures	19
Item 5.	Other Information	19
Item 6.	Exhibits	20
SIGNATURES		21

2

FINANCIAL STATEMENT SCHEDULES

Financial Statements:
Consolidated Balance Sheets	F-2
Consolidated Statements of Operations and Comprehensive Income (Loss)	F-3
Consolidated Statements of Changes in Stockholders’ Equity	F-4
Consolidated Statements of Cash Flows	F-5
Notes to Consolidated Financial Statements	F-6

F-1

EOS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	September 30,		December 31,
	2021		2020
Assets
Current Assets
Cash and cash equivalents	$	200,730	$	122,482
Accounts receivable		243,933		175,766
Inventory, net		161,866		449,227
Advance to suppliers		277,441		191,633
Security deposits		1,122,835		-
Prepaid expenses and other current assets		23,042		26,459
Total current assets		2,029,847		965,567
Property and equipment, net		8,097		8,175
Security deposits		-		1,113,010
Total Assets	$	2,037,944	$	2,086,752
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	-	$	18,415
Other payable and accrued expenses		47,851		81,359
Due to shareholders		19,281		107,791
Income tax payable		79,046		105,969
Other current liabilities		437,500		250,000
Short-term loan		79,339		-
Total current liabilities		663,017		563,534
Long-term loan		223,533		166,985
Total liabilities		886,550		730,519
Commitments and Contingencies				-
Stockholders’ Equity
Preferred stock ($0.001 par value, 5,000,000 shares authorized, 1,500,000 and zero shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively)		1,500		-
Common stock ($0.001 par value; 575,000,000 shares authorized, 180,065,254 and 74,123 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively)		180,065		74
Additional paid-in capital		41,030		186,474
Retained earnings		804,234		1,058,090
Accumulated other comprehensive income		100,338		87,051
Total stockholders’ equity		1,127,167		1,331,689
Non-controlling interest		24,227		24,544
Total Equity		1,151,394		1,356,233
Total Liabilities and Stockholders’ Equity	$	2,037,944	$	2,086,752

The accompanying notes are an integral part of these consolidated financial statements.

F-2

EOS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	For the Nine Months Ended September 30,						For the Three Months Ended September 30,
	2021			2020			2021			2020
Net sales	$	886,020			1,417,026			549,242			590,293
Cost of sales		392,891			167,539			373,100			60,525
Gross profit		493,129			1,249,487			176,142			529,768
Selling, general and administrative expenses		782,242			722,588			276,996			189,440
Income from operations		(289,113	)		526,899			(100,854	)		340,328
Other income (expense)
Interest income (expense)		(1,043	)		149			(826	)		1
Other income (expense)		(48,676	)		7,415			(40,198	)		7,405
Gain (loss) on foreign currency exchange		-			-			-			16,900
Gain (loss) on investment in equity securities		33,411			(20,750	)		-			-
Total other income (expense)		(16,308	)		(13,186	)		(41,024	)		24,306
Income (loss) before income tax provision		(305,421	)		513,713			(141,878	)		364,634
Income tax provision		(51,058	)		-			(99	)		-
Net Income (loss)	$	(254,363	)		513,713			(141,779	)		364,634
Other Comprehensive Income (Loss):
Net income (loss) attributable to non-controlling interests	$	(507	)		9,014			-			17,747
Net income (loss) attributable to EOS and subsidiaries		(253,856	)		504,699			(141,779	)		346,887
Foreign currency translation adjustment, net of tax		13,287			55,733			4,431			31,665
Comprehensive Income (loss)	$	(240,569	)		560,432			(137,348	)		378,552
Net income per share:
Basic and diluted	$	(0.01	)		6.93			(0.00	)		4.92
Weighted average number of common shares:
Basic and diluted		42,592,727			74,123			126,260,906			74,123

The accompanying notes are an integral part of these consolidated financial statements.

F-3

EOS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

	Common Stock						Preferred Stock				Accumulated Additional Paid-in			Retained			Accumulated Other Comprehensive Income			Non-controlling
	Shares			Amount			Shares		Amount		Capital			Earnings			(Loss)			Interest			Total
Balance at December 31, 2020		74,123		$	74			-	$	-	$	186,474		$	1,058,090		$	87,051		$	24,544		$	1,356,233
Foreign currency translation adjustment		-			-			-		-		-						(23,514	)		(514	)		(24,028	)
Net income		-			-			-		-		-			68,936			-			3,990			72,926
Balance at March 31, 2021		74,123		$	74			-	$	-	$	186,474		$	1,127,026		$	63,537		$	28,020			1,405,131
Cancellation of common stock		(10,000	)		(10	)						(33,401	)											(33,411	)
Reverse Stock Split Adjustment		1,131			1							(1	)											-
Foreign currency translation adjustment		-			-							-			-			32,370			704			33,074
Net income		-			-							-			(181,013	)		-			(4,497	)		(185,510	)
Balance at June 30, 2021		65,254		$	65			-	$	-	$	153,072			946,013		$	95,907		$	24,227			1,219,284
Shares Issued for Liability Converted		90,000,000			90,000							(20,542	)											69,458
Shares Issued for minority controlling interests of its subsidiary		90,000,000			90,000							(90,000	)											-
Issuance of Preferred Stock to related party								1,500,000		1,500		(1,500	)											-
Foreign currency translation adjustment																		4,431			-			4,431
Net income															(141,779	)					-			(141,779	)
Balance at September 30, 2021		180,000,000		$	180,065			1,500,000	$	1,500	$	41,030			804,234		$	100,338		$	24,227			1,151,394

	Common Stock				Preferred Stock				Additional Paid-in			Retained			Accumulated Other Comprehensive Income			Non-controlling
	Shares		Amount		Shares		Amount		Capital			Earnings			(Loss)			Interest			Total
Balance at December 31, 2019		74,123	$	74		-	$	-	$	124,794		$	2,577,898		$	12,969		$	-		$	2,715,735
Stock-based compensation		-		-		-		-		62,500			-			-			-			62,500
Foreign currency translation adjustment		-		-		-		-		-			-			(19,331	)		-			(19,331	)
Net income		-		-		-		-		-			353,231			-			-			353,231
Balance at March 31, 2020		74,123	$	74		-	$	-	$	187,294		$	2,931,129		$	(6,362	)	$	-		$	3,112,135
Stock-based compensation		-		-		-		-		62,500			-			-			-			62,500
Contributions from non-controlling interest		-		-		-		-		-			-			-			33,398			33,398
Foreign currency translation adjustment		-		-		-		-		-			-			43,399			-			43,399
Net loss		-		-		-		-		-			(195,420	)		-			(8,732	)		(204,152	)
Balance at June 30, 2020		74,123	$	74		-	$	-		249,794		$	2,735,709		$	37,037		$	24,666		$	3,047,280
Stock-based compensation		-		-		-		-		(125,000	)		-			-			-			(125,000	)
Contributions from non-controlling interest		-		-		-		-		-			-			-						-
Foreign currency translation adjustment		-		-		-		-		-			-			31,665			2,020			33,685
Net loss		-		-		-		-		-			346,887			-			17,747			364,634
Balance at September 30, 2020		74,123	$	74		-	$	-		124,794		$	3,082,596		$	68,702		$	44,433		$	3,320,599

The accompanying notes are an integral part of these consolidated financial statements

F-4

EOS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended September 30,
	2021			2020
Cash Flows from Operating Activities
Net income (loss)	$	(254,363	)	$	513,713
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,677			1,733
Loss on investment in equity securities		-			20,750
Unrealized (gain) loss from investment		(33,411	)		-
Changes in assets and liabilities:
Decrease (increase) in accounts receivable		(64,569	)		(318,266	)
Decrease (increase) in inventory		289,835			(65,011	)
Decrease (increase) in advance to suppliers		(83,766	)		122,388
Decrease (increase) in security deposits and other assets		3,636			909,448
Increase (decrease) in accounts payable		(20,575	)		235,609
Increase (decrease) in accrued expenses		153,419			14,145
Increase (decrease) in income tax payable		(27,728	)		(9,977	)
Net cash used in operating activities		(35,845	)		(394,364	)
Cash flows from Investing activities
Purchase of equipment		(1,528	)		(2,194	)
Net cash used in investing activities		(1,528	)		(2,194	)
Cash flows from Financing activities
Proceeds from (Repayment to) related party		(19,698	)		69,810
Proceeds from (Repayment to) borrowings		133,854			167,918
Proceeds from investments by non-controlling interests in subsidiary		-			33,398
Net cash provided by financing activities		114,156			271,126
Effect of exchange rate changes on cash and cash equivalents		1,465			4,447
Net decrease in cash and cash equivalents		78,248			(120,985	)
Cash and Cash Equivalents
Beginning		122,482			295,594
Ending	$	200,730		$	174,609
Supplemental Disclosure of Cash Flows
Cash paid during the periods for:
Interest	$	2,179		$	-
Income taxes	$	(51,058	)	$	-
Non-cash investing and financing activities:
Related party debt converted to Common stock		69,459			-
Issuance of Common Stock for minority controlling interests of its subsidiary		90,000			-
Issuance of Preferred Stock to related party		1,500			-

The accompanying notes are an integral part of these consolidated financial statements.

F-5

EOS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDAED FINANCIAL STATEMENTS (UNAUDITED)

Note 1. NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial reporting and in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial statements contained in this report reflect all adjustments that are normal and recurring in nature and considered necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The year-end balance sheet data were derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. The results of operations for the interim period are not necessarily indicative of the results expected for the full year. These unaudited consolidated financial statements, footnote disclosures, and other information should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Organization

EOS Inc. was incorporated on April 3, 2015 in the State of Nevada. The Company’s business plan is to market and distribute skin care products, including masks and serums.

On November 18, 2016, the Company set up a wholly-owned subsidiary in Taiwan to assist the Company to promote the business in Taiwan.

Emperor Star International Trade Co., Ltd., (“Emperor Star”), was incorporated on November 16, 2015 under the laws of Taiwan. Emperor Star is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers.

On May 3, 2017, the Company entered into and closed a Share Purchase and Sale Agreement (the “Purchase Agreement”) with Emperor Star and the shareholder of Emperor Star to acquire all issued and outstanding shares of Emperor Star in consideration of $30,562 in cash. As a result of the Purchase Agreement, Emperor Star became the Company’s wholly owned subsidiary. Upon consummation of the transaction, the Company has assumed the business of Emperor Star and ceased to be a shell company.

On September 20, 2018, the Company set up another wholly-owned subsidiary, EOS International Inc. (“EOS(BVI)”), under the laws of British Virgin Islands. EOS(BVI) is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers.

F-6

On March 1, 2019, EOS(BVI) set up a subsidiary, Shanghai Maosong Co., Ltd (“Maosong”), under the laws of People’s Republic of China. Maosong is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers in China.

On June 2, 2020, EOS(BVI) 83.33% owner, and Shanghai Qifan Qiye Management Co., Ltd. (“Qifan”) 16.67% owner of Maosong resolute to change the registered capital of Maosong to RMB 12,000,000,000 (1.2 billion) and that EOS to contribute certain Intellectual Property as registered capital of Shanghai Maosong. Intellectual Property owned by EOS International Inc was valued at RMB 10,000,000,000 (1 billion) and Intellectual Property owned by Qifan was valued at RMB 2,000,000,000 (200 million).

On July 13, 2021, EOS(BVI), MaoSong, and Qifan entered into a Shareholder Agreement where Qifan (i) delegate its 16.67% equity voting rights, powers, or benefits in Maosong to EOS(BVI); (ii) grant EOS(BVI) an irrevocable, unconditional, exclusive option to purchase Maosong’s equity interest; (iii) the right to receive any proceeds from the Maosong’s Equity Interest; (iv) pledge its existing or any prospective Maosong equity interest to EOS Int’l; as a result EOS(BVI) retains 100% control of MaoSong and the 16.67% noncontrolling interest are consolidated.

Principles of Consolidation

The accompanying consolidated financial statements, including the accounts of EOS Inc. and its wholly owned subsidiaries in Taiwan, British Virgin Islands, and People’s Republic of China, have been prepared in conformity with accounting principles generally accepted in the United States of America. Since the Company and Emperor Star are entities under common control prior to the acquisition of Emperor Star, the transaction is accounted for as a restructuring transaction. All assets and liabilities of Emperor Star were transferred to the Company at their respective carrying amounts on the date of transaction. The Company has recast prior period financial statements to reflect the conveyance of Emperor Star’s common shares as if the restructuring transaction had occurred as of the earliest date of the consolidated financial statements. All material intercompany accounts, transactions, and profits have been eliminated in consolidation. The nature of and effects on earnings per share (EPS) of non-recurring intra-entity transactions involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast to include the earnings (or losses) of the transferred net assets.

The functional currency of the subsidiaries in Taiwan is the New Taiwan dollars and the subsidiary in People’s Republic of China is the Chinese Yuan, or Renminbi; however, the accompanying consolidated financial statements have been translated and presented in United States Dollars ($). In the accompanying consolidated financial statements and notes, “$”, “US$” and “U.S. dollars” mean United States dollars, “NT$” and “NT dollars” mean New Taiwan dollars, and “CNY” means Chinese Yuan.

Use of Estimates

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

Classification

Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net income nor retained earnings.

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.

Accounts Receivable

Accounts receivable are stated at carrying value less estimates made for doubtful receivables. An allowance for impairment of trade receivables is established if the collection of a receivable becomes doubtful. Such receivable becomes doubtful when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. An impairment loss is recognized in the statement of income, as are subsequent recoveries of previous impairments.

F-7

Inventory

Inventory is stated at the lower of cost and net realizable value. Net realizable value (NRV) is defined as estimated selling prices less costs of completion, disposal, and transportation. Inventory consists mainly of finished goods held for resale. Cost is determined on a weighted average cost method. The Company periodically reviews the age and turnover of its inventory to determine whether any inventory has become obsolete or has declined in value, and incurs a charge to operations for known and anticipated inventory obsolescence.

Property and Equipment

Property and equipment are carried at cost net of accumulated amortization. Expenditures that improve the functionality of the related asset or extend the useful life are capitalized. When property and equipment is retired or otherwise disposed of, the related gain or loss is included in operating income. Leasehold improvements are depreciated on the straight-line method over the shorter of the remaining lease term or estimated useful life of the asset. Depreciation is calculated on the straight-line method, including property and equipment under capital leases, generally over five years. Depreciation expense is $1,677 and $1,733 for the nine months ended September 30, 2021 and 2020, respectively.

Impairment of Long-Lived Assets

The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve breakeven operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. Management has determined that no impairments of long-lived assets currently exist as of September 30, 2021 and December 31, 2020.

Long-term Equity Investment

The Company acquires equity investment to promote business and strategic objectives. The Company accounts for non-marketable equity and other equity investments for which the Company does not have control over the investees as:

• Equity method investments when the Company has the ability to exercise significant influence, but not control, over the investee. Its proportionate share of the income or loss is recognized monthly and is recorded in gain (loss) on equity investments.

• Non-marketable cost method investments when the equity method does not apply.

F-8

Significant judgment is required to identify whether an impairment exists in the valuation of the Company’s non-marketable equity investments, and therefore the Company considers this a critical accounting estimate. Its yearly analysis considers both qualitative and quantitative factors that may have a significant impact on the investee’s fair value. Qualitative analysis of its investments involves understanding the financial performance and near-term prospects of the investee, changes in general market conditions in the investee’s industry or geographic area, and the management and governance structure of the investee. Quantitative assessments of the fair value of its investments are developed using the market and income approaches. The market approach includes the use of comparable financial metrics of private and public companies and recent financing rounds. The income approach includes the use of a discounted cash flow model, which requires significant estimates regarding the investees’ revenue, costs, and discount rates. The Company’s assessment of these factors in determining whether an impairment exists could change in the future due to new developments or changes in applied assumptions.

Other-Than-Temporary Impairment

The Company’s long-term equity investments are subject to a periodic impairment review. Impairments affect earnings as follows:

• Marketable equity securities include the consideration of general market conditions, the duration and extent to which the fair value is below cost, and the Company’s ability and intent to hold the investment for a sufficient period of time to allow for recovery of value in the foreseeable future. The Company also considers specific adverse conditions related to the financial health of, and the business outlook for, the investee, which may include industry and sector performance, changes in technology, operational and financing cash flow factors, and changes in the investee’s credit rating. The Company records other-than-temporary impairments on marketable equity securities and marketable equity method investments in gain (loss) on equity investments.

• Non-marketable equity investments based on the Company’s assessment of the severity and duration of the impairment, and qualitative and quantitative analysis of the operating performance of the investee; adverse changes in market conditions and the regulatory or economic environment; changes in operating structure or management of the investee; additional funding requirements; and the investee’s ability to remain in business. A series of operating losses of an investee or other factors may indicate that a decrease in value of the investment has occurred that is other than temporary and that shall be recognized even though the decrease in value is in excess of what would otherwise be recognized by application of the equity method. A loss in value of an investment that is other than a temporary decline shall be recognized. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. The Company records other-than-temporary impairments for non-marketable cost method investments and equity method investments in gain (loss) on equity investments.

F-9

Revenue Recognition

Pursuant to ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines is within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customers. At inception of the contract, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Merchandise sales: The Company recognizes sales revenues from merchandise sales when customers obtain control of the Company’s products, which typically occurs upon delivery to customer. Merchandise sales revenues are recorded at the sales price, or “transaction price”.

Trade discount and allowances: The Company generally does not provide invoice discounts on product sales to its customers for prompt payment.

Product returns: The Company generally does not provide customers with the right to return a product for a full or partial refund, a credit, or an exchange for another product.

To date, product allowance and returns have been minimal and, based on its experience, the Company believes that returns of its products will continue to be minimal.

The following tables provide details of revenue by major products and by geography.

F-10

Revenue by Major Products

For the nine months ended September 30, 2021:
Water purifier machine	$	886,020
Automobile carbon reduction machine		-
Nutrition supplement		-
Total	$	886,020

For the nine months ended September 30, 2020:
Water purifier machine	$	1,181,007
Automobile carbon reduction machine		131,882
Nutrition supplement		70,629
Software		33,508
Total	$	1,417,026

F-11

Revenue by Geography

For the nine months ended September 30, 2021:
Asia Pacific	$	886,020
Total	$	886,020

For the nine months ended September 30, 2020:
Asia Pacific	$	1,417,026
Total	$	1,417,026

Leases — The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) using the modified retrospective approach, electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, the Company presented the disclosures which were required under ASC 840.

The Company applied the following practical expedients in the transition to the new standard and allowed under ASC 842:

Practical Expedient	Description
Reassessment of expired or existing contracts	The Company elected not to reassess, at the application date, whether any expired or existing contracts contained leases, the lease classification for any expired or existing leases, and the accounting for initial direct costs for any existing leases.
Use of hindsight	The Company elected to use hindsight in determining the lease term (that is, when considering options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of right-to-use assets.
Reassessment of existing or expired land easements	The Company elected not to evaluate existing or expired land easements that were not previously accounted for as leases under ASC 840, as allowed under the transition practical expedient. Going forward, new or modified land easements will be evaluated under ASU No. 2016-02.
Separation of lease and non-lease components	Lease agreements that contain both lease and non-lease components are generally accounted for separately.
Short-term lease recognition exemption	The Company also elected the short-term lease recognition exemption and will not recognize ROU assets or lease liabilities for leases with a term less than 12 months.

The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. The Company’s future minimum based payments used to determine the Company’s lease liabilities mainly include minimum based rent payments. As most of Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

F-12

The adoption of ASC 842 had no substantial impact on the Company’s consolidated balance sheets. The most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, adoption of this standard resulted in the recognition of operating lease right-of-use assets of $8,235 and operating lease liabilities of $8,235 on the consolidated balance sheet as of January 1, 2019. The adoption of ASC 842 did not result in a cumulative-effect adjustment to the opening balance of retained earnings.

In addition, the adoption of the standard did not have a material impact on the Company’s results of operations or cash flows. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur.

Advertising Costs

Advertising costs are expensed at the time such advertising commences. Advertising expenses were $399 and $17,795 for the nine months ended September 30, 2021 and 2020, respectively.

Post-retirement and Post-employment Benefits

The Company’s subsidiaries in Taiwan adopted the government mandated defined contribution plan pursuant to the Taiwan Labor Pension Act (the “Act”). Such labor regulations require that the rate of contribution made by an employer to the Labor Pension Fund per month shall not be less than 6% of the worker’s monthly salaries. Pursuant to the Act, the Company makes monthly contribution equal to 6% of employees’ salaries to the employees’ pension fund. The Company has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which were expensed as incurred, were $4,541 and $3,852 for the nine months ended September 30, 2021 and 2020, respectively. Other than the above, the Company does not provide any other post-retirement or post-employment benefits.

Fair Value Measurements

FASB ASC 820, “Fair Value Measurements” defines fair value for certain financial and non-financial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:

Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.

F-13

The carrying values of certain assets and liabilities of the Company, such as cash and cash equivalents, accounts receivable, inventory, advance to suppliers, prepaid expenses, accounts payable, accrued expenses, and due to shareholders, approximate fair value because of to their relatively short maturities.

Net Income Per Share

Basic income per share is computed by dividing net income by weighted average number of shares of common stock outstanding during each period. Diluted income per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents, and potentially dilutive securities outstanding during each period. For the nine months ended September 30, 2021 and 2020, the Company does not have any outstanding common stock equivalents; therefore, a separate computation of diluted income per share is not presented.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.

Concentration of Credit Risk

Cash and cash equivalents: The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions in Taiwan, but these investments may be in excess of the insurance limits of Taiwan Central Deposit Insurance Corporation (the “TCDIC”). The Company does not enter into financial instruments for hedging, trading or speculative purposes. Concentration of credit risk with respect to trade and notes receivables is limited due to the wide variety of customers and markets in which the Company transacts business, as well as their dispersion across many geographical areas. As of September 30, 2021, the Company had approximately $92,387 in excess of TCDIC insured limits. The Company has not experienced any losses in such accounts.

Customers: The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral.

For the nine months ended September 30, 2021, one customer accounted for more than 10% of the Company’s total revenues, representing approximately 100% of its total revenues, and 100% of accounts receivable in aggregate at September 30, 2021.

Customer	Net sales For the nine months ended September 30, 2021		Accounts receivable balance as of September 30, 2021
A	$	886,020	$	243,933

For the nine months ended September 30, 2020, one customer accounted for more than 10% of the Company’s total revenues, representing approximately 83.34% of its total revenues, and 71.43% of accounts receivable in aggregate at September 30, 2020.

Customer	Net sales For the nine months ended September 30, 2020		Accounts receivable balance as of September 30, 2020
A	$	1,181,007	$	1,801,027

F-14

Suppliers: The Company’s inventory is purchased from various suppliers.

For the nine months ended September 30, 2021, three suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 12.49%, 69.30% and 12.74% of total net purchase, and 0% of accounts payable in aggregate at September 30, 2021, respectively:

Supplier	Net purchase for the nine months ended September 30, 2021		Accounts payable balance as of nine 30, 2021
A	$	-	$	-
B	$	-	$	-
C	$	-	$	-
D	$	12,930	$	-
E	$	71,712	$	-
F	$	13,189	$	-

For the nine months ended September 30, 2020, three suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 39%, 31% and 22% of total net purchase, and 0% of accounts payable in aggregate at September 30, 2020, respectively:

Supplier	Net purchase for the nine months ended September 30, 2020		Accounts payable balance as of September 30, 2020
A	$	60,547	$	-
B	$	49,300	$	-
C	$	34,000	$	-

Foreign-currency Transactions

Foreign-currency transactions are recorded in New Taiwan dollars (“NTD”) and Chinese Yuan (“CNY”) at the rates of exchange in effect when the transactions occur. Gains or losses resulting from the application of different foreign exchange rates when cash in foreign currency is converted into New Taiwan dollars and Chinese Yuan, or when foreign-currency receivables or payables are settled, are credited or charged to income in the year of conversion or settlement. On the balance sheet dates, the balances of foreign-currency assets and liabilities are restated at the prevailing exchange rates and the resulting differences are charged to current income except for those foreign currencies denominated investments in shares of stock where such differences are accounted for as translation adjustments under stockholders’ equity.

F-15

Translation Adjustment

The accounts of the Company’s subsidiaries were maintained, and their financial statements were expressed in New Taiwan Dollar (“NTD”) and Chinese Yuan (“CNY”). Such financial statements were translated into U.S. Dollars (“$” or “USD”) in accordance ASC 830, “Foreign Currency Matters”, with the NTD and CNY as the functional currency. According to the Statement, all assets and liabilities are translated at the current exchange rate, common stock and additional paid-in capital are translated at the historical rates, and income statement items are translated at an average exchange rate for the period. The resulting translation adjustments are reported under accumulated other comprehensive income (loss) as a component of stockholders’ equity.

Comprehensive Income (loss)

Comprehensive income (loss) includes accumulated foreign currency translation gains and losses. The Company has reported the components of comprehensive income (loss) on its consolidated statements of operations and other comprehensive income (loss).

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL), the revised effective date is January 2023.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.

Note 2. LEASE

The Company has no finance leases. The Company has terminated an office facility lease with Wanhong Enterprise Co., Ltd on September 28, 2020. The Company has entered into new lease agreement with Xiuling Huang on September 29, 2020 for the period of approximately 9 months. After the lease term expired on June 14, 2021, the Company has entered into new lease agreement with Xiuling Huang on June 15, 2021 for the period of 1 year.

As of September 30, 2021, operating lease expense was $38,100. Future lease payable was $17,778.

Note 3. LONG-TERM INVESTMENT

On January 15, 2019, the Company, A-Best Wire Harness & Components Co., Ltd. (“A-Best” or the “Investee”), a company formed under the laws of Taiwan, and Mr. Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into an investment cooperation agreement (the “Investment Cooperation Agreement”), pursuant to which the Company issued 10,000 shares of its common stock to Mr. Ing-Ming Lai to purchase twenty percent (20%) of the issued and outstanding equity in A-Best. On May 24, 2019, the Company consummated the shareholder registration of A-Best with the Investment Commission of Ministry of Economic Affairs of Taiwan and issued 10,000 shares of its common stock to Mr. Ing-Ming Lai to acquire 20% of the issued and outstanding equity in A-Best.

F-16

On March 2, 2020, the Company, A-Best, and Ing-Ming Lai, (collectively, the “Parties”) entered into a strategic alliance agreement (the “Strategic Alliance Agreement”), pursuant to which the Parties redefined their cooperation with respect to the sales and distribution of A-Best’s micro-ceramic speakers. In accordance with the Strategic Alliance Agreement, A-Best, Mr. Ing-Ming Lai and the Company terminated the Investment Cooperation Agreement dated January 15, 2019 entered by and among the Parties and as a result the Company agreed to return 20% of the equity interest in A-Best to Mr. Ing-Ming Lai, which was valued at approximately $33,411 by the Parties.

Furthermore, subject to the terms and conditions of the Strategic Alliance Agreement, A-Best has granted the Company the exclusive sale and distribution right of A-Best’s micro-ceramic speakers in the world for one (1) year (the “Term”), which may be renewed with mutual consent of the Parties two months prior to the expiration of the Term, while A-Best retains its own right to sell and distribute the micro-ceramic speakers on its own. In consideration for the exclusive distribution right of A-Best’s speakers under the Strategic Alliance Agreement, the Company agreed to have A-Best keep the Company’s 10,000 shares of common stock issued under the Investment Cooperation Agreement and the Company may keep the revenue and profits generated from the sale of A-Best speakers until the total revenue from such speakers reaches $15 million U.S. dollars.

On April 22, 2020, the Company returned 20% equity interest in A-Best to Mr. Ing-Ming Lai pursuant to the Strategic Alliance Agreement. As of April 22, 2020, the Company holds 20% equity interest in A-Best and uses equity method to account for its equity investment as prescribed in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). Equity method adjustments include the Company’s proportionate share of investee’s income or loss and other adjustments required by the equity method. For the period from January 1, 2020, to April 22, 2020, the share of loss from investment accounted for using equity method was $2,848. As a result of the return of equity interest, the Company also recognized loss on investment in equity securities of $17,902 for the same period.

Summarized financial information for the Company’s equity method investee, A-Best, is as follows:

Balance Sheets

	April 22,			December 31,
	2020			2019
Current assets	$	38,303		$	42,818
Non-current assets		779			857
Current liabilities		1,406,166			1,372,351
Shareholders’ deficit		(1,367,084	)		(1,328,676	)

Statement of Operation

	For the period from January 1, 2020 to April 22, 2020.
Net sales	$	854
Gross profit		498
Net loss		(14,240	)
Share of loss from investment accounted for using equity method		(2,848	)

F-17

On May 26, 2020, EOS Inc. increased its investment in Emperor Star by $134,004 (NTD$4,000,000). The Company also received the contributions to Emperor Star from non-controlling interests in the amount of $33,398 (NTD$1,000,000). As a result, the Company owns 83% equity interest of Emperor Star as of September 30, 2020, which is no longer a wholly-owned subsidiary.

On April 12, 2021, A-Best, and Mr. Ing-Ming Lai entered into a termination agreement (the “Termination Agreement”) to terminate the agreement of Strategic Alliance Agreement dated March 2, 2020. In the agreement, Ing-Ming Lai has proceeded to return a total of 10,000 shares in EOS Inc, back to the Company.

The Board of Directors of this Corporation authorized the return of the 10,000 EOSS shares from Ing Ming Lai.

Note 4. SECURITY DEPOSITS

On November 21, 2019, the Company and Shuang Hua International Culture Media Co, Ltd. (“Shuang Hua”), a corporation formed under laws of Taiwan, entered into an exclusive copyright and distribution agreement (the “Agreement”), pursuant to which, subject to the terms and condition therein, Shuang Hua granted the Company an exclusive right to produce, market, distribute and sell the bilingual films and electronic books of which the copyrights are owned by Shuang Hua. In accordance to the agreement, the Company shall pay Shuang Hua a refundable deposit of in the aggregate amount of $2,894,000, before December 31, 2021.

As of September 30, 2021 and December 31, 2020, the Company has paid $1,030,000 and $1,030,000 to Shuang Hua, respectively, and are recorded as other long-term assets. Due to Covid-19 in 2020, the Company has not started its business plan with the exclusive copyright and distribution agreement. The Company will extend it for another two years.

Note 5. RELATED PARTY TRANSACTIONS

Related parties of the Company during the nine months ended September 30, 2021 and December 31, 2020 consist of the following:

Name of Related Party	Nature of Relationship
Yu Cheng Yang	Majority Shareholder, Director and Officer of the Company
Co-Innovation Group Limited	Company under control of Yu Cheng Yang
World Capital Holding Limited	Company under control by Shanghai Qifan Qiye Management Co., Ltd.’s shareholders, former non-controlling interest of the Company

Due to shareholders

The Company has advanced funds from its directors and shareholders Yu Cheng Yang for working capital purposes. As of September 30, 2021 and December 31, 2020, there were $19,281 and $107,791 advance outstanding, respectively. The Company has agreed that the outstanding balances bear 0% interest rate and are due upon demand after thirty days of written notice by the director and shareholder.

Mr. Yang advanced $200,267 to the Company as working capital, and the Company repaid $219,965 to Mr. Yang for the nine months ended September 30, 2021.

On July 8, 2021, the Company issued the 90,000,000 shares of common stock to convert $90,000 owed to Mr. Yang.

As of September 30, 2021, the outstanding balance payable to Mr Yang was $19,281.

Note 6. TERM LOAN

Loan from First Commercial Bank

On September 30, 2020, TWD 3,000,000 (approximately $107,750) term loan was granted to the Company for working capital with repayment period of 60 months. The term loan is subject to an interest charge at 1% per annum for the first 9 months of the term loan; interest charges on the term loan from 10th to 60th is 3.5% per annum.

On September 30, 2020, TWD 2,000,000 (approximately $71,833) term loan was granted to the Company for employee salary with repayment period of 30 months. The term loan is subject to an interest charge at 1.5% per annum for the first 9 months of the term loan; interest charges on the term loan from 10th to 60th is 1.845% per annum.

F-18

Loan from Bank of Taiwan

On May 7, 2021, TWD 4,000,000 (approximately $143,666) term loan was granted to the Company for employee salary with repayment period of 60 months. The term loan is subject to an interest charge at 1% per annum for the first 8 months of the term loan; interest charges on the term loan from 9th to 60th is 1.9% per annum.

On May 7, 2021, TWD 1,000,000 (approximately $35,917) term loan was granted to the Company for employee salary with repayment period of 60 months. The term loan is subject to an interest charge at 1.5% per annum for the first 8 months of the term loan; interest charges on the term loan from 9th to 60th is 2% per annum.

The outstanding balance of the term loan is $302,872, of which $79,339 is due within one year and classified as short term, and $223,533 is due after one year, and has classified as long term.

Interest expenses were $2,179 and $494 for the nine months ended September 30, 2021 and December 31, 2020, respectively.

Note 7. STOCKHOLDERS’ EQUITY

Preferred Stock

On July 8, 2021, the board of directors of the Company amended its stock designation and the Company is authorized to issue 5,000,000 shares of Series A Preferred Stock with par value $0.001. Each stock is entitled to 1,000 votes of common stock without dividend rights.

On July 8, 2021, the Company issued 1,500,000 shares of Series A Preferred Stock to Co-Innovation Group Limited for proceeds of $1,500, the amount is recorded as a reduction to additional paid-in capital of $1,500

Common Stock

On August 18, 2021, the Company completed and closed a series of transactions to reorganize the Company’s structure and to develop its business by acquiring certain minority control interest of its subsidiary and intellectual properties. Pursuant to the Intellectual Property Transfer Agreement, the Company to issue 75,000,000 shares of Common Stock to the transferors for the intellectual properties in consideration of the transfer. Pursuant to the Shareholders’ Agreement of Shanghai Maosong Trading Co., Ltd and Equity Pledge Agreements, the Company to issue 15,000,000 shares of Common Stock to the transferors for the minority controlling interests of its subsidiary. Upon completion of the transactions above, EOS International Inc became a wholly controlled subsidiary of the Company.

On July 8, 2021, the Company issued 75,000,000 shares of Common Stock at $0.001 per share to convert outstanding debt owed to Co-Innovation Group Limited in the amount of $75,000.

On July 8, 2021, the Company issued 15,000,000 shares of Common Stock at $0.001 per share to convert outstanding debt owed to World Capital Holding Ltd in the amount of $15,000.

On April 12, 2021, A-Best, and Mr. Ing-Ming Lai entered into a termination agreement (the “Termination Agreement”) to terminate the agreement of Strategic Alliance Agreement dated March 2, 2020. In the agreement, Ing-Ming Lai has proceeded to return a total of 10,000 shares in EOS Inc, back to the Company.

On March 31, 2021, the Company’s board of directors and stockholders authorized a reverse stock split of its outstanding common stock at a ratio of 1-for-1000 without any change in the par value per share which became effective on April 7, 2021 upon approval by FINRA. The number of shares and price per share in the financial statements have been retrospectively adjusted accordingly to reflect this reverse stock split.

On March 16, 2021, the authorized shares of common stock were increased from 75,000,000 to 575,000,000 shares and the par value remains at $0.001.

On June 1, 2020, the Company and Fortune King entered into a sales collaboration agreement (the “Sales Collaboration Agreement”), pursuant to which, subject to the terms and condition therein, Fortune King agreed to provide promotional and marketing service of the Company’s products within six years from January 2020, to December 2025. Fortune King is obligated to perform such service regardless of whether the Company sells products to Fortune King during the designated period. In accordance with the Sales Collaboration Agreement and in consideration for the service provided by Fortune King, the Company shall issue 3,000,000 shares of common stock to Fortune King for the promotional and marketing service of $1,500,000. The 3,000,000 shares were issued on December 29, 2020.

F-19

Note 8. INCOME TAXES

United States

EOS, Inc. is incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company has no taxable income for the period. As of September 30, 2021, the Company had net operating loss carry forwards of $154,880 that may be available to reduce future years’ taxable income. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements as their realization is determined not likely to occur and, accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. No tax benefit has been realized since a 100% valuation allowance has offset deferred tax asset resulting from the net operating losses.

British Virgin Islands

EOS International Inc. is incorporated in British Virgin Islands and are not required to pay income tax.

Taiwan

The subsidiary of EOS Inc. and Emperor Star is incorporated in Taiwan. According to the amendments to the “Taiwan Income Tax Act” enacted by the office of the President of Taiwan on February 7, 2018, statutory income tax rate increased from 17% to 20% and undistributed earning tax decreased from from 10% to 5%, effective from January 1, 2018.

People’s Republic of China (“PRC”)

Under the Enterprise Income Tax (“EIT”) Law of the PRC, the standard EIT rate is 25%. The PRC subsidiary of the Company is subject to PRC income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which they operate. No provision for income taxes have been made as Maosong had no taxable income as of and for the nine months ended September 30, 2021.

Provision for income tax consists of the following:

	For the Nine Months Ended September 30,
	2021			2020
Current income tax
U.S.	$	-		$	-
Taiwan		(51,058	)		-
PRC		-			-
Sub total		(51,058	)		-
Deferred income tax
U.S.
Deferred tax assets for NOL carryforwards		(44,945	)		(46,300	)
Valuation allowance		44,945			46,300
Net changes in deferred income tax (benefit)		-			-
Total income tax provision	$	-		$	-

F-20

The following is a reconciliation of the statutory tax rate to the effective tax rate:

	For the Nine Months Ended September 30,
	2021			2020
U.S. statutory income tax rate		21	%		21	%
Taiwan unified income tax rate		20	%		20	%
PRC standard EIT rate		25	%		25	%
Changes in valuation allowance		(46	)%		(46	)%
Other		(20	)%		(20	)%
Effective combined income tax rate		0	%		0	%

Significant components of the Company’s deferred taxes as of September 30, 2021 and December 31, 2020 were as follows:

	September 30,			December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	210,309		$	177,784
Less: Valuation allowance		(210,309	)		(177,784	)
Deferred tax assets, net	$	-		$	-

Note 9. COMMITMENTS AND CONTINGENCIES

Sales Collaboration Agreement

On June 1, 2020, the Company and Fortune King entered into a sales collaboration agreement (the “Sales Collaboration Agreement”), pursuant to which, subject to the terms and condition therein, Fortune King agreed to provide promotional and marketing service of the Company’s products within six years from January 2020, to December 2025. Fortune King is obligated to perform such service regardless of whether the Company sells products to Fortune King during the designated period. In accordance with the Sales Collaboration Agreement and in consideration for the service provided by Fortune King, the Company shall issue 3,000,000 shares of common stock to Fortune King for the promotional and marketing service of $1,500,000. The 3,000,000 shares were issued on December 29, 2020.

The Company recognized the stock-based compensation of marketing expenses based on quarterly basis, with a quarterly marketing expense of $62,500, total up have 24 quarters.

Copyright and Distribution Agreement

On November 21, 2019, the Company and Shuang Hua International Culture Media Co, Ltd. (“Shuang Hua”), a corporation formed under laws of Taiwan, entered into an exclusive copyright and distribution agreement (the “Agreement”), pursuant to which, subject to the terms and condition therein, Shuang Hua granted the Company an exclusive right to produce, market, distribute and sell the bilingual films and electronic books of which the copyrights owned by Shuang Hua. In accordance to the agreement, the Company shall pay Shuang Hua a refundable deposit of in the aggregate amount of $2,894,000, before December 31, 2021. As of September 30, 2021, the Company has paid $1,030,000 to Shuang Hua.

F-21

Note 10. SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date which the financial statements are available to be issued. All subsequent events requiring recognition as of September 30, 2021 have been incorporated into these consolidated financial statements and there are no other subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

F-22

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

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including this discussion and analysis by management, contains or incorporates forward-looking statements. All statements other than statements of historical fact made in report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as “believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,” “projects,” “expects,” “may,” “will,” or “should” or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from management’s expectations.

The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Recent Developments

On March 31, 2021, the Company’s board of directors and stockholders authorized a reverse stock split of its outstanding common stock at a ratio of 1-for-1000 without any change in the par value per share which became effective on April 7, 2021 upon approval by FINRA. The number of shares and price per share in the report have been retrospectively adjusted accordingly to reflect this reverse stock split.

Description of Business

General Information

EOS Inc. (“we,” “us,” “our,” or the “Company”) was incorporated in the State of Nevada on April 3, 2015.

On or about November 18, 2016, the Company formed EOS INC. TAIWAN BRANCH, a Taiwanese corporation (“EITB”) and the Company owns 100% of EITB. Yu-Cheng Yang, a shareholder and director of the Company, is the sole director of EITB. Yu-Hsiang Chia is the branch manager of EITB.

Emperor Star International Trade Co., Ltd., (“Emperor Star”), was incorporated on November 16, 2015 under the laws of Taiwan. Emperor Star is in the business of marketing and distributing various consumer products, including detergents, nutrition supplements, and skin care products.

3

On May 3, 2017, the Company entered into and closed a Share Purchase and Sale Agreement (the “Purchase Agreement”) with Emperor Star to acquire all issued and outstanding shares of Emperor Star in consideration of $30,562 in cash. As a result of the transaction, Emperor Star became the Company’s wholly owned subsidiary. Upon consummation of the transaction, the Company has assumed the business of Emperor Star and ceased to be a shell company. Yu-Hsiang Chia currently serves as the officer and director of Emperor Star. On May 26, 2020, EOS Inc. increased its investment in Emperor Star by $134,004 (NTD$4,000,000). The Company also received the contributions to Emperor Star from non-controlling interests in the amount of $33,398 (NTD$1,000,000). As a result, the Company owns 83% equity interest of Emperor Star as of June 30, 2020, which is no longer a wholly-owned subsidiary.

On September 20, 2018, the Company set up another wholly-owned subsidiary, EOS International Inc. (“EOS(BVI)”), under the laws of British Virgin Islands. EOS(BVI) is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifying machines.

On March 1, 2019, EOS(BVI) set up a wholly-owned subsidiary, Shanghai Maosong Co., Ltd (“Maosong”), under the laws of People’s Republic of China. Maosong is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers in China.

On June 2, 2020, EOS International Inc 83.33% owner, and Shanghai Qifan Qiye Management Co., Ltd. (“Qifan”) 16.67% owner of Maosong resolute to change the registered capital of Maosong to RMB 12,000,000,000 (1.2 billion) and that EOS to contribute certain Intellectual Property as registered capital of Shanghai Maosong. Intellectual Property owned by EOS International Inc was valued at RMB 10,000,000,000 (1 billion) and Intellectual Property owned by Qifan was valued at RMB 2,000,000,000 (200 million).

On July 13, 2021, EOS(BVI), MaoSong, and Qifan entered into a Shareholder Agreement where Qifan (i) delegate its 16.67% equity voting rights, powers, or benefits in Maosong to EOS(BVI); (ii) grant EOS(BVI) an irrevocable, unconditional, exclusive option to purchase Maosong’s equity interest; (iii) the right to receive any proceeds from the Maosong’s Equity Interest; (iv) pledge its existing or any prospective Maosong equity interest to EOS Int’l; as a result EOS(BVI) retains 100% control of MaoSong and the 16.67% noncontrolling interest are consolidated.

We have never been a party to any bankruptcy, receivership or similar proceeding, nor have we undergone any material reclassification, merger, consolidation, purchase or sale of a significant amount of assets not in the ordinary course of business.

We do not own any real property. Our principal executive office is presently located at 7F.-1, No. 162, Sec. 2, Zhongshan N. Rd., Zhongshan District, Taipei City 10452, Taiwan (Republic of China). EITB and Emperor Star operate from this Taipei location. Taiwan. Emperor Star and EITB entered into the office leases which commenced on June 15, 2019 and will end on June 14, 2021. The office occupies approximately 1,388 square feet and the average amount of office rent (including the maintenance fees) is approximately $2,016 per month. Before this location, our former principal executive office was at 372 Linsen N. Road, Suite 519, Zhongshan District, Taipei City, 104, Taiwan. Our then monthly rent for that office space was $1,280 and that lease expired on June 30, 2019.

General Business Overview

EOS Inc. markets and distributes a variety of consumer products selected based on its understanding of the demand for each of its products. EOS conducts its business primarily in Asia, including the People’s Republic of China (“PRC”), Taiwan, Singapore and Malaysia. The principal products that EOS markets and sells through its subsidiaries include Nine Layer Transformation Hair Cream, Deep Seawater Mineral Extract, and Lifegenes & Youthgenes. Nine Layer Transformation Hair Cream is hair-coloring product that darkens the user’s hair color to brown or black while nourishing the hair. Deep Seawater Mineral Extract is a dietary supplement that is designed to enhance the overall health and appearance of the consumer. Both Lifegenes and Youthgenes are dietary supplements designed to improve the consumer’s health. In addition to the four major products, EOS also sells and distributes other dietary supplements and skin care products from time to time as it deems profitable. During the nine months ended September 30, 2021, the net sales of dietary supplements and skin care products were $0, which represented approximately 0% of the total net sales for that period.

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On April 30, 2018, we, through our Emperor Star, started purchasing a type of water purifying machines from Cosminergy Hitech Development Co., Ltd. (“Cosminergy”) and reselling the water purifying machines in certain Asian areas and countries. The sales generated from selling the water purifying machines for the nine months ended September 30, 2021 and 2020 were $886,020 and $1,181,007, respectively, accounting for approximately 100% and 78.47% of the total revenue of the said period, respectively.

In November 2019, we started the marketing, promotion, sales and distribution of certain electrical noise suppressing device (the “Calibrator”) globally provided by Ultra Velocity Technology Ltd. (“Ultra Velocity”), a corporation formed under the laws of Taiwan, based on an exclusive patent licensing and distribution agreement (the “Ultra Velocity Agreement”) between Ultra Velocity and us. However, due to the outbreak of coronavirus (“COVID-19”) in mainland China, Ultra Velocity and we terminated the Ultra Velocity Agreement in March 2020 and intended to redefine the cooperation model between the respective parties. During the nine months ended September 30, 2021, the net sales of calibrator was $0, which represented approximately 0% of the total net sales for that period.

In addition, we provided inventory, membership and business management software that designed by CKS Information Co., Ltd. to our customers in the fiscal year of 2019. During the nine months ended September 30, 2021 and 2020, the software business line generated $0 and $33,508 respectively, accounting for approximately 0% and 1.63% of the total net sales for that period.

Distribution Agreements and Supply Agreement

On May 1, 2015, we entered into a written Distribution Agreement with A.C. (USA), Inc. (“A.C.”) pursuant to which we have an exclusive right to market and distribute in Taiwan certain skin care products manufactured by A.C. for a period of 5 years (the “Distribution Agreement”). Pursuant to the provisions of the Distribution Agreement, we will market and promote the A.C. Products as defined therein in Taiwan. Accordingly, we are the exclusive distributor for those A.C. Products in Taiwan.

On April 30, 2018, we, through our Emperor Star, entered into a distribution agreement (the “Cosminergy Distribution Agreement”) with Cosminergy Hitech Development Co., Ltd. (Cosminergy”) pursuant to which we started purchasing a type of water purifying machines from Cosminergy and reselling the water purifying machines in certain Asian areas and countries. The Cosminergy Distribution Agreement expired on April 30, 2019 and we did not renew it.

We, through one of our wholly-owned subsidiaries, entered into a product supply agreement (“Fortune King Product Supply Agreement”) with Fortune King (HK) Trading Limited (“Fortune King”), a company formed under the laws of Hong Kong, to provide and sell any products that Fortune King orders from EOS and its subsidiaries. Pursuant to the Fortune King Product Supply Agreement, we agreed to provide products ordered by Fortune King within five business days from the order date and the products we sell should have the expiration date/shelf life at least one year from the supply date. The Fortune King Product Supply Agreement became effective on October 1, 2018 and was extended to September 30, 2021. We provide marketing information on the products we sell and training services to Fortune King. During the year ended December 31, 2018 and nine months ended September 30, 2019, the majority of EOS’ sales of Nine Layer Transformation Hair Cream, Deep Seawater Mineral Extract, Lifegenes, Youthgenes, and household water purifying machines were to Fortune King. As of June 30, 2019, Fortune King was a related party of us because the founder and officer of Fortune King was a shareholder of EOS. On or about June 30, 2019, the founder and officer of Fortune King transferred her equity interest in the Company and therefore Fortune King is no longer a related party to the Company.

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Acquisition of Control Interest in A-Best

On August 7, 2019, the Company, A-Best Wire Harness & Components Co., Ltd (“A-Best”), a company formed under the laws of Taiwan, and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into a purchase agreement (the “Purchase Agreement”), pursuant to which, subject to the terms and conditions therein, the Company shall purchase thirty-one percent (31%) of the issued and outstanding equity interest in A-Best and as consideration, issue ten thousand (10,000) shares (the “Stock Consideration”) of its common stock (the “Common Stock”) to Ing-Ming Lai and pay Ing-Ming Lai fifty-five million (55,000,000) new Taiwanese dollars (“NTD”) (the “Cash Consideration”). The Company currently owns twenty percent (20%) of equity securities in A-Best, and will subsequently own a total of fifty-one percent (51%) of issued and outstanding A-Best shares when Ing-Ming Lai completes transferring his 31% of A-Best’s equity to the Company in accordance with the Purchase Agreement. Pursuant to the Purchase Agreement, the Company shall use its best efforts to obtain its shareholder approval to increase the number of authorized common stock to allow legal issuance of the Stock Consideration to Ing-Ming Lai no later than December 31, 2019. In addition, pursuant to the Purchase Agreement, the Company shall pay the Cash Consideration to Ing-Ming Lai if and only if the Company successfully completes an Initial Public Offering (the “IPO”) of its common stock, with gross proceeds of no less than $5,000,000 USD. The Purchase Agreement contains the customary confidentiality provision, representations and warranties. The Purchase Agreement also provides for mutual indemnification clauses. A-Best is a Taipei-based company that designs magnetic resonance speakers.

In connection with the Purchase Agreement, on August 7, 2019, the Company, A-Best, and Ing Ming Lai entered into an Exclusive Sales Agreement (the “Exclusive Sales Agreement”), pursuant to which the Company is granted the right as the exclusive distributor to sell all of A-Best’s products, including its Micro-ceramic magnetic resonance speakers in the world, and the right to use A-Best’s trademarks and copyrights in connection with the sale of such products. The term of the Exclusive Sales Agreement shall be three (3) years from execution and be automatically renewed for another term of three (3) years unless one party gives the other parties a written notice of termination three (3) months before the end of the term.

In connection with the Purchase Agreement, on August 7, 2019, the Company and Ing-Ming Lai entered into a management agreement (the “Management Agreement”), pursuant to which the Company has agreed to maintain A-Best’s existing operations and Ing-Ming Lai’s positions as A-Best’s President and Chief Executive Officer of A-Best, until A-Best’s board of directors decides to terminate the terms of his positions. Pursuant to the Management Agreement, the Company shall also designate one individual to A-Best’s board of directors, and A-Best’s board of directors shall continue to maintain two director seats, where at least one of the two directors is designated by the Company until the Parties either reach a shareholder agreement or A-Best receives additional capital investment in equity or debt. The Management Agreement became effective upon execution. For more information about this transaction, the Purchase Agreement, the Exclusive Sales Agreement and Management Agreement, please refer to the current report on Form 8-K which was filed with the Securities and Exchange Commission on August 13, 2019.

On December 30, 2019, the Company, A-Best, and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into a termination agreement (the “Termination Agreement”) to, among other things, terminate the Purchase Agreement, Exclusive Sales Agreement, and Management Agreement, all of which were dated August 7, 2019. The Company, A-Best and Mr. Ing-Ming Lai decided to terminate the three agreements primarily because they need more time to agree to a mutually beneficial way to cooperate with each other with respect to the sales of the Micro-ceramic magnetic resonance speakers that A-Best has developed. Pursuant to the Termination Agreement which became effective on December 31, 2019, none of the three parties owes any compensation, payments, damages, penalties or liabilities to one another or has any obligations to perform under any of the Purchase Agreement, Exclusive Sales Agreement, and Management Agreement, except that each party agrees to keep confidential the business plans, research and development information obtained from performing the three agreements. For more information about the Termination Agreement, please refer to the current report on Form 8-K which was filed with the Securities and Exchange Commission on December 31, 2019.

On March 2, 2020, the Company, A-Best, and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best (collectively, the “Parties”) entered into a strategic alliance agreement (the “Strategic Alliance Agreement”), pursuant to which the Parties redefined their cooperation with respect to the sales and distribution of A-Best’s micro-ceramic speakers. In accordance with the Strategic Alliance Agreement, A-Best, Mr. Ing-Ming Lai and the Company terminated the Investment Cooperation Agreement dated January 12, 2019 entered by and among the Parties and as a result the Company agreed to return 20% of the equity interest in A-Best to Mr. Ing-Ming Lai, which was valued at approximately $33,411 by the Parties.

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Furthermore, subject to the terms and conditions of the Strategic Alliance Agreement, A-Best has granted the Company the exclusive sale and distribution right of A-Best’s micro-ceramic speakers in the world for one (1) year (the “Term”), which may be renewed with mutual consent of the Parties two months prior to the expiration of the Term, while A-Best retains its own right to sell and distribute the micro-ceramic speakers on its own. In consideration for the exclusive distribution right of A-Best’s speakers under the Strategic Alliance Agreement, the Company agreed to have A-Best keep the Company’s 10,000 shares of common stock, par value $0.001 per share, issued under the Investment Cooperation Agreement and the Company may keep the revenue and profits generated from the sale of A-Best speakers until the total revenue from such speakers reaches $15 million U.S. dollars. This Strategic Alliance Agreement contains A-Best’s and Mr. Ing-Ming Lai’s joint representation regarding their intellectual property rights to A-Best ceramic speakers. For more information about this transaction and the Strategic Alliance Agreement, please refer to the current report on Form 8-K which was filed with the Securities and Exchange Commission on March 5, 2020.

On April 22, 2020, the Company returned 20% equity interest in A-Best to Mr. Ing-Ming Lai pursuant to the Strategic Alliance Agreement.

On November 25, 2019, the Company and Ultra Velocity Technology Ltd. (“Ultra Velocity”), a corporation formed under the laws of Taiwan, entered into an exclusive patent licensing and distribution agreement (the “Exclusive Patent Licensing and Distribution Agreement”), pursuant to which, subject to the terms and conditions therein, Ultra Velocity granted the Company an exclusive license to the patent (Patent M566970 registered in Taiwan) to its electrical noise suppressing device (the “Calibrator”) and the exclusive right to market, promote, distribute and sell the Calibrator globally. In accordance with the Agreement and in consideration for the exclusive patent license and distribution right to the Calibrator, the Company agreed to issue Ultra Velocity three thousand (3,000) restricted shares of its common stock after the execution of this Agreement and upon the shareholder approval to increase the number of authorized capital of the Company (the “Shareholder Approval”). The term of this Agreement was ten years, commencing from the dare thereof. However, on March 30, 2020, the Company and Ultra Velocity terminated the Exclusive Patent Licensing and Distribution Agreement via a mutually agreed written notice, effective March 24, 2020.

On April 12, 2021, the Company, A-Best, and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into a termination agreement (the “Termination Agreement”) to terminate the agreement of Strategic Alliance Agreement (the “Strategic Alliance Agreement”) dated March 2, 2020. In the agreement, Ing-Ming Lai has proceeded to return of a total of 10,000 shares in EOS INC, back to the company.

The Board of Directors of this Corporation authorized the return of the 10,000 EOSS shares from Ing Ming Lai.

Risks Related to Doing Business in China

The recent state government interference into business activities on U.S. listed Chinese companies may negatively impact our operations.

Recently, the Chinese government announced that it would step up supervision of Chinese firms listed offshore. Under the new measures, China will improve regulation of cross-border data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuance, market manipulation and insider trading, China will also check sources of funding for securities investment and control leverage ratios. The Cyberspace Administration of China (“CAC”) has also opened a cybersecurity probe into several U.S.-listed tech giants focusing on anti-monopoly, financial technology regulation and more recently, with the passage of the Data Security Law, how companies collect, store, process and transfer data. Our operations and business interests are in Taiwan and mainland China. If the Chinese government’s interference expands and by proxy, our business interests are affected, our operations may be negatively impacted although presently, there is no discernible immediate impact.

If our public accounting firm does not permit the Public Company Accounting Oversight Board (“PCAOB”) to inspect it within three years pursuant to the Holding Foreign Companies Accountable Act, we may be delisted.

The Holding Foreign Companies Accountable Act requires that the Public Company Accounting Oversight Board (“PCAOB”) be permitted to inspect our public accounting firm within three years. If our public accounting firm does not permit or the PCAOB is unable to conduct such an inspection, it may result in our delisting. Our current auditor and previous auditor are both PCAOB-registered. We are not aware of any reasons to believe or conclude that either one would not permit an inspection by PCAOB or that either one may not be subject to such inspection.

Results of Operation – For the three months ended September 30, 2021 compared to the three months ended September 30, 2020

Net sales

Net sales were $549,242 for three months ended September 30, 2021, representing a decrease of $41,051, or 6.95%, as compared to $590,293 for the three months ended September 30, 2020. The decrease was primarily due to the COVID-19 outbreak which have a material and adverse impacts on the Company’s business operations and its financial condition, including but not limited to material negative impact to the Company’s total revenues. Since late March 2020, due to restrictions on domestic and international travels and uncertainty of the pandemic, the company’s revenue substantially decreased.

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Cost of sales

Cost of sales was $373,100 for the three months ended September 30, 2021, representing an increase of $312,575 or 516.44%, as compared to $60,525 for the three months ended September 30, 2020.

Gross profit

Gross profit was $176,142 for the three months ended September 30, 2021, compared to $529,768 for the same period in 2020. Gross profit as a percentage of net sales was 32.07% for the three months ended September 30, 2021, compared to 89.75% in the same period in 2020.

Selling, general and administrative expenses

Selling, general and administrative expenses consist primarily of office rent, salary and related costs for personnel and facilities, and professional service fees. Selling, general and administrative expenses were $276,996 for the three months ended September 30, 2021, representing an increase of $87,556 or 46.22%, as compared to $189,440 for the three months ended September 30, 2020.

Income (loss) from operations

Loss from operations was $100,854 for the three months ended September 30, 2021 compared to profit from operations of $340,328 for the three months ended September 30, 2020, representing a decrease in income of $440,912, or 129.56%. Such decrease was primarily due to the decrease in sales, and the increase in selling, general and administrative expenses.

Other income (loss)

Other loss was $41,024 for the three months ended September 30, 2021, reflecting a decrease of $65,330, or 268.78%, compared to other loss of $24,306 for the three months September 30, 2020. The increase was mainly attributable to the increase in gain on investment in equity securities.

Net loss

As a result of the above factors, our net loss was $141,779 for the three months ended September 30, 2021, as compared to net income of $364,634 for the three months ended September 30, 2020, representing a decrease in income of $506,413 or 138.88%.

Results of Operation – For the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020

Net sales

Net sales were $886,020 for nine months ended September 30, 2021, representing an decrease of $531,006, or 37.47%, as compared to $1,417,026 for the nine months ended September 30, 2020. The decrease was primarily due to the COVID-19 outbreak which have a material and adverse impacts on the Company’s business operations and its financial condition, including but not limited to material negative impact to the Company’s total revenues. Since late March 2020, due to restrictions on domestic and international travels and uncertainty of the pandemic, the company’s revenue substantially decreased.

Cost of sales

Cost of sales was $392,891 for the nine months ended September 30, 2021, representing an increase of $225,352 or 134.51%, as compared to $167,539 for the nine months ended September 30, 2020.

Gross profit

Gross profit was $493,129 for the nine months ended September 30, 2021, compared to $1,249,487 for the same period in 2020. Gross profit as a percentage of net sales was 55.66% for the nine months ended September 30, 2021, compared to 88.18% in the same period in 2020.

Selling, general and administrative expenses

Selling, general and administrative expenses consist primarily of office rent, salary and related costs for personnel and facilities, and professional service fees. Selling, general and administrative expenses were $782,242 for the nine months ended September 30, 2021, representing an increase of $59,654 or 8.25%, as compared to $722,588 for the nine months ended September 30, 2020.

Income (loss) from operations

Loss from operations was $289,113 for the nine months ended September 30, 2021 compared to income from operations of $526,899 for the nine months ended September 30, 2020, representing a decrease in income of $816,012 or 154.87%. Such decrease was primarily due to the decrease in sales.

Other income (loss)

Other loss was $16,308 for the nine months ended September 30, 2021, reflecting a decrease of $3,122, or 23.68%, compared to other loss of $13,186 for the nine months September 30, 2020. The decrease was mainly attributable to the decrease in loss on foreign currency exchange and loss on investment in equity securities.

Net loss

As a result of the above factors, our net loss was $254,363 for the nine months ended September 30, 2021, as compared to net income of $513,713 for the nine months ended September 30, 2020, representing a decrease in income of $768,076 or 149.51%.

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Liquidity and Capital Resources

Cash and cash equivalents were $200,730 at September 30, 2021 and $122,482 at December 31, 2020. Our total current assets were $2,029,847 at September 30, 2021, as compared to $965,567 at December 31, 2020. Our total current liabilities were $663,017 at September 30, 2021, as compared to $563,534 at December 31, 2020.

We had a working capital of $1,366,830 on September 30, 2021, compared to the working capital of $402,033 on December 31, 2020. The decrease in working capital was primarily attributable to the decrease in inventory of $287,361 and increased in advances and prepayment to suppliers of $85.808.

Net cash used in operating activities was $35,845 during the nine months ended September 30, 2021, as compared to $394,364 for the nine months ended September 30, 2020. The decrease in net cash used in operating activities in the amount of $358,519 was primary attributable to the decrease in security deposit and other asset of $905,812.

Net cash used in investing activities was $1,528 during the nine months ended September 30, 2021, as compared to $2,194 for the nine months ended September 30, 2020. The decrease in net cash used in investing activities was due to the slight decrease in the acquisition of property, plant, and equipment.

Net cash provided by financing activities was $114,156 during the nine months ended September 30, 2021, as compared to $271,125 for the nine months ended September 30, 2020. The decrease in net cash provided by financing activities was due to the proceeds from related party payable and borrowings.

As a result of the above factors, net decrease in cash and cash equivalents were $78,248 for the nine months ended September 30, 2021, as compared to $120,985 for the nine months ended September 30, 2020.

Inflation

Our opinion is that inflation has not had a material effect on our operations and is not expected to have any material effect on our operations.

Critical Accounting Policies

Principles of Consolidation

The accompanying unaudited consolidated financial statements, including the accounts of EOS Inc. and its wholly owned subsidiaries in Taiwan, British Virgin Islands, and People’s Republic of China, have been prepared in conformity with accounting principles generally accepted in the United States of America. Since the Company and Emperor Star are entities under common control prior to the acquisition of Emperor Star, the transaction is accounted for as a restructuring transaction. All the assets and liabilities of Emperor Star were transferred to the Company at their respective carrying amounts on the date of transaction. The Company has recast prior period financial statements to reflect the conveyance of Emperor Star’s common shares as if the restructuring transaction had occurred as of the earliest date of the financial statements. All material intercompany accounts, transactions, and profits have been eliminated in consolidation. The nature of and effects on earnings per share (EPS) of nonrecurring intra-entity transactions involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast to include the earnings (or losses) of the transferred net assets.

The functional currency of the subsidiaries in Taiwan is the New Taiwan dollars and the subsidiary in People’s Republic of China is the Chinese Yuan, or Renminbi; however, the accompanying unaudited consolidated financial statements have been translated and presented in United States Dollars ($). In the accompanying unaudited consolidated financial statements and notes, “$”, “US$” and “U.S. dollars” mean United States dollars, “NT$” and “NT dollars” mean New Taiwan dollars, and “CNY” means Chinese Yuan,

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Use of Estimates

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

Classification

Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net income nor retained earnings.

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.

Accounts Receivable

Accounts receivable are stated at carrying value less estimates made for doubtful receivables. An allowance for impairment of trade receivables is established if the collection of a receivable becomes doubtful. Such receivable becomes doubtful when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. An impairment loss is recognized in the statement of income, as are subsequent recoveries of previous impairments.

Inventory

Inventory is stated at the lower of cost and net realizable value. Net realizable value (NRV) is defined as estimated selling prices less costs of completion, disposal, and transportation. Inventory consists mainly of finished goods held for resale. Cost is determined on a weighted average cost method. The Company periodically reviews the age and turnover of its inventory to determine whether any inventory has become obsolete or has declined in value, and incurs a charge to operations for known and anticipated inventory obsolescence.

Property and Equipment

Property and equipment is carried at cost net of accumulated depreciation. Repairs and maintenance are expensed as incurred. Expenditures that improve the functionality of the related asset or extend the useful life are capitalized. When property and equipment is retired or otherwise disposed of, the related gain or loss is included in operating income. Leasehold improvements are depreciated on the straight-line method over the shorter of the remaining lease term or estimated useful life of the asset. Depreciation is calculated on the straight-line method, including property and equipment under capital leases, generally is five years. Depreciation expense is $1,677 and $1,733 for the nine months ended September 30, 2021 and 2020, respectively.

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Impairment of Long-Lived Assets

The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve breakeven operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. Management has determined that no impairments of long-lived assets currently exist as of September 30, 2021 and December 31,2020.

Long-term Equity Investment

The Company acquires equity investment to promote business and strategic objectives. The Company accounts for non-marketable equity and other equity investments for which the Company does not have control over the investees as:

☐	Equity method investments when the Company has the ability to exercise significant influence, but not control, over the investee. Its proportionate share of the income or loss is recognized monthly and is recorded in gain (loss) on equity investments.
☐	Non-marketable cost method investments when the equity method does not apply.

Significant judgment is required to identify whether an impairment exists in the valuation of the Company’s non-marketable equity investments, and therefore the Company considers this a critical accounting estimate. Its yearly analysis considers both qualitative and quantitative factors that may have a significant impact on the investee’s fair value. Qualitative analysis of its investments involves understanding the financial performance and near-term prospects of the investee, changes in general market conditions in the investee’s industry or geographic area, and the management and governance structure of the investee. Quantitative assessments of the fair value of its investments are developed using the market and income approaches. The market approach includes the use of comparable financial metrics of private and public companies and recent financing rounds. The income approach includes the use of a discounted cash flow model, which requires significant estimates regarding the investees’ revenue, costs, and discount rates. The Company’s assessment of these factors in determining whether an impairment exists could change in the future due to new developments or changes in applied assumptions.

Other-Than-Temporary Impairment

The Company’s long-term equity investments are subject to a periodic impairment review. Impairments affect earnings as follows:

☐

Marketable equity securities include the consideration of general market conditions, the duration and extent to which the fair value is below cost, and our ability and intent to hold the investment for a sufficient period of time to allow for recovery of value in the foreseeable future. The Company also considers specific adverse conditions related to the financial health of, and the business outlook for, the investee, which may include industry and sector performance, changes in technology, operational and financing cash flow factors, and changes in the investee’s credit rating. The Company records other-than-temporary impairments on marketable equity securities and marketable equity method investments in gain (loss) on equity investments.

☐

Non-marketable equity investments based on the Company’s assessment of the severity and duration of the impairment, and qualitative and quantitative analysis of the operating performance of the investee; adverse changes in market conditions and the regulatory or economic environment; changes in operating structure or management of the investee; additional funding requirements; and the investee’s ability to remain in business. A series of operating losses of an investee or other factors may indicate that a decrease in value of the investment has occurred that is other than temporary and that shall be recognized even though the decrease in value is in excess of what would otherwise be recognized by application of the equity method. A loss in value of an investment that is other than a temporary decline shall be recognized. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. The Company records other-than-temporary impairments for non-marketable cost method investments and equity method investments in gain (loss) on equity investments.

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Revenue Recognition

During the fiscal year 2018, the Company has adopted FASB Accounting Standards Codification (“ASC”), Topic 606 (“ASC 606”), Revenue from Contracts with Customers, using the modified retrospective method to all contracts that were not completed as of January 1, 2018. The Company recognized the cumulative effect of applying the new revenue standard as an adjustment to the opening balance of accumulated deficit at the beginning of 2018. The results for the Company’s reporting periods beginning on and after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. Based on the Company’s review of existing sales contracts as of January 1, 2018, the Company concluded that the adoption of the new guidance did not have a significant change on the Company’s revenue during all periods presented.

Pursuant to ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines is within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customers. At inception of the contract, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Merchandise sales: The Company recognizes sales revenues from merchandise sales when customers obtain control of the Company’s products, which typically occurs upon delivery to customer. Merchandise sales revenues are recorded at the sales price, or “transaction price”.

Software sales: The Company does not develop the software products on its own. When the Company receives a purchase order from the customer, the Company would engage with the third-party software company to customize and develop the software products. The Company recognizes software revenues upon completion of the installation and testing, and transfer the control of the software products to the customer. Software revenues are recorded at the fixed sales price, or “transaction price”, pursuant to the sales contracts. The Company may also charge the customer maintenance service fees on a straight-line basis over the service period pursuant to the sales contract. The Company concluded that the performance obligation for the maintenance service is distinct. Therefore, such maintenance service revenue can be separated from other elements in the arrangement.

Trade discount and allowances: The Company generally does not provide invoice discounts on product sales to its customers for prompt payment.

Product returns: The Company generally does not provide customers with the right to return a product for a full or partial refund, a credit, or an exchange for another product.

To date, product allowance and returns have been minimal and, based on its experience, the Company believes that returns of its products will continue to be minimal.

The following tables provide details of revenue by major products and by geography.

Revenue by Major Products

For the nine months ended September 30, 2021:
Water purifier machine	$	886,020
Automobile carbon reduction machine		-
Nutrition supplement		-
Software		-
Total	$	886,020

For the nine months ended September 30, 2020:
Water purifier machine	$	1,181,007
Automobile carbon reduction machine		131,882
Nutrition supplement		70,629
Software		33,508
Total	$	1,417,026

Revenue by Geography

For the nine months ended September 30, 2021:
Asia Pacific	$	886,020
Total	$	886,020

For the nine months ended September 30, 2020:
Asia Pacific	$	1,417,026
Total	$	1,417,026

12

Leases -— The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) using the modified retrospective approach, electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, the Company presented the disclosures which were required under ASC 840.

The Company applied the following practical expedients in the transition to the new standard and allowed under ASC 842:

Practical Expedient	Description
Reassessment of expired or existing contracts	The Company elected not to reassess, at the application date, whether any expired or existing contracts contained leases, the lease classification for any expired or existing leases, and the accounting for initial direct costs for any existing leases.
Use of hindsight	The Company elected to use hindsight in determining the lease term (that is, when considering options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of right-to-use assets.
Reassessment of existing or expired land easements	The Company elected not to evaluate existing or expired land easements that were not previously accounted for as leases under ASC 840, as allowed under the transition practical expedient. Going forward, new or modified land easements will be evaluated under ASU No. 2016-02.
Separation of lease and non-lease components	Lease agreements that contain both lease and non-lease components are generally accounted for separately.
Short-term lease recognition exemption	The Company also elected the short-term lease recognition exemption and will not recognize ROU assets or lease liabilities for leases with a term less than 12 months.

13

The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. The Company’s future minimum based payments used to determine the Company’s lease liabilities mainly include minimum based rent payments. As most of Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The adoption of ASC 842 had no substantial impact on the Company’s consolidated balance sheets. The most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, adoption of this standard resulted in the recognition of operating lease right-of-use assets of $8,235 and operating lease liabilities of $8,235 on the consolidated balance sheet as of January 1, 2019. The adoption of ASC 842 did not result in a cumulative-effect adjustment to the opening balance of retained earnings.

In addition, the adoption of the standard did not have a material impact on the Company’s results of operations or cash flows. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in Selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur.

Advertising Costs

Advertising costs are expensed at the time such advertising commences. Advertising expenses were $399 and $17,795 for the nine months ended September 30, 2021 and 2020, respectively.

Post-retirement and Post-employment Benefits

The Company’s subsidiaries in Taiwan adopted the government mandated defined contribution plan pursuant to the Taiwan Labor Pension Act (the “Act”). Such labor regulations require that the rate of contribution made by an employer to the Labor Pension Fund per month shall not be less than 6% of the worker’s monthly salaries. Pursuant to the Act, the Company makes monthly contribution equal to 6% of employees’ salaries to the employees’ pension fund. The Company has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which were expensed as incurred, were $4,541 and $3,852 for the nine months ended September 30, 2021 and 2020, respectively. Other than the above, the Company does not provide any other post-retirement or post-employment benefits.

Fair Value Measurements

FASB ASC 820, “Fair Value Measurements” defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:

14

☐	Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.
☐	Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
☐	Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.

The carrying values of certain assets and liabilities of the Company, such as cash and cash equivalents, accounts receivable, inventory, advance to suppliers, prepaid expenses, accounts payable, accrued expenses, and due to shareholders, approximate fair value because of to their relatively short maturities.

Net Income Per Share

Basic income per share is computed by dividing net income by weighted average number of shares of common stock outstanding during each period. Diluted income per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents, and potentially dilutive securities outstanding during each period. For the nine months ended September 30, 2021 and 2020, the Company does not have any outstanding common stock equivalents; therefore, a separate computation of diluted income per share is not presented.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.

Concentration of Credit Risk

Cash and cash equivalents: The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions in Taiwan, but these investments may be in excess of the insurance limits of Taiwan Central Deposit Insurance Corporation (the “TCDIC”). The Company does not enter into financial instruments for hedging, trading or speculative purposes. Concentration of credit risk with respect to trade and notes receivables is limited due to the wide variety of customers and markets in which the Company transacts business, as well as their dispersion across many geographical areas. As of September 30, 2021, the Company had approximately $0 in excess of TCDIC insured limits. The Company has not experienced any losses in such accounts.

Customers: The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral.

For the nine months ended September 30, 2021, one customer accounted for more than 10% of the Company’s total revenues, representing approximately 100% of its total revenues, and 100% of accounts receivable in aggregate at September 30, 2021.

Customer	Net sales for the nine months ended September 30, 2021		Accounts receivable balance as of September 30, 2021
A	$	886,020	$	243,933

15

For the nine months ended September 30, 2020, one customer accounted for more than 10% of the Company’s total revenues, representing approximately 83.34% of its total revenues, and 71.43% of accounts receivable in aggregate at September 30, 2020.

Customer	Net sales for the nine months ended September 30, 2020		Accounts receivable balance as of September, 2020
A	$	1,181,007	$	1,801,027

Suppliers: The Company’s inventory is purchased from various suppliers.

For the nine months ended September 30, 2021, three suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 14.49%, 69.30%, 12.74% of total net purchase, and 0% of accounts payable in aggregate at September 30, 2021, respectively:

Supplier	Net purchase for the nine months ended September 30, 2021		Accounts payable balance as of September 30, 2021
A	$	-	$	-
B	$	-	$	-
C	$	-	$	-
D	$	12,930	$	-
E	$	71,712	$	-
F	$	13,189	$	-

For the nine months ended September 30, 2020, three suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 39%, 31% and 22% of total net purchase, and 0% of accounts payable in aggregate at September 30, 2020, respectively:

Supplier	Net purchase for the nine months ended September 30, 2020		Accounts payable balance as of September 30, 2020
A	$	60,547	$	-
B	$	49,300	$	-
C	$	34,000	$	-

Foreign-currency Transactions

Foreign-currency transactions are recorded in New Taiwan dollars (“NTD”) and Renminbi (“RMB”) at the rates of exchange in effect when the transactions occur. Gains or losses resulting from the application of different foreign exchange rates when cash in foreign currency is converted into New Taiwan dollars and Renminbi, or when foreign-currency receivables or payables are settled, are credited or charged to income in the year of conversion or settlement. On the balance sheet dates, the balances of foreign-currency assets and liabilities are restated at the prevailing exchange rates and the resulting differences are charged to current income except for those foreign currencies denominated investments in shares of stock where such differences are accounted for as translation adjustments under stockholders’ equity.

16

Translation Adjustment

The accounts of the Company’s subsidiaries were maintained, and their financial statements were expressed in New Taiwan Dollar (“NTD”) and Renminbi (“RMB”). Such financial statements were translated into U.S. Dollars (“$” or “USD”) in accordance ASC 830, “Foreign Currency Matters”, with the NTD and RMB as the functional currency. According to the Statement, all assets and liabilities are translated at the current exchange rate, common stock and additional paid-in capital are translated at the historical rates, and income statement items are translated at an average exchange rate for the period. The resulting translation adjustments are reported under accumulated other comprehensive income (loss) as a component of stockholders’ equity.

Comprehensive Income (loss)

Comprehensive income (loss) includes accumulated foreign currency translation gains and losses. The Company has reported the components of comprehensive income (loss) on its consolidated statements of operations and other comprehensive income (loss).

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The ASU modifies the disclosure requirements in Topic 820, Fair Value Measurement, by removing certain disclosure requirements related to the fair value hierarchy, modifying existing disclosure requirements related to measurement uncertainty and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This ASU is effective for public companies for annual reporting periods and interim periods within those annual periods beginning after December 15, 2019. The Company is currently evaluating the effect, if any, that the ASU will have on its consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments in the ASU are effective for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standard is permitted, including adoption in interim or annual periods for which financial statements have not yet been issued. The Company is currently evaluating the effect, if any, that the ASU will have on its consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

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

17

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that the information is accumulated and communicated to our management, including our Chief Executive Officer and interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We performed an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on their evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were not effective as of September 30, 2021.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures is also based partly on 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.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during our last fiscal quarter to which this Quarterly Report on Form 10-Q relates that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

18

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

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

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.

19

ITEM 6. EXHIBITS

The following exhibits are filed herewith:

Exhibit No.	Description
31.1	Certification of Chief Executive and Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1	Certification of Chief Executive and Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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

20

SIGNATURES

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

	EOS Inc.
Date: November 19, 2021	By:	/s/ He-Siang Yang
		He-Siang Yang
		Principal Executive Officer, Principal Financial Officer, President and Chairman of the Board

21

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, He-Siang Yang, Principal Executive Officer and Principal Financial and Accounting Officer of EOS Inc., certify that:

1.	I have reviewed this quarterly report on Form 10-Q for quarter ended September 30, 2021 of EOS Inc. (the “registrant”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer 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 over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer 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 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.

November 19, 2021

/s/ He-Siang Yang

He-Siang Yang

Principal Executive Officer and

Principal Financial and Accounting Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF SARBANES-OXLEY ACT OF 2002

I, He-Siang Yang, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of EOS, Inc. (the “Company”) for the period ended September 30, 2021 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 19, 2021	By:	/s/ He-Siang Yang
		He-Siang Yang
		Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer)

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of a separate disclosure document.

XML

Cover - shares	9 Months Ended
	Sep. 30, 2021	Nov. 13, 2021
Cover [Abstract]
Entity Registrant Name	EOS Inc.
Entity Central Index Key	0001651958
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	true
Entity Current Reporting Status	Yes
Document Period End Date	Sep. 30, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2021
Entity Ex Transition Period	false
Entity Common Stock Shares Outstanding		180,065,254
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-55661
Entity Incorporation State Country Code	NV
Entity Tax Identification Number	30-0873246
Entity Address Address Line 1	7F.-1, No. 162, Sec. 2, Zhongshan N. Rd.
Entity Address City Or Town	Zhongshan District
Entity Address Country	TW
Entity Address Postal Zip Code	10452
City Area Code	886
Local Phone Number	2-2586-8300
Entity Interactive Data Current	Yes

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2021	Dec. 31, 2020
Current Assets
Cash and cash equivalents	$ 200,730	$ 122,482
Accounts receivable	243,933	175,766
Inventory, net	161,866	449,227
Advance to suppliers	277,441	191,633
Security deposits	1,122,835	0
Prepaid expenses and other current assets	23,042	26,459
Total current assets	2,029,847	965,567
Property and equipment, net	8,097	8,175
Security deposits	0	1,113,010
Total Assets	2,037,944	2,086,752
Current Liabilities
Accounts payable	0	18,415
Other payable and accrued expenses	47,851	81,359
Due to shareholders	19,281	107,791
Income tax payable	79,046	105,969
Other current liabilities	437,500	250,000
Short-term loan	79,339	0
Total current liabilities	663,017	563,534
Long-term loan	223,533	166,985
Total liabilities	886,550	730,519
Commitments and Contingencies		0
Stockholders' Equity
Preferred stock ($0.001 par value, 5,000,000 shares authorized, 1,500,000 and zero shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively)	1,500	0
Common stock ($0.001 par value; 575,000,000 shares authorized, 180,065,254 and 74,123 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively)	180,065	74
Additional paid-in capital	41,030	186,474
Retained earnings	804,234	1,058,090
Accumulated other comprehensive income	100,338	87,051
Total stockholders' equity	1,127,167	1,331,689
Noncontrolling Interest	24,227	24,544
Total Equity	1,151,394	1,356,233
Total Liabilities and Stockholders' Equity	$ 2,037,944	$ 2,086,752

XML

CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
CONSOLIDATED BALANCE SHEETS
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	575,000,000	575,000,000
Common stock, shares issued	180,065,254	74,123
Common stock, shares outstanding	180,065,254	74,123
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	1,500,000	0
Preferred stock, shares outstanding	1,500,000	0

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
Net sales	$ 549,242	$ 590,293	$ 886,020	$ 1,417,026
Cost of sales	373,100	60,525	392,891	167,539
Gross profit	176,142	529,768	493,129	1,249,487
Selling, general and administrative expenses	276,996	189,440	782,242	722,588
Income from operations	(100,854)	340,328	(289,113)	526,899
Other income (expense)
Interest income (expense)	(826)	1	(1,043)	149
Other income (expenses)	(40,198)	7,405	(48,676)	7,415
Gain (loss) on foreign currency exchange	0	16,900	0	0
Gain (loss) on investment in equity securities	0	0	33,411	(20,750)
Total other income (expense)	(41,024)	24,306	(16,308)	(13,186)
Income (loss) before income tax provision	(141,878)	364,634	(305,421)	513,713
Income tax provision	(99)	0	(51,058)	0
Net Income (loss)	(141,779)	364,634	(254,363)	513,713
Other Comprehensive Income (Loss):
Net income (loss) attributable to non-controlling interests	0	17,747	(507)	9,014
Net income (loss) attributable to EOS and subsidiaries	(141,779)	346,887	(253,856)	504,699
Foreign currency translation adjustment, net of tax	4,431	31,665	13,287	55,733
Comprehensive Income (loss)	$ (137,348)	$ 378,552	$ (240,569)	$ 560,432
Net income per share:
Basic and diluted	$ (0.00)	$ 4.92	$ (0.01)	$ 6.93
Weighted average number of common shares:
Basic and diluted	126,260,906	74,123	42,592,727	74,123

XML

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($)	Total	Common Stock	Preferred Stock	Additional Paid-In Capital	Retained Earnings (Accumulated Deficit)	Accumulated other comprehensive loss	Non-controlling Interest
Balance, shares at Dec. 31, 2019		74,123
Balance, amount at Dec. 31, 2019	$ 2,715,735	$ 74	$ 0	$ 124,794	$ 2,577,898	$ 12,969	$ 0
Stock-based compensation	62,500	0	0	62,500	0	0	0
Foreign currency translation adjustment	(19,331)	0	0	0	0	(19,331)	0
Net income	353,231	$ 0	0	0	353,231	0	0
Balance, shares at Mar. 31, 2020		74,123
Balance, amount at Mar. 31, 2020	3,112,135	$ 74	0	187,294	2,931,129	(6,362)	0
Balance, shares at Dec. 31, 2019		74,123
Balance, amount at Dec. 31, 2019	2,715,735	$ 74	0	124,794	2,577,898	12,969	0
Balance, shares at Dec. 31, 2019		74,123
Balance, amount at Dec. 31, 2019	2,715,735	$ 74	0	124,794	2,577,898	12,969	0
Net income	513,713
Balance, shares at Sep. 30, 2020		74,123
Balance, amount at Sep. 30, 2020	3,320,599	$ 74	0	124,794	3,082,596	68,702	44,433
Balance, shares at Mar. 31, 2020		74,123
Balance, amount at Mar. 31, 2020	3,112,135	$ 74	0	187,294	2,931,129	(6,362)	0
Stock-based compensation	62,500	0	0	62,500	0	0	0
Foreign currency translation adjustment	43,399	0	0	0	0	43,399	0
Net income	(204,152)	0	0	0	(195,420)	0	(8,732)
Contributions from noncontrolling interest	33,398	$ 0	0	0	0	0	33,398
Balance, shares at Jun. 30, 2020		74,123
Balance, amount at Jun. 30, 2020	3,047,280	$ 74	0	249,794	2,735,709	37,037	24,666
Stock-based compensation	(125,000)	0	0	(125,000)	0	0	0
Foreign currency translation adjustment	33,685		0	0	0	31,665	2,020
Net income	364,634	0	0	0	346,887	0	17,747
Contributions from noncontrolling interest		$ 0	0	0	0	0
Balance, shares at Sep. 30, 2020		74,123
Balance, amount at Sep. 30, 2020	3,320,599	$ 74	0	124,794	3,082,596	68,702	44,433
Balance, shares at Dec. 31, 2020		74,123
Balance, amount at Dec. 31, 2020	1,356,233	$ 74	0	186,474	1,058,090	87,051	24,544
Foreign currency translation adjustment	(24,028)	0	0	0		(23,514)	(514)
Net income	72,926	$ 0	0	0	68,936	0	3,990
Balance, shares at Mar. 31, 2021		74,123
Balance, amount at Mar. 31, 2021	1,405,131	$ 74	0	186,474	1,127,026	63,537	28,020
Balance, shares at Dec. 31, 2020		74,123
Balance, amount at Dec. 31, 2020	1,356,233	$ 74	$ 0	186,474	1,058,090	87,051	24,544
Net income	(254,363)
Balance, shares at Sep. 30, 2021		180,000,000	1,500,000
Balance, amount at Sep. 30, 2021	1,151,394	$ 180,065	$ 1,500	41,030	804,234	100,338	24,227
Balance, shares at Mar. 31, 2021		74,123
Balance, amount at Mar. 31, 2021	1,405,131	$ 74	0	186,474	1,127,026	63,537	28,020
Foreign currency translation adjustment	33,074	0		0	0	32,370	704
Net income	(185,510)	$ 0		0	(181,013)	0	(4,497)
Cancellation of common stock, shares		(10,000)
Cancellation of common stock, amount	(33,411)	$ (10)		(33,401)
Reverse Stock Split Adjustment, shares		1,131
Reverse Stock Split Adjustment, amount	0	$ 1		(1)
Balance, shares at Jun. 30, 2021		65,254
Balance, amount at Jun. 30, 2021	1,219,284	$ 65	$ 0	153,072	946,013	95,907	24,227
Foreign currency translation adjustment	4,431					4,431	0
Net income	(141,779)				(141,779)		0
Shared Issued for Liability Converted, shares		90,000,000
Shared Issued for Liability Converted, amount	69,458	$ 90,000		(20,542)
Shares Issued for minority controlling interests of its subsidiary, shares		90,000,000
Shares Issued for minority controlling interests of its subsidiary, amount	0	$ 90,000		(90,000)
Issuance of Preferred Stock to related party, shares			1,500,000
Issuance of Preferred Stock to related party, amount	0		$ 1,500	(1,500)
Balance, shares at Sep. 30, 2021		180,000,000	1,500,000
Balance, amount at Sep. 30, 2021	$ 1,151,394	$ 180,065	$ 1,500	$ 41,030	$ 804,234	$ 100,338	$ 24,227

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Cash Flows from Operating Activities
Net income (loss)	$ (254,363)	$ 513,713
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation	1,677	1,733
Loss on investment in equity securities	0	20,750
Unrealized (gain) loss from investment	(33,411)	0
Changes in assets and liabilities:
Decrease (increase) in accounts receivable	(64,569)	(318,266)
Decrease (increase) in inventory	289,835	(65,011)
Decrease (increase) in advance to suppliers	(83,766)	122,388
Decrease (increase) in security deposits and other assets	3,636	909,448
Increase (decrease) in accounts payable	(20,575)	235,609
Increase (decrease) in accrued expenses	153,419	14,145
Increase (decrease) in income tax payable	(27,728)	(9,977)
Net cash used in operating activities	(35,845)	(394,364)
Cash flows from Investing activities
Purchase of equipment	(1,528)	(2,194)
Net cash used in investing activities	(1,528)	(2,194)
Cash flows from Financing activities
Proceeds from (Repayment to) related party payable	(19,698)	69,810
Proceeds from (Repayment to) borrowings	133,854	167,918
Proceeds from investments by noncontrolling interests in subsidiary	0	33,398
Net cash provided by financing activities	114,156	271,126
Effect of exchange rate changes on cash and cash equivalents	1,465	4,447
Net decrease in cash and cash equivalents	78,248	(120,985)
Cash and Cash Equivalents
Beginning	122,482	295,594
Ending	200,730	174,609
Cash paid during the periods for:
Interest	2,179	0
Income taxes	(51,058)	0
Non-cash investing and financing activities:
Related party debt converted to Common stock	69,459	0
Issuance of Common Stock for minority controlling interests of its subsidiary	90,000	0
Issuance of Preferred Stock to related party	$ 1,500	$ 0

XML

NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2021

NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

Note 1. NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

Note 1. NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial reporting and in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial statements contained in this report reflect all adjustments that are normal and recurring in nature and considered necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The year-end balance sheet data were derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. The results of operations for the interim period are not necessarily indicative of the results expected for the full year. These unaudited consolidated financial statements, footnote disclosures, and other information should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Organization

EOS Inc. was incorporated on April 3, 2015 in the State of Nevada. The Company’s business plan is to market and distribute skin care products, including masks and serums.

On November 18, 2016, the Company set up a wholly-owned subsidiary in Taiwan to assist the Company to promote the business in Taiwan.

Emperor Star International Trade Co., Ltd., (“Emperor Star”), was incorporated on November 16, 2015 under the laws of Taiwan. Emperor Star is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers.

On May 3, 2017, the Company entered into and closed a Share Purchase and Sale Agreement (the “Purchase Agreement”) with Emperor Star and the shareholder of Emperor Star to acquire all issued and outstanding shares of Emperor Star in consideration of $30,562 in cash. As a result of the Purchase Agreement, Emperor Star became the Company’s wholly owned subsidiary. Upon consummation of the transaction, the Company has assumed the business of Emperor Star and ceased to be a shell company.

On September 20, 2018, the Company set up another wholly-owned subsidiary, EOS International Inc. (“EOS(BVI)”), under the laws of British Virgin Islands. EOS(BVI) is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers.

On March 1, 2019, EOS(BVI) set up a subsidiary, Shanghai Maosong Co., Ltd (“Maosong”), under the laws of People’s Republic of China. Maosong is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers in China.

On June 2, 2020, EOS(BVI) 83.33% owner, and Shanghai Qifan Qiye Management Co., Ltd. (“Qifan”) 16.67% owner of Maosong resolute to change the registered capital of Maosong to RMB 12,000,000,000 (1.2 billion) and that EOS to contribute certain Intellectual Property as registered capital of Shanghai Maosong. Intellectual Property owned by EOS International Inc was valued at RMB 10,000,000,000 (1 billion) and Intellectual Property owned by Qifan was valued at RMB 2,000,000,000 (200 million).

On July 13, 2021, EOS(BVI), MaoSong, and Qifan entered into a Shareholder Agreement where Qifan (i) delegate its 16.67% equity voting rights, powers, or benefits in Maosong to EOS(BVI); (ii) grant EOS(BVI) an irrevocable, unconditional, exclusive option to purchase Maosong’s equity interest; (iii) the right to receive any proceeds from the Maosong’s Equity Interest; (iv) pledge its existing or any prospective Maosong equity interest to EOS Int’l; as a result EOS(BVI) retains 100% control of MaoSong and the 16.67% noncontrolling interest are consolidated.

Principles of Consolidation

The accompanying consolidated financial statements, including the accounts of EOS Inc. and its wholly owned subsidiaries in Taiwan, British Virgin Islands, and People’s Republic of China, have been prepared in conformity with accounting principles generally accepted in the United States of America. Since the Company and Emperor Star are entities under common control prior to the acquisition of Emperor Star, the transaction is accounted for as a restructuring transaction. All assets and liabilities of Emperor Star were transferred to the Company at their respective carrying amounts on the date of transaction. The Company has recast prior period financial statements to reflect the conveyance of Emperor Star’s common shares as if the restructuring transaction had occurred as of the earliest date of the consolidated financial statements. All material intercompany accounts, transactions, and profits have been eliminated in consolidation. The nature of and effects on earnings per share (EPS) of non-recurring intra-entity transactions involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast to include the earnings (or losses) of the transferred net assets.

The functional currency of the subsidiaries in Taiwan is the New Taiwan dollars and the subsidiary in People’s Republic of China is the Chinese Yuan, or Renminbi; however, the accompanying consolidated financial statements have been translated and presented in United States Dollars ($). In the accompanying consolidated financial statements and notes, “$”, “US$” and “U.S. dollars” mean United States dollars, “NT$” and “NT dollars” mean New Taiwan dollars, and “CNY” means Chinese Yuan.

Use of Estimates

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

Classification

Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net income nor retained earnings.

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.

Accounts Receivable

Accounts receivable are stated at carrying value less estimates made for doubtful receivables. An allowance for impairment of trade receivables is established if the collection of a receivable becomes doubtful. Such receivable becomes doubtful when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. An impairment loss is recognized in the statement of income, as are subsequent recoveries of previous impairments.

Inventory

Inventory is stated at the lower of cost and net realizable value. Net realizable value (NRV) is defined as estimated selling prices less costs of completion, disposal, and transportation. Inventory consists mainly of finished goods held for resale. Cost is determined on a weighted average cost method. The Company periodically reviews the age and turnover of its inventory to determine whether any inventory has become obsolete or has declined in value, and incurs a charge to operations for known and anticipated inventory obsolescence.

Property and Equipment

Property and equipment are carried at cost net of accumulated amortization. Expenditures that improve the functionality of the related asset or extend the useful life are capitalized. When property and equipment is retired or otherwise disposed of, the related gain or loss is included in operating income. Leasehold improvements are depreciated on the straight-line method over the shorter of the remaining lease term or estimated useful life of the asset. Depreciation is calculated on the straight-line method, including property and equipment under capital leases, generally over five years. Depreciation expense is $1,677 and $1,733 for the nine months ended September 30, 2021 and 2020, respectively.

Impairment of Long-Lived Assets

The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve breakeven operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. Management has determined that no impairments of long-lived assets currently exist as of September 30, 2021 and December 31, 2020.

Long-term Equity Investment

The Company acquires equity investment to promote business and strategic objectives. The Company accounts for non-marketable equity and other equity investments for which the Company does not have control over the investees as:

• Equity method investments when the Company has the ability to exercise significant influence, but not control, over the investee. Its proportionate share of the income or loss is recognized monthly and is recorded in gain (loss) on equity investments.

• Non-marketable cost method investments when the equity method does not apply.

Significant judgment is required to identify whether an impairment exists in the valuation of the Company’s non-marketable equity investments, and therefore the Company considers this a critical accounting estimate. Its yearly analysis considers both qualitative and quantitative factors that may have a significant impact on the investee’s fair value. Qualitative analysis of its investments involves understanding the financial performance and near-term prospects of the investee, changes in general market conditions in the investee’s industry or geographic area, and the management and governance structure of the investee. Quantitative assessments of the fair value of its investments are developed using the market and income approaches. The market approach includes the use of comparable financial metrics of private and public companies and recent financing rounds. The income approach includes the use of a discounted cash flow model, which requires significant estimates regarding the investees’ revenue, costs, and discount rates. The Company’s assessment of these factors in determining whether an impairment exists could change in the future due to new developments or changes in applied assumptions.

Other-Than-Temporary Impairment

The Company’s long-term equity investments are subject to a periodic impairment review. Impairments affect earnings as follows:

• Marketable equity securities include the consideration of general market conditions, the duration and extent to which the fair value is below cost, and the Company’s ability and intent to hold the investment for a sufficient period of time to allow for recovery of value in the foreseeable future. The Company also considers specific adverse conditions related to the financial health of, and the business outlook for, the investee, which may include industry and sector performance, changes in technology, operational and financing cash flow factors, and changes in the investee’s credit rating. The Company records other-than-temporary impairments on marketable equity securities and marketable equity method investments in gain (loss) on equity investments.

• Non-marketable equity investments based on the Company’s assessment of the severity and duration of the impairment, and qualitative and quantitative analysis of the operating performance of the investee; adverse changes in market conditions and the regulatory or economic environment; changes in operating structure or management of the investee; additional funding requirements; and the investee’s ability to remain in business. A series of operating losses of an investee or other factors may indicate that a decrease in value of the investment has occurred that is other than temporary and that shall be recognized even though the decrease in value is in excess of what would otherwise be recognized by application of the equity method. A loss in value of an investment that is other than a temporary decline shall be recognized. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. The Company records other-than-temporary impairments for non-marketable cost method investments and equity method investments in gain (loss) on equity investments.

Revenue Recognition

Pursuant to ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines is within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customers. At inception of the contract, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Merchandise sales: The Company recognizes sales revenues from merchandise sales when customers obtain control of the Company’s products, which typically occurs upon delivery to customer. Merchandise sales revenues are recorded at the sales price, or “transaction price”.

Trade discount and allowances: The Company generally does not provide invoice discounts on product sales to its customers for prompt payment.

Product returns: The Company generally does not provide customers with the right to return a product for a full or partial refund, a credit, or an exchange for another product.

To date, product allowance and returns have been minimal and, based on its experience, the Company believes that returns of its products will continue to be minimal.

The following tables provide details of revenue by major products and by geography.

Revenue by Major Products

For the nine months ended September 30, 2021:
Water purifier machine	$	886,020
Automobile carbon reduction machine		-
Nutrition supplement		-
Total	$	886,020

For the nine months ended September 30, 2020:
Water purifier machine	$	1,181,007
Automobile carbon reduction machine		131,882
Nutrition supplement		70,629
Software		33,508
Total	$	1,417,026

Revenue by Geography

For the nine months ended September 30, 2021:
Asia Pacific	$	886,020
Total	$	886,020

For the nine months ended September 30, 2020:
Asia Pacific	$	1,417,026
Total	$	1,417,026

Leases — The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) using the modified retrospective approach, electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, the Company presented the disclosures which were required under ASC 840.

The Company applied the following practical expedients in the transition to the new standard and allowed under ASC 842:

Practical Expedient	Description
Reassessment of expired or existing contracts	The Company elected not to reassess, at the application date, whether any expired or existing contracts contained leases, the lease classification for any expired or existing leases, and the accounting for initial direct costs for any existing leases.
Use of hindsight	The Company elected to use hindsight in determining the lease term (that is, when considering options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of right-to-use assets.
Reassessment of existing or expired land easements	The Company elected not to evaluate existing or expired land easements that were not previously accounted for as leases under ASC 840, as allowed under the transition practical expedient. Going forward, new or modified land easements will be evaluated under ASU No. 2016-02.
Separation of lease and non-lease components	Lease agreements that contain both lease and non-lease components are generally accounted for separately.
Short-term lease recognition exemption	The Company also elected the short-term lease recognition exemption and will not recognize ROU assets or lease liabilities for leases with a term less than 12 months.

The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. The Company’s future minimum based payments used to determine the Company’s lease liabilities mainly include minimum based rent payments. As most of Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The adoption of ASC 842 had no substantial impact on the Company’s consolidated balance sheets. The most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, adoption of this standard resulted in the recognition of operating lease right-of-use assets of $8,235 and operating lease liabilities of $8,235 on the consolidated balance sheet as of January 1, 2019. The adoption of ASC 842 did not result in a cumulative-effect adjustment to the opening balance of retained earnings.

In addition, the adoption of the standard did not have a material impact on the Company’s results of operations or cash flows. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur.

Advertising Costs

Advertising costs are expensed at the time such advertising commences. Advertising expenses were $399 and $17,795 for the nine months ended September 30, 2021 and 2020, respectively.

Post-retirement and Post-employment Benefits

The Company’s subsidiaries in Taiwan adopted the government mandated defined contribution plan pursuant to the Taiwan Labor Pension Act (the “Act”). Such labor regulations require that the rate of contribution made by an employer to the Labor Pension Fund per month shall not be less than 6% of the worker’s monthly salaries. Pursuant to the Act, the Company makes monthly contribution equal to 6% of employees’ salaries to the employees’ pension fund. The Company has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which were expensed as incurred, were $4,541 and $3,852 for the nine months ended September 30, 2021 and 2020, respectively. Other than the above, the Company does not provide any other post-retirement or post-employment benefits.

Fair Value Measurements

FASB ASC 820, “Fair Value Measurements” defines fair value for certain financial and non-financial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:

Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.

The carrying values of certain assets and liabilities of the Company, such as cash and cash equivalents, accounts receivable, inventory, advance to suppliers, prepaid expenses, accounts payable, accrued expenses, and due to shareholders, approximate fair value because of to their relatively short maturities.

Net Income Per Share

Basic income per share is computed by dividing net income by weighted average number of shares of common stock outstanding during each period. Diluted income per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents, and potentially dilutive securities outstanding during each period. For the nine months ended September 30, 2021 and 2020, the Company does not have any outstanding common stock equivalents; therefore, a separate computation of diluted income per share is not presented.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.

Concentration of Credit Risk

Cash and cash equivalents: The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions in Taiwan, but these investments may be in excess of the insurance limits of Taiwan Central Deposit Insurance Corporation (the “TCDIC”). The Company does not enter into financial instruments for hedging, trading or speculative purposes. Concentration of credit risk with respect to trade and notes receivables is limited due to the wide variety of customers and markets in which the Company transacts business, as well as their dispersion across many geographical areas. As of September 30, 2021, the Company had approximately $92,387 in excess of TCDIC insured limits. The Company has not experienced any losses in such accounts.

Customers: The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral.

For the nine months ended September 30, 2021, one customer accounted for more than 10% of the Company’s total revenues, representing approximately 100% of its total revenues, and 100% of accounts receivable in aggregate at September 30, 2021.

Customer	Net sales For the nine months ended September 30, 2021		Accounts receivable balance as of September 30, 2021
A	$	886,020	$	243,933

For the nine months ended September 30, 2020, one customer accounted for more than 10% of the Company’s total revenues, representing approximately 83.34% of its total revenues, and 71.43% of accounts receivable in aggregate at September 30, 2020.

Customer	Net sales For the nine months ended September 30, 2020		Accounts receivable balance as of September 30, 2020
A	$	1,181,007	$	1,801,027

Suppliers: The Company’s inventory is purchased from various suppliers.

For the nine months ended September 30, 2021, three suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 12.49%, 69.30% and 12.74% of total net purchase, and 0% of accounts payable in aggregate at September 30, 2021, respectively:

Supplier	Net purchase for the nine months ended September 30, 2021		Accounts payable balance as of nine 30, 2021
A	$	-	$	-
B	$	-	$	-
C	$	-	$	-
D	$	12,930	$	-
E	$	71,712	$	-
F	$	13,189	$	-

For the nine months ended September 30, 2020, three suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 39%, 31% and 22% of total net purchase, and 0% of accounts payable in aggregate at September 30, 2020, respectively:

Supplier	Net purchase for the nine months ended September 30, 2020		Accounts payable balance as of September 30, 2020
A	$	60,547	$	-
B	$	49,300	$	-
C	$	34,000	$	-

Foreign-currency Transactions

Foreign-currency transactions are recorded in New Taiwan dollars (“NTD”) and Chinese Yuan (“CNY”) at the rates of exchange in effect when the transactions occur. Gains or losses resulting from the application of different foreign exchange rates when cash in foreign currency is converted into New Taiwan dollars and Chinese Yuan, or when foreign-currency receivables or payables are settled, are credited or charged to income in the year of conversion or settlement. On the balance sheet dates, the balances of foreign-currency assets and liabilities are restated at the prevailing exchange rates and the resulting differences are charged to current income except for those foreign currencies denominated investments in shares of stock where such differences are accounted for as translation adjustments under stockholders’ equity.

Translation Adjustment

The accounts of the Company’s subsidiaries were maintained, and their financial statements were expressed in New Taiwan Dollar (“NTD”) and Chinese Yuan (“CNY”). Such financial statements were translated into U.S. Dollars (“$” or “USD”) in accordance ASC 830, “Foreign Currency Matters”, with the NTD and CNY as the functional currency. According to the Statement, all assets and liabilities are translated at the current exchange rate, common stock and additional paid-in capital are translated at the historical rates, and income statement items are translated at an average exchange rate for the period. The resulting translation adjustments are reported under accumulated other comprehensive income (loss) as a component of stockholders’ equity.

Comprehensive Income (loss)

Comprehensive income (loss) includes accumulated foreign currency translation gains and losses. The Company has reported the components of comprehensive income (loss) on its consolidated statements of operations and other comprehensive income (loss).

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL), the revised effective date is January 2023.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.

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LEASE

9 Months Ended

Sep. 30, 2021

LEASE

Note 2. LEASE

Note 2. LEASE

The Company has no finance leases. The Company has terminated an office facility lease with Wanhong Enterprise Co., Ltd on September 28, 2020. The Company has entered into new lease agreement with Xiuling Huang on September 29, 2020 for the period of approximately 9 months. After the lease term expired on June 14, 2021, the Company has entered into new lease agreement with Xiuling Huang on June 15, 2021 for the period of 1 year.

As of September 30, 2021, operating lease expense was $38,100. Future lease payable was $17,778.

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LONG-TERM INVESTMENT

9 Months Ended

Sep. 30, 2021

LONG-TERM INVESTMENT

Note 3. LONG-TERM INVESTMENTS

Note 3. LONG-TERM INVESTMENT

On January 15, 2019, the Company, A-Best Wire Harness & Components Co., Ltd. (“A-Best” or the “Investee”), a company formed under the laws of Taiwan, and Mr. Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into an investment cooperation agreement (the “Investment Cooperation Agreement”), pursuant to which the Company issued 10,000 shares of its common stock to Mr. Ing-Ming Lai to purchase twenty percent (20%) of the issued and outstanding equity in A-Best. On May 24, 2019, the Company consummated the shareholder registration of A-Best with the Investment Commission of Ministry of Economic Affairs of Taiwan and issued 10,000 shares of its common stock to Mr. Ing-Ming Lai to acquire 20% of the issued and outstanding equity in A-Best.

On March 2, 2020, the Company, A-Best, and Ing-Ming Lai, (collectively, the “Parties”) entered into a strategic alliance agreement (the “Strategic Alliance Agreement”), pursuant to which the Parties redefined their cooperation with respect to the sales and distribution of A-Best’s micro-ceramic speakers. In accordance with the Strategic Alliance Agreement, A-Best, Mr. Ing-Ming Lai and the Company terminated the Investment Cooperation Agreement dated January 15, 2019 entered by and among the Parties and as a result the Company agreed to return 20% of the equity interest in A-Best to Mr. Ing-Ming Lai, which was valued at approximately $33,411 by the Parties.

Furthermore, subject to the terms and conditions of the Strategic Alliance Agreement, A-Best has granted the Company the exclusive sale and distribution right of A-Best’s micro-ceramic speakers in the world for one (1) year (the “Term”), which may be renewed with mutual consent of the Parties two months prior to the expiration of the Term, while A-Best retains its own right to sell and distribute the micro-ceramic speakers on its own. In consideration for the exclusive distribution right of A-Best’s speakers under the Strategic Alliance Agreement, the Company agreed to have A-Best keep the Company’s 10,000 shares of common stock issued under the Investment Cooperation Agreement and the Company may keep the revenue and profits generated from the sale of A-Best speakers until the total revenue from such speakers reaches $15 million U.S. dollars.

On April 22, 2020, the Company returned 20% equity interest in A-Best to Mr. Ing-Ming Lai pursuant to the Strategic Alliance Agreement. As of April 22, 2020, the Company holds 20% equity interest in A-Best and uses equity method to account for its equity investment as prescribed in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). Equity method adjustments include the Company’s proportionate share of investee’s income or loss and other adjustments required by the equity method. For the period from January 1, 2020, to April 22, 2020, the share of loss from investment accounted for using equity method was $2,848. As a result of the return of equity interest, the Company also recognized loss on investment in equity securities of $17,902 for the same period.

Summarized financial information for the Company’s equity method investee, A-Best, is as follows:

Balance Sheets

	April 22,			December 31,
	2020			2019
Current assets	$	38,303		$	42,818
Non-current assets		779			857
Current liabilities		1,406,166			1,372,351
Shareholders’ deficit		(1,367,084	)		(1,328,676	)

Statement of Operation

	For the period from January 1, 2020 to April 22, 2020.
Net sales	$	854
Gross profit		498
Net loss		(14,240	)
Share of loss from investment accounted for using equity method		(2,848	)

On May 26, 2020, EOS Inc. increased its investment in Emperor Star by $134,004 (NTD$4,000,000). The Company also received the contributions to Emperor Star from non-controlling interests in the amount of $33,398 (NTD$1,000,000). As a result, the Company owns 83% equity interest of Emperor Star as of September 30, 2020, which is no longer a wholly-owned subsidiary.

On April 12, 2021, A-Best, and Mr. Ing-Ming Lai entered into a termination agreement (the “Termination Agreement”) to terminate the agreement of Strategic Alliance Agreement dated March 2, 2020. In the agreement, Ing-Ming Lai has proceeded to return a total of 10,000 shares in EOS Inc, back to the Company.

The Board of Directors of this Corporation authorized the return of the 10,000 EOSS shares from Ing Ming Lai.

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SECURITY DEPOSITS

9 Months Ended

Sep. 30, 2021

SECURITY DEPOSITS

Note 4. SECURITY DEPOSITS

Note 4. SECURITY DEPOSITS

On November 21, 2019, the Company and Shuang Hua International Culture Media Co, Ltd. (“Shuang Hua”), a corporation formed under laws of Taiwan, entered into an exclusive copyright and distribution agreement (the “Agreement”), pursuant to which, subject to the terms and condition therein, Shuang Hua granted the Company an exclusive right to produce, market, distribute and sell the bilingual films and electronic books of which the copyrights are owned by Shuang Hua. In accordance to the agreement, the Company shall pay Shuang Hua a refundable deposit of in the aggregate amount of $2,894,000, before December 31, 2021.

As of September 30, 2021 and December 31, 2020, the Company has paid $1,030,000 and $1,030,000 to Shuang Hua, respectively, and are recorded as other long-term assets. Due to Covid-19 in 2020, the Company has not started its business plan with the exclusive copyright and distribution agreement. The Company will extend it for another two years.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2021

RELATED PARTY TRANSACTIONS

Note 5. RELATED PARTY TRANSACTIONS

Note 5. RELATED PARTY TRANSACTIONS

Related parties of the Company during the nine months ended September 30, 2021 and December 31, 2020 consist of the following:

Name of Related Party	Nature of Relationship
Yu Cheng Yang	Majority Shareholder, Director and Officer of the Company
Co-Innovation Group Limited	Company under control of Yu Cheng Yang
World Capital Holding Limited	Company under control by Shanghai Qifan Qiye Management Co., Ltd.’s shareholders, former non-controlling interest of the Company

Due to shareholders

The Company has advanced funds from its directors and shareholders Yu Cheng Yang for working capital purposes. As of September 30, 2021 and December 31, 2020, there were $19,281 and $107,791 advance outstanding, respectively. The Company has agreed that the outstanding balances bear 0% interest rate and are due upon demand after thirty days of written notice by the director and shareholder.

Mr. Yang advanced $200,267 to the Company as working capital, and the Company repaid $219,965 to Mr. Yang for the nine months ended September 30, 2021.

On July 8, 2021, the Company issued the 90,000,000 shares of common stock to convert $90,000 owed to Mr. Yang.

As of September 30, 2021, the outstanding balance payable to Mr Yang was $19,281.

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TERM LOAN

9 Months Ended

Sep. 30, 2021

TERM LOAN

Note 6. TERM LOAN

Note 6. TERM LOAN

Loan from First Commercial Bank

On September 30, 2020, TWD 3,000,000 (approximately $107,750) term loan was granted to the Company for working capital with repayment period of 60 months. The term loan is subject to an interest charge at 1% per annum for the first 9 months of the term loan; interest charges on the term loan from 10th to 60th is 3.5% per annum.

On September 30, 2020, TWD 2,000,000 (approximately $71,833) term loan was granted to the Company for employee salary with repayment period of 30 months. The term loan is subject to an interest charge at 1.5% per annum for the first 9 months of the term loan; interest charges on the term loan from 10th to 60th is 1.845% per annum.

Loan from Bank of Taiwan

On May 7, 2021, TWD 4,000,000 (approximately $143,666) term loan was granted to the Company for employee salary with repayment period of 60 months. The term loan is subject to an interest charge at 1% per annum for the first 8 months of the term loan; interest charges on the term loan from 9th to 60th is 1.9% per annum.

On May 7, 2021, TWD 1,000,000 (approximately $35,917) term loan was granted to the Company for employee salary with repayment period of 60 months. The term loan is subject to an interest charge at 1.5% per annum for the first 8 months of the term loan; interest charges on the term loan from 9th to 60th is 2% per annum.

The outstanding balance of the term loan is $302,872, of which $79,339 is due within one year and classified as short term, and $223,533 is due after one year, and has classified as long term.

Interest expenses were $2,179 and $494 for the nine months ended September 30, 2021 and December 31, 2020, respectively.

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2021

STOCKHOLDERS' EQUITY

Note 7. STOCKHOLDERS' EQUITY

Note 7. STOCKHOLDERS’ EQUITY

Preferred Stock

On July 8, 2021, the board of directors of the Company amended its stock designation and the Company is authorized to issue 5,000,000 shares of Series A Preferred Stock with par value $0.001. Each stock is entitled to 1,000 votes of common stock without dividend rights.

On July 8, 2021, the Company issued 1,500,000 shares of Series A Preferred Stock to Co-Innovation Group Limited for proceeds of $1,500, the amount is recorded as a reduction to additional paid-in capital of $1,500

Common Stock

On August 18, 2021, the Company completed and closed a series of transactions to reorganize the Company’s structure and to develop its business by acquiring certain minority control interest of its subsidiary and intellectual properties. Pursuant to the Intellectual Property Transfer Agreement, the Company to issue 75,000,000 shares of Common Stock to the transferors for the intellectual properties in consideration of the transfer. Pursuant to the Shareholders’ Agreement of Shanghai Maosong Trading Co., Ltd and Equity Pledge Agreements, the Company to issue 15,000,000 shares of Common Stock to the transferors for the minority controlling interests of its subsidiary. Upon completion of the transactions above, EOS International Inc became a wholly controlled subsidiary of the Company.

On July 8, 2021, the Company issued 75,000,000 shares of Common Stock at $0.001 per share to convert outstanding debt owed to Co-Innovation Group Limited in the amount of $75,000.

On July 8, 2021, the Company issued 15,000,000 shares of Common Stock at $0.001 per share to convert outstanding debt owed to World Capital Holding Ltd in the amount of $15,000.

On April 12, 2021, A-Best, and Mr. Ing-Ming Lai entered into a termination agreement (the “Termination Agreement”) to terminate the agreement of Strategic Alliance Agreement dated March 2, 2020. In the agreement, Ing-Ming Lai has proceeded to return a total of 10,000 shares in EOS Inc, back to the Company.

On March 31, 2021, the Company’s board of directors and stockholders authorized a reverse stock split of its outstanding common stock at a ratio of 1-for-1000 without any change in the par value per share which became effective on April 7, 2021 upon approval by FINRA. The number of shares and price per share in the financial statements have been retrospectively adjusted accordingly to reflect this reverse stock split.

On March 16, 2021, the authorized shares of common stock were increased from 75,000,000 to 575,000,000 shares and the par value remains at $0.001.

On June 1, 2020, the Company and Fortune King entered into a sales collaboration agreement (the “Sales Collaboration Agreement”), pursuant to which, subject to the terms and condition therein, Fortune King agreed to provide promotional and marketing service of the Company’s products within six years from January 2020, to December 2025. Fortune King is obligated to perform such service regardless of whether the Company sells products to Fortune King during the designated period. In accordance with the Sales Collaboration Agreement and in consideration for the service provided by Fortune King, the Company shall issue 3,000,000 shares of common stock to Fortune King for the promotional and marketing service of $1,500,000. The 3,000,000 shares were issued on December 29, 2020.

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INCOME TAXES

9 Months Ended

Sep. 30, 2021

INCOME TAXES

Note 8. INCOME TAXES

Note 8. INCOME TAXES

United States

EOS, Inc. is incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company has no taxable income for the period. As of September 30, 2021, the Company had net operating loss carry forwards of $154,880 that may be available to reduce future years’ taxable income. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements as their realization is determined not likely to occur and, accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. No tax benefit has been realized since a 100% valuation allowance has offset deferred tax asset resulting from the net operating losses.

British Virgin Islands

EOS International Inc. is incorporated in British Virgin Islands and are not required to pay income tax.

Taiwan

The subsidiary of EOS Inc. and Emperor Star is incorporated in Taiwan. According to the amendments to the “Taiwan Income Tax Act” enacted by the office of the President of Taiwan on February 7, 2018, statutory income tax rate increased from 17% to 20% and undistributed earning tax decreased from from 10% to 5%, effective from January 1, 2018.

People’s Republic of China (“PRC”)

Under the Enterprise Income Tax (“EIT”) Law of the PRC, the standard EIT rate is 25%. The PRC subsidiary of the Company is subject to PRC income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which they operate. No provision for income taxes have been made as Maosong had no taxable income as of and for the nine months ended September 30, 2021.

Provision for income tax consists of the following:

	For the Nine Months Ended September 30,
	2021			2020
Current income tax
U.S.	$	-		$	-
Taiwan		(51,058	)		-
PRC		-			-
Sub total		(51,058	)		-
Deferred income tax
U.S.
Deferred tax assets for NOL carryforwards		(44,945	)		(46,300	)
Valuation allowance		44,945			46,300
Net changes in deferred income tax (benefit)		-			-
Total income tax provision	$	-		$	-

The following is a reconciliation of the statutory tax rate to the effective tax rate:

	For the Nine Months Ended September 30,
	2021			2020
U.S. statutory income tax rate		21	%		21	%
Taiwan unified income tax rate		20	%		20	%
PRC standard EIT rate		25	%		25	%
Changes in valuation allowance		(46	)%		(46	)%
Other		(20	)%		(20	)%
Effective combined income tax rate		0	%		0	%

Significant components of the Company’s deferred taxes as of September 30, 2021 and December 31, 2020 were as follows:

	September 30,			December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	210,309		$	177,784
Less: Valuation allowance		(210,309	)		(177,784	)
Deferred tax assets, net	$	-		$	-

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2021

COMMITMENTS AND CONTINGENCIES

Note 9. COMMITMENTS AND CONTINGENCIES

Note 9. COMMITMENTS AND CONTINGENCIES

Sales Collaboration Agreement

On June 1, 2020, the Company and Fortune King entered into a sales collaboration agreement (the “Sales Collaboration Agreement”), pursuant to which, subject to the terms and condition therein, Fortune King agreed to provide promotional and marketing service of the Company’s products within six years from January 2020, to December 2025. Fortune King is obligated to perform such service regardless of whether the Company sells products to Fortune King during the designated period. In accordance with the Sales Collaboration Agreement and in consideration for the service provided by Fortune King, the Company shall issue 3,000,000 shares of common stock to Fortune King for the promotional and marketing service of $1,500,000. The 3,000,000 shares were issued on December 29, 2020.

The Company recognized the stock-based compensation of marketing expenses based on quarterly basis, with a quarterly marketing expense of $62,500, total up have 24 quarters.

Copyright and Distribution Agreement

On November 21, 2019, the Company and Shuang Hua International Culture Media Co, Ltd. (“Shuang Hua”), a corporation formed under laws of Taiwan, entered into an exclusive copyright and distribution agreement (the “Agreement”), pursuant to which, subject to the terms and condition therein, Shuang Hua granted the Company an exclusive right to produce, market, distribute and sell the bilingual films and electronic books of which the copyrights owned by Shuang Hua. In accordance to the agreement, the Company shall pay Shuang Hua a refundable deposit of in the aggregate amount of $2,894,000, before December 31, 2021. As of September 30, 2021, the Company has paid $1,030,000 to Shuang Hua.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2021

SUBSEQUENT EVENTS

Note 10. SUBSEQUENT EVENTS

Note 10. SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date which the financial statements are available to be issued. All subsequent events requiring recognition as of September 30, 2021 have been incorporated into these consolidated financial statements and there are no other subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

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NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2021

NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial reporting and in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial statements contained in this report reflect all adjustments that are normal and recurring in nature and considered necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The year-end balance sheet data were derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. The results of operations for the interim period are not necessarily indicative of the results expected for the full year. These unaudited consolidated financial statements, footnote disclosures, and other information should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

Organization

EOS Inc. was incorporated on April 3, 2015 in the State of Nevada. The Company’s business plan is to market and distribute skin care products, including masks and serums.

On November 18, 2016, the Company set up a wholly-owned subsidiary in Taiwan to assist the Company to promote the business in Taiwan.

Emperor Star International Trade Co., Ltd., (“Emperor Star”), was incorporated on November 16, 2015 under the laws of Taiwan. Emperor Star is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers.

On May 3, 2017, the Company entered into and closed a Share Purchase and Sale Agreement (the “Purchase Agreement”) with Emperor Star and the shareholder of Emperor Star to acquire all issued and outstanding shares of Emperor Star in consideration of $30,562 in cash. As a result of the Purchase Agreement, Emperor Star became the Company’s wholly owned subsidiary. Upon consummation of the transaction, the Company has assumed the business of Emperor Star and ceased to be a shell company.

On September 20, 2018, the Company set up another wholly-owned subsidiary, EOS International Inc. (“EOS(BVI)”), under the laws of British Virgin Islands. EOS(BVI) is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers.

On March 1, 2019, EOS(BVI) set up a subsidiary, Shanghai Maosong Co., Ltd (“Maosong”), under the laws of People’s Republic of China. Maosong is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers in China.

On June 2, 2020, EOS(BVI) 83.33% owner, and Shanghai Qifan Qiye Management Co., Ltd. (“Qifan”) 16.67% owner of Maosong resolute to change the registered capital of Maosong to RMB 12,000,000,000 (1.2 billion) and that EOS to contribute certain Intellectual Property as registered capital of Shanghai Maosong. Intellectual Property owned by EOS International Inc was valued at RMB 10,000,000,000 (1 billion) and Intellectual Property owned by Qifan was valued at RMB 2,000,000,000 (200 million).

On July 13, 2021, EOS(BVI), MaoSong, and Qifan entered into a Shareholder Agreement where Qifan (i) delegate its 16.67% equity voting rights, powers, or benefits in Maosong to EOS(BVI); (ii) grant EOS(BVI) an irrevocable, unconditional, exclusive option to purchase Maosong’s equity interest; (iii) the right to receive any proceeds from the Maosong’s Equity Interest; (iv) pledge its existing or any prospective Maosong equity interest to EOS Int’l; as a result EOS(BVI) retains 100% control of MaoSong and the 16.67% noncontrolling interest are consolidated.

Principles of Consolidation

The accompanying consolidated financial statements, including the accounts of EOS Inc. and its wholly owned subsidiaries in Taiwan, British Virgin Islands, and People’s Republic of China, have been prepared in conformity with accounting principles generally accepted in the United States of America. Since the Company and Emperor Star are entities under common control prior to the acquisition of Emperor Star, the transaction is accounted for as a restructuring transaction. All assets and liabilities of Emperor Star were transferred to the Company at their respective carrying amounts on the date of transaction. The Company has recast prior period financial statements to reflect the conveyance of Emperor Star’s common shares as if the restructuring transaction had occurred as of the earliest date of the consolidated financial statements. All material intercompany accounts, transactions, and profits have been eliminated in consolidation. The nature of and effects on earnings per share (EPS) of non-recurring intra-entity transactions involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast to include the earnings (or losses) of the transferred net assets.

The functional currency of the subsidiaries in Taiwan is the New Taiwan dollars and the subsidiary in People’s Republic of China is the Chinese Yuan, or Renminbi; however, the accompanying consolidated financial statements have been translated and presented in United States Dollars ($). In the accompanying consolidated financial statements and notes, “$”, “US$” and “U.S. dollars” mean United States dollars, “NT$” and “NT dollars” mean New Taiwan dollars, and “CNY” means Chinese Yuan.

Use of Estimates

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

Classification

Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net income nor retained earnings.

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.

Accounts Receivable

Accounts receivable are stated at carrying value less estimates made for doubtful receivables. An allowance for impairment of trade receivables is established if the collection of a receivable becomes doubtful. Such receivable becomes doubtful when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. An impairment loss is recognized in the statement of income, as are subsequent recoveries of previous impairments.

Inventory

Inventory is stated at the lower of cost and net realizable value. Net realizable value (NRV) is defined as estimated selling prices less costs of completion, disposal, and transportation. Inventory consists mainly of finished goods held for resale. Cost is determined on a weighted average cost method. The Company periodically reviews the age and turnover of its inventory to determine whether any inventory has become obsolete or has declined in value, and incurs a charge to operations for known and anticipated inventory obsolescence.

Property and Equipment

Property and equipment are carried at cost net of accumulated amortization. Expenditures that improve the functionality of the related asset or extend the useful life are capitalized. When property and equipment is retired or otherwise disposed of, the related gain or loss is included in operating income. Leasehold improvements are depreciated on the straight-line method over the shorter of the remaining lease term or estimated useful life of the asset. Depreciation is calculated on the straight-line method, including property and equipment under capital leases, generally over five years. Depreciation expense is $1,677 and $1,733 for the nine months ended September 30, 2021 and 2020, respectively.

Impairment of Long-Lived Assets

The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve breakeven operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. Management has determined that no impairments of long-lived assets currently exist as of September 30, 2021 and December 31, 2020.

Long-term Equity Investment

The Company acquires equity investment to promote business and strategic objectives. The Company accounts for non-marketable equity and other equity investments for which the Company does not have control over the investees as:

• Equity method investments when the Company has the ability to exercise significant influence, but not control, over the investee. Its proportionate share of the income or loss is recognized monthly and is recorded in gain (loss) on equity investments.

• Non-marketable cost method investments when the equity method does not apply.

Significant judgment is required to identify whether an impairment exists in the valuation of the Company’s non-marketable equity investments, and therefore the Company considers this a critical accounting estimate. Its yearly analysis considers both qualitative and quantitative factors that may have a significant impact on the investee’s fair value. Qualitative analysis of its investments involves understanding the financial performance and near-term prospects of the investee, changes in general market conditions in the investee’s industry or geographic area, and the management and governance structure of the investee. Quantitative assessments of the fair value of its investments are developed using the market and income approaches. The market approach includes the use of comparable financial metrics of private and public companies and recent financing rounds. The income approach includes the use of a discounted cash flow model, which requires significant estimates regarding the investees’ revenue, costs, and discount rates. The Company’s assessment of these factors in determining whether an impairment exists could change in the future due to new developments or changes in applied assumptions.

Other than temporary impairment policy

The Company’s long-term equity investments are subject to a periodic impairment review. Impairments affect earnings as follows:

• Marketable equity securities include the consideration of general market conditions, the duration and extent to which the fair value is below cost, and the Company’s ability and intent to hold the investment for a sufficient period of time to allow for recovery of value in the foreseeable future. The Company also considers specific adverse conditions related to the financial health of, and the business outlook for, the investee, which may include industry and sector performance, changes in technology, operational and financing cash flow factors, and changes in the investee’s credit rating. The Company records other-than-temporary impairments on marketable equity securities and marketable equity method investments in gain (loss) on equity investments.

• Non-marketable equity investments based on the Company’s assessment of the severity and duration of the impairment, and qualitative and quantitative analysis of the operating performance of the investee; adverse changes in market conditions and the regulatory or economic environment; changes in operating structure or management of the investee; additional funding requirements; and the investee’s ability to remain in business. A series of operating losses of an investee or other factors may indicate that a decrease in value of the investment has occurred that is other than temporary and that shall be recognized even though the decrease in value is in excess of what would otherwise be recognized by application of the equity method. A loss in value of an investment that is other than a temporary decline shall be recognized. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. The Company records other-than-temporary impairments for non-marketable cost method investments and equity method investments in gain (loss) on equity investments.

Revenue Recognition

Pursuant to ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines is within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customers. At inception of the contract, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Merchandise sales: The Company recognizes sales revenues from merchandise sales when customers obtain control of the Company’s products, which typically occurs upon delivery to customer. Merchandise sales revenues are recorded at the sales price, or “transaction price”.

Trade discount and allowances: The Company generally does not provide invoice discounts on product sales to its customers for prompt payment.

Product returns: The Company generally does not provide customers with the right to return a product for a full or partial refund, a credit, or an exchange for another product.

To date, product allowance and returns have been minimal and, based on its experience, the Company believes that returns of its products will continue to be minimal.

The following tables provide details of revenue by major products and by geography.

Revenue by Major Products

For the nine months ended September 30, 2021:
Water purifier machine	$	886,020
Automobile carbon reduction machine		-
Nutrition supplement		-
Total	$	886,020

For the nine months ended September 30, 2020:
Water purifier machine	$	1,181,007
Automobile carbon reduction machine		131,882
Nutrition supplement		70,629
Software		33,508
Total	$	1,417,026

Revenue by Geography

For the nine months ended September 30, 2021:
Asia Pacific	$	886,020
Total	$	886,020

For the nine months ended September 30, 2020:
Asia Pacific	$	1,417,026
Total	$	1,417,026

Leases

Leases — The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) using the modified retrospective approach, electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, the Company presented the disclosures which were required under ASC 840.

The Company applied the following practical expedients in the transition to the new standard and allowed under ASC 842:

Practical Expedient	Description
Reassessment of expired or existing contracts	The Company elected not to reassess, at the application date, whether any expired or existing contracts contained leases, the lease classification for any expired or existing leases, and the accounting for initial direct costs for any existing leases.
Use of hindsight	The Company elected to use hindsight in determining the lease term (that is, when considering options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of right-to-use assets.
Reassessment of existing or expired land easements	The Company elected not to evaluate existing or expired land easements that were not previously accounted for as leases under ASC 840, as allowed under the transition practical expedient. Going forward, new or modified land easements will be evaluated under ASU No. 2016-02.
Separation of lease and non-lease components	Lease agreements that contain both lease and non-lease components are generally accounted for separately.
Short-term lease recognition exemption	The Company also elected the short-term lease recognition exemption and will not recognize ROU assets or lease liabilities for leases with a term less than 12 months.

The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. The Company’s future minimum based payments used to determine the Company’s lease liabilities mainly include minimum based rent payments. As most of Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

The adoption of ASC 842 had no substantial impact on the Company’s consolidated balance sheets. The most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, adoption of this standard resulted in the recognition of operating lease right-of-use assets of $8,235 and operating lease liabilities of $8,235 on the consolidated balance sheet as of January 1, 2019. The adoption of ASC 842 did not result in a cumulative-effect adjustment to the opening balance of retained earnings.

In addition, the adoption of the standard did not have a material impact on the Company’s results of operations or cash flows. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur.

Advertising costs

Advertising costs are expensed at the time such advertising commences. Advertising expenses were $399 and $17,795 for the nine months ended September 30, 2021 and 2020, respectively.

Post retirement and Post employment Benefits

The Company’s subsidiaries in Taiwan adopted the government mandated defined contribution plan pursuant to the Taiwan Labor Pension Act (the “Act”). Such labor regulations require that the rate of contribution made by an employer to the Labor Pension Fund per month shall not be less than 6% of the worker’s monthly salaries. Pursuant to the Act, the Company makes monthly contribution equal to 6% of employees’ salaries to the employees’ pension fund. The Company has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which were expensed as incurred, were $4,541 and $3,852 for the nine months ended September 30, 2021 and 2020, respectively. Other than the above, the Company does not provide any other post-retirement or post-employment benefits.

Fair Value Measurements

FASB ASC 820, “Fair Value Measurements” defines fair value for certain financial and non-financial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:

Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.

The carrying values of certain assets and liabilities of the Company, such as cash and cash equivalents, accounts receivable, inventory, advance to suppliers, prepaid expenses, accounts payable, accrued expenses, and due to shareholders, approximate fair value because of to their relatively short maturities.

Net Income Per Share

Basic income per share is computed by dividing net income by weighted average number of shares of common stock outstanding during each period. Diluted income per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents, and potentially dilutive securities outstanding during each period. For the nine months ended September 30, 2021 and 2020, the Company does not have any outstanding common stock equivalents; therefore, a separate computation of diluted income per share is not presented.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.

Concentration of Credit Risk

Cash and cash equivalents: The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions in Taiwan, but these investments may be in excess of the insurance limits of Taiwan Central Deposit Insurance Corporation (the “TCDIC”). The Company does not enter into financial instruments for hedging, trading or speculative purposes. Concentration of credit risk with respect to trade and notes receivables is limited due to the wide variety of customers and markets in which the Company transacts business, as well as their dispersion across many geographical areas. As of September 30, 2021, the Company had approximately $92,387 in excess of TCDIC insured limits. The Company has not experienced any losses in such accounts.

Customers: The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral.

For the nine months ended September 30, 2021, one customer accounted for more than 10% of the Company’s total revenues, representing approximately 100% of its total revenues, and 100% of accounts receivable in aggregate at September 30, 2021.

Customer	Net sales For the nine months ended September 30, 2021		Accounts receivable balance as of September 30, 2021
A	$	886,020	$	243,933

For the nine months ended September 30, 2020, one customer accounted for more than 10% of the Company’s total revenues, representing approximately 83.34% of its total revenues, and 71.43% of accounts receivable in aggregate at September 30, 2020.

Customer	Net sales For the nine months ended September 30, 2020		Accounts receivable balance as of September 30, 2020
A	$	1,181,007	$	1,801,027

Suppliers: The Company’s inventory is purchased from various suppliers.

For the nine months ended September 30, 2021, three suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 12.49%, 69.30% and 12.74% of total net purchase, and 0% of accounts payable in aggregate at September 30, 2021, respectively:

Supplier	Net purchase for the nine months ended September 30, 2021		Accounts payable balance as of nine 30, 2021
A	$	-	$	-
B	$	-	$	-
C	$	-	$	-
D	$	12,930	$	-
E	$	71,712	$	-
F	$	13,189	$	-

For the nine months ended September 30, 2020, three suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 39%, 31% and 22% of total net purchase, and 0% of accounts payable in aggregate at September 30, 2020, respectively:

Supplier	Net purchase for the nine months ended September 30, 2020		Accounts payable balance as of September 30, 2020
A	$	60,547	$	-
B	$	49,300	$	-
C	$	34,000	$	-

Foreign Currency Transactions

Foreign-currency transactions are recorded in New Taiwan dollars (“NTD”) and Chinese Yuan (“CNY”) at the rates of exchange in effect when the transactions occur. Gains or losses resulting from the application of different foreign exchange rates when cash in foreign currency is converted into New Taiwan dollars and Chinese Yuan, or when foreign-currency receivables or payables are settled, are credited or charged to income in the year of conversion or settlement. On the balance sheet dates, the balances of foreign-currency assets and liabilities are restated at the prevailing exchange rates and the resulting differences are charged to current income except for those foreign currencies denominated investments in shares of stock where such differences are accounted for as translation adjustments under stockholders’ equity.

Translation Adjustment

The accounts of the Company’s subsidiaries were maintained, and their financial statements were expressed in New Taiwan Dollar (“NTD”) and Chinese Yuan (“CNY”). Such financial statements were translated into U.S. Dollars (“$” or “USD”) in accordance ASC 830, “Foreign Currency Matters”, with the NTD and CNY as the functional currency. According to the Statement, all assets and liabilities are translated at the current exchange rate, common stock and additional paid-in capital are translated at the historical rates, and income statement items are translated at an average exchange rate for the period. The resulting translation adjustments are reported under accumulated other comprehensive income (loss) as a component of stockholders’ equity.

Comprehensive Income (Loss)

Comprehensive income (loss) includes accumulated foreign currency translation gains and losses. The Company has reported the components of comprehensive income (loss) on its consolidated statements of operations and other comprehensive income (loss).

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL), the revised effective date is January 2023.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.

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NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2021

NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

Schedule of revenue by major products

For the nine months ended September 30, 2021:
Water purifier machine	$	886,020
Automobile carbon reduction machine		-
Nutrition supplement		-
Total	$	886,020

For the nine months ended September 30, 2020:
Water purifier machine	$	1,181,007
Automobile carbon reduction machine		131,882
Nutrition supplement		70,629
Software		33,508
Total	$	1,417,026

Schedule of revenue by geography

For the nine months ended September 30, 2021:
Asia Pacific	$	886,020
Total	$	886,020

For the nine months ended September 30, 2020:
Asia Pacific	$	1,417,026
Total	$	1,417,026

Schedule of accounts payable

Supplier	Net purchase for the nine months ended September 30, 2021		Accounts payable balance as of nine 30, 2021
A	$	-	$	-
B	$	-	$	-
C	$	-	$	-
D	$	12,930	$	-
E	$	71,712	$	-
F	$	13,189	$	-

Supplier	Net purchase for the nine months ended September 30, 2020		Accounts payable balance as of September 30, 2020
A	$	60,547	$	-
B	$	49,300	$	-
C	$	34,000	$	-

Schedule of accounts receivable

Customer	Net sales For the nine months ended September 30, 2021		Accounts receivable balance as of September 30, 2021
A	$	886,020	$	243,933

Customer	Net sales For the nine months ended September 30, 2020		Accounts receivable balance as of September 30, 2020
A	$	1,181,007	$	1,801,027

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LONG-TERM INVESTMENT (Tables)

9 Months Ended

Sep. 30, 2021

LONG-TERM INVESTMENT

Summary of equity method investee

	April 22,			December 31,
	2020			2019
Current assets	$	38,303		$	42,818
Non-current assets		779			857
Current liabilities		1,406,166			1,372,351
Shareholders’ deficit		(1,367,084	)		(1,328,676	)

	For the period from January 1, 2020 to April 22, 2020.
Net sales	$	854
Gross profit		498
Net loss		(14,240	)
Share of loss from investment accounted for using equity method		(2,848	)

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INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2021

INCOME TAXES

Schedule of provision for income taxes

	For the Nine Months Ended September 30,
	2021			2020
Current income tax
U.S.	$	-		$	-
Taiwan		(51,058	)		-
PRC		-			-
Sub total		(51,058	)		-
Deferred income tax
U.S.
Deferred tax assets for NOL carryforwards		(44,945	)		(46,300	)
Valuation allowance		44,945			46,300
Net changes in deferred income tax (benefit)		-			-
Total income tax provision	$	-		$	-

Schedule of reconciliation of statutoty income tax rate

	For the Nine Months Ended September 30,
	2021			2020
U.S. statutory income tax rate		21	%		21	%
Taiwan unified income tax rate		20	%		20	%
PRC standard EIT rate		25	%		25	%
Changes in valuation allowance		(46	)%		(46	)%
Other		(20	)%		(20	)%
Effective combined income tax rate		0	%		0	%

Schedule of deferred tax assets

	September 30,			December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	210,309		$	177,784
Less: Valuation allowance		(210,309	)		(177,784	)
Deferred tax assets, net	$	-		$	-

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NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenue by Major Products			$ 886,020	$ 1,417,026
Revenue by Major Products	$ 549,242	$ 590,293	886,020	1,417,026
Information relates to Automobile carbon reduction machine.
Revenue by Major Products			0	131,882
Information of nutrition supplement.
Revenue by Major Products			0	70,629
Information of software.
Revenue by Major Products			0	33,508
Shanghai Qifan Qiye Management Co [Member]
Revenue by Major Products			$ 886,020	$ 1,181,007

XML

NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (Details 1) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenue	$ 549,242	$ 590,293	$ 886,020	$ 1,417,026
Revenue By Geography [Member]
Revenue			886,020	1,417,026
Asia Pacific [Member]
Revenue			$ 886,020	$ 1,417,026

XML

NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (Details 2) - Customer A - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Net sales	$ 886,020	$ 1,181,007
Accounts receivable	$ 243,933	$ 1,801,027

XML

NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (Details 3) - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Supplier B [Member]
Represents information about purchase during the period	$ 0	$ 49,300
Accounts Payable	0	0
Supplier C [Member]
Represents information about purchase during the period	0	34,000
Accounts Payable	0	0
Supplier D [Member]
Represents information about purchase during the period	12,930
Accounts Payable	0
Supplier E [Member]
Represents information about purchase during the period	71,712
Accounts Payable	0
Supplier F [Member]
Represents information about purchase during the period	13,189
Accounts Payable	0
Supplier A [Member]
Represents information about purchase during the period	0	60,547
Accounts Payable	$ 0	$ 0

XML

NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES (Details Narrative)				9 Months Ended
	Jul. 13, 2021	Jun. 02, 2020 USD ($)	May 03, 2017 USD ($)	Sep. 30, 2021 USD ($) integer	Sep. 30, 2020 USD ($) integer	Jan. 31, 2019 USD ($)
Cash consideration to acquire equity interest			$ 30,562
Depreciation expense				$ 1,677	$ 1,733
Methods of depreciation				straight-line method
Estimated useful life of property and equipment				five years
Advertising cost				$ 399	17,795
Amount of employee benefits				4,541	$ 3,852
TCDIC insured limits				92,387
Shareholders Agreement [Member]
Concentration risk, percentage	16.67%
Non controlling interest	16.67%
Subsidiary Issuer [Member] | SMarch 1, 2019 [Member]
Registered capital				$ 185,800,000
Accounting Standards Update 2016-02 [Member]
Operating lease right-of-use assets						$ 8,235
Operating lease liabilities						$ 8,235
SupplierConcentrationRisk C [Member]
Concentration risk, percentage				0.00%	22.00%
SupplierConcentrationRisk B [Member]
Concentration risk, percentage				12.74%	39.00%
Customers
Number of customers | Customer | integer				2	1
Customers | Revenue Benchmark [Member] | Customer A
Concentration risk, percentage				10.00%	83.34%
Customers | Accounts Receivable [Member] | Customer A
Concentration risk, percentage				100.00%	71.43%
Supplier Concentration Risk [Member]
Number of suppliers | Supplier | integer				4	4
Supplier Concentration Risk [Member] | Supplier A [Member] | Accounts Payable [Member]
Concentration risk, percentage				0.00%	0.00%
Supplier Concentration Risk [Member] | Cost of Goods and Service Benchmark [Member] | Supplier A [Member]
Concentration risk, percentage				12.49%	69.30%
Shanghai Qifan Qiye Management Co [Member]
Ownership percentage		83.33%
Intellectual property registered		$ 12,000,000,000
Ownership on intellectual property by related party		$ 2,000,000,000

XML

LEASE (Details Narrative)	9 Months Ended
	Sep. 30, 2021 USD ($)
LEASE
OperatingLeaseExpense	$ 38,100
Future lease payable	$ 17,778

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LONGTERM INVESTMENT (Details) - USD ($)	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Apr. 22, 2020	Mar. 31, 2020	Dec. 31, 2019
Current assets	$ 2,029,847			$ 965,567
Current liabilities	663,017			563,534
Shareholders' deficit	$ 1,151,394	$ 1,219,284	$ 1,405,131	$ 1,356,233	$ 3,320,599	$ 3,047,280		$ 3,112,135	$ 2,715,735
Equity Method Investee [Member]
Current assets							$ 38,303		42,818
Noncurrent assets							779		857
Current liabilities							1,406,166		1,372,351
Shareholders' deficit							$ (1,367,084)		$ (1,328,676)

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LONGTERM INVESTMENT (Details 1) - USD ($)	3 Months Ended						4 Months Ended	9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Apr. 22, 2020	Sep. 30, 2021	Sep. 30, 2020
Gross profit	$ 176,142			$ 529,768				$ 493,129	$ 1,249,487
Net income (loss)	$ (141,779)	$ (185,510)	$ 72,926	$ 364,634	$ (204,152)	$ 353,231		$ (254,363)	$ 513,713
Equity Method Investee [Member]
Net sales							$ 854
Gross profit							498
Net income (loss)							(14,240)
Share of loss from investment accounted for using equity method							$ (2,848)

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LONGTERM INVESTMENT (Details Narrative) - USD ($)		1 Months Ended	2 Months Ended	3 Months Ended		4 Months Ended	9 Months Ended		12 Months Ended
	Apr. 12, 2021	May 26, 2020	Mar. 02, 2020	Sep. 30, 2021	Sep. 30, 2020	Apr. 22, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020	May 24, 2019	Jan. 15, 2019
Common stock shares issued shares				180,065,254			180,065,254		74,123
Revenue				$ 549,242	$ 590,293		$ 886,020	$ 1,417,026
Termination Agreement [Member]
Proceeded to return shares EOS Inc	10,000
Equity Method Investee [Member]
Share of loss from investment accounted for using equity method						$ (2,848)			$ 2,848
Equity Securities, FV-NI, Realized Loss						$ 17,902
Equity Method Investee [Member] | Information of Strategic Alliance Agreement [Member]
Revenue			$ 15,000,000
Emperor Star [Member]
Percentage of equity method investment		83.00%
Equity Method Investments		$ 134,004
Represents amount of Contributions from noncontrolling interests.		$ 33,398
Board of Directors [Member]
Authorized return EOSS shares							10,000
Represent the information of majority shareholder in equity method investee. | Equity Method Investee [Member]
Common stock shares issued shares										10,000	10,000
Percentage of equity method investment										20.00%	20.00%
Represent the information of majority shareholder in equity method investee. | Equity Method Investee [Member] | Information of Strategic Alliance Agreement [Member]
Returned percentage of equity method investment						20.00%
Agree to return amount of equity interest			$ 33,411

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SECURITY DEPOSITS (Details Narrative) - USD ($)	Sep. 30, 2021	Dec. 31, 2020	Nov. 21, 2019
Security Deposit	$ 1,122,835	$ 0
Shuang Hua International Culture Media Co, Ltd [Member]
Security Deposit	1,030,000
Shuang Hua [Member]
Security Deposit	$ 1,030,000	$ 1,030,000
Exclusive copyright and distribution agreement [Member] | Shuang Hua International Culture Media Co, Ltd [Member]
Security Deposit			$ 2,894,000

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RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	9 Months Ended
	Sep. 30, 2021	Dec. 31, 2020
Due to shareholders	$ 19,281	$ 107,791
Mr. Yang [Member]
Due to shareholders	19,281
Advance for the working capital	200,267
Repayment to the related party	$ 219,965
Shared Issued for Liability Converted, shares	90,000,000
Shared Issued for Liability Converted, amount	$ 90,000
Interest rate	0.00%

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TERM LOAN (Details Narrative) - USD ($)		1 Months Ended	9 Months Ended	12 Months Ended
	May 07, 2021	Sep. 30, 2020	Sep. 30, 2021	Dec. 31, 2020
Interest expenses			$ 2,179	$ 494
Short-term loan			79,339	$ 0
Long-term loan			223,533
Outstanding balance of term loan			$ 302,872
Term Loan 2 [Member] | Loan from Bank of Taiwan [Member]
Interest charge	1.50%
Term loan description	the first 8 months of the term loan; interest charges on the term loan from 9th to 60th is 2% per annum	the first 9 months of the term loan; interest charges on the term loan from 10th to 60th is 1.845% per annum
Notes payble	$ 35,917
Term Loan 2 [Member] | Loan from First Commercial Bank[Member]
Interest charge		1.50%
Term loan description		the first 9 months of the term loan; interest charges on the term loan from 10th to 60th is 1.845% per annum
Notes payble		$ 71,833
Term Loan 1 [Member] | Loan from Bank of Taiwan [Member]
Interest charge	1.00%	1.50%
Term loan description	the first 8 months of the term loan; interest charges on the term loan from 9th to 60th is 1.9% per annum.
Notes payble	$ 143,666
Term Loan 1 [Member] | Loan from First Commercial Bank[Member]
Interest charge		1.00%
Term loan description		the first 9 months of the term loan; interest charges on the term loan from 10th to 60th is 3.5% per annum
Notes payble		$ 107,750

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STOCKHOLDERS EQUITY (Details Narrative) - USD ($)			1 Months Ended
	Jul. 08, 2021	Apr. 12, 2021	Aug. 18, 2021	Mar. 31, 2021	Dec. 29, 2020	Jun. 30, 2020	Sep. 30, 2021	Mar. 16, 2021	Dec. 31, 2020
Common stock shares issued to intellectual properties			75,000,000
Shares transfer to minority controlling interests			15,000,000
Common stock per value							$ 0.001	$ 0.001	$ 0.001
Common stock, shares Authorized							575,000,000	75,000,000	575,000,000
Reverse stock split Shares				1-for-1000
Preferred Stock par value							$ 0.001		$ 0.001
Additional paid-in capital							$ 41,030		$ 186,474
Information about sales collaboration agreement [Member]
Number of shares issued amount						$ 1,500,000
Number of common stock issued for promotional and marketing service shares					3,000,000	3,000,000
Amount of common stock issued for promotional and marketing service						$ 1,500,000
Termination Agreement [Member]
Proceeded to return shares EOS Inc		10,000
World Capital Holding Ltd [Member]
Converted price per share	$ 0.001
Conversion of shares Converted to related parties Amount	$ 15,000
Common stock share upon conversion of related party	15,000,000
Co-Innovation Group Limited [Member]
Converted price per share	$ 0.001
Conversion of shares Converted to related parties Amount	$ 75,000
Common stock share upon conversion of related party	75,000,000
Series A Preferred Stock [Member]
Common stock, shares Authorized	5,000,000
Preferred Stock par value	$ 0.001
Number of shares issued	1,500,000
Number of shares issued amount	$ 1,500
Additional paid-in capital	$ 1,500

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INCOME TAXES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Current income tax
U.S.			$ 0	$ 0
Taiwan			(51,058)	0
PRC			0	0
Sub total			(51,058)	0
Deferred tax assets for NOL carryforwards	$ (44,945)	$ (46,300)	(44,945)	(46,300)
Valuation allowance	44,945	46,300	44,945	46,300
Net changes in deferred income tax (benefit)	0	0	0	0	$ 0
Total income tax provision	$ 99	$ 0	$ 51,058	$ 0

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INCOME TAXES (Details 1)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
INCOME TAXES
U.S. statutory income tax rate	21.00%	21.00%
Taiwan unified income tax rate	20.00%	20.00%
PRC standard EIT rate	25.00%	25.00%
Changes in valuation allowance	(46.00%)	(46.00%)
Other	(20.00%)	(20.00%)
Effective combined income tax rate	0.00%	0.00%

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INCOME TAXES (Details 2) - USD ($)	Sep. 30, 2021	Dec. 31, 2020	Sep. 30, 2020
Deferred tax assets:
Net operating loss carryforwards	$ 210,309	$ 177,784
Less: Valuation allowance	(210,309)	(177,784)
Deferred tax assets, net	$ 0	$ 0	$ 0

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INCOME TAXES (DetailS Narrative)	9 Months Ended
	Sep. 30, 2021 USD ($)
Valuation allowance percentage	100.00%
EIT rate	25.00%
Net operating loss carry forwards	$ 154,880
Taiwan [Member]
Income tax rate description	The subsidiary of EOS Inc. and Emperor Star is incorporated in Taiwan. According to the amendments to the “Taiwan Income Tax Act” enacted by the office of the President of Taiwan on February 7, 2018, statutory income tax rate increased from 17% to 20% and undistributed earning tax decreased from from 10% to 5%, effective from January 1, 2018.

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COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	1 Months Ended		9 Months Ended
	Dec. 29, 2020	Jun. 30, 2020	Sep. 30, 2021	Dec. 31, 2020	Nov. 21, 2019
Security deposits			$ 1,122,835	$ 0
Shuang Hua International Culture Media Co, Ltd [Member]
Security deposits			1,030,000
Information about sales collaboration agreement [Member]
Number of common stock issued for promotional and marketing service shares	3,000,000	3,000,000
Amount of common stock issued for promotional and marketing service		$ 1,500,000
Exclusive copyright and distribution agreement [Member] | Shuang Hua International Culture Media Co, Ltd [Member]
Security deposits					$ 2,894,000
Selling and Marketing Expense [Member] | Information about sales collaboration agreement [Member] | Represents information about Fortune King Trading Limited a legal entity.
stock-based compensation of marketing expenses			$ 62,500