UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
For
the Quarterly Period Ended
OR
For the transition period from ______________ to ______________
Commission
File No.
(Exact name of small business issuer as specified in its charter)
| 6552 | ||||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification No.) |
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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller
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| Emerging
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If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
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by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐
The number of shares of Common Stock, $0.0001 par value, of the registrant outstanding at November 11, 2021, was .
FORGE INNOVATION DEVELOPMENT CORP.
QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED September 30, 2021
TABLE OF CONTENTS
| i |
PART I
ITEM 1. FINANCIAL STATEMENTS
FRORGE INNOVATION DEVELOPMENT CORP.
INDEX TO CONDENSED FINANCIAL STATEMENTS
| 1 |
FORGE INNOVATION DEVELOPMENT CORP.
CONDENSED BALANCE SHEETS
| September 30, 2021 | December 31, 2020 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Account receivable | - | |||||||
| Other receivable - related party | ||||||||
| Other current assets | ||||||||
| Total Current Assets | ||||||||
| NONCURRENT ASSETS | ||||||||
| Operating lease right-of-use assets | ||||||||
| Property and equipment, net | ||||||||
| Rent deposit | ||||||||
| Total Noncurrent Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and other payable | $ | $ | ||||||
| Other payable - related parties | ||||||||
| Loans, current portion | ||||||||
| PPP Loan | - | |||||||
| Operating lease liabilities | ||||||||
| Total Current Liabilities | ||||||||
| Loans, noncurrent | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock ($ par value, shares authorized; share issued and outstanding as of September 30, 2021 and December 31, 2020) | - | - | ||||||
| Common stock ($ par value, shares authorized, shares issued and outstanding as of September 30, 2021 and December 31, 2020) | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ (Deficit) Equity | ( | ) | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 2 |
FORGE INNOVATION DEVELOPMENT CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| For the three months ended | For the nine months ended | |||||||||||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||||||
| Service revenue | $ | $ | $ | $ | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Consulting Expenses | ||||||||||||||||
| Selling, General and Administrative Expenses | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Government grants | - | - | ||||||||||||||
| Income tax expense | - | ( | ) | ( | ) | ( | ) | |||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Net loss per common share, basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Weighted average number of common shares outstanding, basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 3 |
FORGE INNOVATION DEVELOPMENT CORP.
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the nine months ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of ROU | ||||||||
| Depreciation expense | ||||||||
| Forgiveness of PPP loan | ( | ) | - | |||||
| Change in operating assets and liabilities: | ||||||||
| Prepaid expense and other current assets | ( | ) | ( | ) | ||||
| Accounts receivable | ( | ) | ||||||
| Other receivable-Related party | ( | ) | - | |||||
| Other current liabilities | ( | ) | ||||||
| Other payable - related party | - | |||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Note receivable | - | |||||||
| Purchase of property and equipment | ( | ) | - | |||||
| Net cash (used in) provided by investing activities | ( | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Repayment of SBA loan | ( | ) | ||||||
| Proceed from PPP loan | - | |||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Net (decrease) in Cash | ( | ) | ( | ) | ||||
| Cash at beginning of period: | ||||||||
| Cash at end of period: | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFOR | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| NONCASH TRANSACTION OF INVESTING ACTIVITIES | ||||||||
| Loan carried through purchase of vehicle | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
| 4 |
FORGE INNOVATION DEVELOPMENT CORP.
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
(Unaudited)
Number of Shares | Common Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity (Deficit) | ||||||||||||||||
| Balance, January 1, 2021 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| Balance, September 30, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
Number of Shares | Common Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | ||||||||||||||||
| Balance, January 1, 2020 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| $ | $ | $ | ( | ) | $ | |||||||||||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
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Forge Innovation Development Corp.
Notes to the unaudited financial statements
Note 1 - Organization and Description of Business
Forge Innovation Development Corp. (individually “Forge” and collectively with its subsidiary, the “Company”), was initially incorporated in the State of Nevada on January 15, 2016 under the name of You-Go Enterprises, LLC (the “Company Predecessor”). On November 3, 2016, Forge filed an amendment to its Articles of Incorporation in the State of Nevada to change the Company Predecessor’s name to Forge Innovation Development Corp. Our current principle executive office is located at 6280 Mission Blvd Unit 205, Jurupa Valley, CA 92509. Tel: 626-986-4566. The Company’s main business focuses on real estate development, land purchasing and selling and property management. The Company’s common stock is currently traded on OTCQB under the symbol “FGNV”.
On August 17, 2020, the Company established a wholly owned subsidiary, Forge Network Inc, in the State of California. Forge Network Inc is engaged in online retail under the website: http://www.ez2go.us. The website has been formally launched in January 2021.
Note 2 - Summary of Significant Accounting Policies
The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.
Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the consolidated financial statements not misleading have been included. Actual results could differ from those estimates.
Revenue Recognition
The Company adopted ASU 2014-09 (ASC 606), Revenue from Contracts with Customers, using the modified retrospective approach on January 1, 2018. Under the standard, revenue is recognized upon transfer of control of promised goods and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods and services.
Property management services: the Company deals directly with prospects and tenants for the owners of properties, which mainly includes marketing property, collecting rent, handling maintenance, repairing issues and responding to tenant complaints. The Company recognizes revenue as earned on a monthly basis under ASC 606.
| 6 |
Real estate sales: The Company accounts for the sale of real estate assets and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions, other than retail land sales. The Company recognizes the sale, and associated gain or loss from the disposition, provided that the earnings process is complete, and the Company does not have significant continuing involvement.
Recently Issued Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts, rather than the “incurred loss” model. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. The effective date of ASU No. 2016-13 for smaller reporting companies is postponed to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations.
The management does not believe that other than disclosed above, the recently issued but not yet adopted accounting pronouncements will have a material impact on its financial position results of operations or cash flows.
Note 3 - Going Concern
The
accompanying consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and
the satisfaction of obligations in the normal course of business. However, the Company has suffered recurring losses from operations
since inception, resulting in an accumulated deficit of $
In view of these matters, continuation as a going concern is dependent upon several factors, including the availability of debt or equity funding upon terms and conditions acceptable to the Company and ultimately achieving profitable operations. Management believes that the Company’s business plan provides it with an opportunity to continue as a going concern. However, management cannot provide assurance that the Company will meet its objectives and be able to continue in operation.
The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of Forge Innovation Development Corp. to continue as a going concern.
Note 4 - Income Taxes
The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.
For
the nine months ended September 30, 2021 and 2020, the Company has incurred a net loss before tax of $
Note 5 - Concentration of Risk
The
Company maintains cash in two accounts within two local commercial banks located in Southern California. The standard insurance amount
is $
For
the nine months ended September 30, 2021 and 2020, the Company’s revenue generated from one customer in the amount of $
| 7 |
Note 6 - Related Party Transactions
During
the nine months ended September 30, 2021 and 2020, Mr. Liang, the Company’s CEO, paid operating expenses on behalf of the Company
in the amount of $
On
January 4, 2021, the Company purchased a vehicle from Patrick Liang, the President of the Company, for daily business operation, in the
amount of $
During
the nine months ended September 30, 2021 and 2020, the Company incurred a $
Note 7 - Notes Receivable
On
March 17, 2017, the Company entered into a Land Transaction Agreement with Steven Zhi Qin, a third party individual. Pursuant to the
agreement, the Company sold the undeveloped land located in Desert Hot Spring with value of $
Note 8 - Lease
The Company has four-year operating lease for its office space with a third party, Puente Hills Business Center II, L.P. (“PHBC-II”), from which the Company vacated on September 29, 2020. We determined if an arrangement is a lease inception of the contract and whether a contract is or contains a lease by determining whether it conveys the right to control the use of identified asset for a period of time. The contract provides us the right to obtain substantially all the economic benefits from the use of the identified asset and the right to direct use of the identified asset, we consider it to be, or contain, a lease.
Leases
is classified as operating at inception of the lease. Operating leases result in the recognition of ROU assets and lease liabilities
on the balance sheet. ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the
lease term as of the commencement date. Because our leases do not provide an explicit or implicit rate of return, we use our incremental
borrowing rate based on the information available at the commencement date in determining the present value of lease payments on an individual
lease basis. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow
an amount equal to the lease payments for the asset under similar term, which is
Our
leases do not contain any residual value guarantees or material restrictive covenants.
| 8 |
During
the nine months ended September 30, 2021 and 2020, cash paid for amounts included in the measurement of lease liabilities- operating
cash flows from operating lease were $and $
The components of lease expense consist of the following:
Three
Months Ended | ||||||||||
| Classification | 2021 | 2020 | ||||||||
| Operating lease cost | G&A expense | $ | $ | |||||||
| Net lease cost | $ | $ | ||||||||
Nine
Months Ended | ||||||||||
| Classification | 2021 | 2020 | ||||||||
| Operating lease cost | G&A expense | $ | $ | |||||||
| Net lease cost | $ | $ | ||||||||
Balance sheet information related to leases consists of the following:
| Classification | September 30, 2021 | December 31, 2020 | ||||||||
| Assets | ||||||||||
| Operating lease ROU assets | Right-of-use assets | $ | $ | |||||||
| Total leased assets | $ | $ | ||||||||
| Liabilities | ||||||||||
| Current portion | ||||||||||
| Operating lease liabilities | Current maturities of operating lease liabilities | $ | $ | |||||||
| Total lease liabilities | $ | $ | ||||||||
| Weighted average remaining lease term | ||||||||||
| Operating leases | ||||||||||
| Weighted average discount rate | ||||||||||
| Operating leases | % | % | ||||||||
Cash flow information related to leases consists of the following:
Nine
Months Ended | ||||||||
| 2021 | 2020 | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flows from operating leases | $ | $ | ||||||
| Right-of-use assets obtained in exchange for lease obligations: | ||||||||
| Operating leases | ||||||||
| 9 |
Future minimum lease payment under non-cancellable lease as of September 30, 2021 are as follows:
| Ending December 31, | Operating Leases | ||||
| 2021 | $ | ||||
| Less: Interest | ( | ) | |||
| Present value of lease liabilities | $ | ||||
Note 9 –Loans
On
April 16, 2020, the Company received a Promissory Note (the “Note”) in the amount of $
On
July 14, 2020, the Company entered into a loan agreement with The U.S. Small Business Administration (SBA), pursuant to which the Company
obtain a loan in the amount of $
On
July 2021, the Company received $
Note 10 – Contingencies
On
December 8, 2017, the Company entered into a lease agreement with Puente Hills Business Center II, L.P. (“PHBC-II”) for a
lease term of
Note 11 - Subsequent Event
The Company has evaluated all other subsequent events through the date these consolidated financial statements were issued and determine that there were no other subsequent events or transactions that require recognition or disclosures in the consolidated financial statements.
| 10 |
Item 2. Management’s Discussion and Analysis or Plan of Operation
This 10−Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the audited consolidated financial statements and accompanying notes and the other financial information appearing elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.
Overview
Forge Innovation Development Corp. is a development stage company and was incorporated in the State of Nevada in January 2016. The Company’s primary objective is commercial and residential land development, including the purchase and sale of real estate, targeting properties primarily in Southern California. We also intend to manage properties we own, and properties owned by unaffiliated third parties. Our activities will include securing acquisition rights to properties, obtaining zoning and other entitlements for the properties, securing financing for purchase of the properties, improving the properties’ infrastructure and amenities and selling the properties to homeowner and commercial owners for restaurants, offices and small businesses. Our first property acquisition was 29 acres in the city of Desert Hot Springs in Southern California. Due to problems with permits and adjacent landowners, rather than getting involved in protracted negotiations, the Company sold the property to an independent third party for a profit.
On August 17, 2020, the Company established a wholly owned subsidiary, Forge Network Inc, in the State of California. Forge Network Inc is engaged in online retail under the website: http://www.ez2go.us. The website has been formally launched in January 2021.
Results of Operation for the three months ended September 30, 2021 and 2020
During the three months ended September 30, 2021 and 2020, the Company generated $9,000 and $9,000 of revenues, respectively; the revenue was generated from property management service. During the three months ended September 30, 2021 and 2020, the Company incurred general and administrative expenses of $85,261 and $94,943, respectively. The decrease was mainly due to the decrease in salary expense. For the three months ended September 30, 2021 and 2020, our net loss was $71,261 and $86,733, respectively. The decrease in net loss was mainly due to the decrease in general and administrative expense for the three months ended September 30, 2021, compared to the same period in last year.
Results of Operation for the nine months ended September 30, 2021 and 2020
During the nine months ended September 30, 2021 and 2020, the Company generated $27,000 and $27,000 of revenues, respectively; the revenue was generated from property management service. During the nine months ended September 30, 2021 and 2020, the Company incurred general and administrative expenses of $256,750 and $266,307, respectively. The decrease in general and administrative expenses was mainly due to the decrease in salary expense. For the nine months ended September 30, 2021 and 2020, our net loss was $206,150 and $240,107, respectively. The decrease in net loss was mainly due to the decrease in general and administrative expenses for the nine months ended September 30, 2021, compared to the same period in last year.
Equity and Capital Resources
We have incurred losses since inception of our business in 2016 and, as of September 30, 2021, we had an accumulated deficit of $1,475,183. As of September 30, 2021, we had cash of $92,904 and a working capital deficits of $42,948, compared to cash of $236,586 and a working capital of $117,751 on December 31, 2020. The decrease in the working capital was primarily due to cash used to pay for operating expenses.
| 11 |
Going Concern Assessment
The Company demonstrates adverse conditions that raise substantial doubt about the Company’s ability to continue as a going concern. These adverse conditions are negative financial trends, specifically cash outflow from operating activities, operating losses, accumulated deficit and other adverse key financial ratios.
Management’s plan to alleviate the substantial doubt about the Company’s ability to continue as a going concern include attempting to improve its business profitability, its ability to generate sufficient cash flow from its operations and execute the business plan of the Company in order to meet its operating needs on a timely basis. However, there can be no assurance that these plans and arrangements will be sufficient to fund the Company’s ongoing capital expenditures and other requirements.
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Critical Accounting Policies
The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The critical accounting policies are discussed in further detail in the notes to the audited consolidated financial statements appearing elsewhere in this report. Management believes that the application of these policies on a consistent basis enables us to provide useful and reliable financial information about our operating results and financial condition.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” we are not required to provide this information under this item pursuant to Regulation S-K.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As of the end of the period covered by this report on Form 10-Q, our President (principal executive officer) and our Chief Financial Officer performed an evaluation of the effectiveness of and the operation of our disclosure controls and procedures as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act. Based on that evaluation, our President and Chief Financial Officer each concluded that as of the end of the period covered by this report on Form 10-Q, our disclosure controls and procedures were not effective in timely alerting them to material information relating to Forge Innovation Development Corp. required to be included in our Exchange Act filings.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred during the quarter ended September 30, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| 12 |
PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
On December 8, 2017, the Company entered into a lease agreement with Puente Hills Business Center II, L.P. (“PHBC-II”) for a lease term of forty-eight months, and which was scheduled to expire on January 14, 2022, at monthly rent of $4,962, subject to increase. On or about September 29, 2020, the Company vacated the premises. On October 22, 2020, PHBC-II filed a lawsuit against the Company and its guarantor, Mr. Liang. No judgment has been rendered, and the litigation is in its infancy stage. The Company has retained legal counsel to address the matter.
Item 1A. Risk Factors.
As a “smaller reporting company”, we are not required to provide this information under this item pursuant to Regulation S-K.
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
| 13 |
Item 6. Exhibits.
(a) Exhibits.
| Exhibit | Item | |
| 31.1* | Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
| 14 |
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.
| FORGE INNOVATION DEVELOPMENT CORP. | |
| Date: November 12, 2021 | /s/ Patrick Liang |
| Patrick Liang, President | |
| (Principal Executive Officer) | |
| Date: November 12, 2021 | /s/ Patrick Liang |
| Patrick Liang, Chief Financial Officer | |
| (Principal Financial and Accounting Officer) |
| 15 |
EXHIBIT INDEX
| Exhibit | Item | |
| 31.1* | Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certification of Chief Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
| 16 |
EXHIBIT 31.1
CERTIFICATION
I, Patrick Liang, certify that:
| 1. | I have reviewed this report on Form 10-Q of Forge Innovation Development Corp.; |
| 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)) 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. | 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 | |
| c. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of 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. |
| /s/ Patrick Liang | |
| Patrick Liang | |
| President (Principal Executive Officer) | |
| November 12, 2021 |
EXHIBIT 31.2
CERTIFICATION
I, Patrick Liang, certify that:
| 1. | I have reviewed this report on Form 10-Q of Forge Innovation Development Corp.; |
| 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)) 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. | 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 | |
| c. | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of 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. |
| /s/ Patrick Liang | |
| Patrick Liang | |
| Chief Financial Officer | |
| November 12, 2021 |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the report of Forge Innovation Development Corp. (the “Company”) on Form 10-Q for the period ending September 30, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the dates indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Patrick Liang | |
| Patrick Liang | |
| President (Principal Executive Officer) | |
| November 12, 2021 | |
| /s/ Patrick Liang | |
| Patrick Liang | |
| Chief Financial Officer | |
| November 12, 2021 |
Condensed Balance Sheets (Parenthetical) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Preferred stock, shares outstanding | 0 | 0 |
| Common stock, par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 200,000,000 | 200,000,000 |
| Common stock, shares issued | 45,621,868 | 45,621,868 |
| Common stock, shares outstanding | 45,621,868 | 45,621,868 |
Condensed Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Income Statement [Abstract] | ||||
| Service revenue | $ 9,000 | $ 9,000 | $ 27,000 | $ 27,000 |
| Operating Expenses | ||||
| Consulting Expenses | 18,000 | 18,000 | 54,000 | 54,000 |
| Selling, General and Administrative Expenses | 67,261 | 76,933 | 202,750 | 212,307 |
| Total Operating Expenses | 85,261 | 94,933 | 256,750 | 266,307 |
| Government grants | 5,000 | 24,400 | ||
| Income tax expense | (800) | (800) | (800) | |
| Net loss | $ (71,261) | $ (86,733) | $ (206,150) | $ (240,107) |
| Net loss per common share, basic and diluted | $ (0.00) | $ (0.00) | $ (0.00) | $ (0.00) |
| Weighted average number of common shares outstanding, basic and diluted | 45,621,868 | 45,621,868 | 45,621,868 | 45,621,868 |
Statements of Changes in Shareholders' Equity (Deficit) (Unaudited) - USD ($) |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|
| Beginning balance, value at Dec. 31, 2019 | $ 4,562 | $ 1,469,678 | $ (948,904) | $ 525,336 |
| Beginning balance, shares at Dec. 31, 2019 | 45,621,868 | |||
| Net loss | (240,107) | (240,107) | ||
| Ending balance, value at Sep. 30, 2020 | $ 4,562 | 1,469,678 | (1,189,011) | 285,229 |
| Ending balance, shares at Sep. 30, 2020 | 45,621,868 | |||
| Beginning balance, value at Dec. 31, 2020 | $ 4,562 | 1,469,678 | (1,269,033) | 205,207 |
| Beginning balance, shares at Dec. 31, 2020 | 45,621,868 | |||
| Net loss | (206,150) | (206,150) | ||
| Ending balance, value at Sep. 30, 2021 | $ 4,562 | $ 1,469,678 | $ (1,475,183) | $ (943) |
| Ending balance, shares at Sep. 30, 2021 | 45,621,868 |
Organization and Description of Business |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Organization and Description of Business | Note 1 - Organization and Description of Business
Forge Innovation Development Corp. (individually “Forge” and collectively with its subsidiary, the “Company”), was initially incorporated in the State of Nevada on January 15, 2016 under the name of You-Go Enterprises, LLC (the “Company Predecessor”). On November 3, 2016, Forge filed an amendment to its Articles of Incorporation in the State of Nevada to change the Company Predecessor’s name to Forge Innovation Development Corp. Our current principle executive office is located at 6280 Mission Blvd Unit 205, Jurupa Valley, CA 92509. Tel: 626-986-4566. The Company’s main business focuses on real estate development, land purchasing and selling and property management. The Company’s common stock is currently traded on OTCQB under the symbol “FGNV”.
On August 17, 2020, the Company established a wholly owned subsidiary, Forge Network Inc, in the State of California. Forge Network Inc is engaged in online retail under the website: http://www.ez2go.us. The website has been formally launched in January 2021.
|
Summary of Significant Accounting Policies |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Accounting Policies [Abstract] | |
| Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies
The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K, have been omitted.
Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the consolidated financial statements not misleading have been included. Actual results could differ from those estimates.
Revenue Recognition
The Company adopted ASU 2014-09 (ASC 606), Revenue from Contracts with Customers, using the modified retrospective approach on January 1, 2018. Under the standard, revenue is recognized upon transfer of control of promised goods and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods and services.
Property management services: the Company deals directly with prospects and tenants for the owners of properties, which mainly includes marketing property, collecting rent, handling maintenance, repairing issues and responding to tenant complaints. The Company recognizes revenue as earned on a monthly basis under ASC 606.
Real estate sales: The Company accounts for the sale of real estate assets and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions, other than retail land sales. The Company recognizes the sale, and associated gain or loss from the disposition, provided that the earnings process is complete, and the Company does not have significant continuing involvement.
Recently Issued Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts, rather than the “incurred loss” model. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. The effective date of ASU No. 2016-13 for smaller reporting companies is postponed to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations.
The management does not believe that other than disclosed above, the recently issued but not yet adopted accounting pronouncements will have a material impact on its financial position results of operations or cash flows.
|
Going Concern |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Going Concern | Note 3 - Going Concern
The accompanying consolidated financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. However, the Company has suffered recurring losses from operations since inception, resulting in an accumulated deficit of $ 1,475,183 as of September 30, 2021. These conditions raise substantial doubt about the ability of the Company to continue as a going concern.
In view of these matters, continuation as a going concern is dependent upon several factors, including the availability of debt or equity funding upon terms and conditions acceptable to the Company and ultimately achieving profitable operations. Management believes that the Company’s business plan provides it with an opportunity to continue as a going concern. However, management cannot provide assurance that the Company will meet its objectives and be able to continue in operation.
The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of Forge Innovation Development Corp. to continue as a going concern.
|
Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 4 - Income Taxes
The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.
For the nine months ended September 30, 2021 and 2020, the Company has incurred a net loss before tax of $206,150 and $240,107, respectively. Net operation losses (“NOLs”) can be carried forever based on the 2017 Tax Cuts and Jobs Act. As of September 30, 2021 and December 31, 2020, deferred tax assets resulted from NOLs of approximately $393,616 and $346,932, which was fully off-set by valuation allowance reserved.
|
Concentration of Risk |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Risks and Uncertainties [Abstract] | |
| Concentration of Risk | Note 5 - Concentration of Risk
The Company maintains cash in two accounts within two local commercial banks located in Southern California. The standard insurance amount is $250,000 per depositors under the FDIC’s general deposit insurance rules. On September 30, 2021 and December 31, 2020, there was no uninsured cash balances for the Company.
For the nine months ended September 30, 2021 and 2020, the Company’s revenue generated from one customer in the amount of $27,000 and $27,000, respectively. As of September 30, 2021 and December 31, 2020, the Company had $ and $3,000 accounts receivable from the customer, respectively.
|
Related Party Transactions |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions | Note 6 - Related Party Transactions
During the nine months ended September 30, 2021 and 2020, Mr. Liang, the Company’s CEO, paid operating expenses on behalf of the Company in the amount of $1,702 and $Nil, respectively. As of September 30, 2021 and December 31, 2020, the Company had payable balance to Mr. Liang in the amount of $365 and $Nil, respectively.
On January 4, 2021, the Company purchased a vehicle from Patrick Liang, the President of the Company, for daily business operation, in the amount of $22,861, which equaled to the remaining vehicle loan balance with 7.11% interest rate annum for a period of 41 months and monthly installment of $558. As of September 30, 2021, $6,691 will be due within the next 12 months, out of $17,842 loan balance. The title of the car is under the process of transferring as of September 30, 2021.
During the nine months ended September 30, 2021 and 2020, the Company incurred a $6,000 monthly professional fee with Speedlight Consulting Services Inc., whose owner has been our director since November 9, 2020, with a total amounts of $54,000 and $54,000, respectively. As of September 30, 2021 and December 31, 2020, the Company had balance of due to Speedlight Consulting Services Inc. in the amount of $48,000 and $24,000, respectively.
|
Notes Receivable |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Receivables [Abstract] | |
| Notes Receivable | Note 7 - Notes Receivable
On March 17, 2017, the Company entered into a Land Transaction Agreement with Steven Zhi Qin, a third party individual. Pursuant to the agreement, the Company sold the undeveloped land located in Desert Hot Spring with value of $283,333, to Steven Zhi Qin in exchange for a Promissory Note in the amount of $310,000. The Promissory Note is secured by a Deed of Trust to Chicago Title Company, a California corporation and an independent institution insuring the Company’s collection right, and was due on March 17, 2018, with interest at the rate of 2% per annum, payable in monthly installment of interest only, in the amount of $517. The Promissory Note also applies to Steven Zhi Qin’s personal property located at 1715 East Cortez Street, West Covina, CA 91791 as additional collateral, of which a lien was recorded against said property. On March 6, 2018, the Company reached an agreement with Steven Zhi Qin, pursuant to which the Company agreed and approved the amendment of the Promissory Note to extend maturity date to March 17, 2019. On March 12, 2019, the Company reached another agreement with Steven Zhi Qin, pursuant to which the Company agreed and approved amendment of the Promissory Note to extend maturity date to June 30, 2019. On June 26, 2019, the Company reached the third amendment with Steven Zhi Qi, pursuant to which the Company agreed and approved amendment of the Promissory Note to extend maturity date to September 30, 2019, and the remaining $110,000 was due on September 30, 2019. On September 30, 2019, the Company reached the fourth amendment with Steven Zhi Qi, pursuant to which the Company agreed and approved amendment of the Promissory Note to extend maturity date to December 31, 2019, and the remaining $110,000 was due on December 31, 2019. On March 12, 2020, the Company received the repayment of the note in the amount of $110,000.
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Lease |
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| Lease | Note 8 - Lease
The Company has four-year operating lease for its office space with a third party, Puente Hills Business Center II, L.P. (“PHBC-II”), from which the Company vacated on September 29, 2020. We determined if an arrangement is a lease inception of the contract and whether a contract is or contains a lease by determining whether it conveys the right to control the use of identified asset for a period of time. The contract provides us the right to obtain substantially all the economic benefits from the use of the identified asset and the right to direct use of the identified asset, we consider it to be, or contain, a lease.
Leases is classified as operating at inception of the lease. Operating leases result in the recognition of ROU assets and lease liabilities on the balance sheet. ROU assets and operating lease liabilities are recognized based on the present value of lease payments over the lease term as of the commencement date. Because our leases do not provide an explicit or implicit rate of return, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments on an individual lease basis. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments for the asset under similar term, which is 5.5%. Lease expense for these leases is recognized on a straight-line basis over the lease term.
Our leases do not contain any residual value guarantees or material restrictive covenants. Leases with a lease term of 12 months or less are not recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. We currently have no finance leases.
During the nine months ended September 30, 2021 and 2020, cash paid for amounts included in the measurement of lease liabilities- operating cash flows from operating lease were $and $32,196, respectively. As of September 30, 2021 and December 31, 2020, $82,994 and $79,554 lease liability were outstanding under the lease agreement, respectively. On October 22, 2020, PHBC-II filed a lawsuit against the Company and its guarantor, Mr. Liang. No judgment has been rendered as of September 30, 2021, and the litigation is in its infancy stage. The Company has retained legal counsel to address the matter.
The components of lease expense consist of the following:
Balance sheet information related to leases consists of the following:
Cash flow information related to leases consists of the following:
Future minimum lease payment under non-cancellable lease as of September 30, 2021 are as follows:
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Loans |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Debt Disclosure [Abstract] | |
| Loans | Note 9 –Loans
On April 16, 2020, the Company received a Promissory Note (the “Note”) in the amount of $19,400 under the Paycheck Protection Program (the “PPP Loan”) through East West Bank (the “Lender”). The interest rate on this Note is a fixed rate of 1.00% per annum. According to SBA’s PPP Loan description, the PPP loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The Company submit its application for the forgiveness of the full amount $19,400 PPP Loan and received the approval letter from SBA on March 10, 2021. The Company recognized government grant in the amount of $19,400 for the nine months ended September 30, 2021.
On July 14, 2020, the Company entered into a loan agreement with The U.S. Small Business Administration (SBA), pursuant to which the Company obtain a loan in the amount of $14,000 with the term of 30 years and at the interest rate of 3.75%, payable monthly including principal and interest in the amount $69. The Company received the loan amount of $14,000 from SBA on July 20, 2020. As of September 30, 2021 and December 31, 2020, the outstanding loan balances were $13,724 nd $13,884, respectively.
On July 2021, the Company received $5,000 grant through California Relief Program to support eligible small business impacted by COVID-19 and related health and safety restrictions. The grant recognized as other income during the three and nine months ended September 30, 2021.
|
Contingencies |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Contingencies | Note 10 – Contingencies
On December 8, 2017, the Company entered into a lease agreement with Puente Hills Business Center II, L.P. (“PHBC-II”) for a lease term of forty-eight months, and which was scheduled to expire on January 14, 2022, at monthly rent of $4,962, subject to increase. On or about September 29, 2020, the Company vacated the premises. On October 22, 2020, PHBC-II filed a lawsuit against the Company and its guarantor, Mr. Liang. No judgment has been rendered as of September 30, 2021, and the litigation is in its infancy stage. The Company has retained legal counsel to address the matter and the Court has scheduled the trial date on January 31, 2023.
|
Subsequent Event |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Subsequent Events [Abstract] | |
| Subsequent Event | Note 11 - Subsequent Event
The Company has evaluated all other subsequent events through the date these consolidated financial statements were issued and determine that there were no other subsequent events or transactions that require recognition or disclosures in the consolidated financial statements. |
Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Accounting Policies [Abstract] | |
| Use of Estimates | Use of Estimates
The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments necessary in order to make the consolidated financial statements not misleading have been included. Actual results could differ from those estimates.
|
| Revenue Recognition | Revenue Recognition
The Company adopted ASU 2014-09 (ASC 606), Revenue from Contracts with Customers, using the modified retrospective approach on January 1, 2018. Under the standard, revenue is recognized upon transfer of control of promised goods and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods and services.
Property management services: the Company deals directly with prospects and tenants for the owners of properties, which mainly includes marketing property, collecting rent, handling maintenance, repairing issues and responding to tenant complaints. The Company recognizes revenue as earned on a monthly basis under ASC 606.
Real estate sales: The Company accounts for the sale of real estate assets and any related gain recognition in accordance with the accounting guidance applicable to sales of real estate, which establishes standards for recognition of profit on all real estate sales transactions, other than retail land sales. The Company recognizes the sale, and associated gain or loss from the disposition, provided that the earnings process is complete, and the Company does not have significant continuing involvement.
|
| Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, (FASB ASC Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts, rather than the “incurred loss” model. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. The effective date of ASU No. 2016-13 for smaller reporting companies is postponed to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations.
The management does not believe that other than disclosed above, the recently issued but not yet adopted accounting pronouncements will have a material impact on its financial position results of operations or cash flows.
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Lease (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Lease | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Lease Expense | The components of lease expense consist of the following:
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| Schedule of Balance Sheet Information Related to Leases | Balance sheet information related to leases consists of the following:
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| Schedule of Cash Flow Information Related to Leases | Cash flow information related to leases consists of the following:
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| Schedule of Future Minimum Lease Payment Under Non-cancellable Lease | Future minimum lease payment under non-cancellable lease as of September 30, 2021 are as follows:
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Going Concern (Details Narrative) - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Retained Earnings (Accumulated Deficit) | $ 1,475,183 | $ 1,269,033 |
Income Taxes (Details Narrative) - USD ($) |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
| Income Tax Disclosure [Abstract] | |||
| Net loss before tax | $ 206,150 | $ 240,107 | |
| Deferred tax assets | $ 393,616 | $ 346,932 | |
Concentration of Risk (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
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| Risks and Uncertainties [Abstract] | |||||
| FDIC standard insurance amount | $ 250,000 | $ 250,000 | |||
| Uninsured Amount | 0 | 0 | $ 0 | ||
| Revenue | 9,000 | $ 9,000 | 27,000 | $ 27,000 | |
| Accounts receivable net current | $ 3,000 | ||||
Related Party Transactions (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
|---|---|---|---|---|---|---|
Jan. 04, 2021 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
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| Related Party Transaction [Line Items] | ||||||
| Operating Expenses | $ 85,261 | $ 94,933 | $ 256,750 | $ 266,307 | ||
| Professional fees | 18,000 | $ 18,000 | 54,000 | 54,000 | ||
| Mr. Liang [Member] | ||||||
| Related Party Transaction [Line Items] | ||||||
| Operating Expenses | 1,702 | |||||
| Due to related parties current | $ 22,861 | 365 | 365 | |||
| Debt instrument interest rate | 7.11% | |||||
| Debt instrument periodic payment | $ 558 | |||||
| Long term debt maturities | 6,691 | 6,691 | ||||
| Debt face amount | 17,842 | 17,842 | ||||
| Speedlight Consulting Services Inc [Member] | Director [Member] | ||||||
| Related Party Transaction [Line Items] | ||||||
| Due to related parties current | $ 48,000 | 48,000 | $ 24,000 | |||
| Monthly professional fees | 6,000 | 6,000 | ||||
| Professional fees | $ 54,000 | $ 54,000 | ||||
Notes Receivable (Details Narrative) - Land Transaction Agreement [Member] - Steven Zhi Qin [Member] - USD ($) |
Mar. 12, 2020 |
Sep. 30, 2019 |
Jun. 26, 2019 |
Mar. 12, 2019 |
Mar. 06, 2018 |
Mar. 17, 2017 |
|---|---|---|---|---|---|---|
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
| Sold undeveloped land located in Desert Hot Spring | $ 283,333 | |||||
| Promissory note amount | $ 310,000 | |||||
| Promissory note interest rate | 2.00% | |||||
| Promissory note monthly installment of interest amount | $ 517 | |||||
| Promissory note maturity date | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 17, 2019 | ||
| Promissory note remaining amount | $ 110,000 | $ 110,000 | ||||
| Promissory note description | the Company reached the fourth amendment with Steven Zhi Qi, pursuant to which the Company agreed and approved amendment of the Promissory Note to extend maturity date to December 31, 2019, and the remaining $110,000 was due on December 31, 2019. | |||||
| Proceeds from promissory note | $ 110,000 |
Schedule of Lease Expense (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
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| Lease | ||||
| Operating lease cost | $ 16,107 | $ 16,107 | $ 48,321 | $ 48,321 |
| Net lease cost | $ 16,107 | $ 16,107 | $ 48,321 | $ 48,321 |
Schedule of Balance Sheet Information Related to Leases (Details) - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Lease | ||
| Operating lease ROU assets | $ 16,030 | $ 62,773 |
| Total leased assets | 16,030 | 62,773 |
| Current portion Operating lease liabilities | 82,994 | 63,456 |
| Total lease liabilities | $ 82,994 | $ 63,456 |
| Weighted average remaining lease term Operating leases | 3 months | 1 year 3 months |
| Weighted average discount rate Operating leases | 5.50% | 5.50% |
Schedule of Cash Flow Information Related to Leases (Details) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Lease | ||
| Operating cash flows from operating leases | $ 44,178 | |
| Operating leases | $ 46,742 | $ 44,205 |
Schedule of Future Minimum Lease Payment Under Non-cancellable Lease (Details) - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Lease | ||
| 2021 | $ 83,070 | |
| Less: Interest | (76) | |
| Present value of lease liabilities | $ 82,994 | $ 63,456 |
Lease (Details Narrative) - USD ($) |
9 Months Ended | ||
|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
| Lease | |||
| Lease interest rate | 5.50% | 5.50% | |
| Lease term, description | Leases with a lease term of 12 months or less are not recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. | ||
| Remaining operating lease term | 12 months | ||
| Measurement of lease liabilities- operating cash flows from operating lease | $ 0 | $ 32,196 | |
| [custom:OperatingLeaseLiabilityOutstanding-0] | $ 82,994 | $ 79,554 | |
Loans (Details Narrative) - USD ($) |
9 Months Ended | |||||
|---|---|---|---|---|---|---|
Jul. 31, 2021 |
Jul. 20, 2020 |
Jul. 14, 2020 |
Apr. 16, 2020 |
Sep. 30, 2021 |
Dec. 31, 2020 |
|
| Short-term Debt [Line Items] | ||||||
| Government grant | $ 5,000 | |||||
| PPP Loan [Member] | ||||||
| Short-term Debt [Line Items] | ||||||
| Debt Instrument, Face Amount | $ 19,400 | |||||
| Debt Instrument, Interest Rate, Stated Percentage | 1.00% | |||||
| Debt Instrument, Description | at least 75% of the forgiven amount must have been used for payroll). | |||||
| Loan amount forgiven | $ 19,400 | |||||
| Government grant | 19,400 | |||||
| SBA Loan [Member] | ||||||
| Short-term Debt [Line Items] | ||||||
| Debt Instrument, Face Amount | $ 14,000 | |||||
| Debt Instrument, Interest Rate, Stated Percentage | 3.75% | |||||
| Debt Instrument, Term | 30 years | |||||
| Debt Instrument, Periodic Payment | $ 69 | |||||
| Proceeds from Loans | $ 14,000 | |||||
| Outstanding loan balances | $ 13,724 | $ 13,884 |
Contingencies (Details Narrative) - USD ($) |
9 Months Ended | |
|---|---|---|
Dec. 08, 2017 |
Sep. 30, 2021 |
|
| Lessee, Operating Lease, Description | Leases with a lease term of 12 months or less are not recorded on the balance sheet and lease expense is recognized on a straight-line basis over the lease term. | |
| Puente Hills Business Center II, L.P [Member] | ||
| Lessee, Operating Lease, Description | forty-eight | |
| Lease Expiration Date | Jan. 14, 2022 | |
| Payments for Rent | $ 4,962 |