0001640334-21-001436.txt : 20210629 0001640334-21-001436.hdr.sgml : 20210629 20210628184146 ACCESSION NUMBER: 0001640334-21-001436 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 47 CONFORMED PERIOD OF REPORT: 20210331 FILED AS OF DATE: 20210629 DATE AS OF CHANGE: 20210628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Cosmos Group Holdings Inc. CENTRAL INDEX KEY: 0001706509 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING & COURIER SERVICES (NO AIR) [4210] IRS NUMBER: 223617931 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55793 FILM NUMBER: 211055070 BUSINESS ADDRESS: STREET 1: ROOMS 1309-11, 13TH FLOOR STREET 2: TAI YAU BUILDING, NO. 181 JOHNSTON ROAD CITY: WANCHAI STATE: K3 ZIP: 00000 BUSINESS PHONE: 852 3188 9363 MAIL ADDRESS: STREET 1: ROOMS 1309-11, 13TH FLOOR STREET 2: TAI YAU BUILDING, NO. 181 JOHNSTON ROAD CITY: WANCHAI STATE: K3 ZIP: 00000 10-Q 1 cosmos_10q.htm FORM 10-Q cosmos_10q.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 10-Q

 

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

 

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2021

 

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

 

Commission File Number 000-55793

 

COSMOS GROUP HOLDINGS INC.

(Exact Name of Registrant as Specified in Its Charter)

   

Nevada

 

22-3617931

(State or Other Jurisdiction

 

(I.R.S. Employer

of Incorporation or Organization)

 

Identification No.)

 

Rooms 1309-11, 13th Floor, Tai Yau Building,

No. 181 Johnston Road

Wanchai, Hong Kong

+852 3188 9363

(Address of Principal Executive Offices and Issuer’s
Telephone Number, including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each Class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value US$0.001

COSG

N/A 

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 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, a 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 ☒

 

As of May 5, 2021, the issuer had outstanding 21,536,933 shares of common stock.

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

 

 

 

 

PART I FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

ITEM 1

Financial Statements

 

 

3

 

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of March 31, 2021 (Unaudited) and December 31, 2020

 

 

3

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2021 and 2020 (Unaudited)

 

 

4

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020 (Unaudited)

 

 

5

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Changes in Stockholders’ Deficit for the Three Months Ended March 31, 2021 (Unaudited)

 

 

6

 

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

 

7

 

 

 

 

 

 

 

ITEM 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

 

17

 

 

 

 

 

 

 

ITEM 3

Quantitative and Qualitative Disclosures about Market Risk

 

 

23

 

 

 

 

 

 

 

ITEM 4

Controls and Procedures

 

 

24

 

 

 

 

 

 

 

PART II OTHER INFORMATION

 

 

 

 

 

 

 

 

 

 

ITEM 1

Legal Proceedings

 

 

25

 

 

 

 

 

 

 

ITEM 1A

Risk Factors

 

 

25

 

 

 

 

 

 

 

ITEM 2

Unregistered Sales of Equity Securities and Use of Proceeds

 

 

25

 

 

 

 

 

 

 

ITEM 3

Defaults upon Senior Securities

 

 

25

 

 

 

 

 

 

 

ITEM 4

Mine Safety Disclosures

 

 

25

 

 

 

 

 

 

 

ITEM 5

Other Information

 

 

25

 

 

 

 

 

 

 

ITEM 6

Exhibits

 

 

26

 

 

 

 

 

 

 

SIGNATURES

 

 

27

 

 

 
2

Table of Contents

 

PART I FINANCIAL INFORMATION

ITEM 1 Financial Statements

 

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,

2021

 

 

December 31,

2020

 

 

 

(Unaudited)

 

 

 

ASSETS

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Accounts receivable (including related party), net

 

$ -

 

 

$ -

 

Non-current assets:

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

30,226

 

 

 

33,808

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$ 30,226

 

 

$ 33,808

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$ 173,775

 

 

$ 151,173

 

Due to related parties

 

 

534,258

 

 

 

512,537

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

708,033

 

 

 

663,710

 

 

 

 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

7,864

 

 

 

7,886

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

715,897

 

 

 

671,596

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 500,000,000 shares authorized; 21,536,933 and 21,536,933 shares issued and outstanding as of March 31, 2021 and December 31, 2020

 

 

21,536

 

 

 

21,536

 

Additional paid-in capital

 

 

395,516

 

 

 

395,516

 

Accumulated deficit

 

 

(1,102,276 )

 

 

(1,052,582 )

Accumulated other comprehensive loss

 

 

(447 )

 

 

(2,258 )

 

 

 

 

 

 

 

 

 

Total stockholders’ deficit

 

 

(685,671 )

 

 

(637,788 )

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

$ 30,226

 

 

$ 33,808

 

 

See accompanying notes to condensed consolidated financial statements.

 

 
3

Table of Contents

 

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF

OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

 

 

 

Three months ended

March 31,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

Revenue

 

$

 

 

$ 90,388

 

Revenue-related party

 

 

 

 

 

72,912

 

Total revenues, net

 

 

 

 

 

163,300

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

 

 

 

(112,966 )

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

 

 

 

50,334

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

General and administrative

 

 

(49,694 )

 

 

(56,153 )

Total operating expenses

 

 

(49,694 )

 

 

(56,153 )

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(49,694 )

 

 

(5,819 )

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

1

 

Interest expense

 

 

 

 

 

(565 )

 

 

 

 

 

 

 

 

 

Total other (expense) income

 

 

 

 

 

(564 )

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAXES

 

 

(49,694 )

 

 

(6,383 )

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from continuing operation

 

 

(49,694 )

 

 

(6,383 )

Loss from discontinued operations, net of tax

 

 

 

 

 

(6,286 )

 

 

 

 

 

 

 

 

 

NET LOSS

 

$ (49,694 )

 

$ (12,669 )

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

(49,694 )

 

 

(12,669 )

Foreign currency translation gain (loss)

 

 

1,811

 

 

 

(2,636 )

COMPREHENSIVE LOSS

 

$ (47,883 )

 

$ (15,305 )

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

Continuing operations – basic and diluted

 

$ (0.00 )

 

$ (0.00 )

Discontinued operations – basic and diluted

 

 

-

 

 

 

(0.00 )

Net loss per share - basic and diluted

 

$ (0.00 )

 

$ (0.00 )

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

– Basic and diluted

 

 

21,536,933

 

 

 

21,536,933

 

  

See accompanying notes to condensed consolidated financial statements.

 

 
4

Table of Contents

 

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Three months ended

March 31,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$ (49,694 )

 

$ (12,669 )

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

 

 

Depreciation

 

 

3,495

 

 

 

3,062

 

Deferred tax

 

 

 

 

 

48

 

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

 

 

 

(12,635 )

Accounts payable and accrued liabilities

 

 

22,996

 

 

 

(9,743 )

Income tax payable

 

 

 

 

 

(3,603 )

Net cash provided by operating activities from discontinued operations

 

 

 

 

 

1,043

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

 

(23,203 )

 

 

(34,497 )

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Advances from related parties

 

 

23,203

 

 

 

14,107

 

Repayment of lease liability

 

 

 

 

 

(4,980 )

Net cash provided by financing activities from discontinued operations

 

 

 

 

 

5,328

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

23,203

 

 

 

14,455

 

 

 

 

 

 

 

 

 

 

Effect on exchange rate change on cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

 

 

 

 

(20,042 )

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

 

 

 

 

 

28,816

 

 

 

 

 

 

 

 

 

 

CASH AND CASH EQUIVALENTS, END OF PERIOD

 

$

 

 

$ 8,774

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

 

 

$ 565

 

Cash paid for tax

 

$

 

 

$ 3,603

 

 

See accompanying notes to condensed consolidated financial statements.

 

 
5

Table of Contents

 

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020

(UNAUDITED)

 

 

 

Common stock

 

 

Additional paid-in

 

 

Accumulated other comprehensive

 

 

Accumulated

 

 

Total stockholders’

 

 

 

No. of shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

deficit

 

 

deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2020

 

 

21,536,933

 

 

$ 21,536

 

 

$ 395,516

 

 

$ (2,258 )

 

$ (1,052,582 )

 

$ (637,788 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

1,811

 

 

 

 

 

 

1,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(49,694 )

 

 

(49,694 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of March 31, 2021

 

 

21,536,933

 

 

$ 21,536

 

 

$ 395,516

 

 

$ (447 )

 

$ (1,102,276 )

 

$ (685,671 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

Additional paid-in

 

 

Accumulated other comprehensive

 

 

Accumulated

 

 

Total stockholders’

 

 

 

No. of shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

losses

 

 

deficit

 

Balance as of December 31, 2019

 

 

21,536,933

 

 

$ 21,536

 

 

$ 395,516

 

 

$

 

 

$ (806,842 )

 

$ (389,790 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

(2,636 )

 

 

 

 

 

(2,636 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(12,669 )

 

 

(12,669 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of March 31, 2020

 

 

21,536,933

 

 

$ 21,536

 

 

$ 395,516

 

 

$ (2,636 )

 

$ (819,511 )

 

$ (405,095 )

  

See accompanying notes to condensed consolidated financial statements.

 

 
6

Table of Contents

 

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 1 - BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the consolidated balance sheet as of December 31, 2020 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2021 or for any future period.

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2020.

 

NOTE 2 - ORGANIZATION AND BUSINESS BACKGROUND

 

Cosmos Group Holdings Inc. (the “Company” or “COSG”) was incorporated in the state of Nevada on August 14, 1987.

 

The Company, through its subsidiaries, mainly engaged in the provision of truckload transportation service in Hong Kong, in which the Company utilized its owned trucks or independent contractor owned trucks for the pickup and delivery of freight from port to the designated destination, upon the customers’ request. Starting March 2020, the Company generates most of its revenues from referring truckload transportation service business to one of its related party Lee Tat Logistic Holdings Limited, a company owned by one director of the Company, and charges a fixed rate of commission fee.

 

Description of subsidiaries

 

Name

 

Place of

incorporation
and kind of
legal entity

 

Principal

activities
and place

of operation

 

Particulars

of issued/
registered

share
capital

 

Effective

interest

held

 

 

 

 

 

 

 

 

 

 

 

Lee Tat International Holdings Limited

 

British Virgin Islands

 

Investment holding

 

50,000 shares at US$1 each

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

Lee Tat Transportation International Limited

 

Hong Kong

 

Logistic and delivery

 

10,000 ordinary shares for HK$10,000

 

 

100

%

 

COSG and its subsidiaries are hereinafter referred to as (the “Company”).

 

 
7

Table of Contents

 

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.

 

·

Use of estimates

 

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.

 

·

Basis of consolidation

 

The condensed consolidated financial statements include the financial statements of COSG and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

·

Reclassification

 

Certain reclassifications 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 loss or accumulated deficit.

 

·

Discontinued operations

 

On March 16, 2020, the Company approved to discontinue and exit its AI Education business. On May 4, 2020, the Company completed a stock transfer agreement with each of the three purchasers (the “Purchasers”), pursuant to which the Company agreed to transfer its 100% interest in Cosmos Robotor Holdings Limited (“Cosmos Robotor”) to the three Purchasers for $50 in aggregate, and the Purchasers agreed to assume all the assets and liabilities of Cosmos Robotor.

 

·

Cash and cash equivalents

 

Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.

 

·

Accounts receivable

 

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer’s financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2021 and December 31, 2020, the allowance for doubtful accounts was $48,784 and $48,920, respectively, based on management’s assessment.

 

 
8

Table of Contents

 

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

·

Property, plant and equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

 

 

 

Expected

useful life

 

Service vehicle

 

8 years

 

 

Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

 

Depreciation expense for the three months ended March 31, 2021 and 2020 were $3,495 and $3,062, respectively.

 

·

Impairment of long-lived assets

 

In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the three months ended March 31, 2021 and 2020.

 

·

Revenue recognition

 

The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) using the full retrospective transition method. The Company’s adoption of ASU 2014-09 did not have a material impact on the amount and timing of revenue recognized in its condensed consolidated financial statements.

 

Under ASU 2014-09, the Company recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

 

 
9

Table of Contents

 

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

The Company derives its revenues from the rendering of transportation services and recognizes in full upon completion of delivery to the receiver’s location. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

identify the contract with a customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to performance obligations in the contract; and

recognize revenue as the performance obligation is satisfied.

 

·

Comprehensive income

 

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying condensed consolidated statement of stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

 

·

Income taxes

 

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

For the three months ended March 31, 2021 and 2020, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2021, the Company did not have any significant unrecognized uncertain tax positions.

 

The Company conducts the majority of its businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by a foreign tax authority.

 

 
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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

·

Lease

 

The Company adopted Topic 842, Leases (“ASC 842”), using the modified retrospective approach through a cumulative-effect adjustment and utilizing the effective date of January 1, 2019 as its date of initial application, with prior periods unchanged and presented in accordance with the previous guidance in Topic 840, Leases (“ASC 840”).

 

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

 

In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.

 

The Company made the policy election to not separate lease and non-lease components. Each lease component and the related non-lease components are accounted for together as a single component.

 

·

Net loss per share

 

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 

·

Foreign currencies translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

 

The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in Hong Kong and the PRC maintain their books and records in their local currency, Hong Kong Dollars (“HK$”) and Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.

 

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the condensed consolidated statement of stockholders’ deficit.

 

 
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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

·

Related parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

·

Segment reporting

 

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the three months ended March 31, 2021 and 2020, the Company operates in one reportable operating segment in Hong Kong.

 

·

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

 

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.

 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

·

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

 

·

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

 

·

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

 
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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

 

·

Recent accounting pronouncements

 

Recently Adopted Accounting Standards

 

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, with early adoption permitted. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively. This adoption on January 1, 2021 did not have a material impact on the Company’s consolidated financial statements.

 

NOTE 4 - GOING CONCERN UNCERTAINTIES

 

The accompanying condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

The Company has experienced a net loss of $49,694 and negative operating cash flows of $23,203, for the period ended March 31, 2021. Also, at March 31, 2021, the Company has incurred an accumulated deficit of $1,102,276.

 

The continuation of the Company as a going concern through March 31, 2022 is dependent upon the continued financial support from its stockholders. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

 

These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

 

 

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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

  

NOTE 5 - INCOME TAXES

 

The Company generated an operating loss for the three months ended March 31, 2021 and 2019 and did not record income tax expense. The Company has operations in various countries and is subject to tax in the jurisdictions in which they operate, as follows:

 

United States of America

 

COSG is registered in the State of Nevada and is subject to the tax laws of United States of America

 

As of March 31, 2021, the operation in the United States of America incurred $2,710,001 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2039, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $569,100 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

Hong Kong

 

The Company’s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the two-tiered income tax rate from 8.25% to 16.5% on the assessable income arising in Hong Kong during its tax year. 

  

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

 

 

 

For the Three Months

 

 

 

Ended March 31,

 

 

 

2020

 

 

2020

 

 

 

 

 

 

 

 

U.S. statutory tax (benefit)

 

 

(21.0 )%

 

 

(21.0 )%

Hong Kong statutory tax (benefit)

 

 

(8.25 )%

 

 

8.25 %

Permanent and temporary differences

 

 

0 %

 

 

(8.25 )%

Change in deferred tax asset valuation allowance

 

 

29.25 %

 

 

21.0 %

Effective income tax rate

 

 

0 %

 

 

0 %

 

NOTE 7 - STOCKHOLDERS’ EQUITY

 

Authorized stock

 

The Company’s authorized share is 500,000,000 common shares with a par value of $0.001 per share.

 

Common stock outstanding

 

As of March 31, 2021 and December 31, 2020, the Company had a total of 21,536,933 shares of its common stock issued and outstanding, respectively.

 

NOTE 8 - RELATED PARTY TRANSACTIONS

 

Sales to related party

 

Starting March 2020, the Company generates its revenue mostly from referring truckload transportation service business to one of its related party Lee Tat Logistic Holdings Limited, a Company owned by one the director of the Company, and charges a fixed rate of commission fee. Revenue from Lee Tat Logistic Holding Limited amounted to $0 and $72,912 for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, accounts receivable from Lee Tat Logistic Holding Limited was $44,672 and $44,797, respectively, of which $44,672 and $44,797 was recorded as allowance for doubtful accounts as of March 31, 2021 and December 31, 2020, respectively.

 

Due to related parties

 

As of March 31, 2021 and December 31, 2020, the Company had $85,389 and $85,628 due to Cosmos Links International Holding Limited, respectively. Cosmos Links International Holding Limited is an entity controlled by Miky Wan, President, Chief Executive Officer and director of the Company. Those loans are unsecured, bear no interest, and are due on demand.

 

As of March 31, 2021 and December 31, 2020, the Company had $368,002 and $370,167 due to Asia Cosmos Group Limited, respectively. Asia Cosmos Group Limited is an entity controlled by Miky Wan, President, Chief Executive Officer and director of the Company. Those loans are unsecured, bear no interest, and are due on demand.

 

The Company has advanced funds from Koon Wing Cheung, a shareholder of the Company and director of Lee Tat International Holdings limited, for working capital purposes. As of March 31, 2021 and December 31, 2020, there were $80,867 and $56,742 advances outstanding, respectively. Those advances are unsecured, bear no interest, and are due on demand. 

 

Lease

 

On July 1, 2020, the Company entered into a lease agreement with Koon Wing Cheung, a shareholder of the Company and director of Lee Tat International Holdings limited, pursuant to which the Company agreed to lease a real property located in Hong Kong from July 1, 2020 to March 31, 2021, with a monthly rent of $7,740 (HK$ 60,000), payable in advance on the 1st day of each month.

 

 
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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

NOTE 9 - CONCENTRATIONS OF RISK

 

The Company is exposed to the following concentrations of risk:

 

(a) Major customer

 

For the three months ended March 31, 2021, the Company generated no revenue, whilst, for the three months ended March 31, 2020, the customers who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at year-end dates, are presented as follows:

 

 

 

Three months ended
March 31, 2020

 

 

 

 

March 31, 2020

 

Customers

 

Revenues

 

 

Percentage
of revenues

 

 

 

 

Accounts
Receivable

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer A – related party

 

$ 72,912

 

 

 

45 %

 

 

 

$ 73,082

 

Customer B

 

 

61,188

 

 

 

37 %

 

 

 

 

3,969

 

Customer C

 

 

26,436

 

 

 

16 %

 

 

 

 

 

Total:

 

$ 160,536

 

 

 

98 %

 

Total:

 

$ 77,051

 

 

 
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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

 

All customers are located in the Hong Kong.

 

(b) Credit risk

 

Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

 

(c) Interest rate risk

 

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

 

The Company’s interest-rate risk arises from borrowing under finance lease. The Company manages interest rate risk by varying the issuance and maturity dates variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates.

 

(d) Exchange rate risk

 

The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in HKD and a significant portion of the assets and liabilities are denominated in HKD. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and HKD. If HKD depreciates against US$, the value of HKD revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk.

 

NOTE 10 - SUBSEQUENT EVENTS

 

On June 17, 2021, the Company entered into a Share Acquisition Agreement (the “Share Acquisition Agreement”), by and among the Company, Massive Treasure Limited, a British Virgin Islands corporation (“Massive Treasure”), and the holders of common shares of Massive Treasure.

 

Under the terms and conditions of the Share Acquisition Agreement, the Company offered to issue 1,078,269,470 shares of common stock of the Company, in consideration for all the issued and outstanding shares in Massive Treasure. Herbert Lee, expected to be appointed as a Company director, is the beneficial holder of 47,500 common shares, or 95%, of the issued and outstanding shares of Massive Treasure.

 

The Company will also issue 55,641,014 shares to complete the acquisitions of 12 business entities which Massive Treasure has signed with and remain outstanding.

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred March 31, 2021, up through the date, the Company issued the condensed consolidated financial statements.

 

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

 

Forward-looking statements

 

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report on Form 10-Q. This quarterly report on Form 10-Q contains certain forward-looking statements and our future operating results could differ materially from those discussed herein. Certain statements contained in this discussion, including, without limitation, statements containing the words “believes,” “anticipates,” “expects” and the like, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, as we issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are ineligible to rely on these safe harbor provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained herein to reflect future events or developments.

 

Currency and exchange rate

 

Unless otherwise noted, all currency figures quoted as “U.S. dollars”, “dollars” or “$” refer to the legal currency of the United States. Throughout this report, assets and liabilities of the Company’s subsidiaries are translated into U.S. dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

 

Overview

 

The Company, through its subsidiaries, currently engaged in the provision of truckload transportation service in Hong Kong, in which the Company utilized its owned trucks or independent contractor owned trucks for the pickup and delivery of freight from port to the designated destination, upon the customers’ request. Starting March 2020, the Company generates most of its revenues from referring truckload transportation service business to one of its related party Lee Tat Logistic Holdings Limited, a company owned by one director of the Company, and charges a fixed rate of commission fee.

 

 
17

Table of Contents

 

Results of Operations

 

Comparison of the three months ended March 31, 2021 and March 31, 2020

 

As of March 31, 2021, we suffered from a working capital deficit of $708,033. As a result, our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders or other capital sources. Management believes that the continuing financial support from the existing shareholders and external financing will provide the additional cash to meet our obligations as they become due. Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

 

The following table sets forth certain operational data for the three months ended March 31, 2021, compared to the three months ended March 31, 2020:

 

 

 

Three months ended March 31,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

Revenue

 

$

 

 

$ 163,300

 

Cost of revenue

 

 

 

 

 

(112,966 )

Gross profit

 

 

 

 

 

50,334

 

Operating Expenses

 

 

(49,694 )

 

 

(56,153 )

Loss from operations

 

 

(49,694 )

 

 

(5,819 )

Total other expense

 

 

 

 

 

(564 )

Income tax expense

 

 

 

 

 

 

Loss from discontinued operation

 

 

 

 

 

(6,286 )

NET LOSS

 

$ (49,694 )

 

$ (12,669 )

 

During the three months ended March 31, 2021, we generated no revenue, whilst, during the three months ended March 31, 2020, the following customers accounted for 10% or more of our total net revenues:

 

 

 

Three Months ended
March 31, 2020

 

 

March 30,
2020

 

 

 

Revenues

 

 

Percentage
of revenues

 

 

Accounts
receivable

 

 

 

 

 

 

 

 

 

 

 

Lee Tat Logistic Holding Limited

 

$ 72,912

 

 

 

45 %

 

$ 73,082

 

Hip Tung Cables Company Limited

 

 

61,188

 

 

 

37 %

 

 

3,969

 

Peaceman Cable Engineering Limited

 

 

26,436

 

 

 

16 %

 

 

 

Total

 

$ 160,536

 

 

 

98 %

 

$ 77,051

 

 

All of our major customers are located in Hong Kong.

 

Revenue. Revenue for the three months ended March 31, 2021 and 2020 was $0 and $163,300. Revenue decreased primarily as a result of the decrease in our business volume.

 

Cost of Revenue. Cost of revenue for the three months ended March 31, 2021 and 2020 was $0 and $112,966. Cost of revenue decreased primarily as a result of the decrease in our business volume.

 

Gross Profit. We achieved a gross profit of $0 and $50,334 for the three months ended March 31, 2021, and 2020, respectively. The decrease in gross profit is primarily attributable to the logistic business slow down.

 

Operating Expenses. We incurred G&A expenses of $49,694 and $56,153 for the three months ended March 31, 2021, and 2020, respectively.

 

 
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Other Expenses, net. We incurred net other expenses of $0 and $564 for the three months ended March 31, 2021 and 2020, respectively.

 

Income Tax Expense. Our income tax expenses for the three months ended March 31, 2021 and 2020 was $0 and $0, respectively.

 

Net Loss. During the three months ended March 31, 2021 and 2020, we incurred a net loss of $49,694 and $12,669, respectively. The increase in net loss is primarily attributable to sales reduction during this fiscal quarter.

 

Liquidity and Capital Resources

 

As of March 31, 2021 and December 31, 2020, we had cash and cash equivalents of $0 and accounts receivable of $0.

 

We expect to incur significantly greater expenses in the near future as we develop our artificial intelligence education business or enter into strategic partnerships. We also expect our general and administrative expenses to increase as we expand our finance and administrative staff, add infrastructure, and incur additional costs related to being reporting act company, including directors’ and officers’ insurance and increased professional fees.

 

We have never paid dividends on our Common Stock. Our present policy is to apply cash to investments in product development, acquisitions or expansion; consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.

 

Going Concern Uncertainties

 

Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and public offerings, lease liability and short-term and long-term debts. In addition, with respect to the ongoing and evolving coronavirus (COVID-19) outbreak, which was designated as a pandemic by the World Health Organization on March 11, 2020, the outbreak has caused substantial disruption in international economies and global trades and if repercussions of the outbreak are prolonged, could have a significant adverse impact on our business. Given the addition political and public health challenges, our ability to obtain external financing or financing from existing shareholders to fund our working capital needs has been materially and adversely impacted, and there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed below are adequate to support general operations for at least the next 12 months.

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Net cash used in operating activities

 

$ (23,203 )

 

$ 34,497

 

Net cash used in investing activities

 

 

 

 

 

 

Net cash provided by financing activities

 

$ 23,203

 

 

$ 14,455

 

 

 
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Net Cash Used In Operating Activities.

 

For the three months ended March 31, 2021, net cash used in operating activities was $23,203 which consisted primarily of a net loss of $49,694, an increase in accounts payable and accrued liabilities of $22,996 and depreciation of property, plant and equipment of $3,495.

 

For the three months ended March 31, 2020, net cash used in operating activities was $34,497, which consisted primarily of a net loss of $12,669, an increase in account receivable of $12,635, net cash provided by operating activities of discontinued operation of $1,043, a decrease in accounts payable and accrued liabilities of $9,743, a decrease in income tax payable of $3,603, depreciation of property, plant and equipment of $3,062 and deferred tax of $48.

 

We expect to continue to rely on cash generated through financing from our existing shareholders and private placements of our securities, however, to finance our operations and future acquisitions.

 

Net Cash Used In Investing Activities.

 

For the three months ended March 31, 2021 and 2020, net cash used in investment activities was $0.

 

Net Cash Provided By Financing Activities.

 

For the three months ended March 31, 2021, net cash provided by financing activities was $23,203 consisting primarily of advances from related parties of $23,203.

 

For the three months ended March 31, 2020, net cash provided by financing activities was $14,455 consisting primarily of advances from related parties of $14,107 and net cash provided by financing activities of discontinued operation $5,328, offset by repayments on a finance lease of $4,980.

 

Off-Balance Sheet Arrangements

 

We have no outstanding off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

 

Contractual Obligations and Commercial Commitments

 

We had the following contractual obligations and commercial commitments as of March 31, 2021:

 

Contractual Obligations

 

Total

 

 

Less than 1
Year

 

 

1-3 Years

 

 

3-5 Years

 

 

More than 5
Years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts due to related parties

 

$ 534,258

 

 

$ 534,258

 

 

$

 

 

$

 

 

$

 

Total obligations

 

$ 534,258

 

 

$ 534,258

 

 

$

 

 

$

 

 

$

 

 

 
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Off-Balance Sheet Arrangements

 

We have no outstanding off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

 

Critical Accounting Policies and Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management’s subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe the following accounting policies are critical in the preparation of our financial statements.

 

·

Basis of consolidation

 

The condensed consolidated financial statements include the financial statements of COSG and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

·

Accounts receivable

 

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer’s financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers.

 

·

Property, plant and equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

 

 

 

Expected

useful life

Service vehicle

 

8 years

 

 
21

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Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

 

·

Impairment of long-lived assets

 

In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.

 

·

Revenue recognition

 

Revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company derives its revenues from the rendering of transportation services and recognizes in full upon completion of delivery to the receiver’s location. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

 

identify the contract with a customer;

 

identify the performance obligations in the contract;

 

determine the transaction price;

 

allocate the transaction price to performance obligations in the contract; and

 

recognize revenue as the performance obligation is satisfied.

 

·

Income taxes

 

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

The Company conducts major businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the foreign tax authority.

 

·

Foreign currencies translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

 

The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in Hong Kong and the PRC maintain their books and records in their local currency, Hong Kong Dollars (“HK$”) and Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.

 

 
22

Table of Contents

 

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

 

·

Related parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

·

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and finance lease): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

 

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.

 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

·

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

 

·

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

 

·

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

 

·

Recent accounting pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

ITEM 3 Quantitative and Qualitative Disclosures about Market Risk

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

 
23

Table of Contents

 

ITEM 4 Controls and Procedure

 

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

 

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures, subject to limitations as noted below, as of March 31, 2021, and during the period prior to and including the date of this report, were effective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

Inherent Limitations

 

Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

 

Changes in Internal Control over Financial Reporting

 

Subject to the foregoing disclosure, there were no changes in our internal control over financial reporting that occurred during our fiscal quarter ended March 31, 2021, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
24

Table of Contents

 

PART II OTHER INFORMATION

 

ITEM 1 Legal Proceedings

 

We are not a party to any legal or administrative proceedings that we believe, individually or in the aggregate, would be likely to have a material adverse effect on our financial condition or results of operations.

 

ITEM 1A Risk Factors

 

None.

 

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.

 

 
25

Table of Contents

 

ITEM 6 Exhibits

 

Exhibit No.

 

Description

 

 

 

3.1

 

Articles of Incorporation and Certificate of Amendment to Articles of Incorporation (1)

3.2

 

Amended and Restated Bylaws (2)

21

 

Subsidiaries*

31.1

 

Certification of Chief Executive Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act.*

31.2

 

Certification of Chief Financial Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act.*

32.1

 

Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2

 

Certification of Chief 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 Schema Document*

101.CAL

 

XBRL Calculation Linkbase Document*

101.DEF

 

XBRL Definition Linkbase Document*

101.LAB

 

XBRL Label Linkbase Document*

101.PRE

 

XBRL Presentation Linkbase Document*

 

* Filed herewith

(1) Incorporated by reference from our Registration Statement on Form 10 filed with the Securities and Exchange Commission on May 23, 2017.

(2) Incorporated by reference from our Form 10-SB filed with the Securities and Exchange Commission on January 19, 2000, under the name Interactive Marketing Technology, Inc.

 

 
26

Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

COSMOS GROUP HOLDINGS INC.

 

 

 

 

 

By:

/s/ Miky Y.C. Wan

 

 

 

Miky Y.C. Wan

 

 

 

Chief Executive Officer, President

 

 

 

 

 

Date: June 28, 2021

 

 

    

  

27
EX-21 2 cosmos_ex21.htm EX-21 cosmos_ex21.htm

EXHIBIT 21

 

LIST OF SUBSIDIARIES

 

Company Name

Place/Date of Incorporation

Issued Capital

Principal Activities

Lee Tat International Holdings Limited

British Virgin Islands

50,000 shares

Holding company

Lee Tat Transportation International Limited

Hong Kong

10,000 shares

Logistic and delivery company

EX-31.1 3 cosmos_ex311.htm EX-31.1 cosmos_ex311.htm

EXHIBIT 31.1

  

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Miky Y.C. Wan, certify that:

 

 

1.

I have reviewed this quarterly report on Form 10-Q of Cosmos Group Holdings Inc.;

 

 

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 the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

    

Date: June 28, 2021

By:

/s/ Miky Y.C. Wan                                    

 

 

Name:

Miky Y.C. Wan

 

 

Title:

Chief Executive Officer and President

(Principal Executive Officer)

 

EX-31.2 4 cosmos_ex312.htm EX-31.2 cosmos_ex312.htm

EXHIBIT 31.2

 

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Miky Y.C. Wan, certify that:

 

 

1.

I have reviewed this quarterly report on Form 10-Q of Cosmos Group Holdings Inc.;

 

 

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 the registrant’s board of directors (or persons performing the equivalent functions):

 

 

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

 

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

  

Date: June 28, 2021

By:

/s/ Miky Y.C. Wan                                

 

 

Name:

Miky Y.C. Wan

 

 

Title:

Chief Financial Officer

(Principal Financial Officer)

 

EX-32.1 5 cosmos_ex321.htm EX-32.1 cosmos_ex321.htm

EXHIBIT 32.1

 

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Cosmos Group Holdings Inc., a Nevada corporation (the “Company”), on Form 10-Q for the quarter ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Miky Y.C. Wan, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

 

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; 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: June 28, 2021

By:

/s/ Miky Y.C. Wan                                

 

 

Name:

Miky Y.C. Wan

 

 

Title:

Chief Executive Officer

(Principal Executive Officer)

 

EX-32.2 6 cosmos_ex322.htm EX-32.2 cosmos_ex322.htm

EXHIBIT 32.2

 

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Cosmos Group Holdings Inc., a Nevada corporation (the “Company”), on Form 10-Q for the quarter ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Miky Y.C. Wan, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

 

1.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; 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: June 28, 2021

By:

/s/ Miky Y.C. Wan                                

 

 

Name:

Miky Y.C. Wan

 

 

Title:

Chief Financial Officer

(Principal Financial Officer)

 

 

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FONT: 10pt TIMES NEW ROMAN"><p style="MARGIN: 0px; text-align:justify;">The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (&#8220;GAAP&#8221;), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.</p> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="MARGIN: 0px; text-align:justify;">In the opinion of management, the consolidated balance sheet as of December 31, 2020 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2021 or for any future period.</p> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="MARGIN: 0px; text-align:justify;">These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management&#8217;s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2020.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Cosmos Group Holdings Inc. (the &#8220;Company&#8221; or &#8220;COSG&#8221;) was&nbsp;incorporated in the state of Nevada on August 14, 1987.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company, through its subsidiaries, mainly engaged in the provision of truckload transportation service in Hong Kong, in which the Company utilized its owned trucks or independent contractor owned trucks for the pickup and delivery of freight from port to the designated destination, upon the customers&#8217; request. Starting March 2020, the Company generates most of its revenues from referring truckload transportation service business to one of its related party Lee Tat Logistic Holdings Limited, a company owned by one director of the Company, and charges a fixed rate of commission fee.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><u>Description of subsidiaries</u></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;"> <p style="margin:0px"><strong>Name</strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;"> <p style="MARGIN: 0px; text-align:center;"><strong>Place of</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>incorporation </strong><strong><br /><strong>and kind of </strong><br /><strong>legal entity</strong></strong></p></td> <td> <p style="MARGIN: 0px; text-align:center;">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;"> <p style="MARGIN: 0px; text-align:center;"><strong>Principal</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>activities </strong><strong><br /><strong>and place</strong></strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>of operation</strong></p></td> <td> <p style="MARGIN: 0px; text-align:center;">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;"> <p style="MARGIN: 0px; text-align:center;"><strong>Particulars</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>of issued/ </strong><strong><br /><strong>registered</strong></strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>share </strong><strong><br /><strong>capital</strong></strong></p></td> <td> <p style="MARGIN: 0px; text-align:center;">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>Effective</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>interest</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>held</strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td colspan="2"> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="width:25%;vertical-align:top;"> <p style="margin:0px">Lee Tat International Holdings Limited</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:21%;vertical-align:top;"> <p style="margin:0px">British Virgin Islands</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:20%;vertical-align:top;"> <p style="margin:0px">Investment holding</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:19%;vertical-align:top;"> <p style="margin:0px">50,000 shares at US$1 each</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;vertical-align:top;"> <p style="MARGIN: 0px; text-align:right;">100</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px">%</p></td></tr> <tr style="height:15px;background-color:#ffffff"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px; text-align:right;">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="margin:0px">Lee Tat Transportation International Limited</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="margin:0px">Hong Kong</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="margin:0px">Logistic and delivery</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="margin:0px">10,000 ordinary shares for HK$10,000</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:right;">100</p></td> <td style="vertical-align:top;"> <p style="margin:0px">%</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">COSG and its subsidiaries are hereinafter referred to as (the &#8220;Company&#8221;).</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Use of estimates</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Basis of consolidation</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The condensed consolidated financial statements include the financial statements of COSG and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Reclassification</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Certain reclassifications 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 loss or accumulated deficit.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Discontinued operations</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">On March 16, 2020<strong>,</strong>&nbsp;the Company approved to discontinue and exit its AI Education business. On May 4, 2020, the Company completed a stock transfer agreement with each of the three purchasers (the &#8220;Purchasers&#8221;), pursuant to which the Company agreed to transfer its 100% interest in Cosmos Robotor Holdings Limited (&#8220;Cosmos Robotor&#8221;) to the three Purchasers for $50 in aggregate, and the Purchasers agreed to assume all the assets and liabilities of Cosmos Robotor. </p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Cash and cash equivalents</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Accounts receivable</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer&#8217;s financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of fiscal year, the Company specifically evaluates individual customer&#8217;s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2021 and December 31, 2020, the allowance for doubtful accounts was $48,784 and $48,920, respectively, based on management&#8217;s assessment.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp; </p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Property, plant and equipment</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:78%;"> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p></td> <td style="width:1%;"> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:20%;vertical-align:top;"> <p style="MARGIN: 0px; text-align:center;"><strong>Expected</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>useful life</strong></p></td> <td style="width:1%;"> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">Service vehicle</p></td> <td> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:center;">8 years</p></td> <td> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Depreciation expense for the three months ended March 31, 2021 and 2020 were $3,495 and $3,062, respectively.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Impairment of long-lived assets</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In accordance with the provisions of ASC Topic 360, &#8220;<em>Impairment or Disposal of Long-Lived Assets</em>&#8221;, all long-lived assets such as property, plant and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the three months ended March 31, 2021 and 2020.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Revenue recognition</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company adopted Accounting Standards Update (&#8220;ASU&#8221;) No. 2014-09, <em>Revenue from Contracts with Customers (Topic 606) </em>(&#8220;ASU 2014-09&#8221;) using the full retrospective transition method. The Company&#8217;s adoption of ASU 2014-09 did not have a material impact on the amount and timing of revenue recognized in its condensed consolidated financial statements.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Under ASU 2014-09, the Company recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;&nbsp; </p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company derives its revenues from the rendering of transportation services and recognizes in full upon completion of delivery to the receiver&#8217;s location. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-size:14pt">&#8226;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">identify the contract with a customer;</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-size:14pt">&#8226;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">identify the performance obligations in the contract;</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-size:14pt">&#8226;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">determine the transaction price;</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-size:14pt">&#8226;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">allocate the transaction price to performance obligations in the contract; and</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-size:14pt">&#8226;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">recognize revenue as the performance obligation is satisfied.</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Comprehensive income</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">ASC Topic 220, &#8220;<em>Comprehensive Income</em>&#8221;, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying condensed consolidated statement of stockholders&#8217; equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Income taxes</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Income taxes are determined in accordance with the provisions of ASC Topic 740, &#8220;<em>Income Taxes</em>&#8221; (&#8220;ASC 740&#8221;). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">For the three months ended March 31, 2021 and 2020, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2021, the Company did not have any significant unrecognized uncertain tax positions.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company conducts the majority of its businesses&nbsp;in Hong Kong&nbsp;and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by a foreign tax authority.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp; </p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Lease</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company adopted Topic 842,&nbsp;<em>Leases&nbsp;</em>(&#8220;ASC 842&#8221;), using the modified retrospective approach through a cumulative-effect adjustment and utilizing the effective date of January 1, 2019 as its date of initial application, with prior periods unchanged and presented in accordance with the previous guidance in Topic 840,&nbsp;<em>Leases</em>&nbsp;(&#8220;ASC 840&#8221;).</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company made the policy election to not separate lease and non-lease components. Each lease component and the related non-lease components are accounted for together as a single component.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Net loss per share</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company calculates net loss per share in accordance with ASC Topic 260, &#8220;<em>Earnings per Share</em>.&#8221; Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Foreign currencies translation</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The reporting currency of the Company is the United States Dollar (&#8220;US$&#8221;). The Company&#8217;s subsidiaries in Hong Kong and the PRC maintain their books and records in their local currency, Hong Kong Dollars (&#8220;HK$&#8221;) and Renminbi Yuan (&#8220;RMB&#8221;), which is the functional currency as being the primary currency of the economic environment in which these entities operate.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, &#8220;<em>Translation of Financial Statement</em>&#8221;, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the condensed consolidated statement of stockholders&#8217; deficit.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Related parties</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Segment reporting</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">ASC Topic 280, &#8220;<em>Segment Reporting</em>&#8221; establishes standards for reporting information about operating segments on a basis consistent with the Company&#8217;s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the three months ended March 31, 2021 and 2020, the Company operates in one reportable operating segment in Hong Kong.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Fair value of financial instruments</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The carrying value of the Company&#8217;s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company also follows the guidance of the ASC Topic 820-10, &#8220;<em>Fair Value Measurements and Disclosures</em>&#8221; (&#8220;ASC 820-10&#8221;), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp; </p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Recent accounting pronouncements</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>Recently Adopted Accounting Standards</em></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In December 2019, the FASB issued ASU No. 2019-12,&nbsp;<em>Income Taxes: Simplifying the Accounting for Income Taxes</em>&nbsp;(&#8220;ASU 2019-12&#8221;), which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, with early adoption permitted. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively.&nbsp;This adoption on January 1, 2021 did not have a material impact on the Company&#8217;s consolidated financial statements.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The accompanying condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company has experienced a net loss of $49,694 and negative operating cash flows of $23,203, for the period ended March 31, 2021. Also, at March 31, 2021, the Company has incurred an accumulated deficit of $1,102,276.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The continuation of the Company as a going concern through March 31, 2022 is dependent upon the continued financial support from its stockholders. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">These and other factors raise substantial doubt about the Company&#8217;s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company generated an operating loss for the three months ended March 31, 2021 and 2019 and did not record income tax expense. The Company has operations in various countries and is subject to tax in the jurisdictions in which they operate, as follows:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>United States of America</em></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">COSG is registered in the State of Nevada and is subject to the tax laws of United States of America</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">As of March 31, 2021, the operation in the United States of America incurred $2,710,001 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2039, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $569,100 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>Hong Kong</em></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company&#8217;s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the two-tiered income tax rate from 8.25% to 16.5% on the assessable income arising in Hong Kong during its tax year.&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The following is a reconciliation of the statutory tax rate to the effective tax rate:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%" cellpadding="0"> <tr style="height:15px"> <td></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="hdcell" colspan="6" style="width:9%;vertical-align:bottom;text-align:center;"> <p style="MARGIN: 0px; text-align:center;"><strong>For the Three Months</strong></p></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="hdcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;" colspan="6"> <p style="MARGIN: 0px; text-align:center;"><strong>Ended March 31,</strong></p></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="hdcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>2020</strong></p></td> <td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="hdcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>2020</strong></p></td> <td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" colspan="2" style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" colspan="2" style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">U.S. statutory tax (benefit)</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(21.0 </td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">)%</td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(21.0 </td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">)%</td></tr> <tr style="height:15px;background-color:#ffffff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">Hong Kong statutory tax (benefit)</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(8.25 </td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">)%</td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">8.25</td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">Permanent and temporary differences</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(8.25 </td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">)%</td></tr> <tr style="height:15px;background-color:#ffffff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">Change in deferred tax asset valuation allowance</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 1px solid;width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="BORDER-BOTTOM: black 1px solid;width:9%;vertical-align:bottom;text-align:right;">29.25</td> <td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 1px solid;width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="BORDER-BOTTOM: black 1px solid;width:9%;vertical-align:bottom;text-align:right;">21.0</td> <td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">Effective income tax rate</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 3px double;width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="BORDER-BOTTOM: black 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td> <td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 3px double;width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="BORDER-BOTTOM: black 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td> <td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em><u>Authorized stock</u></em></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company&#8217;s authorized share is 500,000,000 common shares with a par value of $0.001 per share.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em><u>Common stock outstanding</u></em></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">As of March 31, 2021 and December 31, 2020, the Company had a total of 21,536,933 shares of its common stock issued and outstanding, respectively.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><u>Sales to related party</u></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Starting March 2020, the Company generates its revenue mostly from referring truckload transportation service business to one of its related party Lee Tat Logistic Holdings Limited, a Company owned by one the director of the Company, and charges a fixed rate of commission fee. Revenue from Lee Tat Logistic Holding Limited amounted to $0 and $72,912 for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, accounts receivable from Lee Tat Logistic Holding Limited was $44,672 and $44,797, respectively, of which $44,672 and $44,797 was recorded as allowance for doubtful accounts as of March 31, 2021 and December 31, 2020, respectively.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><u>Due to related parties</u></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">As of March 31, 2021 and December 31, 2020, the Company had $85,389 and $85,628 due to Cosmos Links International Holding Limited, respectively. Cosmos Links International Holding Limited is an entity controlled by Miky Wan, President, Chief Executive Officer and director of the Company. Those loans are unsecured, bear no interest, and are due on demand.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">As of March 31, 2021 and December 31, 2020, the Company had $368,002 and $370,167 due to Asia Cosmos Group Limited, respectively. Asia Cosmos Group Limited is an entity controlled by Miky Wan, President, Chief Executive Officer and director of the Company. Those loans are unsecured, bear no interest, and are due on demand.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company has advanced funds from Koon Wing Cheung, a shareholder of the Company and director of Lee Tat International Holdings limited, for working capital purposes. As of March 31, 2021 and December 31, 2020, there were $80,867 and $56,742 advances outstanding, respectively. Those advances are unsecured, bear no interest, and are due on demand.&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><u>Lease</u></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">On July 1, 2020, the Company entered into a lease agreement with Koon Wing Cheung, a shareholder of the Company and director of Lee Tat International Holdings limited, pursuant to which the Company agreed to lease a real property located in Hong Kong from July 1, 2020 to March 31, 2021, with a monthly rent of $7,740 (HK$ 60,000), payable in advance on the 1st day of each month.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company is exposed to the following concentrations of risk:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">(a) Major customer</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">For the three months ended March 31, 2021, the Company generated no revenue, whilst, for the three months ended March 31, 2020, the customers who accounts for 10% or more of the Company&#8217;s revenues and its outstanding receivable balances as at year-end dates, are presented as follows:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;" colspan="6"> <p style="MARGIN: 0px; text-align:center;"><strong>Three months ended </strong><strong><br /><strong>March 31, 2020</strong></strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>March 31, 2020</strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;"> <p style="margin:0px"><strong>Customers</strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>Revenues</strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>Percentage </strong><strong><br /><strong>of revenues</strong></strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>Accounts </strong><strong><br /><strong>Receivable</strong></strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td colspan="2" style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td colspan="2" style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td colspan="2" style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="margin:0px">Customer A &#8211; related party</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">$</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">72,912</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">45</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">%</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">$</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">73,082</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#ffffff"> <td style="vertical-align:top;"> <p style="margin:0px">Customer B</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">61,188</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">37</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">%</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">3,969</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="margin:0px">Customer C</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">26,436</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">16</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">%</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">&#8211;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#ffffff"> <td style="vertical-align:top;"> <p style="margin:0px">Total:</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">$</p></td> <td style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">160,536</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 3px double;width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">98</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">%</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px; text-align:right;">Total:</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">$</p></td> <td style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">77,051</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">All customers are located in the Hong Kong.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">(b) Credit risk</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">(c) Interest rate risk</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">As the Company has no significant interest-bearing assets, the Company&#8217;s income and operating cash flows are substantially independent of changes in market interest rates.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company&#8217;s interest-rate risk arises from borrowing under finance lease. The Company manages interest rate risk by varying the issuance and maturity dates variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. </p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">(d) Exchange rate risk</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in HKD and a significant portion of the assets and liabilities are denominated in HKD. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and HKD. If HKD depreciates against US$, the value of HKD revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">On June 17, 2021, the Company entered into a Share Acquisition Agreement (the &#8220;Share Acquisition Agreement&#8221;), by and among the Company, Massive Treasure Limited, a British Virgin Islands corporation (&#8220;Massive Treasure&#8221;), and the holders of common shares of Massive Treasure.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Under the terms and conditions of the Share Acquisition Agreement, the Company offered to issue 1,078,269,470 shares of common stock of the Company, in consideration for all the issued and outstanding shares in Massive Treasure. Herbert Lee, expected to be appointed as a Company director, is the beneficial holder of 47,500 common shares, or 95%, of the issued and outstanding shares of Massive Treasure.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company will also issue 55,641,014 shares to complete the acquisitions of 12 business entities which Massive Treasure has signed with and remain outstanding.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In accordance with ASC Topic 855, &#8220;<em>Subsequent Events</em>&#8221;, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred March 31, 2021, up through the date, the Company issued the condensed consolidated financial statements.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The condensed consolidated financial statements include the financial statements of COSG and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Certain reclassifications 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 loss or accumulated deficit.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">On March 16, 2020<strong>,</strong>&nbsp;the Company approved to discontinue and exit its AI Education business. On May 4, 2020, the Company completed a stock transfer agreement with each of the three purchasers (the &#8220;Purchasers&#8221;), pursuant to which the Company agreed to transfer its 100% interest in Cosmos Robotor Holdings Limited (&#8220;Cosmos Robotor&#8221;) to the three Purchasers for $50 in aggregate, and the Purchasers agreed to assume all the assets and liabilities of Cosmos Robotor.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer&#8217;s financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of fiscal year, the Company specifically evaluates individual customer&#8217;s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2021 and December 31, 2020, the allowance for doubtful accounts was $48,784 and $48,920, respectively, based on management&#8217;s assessment.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:78%;"> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p></td> <td style="width:1%;"> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:20%;vertical-align:top;"> <p style="MARGIN: 0px; text-align:center;"><strong>Expected</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>useful life</strong></p></td> <td style="width:1%;"> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">Service vehicle</p></td> <td> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:center;">8 years</p></td> <td> <p style="MARGIN: 0px; text-align:justify;">&nbsp;</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Depreciation expense for the three months ended March 31, 2021 and 2020 were $3,495 and $3,062, respectively.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In accordance with the provisions of ASC Topic 360, &#8220;<em>Impairment or Disposal of Long-Lived Assets</em>&#8221;, all long-lived assets such as property, plant and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the three months ended March 31, 2021 and 2020.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company adopted Accounting Standards Update (&#8220;ASU&#8221;) No. 2014-09, <em>Revenue from Contracts with Customers (Topic 606) </em>(&#8220;ASU 2014-09&#8221;) using the full retrospective transition method. The Company&#8217;s adoption of ASU 2014-09 did not have a material impact on the amount and timing of revenue recognized in its condensed consolidated financial statements.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Under ASU 2014-09, the Company recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company derives its revenues from the rendering of transportation services and recognizes in full upon completion of delivery to the receiver&#8217;s location. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-size:14pt">&#8226;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">identify the contract with a customer;</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-size:14pt">&#8226;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">identify the performance obligations in the contract;</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-size:14pt">&#8226;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">determine the transaction price;</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-size:14pt">&#8226;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">allocate the transaction price to performance obligations in the contract; and</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-size:14pt">&#8226;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">recognize revenue as the performance obligation is satisfied.</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">ASC Topic 220, &#8220;<em>Comprehensive Income</em>&#8221;, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying condensed consolidated statement of stockholders&#8217; equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Income taxes are determined in accordance with the provisions of ASC Topic 740, &#8220;<em>Income Taxes</em>&#8221; (&#8220;ASC 740&#8221;). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;&nbsp; </p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">For the three months ended March 31, 2021 and 2020, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2021, the Company did not have any significant unrecognized uncertain tax positions.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company conducts the majority of its businesses&nbsp;in Hong Kong&nbsp;and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by a foreign tax authority.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company adopted Topic 842,&nbsp;<em>Leases&nbsp;</em>(&#8220;ASC 842&#8221;), using the modified retrospective approach through a cumulative-effect adjustment and utilizing the effective date of January 1, 2019 as its date of initial application, with prior periods unchanged and presented in accordance with the previous guidance in Topic 840,&nbsp;<em>Leases</em>&nbsp;(&#8220;ASC 840&#8221;).</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company made the policy election to not separate lease and non-lease components. Each lease component and the related non-lease components are accounted for together as a single component.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company calculates net loss per share in accordance with ASC Topic 260, &#8220;<em>Earnings per Share</em>.&#8221; Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The reporting currency of the Company is the United States Dollar (&#8220;US$&#8221;). The Company&#8217;s subsidiaries in Hong Kong and the PRC maintain their books and records in their local currency, Hong Kong Dollars (&#8220;HK$&#8221;) and Renminbi Yuan (&#8220;RMB&#8221;), which is the functional currency as being the primary currency of the economic environment in which these entities operate.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, &#8220;<em>Translation of Financial Statement</em>&#8221;, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the condensed consolidated statement of stockholders&#8217; deficit.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">ASC Topic 280, &#8220;<em>Segment Reporting</em>&#8221; establishes standards for reporting information about operating segments on a basis consistent with the Company&#8217;s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the three months ended March 31, 2021 and 2020, the Company operates in one reportable operating segment in Hong Kong.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The carrying value of the Company&#8217;s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company also follows the guidance of the ASC Topic 820-10, &#8220;<em>Fair Value Measurements and Disclosures</em>&#8221; (&#8220;ASC 820-10&#8221;), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><font style="font-family:Symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-family:Symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td style="vertical-align:top;"> <p style="margin:0px"><font style="font-family:Symbol">&#183;</font></p></td> <td style="vertical-align:top;"> <p style="margin:0px">Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.</p></td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp; &nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>Recently Adopted Accounting Standards</em></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In December 2019, the FASB issued ASU No. 2019-12,&nbsp;<em>Income Taxes: Simplifying the Accounting for Income Taxes</em>&nbsp;(&#8220;ASU 2019-12&#8221;), which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, with early adoption permitted. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively.&nbsp;This adoption on January 1, 2021 did not have a material impact on the Company&#8217;s consolidated financial statements.</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;"> <p style="margin:0px"><strong>Name</strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;"> <p style="MARGIN: 0px; text-align:center;"><strong>Place of</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>incorporation </strong><strong><br /><strong>and kind of </strong><br /><strong>legal entity</strong></strong></p></td> <td> <p style="MARGIN: 0px; text-align:center;">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;"> <p style="MARGIN: 0px; text-align:center;"><strong>Principal</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>activities </strong><strong><br /><strong>and place</strong></strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>of operation</strong></p></td> <td> <p style="MARGIN: 0px; text-align:center;">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;"> <p style="MARGIN: 0px; text-align:center;"><strong>Particulars</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>of issued/ </strong><strong><br /><strong>registered</strong></strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>share </strong><strong><br /><strong>capital</strong></strong></p></td> <td> <p style="MARGIN: 0px; text-align:center;">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>Effective</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>interest</strong></p> <p style="MARGIN: 0px; text-align:center;"><strong>held</strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td colspan="2"> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="width:25%;vertical-align:top;"> <p style="margin:0px">Lee Tat International Holdings Limited</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:21%;vertical-align:top;"> <p style="margin:0px">British Virgin Islands</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:20%;vertical-align:top;"> <p style="margin:0px">Investment holding</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:19%;vertical-align:top;"> <p style="margin:0px">50,000 shares at US$1 each</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;vertical-align:top;"> <p style="MARGIN: 0px; text-align:right;">100</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px">%</p></td></tr> <tr style="height:15px;background-color:#ffffff"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px; text-align:right;">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="margin:0px">Lee Tat Transportation International Limited</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="margin:0px">Hong Kong</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="margin:0px">Logistic and delivery</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="margin:0px">10,000 ordinary shares for HK$10,000</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:right;">100</p></td> <td style="vertical-align:top;"> <p style="margin:0px">%</p></td></tr></table></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:12%;vertical-align:top;"> <p style="MARGIN: 0px; text-align:center;"><strong>Expected useful life</strong></p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="margin:0px">Service vehicle</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:center;">8 years</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr></table></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><table style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%" cellpadding="0"> <tr style="height:15px"> <td></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="hdcell" colspan="6" style="width:9%;vertical-align:bottom;text-align:center;"> <p style="MARGIN: 0px; text-align:center;"><strong>For the Three Months</strong></p></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="hdcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;" colspan="6"> <p style="MARGIN: 0px; text-align:center;"><strong>Ended March 31,</strong></p></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="hdcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>2020</strong></p></td> <td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="hdcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>2020</strong></p></td> <td style="PADDING-BOTTOM: 1px;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" colspan="2" style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" colspan="2" style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">U.S. statutory tax (benefit)</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(21.0 </td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">)%</td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(21.0 </td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">)%</td></tr> <tr style="height:15px;background-color:#ffffff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">Hong Kong statutory tax (benefit)</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(8.25 </td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">)%</td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">8.25</td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">Permanent and temporary differences</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(8.25 </td> <td style="width:1%;vertical-align:bottom;white-space: nowrap;">)%</td></tr> <tr style="height:15px;background-color:#ffffff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">Change in deferred tax asset valuation allowance</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 1px solid;width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="BORDER-BOTTOM: black 1px solid;width:9%;vertical-align:bottom;text-align:right;">29.25</td> <td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 1px solid;width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="BORDER-BOTTOM: black 1px solid;width:9%;vertical-align:bottom;text-align:right;">21.0</td> <td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">Effective income tax rate</p></td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 3px double;width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="BORDER-BOTTOM: black 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td> <td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td> <td style="width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: black 3px double;width:1%;white-space: nowrap;"> <p style="margin:0px">&nbsp;</p></td> <td class="ffcell" style="BORDER-BOTTOM: black 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td> <td style="PADDING-BOTTOM: 3px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p></div> <div style="TEXT-ALIGN: justify; FONT: 10pt TIMES NEW ROMAN"><table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;" colspan="6"> <p style="MARGIN: 0px; text-align:center;"><strong>Three months ended </strong><strong><br /><strong>March 31, 2020</strong></strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>March 31, 2020</strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td style="BORDER-BOTTOM: 1px solid;vertical-align:bottom;"> <p style="margin:0px"><strong>Customers</strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>Revenues</strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>Percentage </strong><strong><br /><strong>of revenues</strong></strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;" colspan="2"> <p style="MARGIN: 0px; text-align:center;"><strong>Accounts </strong><strong><br /><strong>Receivable</strong></strong></p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td colspan="2" style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td colspan="2" style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td colspan="2" style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="margin:0px">Customer A &#8211; related party</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">$</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">72,912</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">45</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">%</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">$</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">73,082</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#ffffff"> <td style="vertical-align:top;"> <p style="margin:0px">Customer B</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">61,188</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">37</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">%</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">3,969</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#cceeff"> <td style="vertical-align:top;"> <p style="margin:0px">Customer C</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">26,436</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">16</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">%</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:9%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">&#8211;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px;background-color:#ffffff"> <td style="vertical-align:top;"> <p style="margin:0px">Total:</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">$</p></td> <td style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">160,536</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 3px double;width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">98</p></td> <td style="width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">%</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td> <p style="MARGIN: 0px; text-align:right;">Total:</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;"> <p style="margin:0px 0px 0px 0cm">$</p></td> <td style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;"> <p style="MARGIN: 0px 0px 0px 0cm; text-align:right;">77,051</p></td> <td style="width:1%;"> <p style="margin:0px">&nbsp;</p></td></tr></table></div> 1 1 British Virgin Islands Hong Kong Investment holding Logistic and delivery 50,000 ordinary shares at US$1 each 10,000 ordinary shares at HK$10,000 P8Y Tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority 48784 48920 3495 Tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority The Company agreed to transfer its 100% interest in Cosmos Robotor Holdings Limited (&#8220;Cosmos Robotor&#8221;) to the three Purchasers for $50 in aggregate 3062 -23203 -0.21 -0.21 -0.0825 0.0825 0 -0.0825 0.2925 0.21 0 0 -2710001 2039 569100 0.165 Payable in advance on the 1st day of each month. 7740 0 72912 44672 44672 44797 0 44797 85628 85389 370167 368002 56742 80867 0.45 61188 0.37 0.16 26436 72912 73082 3969 0 160536 77051 0.98 47500 1078269470 55641014 EX-101.SCH 8 cosm-20210331.xsd XBRL TAXONOMY EXTENSION SCHEMA 000001 - Document - Cover link:presentationLink link:calculationLink link:definitionLink 000002 - Statement - CONDENSED CONSOLIDATED BALANCE SHEETS link:presentationLink link:calculationLink link:definitionLink 000003 - Statement - CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) link:presentationLink link:calculationLink link:definitionLink 000004 - Statement - CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) 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It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning al Amount of income related to nonoperating activities, classified as other. Percentage of domestic federal statutory tax rate applicable to pretax income (loss). Amount of operating loss carryforward, before tax effects, available to reduce future taxable income under enacted tax laws. Amount, after sales adjustments, returns, allowances, and discounts, of revenue classified as other. EX-101.CAL 10 cosm-20210331_cal.xml XBRL TAXONOMY EXTENSION CALCULATION LINKBASE EX-101.PRE 11 cosm-20210331_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE EX-101.DEF 12 cosm-20210331_def.xml XBRL TAXONOMY EXTENSION DEFINITION LINKBASE XML 13 R1.htm IDEA: XBRL DOCUMENT v3.21.2
Cover - shares
3 Months Ended
Mar. 31, 2021
May 05, 2021
Cover [Abstract]    
Entity Registrant Name COSMOS GROUP HOLDINGS INC.  
Entity Central Index Key 0001706509  
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 false  
Entity Current Reporting Status Yes  
Document Period End Date Mar. 31, 2021  
Entity Filer Category Non-accelerated Filer  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2021  
Entity Common Stock Shares Outstanding   21,536,933
Document Quarterly Report true  
Document Transition Report false  
Entity Interactive Data Current Yes  
XML 14 R2.htm IDEA: XBRL DOCUMENT v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
Mar. 31, 2021
Dec. 31, 2020
Current assets    
Accounts receivable (including related party), net $ 0 $ 0
Non-current assets:    
Property, plant and equipment, net 30,226 33,808
TOTAL ASSETS 30,226 33,808
Current liabilities:    
Accounts payable and accrued liabilities 173,775 151,173
Due to related parties 534,258 512,537
Total current liabilities 708,033 663,710
Non-current liabilities:    
Deferred tax liabilities 7,864 7,886
TOTAL LIABILITIES 715,897 671,596
Commitments and contingencies 0 0
Stockholders' deficit:    
Common stock, $0.001 par value; 500,000,000 shares authorized; 21,536,933 and 21,536,933 shares issued and outstanding as of March 31, 2021 and December 31, 2020 21,536 21,536
Additional paid-in capital 395,516 395,516
Accumulated deficit (1,102,276) (1,052,582)
Accumulated other comprehensive loss (447) (2,258)
Total stockholders' deficit (685,671) (637,788)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 30,226 $ 33,808
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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Mar. 31, 2021
Dec. 31, 2020
Stockholders' Equity    
Common stock, shares par value $ 0.001 $ 0.001
Common stock, shares authorized 500,000,000 500,000,000
Common stock, shares issued 21,536,933 21,536,933
Common stock, shares outstanding 21,536,933 21,536,933
XML 16 R4.htm IDEA: XBRL DOCUMENT v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($)
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)    
Revenue $ 0 $ 90,388
Revenue-related party 0 72,912
Total revenues, net 0 163,300
Cost of revenue 0 (112,966)
GROSS PROFIT 0 50,334
OPERATING EXPENSES:    
General and administrative (49,694) (56,153)
Total operating expenses (49,694) (56,153)
LOSS FROM OPERATIONS (49,694) (5,819)
Other income (expense):    
Interest income 0 1
Interest expense 0 (565)
Total other (expense) income 0 (564)
LOSS BEFORE INCOME TAXES (49,694) (6,383)
Income tax expense 0 0
Loss from continuing operation (49,694) (6,383)
Loss from discontinued operations, net of tax 0 (6,286)
NET LOSS $ (49,694) $ (12,669)
Net loss per share:    
Continuing operations - basic and diluted $ (0.00) $ (0.00)
Discontinued operations - basic and diluted   (0.00)
Net loss per share - basic and diluted $ (0.00) $ (0.00)
Weighted average common shares outstanding:    
- Weighted Basic and diluted 21,536,933 21,536,933
Other comprehensive loss    
Foreign currency translation gain (loss) $ 1,811 $ (2,636)
COMPREHENSIVE LOSS $ (47,883) $ (15,305)
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Cash flows from operating activities:    
Net loss $ (49,694) $ (12,669)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation 3,495 3,062
Deferred tax 0 48
Change in operating assets and liabilities:    
Accounts receivable 0 (12,635)
Accounts payable and accrued liabilities 22,996 (9,743)
Income tax payable 0 (3,603)
Net cash provided by operating activities from discontinued operations 0 1,043
Net cash used in operating activities (23,203) (34,497)
Cash flows from financing activities:    
Advances from related parties 23,203 14,107
Repayment of lease liability 0 (4,980)
Net cash provided by financing activities from discontinued operations 0 5,328
Net cash provided by financing activities 23,203 14,455
Effect on exchange rate change on cash and cash equivalents 0 0
NET CHANGE IN CASH AND CASH EQUIVALENTS 0 (20,042)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 0 28,816
CASH AND CASH EQUIVALENTS, END OF PERIOD 0 8,774
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Cash paid for interest 0 565
Cash paid for tax $ 0 $ 3,603
XML 18 R6.htm IDEA: XBRL DOCUMENT v3.21.2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS DEFICIT (UNAUDITED) - USD ($)
Total
Common Stock
Additional Paid-In Capital
Accumulated other comprehensive income (loss)
Accumulated Dificit
Balance, shares at Dec. 31, 2019   21,536,933      
Balance, amount at Dec. 31, 2019 $ (389,790) $ 21,536 $ 395,516 $ 0 $ (806,842)
Foreign currency translation adjustment (2,636) 0 0 (2,636) 0
Net loss (12,669) $ 0 0 0 (12,669)
Balance, shares at Mar. 31, 2020   21,536,933      
Balance, amount at Mar. 31, 2020 (405,095) $ 21,536 395,516 (2,636) (819,511)
Balance, shares at Dec. 31, 2020   21,536,933      
Balance, amount at Dec. 31, 2020 (637,788) $ 21,536 395,516 (2,258) (1,052,582)
Foreign currency translation adjustment 1,811 0 0 1,811 0
Net loss (49,694) $ 0 0 0 (49,694)
Balance, shares at Mar. 31, 2021   21,536,933      
Balance, amount at Mar. 31, 2021 $ (685,671) $ 21,536 $ 395,516 $ (447) $ (1,102,276)
XML 19 R7.htm IDEA: XBRL DOCUMENT v3.21.2
BASIS OF PRESENTATION
3 Months Ended
Mar. 31, 2021
BASIS OF PRESENTATION  
NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the consolidated balance sheet as of December 31, 2020 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2021 or for any future period.

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2020.

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ORGANIZATION AND BUSINESS BACKGROUND
3 Months Ended
Mar. 31, 2021
ORGANIZATION AND BUSINESS BACKGROUND  
NOTE 2 - ORGANIZATION AND BUSINESS BACKGROUND

Cosmos Group Holdings Inc. (the “Company” or “COSG”) was incorporated in the state of Nevada on August 14, 1987.

 

The Company, through its subsidiaries, mainly engaged in the provision of truckload transportation service in Hong Kong, in which the Company utilized its owned trucks or independent contractor owned trucks for the pickup and delivery of freight from port to the designated destination, upon the customers’ request. Starting March 2020, the Company generates most of its revenues from referring truckload transportation service business to one of its related party Lee Tat Logistic Holdings Limited, a company owned by one director of the Company, and charges a fixed rate of commission fee.

 

Description of subsidiaries

 

Name

 

Place of

incorporation
and kind of
legal entity

 

Principal

activities
and place

of operation

 

Particulars

of issued/
registered

share
capital

 

Effective

interest

held

 

 

 

 

 

 

 

 

 

 

 

Lee Tat International Holdings Limited

 

British Virgin Islands

 

Investment holding

 

50,000 shares at US$1 each

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

Lee Tat Transportation International Limited

 

Hong Kong

 

Logistic and delivery

 

10,000 ordinary shares for HK$10,000

 

 

100

%

 

COSG and its subsidiaries are hereinafter referred to as (the “Company”).

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3 Months Ended
Mar. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.

 

·

Use of estimates

 

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.

 

·

Basis of consolidation

 

The condensed consolidated financial statements include the financial statements of COSG and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

·

Reclassification

 

Certain reclassifications 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 loss or accumulated deficit.

 

·

Discontinued operations

 

On March 16, 2020, the Company approved to discontinue and exit its AI Education business. On May 4, 2020, the Company completed a stock transfer agreement with each of the three purchasers (the “Purchasers”), pursuant to which the Company agreed to transfer its 100% interest in Cosmos Robotor Holdings Limited (“Cosmos Robotor”) to the three Purchasers for $50 in aggregate, and the Purchasers agreed to assume all the assets and liabilities of Cosmos Robotor.

 

·

Cash and cash equivalents

 

Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.

 

·

Accounts receivable

 

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer’s financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2021 and December 31, 2020, the allowance for doubtful accounts was $48,784 and $48,920, respectively, based on management’s assessment.

 

·

Property, plant and equipment

 

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

 

 

 

Expected

useful life

 

Service vehicle

 

8 years

 

 

Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

 

Depreciation expense for the three months ended March 31, 2021 and 2020 were $3,495 and $3,062, respectively.

 

·

Impairment of long-lived assets

 

In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the three months ended March 31, 2021 and 2020.

 

·

Revenue recognition

 

The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) using the full retrospective transition method. The Company’s adoption of ASU 2014-09 did not have a material impact on the amount and timing of revenue recognized in its condensed consolidated financial statements.

 

Under ASU 2014-09, the Company recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

  

The Company derives its revenues from the rendering of transportation services and recognizes in full upon completion of delivery to the receiver’s location. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

identify the contract with a customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to performance obligations in the contract; and

recognize revenue as the performance obligation is satisfied.

 

·

Comprehensive income

 

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying condensed consolidated statement of stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

 

·

Income taxes

 

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

For the three months ended March 31, 2021 and 2020, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2021, the Company did not have any significant unrecognized uncertain tax positions.

 

The Company conducts the majority of its businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by a foreign tax authority.

 

·

Lease

 

The Company adopted Topic 842, Leases (“ASC 842”), using the modified retrospective approach through a cumulative-effect adjustment and utilizing the effective date of January 1, 2019 as its date of initial application, with prior periods unchanged and presented in accordance with the previous guidance in Topic 840, Leases (“ASC 840”).

 

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

 

In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.

 

The Company made the policy election to not separate lease and non-lease components. Each lease component and the related non-lease components are accounted for together as a single component.

 

·

Net loss per share

 

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 

·

Foreign currencies translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

 

The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in Hong Kong and the PRC maintain their books and records in their local currency, Hong Kong Dollars (“HK$”) and Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.

 

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the condensed consolidated statement of stockholders’ deficit.

 

·

Related parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

·

Segment reporting

 

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the three months ended March 31, 2021 and 2020, the Company operates in one reportable operating segment in Hong Kong.

 

·

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

 

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.

 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

·

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

 

·

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

 

·

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

 

·

Recent accounting pronouncements

 

Recently Adopted Accounting Standards

 

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, with early adoption permitted. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively. This adoption on January 1, 2021 did not have a material impact on the Company’s consolidated financial statements.

XML 22 R10.htm IDEA: XBRL DOCUMENT v3.21.2
GOING CONCERN UNCERTAINTIES
3 Months Ended
Mar. 31, 2021
GOING CONCERN UNCERTAINTIES  
NOTE 4 - GOING CONCERN UNCERTAINTIES

The accompanying condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

The Company has experienced a net loss of $49,694 and negative operating cash flows of $23,203, for the period ended March 31, 2021. Also, at March 31, 2021, the Company has incurred an accumulated deficit of $1,102,276.

 

The continuation of the Company as a going concern through March 31, 2022 is dependent upon the continued financial support from its stockholders. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

 

These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

XML 23 R11.htm IDEA: XBRL DOCUMENT v3.21.2
INCOME TAXES
3 Months Ended
Mar. 31, 2021
INCOME TAXES  
NOTE 5 - INCOME TAXES

The Company generated an operating loss for the three months ended March 31, 2021 and 2019 and did not record income tax expense. The Company has operations in various countries and is subject to tax in the jurisdictions in which they operate, as follows:

 

United States of America

 

COSG is registered in the State of Nevada and is subject to the tax laws of United States of America

 

As of March 31, 2021, the operation in the United States of America incurred $2,710,001 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2039, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $569,100 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

Hong Kong

 

The Company’s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the two-tiered income tax rate from 8.25% to 16.5% on the assessable income arising in Hong Kong during its tax year. 

 

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

 

 

For the Three Months

 

 

 

Ended March 31,

 

 

 

2020

 

 

2020

 

 

 

 

 

 

 

 

U.S. statutory tax (benefit)

 

 

(21.0 )%

 

 

(21.0 )%

Hong Kong statutory tax (benefit)

 

 

(8.25 )%

 

 

8.25 %

Permanent and temporary differences

 

 

0 %

 

 

(8.25 )%

Change in deferred tax asset valuation allowance

 

 

29.25 %

 

 

21.0 %

Effective income tax rate

 

 

0 %

 

 

0 %

 

XML 24 R12.htm IDEA: XBRL DOCUMENT v3.21.2
STOCKHOLDERS EQUITY
3 Months Ended
Mar. 31, 2021
STOCKHOLDERS EQUITY  
NOTE 6 - STOCKHOLDERS' EQUITY

Authorized stock

 

The Company’s authorized share is 500,000,000 common shares with a par value of $0.001 per share.

 

Common stock outstanding

 

As of March 31, 2021 and December 31, 2020, the Company had a total of 21,536,933 shares of its common stock issued and outstanding, respectively.

XML 25 R13.htm IDEA: XBRL DOCUMENT v3.21.2
RELATED PARTY TRANSACTIONS
3 Months Ended
Mar. 31, 2021
RELATED PARTY TRANSACTIONS  
NOTE 7 - RELATED PARTY TRANSACTIONS

Sales to related party

 

Starting March 2020, the Company generates its revenue mostly from referring truckload transportation service business to one of its related party Lee Tat Logistic Holdings Limited, a Company owned by one the director of the Company, and charges a fixed rate of commission fee. Revenue from Lee Tat Logistic Holding Limited amounted to $0 and $72,912 for the three months ended March 31, 2021 and 2020, respectively. As of March 31, 2021 and December 31, 2020, accounts receivable from Lee Tat Logistic Holding Limited was $44,672 and $44,797, respectively, of which $44,672 and $44,797 was recorded as allowance for doubtful accounts as of March 31, 2021 and December 31, 2020, respectively.

 

Due to related parties

 

As of March 31, 2021 and December 31, 2020, the Company had $85,389 and $85,628 due to Cosmos Links International Holding Limited, respectively. Cosmos Links International Holding Limited is an entity controlled by Miky Wan, President, Chief Executive Officer and director of the Company. Those loans are unsecured, bear no interest, and are due on demand.

 

As of March 31, 2021 and December 31, 2020, the Company had $368,002 and $370,167 due to Asia Cosmos Group Limited, respectively. Asia Cosmos Group Limited is an entity controlled by Miky Wan, President, Chief Executive Officer and director of the Company. Those loans are unsecured, bear no interest, and are due on demand.

 

The Company has advanced funds from Koon Wing Cheung, a shareholder of the Company and director of Lee Tat International Holdings limited, for working capital purposes. As of March 31, 2021 and December 31, 2020, there were $80,867 and $56,742 advances outstanding, respectively. Those advances are unsecured, bear no interest, and are due on demand. 

 

Lease

 

On July 1, 2020, the Company entered into a lease agreement with Koon Wing Cheung, a shareholder of the Company and director of Lee Tat International Holdings limited, pursuant to which the Company agreed to lease a real property located in Hong Kong from July 1, 2020 to March 31, 2021, with a monthly rent of $7,740 (HK$ 60,000), payable in advance on the 1st day of each month.

XML 26 R14.htm IDEA: XBRL DOCUMENT v3.21.2
CONCENTRATIONS OF RISK
3 Months Ended
Mar. 31, 2021
CONCENTRATIONS OF RISK  
NOTE 8 - CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

 

(a) Major customer

 

For the three months ended March 31, 2021, the Company generated no revenue, whilst, for the three months ended March 31, 2020, the customers who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at year-end dates, are presented as follows:

 

 

 

Three months ended
March 31, 2020

 

 

 

 

March 31, 2020

 

Customers

 

Revenues

 

 

Percentage
of revenues

 

 

 

 

Accounts
Receivable

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer A – related party

 

$

72,912

 

 

 

45

%

 

 

 

$

73,082

 

Customer B

 

 

61,188

 

 

 

37

%

 

 

 

 

3,969

 

Customer C

 

 

26,436

 

 

 

16

%

 

 

 

 

 

Total:

 

$

160,536

 

 

 

98

%

 

Total:

 

$

77,051

 

 

All customers are located in the Hong Kong.

 

(b) Credit risk

 

Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

 

(c) Interest rate risk

 

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

 

The Company’s interest-rate risk arises from borrowing under finance lease. The Company manages interest rate risk by varying the issuance and maturity dates variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates.

 

(d) Exchange rate risk

 

The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in HKD and a significant portion of the assets and liabilities are denominated in HKD. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and HKD. If HKD depreciates against US$, the value of HKD revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk.

XML 27 R15.htm IDEA: XBRL DOCUMENT v3.21.2
SUBSEQUENT EVENTS
3 Months Ended
Mar. 31, 2021
SUBSEQUENT EVENTS  
NOTE 9 - SUBSEQUENT EVENTS

On June 17, 2021, the Company entered into a Share Acquisition Agreement (the “Share Acquisition Agreement”), by and among the Company, Massive Treasure Limited, a British Virgin Islands corporation (“Massive Treasure”), and the holders of common shares of Massive Treasure.

 

Under the terms and conditions of the Share Acquisition Agreement, the Company offered to issue 1,078,269,470 shares of common stock of the Company, in consideration for all the issued and outstanding shares in Massive Treasure. Herbert Lee, expected to be appointed as a Company director, is the beneficial holder of 47,500 common shares, or 95%, of the issued and outstanding shares of Massive Treasure.

 

The Company will also issue 55,641,014 shares to complete the acquisitions of 12 business entities which Massive Treasure has signed with and remain outstanding.

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred March 31, 2021, up through the date, the Company issued the condensed consolidated financial statements.

XML 28 R16.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
3 Months Ended
Mar. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
Use of estimates

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.

Basis of consolidation

The condensed consolidated financial statements include the financial statements of COSG and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

Reclassification

Certain reclassifications 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 loss or accumulated deficit.

Discontinued operations

On March 16, 2020, the Company approved to discontinue and exit its AI Education business. On May 4, 2020, the Company completed a stock transfer agreement with each of the three purchasers (the “Purchasers”), pursuant to which the Company agreed to transfer its 100% interest in Cosmos Robotor Holdings Limited (“Cosmos Robotor”) to the three Purchasers for $50 in aggregate, and the Purchasers agreed to assume all the assets and liabilities of Cosmos Robotor.

Cash and cash equivalents

Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. Cash equivalents consist of highly liquid investments that are readily convertible to cash and that mature within three months or less from the date of purchase. The carrying amounts approximate fair value due to the short maturities of these instruments.

Accounts receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer’s financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectability. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of March 31, 2021 and December 31, 2020, the allowance for doubtful accounts was $48,784 and $48,920, respectively, based on management’s assessment.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

 

 

 

Expected

useful life

 

Service vehicle

 

8 years

 

 

Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

 

Depreciation expense for the three months ended March 31, 2021 and 2020 were $3,495 and $3,062, respectively.

Impairment of long-lived assets

In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the three months ended March 31, 2021 and 2020.

Revenue recognition

The Company adopted Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) using the full retrospective transition method. The Company’s adoption of ASU 2014-09 did not have a material impact on the amount and timing of revenue recognized in its condensed consolidated financial statements.

 

Under ASU 2014-09, the Company recognizes revenue when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

 

The Company derives its revenues from the rendering of transportation services and recognizes in full upon completion of delivery to the receiver’s location. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

identify the contract with a customer;

identify the performance obligations in the contract;

determine the transaction price;

allocate the transaction price to performance obligations in the contract; and

recognize revenue as the performance obligation is satisfied.

 

Comprehensive income

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying condensed consolidated statement of stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

Income taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

  

For the three months ended March 31, 2021 and 2020, the Company did not have any interest and penalties associated with tax positions. As of March 31, 2021, the Company did not have any significant unrecognized uncertain tax positions.

 

The Company conducts the majority of its businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by a foreign tax authority.

Leases

The Company adopted Topic 842, Leases (“ASC 842”), using the modified retrospective approach through a cumulative-effect adjustment and utilizing the effective date of January 1, 2019 as its date of initial application, with prior periods unchanged and presented in accordance with the previous guidance in Topic 840, Leases (“ASC 840”).

 

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

 

In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.

 

The Company made the policy election to not separate lease and non-lease components. Each lease component and the related non-lease components are accounted for together as a single component.

Net loss per share

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

 

The reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiaries in Hong Kong and the PRC maintain their books and records in their local currency, Hong Kong Dollars (“HK$”) and Renminbi Yuan (“RMB”), which is the functional currency as being the primary currency of the economic environment in which these entities operate.

 

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the condensed consolidated statement of stockholders’ deficit.

Related parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

Segment reporting

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. For the three months ended March 31, 2021 and 2020, the Company operates in one reportable operating segment in Hong Kong.

Fair value of financial instruments

The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

 

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.

 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

·

Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

 

·

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

 

 

·

Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

   

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Recent accounting pronouncements

Recently Adopted Accounting Standards

 

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2020, with early adoption permitted. Adoption of the standard requires certain changes to be made prospectively, with some changes to be made retrospectively. This adoption on January 1, 2021 did not have a material impact on the Company’s consolidated financial statements.

XML 29 R17.htm IDEA: XBRL DOCUMENT v3.21.2
ORGANIZATION AND BUSINESS BACKGROUND (Tables)
3 Months Ended
Mar. 31, 2021
ORGANIZATION AND BUSINESS BACKGROUND  
Schedule of description of subsidiaries

Name

 

Place of

incorporation
and kind of
legal entity

 

Principal

activities
and place

of operation

 

Particulars

of issued/
registered

share
capital

 

Effective

interest

held

 

 

 

 

 

 

 

 

 

 

 

Lee Tat International Holdings Limited

 

British Virgin Islands

 

Investment holding

 

50,000 shares at US$1 each

 

 

100

%

 

 

 

 

 

 

 

 

 

 

 

Lee Tat Transportation International Limited

 

Hong Kong

 

Logistic and delivery

 

10,000 ordinary shares for HK$10,000

 

 

100

%

XML 30 R18.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
3 Months Ended
Mar. 31, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
Schedule of Property and equipment useful life

 

 

Expected useful life

 

Service vehicle

 

8 years

 

XML 31 R19.htm IDEA: XBRL DOCUMENT v3.21.2
INCOME TAXES (Tables)
3 Months Ended
Mar. 31, 2021
INCOME TAXES  
Schedule of reconciliation of income tax rate

 

For the Three Months

 

 

 

Ended March 31,

 

 

 

2020

 

 

2020

 

 

 

 

 

 

 

 

U.S. statutory tax (benefit)

 

 

(21.0 )%

 

 

(21.0 )%

Hong Kong statutory tax (benefit)

 

 

(8.25 )%

 

 

8.25 %

Permanent and temporary differences

 

 

0 %

 

 

(8.25 )%

Change in deferred tax asset valuation allowance

 

 

29.25 %

 

 

21.0 %

Effective income tax rate

 

 

0 %

 

 

0 %

 

XML 32 R20.htm IDEA: XBRL DOCUMENT v3.21.2
CONCENTRATIONS OF RISK (Tables)
3 Months Ended
Mar. 31, 2021
CONCENTRATIONS OF RISK  
Schedule of Concentrations of Risk

 

 

Three months ended
March 31, 2020

 

 

 

 

March 31, 2020

 

Customers

 

Revenues

 

 

Percentage
of revenues

 

 

 

 

Accounts
Receivable

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer A – related party

 

$

72,912

 

 

 

45

%

 

 

 

$

73,082

 

Customer B

 

 

61,188

 

 

 

37

%

 

 

 

 

3,969

 

Customer C

 

 

26,436

 

 

 

16

%

 

 

 

 

 

Total:

 

$

160,536

 

 

 

98

%

 

Total:

 

$

77,051

 

XML 33 R21.htm IDEA: XBRL DOCUMENT v3.21.2
ORGANIZATION AND BUSINESS BACKGROUND (Details)
3 Months Ended
Mar. 31, 2021
Lee Tat International Holdings limited [Member]  
Ownership percentage 100.00%
Place of incorporation British Virgin Islands
Principal activities Investment holding
Registered share capital 50,000 ordinary shares at US$1 each
Lee Tat Transporation International Limited [Member]  
Ownership percentage 100.00%
Place of incorporation Hong Kong
Principal activities Logistic and delivery
Registered share capital 10,000 ordinary shares at HK$10,000
XML 34 R22.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)
3 Months Ended
Mar. 31, 2021
Service vehicle [Member]  
Expected useful life of property 8 years
XML 35 R23.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
May 04, 2020
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        
Income tax benefit   Tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority   Tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority
Allowance for doubtful accounts   $ 48,784   $ 48,920
Depreciation expense   $ 3,495 $ 3,062  
Stock transfer agreement description The Company agreed to transfer its 100% interest in Cosmos Robotor Holdings Limited (“Cosmos Robotor”) to the three Purchasers for $50 in aggregate      
XML 36 R24.htm IDEA: XBRL DOCUMENT v3.21.2
GOING CONCERN UNCERTAINTIES (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
GOING CONCERN UNCERTAINTIES      
Net loss $ (49,694) $ (12,669)  
Net cash used in operating activities (23,203)    
Accumulated deficit $ (1,102,276)   $ (1,052,582)
XML 37 R25.htm IDEA: XBRL DOCUMENT v3.21.2
INCOME TAXES (Details )
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
INCOME TAXES    
U.S. statutory tax (benefit) (21.00%) (21.00%)
Hong Kong statutory tax (benefit) (8.25%) 8.25%
Permanent and temporary differences 0.00% (8.25%)
Change in deferred tax asset valuation allowance 29.25% 21.00%
Effective income tax rate 0.00% 0.00%
XML 38 R26.htm IDEA: XBRL DOCUMENT v3.21.2
INCOME TAXES (Details Narrative)
3 Months Ended
Mar. 31, 2021
USD ($)
Net operating loss carryforward $ (2,710,001)
Operating losses carry forward, expiration period 2039
Deferred tax assets, valuation allowance $ 569,100
Hong Kong Profits Tax [Member]  
Effective tax rate 16.50%
XML 39 R27.htm IDEA: XBRL DOCUMENT v3.21.2
STOCKHOLDERS EQUITY (Details Narrative) - $ / shares
Mar. 31, 2021
Dec. 31, 2020
STOCKHOLDERS EQUITY    
Common stock, shares authorized 500,000,000 500,000,000
Common stock, par value $ 0.001 $ 0.001
Common stock, shares outstanding 21,536,933 21,536,933
Common stock, shares issued 21,536,933 21,536,933
XML 40 R28.htm IDEA: XBRL DOCUMENT v3.21.2
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
3 Months Ended 12 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
Lee Tat Logistic Holdings Limited [Member]      
Revenue $ 0 $ 72,912 $ 0
Accounts receivable 44,672   44,797
Allowance for doubtful debts 44,672   44,797
Cosmos Links International Holding Limited [Member]      
Due to related party 85,389   85,628
Asia Cosmos Group Limited [Member]      
Due to related party 368,002   370,167
Koon Wing CHEUNG [Member]      
Due to related party $ 80,867   $ 56,742
Lease Agreement [Member] | 1 July, 2020 [Member]      
Maturity Date description Payable in advance on the 1st day of each month.    
Monthly rent $ 7,740    
XML 41 R29.htm IDEA: XBRL DOCUMENT v3.21.2
CONCENTRATIONS OF RISK (Details)
3 Months Ended
Mar. 31, 2020
USD ($)
Sales Revenue, Net [Member]  
Concentration risk percentage 98.00%
Revenues $ 160,536
Sales Revenue, Net [Member] | Customer A [Member]  
Concentration risk percentage 45.00%
Revenues $ 72,912
Sales Revenue, Net [Member] | Customer B [Member]  
Concentration risk percentage 37.00%
Revenues $ 61,188
Sales Revenue, Net [Member] | Customer C [Member]  
Concentration risk percentage 16.00%
Revenues $ 26,436
Accounts Receivable [Member]  
Accounts receivable 77,051
Accounts Receivable [Member] | Customer A [Member]  
Accounts receivable 73,082
Accounts Receivable [Member] | Customer B [Member]  
Accounts receivable 3,969
Accounts Receivable [Member] | Customer C [Member]  
Accounts receivable $ 0
XML 42 R30.htm IDEA: XBRL DOCUMENT v3.21.2
SUBSEQUENT EVENTS (Details Narrative) - Share Acquisition Agreement [Member] - Subsequent Event [Member]
1 Months Ended
Jun. 17, 2021
shares
Common stock shares holder 47,500
Common stock shares issued 1,078,269,470
Stock issued for acquisition, shares 55,641,014
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