0001640334-21-001899.txt : 20210816 0001640334-21-001899.hdr.sgml : 20210816 20210816111856 ACCESSION NUMBER: 0001640334-21-001899 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 42 CONFORMED PERIOD OF REPORT: 20210630 FILED AS OF DATE: 20210816 DATE AS OF CHANGE: 20210816 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: 211175599 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 cosg_10q.htm FORM 10-Q cosg_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 JUNE 30, 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

90-1177460

(State or Other Jurisdiction

(I.R.S. Employer

of Incorporation or Organization)

 

Identification No.)

 

37th Floor, Singapore Land Tower

50 Raffles Place, Singapore 048623

+65 6829 7017

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

 

Level 7, K11 Atelier Victoria Dockside

18 Salisbury Road, Tsim Sha Tsui

Hong Kong

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

 

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 August 10, 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 June 30, 2021 (Unaudited) and December 31, 2020

 

 

3

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2021 and 2020 (Unaudited)

 

 

4

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020 (Unaudited)

 

 

5

 

 

 

 

 

 

 

 

Condensed Consolidated Statement of Changes in Stockholders’ Deficit for the Three and Six Months Ended June 30, 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

 

 

16

 

 

 

 

 

 

 

ITEM 3

Quantitative and Qualitative Disclosures about Market Risk

 

 

23

 

 

 

 

 

 

 

ITEM 4

Controls and Procedures

 

 

23

 

 

 

 

 

 

 

PART II OTHER INFORMATION

 

 

 

 

 

 

 

 

 

 

ITEM 1

Legal Proceedings

 

 

24

 

 

 

 

 

 

 

ITEM 1A

Risk Factors

 

 

24

 

 

 

 

 

 

 

ITEM 2

Unregistered Sales of Equity Securities and Use of Proceeds

 

 

25

 

 

 

 

 

 

 

ITEM 3

Defaults upon Senior Securities

 

 

26

 

 

 

 

 

 

 

ITEM 4

Mine Safety Disclosures

 

 

26

 

 

 

 

 

 

 

ITEM 5

Other Information

 

 

26

 

 

 

 

 

 

 

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

AS OF JUNE 30, 2021 AND DECEMBER 31, 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

 

June 30,

2021

 

 

December 31,

2020

 

 

 

(Unaudited)

 

 

(Audited)

 

ASSETS

 

 

 

 

 

 

Non-current assets:

 

 

 

 

 

 

Property, plant and equipment, net

 

$-

 

 

$33,808

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$-

 

 

$33,808

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$5,997

 

 

$151,173

 

Amounts due to related parties

 

 

-

 

 

 

512,537

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

5,997

 

 

 

663,710

 

 

 

 

 

 

 

 

 

 

Non-current liabilities:

 

 

 

 

 

 

 

 

Deferred tax liabilities

 

 

-

 

 

 

7,886

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES

 

 

5,997

 

 

 

671,596

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

Common stock, $0.001 par value; 2,000,000,000 shares authorized; 21,536,933 and 21,536,933 shares issued and outstanding as of June 30, 2021 and December 31, 2020

 

 

21,536

 

 

 

21,536

 

Additional paid-in capital

 

 

395,516

 

 

 

395,516

 

Accumulated losses

 

 

(421,613)

 

 

(1,052,582)

Accumulated other comprehensive loss

 

 

(1,436 )

 

 

(2,258 )

 

 

 

 

 

 

 

 

 

Total stockholders’ deficit

 

 

(5,997 )

 

 

(637,788)

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

$-

 

 

$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 INCOME (LOSS)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$-

 

 

$139

 

 

$-

 

 

$90,527

 

Revenue-related party

 

 

-

 

 

 

30,276

 

 

 

-

 

 

 

103,188

 

Revenue, net

 

 

-

 

 

 

30,415

 

 

 

-

 

 

 

193,715

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

-

 

 

 

(62,619 )

 

 

-

 

 

 

(175,585)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT (LOSS)

 

 

-

 

 

 

(32,204 )

 

 

-

 

 

 

18,130

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

(5,975 )

 

 

(74,122 )

 

 

(55,669 )

 

 

(130,275)

Total operating expenses

 

 

(5,975 )

 

 

(74,122 )

 

 

(55,669 )

 

 

(130,275)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(5,975 )

 

 

(106,326)

 

 

(55,669 )

 

 

(112,145)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposal of subsidiaries

 

 

173,812

 

 

 

-

 

 

 

173,812

 

 

 

-

 

Gain from forgiveness of related party's debt

 

 

512,826

 

 

 

-

 

 

 

512,826

 

 

 

-

 

Interest income

 

 

-

 

 

 

1

 

 

 

-

 

 

 

2

 

Interest expense

 

 

-

 

 

 

(378 )

 

 

-

 

 

 

(943 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

686,638

 

 

 

(377 )

 

 

686,638

 

 

 

(941 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

 

680,663

 

 

 

(106,703)

 

 

630,969

 

 

 

(113,086)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operation

 

 

680,663

 

 

 

(106,703)

 

 

630,969

 

 

 

(113,086)

Loss from discontinued operations, net of tax

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6,286 )

Gain on disposal of discontinued operations, net of tax

 

 

-

 

 

 

21,472

 

 

 

-

 

 

 

21,472

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

$680,663

 

 

$(85,231 )

 

$630,969

 

 

$(97,900 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

 

680,663

 

 

 

(85,231 )

 

 

630,969

 

 

 

(97,900 )

Foreign currency translation (loss) gain

 

 

(989 )

 

 

311

 

 

 

822

 

 

 

(2,325 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPREHENSIVE INCOME (LOSS)

 

$679,674

 

 

$(84,920)

 

$631,791

 

 

$(100,225)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

– Basic and diluted

 

$0.03

 

 

$(0.00)

 

$0.03

 

 

$(0.00)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

– Basic and diluted

 

 

21,536,933

 

 

 

21,536,933

 

 

 

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

FOR THE SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

 

 

Six months ended June 30,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

 

$630,969

 

 

$(97,900 )

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

 

 

 

 

 

 

 

 

Depreciation

 

 

-

 

 

 

6,701

 

Gain on disposal of subsidiaries

 

 

(173,812)

 

 

-

 

Gain from forgiveness of related party's debt

 

 

(512,826)

 

 

-

 

Gain on disposal of discontinued operations

 

 

-

 

 

 

(21,472)

Change in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

-

 

 

 

(42,822 )

Accounts payable and accrued liabilities

 

 

6,000

 

 

 

95,350

 

Income tax payable

 

 

-

 

 

 

(4,828 )

Net cash provided by operating activities from discontinued operation

 

 

-

 

 

 

1,043

 

 

 

 

 

 

 

 

 

 

Net cash used in operating activities

 

 

(49,669 )

 

 

(63,928 )

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Advances from related parties

 

 

49,669

 

 

 

43,492

 

Repayment of finance lease

 

 

-

 

 

 

(4,979 )

Net cash provided by financing activities from discontinued operation

 

 

-

 

 

 

5,328

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

49,669

 

 

 

43,841

 

 

 

 

 

 

 

 

 

 

Effect on exchange rate change on cash and cash equivalents

 

 

 -

 

 

 

 45

 

 

 

 

 

 

 

 

 

 

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

 

$-

 

 

$566

 

Cash paid for tax

 

$-

 

 

$4,828

 

 

See accompanying notes to condensed consolidated financial statements.

 

 
5

Table of Contents

  

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021 AND 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

 

Three and six months ended June 30, 2021 and 2020

 

 

 

Common stock

 

 

Additional paid-in

 

 

Accumulated other comprehensive

 

 

Accumulated

 

 

Total stockholders’

 

 

 

No. of shares

 

 

Amount

 

 

capital

 

 

income (loss)

 

 

losses

 

 

deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1, 2021

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(989 )

 

 

-

 

 

 

(989 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

680,663

 

 

 

680,663

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2021

 

 

21,536,933

 

 

$21,536

 

 

$395,516

 

 

$(1,436 )

 

$(421,613)

 

$(5,997 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of January 1, 2020

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

311

 

 

 

-

 

 

 

311

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(85,231 )

 

 

(85,231 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of June 30, 2020

 

 

21,536,933

 

 

$21,536

 

 

$395,516

 

 

$(2,325 )

 

$(904,742)

 

$(490,015)

 

See accompanying notes to condensed consolidated financial statements.

 

 
6

Table of Contents

  

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(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 June 30, 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. On June 28, 2021, the transportation service ceased and was sold to its related party, Koon Wing Cheung the former director.

 

On June 28, 2021, the Company’s Chief Executive Officer, and Koon Wing Cheung completed the sale of their 6,230,618 and 8,149,670 shares, respectively, to Chan Man Chung. The common stock sold constituted sixty-six and seventy-seven hundredth percent (66.77%) of the issued and outstanding shares of our common stock. It resulted in a change of control.

 

In connection with such sale, Miky Wan, the Company’s CEO, President and CFO, resigned from her positions as a director and sole executive officer of the Company. Concurrently therewith, Messrs. Chan Man Chung, Lee Ying Chiu Herbert and Tan Tee Soo were appointed to the Company’s Board of Directors and Chan Man Chung was appointed to serve as the CEO, CFO and Secretary of the Company.

 

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.

 

 
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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

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.

 

 

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 is 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 the 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 June 30, 2021 and December 31, 2020, there was no allowance for doubtful accounts.

 

 

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 June 30, 2021 and 2020 were $0 and $3,640, respectively.

 

Depreciation expense for the six months ended June 30, 2021 and 2020 were $0 and $6,990, 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 six months ended June 30, 2021.

 

 
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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

 

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.

 

 
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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

For the three and six months ended June 30, 2021 and 2020, the Company did not have any interest and penalties associated with tax positions. As of June 30, 2021, the Company did not have any significant unrecognized uncertain tax positions.

 

The Company conducts the majority of its businesses in the PRC 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.

 

 

Finance leases

 

Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30, “Imputation of Interest”.

 

 

Net income (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 have 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$"). The Company's subsidiaries in Hong Kong maintain their books and records in their local currency, Hong Kong Dollars ("HK$"), which is a functional currency, being the primary currency of the economic environment in which these entities operate.

 

Convenience translation of amounts from the local currency of the Company into US$ has been made at the pegged exchange rate at 0.129 for the respective periods.

 

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

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(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 six months ended June 30, 2021 and 2020, the Company operates in one reportable operating segment in the 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 are based upon unadjusted quoted prices for identical instruments traded in active markets;

 

Level 2 : Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

 

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

 

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 Enacted Accounting Standards

 

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 requires that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on the financial statements.

 

 
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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company is currently evaluating the impact of the adoption of ASU 2020-06 on the 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 negative operating cash flows of $49,669 for the period ended June 30, 2021. Also, at June 30, 2021, the Company has incurred an accumulated deficit of $421,613.

 

The continuation of the Company as a going concern through the next twelve months is dependent upon the continued financial support from its stockholders. Management believes the Company is currently pursuing additional financing for its operations and deploying a new business model. 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.

 

NOTE 5 - INCOME TAXES

 

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 June 30, 2021, the operation in the United States of America incurred $2,029,363 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 $426,166 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.

 

 

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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

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 June 30, 2021 and December 31, 2020, the Company had a total of 21,536,933 shares of its common stock issued and outstanding, respectively.

 

NOTE 7 - RELATED PARTY TRANSACTIONS

 

Sales to related party

 

On June 28, 2021, the Company sold the transportation service to a related party, Koon Wing Cheung, the former director at the carrying value and resulted with a gain of $173,812 from disposal of subsidiaries.

 

Due to related parties

 

On June 28, 2021, the related party forgave the Company a debt of $512,826.

 

Apart from the transactions and balances detailed elsewhere in these accompanying financial statements, the Company has no other significant or material related party transactions during the periods presented.

 

NOTE 8 - CONCENTRATIONS OF RISK

 

The Company is exposed to the following concentrations of risk:

 

(a) 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.

 

(b) Risk from COVID-19 pandemic

 

The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in Hong Kong in a limited period during 2020. Due to the nature of the Company’s business, the impact of the closure on the operational capabilities was not significant. The extent to which the COVID-19 outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity and mutation of the virus and the actions to contain its impact , that are beyond the Company’s control. There is no guarantee that the Company’s revenues will grow or remain at a similar level in the foreseeable period.

 

 

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NOTE 9 - COMMITMENTS AND CONTINGENCIES

 

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, our 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.

 

NOTE 10 - SUBSEQUENT EVENTS

 

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 June 30, 2021, up through the date, the Company issued the condensed consolidated financial statements.

 

On July 23, 2021, the Company and Lee Ying Chiu Herbert, the Company’s director, entered into a Sale and Purchase Agreement pursuant to which the Company agreed to purchase Fifty-Five (55) sets of art collectibles (the “Collectibles”) for HK$10,344,000, payable through the issuance of 180,855 shares of common stock of the Company (the “Shares”). The Collectibles were appraised by an independent third party appraisal firm with a valuation amount equal to or exceeding HK$12,930,000. The consummation of such sale occurred on August 13, 2021.

 

 

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CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q includes "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, or the Exchange Act, that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical facts, included in this Form 10-Q including, without limitation, statements in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); expansion and growth of the Company's business and operations; and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company's expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation and other factors, most of which are beyond the control of the Company.

 

These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as "believes," "anticipates," "expects," "estimates," "plans," "may," "will," or similar terms. These statements appear in a number of places in this filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company's financial condition or results of operations for its limited history; (ii) the Company's business and growth strategies; and, (iii) the Company's financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company's limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to our filings with the SEC under the Exchange Act and the Securities Act of 1933, as amended.

 

Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.

 

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

 

The following discussion and analysis of our Company’s financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in the report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors. See “Cautionary Note Concerning Forward-Looking Statements” on page 2.

 

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 is engaged in the physical arts and collectibles business, and intend to provide authentication, valuation and certification (AVC) services, sale and purchase, hire purchase, financing, insurance, custody, security and exhibition (CSE) services. On July 23, 2021, the Company and Lee Ying Chiu Herbert, our director, (the “Seller”) entered into a Sale and Purchase Agreement pursuant to which the Company agreed to purchase Fifty-Five (55) sets of art collectibles (the “Collectibles”) for HK$10,344,000, payable through the issuance of 180,855 shares of common stock of the Company (the “Shares”). The Collectibles were appraised by an independent third party appraisal firm with a valuation amount equal to or exceeding HK$12,930,000. The sale consummated on August 13, 2021.

 

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, our 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 with Massive Treasure has signed. As of the date of this report, these acquisitions have not yet consummated.

 

Change in Control

 

On June 14, 2021, Asia Cosmos Group Limited, an entity controlled by our Chief Executive Officer, and Koon Wing Cheung agreed to sell 6,230,618 and 8,149,670 shares, respectively, of our common stock to Chan Man Chung for a total purchase price of four hundred twenty thousand dollars (US$420,000). The common stock being sold constitutes sixty-six and seventy-seven hundredth percent (66.77%) of the issued and outstanding shares of our common stock. The sellers relied on the exemption from registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act in selling the Company’s securities to Mr. Chan. The funds came from the personal funds of Mr. Chan, and was not the result of a loan. The closing occurred June 28, 2021.

 

In connection with the sale, Miky Y.C. Wan, our CEO, President and CFO resigned from her positions as director and CEO and CFO of the Company. Concurrently, Messrs. Chan Man Chung, Lee Ying Chiu Herbert and Tan Tee Soo were appointed to the Company’s Board of Directors and Chan Man Chung was appointed as the CEO, CFO and Secretary of the Company.

 

Prior to the change in control, we were a Hong Kong-based specialty commercial logistic company.

 

Entry Into Collectibles Business

 

On July 23, 2021, the Company and Lee Ying Chiu Herbert, our director, (the “Seller”) entered into a Sale and Purchase Agreement pursuant to which the Company agreed to purchase Fifty-Five (55) sets of art collectibles (the “Collectibles”) for HK$10,344,000, payable through the issuance of 180,855 shares of common stock of the Company (the “Shares”). The sale consummated on August 13, 2021. It is our understanding that Herbert Lee is not a U.S. Persons within the meaning of Regulations S. Accordingly, the Shares were sold pursuant to the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation S promulgated thereunder.

 

Results of Operations.

 

Comparison of the three months ended June 30, 2021 and June 30, 2020

 

As of June 30, 2021, we had a working capital deficit of $5,997. As a result, our continuation as a going concern is dependent upon improving our profitability and continued financial support from our stockholders or other capital sources. Management believes that continued financial support from existing shareholders and external financing will provide the additional cash necessary 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.

 

 
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The following table sets forth certain operational data for the three months ended June 30, 2021, compared to the three months ended June 30, 2020:

 

 

 

Three months ended June 30,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

Revenue

 

$

 

 

$30,415

 

Cost of revenue

 

 

 

 

 

(62,619 )

Gross profit (loss)

 

 

 

 

 

(32,204 )

Operating Expenses

 

 

(5,975 )

 

 

(74,122 )

Loss from operations

 

 

(5,975 )

 

 

(106,326 )

Total other income (expense)

 

 

686,638

 

 

 

(377 )

Income tax expense

 

 

 

 

 

 

Gain on disposal of discontinued operations

 

 

 

 

 

21,472

 

NET INCOME (LOSS)

 

$680,663

 

 

$(85,231 )

 

During the three months ended June 30, 2021, we generated no revenue and had no customers. During the during the three months ended June 30, 2020, the following customers accounted for 10% or more of our total net revenues:

 

 

 

Three Months ended
June 30, 2020

 

 

June 30,
2020

 

 

 

Revenues

 

 

Percentage
of revenues

 

 

Accounts
receivable

 

 

 

 

 

 

 

 

 

 

 

Lee Tat Logistic Holding Limited

 

$30,276

 

 

 

99%

 

$103,268

 

 

All of our major customers are located in Hong Kong.

 

Revenue. Revenue for the three months ended June 30, 2021 and 2020 was $0 and $30,415. Due to the pandemic, we did not have any business volume during the three months ended June 30, 2021.

 

Cost of Revenue. Cost of revenue for the three months ended June 30, 2021 and 2020 was $0 and $62,619. The decrease of cost of revenue was primarily  a result of the pandemic-related decrease in our business volume.

 

Gross Profit (loss).

We achieved a gross profit (loss) of $0 and $(32,204) for the three months ended June 30, 2021, and 2020, respectively. The decrease in gross profit is primarily attributable to the slowdown of the logistic business during the pandemic.

 

Operating Expenses.

We incurred G&A expenses of $5,975 and $74,122 for the three months ended June 30, 2021, and 2020, respectively.

 

Other Income (Expenses), net. We incurred net other income (expenses) of $686,638 and $(377) for the three months ended June 30, 2021 and 2020, respectively. The increase in net other income is primarily attributable to disposal of our subsidiaries during this fiscal quarter.

 

Income Tax Expense. Our income tax expenses for the three months ended June 30, 2021 and 2020 was $0 and $0, respectively.

 

Net Income (Loss)

. During the three months ended June 30, 2021 and 2020, we incurred a net income (loss) of $680,663 and $(85,231), respectively. The increase in net income is primarily attributable to disposal of subsidiaries during this fiscal quarter.

 

 
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Comparison of the six months ended June 30, 2021 and June 30, 2020

 

The following table sets forth certain operational data for the six months ended June 30, 2021, compared to the six months ended June 30, 2020:

 

 

 

Six months ended June 30,

 

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

Revenue

 

$

 

 

$193,715

 

Cost of revenue

 

 

 

 

 

(175,585)

Gross profit

 

 

 

 

 

18,130

 

Operating Expenses

 

 

(55,669)

 

 

(130,275)

Loss from operations

 

 

(55,669)

 

 

(112,145)

Total other income (expense)

 

 

686,638

 

 

 

(941)

Income tax expense

 

 

 

 

 

 

Loss from discontinued operations, net of tax

 

 

 

 

 

(6,286)

Gain on disposal of discontinued operations

 

 

 

 

 

21,472

 

NET INCOME (LOSS)

 

$630,969

 

 

$(97,900)

 

During the six months ended June 30, 2021, we generated no revenue and had no customers. During the six months ended June 30, 2020, the following customers accounted for 10% or more of our total net revenues:

 

 

 

Six Months ended
June 30, 2020

 

 

June 30,
2020

 

 

 

Revenues

 

 

Percentage
of revenues

 

 

Accounts
receivable

 

 

 

 

 

 

 

 

 

 

 

Lee Tat Logistic Holding Limited

 

$103,188

 

 

 

53%

 

$103,268

 

Hip Tung Cables Company Limited

 

 

61,283

 

 

 

32%

 

 

3,969

 

Peaceman Cable Engineering Limited

 

 

26,477

 

 

 

14%

 

 

 

Total

 

$190,948

 

 

 

99%

 

$107,237

 

 

All of our major customers are located in Hong Kong.

 

Revenue

. Revenue for the six months ended June 30, 2021 and 2020 was $0 and $193,715. Due to the pandemic, we did not have any business volume during the six months ended June 30, 2021.

 

Cost of Revenue. Cost of revenue for the six months ended June 30, 2021 and 2020 was $0 and $175,585. 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 $18,130 for the six months ended June 30, 2021, and 2020, respectively. The decrease in gross profit is primarily attributable to the pandemic-related logistic business slow down.

 

Operating Expenses.

We incurred G&A and professional expenses of $55,669 and $130,275 for the six months ended June 30, 2021, and 2020, respectively.

 

Other Income (Expenses), net. We incurred net other income (expenses) of $686,638 and $(941) for the six months ended June 30, 2021 and 2020, respectively. The increase in net other income is primarily attributable to disposal of our subsidiaries during this fiscal quarter.

 

Income Tax Expense. Our income tax expenses for the six months ended June 30, 2021 and 2020 was $0 and $0, respectively.

 

Net Income (Loss). During the six months ended June 30, 2021 and 2020, we incurred a net income (loss) of $630,969 and $(97,900), respectively. The increase in net income is primarily attributable to disposal of subsidiaries during this fiscal quarter.

 

Liquidity and Capital Resources

 

As of June 30, 2021 and December 31, 2020, we had cash and cash equivalents of $0 and accounts receivable of $0.

 

 
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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.

 

 

 

Six Months Ended June 30,

 

 

 

2021

 

 

2020

 

Net cash used in operating activities

 

$(49,669)

 

$(63,928)

Net cash used in investing activities

 

 

 

 

 

 

Net cash provided by financing activities

 

$49,669

 

 

$43,841

 

 

Net Cash Used In Operating Activities.

 

For the six months ended June 30, 2021, net cash used in operating activities was $49,669 which consisted primarily of a net income of $630,969, gain on disposal of subsidiaries of $173,812 and gain from forgiveness of related party’s debt of $512,826.

 

For the six months ended June 30, 2020, net cash used in operating activities was $63,928, which consisted primarily of a net loss of $97,900, an increase in account receivable of $42,822, net cash provided by operating activities of discontinued operation of $1,043, an increase in accounts payable and accrued liabilities of $95,350, a decrease in income tax payable of $4,828and gain on disposal of discontinued operations of $21,472.

 

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 six months ended June 30, 2021 and 2020, net cash used in investment activities was $0.

 

Net Cash Provided By Financing Activities.

 

For the six months ended June 30, 2021, net cash provided by financing activities was $49,669 consisting of advance from related parties of $49,669.

 

For the six months ended June 30, 2020, net cash provided by financing activities was $43,841 consisting primarily of advances from related parties of $43,492 and net cash provided by financing activities of discontinued operation $5,328, offset by repayments on a finance lease of $4,979.

  

 
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Table of Contents

 

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 have contractual obligations and commercial commitments as of June 30, 2021.

 

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, our 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.

 

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’s 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

 

 
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Table of Contents

 

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.

 

 

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.

 

 
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Table of Contents

 

The reporting currency of the Company is the United States Dollar ("US$"). The Company's subsidiaries in Hong Kong maintain their books and records in their local currency, Hong Kong Dollars ("HK$"), 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 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 are based upon unadjusted quoted prices for identical instruments traded in active markets;

 

Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

 

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

 

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.

 

 
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Table of Contents

 

 

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.

 

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 June 30, 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 June 30, 2021, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
23

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

 

We face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in the PRC and the profitability of such business.

 

We have conducted and expect to continue to conduct our operations and generate our revenue in Hong Kong, S.A.R. Accordingly, economic, political and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects. Policies of the PRC government can have significant effects on economic conditions in Hong Kong. While we believe that the PRC will continue to strengthen its economic and trading relationships with foreign countries and that business development in the PRC will continue to follow market forces, we cannot assure you that this will be the case. Our interests may be adversely affected by changes in policies by the PRC government, including:

 

changes in laws, regulations or their interpretation especially with respect to Hong Kong;

confiscatory taxation;

restrictions on currency conversion, imports or sources of supplies, or ability to continue as a for-profit enterprise;

expropriation or nationalization of private enterprises; and

the allocation of resources.

 

Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in Hong Kong and accordingly on the results of our operations and financial condition.

 

Our business operations may be adversely affected by the current and future political environment in the PRC. The Chinese government exerts substantial influence and control over the manner in which we must conduct our business activities. Our ability to operate in Hong Kong may be adversely affected by changes in Chinese laws and regulations. Under the current government leadership, the government of the PRC has been pursuing reform policies which have adversely affected China-based operating companies whose securities are listed in the United States, with significant policies changes being made from time to time without notice. These policies may be extended to apply to companies that operate in Hong Kong.

 

There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations, including, but not limited to, the laws and regulations governing our business, or the enforcement and performance of our contractual arrangements with borrowers in the event of the imposition of statutory liens, death, bankruptcy or criminal proceedings. Only after 1979 did the Chinese government begin to promulgate a comprehensive system of laws that regulate economic affairs in general, deal with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade, as well as encourage foreign investment in China. Although the influence of the law has been increasing, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. Also, because these laws and regulations are relatively new, and because of the limited volume of published cases and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively. In addition, there have been constant changes and amendments of laws and regulations over the past 30 years in order to keep up with the rapidly changing society and economy in China. Because government agencies and courts provide interpretations of laws and regulations and decide contractual disputes and issues, their inexperience in adjudicating new business and new polices or regulations in certain less developed areas causes uncertainty and may affect our business. Consequently, we cannot predict the future direction of Chinese legislative activities with respect to either businesses with foreign investment or the effectiveness on enforcement of laws and regulations in China. The uncertainties, including new laws and regulations and changes of existing laws, as well as judicial interpretation by inexperienced officials in the agencies and courts in certain areas, may cause possible problems to foreign investors.

 

 
24

Table of Contents

 

Although the PRC government has been pursuing economic reform policies for more than two decades, the PRC government continues to exercise significant control over economic growth in the PRC through the allocation of resources, controlling payments of foreign currency, setting monetary policy and imposing policies that impact particular industries in different ways. We cannot assure you that the PRC government will continue to pursue policies favoring a market oriented economy or that existing policies will not be significantly altered, especially in the event of a change in leadership, social or political disruption, or other circumstances affecting political, economic and social life in the PRC.

 

The Holding Foreign Companies Accountable Act requires the Public Company Accounting Oversight Board (PCAOB) to be permitted to inspect the issuer's public accounting firm within three years. There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. If the U.S. securities regulatory agencies are unable to conduct such investigations, they may suspend or de-register our registration with the SEC and delist our securities from applicable trading market within the US.

 

On December 28, 2019, the newly amended Securities Law of the PRC (the “PRC Securities Law”) was promulgated, which became effective on March 1, 2020. According to Article 177 of the PRC Securities Law (“Article 177”), the securities regulatory authority of the State Council may establish a regulatory cooperation mechanism with securities regulatory authorities of another country or region for the implementation of cross-border supervision and administration. Article 177 further provides that overseas securities regulatory authorities shall not engage in activities pertaining to investigations or evidence collection directly conducted within the territories of the PRC, and that no Chinese entities or individuals shall provide documents and information in connection with securities business activities to any organizations and/or persons aboard without the prior consent of the securities regulatory authority of the State Council and the competent departments of the State Council. As of the date of this prospectus, we are not aware of any implementing rules or regulations which have been published regarding application of Article 177.

 

We believe Article 177 is only applicable where the activities of overseas authorities constitute a direct investigation or evidence collection by such authorities within the territory of the PRC. Our principal business operation is conducted in Hong Kong. In the event that the U.S. securities regulatory agencies carry out an investigation on us such as an enforcement action by the Department of Justice, the SEC or other authorities, such agencies’ activities will constitute conducting an investigation or collecting evidence directly within the territory of the PRC and accordingly fall within the scope of Article 177. In that case, the U.S. securities regulatory agencies may have to consider establishing cross-border cooperation with the securities regulatory authority of the PRC by way of judicial assistance, diplomatic channels or establishing a regulatory cooperation mechanism with the securities regulatory authority of the PRC. However, there is no assurance that the U.S. securities regulatory agencies will succeed in establishing such cross-border cooperation in this particular case and/or establish such cooperation in a timely manner.

 

Furthermore, as Article 177 is a recently promulgated provision, it remains unclear as to how it will be interpreted, implemented or applied by the Chinese Securities Regulatory Commission or other relevant government authorities. As such, there are uncertainties as to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. The Holding Foreign Companies Accountable Act requires the Public Company Accounting Oversight Board (PCAOB) be permitted to inspect the issuer's public accounting firm within three years.. If the U.S. securities regulatory agencies are unable to conduct such investigations, there exists a risk that they may determine to suspend or de-register our registration with the SEC and may also delist our securities from applicable trading market within the US.

 

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

 
25

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ITEM 3 Defaults upon Senior Securities

 

None.

 

ITEM 4 Mine Safety Disclosures

 

Not applicable.

 

ITEM 5 Other Information

 

None.

 

ITEM 6 Exhibits

 

Exhibit No.

 

Description

 

 

 

3.1

 

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

3.2

 

Amended and Restated Bylaws (2)

4.1

 

Specimen certificate evidencing shares of Common Stock (1)

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/ Man Chung CHAN

 

 

 

Man Chung CHAN

 

 

 

Chief Executive Officer, Chief Financial Officer, Secretary

 

 

 

 

 

Date: August 16, 2021

 

 

 

 
27

 

EX-31.1 2 cosg_ex311.htm EX-31.1 cosg_ex311.htm

EXHIBIT 31.1

 

JOINT CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

AND THE PRINCIPAL FINANCIAL OFFICER

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

 

I, Man Chung CHAN, 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.

I am 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.

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: August 16, 2021

By:

/s/ Man Chung CHAN

 

 

Name:

Man Chung CHAN

 

 

Title:

Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

 

 

EX-32.1 3 cosg_ex321.htm EX-32.1 cosg_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 June 30, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Man Chung Chan, 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: August 16, 2021

By:

/s/ Man Chung CHAN

 

 

Name:

Man Chung CHAN

 

 

Title:

Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

 

 

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NV 90-1177460 37th Floor Singapore Land Tower 50 Raffles Place SG 048623 65 6829 7017 Common Stock, par value US$0.001 COSG Yes Yes true false 21536933 0 33808 0 33808 5997 151173 0 512537 5997 663710 0 7886 5997 671596 0 0 0.001 2000000000 21536933 21536933 21536 21536 395516 395516 -421613 -1052582 -1436 -2258 -5997 -637788 0 33808 0 139 0 90527 0 30276 0 103188 0 30415 0 193715 0 62619 0 175585 0 -32204 0 18130 5975 74122 55669 130275 5975 74122 55669 130275 -5975 -106326 -55669 -112145 173812 0 173812 0 512826 0 512826 0 0 1 0 2 0 378 0 943 686638 -377 686638 -941 680663 -106703 630969 -113086 0 0 0 0 680663 -106703 630969 -113086 0 0 0 -6286 0 21472 0 21472 680663 -85231 630969 -97900 -989 311 822 -2325 679674 -84920 631791 -100225 0.03 -0.00 0.03 -0.00 21536933 21536933 21536933 21536933 630969 -97900 0 6701 -173812 0 -512826 0 0 -21472 0 -42822 6000 95350 0 -4828 0 1043 -49669 -63928 -49669 43492 0 -4979 0 5328 -49669 43841 0 45 0 -20042 0 28816 0 8774 0 566 0 4828 21536933 21536 395516 -2258 -1052582 -637788 0 0 1811 0 1811 0 0 0 -49694 -49694 21536933 21536 395516 -447 -1102276 -685671 0 0 -989 0 -989 0 0 0 680663 680663 21536933 21536 395516 -1436 -421613 -5997 21536933 21536 395516 0 -806842 -389790 0 0 -2636 0 -2636 0 0 0 -12669 -12669 21536933 21536 395516 -2636 -819511 -405095 0 0 311 0 311 0 0 0 -85231 -85231 21536933 21536 395516 -2325 -904742 -490015 <p style="font-size:10pt;font-family:times new roman;margin:0px"><strong>NOTE 1 - BASIS OF PRESENTATION</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; 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 (“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.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; 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 June 30, 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="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">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.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>NOTE 2 - ORGANIZATION AND BUSINESS BACKGROUND</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Cosmos Group Holdings Inc. (the “Company” or “COSG”) was 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;"> </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’ request. On June 28, 2021, the transportation service ceased and was sold to its related party, Koon Wing Cheung the former director.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">On June 28, 2021, the Company’s Chief Executive Officer, and Koon Wing Cheung completed the sale of their 6,230,618 and 8,149,670 shares, respectively, to Chan Man Chung. The common stock sold constituted sixty-six and seventy-seven hundredth percent (66.77%) of the issued and outstanding shares of our common stock. It resulted in a change of control.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In connection with such sale, Miky Wan, the Company’s CEO, President and CFO, resigned from her positions as a director and sole executive officer of the Company. Concurrently therewith, Messrs. Chan Man Chung, Lee Ying Chiu Herbert and Tan Tee Soo were appointed to the Company’s Board of Directors and Chan Man Chung was appointed to serve as the CEO, CFO and Secretary of the Company.</p> 6230618 8149670 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Use of estimates</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Basis of consolidation</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Reclassification</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Cash and cash equivalents</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Accounts receivable</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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 is 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 the 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 June 30, 2021 and December 31, 2020, there was no allowance for doubtful accounts.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Property, plant and equipment</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:78%;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td><td style="width:1%;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:20%;vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">Expected useful life</p></td><td style="width:1%;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Service vehicle</p></td><td><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">8 years</p></td><td><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Depreciation expense for the three months ended June 30, 2021 and 2020 were $0 and $3,640, respectively.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Depreciation expense for the six months ended June 30, 2021 and 2020 were $0 and $6,990, respectively.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Impairment of long-lived assets</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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, “<em>Impairment or Disposal of Long-Lived Assets</em>”, 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 six months ended June 30, 2021.</p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Revenue recognition</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company adopted Accounting Standards Update ("ASU") No. 2014-09, <em>Revenue from Contracts with Customers (Topic 606) </em>(“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.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </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’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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">•</p></td><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">identify the contract with a customer;</p></td></tr><tr style="height:15px"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">•</p></td><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">identify the performance obligations in the contract;</p></td></tr><tr style="height:15px"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">•</p></td><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">determine the transaction price;</p></td></tr><tr style="height:15px"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">•</p></td><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;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="font-size:10pt;font-family:times new roman;margin:0px">•</p></td><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">recognize revenue as the performance obligation is satisfied.</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Comprehensive income</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">ASC Topic 220, “<em>Comprehensive Income</em>”, 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.</p><p style="font-size:10pt;font-family:times new roman;margin:0px">  </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Income taxes</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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, “<em>Income Taxes</em>” (“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.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;">For the three and six months ended June 30, 2021 and 2020, the Company did not have any interest and penalties associated with tax positions. As of June 30, 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;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company conducts the majority of its businesses in the PRC 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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Finance leases</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30, “<em>Imputation of Interest</em>”.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Net income (loss) per share</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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, “<em>Earnings per Share</em>.” 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 have 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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Foreign currencies translation</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </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 ("US$"). The Company's subsidiaries in Hong Kong maintain their books and records in their local currency, Hong Kong Dollars ("HK$"), which is a functional currency, being the primary currency of the economic environment in which these entities operate.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Convenience translation of amounts from the local currency of the Company into US$ has been made at the pegged exchange rate at 0.129 for the respective periods.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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, “<em>Translation of Financial Statement</em>”, 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.</p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Related parties</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Segment reporting</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">ASC Topic 280, “<em>Segment Reporting</em>” 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 six months ended June 30, 2021 and 2020, the Company operates in one reportable operating segment in the Hong Kong.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Fair value of financial instruments</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">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.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </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, “<em>Fair Value Measurements and Disclosures</em>” ("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:</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">•</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>Level 1</em> : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">•</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>Level 2 :</em> Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">•</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>Level 3</em> : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">☐</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Recent accounting pronouncements</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>Recently Enacted Accounting Standards</em></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “<em>Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments</em>” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 requires that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on the financial statements.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In August 2020, the FASB issued ASU 2020-06, “<em>Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)</em>”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company is currently evaluating the impact of the adoption of ASU 2020-06 on the financial statements.</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;">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;">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;">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;">Accounts receivable are recorded at the invoiced amount and do not bear interest, which is 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 the 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 June 30, 2021 and December 31, 2020, there was no allowance for doubtful accounts.</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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:78%;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td><td style="width:1%;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:20%;vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">Expected useful life</p></td><td style="width:1%;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Service vehicle</p></td><td><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">8 years</p></td><td><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Depreciation expense for the three months ended June 30, 2021 and 2020 were $0 and $3,640, respectively.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Depreciation expense for the six months ended June 30, 2021 and 2020 were $0 and $6,990, respectively.</p> <table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:78%;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td><td style="width:1%;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:20%;vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">Expected useful life</p></td><td style="width:1%;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Service vehicle</p></td><td><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">8 years</p></td><td><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p></td></tr></tbody></table> P8Y 0 3640 0 6990 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In accordance with the provisions of ASC Topic 360, “<em>Impairment or Disposal of Long-Lived Assets</em>”, 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 six months ended June 30, 2021.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company adopted Accounting Standards Update ("ASU") No. 2014-09, <em>Revenue from Contracts with Customers (Topic 606) </em>(“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.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </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’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;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">•</p></td><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">identify the contract with a customer;</p></td></tr><tr style="height:15px"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">•</p></td><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">identify the performance obligations in the contract;</p></td></tr><tr style="height:15px"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">•</p></td><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">determine the transaction price;</p></td></tr><tr style="height:15px"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">•</p></td><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;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="font-size:10pt;font-family:times new roman;margin:0px">•</p></td><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">recognize revenue as the performance obligation is satisfied.</p></td></tr></tbody></table> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">ASC Topic 220, “<em>Comprehensive Income</em>”, 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.</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, “<em>Income Taxes</em>” (“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.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;">For the three and six months ended June 30, 2021 and 2020, the Company did not have any interest and penalties associated with tax positions. As of June 30, 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;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company conducts the majority of its businesses in the PRC 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> tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30, “<em>Imputation of Interest</em>”.</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, “<em>Earnings per Share</em>.” 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 have 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;">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;"> </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 ("US$"). The Company's subsidiaries in Hong Kong maintain their books and records in their local currency, Hong Kong Dollars ("HK$"), which is a functional currency, being the primary currency of the economic environment in which these entities operate.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Convenience translation of amounts from the local currency of the Company into US$ has been made at the pegged exchange rate at 0.129 for the respective periods.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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, “<em>Translation of Financial Statement</em>”, 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.</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;">ASC Topic 280, “<em>Segment Reporting</em>” 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 six months ended June 30, 2021 and 2020, the Company operates in one reportable operating segment in the Hong Kong.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">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.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;"> </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, “<em>Fair Value Measurements and Disclosures</em>” ("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:</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">•</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>Level 1</em> : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">•</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>Level 2 :</em> Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;font-size:10pt;width:100%"><tbody><tr style="height:15px"><td style="width:4%;vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">•</p></td><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em>Level 3</em> : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.</p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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;">In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “<em>Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments</em>” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 requires that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on the financial statements.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In August 2020, the FASB issued ASU 2020-06, “<em>Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)</em>”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company is currently evaluating the impact of the adoption of ASU 2020-06 on the financial statements.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>NOTE 4 - GOING CONCERN UNCERTAINTIES</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><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;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company has negative operating cash flows of $49,669 for the period ended June 30, 2021. Also, at June 30, 2021, the Company has incurred an accumulated deficit of $421,613.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </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 the next twelve months is dependent upon the continued financial support from its stockholders. Management believes the Company is currently pursuing additional financing for its operations and deploying a new business model. 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;"> </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’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> -49669 -421613 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>NOTE 5 - INCOME TAXES</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">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;"> </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;"> </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;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">As of June 30, 2021, the operation in the United States of America incurred $2,029,363 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 $426,166 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> -2029363 2039 426166 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>NOTE 6 - STOCKHOLDERS’ EQUITY</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em><span style="text-decoration:underline">Authorized stock</span></em></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company’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;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><em><span style="text-decoration:underline">Common stock outstanding</span></em></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">As of June 30, 2021 and December 31, 2020, the Company had a total of 21,536,933 shares of its common stock issued and outstanding, respectively.</p> 0.001 21536933 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>NOTE 7 - RELATED PARTY TRANSACTIONS</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="font-size:10pt;font-family:times new roman;margin:0px"><span style="text-decoration:underline">Sales to related party</span></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">On June 28, 2021, the Company sold the transportation service to a related party, Koon Wing Cheung, the former director at the carrying value and resulted with a gain of $173,812 from disposal of subsidiaries.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="font-size:10pt;font-family:times new roman;margin:0px"><span style="text-decoration:underline">Due to related parties</span></p><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">On June 28, 2021, the related party forgave the Company a debt of $512,826.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Apart from the transactions and balances detailed elsewhere in these accompanying financial statements, the Company has no other significant or material related party transactions during the periods presented.</p> 173812 512826 <p style="font-size:10pt;font-family:times new roman;margin:0px"><strong>NOTE 8 - CONCENTRATIONS OF RISK</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="font-size:10pt;font-family:times new roman;margin:0px">The Company is exposed to the following concentrations of risk:</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="font-size:10pt;font-family:times new roman;margin:0px">(a) Exchange rate risk</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The reporting currency of the Company is US$, 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><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="font-size:10pt;font-family:times new roman;margin:0px">(b) Risk from COVID-19 pandemic</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in Hong Kong in a limited period during 2020. Due to the nature of the Company’s business, the impact of the closure on the operational capabilities was not significant. The extent to which the COVID-19 outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity and mutation of the virus and the actions to contain its impact , that are beyond the Company’s control. There is no guarantee that the Company’s revenues will grow or remain at a similar level in the foreseeable period.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>NOTE </strong><strong>9 - COMMITMENTS AND CONTINGENCIES</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><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 “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, our 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"> </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> 47500 0.95 55641014 <p style="font-size:10pt;font-family:times new roman;margin:0px"><strong>NOTE 10 - SUBSEQUENT EVENTS</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In accordance with ASC Topic 855, “<em>Subsequent Events</em>”, 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 June 30, 2021, up through the date, the Company issued the condensed consolidated financial statements.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">On July 23, 2021, the Company and Lee Ying Chiu Herbert, the Company’s director, entered into a Sale and Purchase Agreement pursuant to which the Company agreed to purchase Fifty-Five (55) sets of art collectibles (the “Collectibles”) for HK$10,344,000, payable through the issuance of 180,855 shares of common stock of the Company (the “Shares”). The Collectibles were appraised by an independent third party appraisal firm with a valuation amount equal to or exceeding HK$12,930,000. The consummation of such sale occurred on August 13, 2021.</p> 180855 XML 10 R1.htm IDEA: XBRL DOCUMENT v3.21.2
Cover - shares
6 Months Ended
Jun. 30, 2021
Aug. 10, 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 Jun. 30, 2021  
Entity Filer Category Non-accelerated Filer  
Document Fiscal Period Focus Q2  
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  
Entity File Number 000-55793  
Entity Incorporation State Country Code NV  
Entity Tax Identification Number 90-1177460  
Entity Address Address Line 1 37th Floor  
Entity Address Address Line 2 Singapore Land Tower  
Entity Address Country SG  
Entity Address City Or Town 50 Raffles Place  
Entity Address Postal Zip Code 048623  
City Area Code 65  
Local Phone Number 6829 7017  
Trading Symbol COSG  
Security 12b Title Common Stock, par value US$0.001  
XML 11 R2.htm IDEA: XBRL DOCUMENT v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
Jun. 30, 2021
Dec. 31, 2020
Non-current assets:    
Property, plant and equipment, net $ 0 $ 33,808
TOTAL ASSETS 0 33,808
Current liabilities:    
Accounts payable and accrued liabilities 5,997 151,173
Amounts due to related parties 0 512,537
Total current liabilities 5,997 663,710
Non-current liabilities:    
Deferred tax liabilities 0 7,886
TOTAL LIABILITIES 5,997 671,596
Commitments and contingencies 0 0
Stockholders' deficit:    
Common stock, $0.001 par value; 2,000,000,000 shares authorized; 21,536,933 and 21,536,933 shares issued and outstanding as of June 30, 2021 and December 31, 2020 21,536 21,536
Additional paid-in capital 395,516 395,516
Accumulated losses (421,613) (1,052,582)
Accumulated other comprehensive loss (1,436) (2,258)
Total stockholders' deficit (5,997) (637,788)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 0 $ 33,808
XML 12 R3.htm IDEA: XBRL DOCUMENT v3.21.2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Jun. 30, 2021
Dec. 31, 2020
Stockholders' Equity    
Common stock, shares par value $ 0.001 $ 0.001
Common stock, shares authorized 2,000,000,000 2,000,000,000
Common stock, shares issued 21,536,933 21,536,933
Common stock, shares outstanding 21,536,933 21,536,933
XML 13 R4.htm IDEA: XBRL DOCUMENT v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)        
Revenue $ 0 $ 139 $ 0 $ 90,527
Revenue-related party 0 30,276 0 103,188
Revenue, net 0 30,415 0 193,715
Cost of revenue 0 (62,619) 0 (175,585)
GROSS PROFIT (LOSS) 0 (32,204) 0 18,130
OPERATING EXPENSES:        
General and administrative (5,975) (74,122) (55,669) (130,275)
Total operating expenses 5,975 74,122 55,669 130,275
LOSS FROM OPERATIONS (5,975) (106,326) (55,669) (112,145)
Other income (expense):        
Gain on disposal of subsidiaries 173,812 0 173,812 0
Gain from forgiveness of related party's debt 512,826 0 512,826 0
Interest income 0 1 0 2
Interest expense 0 (378) 0 (943)
Total other income (expense) 686,638 (377) 686,638 (941)
INCOME (LOSS) BEFORE INCOME TAXES 680,663 (106,703) 630,969 (113,086)
Income tax expense 0 0 0 0
Income (loss) from continuing operation 680,663 (106,703) 630,969 (113,086)
Loss from discontinued operations, net of tax 0 0 0 (6,286)
Gain on disposal of discontinued operations, net of tax 0 21,472 0 21,472
NET INCOME (LOSS) 680,663 (85,231) 630,969 (97,900)
Foreign currency translation (loss) gain (989) 311 822 (2,325)
COMPREHENSIVE INCOME (LOSS) $ 679,674 $ (84,920) $ 631,791 $ (100,225)
Net income (loss) per share:        
Basic and diluted $ 0.03 $ (0.00) $ 0.03 $ (0.00)
Weighted average common shares outstanding:        
Basic and diluted 21,536,933 21,536,933 21,536,933 21,536,933
XML 14 R5.htm IDEA: XBRL DOCUMENT v3.21.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Cash flows from operating activities:    
Net income (loss) $ 630,969 $ (97,900)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation 0 6,701
Gain on disposal of subsidiaries (173,812) 0
Gain from forgiveness of related party's debt (512,826) 0
Gain on disposal of discontinued operations 0 (21,472)
Change in operating assets and liabilities:    
Accounts receivable 0 (42,822)
Accounts payable and accrued liabilities 6,000 95,350
Income tax payable 0 (4,828)
Net cash provided by operating activities from discontinued operation 0 1,043
Net cash used in operating activities (49,669) (63,928)
Cash flows from financing activities:    
Advances from related parties (49,669) 43,492
Repayment of finance lease 0 (4,979)
Net cash provided by financing activities from discontinued operation 0 5,328
Net cash provided by financing activities (49,669) 43,841
Effect on exchange rate change on cash and cash equivalents 0 45
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 0 566
Cash paid for tax $ 0 $ 4,828
XML 15 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, 2019   21,536,933      
Balance, amount at Dec. 31, 2019 (389,790) $ 21,536 395,516 0 (806,842)
Net loss (97,900)        
Balance, shares at Jun. 30, 2020   21,536,933      
Balance, amount at Jun. 30, 2020 (490,015) $ 21,536 395,516 (2,325) (904,742)
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)
Foreign currency translation adjustment 311 0 0 311 0
Net loss (85,231) $ 0 0 0 (85,231)
Balance, shares at Jun. 30, 2020   21,536,933      
Balance, amount at Jun. 30, 2020 (490,015) $ 21,536 395,516 (2,325) (904,742)
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)
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)
Net loss 630,969        
Balance, shares at Jun. 30, 2021   21,536,933      
Balance, amount at Jun. 30, 2021 (5,997) $ 21,536 395,516 (1,436) (421,613)
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)
Foreign currency translation adjustment (989) 0 0 (989) 0
Net loss 680,663 $ 0 0 0 680,663
Balance, shares at Jun. 30, 2021   21,536,933      
Balance, amount at Jun. 30, 2021 $ (5,997) $ 21,536 $ 395,516 $ (1,436) $ (421,613)
XML 16 R7.htm IDEA: XBRL DOCUMENT v3.21.2
BASIS OF PRESENTATION
6 Months Ended
Jun. 30, 2021
BASIS OF PRESENTATION  
NOTE 1 - 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 June 30, 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.

XML 17 R8.htm IDEA: XBRL DOCUMENT v3.21.2
ORGANIZATION AND BUSINESS BACKGROUND
6 Months Ended
Jun. 30, 2021
ORGANIZATION AND BUSINESS BACKGROUND  
NOTE 2 - 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. On June 28, 2021, the transportation service ceased and was sold to its related party, Koon Wing Cheung the former director.

 

On June 28, 2021, the Company’s Chief Executive Officer, and Koon Wing Cheung completed the sale of their 6,230,618 and 8,149,670 shares, respectively, to Chan Man Chung. The common stock sold constituted sixty-six and seventy-seven hundredth percent (66.77%) of the issued and outstanding shares of our common stock. It resulted in a change of control.

 

In connection with such sale, Miky Wan, the Company’s CEO, President and CFO, resigned from her positions as a director and sole executive officer of the Company. Concurrently therewith, Messrs. Chan Man Chung, Lee Ying Chiu Herbert and Tan Tee Soo were appointed to the Company’s Board of Directors and Chan Man Chung was appointed to serve as the CEO, CFO and Secretary of the Company.

XML 18 R9.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Jun. 30, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
NOTE 3 - 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.

 

 

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 is 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 the 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 June 30, 2021 and December 31, 2020, there was no allowance for doubtful accounts.

 

 

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 June 30, 2021 and 2020 were $0 and $3,640, respectively.

 

Depreciation expense for the six months ended June 30, 2021 and 2020 were $0 and $6,990, 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 six months ended June 30, 2021.

 

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 and six months ended June 30, 2021 and 2020, the Company did not have any interest and penalties associated with tax positions. As of June 30, 2021, the Company did not have any significant unrecognized uncertain tax positions.

 

The Company conducts the majority of its businesses in the PRC 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.

 

 

Finance leases

 

Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30, “Imputation of Interest”.

 

 

Net income (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 have 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$"). The Company's subsidiaries in Hong Kong maintain their books and records in their local currency, Hong Kong Dollars ("HK$"), which is a functional currency, being the primary currency of the economic environment in which these entities operate.

 

Convenience translation of amounts from the local currency of the Company into US$ has been made at the pegged exchange rate at 0.129 for the respective periods.

 

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 six months ended June 30, 2021 and 2020, the Company operates in one reportable operating segment in the 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 are based upon unadjusted quoted prices for identical instruments traded in active markets;

 

Level 2 : Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

 

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

 

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 Enacted Accounting Standards

 

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 requires that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on the financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company is currently evaluating the impact of the adoption of ASU 2020-06 on the financial statements.

XML 19 R10.htm IDEA: XBRL DOCUMENT v3.21.2
GOING CONCERN UNCERTAINTIES
6 Months Ended
Jun. 30, 2021
GOING CONCERN UNCERTAINTIES  
NOTE 4 - 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 negative operating cash flows of $49,669 for the period ended June 30, 2021. Also, at June 30, 2021, the Company has incurred an accumulated deficit of $421,613.

 

The continuation of the Company as a going concern through the next twelve months is dependent upon the continued financial support from its stockholders. Management believes the Company is currently pursuing additional financing for its operations and deploying a new business model. 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 20 R11.htm IDEA: XBRL DOCUMENT v3.21.2
INCOME TAXES
6 Months Ended
Jun. 30, 2021
INCOME TAXES  
NOTE 5 - INCOME TAXES

NOTE 5 - INCOME TAXES

 

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 June 30, 2021, the operation in the United States of America incurred $2,029,363 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 $426,166 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.

XML 21 R12.htm IDEA: XBRL DOCUMENT v3.21.2
STOCKHOLDERS EQUITY
6 Months Ended
Jun. 30, 2021
STOCKHOLDERS EQUITY  
NOTE 6 - 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 June 30, 2021 and December 31, 2020, the Company had a total of 21,536,933 shares of its common stock issued and outstanding, respectively.

XML 22 R13.htm IDEA: XBRL DOCUMENT v3.21.2
RELATED PARTY TRANSACTIONS
6 Months Ended
Jun. 30, 2021
RELATED PARTY TRANSACTIONS  
NOTE 7 - RELATED PARTY TRANSACTIONS

NOTE 7 - RELATED PARTY TRANSACTIONS

 

Sales to related party

 

On June 28, 2021, the Company sold the transportation service to a related party, Koon Wing Cheung, the former director at the carrying value and resulted with a gain of $173,812 from disposal of subsidiaries.

 

Due to related parties

 

On June 28, 2021, the related party forgave the Company a debt of $512,826.

 

Apart from the transactions and balances detailed elsewhere in these accompanying financial statements, the Company has no other significant or material related party transactions during the periods presented.

XML 23 R14.htm IDEA: XBRL DOCUMENT v3.21.2
CONCENTRATIONS OF RISK
6 Months Ended
Jun. 30, 2021
CONCENTRATIONS OF RISK  
NOTE 8 - CONCENTRATIONS OF RISK

NOTE 8 - CONCENTRATIONS OF RISK

 

The Company is exposed to the following concentrations of risk:

 

(a) 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.

 

(b) Risk from COVID-19 pandemic

 

The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities in Hong Kong in a limited period during 2020. Due to the nature of the Company’s business, the impact of the closure on the operational capabilities was not significant. The extent to which the COVID-19 outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity and mutation of the virus and the actions to contain its impact , that are beyond the Company’s control. There is no guarantee that the Company’s revenues will grow or remain at a similar level in the foreseeable period.

XML 24 R15.htm IDEA: XBRL DOCUMENT v3.21.2
COMMITMENTS AND CONTINGENCIES
6 Months Ended
Jun. 30, 2021
COMMITMENTS AND CONTINGENCIES  
NOTE 9 - COMMITMENTS AND CONTINGENCIES

NOTE 9 - COMMITMENTS AND CONTINGENCIES

 

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, our 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.

XML 25 R16.htm IDEA: XBRL DOCUMENT v3.21.2
SUBSEQUENT EVENTS
6 Months Ended
Jun. 30, 2021
SUBSEQUENT EVENTS  
NOTE 10 - SUBSEQUENT EVENTS

NOTE 10 - SUBSEQUENT EVENTS

 

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 June 30, 2021, up through the date, the Company issued the condensed consolidated financial statements.

 

On July 23, 2021, the Company and Lee Ying Chiu Herbert, the Company’s director, entered into a Sale and Purchase Agreement pursuant to which the Company agreed to purchase Fifty-Five (55) sets of art collectibles (the “Collectibles”) for HK$10,344,000, payable through the issuance of 180,855 shares of common stock of the Company (the “Shares”). The Collectibles were appraised by an independent third party appraisal firm with a valuation amount equal to or exceeding HK$12,930,000. The consummation of such sale occurred on August 13, 2021.

XML 26 R17.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
6 Months Ended
Jun. 30, 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.

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 is 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 the 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 June 30, 2021 and December 31, 2020, there was no allowance for doubtful accounts.

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 June 30, 2021 and 2020 were $0 and $3,640, respectively.

 

Depreciation expense for the six months ended June 30, 2021 and 2020 were $0 and $6,990, 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 six months ended June 30, 2021.

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 and six months ended June 30, 2021 and 2020, the Company did not have any interest and penalties associated with tax positions. As of June 30, 2021, the Company did not have any significant unrecognized uncertain tax positions.

 

The Company conducts the majority of its businesses in the PRC 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.

Finance leases

Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30, “Imputation of Interest”.

Net income (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 have 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$"). The Company's subsidiaries in Hong Kong maintain their books and records in their local currency, Hong Kong Dollars ("HK$"), which is a functional currency, being the primary currency of the economic environment in which these entities operate.

 

Convenience translation of amounts from the local currency of the Company into US$ has been made at the pegged exchange rate at 0.129 for the respective periods.

 

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 six months ended June 30, 2021 and 2020, the Company operates in one reportable operating segment in the 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 are based upon unadjusted quoted prices for identical instruments traded in active markets;

 

Level 2 : Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

 

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

 

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

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). Financial Instruments—Credit Losses (Topic 326) amends guideline on reporting credit losses for assets held at amortized cost basis and available-for-sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available-for-sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 requires that credit losses be presented as an allowance rather than as a write-down. ASU 2016-13 affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. The amendments in this ASU will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU 2016-13 on the financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock. As well as amend the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. This standard is effective for us on July 1, 2024, including interim periods within those fiscal years. Adoption is either a modified retrospective method or a fully retrospective method of transition. The Company is currently evaluating the impact of the adoption of ASU 2020-06 on the financial statements.

XML 27 R18.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
6 Months Ended
Jun. 30, 2021
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
Schedule of Property and equipment useful life

 

 

Expected useful life

 

Service vehicle

 

8 years

 

XML 28 R19.htm IDEA: XBRL DOCUMENT v3.21.2
ORGANIZATION AND BUSINESS BACKGROUND (Details Narrative)
1 Months Ended
Jun. 28, 2021
shares
Chief Executive Officer [Member]  
Related party stock sale 6,230,618
Koon Wing Cheung [Member]  
Related party stock sale 8,149,670
XML 29 R20.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)
6 Months Ended
Jun. 30, 2021
Service vehicle [Member]  
Expected useful life of property 8 years
XML 30 R21.htm IDEA: XBRL DOCUMENT v3.21.2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 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  
Depreciation expense $ 0 $ 3,640 $ 0 $ 6,990
XML 31 R22.htm IDEA: XBRL DOCUMENT v3.21.2
GOING CONCERN UNCERTAINTIES (Details Narrative) - USD ($)
6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Dec. 31, 2020
GOING CONCERN UNCERTAINTIES      
Net cash used in operating activities $ (49,669) $ (63,928)  
Accumulated deficit $ (421,613)   $ (1,052,582)
XML 32 R23.htm IDEA: XBRL DOCUMENT v3.21.2
INCOME TAXES (Details Narrative)
6 Months Ended
Jun. 30, 2021
USD ($)
INCOME TAXES  
Net operating loss carryforward $ (2,029,363)
Operating losses carry forward, expiration period 2039
Deferred tax assets, valuation allowance $ 426,166
XML 33 R24.htm IDEA: XBRL DOCUMENT v3.21.2
STOCKHOLDERS EQUITY (Details Narrative) - $ / shares
Jun. 30, 2021
Dec. 31, 2020
STOCKHOLDERS EQUITY    
Common stock, shares authorized 2,000,000,000 2,000,000,000
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 34 R25.htm IDEA: XBRL DOCUMENT v3.21.2
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2021
Jun. 30, 2020
Jun. 30, 2021
Jun. 30, 2020
RELATED PARTY TRANSACTIONS        
Gain on disposal of subsidiaries $ 173,812 $ 0 $ 173,812 $ 0
Gain from forgiveness of related party's debt $ 512,826 $ 0 $ 512,826 $ 0
XML 35 R26.htm IDEA: XBRL DOCUMENT v3.21.2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - shares
Jun. 30, 2021
Jun. 17, 2021
Share Acquisition Agreement [Member]    
Shares issued for acquisition 55,641,014  
Herbert Lee [Member]    
Common shares holded by director, percentage   95.00%
Common shares holded by director   47,500
XML 36 R27.htm IDEA: XBRL DOCUMENT v3.21.2
SUBSEQUENT EVENTS (Details Narrative)
1 Months Ended
Jul. 23, 2021
shares
Share Acquisition Agreement [Member] | Subsequent Event [Member]  
Common stock shares issued 180,855
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