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4. Business Combination and Discontinued Operations
12 Months Ended
Dec. 31, 2019
Business Combinations [Abstract]  
Disposal of Subsidiaries

NOTE – 4       BUSINESS COMBINATION AND DISCONTINUED OPERATIONS

 

On July 19, 2019, the Company acquired 51% controlling interest in Hong Kong Healthtech Limited, a private limited company organized under the laws of Hong Kong (“HKHL”), and a start-up education company, for 6,232,951 shares of its common stock, at a price of $8.99 per share, based on the fair value of $109,871,037.

 

The Company’s acquisitions of HKHL were accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price consideration based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from management estimation. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense.

 

The licensing agreement related to the right of use to exploit all intellectual properties from HKHL and its related affiliates, including registered patents, copyrights, software trade secrets, trademarks, service marks, proprietary information for its business purpose.

 

However, no revenue was generated or no physical operation was commenced from this business combination during the current period.

 

On December 23, 2019, the Company approved to terminate this Business Combination transaction and all parties mutually agreed to rescind the Share Exchange Agreement. The termination of both Share Exchange Agreement and IP License Agreement were effectuated in accordance with the terms of that certain Termination Agreement made effective December 27, 2019. As a result, 5,100 Ordinary Shares of HKHL have returned while 6,232,951 shares of Company’s common stock issued in exchange were cancelled accordingly.

 

All counterparties have agreed to continue the business relationship and HKHL is acted as a key supplier of educational content to the Company. The Company agreed to issue 44,000 shares of its common stock for advisory services rendered.

 

Subsequently, on March 16, 2020, the Company approved to discontinue and exit from AI Education business by the end of the first quarter 2020. The results of operations for the Company are presented in the consolidated statements of operations and comprehensive loss as consolidated net loss from discontinued operations.