☒ 10-K/A
2022
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Nevada | 30-0873246 | |
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(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
372 Linsen N. Road, Suite 519,
Zhongshan District,
8862-104,100008 Taiwan (Republic of China)8862-2568-3278o ☒ ☒☐Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐ No ☒ and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec. (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)files). Yes ☒ ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐☐☐☐☒☒☐At June 29, 2018, the registrant is approximately $45 million.The number of shares of registrant’s common stock outstanding, as quoted on the OTCQB maintained by OTC Markets, Inc. on June 30, 2022 (which was $6.50 per share). For purposes of April 12, 2021the above statement only, all directors, executive officers and 10% shareholders are assumed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for any other purpose.
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Emperor Star was incorporated on November 16, 2015 under the laws of Taiwan and is in the business of marketing and distributing various consumer products, including nutrition supplements and skin care products. www.sec.gov. December 31, 2023. The office occupies approximately 2579.78 square feet and the average amount of office rent (including the maintenance fees) is approximately $2,000 per month. Company or our subsidiary, threatened against or affecting our Company, our common stock, our subsidiary or of our companies or our subsidiary’s officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect. High Low Year ended December 31, 2020 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year ended December 31, 2019 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter contain “forward-lookingcontains forward-looking statements” within the meaning of Section 27A of the Private Securities Litigation Reform Act of 1995, all1933, as amended (the “Securities Act”) and Section 21E of whichthe Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including: any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include the words “may,” “might,” “will,” “will likely result,” “would,” “should,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan,” “project,” “forecast,” “anticipate,” “seek,” “continue,” “target” or the negative of such terms or other similar expressions. The ultimate correctness of these forward-looking statements is dependent upon a number of known and unknown risks and events and is subject to risks and uncertainties. Forward-looking statements can be identified by the use of words such as “expects,” “plans,” “will,” “forecasts,” “projects,” “intends,” “estimates,”various uncertainties and other words of similar meaning. One can identify themfactors that may cause our actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by the fact that they do not relate strictly to historical or current facts. These statements are likely to addressthese statements.growth strategy, financialfuture results and productevents, causing those results and events to differ materially from those views expressed or implied in our forward-looking statements: our ability to continue as a going concern absent new debt or equity financings; our ability to successfully remediate material weaknesses in our internal controls; our ability to reach research and development programs. One must carefully considermilestones as planned and within proposed budgets; our ability to control costs; our ability to successfully implement our expansion strategies; our current reliance on substantial debt financing that we currently are unable to repay in cash; our ability to obtain adequate new financing; our ability to successfully develop PRP, our lead product candidate; our ability to successfully develop and market our technologies; our ability to obtain and maintain patent protection; our ability to recruit employees and directors with accounting and finance expertise; our dependence on third parties for services; our dependence on key executives; the impact of government regulations, including U.S. Food and Drug Administration regulations; the impact of any such statementfuture litigation; the availability of capital; changes in economic, business and should understand that many factors could cause actual results to differ from our forward looking statements. These factors may include inaccurate assumptionscompetitive conditions; and a broad varietyother risks. Any one or more of othersuch risks and uncertainties including some thatcould have a material adverse effect on us or the value of our common stock.known and some that are not. No forward looking statement can be guaranteed and actual future results may vary materially.These risks and uncertainties, manymade only as of which are beyond our control, include, and are not limited to:·our growth strategies;·our anticipated future operation and profitability;·our future financing capabilities and anticipated need for working capital;·the anticipated trends in our industry;·acquisitionsthe date of other companies or assets that we might undertake in the future;·our operations in China and the regulatory, economic and political conditions in China; and·current and future competition.In addition, factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Annual Report on Form 10-K, and in particular,or as of the risks discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as those discussed in other documents we file with the SEC.date indicated. We do not undertake noany obligation to, reviseand may not, publicly update or publicly release the results ofcorrect any revision to these forward-looking statements to reflect events or circumstances that subsequently occur or which we hereafter become aware of, except as required by law. Given theseNew risks and uncertainties readersarise from time to time and we cannot predict these events or how they may affect us. When considering these risks, uncertainties and assumptions, you should keep in mind the cautionary statements contained in this Annual Report and any documents incorporated herein by reference. You should read this Annual Report and the documents that we incorporate by reference into this Annual Report completely and with the understanding that our actual future results may be materially different from what we expect. All forward-looking statements attributable to us are cautioned not to place undue reliance on such forward-lookingexpressly qualified by these cautionary statements.3Table of ContentsPARTART IOrganizational StructureOn March 1, 2019, we formed Maosong Trading Co., Ltd. (“Maosong Trading”) under the laws of PRC.During the year ended December 31, 2017, the Company paid the expenses of EITB in the amount of approximately $6,290. Additionally, the Company will continue to pay the expenses of EITB.The principal executive office of EITB is located at 7F-1, No. 162, Sec. 2, Zhongshan N. Rd., Zhongshan District, Taipei City, 10452, Taiwan (Republic of China).Yu-Cheng Yang, a shareholder of the Company, is the sole director of EITB.Yu-Hsiang Chia is the branch manager of EITB. Mr. Chia holds 1,080,817 shares of the Company’s common stock.Emperor Star International Trade Co., Ltd., (“Emperor Star”), was incorporated on November 16, 2015 under the laws of Taiwan. Emperor Star is in the business of marketing and distributing various consumer products, including detergents, nutrition supplements, and skin care products. the contributions to Emperor Star from non-controlling interests in the amount of $33,398 (NTD$1,000,000). As a result, the Company owns 83% equity interest of Emperor Star as of June 30, 2020, which is no longer a wholly-owned subsidiary.We have never been a party to any bankruptcy, receivership or similar proceeding, nor have we undergone any material reclassification, merger, consolidation, purchase or salea significant amount of assets notBritish Virgin Islands. EOS(BVI) is in the ordinary coursebusiness of business.General marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers.4 such as skin care products, dietarywhich aims to improve quality of life, achieve optimal health, and promote green energy. electronic noise suppressing devices and water purifying machines. Based on the sales and trends of various consumer products, we from time to time select or drop the products that we distribute and sell.We market and distribute skin care products manufactured by A.C. (USA), Inc.Wellhead Biological Technology Corp. (“A.C.”Wellhead”), which is headquartered in Taiwan and specializes in Cityactive components in ginseng, and Wellhead owns the patented enzymatic degradation technology to manufacture and extract the pure rare ginsenosides which is deemed highly valuable in the space of Industry, CaliforniaChinese medicines and has offices in Taiwan. healing. Ginsenosides are used to improve health and boost physical strength.marketacquire the products from Wellhead and distribute A.C. skin care productssell directly to resellersour channel partners who will recognize the needs of their targetedtarget customers in various regions in Asia, such as People’s Republic of China (“PRC”), Singapore and Malaysia. We acquire the products from A.C.’s Taiwan warehouses. Our strategy is to target spas, department stores and specialty stores that sell similar skin products. As of the date of this annual report, we have sold the A.C. Products to local distributors and specialty stores.4Table of ContentsThe skin care products that we will distribute are designed to address various skin care needs. Those products include moisturizers, serums, cleansers, toners, body care, exfoliators, acne and oil correctors, facial masks, cleansing devices and sun care products. A number of those products are developed for use on particular areas of the body, such as the face or hands or around the eyes.We believe the Company, together with its subsidiaries, distributes highly innovative personal care products and ecologically friendly cleaning products in Taiwan and plans to expand its distribution to China, Malaysia, and Thailand. Emperor Star’s product line includes anti-aging products that address the key signs of aging to reinvigorate andalso provide youthful energy and nutrition supplements. The Company stopped the line of ecologically friendly cleaning products in 2018.In April 2018, we, through Emperor Star, started purchasing a type of water purifying machines from Cosminergy Hitech Development Co., Ltd. (“Cosminergy”) and reselling such water purifying machines in certain Asian countries and regions. However, we decided not to continue thecomprehensive sales of Cosminergy’s water purifying machines in 2019.In November 2019, we started the marketing, promotion, sales and distribution of certain electrical noise suppressing device (the “Calibrator”) globally provided by Ultra Velocity Technology Ltd. (“Ultra Velocity”), a corporation formed under the laws of Taiwan, based on an exclusive patent licensing and distribution agreement (the “Ultra Velocity Agreement”) between Ultra Velocity and us. However, due to the outbreak of coronavirus (“COVID-19”) in mainland China, Ultra Velocity and we terminated the Ultra Velocity Agreement in March 2020 and intended to redefine the cooperation model between the respective parties.In addition, we provided inventory, membership and business management software that designed by CKS Information Co., Ltd.training to our customers in the fiscal year of 2019.Acquisition of Control Interest in A-BestOn August 7, 2019, the Company, A-Best Wire Harness & Components Co., Ltd (“A-Best”), a company formed under the laws of Taiwan,channel partners through onsite seminars and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into a purchase agreement (the “Purchase Agreement”), pursuantonline webinars to which, subject to the terms and conditions therein, the Company shall purchase thirty-one percent (31%) of the issued and outstanding equity interest in A-Best and as consideration, issue ten million (10,000,000) shares (the “Stock Consideration”) of its common stock (the “Common Stock”) to Ing-Ming Lai and pay Ing-Ming Lai fifty-five million (55,000,000) new Taiwanese dollars (“NTD”) (the “Cash Consideration”). The Company currently owns twenty percent (20%) of equity securities in A-Best, and will subsequently own a total of fifty-one percent (51%) of issued and outstanding A-Best shares when Ing-Ming Lai completes transferring his 31% of A-Best’s equity to the Company in accordance with the Purchase Agreement. Pursuant to the Purchase Agreement, the Company shall use its best efforts to obtain its shareholder approval to increase the number of authorized common stock to allow legal issuance of the Stock Consideration to Ing-Ming Lai no later than December 31, 2019. In addition, pursuant to the Purchase Agreement, the Company shall pay the Cash Consideration to Ing-Ming Lai if and only if the Company successfully completes an Initial Public Offering (the “IPO”) of its common stock, with gross proceeds of no less than $5,000,000 USD. The Purchase Agreement contains the customary confidentiality provision, representations and warranties. The Purchase Agreement also provides for mutual indemnification clauses. A-Best is a Taipei-based company that designs magnetic resonance speakers.In connection with the Purchase Agreement, on August 7, 2019, the Company, A-Best, and Ing Ming Lai entered into an Exclusive Sales Agreement (the “Exclusive Sales Agreement”), pursuant to which the Company is granted the right as the exclusive distributor to sell all of A-Best’s products, including its Micro-ceramic magnetic resonance speakers in the world, and the right to use A-Best’s trademarks and copyrights in connection with the sale of sucheffectively market our products. The term of the Exclusive Sales Agreement shall be three (3) years from execution and be automatically renewed for another term of three (3) years unless one party gives the other parties a written notice of termination three (3) months before the end of the term.In connection with the Purchase Agreement, on August 7, 2019, the Company and Ing-Ming Lai entered into a management agreement (the “Management Agreement”), pursuant to which the Company has agreed to maintain A-Best’s existing operations and Ing-Ming Lai’s positions as A-Best’s President and Chief Executive Officer of A-Best, until A-Best’s board of directors decides to terminate the terms of his positions. Pursuant to the Management Agreement, the Company shall also designate one individual to A-Best’s board of directors, and A-Best’s board of directors shall continue to maintain two director seats, where at least one of the two directors is designated by the Company until the Parties either reach a shareholder agreement or A-Best receives additional capital investment in equity or debt. The Management Agreement became effective upon execution. For more information about this transaction, the Purchase Agreement, the Exclusive Sales Agreement and Management Agreement, please refer to the current report on Form 8-K which was filed with the Securities and Exchange Commission on August 13, 2019.5Table of ContentsOn December 30, 2019, the Company, A-Best, and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into a termination agreement (the “Termination Agreement”) to, among other things, terminate the Purchase Agreement, Exclusive Sales Agreement, and Management Agreement, all of which were dated August 7, 2019. The Company, A-Best and Mr. Ing-Ming Lai decided to terminate the three agreements primarily because they need more time to agree to a mutually beneficial way to cooperate with each other with respect to the sales of the Micro-ceramic magnetic resonance speakers that A-Best has developed. Pursuant to the Termination Agreement which became effective on December 31, 2019, none of the three parties owes any compensation, payments, damages, penalties or liabilities to one another or has any obligations to perform under any of the Purchase Agreement, Exclusive Sales Agreement, and Management Agreement, except that each party agrees to keep confidential the business plans, research and development information obtained from performing the three agreements. For more information about the Termination Agreement, please refer to the current report on Form 8-K which was filed with the Securities and Exchange Commission on December 31, 2019. $33,411$35,142 by the Parties.5 For more information about this transaction and the Strategic Alliance Agreement, please refer to the current report on Form 8-K which was filed with the Securities and Exchange Commission on5, 2020.On April 22,2, 2020, the Company returned 20% equity interest in A-Best to Mr. Ing-Ming Lai pursuant to the Strategic Alliance Agreement.November 25, 2019,April 12, 2021, the Company, A-Best, and Ing-Ming Lai signed the Termination Agreement, and Mr. Ing-Ming Lai returned the 10,000 EOSS common shares (originally 10,000,000 shares prior to EOS Inc. effecting a one-for-one thousand reverse split of the company stock) to EOS Inc. which was issued under the Investment Cooperation Agreement.Ultra Velocity Technology Ltd.AsiaSonic International Industrial Co., LTD. (“Ultra Velocity”AsiaSonic”), a corporation formed under the laws of Taiwan, ROC, entered into an exclusive patent licensingInvestment Cooperation Agreement, and distribution agreement (the “Exclusive Patent LicensingBusiness and Distribution Agreement”),Management Agreement, pursuant to which, subject to the terms and conditions therein, Ultra Velocity granted the Company an exclusive license toand AsiaSonic shall cooperate in the patent (Patent M566970 registered in Taiwan) to its electrical noise suppressing device (the “Calibrator”sales and distribution of AsiaSonic’s automotive peripherals and accessories globally by acquisition of Fifty One percent (51%) and the exclusive right to market, promote, distribute and sell the Calibrator globally. equity interest of AsiaSonic.AgreementAgreements and in consideration for the exclusive patent license and distribution right to the Calibrator,cooperation, the Company agreedshall issue to issue Ultra Velocity three million (3,000,000)AsiaSonic’s shareholders and designees One Million Five Hundred Thousand (1,500,000) restricted shares of its common stock afterin exchange for the executionequivalent value of this Agreement and upon the shareholder approval to increase the number of authorized capitalFifty One percent (51%) of the total issued shares of AsiaSonic. According to the Agreements, AsiaSonic shall assist and provide training and marketing materials to the Company (the “Shareholder Approval”). The termfor the distribution and sale of this Agreement was ten years, commencing fromits products. AsiaSonic shall continue to appoint the dare thereof. However,officers or managers and be in charge of the business operations; and the Company may appoint a director who is entitled to one vote on the Board meetings or to express consent or dissent on Board resolutions.2020,2023, the Company and Ultra Velocity terminated the Exclusive Patent Licensing and Distribution Agreement via a mutually agreed written notice, effective March 24, 2020.6Table of ContentsDistribution Agreements and Supply AgreementOn May 1, 2015, weAsiaSonic entered into a written DistributionTermination Agreement to terminate the Investment Cooperation Agreement and Business and Management Agreement. The decision is made primarily due to additional time required to mutually agree on terms with A.C. (USA)respect to sales strategies and business operations. Inc. (“A.C.”) pursuant to whichZhongzheng Dist., Taipei City 100008 Taiwan (Republic of China).have an exclusive right to marketmake with the SEC.6 distribute in Taiwan certain skin care products manufactured by A.C. for a period of 5 years (the “Distribution Agreement”). Pursuantother documents that we will file with or furnish to the provisionsSEC will be available free of charge by sending a written request to our Corporate Secretary at our corporate headquarters. Additionally, the Distribution Agreement,documents we file with the SEC are or will market and promotebe available free of charge at the A.C. Products as defined therein in the Territory as amended to include PRC, Singapore and Malaysia in addition to Taiwan. Accordingly, we are the exclusive distributor for those A.C. Products in the above Territories.On April 30, 2018, we, through our Emperor Star, entered into a distribution agreement (the “Cosminergy Distribution Agreement”) with Cosminergy Hitech Development Co.SEC’s Public Reference Room at 100 F Street, N.E., Ltd. (Cosminergy”) pursuant to which we started purchasing a type of water purifying machines from Cosminergy and reselling the water purifying machines in certain Asian areas and countries. The Cosminergy Distribution Agreement expired on April 30, 2019 and we did not renew it.We, through one of our wholly-owned subsidiaries, entered into a product supply agreement (“Fortune King Product Supply Agreement”) with Fortune King (HK) Trading Limited (“Fortune King”), a company formed under the laws of Hong Kong, to provide and sell any products that Fortune King orders from EOS and its subsidiaries. Pursuant to the Fortune King Product Supply Agreement, we agreed to provide products ordered by Fortune King within five business days from the order date and the products we sell should have the expiration date/shelf life at least one year from the supply date. The Fortune King Product Supply Agreement became effective on October 1, 2018 and was extended to September 30, 2021. We provide marketingWashington, D.C. 20549. Other information on the products we selloperation of the Public Reference Room may be obtained by calling the SEC at (800) SEC-0330. The SEC maintains a website that contains reports, proxy and training services to Fortune King. During the year ended December 31, 2018information statements and nine months ended September 30, 2019, the majority of EOS’ sales of Nine Layer Transformation Hair Cream, Deep Seawater Mineral Extract, Lifegenes, Youthgenes, and household water purifying machines were to Fortune King. As of June 30, 2019, Fortune King was a related party of us because the founder and officer of Fortune King was a shareholder of EOS. On or about June 30, 2019, the founder and officer of Fortune King transferred her equity interest in the Company and therefore Fortune King is no longer a related party to the Company.Skin Care Products- A.C. ProductsMoisturizing Mask – contains highly concentrated hydrating and anti-wrinkle ingredientsother information regarding registrants that are specifically targeted for anti-wrinkle effects. This product adds moisture to the skin and brings out a natural healthy glow. Key ingredients are collagen, glycerin, hyaluronic acid, purified water and silk hydrolyzed protein. Rose water contributes a relaxing effect.Acne Mask – contains a special formula that penetrates into the skin to clean pores, removes dirt and helps balance oil secretion. While purifying, Acne Mask, also, hydrates and moisturizes the skinfile electronically with the designed calming and luminous effect. Ingredients include aloe vera extract, eucalyptus, lemon extract, hydrogenated castor oil, chamomile extract and sorbitol.Brightening Mask – contains concentrated L-ascorbic acid and natural botanical extracts that are good for evening skin tones and hydrating the skin. Application of the mask after exposure to sun can help minimize sun damage and clarify the skin. Key ingredients include carbopol, perfume, diglycerin, hyaluronic acid, aloe vera extract, mulberry extract, ginseng extract, collagen, rose water, hydrogenated castor oil, kojic acid and berry extract.Levo-H Serum –SEC. The SEC’s website is formulated to provide maximum hydration to the skin, as well as to reduce fine lines. After using this product, we hope the customers feel their skin moisturized and radiant.Levo-C Serum – is designed to diminish ultraviolet damages and even out overall skin tone. This product has a high concentrate L-ascorbic acid and can clarify skin, leaving it with a healthy glow.Cosminergy Water Purifying MachinesThe Cosminergy water purifying machines contain anion ceramic and silicon ceramic which can remove from water particles, sediments, chemical contaminants, like heavy metals and hydrogen sulfide to purify water. We believe the Cosminergy water purifying machines will be popular in the areas where the water quality is relatively poor. We believe the Cosminergy water purifying machines can effectively kill and stop the reproduction of bacteria in the water.7Table of ContentsMarketing and DistributionWe believe our market is retailers who recognize the needs of the targeted consumers. Our strategy is to target spas, department stores and specialty stores that sell similar skin care products. We hope that our product positioning will assist in the marketing and distribution of those skin care products. We anticipate that we will reach our targeted reseller market by the following types of resellers: Spas and Health Clubs – Most high quality day spas and health clubs (and many upscale spas at resort properties) use generic products. Our goal will be to develop affiliations with select spas in urban areas and vacation destinations to whom we will market and sell those skin care products.Lifestyle Retailers – We anticipate that the skin care products will be lifestyle-based rather than the typical soaps and potions of natural product retailers. These retailers exist in almost every city and have developed loyal and sophisticated customer bases.Additionally, we anticipate that we will market those skin care products to cosmetic specialty retailers and boutique department stores.We believe that the targeted in users of those skin care products are between the ages of 20 and 65 and are predominantly female. We believe they are urban professionals with at least some college level education. The targeted users have active lifestyles and are concerned about social and environmental issues. Mind and body wellness are important to them. They belong to a health club; take yoga, pilates or taichi lessons. The maintenance of a youthful appearance are a part of their life.Cosminergy Water Purifying MachinesIn 2018, we mainly distributed the Cosminergy water purifying machines in PRC (including Hong Kong), Taiwan and Singapore through retailers in those regions and countries. In April 2019, we ceased the distribution of Cosminergy water purifying machines. We intend to find another strategic supplier for other types of water purification equipment.CalibratorsWe started the sales and distribution of automobile carbon reduction machines or Calibrators for Ultra Velocity in November 2019. During the year ended December 31, 2019, we generated a gross revenue of approximately $350,000 in the Asian market.Patents and TrademarksAt the present we do not own any patents or trademarks. However, we had obtained the exclusive license to the patent (Patent M566970 registered in Taiwan) to the Calibrator from Ultra Velocity pursuant to the Exclusive Patent Licensing and Distribution Agreement, which was terminated on March 24, 2020.Need for any Government ApprovalThere is no approval required for the marketing and distribution of those A.C. Products in Taiwan; provided, however, pursuant to the Statute for the Control of Cosmetic Hygiene promulgated by the Ministry of Health and Welfare in Taiwan, we are required to file an application with the Ministry of Health and Welfare in Taiwan for reference purposes.8Table of ContentsWe have been informed by appropriate representatives of A.C. that the skin care products we plan to market and distribute pursuant to the Distribution Agreement are classified as cosmetics not containing any medical, poisonous or potent drugs under the Republic of China Statute for Control of Cosmetic Hygiene. Accordingly, those products are not necessarily subject to any inspection to obtain approval for their sales. The labeling of those packages clearly indicate in Chinese the name and address of the manufacturer, the name of the product, the ingredients, the usage and directions, the weight, the manufacturing date, the expiration date, the name and address of the importer. We were informed by those representatives that those skin care products are, currently, appropriate for marketing and distribution in Taiwan. In the year of 2018, the Customs of Hong Kong, Malaysia and Singapore approved the imports of the A.C. Products that we brought to the three regions and countries. We were in the process of preparing additional documents for the Customs of the PRC with respect to the imports of the A.C. Products.Environmental LawsOur operations focused on sales and distribution and therefore are not subject to any environmental laws.Employees and Employment Agreements of the Company, EITB and Emperor StarThe Company, EITB and Emperor Star have a total of nine employees. Our President, He Siang Yang, who, currently, devotes 20 or more hours a week to our business, is responsible for the primary operation of our business. There is no outstanding employment agreement.12 Month Growth StrategyOur goal is to maximize shareholder value. To achieve that goal, we intend to expand our operations and evaluate and cultivate new and alternative revenue generating opportunities. We are committed to marketing and distributing skin care products. While strategic and wisely executed marketing campaigns are key to expanding our operations; offering innovative skin care products should position us in the best possible way for long term success.Itemtem 1A. Risk Factors.Itemtem 1B. Unresolved Staff Comments.7F.-1, No. 162, Sec. 2, Zhongshan N.4F-1, No.5, Qingdao E. Rd., Zhongshan District,Zhongzheng Dist., Taipei City 10452,100008 Taiwan (Republic of China). EOS’s Taiwan branchEITB and Emperor Star operate from this Taipei location. Taiwan. Emperor Star and EOS Taiwan BranchEITB entered into the office leases which commenced on June 15, 2019February 6, 2023 and terminatedwill end on September 28, 2020.Itemtem 3. Legal Proceedings.notinvolved in any litigation that we believe could have a partymaterial adverse effect on our financial condition or results of operations. There is no action, suit, or proceeding by any court, public board, government agency, self-regulatory organization or body pending or, to any material legal or administrative proceedings and are not awarethe knowledge of any pending legal or administrative proceedings against us. We may from time to time become a party to various legal or administrative proceedings arising in the ordinary courseexecutive officers of our business.Itemtem 4. Mine Safety Disclosures9Table of ContentsPARTART II20202022 and 2019.2021. These prices reflect inter-dealer prices, without retail markup, markdown, or commission, and may not represent actual transactions.$ 1.00 $ 1.00 $ 1.50 $ 1.50 $ 1.50 $ 1.50 $ 3.25 $ 3.25 $ 3.50 $ 0.65 $ 2.50 $ 1.10 $ 2.50 $ 1.45 $ 2.40 $ 1.49 7
March 27, 2023.
As of April 13, 2021, the outstanding number of shares of our common stock was 74,122,997. All our outstanding common shares are legally issued, fully paid and non-assessable.
At present, we have no
was 2,000,000. Each share
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Equity Compensation Plans, Bonus Plans
As2022.
Pension Benefits
As of December 31, 2020, we did not have any defined benefit pension plans.
Nonqualified Deferred Compensation
We do not maintain any nonqualified deferred compensation plans.
Debt Securities
We have no debt securities outstanding.
Repurchase Programs
There is currently no share repurchase program pending.
Recent Transactions Involving Unregistered Securities
compensation. The warrants were fully vested upon issuance.
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As a smaller reporting company, we are not required to provide the information under this item.
Itemtem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
1. | Our ability to attract and retain management and key employees; |
2. | Our ability to generate customer demand for our products; |
3. | The intensity of competition; and |
4. | General economic conditions. |
Description
General Information
EOS Inc.various consumer products. Our goal is to source and bring to our channel partners the most innovative products which aims to improve quality of life, achieve optimal health, and promote green energy.
On or about November 18, 2016, the Company formed EOS INC. TAIWAN BRANCH, a Taiwanese corporation (“EITB”)Chinese medicines and healing. Ginsenosides are used to improve health and boost physical strength.
Emperor Star International Trade Co., Ltd., (“Emperor Star”), was incorporated on November 16, 2015 under the laws of Taiwan. Emperor Star istheir target customers in the business of marketing and distributing various consumer products, including detergents, nutrition supplements, and skin care products.
On May 3, 2017, the Company entered into and closed a Share Purchase and Sale Agreement (the “Purchase Agreement”) with Emperor Star to acquire all issued and outstanding shares of Emperor Star in consideration of $30,562 in cash. As a result of the transaction, Emperor Star became the Company’s wholly owned subsidiary. Upon consummation of the transaction, the Company has assumed the business of Emperor Star and ceased to be a shell company. Yu-Hsiang Chia currently serves as the officer and director of Emperor Star. On May 26, 2020, EOS Inc. increased its investment in Emperor Star by $134,004 (NTD$4,000,000). The Company also received the contributions to Emperor Star from non-controlling interests in the amount of $33,398 (NTD$1,000,000). As a result, the Company owns 83% equity interest of Emperor Star as of June 30, 2020, which is no longer a wholly-owned subsidiary.
On September 20, 2018, the Company set up another wholly-owned subsidiary, EOS International Inc. (“EOS(BVI)”), under the laws of British Virgin Islands. EOS(BVI) is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifying machines. On March 1, 2019, EOS(BVI) set up a wholly-owned subsidiary, Shanghai Maosong Co., Ltd (“Maosong”), under the laws of People’s Republic of China. Maosong is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifying machines in China. As of the date of this report, Maosong has a registered capital of USD $100,000, but no capital has actually been paid into Maosong.
We have never been a party to any bankruptcy, receivership or similar proceeding, nor have we undergone any material reclassification, merger, consolidation, purchase or sale of a significant amount of assets not in the ordinary course of business.
We do not own any real property. Our principal executive office is presently located at 7F.-1, No. 162, Sec. 2, Zhongshan N. Rd., Zhongshan District, Taipei City 10452, Taiwan (Republic of China). EITB and Emperor Star operate from this Taipei location. Taiwan. Emperor Star and EITB entered into the office leases which commenced on June 15, 2019 and will end on June 14, 2021. The office occupies approximately 1,388 square feet and the average amount of office rent (including the maintenance fees) is approximately $2,016 per month. Before this location, our former principal executive office was at 372 Linsen N. Road, Suite 519, Zhongshan District, Taipei City, 104, Taiwan. Our then monthly rent for that office space was $1,280 and that lease expired on June 30, 2019.
A-Best operates its business at the address of 159 Songde Road, Building 13, Room 1, Xinyi District, Taipei, Taiwan. A-Best’s lease for that office space commenced on January 20, 2018 and will end on January 19, 2020 with a term of two years. The monthly rent for that office space is $1,451, excluding utilities and maintenance fees.
General Business Overview
EOS Inc. markets and distributes a variety of consumer products selected based on its understanding of the demand for each of its products. EOS conducts its business primarilyregions in Asia, including thesuch as People’s Republic of China (“PRC”), Taiwan, Singapore and Malaysia. We also provide comprehensive sales training to our channel partners through onsite seminars and online webinars to effectively market our products.
On April 30, 2018, we, through our Emperor Star, started purchasing a type of water purifying machines from Cosminergy Hitech Development Co., Ltd. (“Cosminergy”) and reselling the water purifying machines in certain Asian areas and countries. The sales generated from selling the water purifying machinesCompany for the year ended December 31, 2020 and 2019 were $321,808 and $769,592, respectively, accounting for approximately 57.08% and 33.61% of the total revenue of the said period, respectively.
In November 2019, we started the marketing, promotion, sales and distribution of certain electrical noise suppressing device (the “Calibrator”) globally provided by Ultra Velocity Technology Ltd. (“Ultra Velocity”), a corporation formed under the laws of Taiwan, based on an exclusive patent licensing and distribution agreement (the “Ultra Velocity Agreement”) between Ultra Velocity and us. However, due2022 compared to the outbreak of coronavirus (“COVID-19”) in mainland China, Ultra Velocity and we terminated the Ultra Velocity Agreement in March 2020 and intended to redefine the cooperation model between the respective parties. During the year ended December 31, 2020, the net2021.
In addition, we provided inventory, membership and business management software that designed by CKS Information Co., Ltd. to our customers in the fiscal year of 2019. During the year ended December 31, 2020 and 2019, the software business line generated $40,802 and $102,437 respectively, accounting for approximately 7.24% and 4.47% of the total net sales for that period.
Acquisition of Control Interest in A-Best
On August 7, 2019, the Company, A-Best Wire Harness & Components Co., Ltd (“A-Best”), a company formed under the laws of Taiwan, and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into a purchase agreement (the “Purchase Agreement”), pursuant to which, subject2021. The increase was primarily due to the terms and conditions therein, the Company shall purchase thirty-one percent (31%) of the issued and outstanding equity interestincrease in A-Best and as consideration, issue ten million (10,000,000) shares (the “Stock Consideration”) of its common stock (the “Common Stock”) to Ing-Ming Lai and pay Ing-Ming Lai fifty-five million (55,000,000) new Taiwanese dollars (“NTD”) (the “Cash Consideration”). The Company currently owns twenty percent (20%) of equity securities in A-Best, and will subsequently own a total of fifty-one percent (51%) of issued and outstanding A-Best shares when Ing-Ming Lai completes transferring his 31% of A-Best’s equity to the Company in accordance with the Purchase Agreement. Pursuant to the Purchase Agreement, the Company shall use its best efforts to obtain its shareholder approval to increase the number of authorized common stock to allow legal issuance of the Stock Consideration to Ing-Ming Lai no later than December 31, 2019. In addition, pursuant to the Purchase Agreement, the Company shall pay the Cash Consideration to Ing-Ming Lai if and only if the Company successfully completes an Initial Public Offering (the “IPO”) of its common stock, with gross proceeds of no less than $5,000,000 USD. The Purchase Agreement contains the customary confidentiality provision, representations and warranties. The Purchase Agreement also provides for mutual indemnification clauses. A-Best is a Taipei-based company that designs magnetic resonance speakers.
In connection with the Purchase Agreement, on August 7, 2019, the Company, A-Best, and Ing Ming Lai entered into an Exclusive Sales Agreement (the “Exclusive Sales Agreement”), pursuant to which the Company is granted the right as the exclusive distributor to sell all of A-Best’s products, including its Micro-ceramic magnetic resonance speakers in the world, and the right to use A-Best’s trademarks and copyrights in connection with the sale of such products. The term of the Exclusive Sales Agreement shall be three (3) years from execution and be automatically renewed for another term of three (3) years unless one party gives the other parties a written notice of termination three (3) months before the end of the term.
In connection with the Purchase Agreement, on August 7, 2019, the Company and Ing-Ming Lai entered into a management agreement (the “Management Agreement”), pursuant to which the Company has agreed to maintain A-Best’s existing operations and Ing-Ming Lai’s positions as A-Best’s President and Chief Executive Officer of A-Best, until A-Best’s board of directors decides to terminate the terms of his positions. Pursuant to the Management Agreement, the Company shall also designate one individual to A-Best’s board of directors, and A-Best’s board of directors shall continue to maintain two director seats, where at least one of the two directors is designated by the Company until the Parties either reach a shareholder agreement or A-Best receives additional capital investment in equity or debt. The Management Agreement became effective upon execution. For more information about this transaction, the Purchase Agreement, the Exclusive Sales Agreement and Management Agreement, please refer to the current report on Form 8-K which was filed with the Securities and Exchange Commission on August 13, 2019.
On December 30, 2019, the Company, A-Best, and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into a termination agreement (the “Termination Agreement”) to, among other things, terminate the Purchase Agreement, Exclusive Sales Agreement, and Management Agreement, all of which were dated August 7, 2019. The Company, A-Best and Mr. Ing-Ming Lai decided to terminate the three agreements primarily because they need more time to agree to a mutually beneficial way to cooperate with each other with respect to the sales of the Micro-ceramic magnetic resonance speakers that A-Best has developed. Pursuant to the Termination Agreement which became effective on December 31, 2019, nonenutrition supplement.
On March 2, 2020, the Company, A-Best, and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best (collectively, the “Parties”) entered into a strategic alliance agreement (the “Strategic Alliance Agreement”), pursuant to which the Parties redefined their cooperation with respect to the sales and distribution of A-Best’s micro-ceramic speakers. In accordance with the Strategic Alliance Agreement, A-Best, Mr. Ing-Ming Lai and the Company terminated the Investment Cooperation Agreement dated January 12, 2019 entered by and among the Parties and as a result the Company agreed to return 20% of the equity interest in A-Best to Mr. Ing-Ming Lai, which was valued at approximately $33,411 by the Parties.
Furthermore, subject to the terms and conditions of the Strategic Alliance Agreement, A-Best has granted the Company the exclusive sale and distribution right of A-Best’s micro-ceramic speakers in the world$365,282 for one (1) year (the “Term”), which may be renewed with mutual consent of the Parties two months prior to the expiration of the Term, while A-Best retains its own right to sell and distribute the micro-ceramic speakers on its own. In consideration for the exclusive distribution right of A-Best’s speakers under the Strategic Alliance Agreement, the Company agreed to have A-Best keep the Company’s 10,000,000 shares of common stock, par value $0.001 per share, issued under the Investment Cooperation Agreement and the Company may keep the revenue and profits generated from the sale of A-Best speakers until the total revenue from such speakers reaches $15 million U.S. dollars. This Strategic Alliance Agreement contains A-Best’s and Mr. Ing-Ming Lai’s joint representation regarding their intellectual property rights to A-Best ceramic speakers. For more information about this transaction and the Strategic Alliance Agreement, please refer to the current report on Form 8-K which was filed with the Securities and Exchange Commission on March 5, 2020.
On April 22, 2020, the Company returned 20% equity interest in A-Best to Mr. Ing-Ming Lai pursuant to the Strategic Alliance Agreement.
On November 25, 2019, the Company and Ultra Velocity Technology Ltd. (“Ultra Velocity”), a corporation formed under the laws of Taiwan, entered into an exclusive patent licensing and distribution agreement (the “Exclusive Patent Licensing and Distribution Agreement”), pursuant to which, subject to the terms and conditions therein, Ultra Velocity granted the Company an exclusive license to the patent (Patent M566970 registered in Taiwan) to its electrical noise suppressing device (the “Calibrator”) and the exclusive right to market, promote, distribute and sell the Calibrator globally. In accordance with the Agreement and in consideration for the exclusive patent license and distribution right to the Calibrator, the Company agreed to issue Ultra Velocity three million (3,000,000) restricted shares of its common stock after the execution of this Agreement and upon the shareholder approval to increase the number of authorized capital of the Company (the “Shareholder Approval”). The term of this Agreement was ten years, commencing from the dare thereof. However, on March 30, 2020, the Company and Ultra Velocity terminated the Exclusive Patent Licensing and Distribution Agreement via a mutually agreed written notice, effective March 24, 2020.
On April 12, 2021, the Company, A-Best, and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into a termination agreement (the “Termination Agreement”) to terminate the agreement of Strategic Alliance Agreement (the “Strategic Alliance Agreement”) dated March 2, 2020. In the agreement, Ing-Ming Lai has proceed to effect a return of a total of 10,000,000 shares in EOS INC, back to the company.
The Board of Directors of this Corporation authorized the return of the 10,000,000 EOSS shares from Ing Ming Lai.
Distribution Agreements and Supply Agreement
On May 1, 2015, we entered into a written Distribution Agreement with A.C. (USA), Inc. (“A.C.”) pursuant to which we have an exclusive right to market and distribute in Taiwan certain skin care products manufactured by A.C. for a period of 5 years (the “Distribution Agreement”). Pursuant to the provisions of the Distribution Agreement, we will market and promote the A.C. Products as defined therein in Taiwan. Accordingly, we are the exclusive distributor for those A.C. Products in Taiwan.
On April 30, 2018, we, through our Emperor Star, entered into a distribution agreement (the “Cosminergy Distribution Agreement”) with Cosminergy Hitech Development Co., Ltd. (Cosminergy”) pursuant to which we started purchasing a type of water purifying machines from Cosminergy and reselling the water purifying machines in certain Asian areas and countries. The Cosminergy Distribution Agreement expired on April 30, 2019 and we did not renew it.
We, through one of our wholly-owned subsidiaries, entered into a product supply agreement (“Fortune King Product Supply Agreement”) with Fortune King (HK) Trading Limited (“Fortune King”), a company formed under the laws of Hong Kong, to provide and sell any products that Fortune King orders from EOS and its subsidiaries. Pursuant to the Fortune King Product Supply Agreement, we agreed to provide products ordered by Fortune King within five business days from the order date and the products we sell should have the expiration date/shelf life at least one year from the supply date. The Fortune King Product Supply Agreement became effective on October 1, 2018 and was extended to September 30, 2021. We provide marketing information on the products we sell and training services to Fortune King. During the year ended December 31, 2018 and nine months2022, representing an increase of $52,331 or 17%, as compared to $312,951 for the year ended September 30, 2019,December 31, 2021.
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recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.
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Classification
Certain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net income nor retained earnings.
Depreciation expense was $3,257 and $1,887 for the years ended December 31, 2022 and 2021, respectively. Impairment loss was $17,381 and $nil for the years ended December 31, 2022 and 2021, respectively.
Long-term Equity Investment
The Company acquires equity investment to promote business and strategic objectives. The Company accounts for non-marketable equity and other equity investments for which the Company does not have control over the investees as:
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Significant judgment is required to identify whether an impairment exists in the valuation of the Company’s non-marketable equity investments, and therefore the Company considers this a critical accounting estimate. Its yearly analysis considers both qualitative and quantitative factors that may have a significant impact on the investee’s fair value. Qualitative analysis of its investments involves understanding the financial performance and near-term prospects of the investee, changes in general market conditions in the investee’s industry or geographic area, and the management and governance structure of the investee. Quantitative assessments of the fair value of its investments are developed using the market and income approaches. The market approach includes the use of comparable financial metrics of private and public companies and recent financing rounds. The income approach includes the use of a discounted cash flow model, which requires significant estimates regarding the investees’ revenue, costs, and discount rates. The Company’s assessment of these factors in determining whether an impairment exists could change in the future due to new developments or changes in applied assumptions.
Other-Than-Temporary Impairment
The Company’s long-term equity investments are subject to a periodic impairment review. Impairments affect earnings as follows:
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For the year ended December 31, 2020: Nutrition supplement Water purifier machine Automobile carbon reduction machine Software Total For the year ended December 31, 2020: Asia Pacific Total determined that the overall market conditions were improving, and the Company’s collection history in the prior three quarters was positive, and in fourth quarter of 2021 reached sustainable recovery rate comparable to pre-COVID-19 environment. Accordingly, management decided that due to the improved conditions collection is now reasonably certain, and revenue is now recognized when risk and rewards are transferred to its customers. 842. net loss. Customer Net sales for the year ended December 31, 2020 Accounts receivable balance as of December 31, 2020 A B C Customer Net sales for the year ended December 31, 2019 Accounts receivable balance as of December, 2019 A Supplier Net purchase for the year ended December 31, 2020 Accounts payable balance as of December 31, 2020 A B C D Supplier Net purchase for the year ended December 31, 2019 Accounts payable balance as of December 31, 2019 A B C D 2022. companies. : this uncertainty. December 31, December 31, 2020 2019 Assets Current Assets Cash and cash equivalents Accounts receivable Inventory, net Advance to suppliers Prepaid expenses and other current assets Total current assets Property and equipment, net Operating lease right-of-use assets Security deposits Long-term investment Total Assets Liabilities and Stockholders’ Equity Current Liabilities Accounts payable Accrued expenses Due to shareholders Income tax payable Other current liabilities Operating lease liabilities – current Total current liabilities Long-term loan Operating lease liabilities – noncurrent Total liabilities Commitments and Contingencies Stockholders’ Equity Common stock, $0.001 par value; 75,000,000 shares authorized, 74,122,997 shares issued and outstanding as of December 31, 2020 and December 31, 2019 Additional paid-in capital Retained earnings Accumulated other comprehensive income Total stockholders’ equity Noncontrolling Interest Total Equity Total Liabilities and Stockholders’ Equity For the Years Ended December 31, 2020 2019 Net sales Cost of sales Gross profit Selling, general and administrative expenses Income (loss) from operations Other income (expense) Interest income (expense) Other income (expense) Gain (loss) on foreign currency exchange Gain (loss) on investment in equity securities Total other income (expense) Income (loss) before income tax provision Income tax provision Net Income (loss) Other Comprehensive Income (Loss): Net income (loss) attributable to non-controlling interests Net income (loss) attributable to EOS and subsidiaries Foreign currency translation adjustment, net of tax Comprehensive Income (loss) Net income per share: Basic and diluted Weighted average number of common shares: Basic and diluted Common Stock Additional Paid-in Retained Accumulated Other Comprehensive Non controlling Shares Amount Capital Earnings Income (Loss) Interest Total Balance at December 31, 2018 Common shares issued in exchange for investment in equity securities Foreign currency translation adjustment Net income Balance at December 31, 2019 Stock-based compensation Contributions from noncontrolling interests Foreign currency translation adjustment Net income Balance at December 31, 2020 For the Year Ended December 31, 2020 2019 Cash Flows from Operating Activities Net income (loss) Adjustments to reconcile net income to net cash provided by operating activities Depreciation Loss on investment in equity securities Loss (gain) on foreign currency exchange Stock-based compensation Changes in assets and liabilities: Decrease (increase) in accounts receivable Decrease (increase) in inventory Decrease (increase) in advance to suppliers Decrease (increase) in security deposits and other assets Increase (decrease) in accounts payable Increase (decrease) in accrued expenses Increase (decrease) in income tax payable Increase (decrease) in due to shareholders Increase (decrease) in other current liabilities Net cash used in operating activities Cash flows from Investing activities Purchase of equipment Net cash used in investing activities Cash flows from Financing activities Proceeds from (Repayment to) related party payable Proceeds from (Repayment to) borrowings Proceeds from investments by noncontrolling interests in subsidiary Net cash provided by financing activities Effect of exchange rate changes on cash and cash equivalents Net decrease in cash and cash equivalents Cash and Cash Equivalents Beginning Ending Supplemental Disclosure of Cash Flows Cash paid during the periods for: Interest Income taxes Non-cash financing and investing activities Common shares issued in exchange for investment in equity securities Renminbi. 2021, respectively. For the year ended December 31, 2020: Nutrition supplement Water purifier machine Automobile carbon reduction machine Software Total For the year ended December 31, 2020: Asia Pacific $ 563,751 Total $ 563,751 842. net loss. Customer Net sales for the year ended December 31, 2020 Accounts receivable balance as of December 31, 2020 A B C Customer Net sales for the year ended December 31, 2019 Accounts receivable balance as of December, 2019 A Supplier Net purchase for the year ended December 31, 2020 Accounts payable balance as of December 31, 2020 A B C D Supplier Net purchase for the year ended December 31, 2019 Accounts payable balance as of December 31, 2019 A B C D April 22, December 31, 2020 2019 Current assets Noncurrent assets Current liabilities Shareholders’ deficit For the period from January 1, 2020 to April 22, 2020. Net sales Gross profit Net loss Share of loss from investment accounted for using equity method going concern. the following: For the Years Ended December 31, 2020 2019 Current income tax U.S. Taiwan PRC Sub total Deferred income tax U.S. Deferred tax assets for NOL carry forwards Valuation allowance Net changes in deferred income tax (benefit) Total income tax provision For the Years Ended December31, 2020 2019 U.S. statutory income tax rate Taiwan unified income tax rate PRC standard EIT rate Changes in valuation allowance Other - % Effective combined income tax rate December 31, December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards Less: Valuation allowance Deferred tax assets, net quarters in total. has been fully impaired as of December 31, 2022 Disclosure Controls and Procedures 2022. tem 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Currently, Mr Yang also serves as sole director of EITB. Company. From 2008 through 2015, Mr. Kwok served as a financial planner at Prudential Hong Kong Limited, a Hong Kong insurance company. EXECUTIVE SUMMARY COMPENSATION TABLE BY THE COMPANY Name and Principal Position Year Salary FY ($) Bonus ($) Stock Awards ($) Option Awards ($) Non-Equity Incentive Plan Compensation ($) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) All Other Compensation ($) Total ($) He Siang Yang, 2020 CEO, President, Secretary, 2019 Treasurer, and Director(1) Yu Cheng Yang, 2020 Director and General Manager(1) 2019 Lai Chen Kwok, 2020 Director(1) 2019 Yu-Hsiang Chia, 2020 Branch Manager(1) 2019 The Company Name of Beneficial Owner Common Stock Beneficially Owned Percentage of Common Stock Beneficially owned (1) Officers and directors as a group Yu Cheng Yang He Siang Yang Lai Chen Kwok All officers and directors as a group (3 person) 5% or more shareholders Ing-Ming Lai Total Year Ended December 31, 2020 Year Ended December 31, 2019 Audit Fees Tax Fees All Other Fees Total Procedures IGNATURESDuring the fiscal year 2018, the Company has adopted FASB Accounting Standards Codification (“ASC”), Topic 606 (“ASC 606”), Revenue from Contracts with Customers, using the modified retrospective method to all contracts that were not completed as of January 1, 2018. The Company recognized the cumulative effect of applying the new revenue standard as an adjustment to the opening balance of accumulated deficit at the beginning of 2018. The results for the Company’s reporting periods beginning on and after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. Based on the Company’s review of existing sales contracts as of January 1, 2018, the Company concluded that the adoption of the new guidance did not have a significant change on the Company’s revenue during all periods presented.17Table of Contentsreturns: returns: The Company generally does not provide customers with the right to return a product for a full or partial refund, a credit, or an exchange for another product.The following tables provide detailsby major productswould only be recognized when the consideration is received as to satisfy revenue recognition criteria related to reasonable certainty of collections. by geography.Revenue by Major Products$ 57,154 321,808 143,987 40,802 $ 563,751 Revenue by Geography$ 563,751 $ 563,751 13 -— 840.18Table of ContentsThe Company applied the following practical expedients in the transition to the new standard and allowed under ASC 842:Practical ExpedientDescriptionReassessment of expired or existing contractsThe Company elected not to reassess, at the application date, whether any expired or existing contracts contained leases, the lease classification for any expired or existing leases, and the accounting for initial direct costs for any existing leases.Use of hindsightThe Company elected to use hindsight in determining the lease term (that is, when considering options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of right-to-use assets.Reassessment of existing or expired land easementsThe Company elected not to evaluate existing or expired land easements that were not previously accounted for as leases under ASC 840, as allowed under the transition practical expedient. Going forward, new or modified land easements will be evaluated under ASU No. 2016-02.Separation of lease and non-lease componentsLease agreements that contain both lease and non-lease components are generally accounted for separately.Short-term lease recognition exemptionThe Company also elected the short-term lease recognition exemption and will not recognize ROU assets or lease liabilities for leases with a term less than 12 months.The adoption of ASC 842 had no substantial impact on the Company’s consolidated balance sheets. The most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, adoption of this standard resulted in the recognition of operating lease right-of-use assets of $8,235 and operating lease liabilities of $8,235 on the consolidated balance sheet as of January 1, 2019. The adoption of ASC 842 did not result in a cumulative-effect adjustment to the opening balance of retained earnings.14 $22,840$1,966 and $39,645$399 for the yearyears ended December 31, 20202022 and 2019,2021, respectively.$5,377$5,233 and $7,051$5,873 for the yearyears ended December 31, 20202022 and 2019,2021, respectively. Other than the above, the Company does not provide any other post-retirement or post-employment benefits.19Table of Contentsnonfinancialnon-financial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:·Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.15 ·Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.·Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.Net Incomeperiod. year. Dilutive shares are excluded the exercise price is greater than the average market price and when the Company incurred a net loss as the inclusion of such shares would have an anti-dilutive effect.yearyears ended December 31, 20202022 and 2019,2021, warrants were excluded as dilutive shares as the Company does not have any outstanding common stock equivalents; therefore,incurred a separate computation of diluted income per share is not presented.Concentration of Credit RiskCash and cash equivalents: The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions in Taiwan, but these investments may be in excess of the insurance limits of Taiwan Central Deposit Insurance Corporation (the “TCDIC”). The Company does not enter into financial instruments for hedging, trading or speculative purposes. Concentration of credit risk with respect to trade and notes receivables is limited due to the wide variety of customers and markets in which the Company transacts business, as well as their dispersion across many geographical areas. As of December 31, 2020, the Company had approximately $13,916 in excess of TCDIC insured limits. The Company has not experienced any losses in such accounts.Customers: The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral.20Table of ContentsFor the year ended December 31, 2020, two customers accounted for more than 10% of the Company’s total revenues, representing approximately 67% and 18% of its total revenues, and 55% and 30% of accounts receivable in aggregate at December 31, 2020.$ 378,458 $ 79,206 100,478 - - 43,177 For the year ended December 31, 2019, one customer accounted for more than 10% of the Company’s total revenues, representing approximately 95% of its total revenues, and 99% of accounts receivable in aggregate at December 31, 2019.$ 2,171,766 $ 2,151,192 Suppliers: The Company’s inventory is purchased from various suppliers.For the year ended December 31, 2020, four suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 39%, 24%, 23% and 10% of total net purchase, and 0%, 98%, 0% and 0% of accounts payable in aggregate at December 31, 2020, respectively:$ 191,514 $ - $ 119,514 $ 18,079 $ 114,395 $ - $ 51,623 $ - For the year ended December 31, 2019, four suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 34%, 27%, 19% and 10% of total net purchase, and 0% of accounts payable in aggregate at December 31, 2019, respectively:$ 96,743 $ - $ 74,819 $ - $ 52,505 $ - $ 28,400 $ - 21Table of Contents16 17 August 2018,June 2016, the FASB issued ASU 2018-13, Fair Value2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement (Topic 820): Disclosure Framework - Changesof Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the Disclosure Requirementsimpairment model for Fair Value Measurement. The ASU modifiesmost financial assets and will require the disclosure requirements in Topic 820, Fair Value Measurement, by removing certain disclosure requirements relateduse of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the fair value hierarchy, modifying existing disclosure requirements relatedlifetime expected credit loss on such instruments and record an allowance to measurement uncertainty and adding new disclosure requirements, such as disclosingoffset the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the endamortized cost basis of the reporting periodfinancial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and disclosing the rangereasonable and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.supportable forecasts. This ASUpronouncement is effective for public companiesfiscal years, and for annual reporting periods and interim periods within those annual periodsfiscal years, beginning after December 15, 2019. The Company is currently evaluating the effect, if any, that the ASU will have on its consolidated financial statements.In DecemberOn November 19, 2019, the FASB issued ASU No. 2019-12, Simplifying2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the Accounting for Income Taxes, as part of its initiative to reduce complexity in accounting standards. The amendments incredit losses (CECL), the ASU arerevised effective for fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standarddate is permitted, including adoption in interim or annual periods for which financial statements haveJanuary 2023.been issued. The Company iseffective, accounting standards, if currently evaluating theadopted, would have a material effect if any, that the ASU will have on its consolidatedour condensed financial statements.Results of OperationsThe following presents the consolidated results of the Company for the years ended December 31,2020 and December 31,2019.Net Revenue:Net revenue was $563,751 for the year ended December 31, 2020, representing a decrease of $1,725,792, or 75.38%, as compared to $2,289,543 for the year ended December 31, 2019. The decrease was primarily due to the decrease in sales of water purifying machines.22Table of ContentsCost of Sales:Cost of sales was $81,717 for the year ended December 31, 2020, representing a decrease of $193,746 or 70.33%, as compared to $275,463 for the year ended December 31, 2019. Such decrease was mainly due to the decrease in the sales of water purifying machines.Gross Profit:Gross profit was $482,034 for the year ended December 31, 2020, compared to $2,014,080 for the same period in 2019. Gross profit as a percentage of net sales was 85.50% for the year ended December 31, 2020, compared to 87.97% in the same period in 2019. The change in gross margin was because the higher gross margin product accounted for a higher proportion of sales for the year ended December 31, 2020.Selling, General and Administrative Expenses:Selling, general and administrative expenses consist primarily of office rent, salary and related costs for personnel and facilities, and professional service fees. Selling, general and administrative expenses were $1,913,683 for the year ended December 31, 2020, representing an increase of $1,007,861 or 111%, as compared to $905,822 for the year ended December 31, 2019. The increase in selling, general and administrative expenses was primarily attributable to the increase in bad debt expense of approximately $973,910.Income (Loss) from Operations:Loss from operations was $1,431,649 for the year ended December 31, 2020 compared to income from operations of $1,108,258 for the year ended December 31, 2019, representing a decrease of $2,539,907 or -229%. Such decrease was primarily due to the decrease in sales, and the increase in bad debt expenses.Other Income (expenses):Other loss was $7,509 for the year ended December 31, 2020, reflecting an decrease of $18,982 or 72%, compared to other loss of $26,491 for the year ended December 31, 2019. The decrease was mainly attributable to the decrease in foreign currency exchange.Net Income (Loss):As a result of the above factors, we had net loss was $1,439,158 for the year ended December 31, 2020, as compared to net income of $1,081,767 for the year ended December 31, 2019, representing a decrease in income of $2,520,925 or -233%.Liquidity and Capital ResourcesCash and cash equivalents were $122,482 at December 31, 2020 and $295,594 at December 31, 2019. Our total current assets were $965,567 at December 31, 2020, as compared to $2,819,688 at December 31, 2019. Our total current liabilities were $563,534 at December 31, 2020, as compared to $221,694 at December 31, 2019.23Table of ContentsWe had a working capital of $402,033 on December 31, 2020, compared to the working capital of $2,597,994 on December 31, 2019. The decrease in working capital was primarily attributable to the decrease in cash and cash equivalents and increase in accounts payable.Net cash used in operating activities was $373,598 during the year ended December 31, 2020, as compared to net cash from operating activities $265,176 for the year ended December 31, 2019. The decrease in net cash used in operating activities in the amount of $638,774 was primary attributable to the increase in security deposits and other assets and account payable, partially offset by the decrease in net income and advance to suppliers.Net cash used in investing activities was $2,218 during the year ended December 31, 2020, as compared to $1,818 for the year ended December 31, 2019. The increase in net cash used in investing activities was due to the slight increase in the acquisition of property, plant and equipment.Net cash provided by financing activities was $166,014 during the year ended December 31, 2020, as compared to $0 for the year ended December 31, 2019. The increase in net cash provided by financing activities was due to the proceeds from related party payable and borrowing.Net change in cash and cash equivalents was a decrease of $173,112 for the year ended December 31, 2020, as compared to $259,464 for the year ended December 31, 2019.2020.Itemtem 7A. Quantitative and Qualitative Disclosures about Market Risk.As acompany, we are not required to provide the information required by this item.24Itemtem 8. Financial Statements and Supplementary Data.18 F-2F-4F-5F-6F-7F-8F-1 Table of ContentsREPORTEPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMandtogether with its subsidiaries (the “Company”) as of December 31, 2020,2022, and the related consolidated statements of operationsoperation and comprehensive income (loss),loss, stockholders' equity, and cash flows for the year ended December 31, 2020,2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020,2022, and the results of its operations and its cash flows for the year ended December 31, 2020,2022, in conformity with accounting principles generally accepted in the United StatesStates.America.thesethe Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.Critical Audit Matterscritical audit matter communicated belowCompany has significant transactions with related parties, which are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are materialdescribed in Note 5 to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communicationstatements. Transactions involving related parties cannot be presumed to be carried out on an arm’s length basis, as the requisite conditions of critical audit matters doescompetitive, free market dealings may not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.Revenue Recognition AssessmentAs described in Note 1 to the consolidated financial statements, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services.We identified the revenue recognition assessment as a critical audit matter. A high degree of auditor judgment was required in assessing the reasonable assurance for collection of payment from inventory transfer. The following are the primary procedures we performed to address this critical audit matter.·We inquired the Company’s collection policy for its account receivable.·We reviewed collection of accounts receivable from sales in prior years. In addition, we also reviewed subsequent receipt after end of 2020 for transactions of inventory transfer in 2020.·Besides goods transfer, we accessed other transactions between the Company and certain customer. 
Yichien Yeh, CPAOakland Gardens, New YorkApril 15, 2021F-2 
Audit • Tax • Consulting • Financial AdvisoryRegistered with Public Company Accounting Oversight Board (PCAOB)REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Stockholders ofInc. and its subsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheet of EOS Inc. and its subsidiaries ( “the Company”) asINC. AND SUBSIDIARIES2019, the related consolidated statements of operations2022 and comprehensive income, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2019, and the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with the U.S. generally accepted accounting principles in the United States of America.Change in Accounting PrincipleAs discussed in Note 1 and 2 to the consolidated financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Financial Accounting Standards Board Accounting Standards Codification Topic 842, Leases.Basis for OpinionThese consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion./s/ KCCW Accountancy Corp.We have served as the Company’s auditor since 2015.Diamond Bar, CaliforniaApril 8, 2020 6,608 KCCW Accountancy Corp.3333 South Brea Canyon Rd. Suite 206, Diamond Bar, CA 91765, USATel: +1 909 348 7228 • Fax: +1 909 895 4155 • info@kccwcpa.comF-3 F-3Table of ContentsEOS, INC. AND SUBSIDIARIES$ 122,482 $ 295,594 175,766 2,177,124 449,227 10,541 191,633 317,280 26,459 19,149 965,567 2,819,688 8,175 7,719 - 34,979 1,113,010 127,534 - 20,751 $ 2,086,752 $ 3,010,671 $ 18,415 $ 2,045 81,359 74,281 107,791 96,114 105,969 25,837 250,000 - 23,417 563,534 221,694 166,985 - - 11,562 730,519 233,256 - - 74,123 74,123 112,425 112,425 1,058,090 2,577,898 87,051 12,969 1,331,689 2,777,415 24,544 - 1,356,233 2,777,415 $ 2,086,752 $ 3,010,671 The accompanying notes are an integral part of these consolidated financial statements.F-4Table of ContentsEOS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)$ 563,751 $ 2,289,543 81,717 275,463 482,034 2,014,080 1,913,683 905,822 (1,431,649 ) 1,108,258 (339 ) 74 2,428 18 11,152 (14,908 ) (20,750 ) (11,675 ) (7,509 ) (26,491 ) (1,439,158 ) 1,081,767 92,357 - $ (1,531,515 ) $ 1,081,767 $ (11,707 ) $ - (1,519,808 ) 1,081,767 76,381 24,434 $ (1,455,134 ) $ 1,106,201 $ 0.00 $ 0.02 74,122,997 70,177,792 The accompanying notes are an integral part of these consolidated financial statements.F-5Table of ContentsEOS, INC. AND SUBSIDIARIESFOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019$ 64,122,997 $ 64,123 $ 90,000 $ 1,496,131 $ (11,465 ) $ - $ 1,638,789 10,000,000 10,000 22,425 - - - 32,425 - - - - 24,434 - 24,434 - - - 1,081,767 - - 1,081,767 74,122,997 74,123 112,425 2,577,898 12,969 - 2,777,415 - - - - - - - - - - - - 33,952 33,952 - - - - 74,082 2,299 76,381 - - - (1,519,808 ) - (11,707 ) (1,531,515 ) 74,122,997 $ 74,123 $ 112,425 $ 1,058,090 $ 87,051 $ 24,544 $ 1,356,233 The accompanying notes are an integral part of these consolidated financial statementsF-6Table of ContentsEOS, INC. AND SUBSIDIARIES$ (1,531,515 ) $ 1,081,767 2,269 1,916 20,750 11,675 (11,152 ) 14,908 - - 2,021,794 (344,219 ) (420,468 ) (3,074 ) 139,772 (282,115 ) (937,531 ) (111,794 ) 15,483 (44,417 ) 2,208 6,273 74,792 (13,561 ) - (52,183 ) 250,000 - (373,598 ) 265,176 (2,218 ) (1,818 ) (2,218 ) (1,818 ) 6,772 - 159,242 - - 166,014 - 36,690 (3,894 ) (173,112 ) 259,464 295,594 36,130 $ 122,482 $ 295,594 $ - $ - $ - $ 8,125 $ - $ 32,425 The accompanying notes are an integral part of these consolidated financial statements.F-7Table of ContentsNOTESonsolidated Statements of Operation and Comprehensive Loss F-4 - - - - - - - - F-5 (1,912,159 (1,101,565 272,843 233,907 3,257 1,887 26,296 27,963 1,060,300 (35,142 1,231 88,021 341,157 (20,006 186,455 89,547 (85,318 (2,721 (950 (18,524 243,517 255,542 13,261 (1,805 28,297 (26,296 (27,963 (164,714 (194,254 (19,193 (352 (19,193 (352 (235,289 254,835 216,467 179,064 (74,689 (64,971 180,146 95,271 (2,211 994 (5,972 (98,341 24,141 122,482 18,169 24,141 3,142 16,592 59,219 90,000 1,500 38,534 2,140 F-6 has set up a wholly-owned subsidiary in Taiwan to assist the Company to promote the business in Taiwan.becomesbecame the Company’s wholly owned subsidiary. Upon consummation of the Purchase,transaction, the Company has assumed the business of Emperor Star and ceased to be a shell company.nonrecurringnon-recurring intra-entity transactions involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast to include the earnings (or losses) of the transferred net assets.F-7 Renminbi F-8Table of ContentsClassificationCertain classifications have been made to the prior year financial statements to conform to the current year presentation. The reclassification had no impact on previously reported net income nor retained earnings.isare carried at cost net of accumulated depreciation. Repairs and maintenance are expensed as incurred. Expenditures that improve the functionality of the related asset or extend the useful life are capitalized. When property and equipment is retired or otherwise disposed of, the related gain or loss is included in operating income. Leasehold improvements are depreciated on the straight-line method over the shorter of the remaining lease term or estimated useful life of the asset. Depreciation is calculated on the straight-line method, including property and equipment under capital leases, generally isover five years. Depreciation expense is $2,269was $3,257 and $1,916 $1,88720202022 and 2019,2021, respectively. Impairment loss was $17,381 and $nil for the years ended December 31, 2022 and 2021, respectively.F-9F-8Table of Contents Management has determined that no impairments of long-lived assets currently exist as of20202022 and 2019.Long-term Equity InvestmentThe Company acquires equity investment to promote business and strategic objectives. The Company accounts for non-marketable equity and other equity investments for which the Company does not have control over the investees as:·Equity method investments when the Company has the ability to exercise significant influence, but not control, over the investee. Its proportionate share of the income or loss is recognized monthly and is recorded in gain (loss) on equity investments.·Non-marketable cost method investments when the equity method does not apply.Significant judgment is required to identify whether an impairment exists in the valuation of the Company’s non-marketable equity investments, and therefore the Company considers this a critical accounting estimate. Its yearly analysis considers both qualitative and quantitative factors that may have a significant impact on the investee’s fair value. Qualitative analysis of its investments involves understanding the financial performance and near-term prospects of the investee, changes in general market conditions in the investee’s industry or geographic area, and the management and governance structure of the investee. Quantitative assessments of the fair value of its investments are developed using the market and income approaches. The market approach includes the use of comparable financial metrics of private and public companies and recent financing rounds. The income approach includes the use of a discounted cash flow model, which requires significant estimates regarding the investees’ revenue, costs, and discount rates. The Company’s assessment of these factors in determining whether an impairment exists could change in the future due to new developments or changes in applied assumptions.Other-Than-Temporary ImpairmentThe Company’s long-term equity investments are subject to a periodic impairment review. Impairments affect earnings as follows:·Marketable equity securities include the consideration of general market conditions, the duration and extent to which the fair value is below cost, and the Company’s ability and intent to hold the investment for a sufficient period of time to allow for recovery of value in the foreseeable future. The Company also considers specific adverse conditions related to the financial health of, and the business outlook for, the investee, which may include industry and sector performance, changes in technology, operational and financing cash flow factors, and changes in the investee’s credit rating. The Company records other-than-temporary impairments on marketable equity securities and marketable equity method investments in gain (loss) on equity investments.·Non-marketable equity investments based on the Company’s assessment of the severity and duration of the impairment, and qualitative and quantitative analysis of the operating performance of the investee; adverse changes in market conditions and the regulatory or economic environment; changes in operating structure or management of the investee; additional funding requirements; and the investee’s ability to remain in business. A series of operating losses of an investee or other factors may indicate that a decrease in value of the investment has occurred that is other than temporary and that shall be recognized even though the decrease in value is in excess of what would otherwise be recognized by application of the equity method. A loss in value of an investment that is other than a temporary decline shall be recognized. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. The Company records other-than-temporary impairments for non-marketable cost method investments and equity method investments in gain (loss) on equity investments.During the fiscal year 2018, the Company has adopted FASB Accounting Standards Codification (“ASC”), Topic 606 (“ASC 606”), Revenue from Contracts with Customers, using the modified retrospective method to all contracts that were not completed as of January 1, 2018. The Company recognized the cumulative effect of applying the new revenue standard as an adjustment to the opening balance of accumulated deficit at the beginning of 2018. The results for the Company’s reporting periods beginning on and after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for the prior period. Based on the Company’s review of existing sales contracts as of January 1, 2018, the Company concluded that the adoption of the new guidance did not have a significant change on the Company’s revenue during all periods presented amountF-10Table of Contentsreturns: returns: The Company generally does not provide customers with the right to return a product for a full or partial refund, aF-9 $ 57,154 321,808 143,987 40,802 $ 563,751 -— 840.The Company applied the following practical expedients in the transition to the new standard and allowed under ASC 842:Practical ExpedientDescriptionReassessment of expired or existing contractsThe Company elected not to reassess, at the application date, whether any expired or existing contracts contained leases, the lease classification for any expired or existing leases, and the accounting for initial direct costs for any existing leases.Use of hindsightThe Company elected to use hindsight in determining the lease term (that is, when considering options to extend or terminate the lease and to purchase the underlying asset) and in assessing impairment of right-to-use assets.Reassessment of existing or expired land easementsThe Company elected not to evaluate existing or expired land easements that were not previously accounted for as leases under ASC 840, as allowed under the transition practical expedient. Going forward, new or modified land easements will be evaluated under ASU No. 2016-02.Separation of lease and non-lease componentsLease agreements that contain both lease and non-lease components are generally accounted for separately.Short-term lease recognition exemptionThe Company also elected the short-term lease recognition exemption and will not recognize ROU assets or lease liabilities for leases with a term less than 12 months.F-11Table of ContentsThe adoption of ASC 842 had no substantial impact on the Company’s consolidated balance sheets. The most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. Accordingly, adoption of this standard resulted in the recognition of operating lease right-of-use assets of $8,235 and operating lease liabilities of $8,235 on the consolidated balance sheet as of January 1, 2019. The adoption of ASC 842 did not result in a cumulative-effect adjustment to the opening balance of retained earnings. As of December 31, 2020, there was no operating lease right-of-use assets and operating lease liabilities.F-10 $22,840 $1,966$39,645 $399yearyears ended December 31, 20202022 and 2019,2021, respectively.$5,377 $5,233$7,051$5,873 for the years ended December 31, 20202022 and 2019,2021, respectively. Other than the above, the Company does not provide any other post-retirement or post-employment benefits.F-12Table of Contentsnonfinancialnon-financial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:·Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.·Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.·Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.Net Incomeperiod. year. Dilutive shares are excluded the exercise price is greater than the average market price and when the Company incurred a net loss as the inclusion of such shares would have an anti-dilutive effect.yearyears ended December 31, 20202022 and 2019,2021, warrants were excluded as dilutive shares as the Company does not have any outstanding common stock equivalents; therefore,incurred a separate computation of diluted income per share is not presented.F-13Table of ContentsConcentration of Credit RiskCash and cash equivalents: The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions in Taiwan, but these investments may be in excess of the insurance limits of Taiwan Central Deposit Insurance Corporation (the “TCDIC”). The Company does not enter into financial instruments for hedging, trading or speculative purposes. Concentration of credit risk with respect to trade and notes receivables is limited due to the wide variety of customers and markets in which the Company transacts business, as well as their dispersion across many geographical areas. As of December 31, 2020, the Company had approximately $13,916 in excess of TCDIC insured limits. The Company has not experienced any losses in such accounts.Customers: The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral.For the year ended December 31, 2020, two customers accounted for more than 10% of the Company’s total revenues, representing approximately 67% and 18% of its total revenues, and 55% and 30% of accounts receivable in aggregate at December 31, 2020.$ 378,458 $ 79,206 100,478 - - 43,177 For the year ended December 31, 2019, one customer accounted for more than 10% of the Company’s total revenues, representing approximately 95% of its total revenues, and 99% of accounts receivable in aggregate at December 31, 2019.$ 2,171,766 $ 2,151,192 Suppliers: The Company’s inventory is purchased from various suppliers.For the year ended December 31, 2020, four suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 39%, 24%, 23% and 10% of total net purchase, and 0%, 98%, 0% and 0% of accounts payable in aggregate at December 31, 2020, respectively:$ 191,514 $ - $ 119,514 $ 18,079 $ 114,395 $ - $ 51,623 $ - For the year ended December 31, 2019, four suppliers accounted for more than 10% of the Company’s total net purchase, representing approximately 34%, 27%, 19% and 10% of total net purchase, and 0% of accounts payable in aggregate at December 31, 2019, respectively:$ 96,743 $ - $ 74,819 $ - $ 52,505 $ - $ 28,400 $ - * Related party transactions (See Note 5).F-14Table of ContentsF-12
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Total August 2018,June 2016, the FASB issued ASU 2018-13, Fair Value2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement (Topic 820): Disclosure Framework - Changesof Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the Disclosure Requirementsimpairment model for Fair Value Measurement. The ASU modifiesmost financial assets and will require the disclosure requirements in Topic 820, Fair Value Measurement, by removing certain disclosure requirements relateduse of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the fair value hierarchy, modifying existing disclosure requirements relatedlifetime expected credit loss on such instruments and record an allowance to measurement uncertainty and adding new disclosure requirements, such as disclosingoffset the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the endamortized cost basis of the reporting periodfinancial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and disclosing the rangereasonable and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.supportable forecasts. This ASUpronouncement is effective for public companiesfiscal years, and for annual reporting periods and interim periods within those annual periodsfiscal years, beginning after December 15, 2019. The Company is currently evaluating the effect, if any, that the ASU will have on its consolidated financial statements.In DecemberOn November 19, 2019, the FASB issued ASU No. 2019-12, Simplifying2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the Accountingcredit losses (CECL), the revised effective date is January 2023.Income Taxes, as partits car with remaining lease terms of 39 months, photocopier with remaining lease terms of 45 months, and office lease with remaining lease terms of 24 months, respectively. The Company does not have any other leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its initiativeleases as a single lease component. Lease expense is recognized on a straight-line basis over the lease termreduce complexity in accounting standards. The amendmentscalculate present value is incremental borrowing rate or, if available, the rate implicit in the ASUlease. The Company determines the incremental borrowing rate for each lease based primarily on its lease term in Taiwan which is approximately 2.44%.F-14 effectiveas follows: fiscal years beginning after December 15, 2020, including interim periods therein. Early adoption of the standardperiod is permitted, including adoption in interim or annual periods for whichas follows: not yet been issued. The Company is currently evaluating the effect, if any,prepared assuming that the ASUCompany will have on its consolidatedcontinue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.statements.F-15Table of ContentsNote 2. LEASEThestatements, the Company has no finance leases. The Company has terminated an office facility lease with Wanhong Enterprise Co., Ltd on September 28, 2020. The Company has entered into new lease agreement with Xiuling Huang on September 29, 2020had net losses for the period of approximately 9 months.As ofyear ended December 31, December, 2020, operating lease expense was $24,304. Future lease payable was $1,969.Note 3. LONG-TERM INVESTMENTOn January 15, 2019, the Company, A-Best Wire Harness & Components Co., Ltd. (“A-Best” or the “Investee”), a company formed under the laws of Taiwan,2022, and Mr. Ing-Ming Lai, a Taiwanese individualhad negative working capital and the majority shareholder of A-Best, entered into an investment cooperation agreement (the “Investment Cooperation Agreement”), pursuant to which the Company issued 10 million shares of its common stock to Mr. Ing-Ming Lai to purchase twenty percent (20%) of the issued and outstanding equity in A-Best. On May 24, 2019, the Company consummated the shareholder registration of A-Best with the Investment Commission of Ministry of Economic Affairs of Taiwan and issued 10 million shares of its common stock to Mr. Ing-Ming Lai to acquire 20% of the issued and outstanding equity in A-Best.On March 2, 2020, the Company, A-Best, and Ing-Ming Lai, (collectively, the “Parties”) entered into a strategic alliance agreement (the “Strategic Alliance Agreement”), pursuant to which the Parties redefined their cooperation with respect to the sales and distribution of A-Best’s micro-ceramic speakers. In accordance with the Strategic Alliance Agreement, A-Best, Mr. Ing-Ming Lai and the Company terminated the Investment Cooperation Agreement dated January 15, 2019 entered by and among the Parties and as a result the Company agreed to return 20% of the equity interest in A-Best to Mr. Ing-Ming Lai, which was valued at approximately $33,411 by the Parties.Furthermore, subject to the terms and conditions of the Strategic Alliance Agreement, A-Best has granted the Company the exclusive sale and distribution right of A-Best’s micro-ceramic speakers in the world for one (1) year (the “Term”), which may be renewed with mutual consent of the Parties two months prior to the expiration of the Term, while A-Best retains its own right to sell and distribute the micro-ceramic speakers on its own. In consideration for the exclusive distribution right of A-Best’s speakers under the Strategic Alliance Agreement, the Company agreed to have A-Best keep the Company’s 10,000,000 shares of common stock issued under the Investment Cooperation Agreement and the Company may keep the revenue and profits generated from the sale of A-Best speakers until the total revenue from such speakers reaches $15 million U.S. dollars.On April 22, 2020, the Company returned 20% equity interest in A-Best to Mr. Ing-Ming Lai pursuant to the Strategic Alliance Agreement. As of April 22, 2020, the Company holds 20% equity interest in A-Best and uses equity method to account for its equity investment as prescribed in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). Equity method adjustments include the Company’s proportionate share of investee’s income or loss and other adjustments required by the equity method. For the period from January 1, 2020, to April 22, 2020, the share of loss from investment accounted for using equity method was $2,848. As a result of the return of equity interest, the Company also recognized loss on investment in equity securities of $17,902 for the same period.Summarized financial information for the Company’s equity method investee, A-Best, is as follows:Balance Sheets$ 38,303 $ 42,818 779 857 1,406,166 1,372,351 (1,367,084 ) (1,328,676 ) F-16Table of ContentsStatement of Operation$ 854 498 (14,240 ) (2,848 ) On May 26, 2020, EOS Inc. increased its investment in Emperor Star by $134,004 (NTD$4,000,000). The Company also received the contributions to Emperor Star from non-controlling interests in the amount of $33,398 (NTD$1,000,000). As a result, the Company owns 83% equity interest of Emperor Staraccumulated deficit as of December 31, 2020, which2022. These factors raise substantial doubt about the Company’s ability to continue as a going concern.no longerdependent upon the Company’s ability to further generate sufficient revenue and its ability to raise additional funds.wholly-owned subsidiary. 4.20202022 and December 31, 2019,2021, the Company has paid $1,030,000$1,013,541 and $120,000$1,030,000 to Shuang Hua, respectively, and are recorded as security deposits.other long-term assets. Due to Covid-19 in 2020, the Company has not started its business plan with the exclusive copyright and distribution agreement.F-15 5.party – SalesThe Company had sales to Fortune King (HK) Trading Limited, (“Fortune King”), a Hong Kong company. As of June 30, 2019, Fortune King had been a related partyparties of the Company because the founder and officer of Fortune King was a shareholder of the Company. On or about June 30, 2019, the founder and officer of Fortune King transferred her equity interest in the Company and therefore Fortune King is no longer a related party to the Company. Sales to Fortune King amounted to $378,458 and $ 2,171,766 forduring the years ended December 31, 20202022 and 2019, respectively. As2021 consist of December 31, 2020 and December 31, 2020, accounts receivable from Fortune King was $79,206 and $ 2,151,192, respectively.20202022 and December 31, 20192021, there were $107,791$277,080 and $96,114$30,858 advance outstanding, respectively. The Company has agreed that the outstanding balances bear 0% interest rate and are due upon demand after thirty days of written notice by the director and shareholder. 6.F-16 F-17
Shares
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Exercise
RemainingF-18 F-19 % F-17F-20Table of ContentsNote 7. INCOME TAXESUnited StatesEOS, Inc. is incorporated in the United States of America and is subject to United States federal taxation. No provisions for income taxes have been made as the Company has no taxable income for the period. As of December 31, 2020, the Company had net operating loss carry forwards of $1,531,515 that may be available to reduce future years’ taxable income. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements as their realization is determined not likely to occur and, accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. No tax benefit has been realized since a 100% valuation allowance has offset deferred tax asset resulting from the net operating losses.British Virgin IslandsEOS International Inc. is incorporated in British Virgin Islands and are not required to pay income tax.TaiwanThe subsidiary of EOS Inc. and Emperor Star are incorporated in Taiwan. According to the amendments to the “Taiwan Income Tax Act” enacted by the office of the President of Taiwan on February 7, 2018, an increase in the statutory income tax rate from 17% to 20% and decrease in the undistributed earning tax from 10% to 5% are effective from January 1, 2018.People’s Republic of China (“PRC”)Under the Enterprise Income Tax (“EIT”) Law of the PRC, the standard EIT rate is 25%. The PRC subsidiary of the Company is subject to PRC income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which they operate. No provision for income taxes have been made as Maosong had no taxable income as of and for the year ended December 31, 2020.Provision for income tax consists of the following:$ - $ - 92,357 - - - 92,357 - (59,256 ) (4,521 ) 59,256 4,521 - - $ 92,357 $ - F-18Table of ContentsThe following is a reconciliation of the statutory tax rate to the effective tax rate:21 % 21 % 20 % 20 % 25 % 25 % (46 )% (66 )% (20 )% 0 % 0 % Significant components of the Company’s deferred taxes as of December 31, 2020 and December 31, 2019 were as follows:$ 177,784 $ 116,077 (177,784 ) (116,077 ) $ - $ - Note 8. COMMITMENTS AND CONTINGENCIESSales Collaboration AgreementOn June 1, 2020, the Company and Fortune King entered into a sales collaboration agreement (the “Sales Collaboration Agreement”), pursuant to which, subject to the terms and condition therein, Fortune King agreed to provide promotional and marketing service of the Company’s products within six years from January 2020, to December 2025. Fortune King is obligated to perform such service regardless of whether the Company sells products to Fortune King during the designated period. In accordance with the Sales Collaboration Agreement and in consideration for the service provided by Fortune King, the Company shall issue 3,000,000 shares of common stock to Fortune King for the promotional and marketing service of $1,500,000. The shares were issued on December 29, 2020.expensesexpense of $62,500, total up have$62,500. There are 24 quarters.$1,030,000 to Shuang Hua.9.1Reversed stock splitThe Company's board of directors and stockholders authorized a reverse stock split of its outstanding common stock at a ratio of 1-for-1000 without any change in the par value per share which will become effective upon approval by FINRA.Return of EOSS sharesOn April 12, 2021, the Company, A-Best, and Ing-Ming Lai, a Taiwanese individual and the majority shareholder of A-Best, entered into a termination agreement (the “Termination Agreement”) to terminate the agreement of Strategic Alliance Agreement (the “Strategic Alliance Agreement”) dated March 2, 2020. In the agreement, Ing-Ming Lai has proceed to effect a return of a total of 10,000,000 shares in EOS Inc, back to the Company.20202022 have been incorporated into these consolidated financial statements and there are no other subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”******F-19F-21Table of ContentsItemtem 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.Management’s ReportInternal Control over Financial Reporting2020,2022, management identified material weaknesses related to (i) our internal audit functions (ii) inadequate levels of review of the financial statements, (iii) a lack of segregation of duties within accounting functions and (iv) the absence of any independent directors. Therefore, our internal controls over financial reporting were not effective as of December 31, 2020.19 Itemtem 9B. Other Information.None. 25Table of ContentsPARTART III69(“CEO”)(CEO), Chief Financial Officer, President, Secretary, Treasurer and Chairman of the Board(1)41(2)77(3)__________(1) Mr. Yang will serve as a director until the next annual shareholder meeting.(2) Mr. Yang will serve as a director until the next annual shareholder meeting.(3) Mr. Kwok will serve as a director until the next annual shareholder meeting Background of the Executive Officers and Directors of the Company20 obtained a Bachelorwas appointed as the Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and Director of Science degree in mathematics from the National Taiwan Ocean University in Taiwan.Company. Mr. Yang was appointed as the President, Secretary, Treasurer and Director of the Company.Mr. Yang graduated from Jin Wen University of Science and Technology in 2003 with a Bachelor’s Degree in Hotel Management.byas a General Manager of U-Power Co., located in Taipei, Taiwan, which was in the business of developing e-commerce platforms and related server maintenance. Mr. Yang’s duties with U-Power Co. were the development, implementation and management of various business policies.26Table of ContentsMr.obtainedwas appointed as a BachelorDirector of the Arts degree in English from the Overseas Chinese University, a private university in Taiwan.On April 3, 2017, Mr.was appointed asobtained a DirectorBachelor of the Company.Yu-Hsiang Chia, Branch Manager of EITB and Director of Emperor StarMr. Yu-Hsiang Chia, 52, graduated from Fu Jen University located in New Taipei City, Taiwan, with a bachelor’sArts degree in Japanese. From 2013 to 2016, Mr. Chia served asEnglish from the Overseas Chinese University, a vice presidentprivate university in Taiwan.Advantage Universal Limited Co., a Taiwan company, which was inits employees.business of distribution of imported products. From 2016 to present, Mr. Chia serves as a vice president of Emperor Star International Trade Co., Ltd., which was inCompany ends at the business of distribution of supplements and cleaning products. Mr. Chia’s main duties include management and business oversight. In June 2017, Mr. Chia became the branch manager of Emperor Star.Mr. Chia owns 1,081,317 sharesnext annual meeting of the Company’s common stock.Tostockholders or when such director’s successor is elected and qualifies. No date for the next annual meeting of stockholders is specified in the Company’s Bylaws or has been fixed by the Board of Directors. The term of office of each officer of the Company ends at the next annual meeting of stockholders, or when such officer’s successor is elected and qualifies.knowledge, duringdirectors or executive officers or persons nominated or chosen by us to become directors or executive officers.last ten years, noneindependence of our directors and executive officers has been subjectdetermined that we have no independent directors pursuant to anyRule 5605(a)(2) of Nasdaq and applicable SEC rules and regulations. In making this determination, our board of directors considered the following:relationships that each of our directors has with us and all other facts and circumstances our board of directors deemed relevant in determining their independence.·A petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing;21 ·Convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses);·The subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities:(i)Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity;(ii)Engaging in any type of business practice; or(iii)Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws;27Table of Contents·The subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or commodity laws, or to be associated with persons engaged in any such activity;·Found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, and the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated;·Found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated;·The subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of:(i)Any federal or state securities or commodities law or regulation; or(ii)Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or(iii)Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or·The subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.22 23
Awards
Awards
Incentive
Pension
Other 2022 60,459 - - - - - 60,459 CEO, CFO, President, Secretary, 2021 59,091 - - - - - - 59,091 Treasurer, and Director 2022 161,225 6,718 - - - - - 167,943 Director and General Manager 2021 173,692 7,163 - - - - - 180,855 24
Stock
Beneficially
Owned
of
Common
Stock
Beneficially
owned (1)100 28TableContentsthe Company25 Term of OfficeEach of our directors is appointed to hold office until the next annual meeting of our stockholders or until his or her respective successor is elected and qualified, or until he or she resigns or is removed in accordance with the applicable provisions of Nevada law. Our officers are appointed by our Board of Directors and hold office until removed by our Board of Directors or until their resignation.Beneficial Ownership Reporting ComplianceSection 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than ten percent of our common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes of ownership of our common stock. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.We intend to ensure to the best of our ability that all Section 16(a) filing requirements applicable to our officers, directors and greater than ten percent (10%) beneficial owners are complied.We were not aware of any securities transaction during the fiscal year ended December 31, 2020, or subsequent thereto that would require a filing pursuant to Section 16 of the Securities Exchange Act of 1934, as amended was not reported accordingly.Audit Committee Financial ExpertOur current directors act as our audit committee. The current directors are not independent. An informal search is under way to identify a suitable candidate for service on the Board of Directors as an independent director who would be qualified as an audit committee financial expert.Audit CommitteeWe have not yet formed an audit committee, and all of our directors currently act as our audit committee. At the present time, we believe that our directors are capable of analyzing and evaluating our consolidated financial statements and understanding internal controls and procedures for financial reporting. The Company, however, recognizes the importance of good corporate governance and intends to add additional directors to the Board of Directors and appoint an audit committee comprised entirely of independent directors, including at least one financial expert.Limitation on Liability and Indemnification of Directors and OfficersOur articles of incorporation provide that no director or officer shall have any liability to the Company if that person acted in good faith and with the same degree of care and skill as a prudent person in similar circumstances.Our articles of incorporation and bylaws provide that we will indemnify our directors and officers and may indemnify our employees or agents to the fullest extent permitted by law against liabilities and expenses incurred in connection with litigation in which they may be involved because of their offices or positions with us. However, nothing in our articles of incorporation or bylaws protects or indemnifies a director, officer, employee or agent against any liability to which that person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of that person’s office or position. To the extent that a director has been successful in defense of any proceeding, the Nevada Revised Statutes provide that the director shall be indemnified against reasonable expenses incurred in connection with the proceeding.29Table of ContentsItem 11. Executive Compensation.- - - - - - - 58,235 - - - - - - 58,235 229,042 - - - - - - 229,042 171,494 - - - - - - 171,494 - - - - - - - - - - - - - - - - 29,683 - - - - - - 29,683 26,319 - - - - - - 26,319 ____________(1) We have not entered into any employment agreements. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTThe following table sets forth the number of shares of common stock beneficially owned as of April 13, 2021 by (i) those persons or groups known to us to beneficially own more than 5% of our common stock; (ii) each director; (iii) each executive officer; and (iv) all directors and executive officers as a group. The information is determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”) based upon information furnished by persons listed or contained in filings made by them with the SEC or by information provided by such persons directly to us. Except as indicated below, each of the stockholders listed below possesses sole voting and investment power with respect to their shares and the address of each person is c/o EOS Inc. 30,000,000 40.47 % 10,000,000 13.49 % 900,500 1.21 % 40,900,500 55.17 % 10,000,000 13.49 % 50,900,500 68.67 % 30Table of ContentsBeneficial ownership percentages are calculated based on shares of common stock issued and outstanding and is based on a total of 74,122,997 shares of common stock that were issued and outstanding as of April 13, 2021. Beneficial ownership is determined in accordance with Rule 13d-3 of the Exchange Act. The number of shares beneficially owned by a person includes shares of common stock underlying options or warrants held by that person that are currently exercisable or exercisable within 60 days of April 13, 2021. The shares issuable pursuant to the exercise of those options or warrants are deemed outstanding for computing the percentage ownership of the person holding those options and warrants but are not deemed outstanding for the purposes of computing the percentage ownership of any other person. The persons and entities named in the table have sole voting and sole investment power with respect to the shares set forth opposite that person’s name, subject to community property laws, where applicable, unless otherwise noted in the applicable footnote.Item 13. Certain Relationships and Related Transactions, and Director Independence.Related Party TransactionsThe Company had sales to Fortune King (HK) Trading Limited, (“Fortune King”), a Hong Kong company. As of June 30, 2019, Fortune King had been a related party of the Company because the founder and officer of Fortune King was a shareholder of the Company. On or about June 30, 2019, the founder and officer of Fortune King transferred her equity interest in the Company and therefore Fortune King is no longer a related party to the Company. Sales to Fortune King amounted to $378,458 and $ 2,171,766 for the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020 and December 31, 2020, accounts receivable from Fortune King was $77,243 and $ 2,151,192, respectively.Due to shareholdersThe Company has advanced funds from its directors and shareholders for working capital purposes. As of December 31, 2020 and December 31, 2019 there were $107,791 and $96,114 advance outstanding, respectively. The Company has agreed that the outstanding balances bear 0% interest rate and are due upon demand after thirty days of written notice by the director and shareholder.Director IndependenceNone of our directors is deemed “Independent” as defined by the NASDAQ Marketplace Rules and meets the independence standards set forth in Rule 10A-3 of the Exchange Act.Itemtem 14. Principal Accounting Fees and Services.presentsshows the aggregate fees for professionalthe fiscal years ended December 31, 2022 and 2021:
Ended
December
31,
2022
Ended
December
31,
2021--- - servicescommittee or (ii) entered into pursuant to pre-approval policies and other services renderedprocedures established by KCCW Accountancy Corp. $ 35,000 20,000 - 1,000 - $ 35,000 21,000 Audit Fees consistthe audit committee, provided that the policies and procedures are detailed as to the particular service, the audit committee is informed of fees billed foreach service, and such policies and procedures do not include delegation of the annual audit of our consolidated financial statementscommittee’s responsibilities to management.other audit services including the provision of consents and the review of documents filed with the SEC. audit committee and directors, therefore, serves asregistered public accounting firm. All of the audit committee for all purposes relating to communication with our auditors and responsibility for our audit. All engagements for audit services, audit- relatedabove services and tax services arefees during the fiscal years ended December 31, 2022 and 2021 were reviewed and approved in advance by our Board of Directors. Our Board of Directors has considered whetherbefore the provision of therespective services described above for the fiscal year ended December 31, 2020, is compatible with maintaining the auditor’s independence.were rendered.3126Table of ContentsAll audit and non-audit services that may be provided by our principal accountant to us shall require pre-approval by the Board of Directors. Further, our auditor shall not provide those services to us specifically prohibited by the SEC, including bookkeeping or other services related to the accounting records or financial statements of the audit client; financial information systems design and implementation; appraisal or valuation services, fairness opinion, or contribution-in-kind reports; actuarial services; internal audit outsourcing services; management functions; human resources; broker-dealer, investment adviser, or investment banking services; legal services and expert services unrelated to the audit; and any other service that the Public Company Oversight Board determines, by regulation, is impermissible.ItemART IV(a)(1) List of Financial statements included in Part II hereofConsolidated Balance SheetsConsolidated Statements of Operations and Comprehensive IncomeConsolidated Statements of Stockholders’ Equity (Deficit)Consolidated Statements of Cash FlowsNotes to the Financial Statements(a)(2) List of Financial Statement schedules included in Part IV hereof: None.(a)(3) Exhibits
Number4.1Description_____________+Filed herewith***Cover Page Interactive Data File (formatted as inline XBRL and included as Exhibit 101) * XBRL (Extensible Business Reporting Language) information is furnished and not filed herewith, is not a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. [1]Incorporated by reference to Exhibits 3.1 and 3.2 to the Company’s Form S-1 filed on September 10, 2015 and Exhibit 3.4 to the Company’s Form S-1 Amendment No. 1 filed on October 21, 2015.[2)Incorporated by reference to Exhibit 3.3 to the Company’s Form S-1 filed on September 10, 2015.[3]Incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on August 13, 2019.[4]Incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed on August 13, 2019[5]Incorporated by reference to Exhibit 10.3 to the Company’s current report on Form 8-K filed on August 13, 2019[6]Incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on November 26, 2019.[7]Incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on March 5, 2020.[8]Incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on April 1, 2020.Itemtem 16. 10-K Summary.3227Table of ContentsSIGNATURES15, 20216, 2023PrincipalPrincipal Chief Financial OfficerPresident and Chairman of the BoardApril 15, 2021He-Siang YangPresident and Chairman of the Board15, 20216, 202315, 20216, 202328 33