UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

~~FORM 10-Q~~

☒ ~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, ~~2017~~2021

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

Commission File Number 000-55793

~~COSMOS GROUP HOLDINGS INC.~~

~~(Exact Name of Registrant as Specified in Its Charter)~~

~~Nevada~~		~~22-3617931~~ COSMOS GROUP HOLDINGS INC.
(Exact Name of Registrant as Specified in Its Charter)

Nevada		90-1177460
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification No.)

37th Floor, Singapore Land Tower

~~Rooms 1309-11, 13~~^th ~~Floor, Tai Yau Building,~~50 Raffles Place,Singapore 048623

~~No. 181 Johnston Road~~+65 6829 7017

~~Wanchai, Hong Kong~~

~~+852 3188 9363~~
(Address of Principal Executive Offices and Issuer’s

Telephone Number, including Area Code)

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

Title of each Class		Trading Symbol		Name of each exchange on which registered
None.		N/A		N/A

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ ~~229.405~~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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated ~~filer”~~filer,” “smaller reporting company,” and ~~“smaller reporting~~“emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~

Large accelerated filer ☐	☐	Accelerated filer	☐

Non-accelerated filer ☐	☐	Smaller reporting company	☒
~~(Do not check if smaller reporting company)~~

Emerging growth company ☐	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November ~~14, 2017,~~15, 2021, the ~~issuer~~Company had outstanding ~~429,848,898~~358,067,481 shares of common stock.

~~TABLE OF CONTENTS~~

		~~Page~~

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical facts, included in this Form 10-Q including, without limitation, statements in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); expansion and growth of the Company’s business and operations; and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company’s expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation and other factors, most of which are beyond the control of the Company.

These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as “believes,” “anticipates,” “expects,” “estimates,” “plans,” “may,” “will,” or similar terms. These statements appear in a number of places in this filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company’s financial condition or results of operations for its limited history; (ii) the Company’s business and growth strategies; and, (iii) the Company’s financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company’s limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to our filings with the SEC under the Exchange Act and the Securities Act of 1933, as amended, including our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 17, 2021.

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


		2
~~PART I~~	~~FINANCIAL INFORMATION~~	1
Table of Contents

TABLE OF CONTENTS.

			Page

PART I FINANCIAL INFORMATION

ITEM 1	Financial Statements	1	4

	Condensed Consolidated Balance Sheets as of September 30, ~~2017~~2021 (Unaudited) and December 31, ~~2016 (Audited)~~2020	1	F-2

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, ~~2017~~2021 and ~~2016~~2020 (Unaudited)	2	F-3

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2017~~2021 and ~~2016~~2020 (Unaudited)	3
	F-4

	Condensed Consolidated Statement of Changes in Stockholders’ ~~Equity~~Deficit for the Three and Nine Months ~~ended~~Ended September 30, ~~2017 and 2016~~2021 (Unaudited)	4	F-5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	5	F-6 - F18

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16	5

ITEM 3	Quantitative and Qualitative Disclosures about Market Risk	24	14

ITEM 4	Controls and Procedures	24	14

PART II		OTHER INFORMATION	25

ITEM 1	Legal Proceedings	25	15

ITEM 1A	Risk Factors	25	15

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	25	15

ITEM 3	Defaults upon Senior Securities	25	15

ITEM 4	Mine Safety Disclosures	25	15

ITEM 5	Other Information		15

ITEM 6	Exhibits		16

SIGNATURES			17


~~ITEM 5~~	~~Other Information~~	253

~~ITEM 6~~	~~Exhibits~~Table of Contents	25

~~SIGNATURES~~		26

PART I FINANCIAL INFORMATION

ITEM 1 Financial Statements

Table of Contents

COSMOS GROUP HOLDINGS INC.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

		Page

Condensed Consolidated Balance Sheets		F-2

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income		F-3

Condensed Consolidated Statements of Cash Flows		F-4

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)		F-5

Notes to Condensed Consolidated Financial Statements		F-6 – F-18

F-1

Table of Contents

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

~~AS OF SEPTEMBER 30, 2017 AND DECEMBER 31, 2016~~

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

September 30, 2017 December 31, 2016
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $ 20,195 $ 1,581
Amount due from a related party 63,794 –
Accounts receivable 38,178 46,282

Total current assets 122,167 47,863

Non-current assets:
Property, plant and equipment, net 108,521 124,161

TOTAL ASSETS $ 230,688 $ 172,024

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 75,297 $ 13,700
Amounts due to related parties 69,527 41,306
Income tax payable 7,734 –
Current portion of obligation under finance leases 20,000 20,124

Total current liabilities 172,558 75,130

Non-current liabilities:
Deferred tax liabilities 13,191 12,870
Obligation under finance leases 33,333 48,633

Total non-current liabilities 46,524 61,503

TOTAL LIABILITIES 219,082 136,633

Commitments and contingencies

Stockholders’ equity:
Common stock, $0.001 par value; 500,000,000 shares authorized; 429,848,898 and 219,222,938 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 429,849 219,223
Accumulated losses (418,243 ) (183,832 )

Total stockholders’ equity 11,606 35,391

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 230,688 $ 172,024

	September 30,			December 31,
	2021			2020
ASSETS	(Unaudited)			(Restated)
Current asset:
Cash and cash equivalents	$	2,703,539		$	773,381
Digital assets		220,513			0
Loan receivables, net		18,005,477			11,943,595
Loan interest and fee receivables, net		1,429,222			679,341
Inventories		1,148,903			0
Amounts due from related parties		0			138,020
Prepayment and other receivables		796,418			702,037
Income tax receivable		0			1,420
Right-of-use assets, net		368,947			483,537

Total current assets		24,673,019			14,721,331

Non-current assets:
Property and equipment, net		77,504			246,575
Intangible assets		38,891			0
Loan receivables, net		1,166,136			290,229

TOTAL ASSETS	$	25,955,550		$	15,258,135

LIABILTIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accrued liabilities and other payables	$	4,188,607		$	327,586
Loan payable		1,161,212			4,811,843
Amounts due to related parties		20,474,746			9,648,400
Income tax payable		374,808			0
Operating lease liabilities		381,447			483,537

Total current liabilities		26,580,820			15,271,366

TOTAL LIABILITIES		26,580,820			15,271,366

Commitments and contingencies		0			0

STOCKHOLDERS’ DEFICIT
Common stock, $0.001 par value; 500,000,000 shares authorized; 355,628,272 and 333,910,484 issued and outstanding as of September 30, 2021 and December 31, 2020		355,628			333,911
Common stock to be issued		800,000			800,000
Additional paid-in capital		1,334,529			0
Accumulated other comprehensive loss		(10,657	)		(5,374	)
Accumulated deficit		(3,775,794	)		(1,379,358	)
		(1,296,294	)		(250,821	)
Noncontrolling interest		671,024			237,590

Total stockholders’ deficit		(625,270	)		(13,231	)
				��
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	25,955,550		$	15,258,135

See accompanying notes to condensed consolidated financial statements.

F-2

Table of Contents

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF

OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

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

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2021			2020			2021			2020

Revenue, net	$	2,282,399		$	1,554,251		$	5,510,344		$	3,414,244

Cost of revenue		(220,733	)		(327,845	)		(997,679	)		(795,041	)

Gross profit		2,061,666			1,226,406			4,512,665			2,619,203

Operating expenses:
Sales and marketing expenses		(94,508	)		(32,789	)		(136,862	)		(70,889	)
General and administrative expenses		(4,391,148	)		(825,464	)		(6,040,872	)		(2,154,947	)
Total operating expenses		(4,485,656	)		(858,253	)		(6,177,734	)		(2,225,836	)

(LOSS) INCOME FROM OPERATION		(2,423,990	)		368,153			(1,665,069	)		393,367

Other income (expense):
Recovery from bad debt		0			(31,934	)		0			0
Interest income		89			162			89			162
Other income		3,085			60,416			3,085			60,416
Gain from forgiveness of related party debt		0			23			140,712			52,143
Impairment loss on digital asset		(37,451	)		0			(37,451	)		0
Loss from the disposal of digital assets		(14	)		0			(14	)		0
Total other income (expense)		(34,291	)		28,667			106,421			112,721

(LOSS) INCOME BEFORE INCOME TAXES		(2,458,281	)		396,820			(1,558,648	)		506,088

Income tax (expense) credit		(163,524	)		3			(377,453	)		6,051

NET (LOSS) INCOME		(2,621,805	)		396,823			(1,936,101	)		512,139

Net income attributable to noncontrolling interest		103,026			191,088			432,802			248,061

Net (loss) income attributable to COSG		(2,724,831	)		205,735			(2,368,903	)		264,078

Other comprehensive income:
Foreign currency adjustment (loss) gain		(4,948	)		296			(5,283	)		(1,634	)

COMPREHENSIVE (LOSS) INCOME	$	(2,729,779	)	$	206,031		$	(2,374,186	)	$	262,444

Net (loss) income per share – Basic and Diluted	$	(0.01	)	$	0.00		$	(0.01	)	$	0.00

Weighted average common shares outstanding
Basic and Diluted		336,284,874			333,910,484			334,710,645			333,910,484

See accompanying notes to condensed consolidated financial statements.

F-3

Table of Contents

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

(Unaudited)

	Nine months ended September 30,
	2021			2020

Cash flows from operating activities:
Net (loss) income	$	(1,936,101	)	$	512,139

Adjustments to reconcile net (loss) income to net cash used in operating activities
Depreciation of property and equipment		10,916			16,190
Amortisation of intangible assets		434			0
Gain from forgiveness of related party debts		(140,712	)		(52,143	)
Digital assets received as revenue		(257,977	)		0
Impairment loss on digital assets		37,451			0
Loss on disposal of digital assets		14			0
Issuance of common stock for goods and services rendered		1,334,710			0
Loss on written-off property and equipment		163,058			0

Change in operating assets and liabilities:
Loan receivables		(6,991,052	)		(1,494,917	)
Loan interest and fee receivables		(752,839	)		(134,646	)
Inventories		(1,148,903	)		0
Prepayment and other receivables		(97,437	)		(67,691	)
Accrued liabilities and other payables		3,856,451			100,603
Right-of-use assets and operating lease liabilities		12,500			0
Income tax payable		376,222			(12,367	)
Net cash used in operating activities		(5,533,265	)		(1,132,832	)

Cash flows from investing activities:
Payment to acquire property and equipment		0			(17,034	)
Payment to acquire intangible assets		(39,325	)		0
Net cash used in investing activities		(39,325	)		(17,034	)

Cash flows from financing activities:
(Repayment of) proceeds from loan payable		(3,629,682	)		1,096,075
Advance from related parties		11,146,695			168,304
Net cash provided by financing activities		7,517,013			1,264,379

Foreign currency translation adjustment		(14,265	)		(2,639	)

Net change in cash and cash equivalents		1,930,158			111,874

BEGINNING OF PERIOD		773,381			445,144

END OF PERIOD	$	2,703,539		$	557,018

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	0		$	0
Cash paid for interest	$	784,194		$	795,041

See accompanying notes to condensed consolidated financial statements.

F-4

Table of Contents

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2017~~2021 AND ~~2016~~2020

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

(Unaudited)

Three months ended
September 30, Nine months ended
September 30,
2017 2016 2017 2016

Revenues, net $ 292,944 $ 90,518 $ 572,326 $ 276,299

Cost of revenue (180,618 ) (44,865 ) (381,598 ) (212,910 )

Gross profit 112,326 45,653 190,728 63,389

Operating expenses
General and administrative (63,100 ) (202,402 ) (189,937 ) (282,159 )

Total operating expenses (63,100 ) (202,402 ) (189,937 ) (282,159 )

INCOME (LOSS) FROM OPERATIONS 49,226 (156,749 ) 791 (218,770 )

Other (expense) income:
Interest expense (563 ) (567 ) (1,688 ) (1,699 )
Other income 1 105 143 111
Total other expense (562 ) (462 ) (1,545 ) (1,588 )

INCOME (LOSS) BEFORE INCOME TAXES 48,664 (157,211 ) (754 ) (220,358 )

Income tax expense (7,792 ) (454 ) (8,054 ) (1,585 )

NET INCOME (LOSS) $ 40,872 $ (157,665 ) $ (8,808 ) $ (221,943 )

Other comprehensive income (loss):
– Foreign currency translation gain (loss) – – – –

COMPREHENSIVE INCOME (LOSS) $ 40,872 $ (157,665 ) $ (8,808 ) $ (221,943 )

Net income (loss) per share
– Basic $ 0.00 $ 0.00 $ 0.00 $ 0.00
– Diluted $ 0.00 $ 0.00 $ 0.00 $ 0.00

Weighted average common shares outstanding
– Basic 429,848,898 219,222,938 328,407,719 219,222,938
– Diluted 429,848,898 219,222,938 328,407,719 219,222,938

	Common stock				Common stock to be		Additional paid-in			Accumulated other comprehensive			(Accumulated losses) retained			Non-controlling		Total stockholders’ (deficit)
	No. of shares		Amount		issued		capital			loss			earnings			interest		equity

Balance as of January 1, 2020 (restated)		333,910,484	$	333,911	$	800,000		0		$	(3,515	)	$	(1,625,053	)	$	15,561	$	(479,096	)

Foreign currency translation adjustment		-		0		0		0			(964	)		0			0		(964	)
Net income for the period		-		0		0		0			0			29,172			28,487		57,659

Balance as of March 31, 2020		333,910,484		333,911		800,000		0			(4,479	)		(1,595,881	)		44,048		(422,401	)

Foreign currency translation adjustment		-		0		0		0			(965	)		0			0		(965	)
Net income for the period		-		0		0		0			0			29,168			28,486		57,654

Balance as of June 30, 2020		333,910,484		333,911		800,000		0			(5,444	)		(1,566,713	)		72,534		(365,712	)

Foreign currency translation adjustment		-		0		0		0			295			0			0		295
Net income for the period		-		0		0		0			0			205,735			191,088		396,823

Balance as of September 30, 2020		333,910,484	$	333,911	$	800,000		0		$	(5,149	)	$	(1,360,978	)	$	263,622	$	31,406

Balance as of January 1, 2021 (restated)		333,910,484	$	333,911	$	800,000		0		$	(5,374	)	$	(1,379,358	)	$	237,590	$	(13,231	)

Foreign currency translation adjustment		-		0		0		0			(168	)		0			0		(168	)
Net income for the period		-		0		0		0			0			177,964			164,888		342,852

Balance as of March 31, 2021		333,910,484		333,911		800,000		0			(5,542	)		(1,201,394	)		402,478		329,453

Foreign currency translation adjustment		-		0		0		0			(167	)		0			0		(167	)
Net income for the period		-		0		0		0			0			177,964			164,888		342,852

Balance as of June 30, 2021		333,910,484		333,911		800,000		0			(5,709	)		(1,023,430	)		567,366		672,138

Shares issued for acquisition of legal acquirer		21,536,933		21,536		0		395,516			(1,436	)		(421,613	)		0		(5,997	)

Recapitalization of legal acquirer		-		-		-		(395,516	)		1,436			394,080			-		-

Shares issued for goods and services rendered		180,855		181		0		1,334,529			0			0			0		1,334,710
Foreign currency translation adjustment		-		0		0		0			(4,948	)					632		(4,316	)
Net (loss) income for the period		-		0		0		0			0			(2,724,831	)		103,026		(2,621,805	)

Balance as of September 30, 2021		355,628,272	$	355,628	$	800,000		1,334,529		$	(10,657	)	$	(3,775,794	)	$	671,024	$	(625,270	)

See accompanying notes to condensed consolidated financial statements.


2	F-5

Table of Contents

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~OF CASH FLOWS~~

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2017~~2021 AND ~~2016~~2020

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

~~(Unaudited)~~

Nine months ended September 30,
2017 2016
Cash flows from operating activities:
Net loss $ (8,808 ) $ (221,943 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation of property, plant and equipment 14,876 14,968
Change in operating assets and liabilities:
Accounts receivable 8,104 35,851
Accounts payable and accrued liabilities 61,597 (4,054 )
Income tax payable 7,734 –
Deferred tax liabilities 321 1,585

Net cash provided by (used in) operating activities 83,824 (173,593 )

Cash flows from financing activities:
(Repayment to) advances from related parties (49,786 ) 191,062
Repayment of finance lease (15,424 ) (15,093 )
Net cash (used in) provided by financing activities (65,210 ) 175,969

NET CHANGE IN CASH AND CASH EQUIVALENTS 18,614 2,376

BEGINNING OF PERIOD 1,581 4,148

END OF PERIOD $ 20,195 $ 6,524

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for tax $ – $ –
Cash paid for interest $ 1,688 $ 1,699

~~See accompanying notes to condensed consolidated financial statements.~~

~~COSMOS GROUP HOLDINGS INC.~~

~~CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

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

(Unaudited)

Common stock Accumulated Total
stockholders’
No. of shares Amount losses equity

Balance as of January 1, 2017 (restated) 219,222,938 $ 219,223 $ (183,832 ) $ 35,391

Shares issued for acquisition 210,625,960 210,626 (225,603 ) (14,977 )

Net loss for the period – – (8,808 ) (8,808 )

Balance as of September 30, 2017 429,848,898 429,849 $ (418,243 ) $ 11,606

~~See accompanying notes to condensed consolidated financial statements.~~NOTE 1 - BASIS OF PRESENTATION

~~COSMOS GROUP HOLDINGS INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

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

~~(Unaudited)~~

~~NOTE~~ – 1

~~BASIS OF PRESENTATION~~

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

In the opinion of management, the consolidated balance sheet as of December 31, ~~2016~~2020 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, ~~2017~~2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, ~~2017~~2021 or for any future period.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and Analysis, and the audited financial statements and notes thereto included in the Special Report on Form 8-K for the year ended December 31, ~~2016~~2020, filed on ~~Form 10.~~September 17, 2021.

NOTE 2 - ORGANIZATION AND BUSINESS BACKGROUND

~~NOTE~~ – 2

~~ORGANIZATION AND BUSINESS BACKGROUND~~

Cosmos Group Holdings Inc. (the “Company” or “COSG”) was incorporated in the state of Nevada on August 14, 1987, under the name Shur De Cor, Inc. and engaged in developing certain mining claims. In April 1999, Shur De Cor merged with Interactive Marketing Technology, a New Jersey corporation that was engaged in the business of developing and direct marketing of consumer products. As the surviving company, Shur De Cor changed its name to Interactive Marketing Techology, Inc. Shur De Cor's then management resigned and the management of Interactive New Jersey became the Company’s management. The prior management of Shur De Cor retained Shur De Cor’s business and assets. The Company filed a registration statement on Form 10-SB on January 19, 2000.

The Company, through a wholly owned subsidiary, IMT's Plumber, Inc., produced, marketed, and sold a licensed product called the Plumber's Secret, which was discontinued in fiscal 2001. In May 2002, the Company ceased to actively pursue its product development and marketing business and actively sought to either acquire a third party, merge with a third party or pursue a joint venture with a third party in order to re-enter its former business of development and direct marketing of proprietary consumer products in the United States and worldwide.

On November 17, 2004, the Company acquired MPL, a company organized under the laws of the British Virgin Islands, and its subsidiaries in accordance with the terms of a Share Exchange Agreement executed by the parties (the “2004 Agreement”). In connection with the acquisition, the Company issued an aggregate of 109,623,006 shares of its common stock to Imperial International Limited, a company incorporated under the laws of the British Virgin Islands (“Imperial”), the sole shareholder of MPL, in exchange for 100% of the issued and outstanding shares of MPL capital stock (the "2004 Share Exchange"). Upon completion of the share exchange, MPL became the Company's wholly owned subsidiary and the Company’s former owner transferred control of the Company to Imperial. The Company relied on Rule 506 of Regulation D of the Securities Act of 1933, as amended (the "Act"), in regard to the shares that we issued pursuant to the 2004 Share Exchange. The Company treated this transaction as a qualified "business combination" as defined by Rule 501(d). The Company relied on the exemption from registration pursuant to Section 4(2) of, and or Regulation D promulgated under, the Act in issuing the Company’s securities.

In connection with the 2004 Share Exchange, the Company: (i) changed its name from Interactive Marketing Technology, Inc. to China Artists Agency, Inc. ("China Artists"); (ii) obtained a new stock symbol, "CAAY", and CUSIP Number, effective on December 21, 2004; (iii) increased its authorized common stock to 200,000,000 shares; (iv) effectuated a 1 for 1.69 reverse stock split; and (v) spun off the Company’s existing business into a separate public company, All Star Marketing, Inc., a Nevada corporation ("All Star"). All Star was formed as a wholly owned subsidiary of the Company. The Spin-off was satisfied by means of a pro-rata share dividend to the Company's shareholders of record as of December 10, 2004. The purpose of the Spin-Off was to allow the subsidiary to operate as a separate public company and raise working capital through the sale of its own equity. This allowed the Company’s management to focus on its business, while at the same time, allowing the spun-off company to have greater exposure by trading as an independent public company. Additionally, the shareholders and the market would then more easily identify the results and performance of the Company as a separate entity from that of All Star. In August 2005, the Company changed its name to China Entertainment Group, Inc. and, effective August 9, 2005, obtained a new stock symbol "CGRP", and CUSIP Number.

~~COSMOS GROUP HOLDINGS INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

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

~~(Unaudited)~~

Because the Company failed to generate revenues in its new business, prior management commenced litigation in the Superior Court for Los Angeles County California which action was removed to the United States District Court for the Central District of California Case No. CV07-1068 GHK. On January 30, 2008, the parties entered into a Settlement Agreement and Conditional Release (the “Settlement Agreement”), pursuant to which, among other things, the Company’s former management reacquired control of the Company and all assets related to the Chinese entertainment business were transferred out of the Company. The Company, under its former management, once again entered the business of locating products to develop and mass market. These efforts did not prove fruitful and the Company, while continuing its product development business, also began to seek another business to acquire.

~~On January 22, 2010, the Company filed a Form 15-12G to withdraw from its reporting obligations.~~

Effective July 22, 2010, the Company merged with Safe and Secure TV Channel, LLC, a Delaware limited liability company (the “Merger”). In connection with the Merger, the management of the Company resigned and was replaced by the management and principals of Safe and Secure TV Channel, LLC. The holders of interests in Safe and Secure TV Channel, LLC exchanged their interests for approximately 50.2% of the issued and outstanding stock of the Company. In September 2010, the Company effectuated a 9.85 for one stock split to shareholders of record as of August 23, 2010. After the Merger, the Company became a television network and multimedia information and distribution company focused on serving the homeland security and emergency preparedness industry.

On February 15, 2016, the Company sold to Asia Cosmos Group Limited, a private limited liability company incorporated under the laws of British Virgin Islands (“ACOSG”), 10,000,000 shares of its common stock at a per share price of $0.027. ACOSG’s sole shareholder is Miky Wan. The Company relied on the exemption from registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act in selling the Company’s securities to ACOSG.

In connection with the private placement to ACOSG, a change of control occurred and Bryan Glass resigned from his position as President, Secretary, Treasurer and Chairman of the Company. Miky Wan was appointed to serve as Chief Executive Officer, Chief Operating Officer, President and Director, effective February 19, 2016. Peter Tong, our Chief Financial Officer, Secretary and director continued in his positions with the Company. Calvin K.W. Lai, Anthony H.H. Chan, Jenher Jeng, Alice K.M. Tang, Connie Y.M. Kwok were appointed to serve on our Board of Directors effective February 19, 2016. Effective February 26, 2016, the Company changed its name to Cosmos Group Holdings Inc. and filed a Certificate of Amendment to such effect with the Nevada Secretary of State. The name change and the related stock symbol change to “COSG” were approved by the Financial Industry Regulatory Authority on March 31, 2016. The Company also increased the number of its authorized common stock, par value $0.001, from 90,000,0000 shares to 500,000,000 and its preferred stock, par value $0.001, from 10,000,000 to 30,000,000 shares. After the private placement, the Company shifted its business plan to focus on acquiring undervalued companies including those in the Greater China region.

On May 12, 2017, the Company acquired all of the issued and outstanding shares of Lee Tat from Mr. Koon Wing CHEUNG, Lee Tat’s sole shareholder, in exchange for 219,222,938 shares of our issued and outstanding common stock. In connection with the Lee Tat acquisition, Miky Wan resigned from her positions as Chief Executive Officer and Chief Operating Officer and Koon Wing CHEUNG and Yongwei HU were appointed to serve as our Chief Executive Officer and Chief Operating Officer, respectively, and also as our directors. In addition, Anthony H.H. CHAN and Alice K. M. TANG resigned from their positions as directors, and Zhigang LIAO and Weiming CHEN were appointed to fill the vacancies created by their resignations. The Company relied on the exemption from registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act in selling the Company’s securities to the shareholders of Lee Tat.

Prior to the acquisition, the Company was considered as a shell company due to its nominal assets and limited operation. Upon the acquisition, Lee Tat will comprise the ongoing operations of the combined entity and its senior management will serve as the senior management of the combined entity, Lee Tat is deemed to be the accounting acquirer for accounting purposes. The transaction will be treated as a recapitalization of the Company. Accordingly, the consolidated assets, liabilities and results of operations of the Company will become the historical financial statements of Lee Tat, and the Company’s assets, liabilities and results of operations will be consolidated with Lee Tat beginning on the acquisition date. Lee Tat was the legal acquiree but deemed to be the accounting acquirer. The Company was the legal acquirer but deemed to be the accounting acquiree in the reverse merger. The historical financial statements prior to the acquisition are those of the accounting acquirer (Lee Tat). Historical stockholders’ equity of the accounting acquirer prior to the merger are retroactively restated (a recapitalization) for the equivalent number of shares received in the merger. Operations prior to the merger are those of the acquirer. After completion of the share exchange transaction, the Company’s consolidated financial statements include the assets and liabilities, the operations and cash flow of the accounting acquirer.

~~COSMOS GROUP HOLDINGS INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

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

~~(Unaudited)~~

1987.

The Company, through its subsidiaries, mainly ~~engages~~engaged in the provision of truckload transportation service in Hong Kong, in which the Company ~~utilizes~~utilized its owned trucks or independent contractor owned trucks for the pickup and delivery of freight from port to the designated destination, upon the customers’ request. On June 28, 2021, the transportation service ceased and was sold to its related party, Koon Wing Cheung the former director.

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

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

On June 17, 2021, the Company entered into a Share Exchange Agreement with the shareholders of Massive Treasure Limited (“MTL”). Pursuant to the Share Exchange Agreement, the Company agreed to issue 1,078,269,470 in exchange for 100% of MTL. MTL is a party to numerous agreements to acquire 12 additional business entities. As such, the Company further agreed to issue an additional 55,641,014 shares of common stock to complete the acquisition of 12 business entities concurrently. This acquisition was consummated on September 17, 2021.

This Acquisition is considered as a related party transaction, whereas CHAN Man Chung is a director and shareholder of the Company and also controls MTL and its subsidiaries.

Prior to the Share Exchange, the Company was considered as a shell company due to its nominal assets and limited operation. The transaction will be treated as a recapitalization of the Company. Upon the Share Exchange between the Company and MTL on June 17, 2021, is considered as a merger of entities under common control that CHAN Man Chung is the common director of both the Company and MTL. Under the guidance in ASC 805 for transactions between entities under common control, the assets, liabilities and results of operations, are recognized at their carrying amounts on the date of the Share Exchange, which required retrospective combination of the Company and MTL for all periods presented, therefore, the accompanying condensed consolidated financial statements for the nine months ended September 30, 2021 and 2020 have been restated accordingly.

F-6

Table of Contents

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

(Unaudited)

The Company currently offers financial and money lending services in Hong Kong and operates a business selling works of art and collectibles in Singapore.

Description of subsidiaries

~~Name~~ Company name	Place of incorporation and kind of legal entity	Principal activities and place of operation	Particulars of ~~issued/~~ ~~registered~~registered/ paid up share capital	Effective interest held

Massive Treasure Limited	BVI, limited liability company	Investment holding	50,000 ordinary shares at par value of US$1	100%

Coinllectibles Pte Limited	Singapore, limited liability company	Corporate management and IT development in Singapore	1,000 ordinary shares for S$1,000	100%

Coinllectibles Limited	BVI, limited liability company	Procurement of art and collectibles in Singapore	1,000 ordinary shares at par value of US$1	100%

Coinllectibles (HK) Limited	Hong Kong, limited liability company	Corporate management in Hong Kong	1,000 ordinary shares for HK$1,000	100%

Coinllectibles Wealth Limited	Hong Kong, limited liability company	Corporate management in Hong Kong	1 ordinary share for HK$1	100%

Coinllectibles DeFi Limited	Hong Kong, limited liability company	Financing service management in Hong Kong	10,000 ordinary shares for HK$10,000	100%

8M Limited	Hong Kong, limited liability company	Money lending service in Hong Kong	10 ordinary shares for HK$10	100%

Dragon Group Mortgage Limited	Hong Kong, limited liability company	Money lending service in Hong Kong	10,000 ordinary shares for HK$10,000	51%

E-on Finance Limited	Hong Kong, limited liability company	Money lending service in Hong Kong	2 ordinary shares for HK$2	100%

Healthy Finance Limited	Hong Kong, limited liability company	Money lending service in Hong Kong	10,000 ordinary shares for HK$10,000	51%

Lee Kee Finance Limited	Hong Kong, limited liability company	Money lending service in Hong Kong	920,000 ordinary shares for HK$920,000	51%

Rich Finance (Hong Kong) Limited	Hong Kong, limited liability company	Money lending service in Hong Kong	10,000 ordinary shares for HK$10,000	51%

Long Journey Finance Limited	Hong Kong, limited liability company	Money lending service in Hong Kong	100 ordinary shares for HK$100	51%

Vaav Limited	Hong Kong, limited liability company	Money lending service in Hong Kong	10,000 ordinary shares for HK$10,000	51%

Star Credit Limited	Hong Kong, limited liability company	Money lending service in Hong Kong	1,000,000 ordinary shares for HK$1,000,000	51%


~~Cosmo Group International Holdings Limited~~	~~British Virgin Islands~~	~~Investment holding~~	~~50,000 shares at US$1 each~~	~~100%~~F-7

~~Asia Cosmos Group (Hong Kong) Limited~~	~~Hong Kong~~	~~Corporate~~	~~10,000 ordinary shares at HK$1 each~~	~~100%~~Table of Contents

~~Lee Tat Transportation International Limited~~	~~Hong Kong~~	~~Logistic and delivery~~	~~10,000 ordinary shares at HK$1 each~~	~~100%~~

~~COSG~~

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

(Unaudited)

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

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~NOTE – 3~~

~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

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

·	Basis of presentation

· ~~Use~~

These accompanying condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of ~~estimates~~America (“US GAAP”).

·	Use of estimates and assumptions

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates. Significant estimates in the nine months ended September 30, 2021 and 2020 include the allowance for loan receivables, the useful life of property and equipment and intangible assets, assumptions used in assessing impairment of long-term assets, and valuation of deferred tax assets.

· ~~Basis of consolidation~~
·
Basis of consolidation

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

· ~~Cash and cash equivalents~~
·
Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

F-8

· ~~Accounts receivable~~

Table of Contents

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer's financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of September 30, 2017, there was no allowance for doubtful accounts.

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2017~~2021 AND 2020

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

(Unaudited)

·	Digital assets

The Company’s digital assets represent the cryptocurrency of Ethereum and OEC Token. The Company accounts for its digital assets in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill. ASC Subtopic 350-30 requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. The Company’s cryptocurrencies are deemed to have an indefinite useful life; therefore amounts are not amortized, but rather are assessed for impairment.

·	Loan receivables, net

Loans receivables are carried at unpaid principal balances, less the allowance for loan losses and charge-offs. The loans receivables portfolio consists of real estate mortgage loans and personal loans.

· ~~Property, plant~~Loans are placed on nonaccrual status when they are past due 180 days or more as to contractual obligations or when other circumstances indicate that collection is not probable. When a loan is placed on nonaccrual status, any interest accrued but not received is reversed against interest income. Payments received on a nonaccrual loan are either applied to protective advances, the outstanding principal balance or recorded as interest income, depending on an assessment of the ability to collect the loan. A nonaccrual loan may be restored to accrual status when principal and ~~equipment~~interest payments have been brought current and the loan has performed in accordance with its contractual terms for a reasonable period (generally six months).

If the Company determines that a loan is impaired, the Company next determines the amount of the impairment. The amount of impairment on collateral dependent loans is charged off within the given fiscal quarter. Generally the amount of the loan and negative escrow in excess of the appraised value less estimated selling costs, for the fair value of collateral valuation method, is charged off. For all other loans, impairment is measured as described below in Allowance for Loan Losses.

·	Allowance for loan losses (“ALL”)

The adequacy of the Company’s ALL is determined, in accordance with ASC Subtopics 450-20 Loss Contingencies includes management’s review of the Company’s loan portfolio, including the identification and review of individual problem situations that may affect a borrower’s ability to repay. In addition, management reviews the overall portfolio quality through an analysis of delinquency and non-performing loan data, estimates of the value of underlying collateral, current charge-offs and other factors that may affect the portfolio, including a review of regulatory examinations, an assessment of current and expected economic conditions and changes in the size and composition of the loan portfolio.

The ALL reflects management’s evaluation of the loans presenting identified loss potential, as well as the risk inherent in various components of the portfolio. There is significant judgment applied in estimating the ALL. These assumptions and estimates are susceptible to significant changes based on the current environment. Further, any change in the size of the loan portfolio or any of its components could necessitate an increase in the ALL even though there may not be a decline in credit quality or an increase in potential problem loans.

·	Property and equipment, net

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

		Expected useful life
~~Service vehicle~~ Computer and office equipment	5 years	~~8 years~~

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

Depreciation ~~expense~~expenses for the three months ended September 30, ~~2017~~2021 and ~~2016 was $4,959~~2020 were $856 and ~~$4,988,~~$1,028, respectively.

Depreciation ~~expense~~expenses for the nine months ended September 30, ~~2017~~2021 and ~~2016 was $14,876~~2020 were $10,916 and ~~$14,968,~~$16,190, respectively.

•	Intangible assets, net

Intangible assets represent the licensing cost for the trademark registration. Amortization is calculated on the straight-line basis over ten (10) years of useful lives from the registration date. Amortization expense for the three and nine months ended September 30, 2021 and 2020 were $434 and $0, respectively.

·	Impairment of long-lived assets

F-9

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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

(Unaudited)

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

·	Revenue recognition

Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

·	identify the contract with a customer;
·	identify the performance obligations in the contract;
·	determine the transaction price;
·	allocate the transaction price to performance obligations in the contract; and
·	recognize revenue as the performance obligation is satisfied.

The Company is licensed to originate consumer, mortgage and commercial loans in Hong Kong. During the three and nine months ended September 30, ~~2017.~~2021 and 2020, the Company originated loans generally ranging from $644 to $579,000, with terms ranging from 3 months to more than 1 year. The Company mainly derives a portion of its revenue from loan which is specifically excluded from the scope of this standard.

Leases

· ~~Revenue recognition~~

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

In accordance with the guidance in ASC ~~Topic 605,~~~~“Revenue Recognition”~~842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the ~~Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered,~~fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the ~~selling price is fixed or determinable~~respective relative fair values to the lease components and ~~collectibility is reasonably assured.~~non-lease components.

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

·	Income taxes

The Company adopted the ASC 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in ~~full~~the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ~~completion of delivery~~ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the ~~receiver’s location.~~provisions of paragraph 740-10-25-13.

· ~~Comprehensive~~The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

F-10

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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

(Unaudited)

·	Uncertain tax positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the periods ended September 30, 2021 and, 2020.

·	Foreign currencies translation

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

The reporting currency of the Company is United States Dollar (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong and maintain its books and record in its local currency, Hong Kong Dollars (“HKD”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, Translation of Financial Statement, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholder’s equity.

Translation of amounts from HKD into US$ has been made at the following exchange rates for the following periods:-

September 30,

2021

December 31,

2020

Period-end HKD:US$ exchange rate

0.1284

0.1290

Period average HKD:US$ exchange rate

0.1288

0.1289

·	Comprehensive income

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

· ~~Income taxes~~

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

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

8Noncontrolling interest

~~COSMOS GROUP HOLDINGS INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

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

~~(Unaudited)~~

For the three and nine months ended September 30, 2017 and 2016, the Company did not have any interest and penalties associated with tax positions. As of September 30, 2017, the Company did not have any significant unrecognized uncertain tax positions.

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

· ~~Finance leases~~

~~Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted~~accounts for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciatednoncontrolling interest in accordance with ASC Topic 810-10-45, which requires the ~~Company’s depreciation policy if~~Company to present noncontrolling interests as a separate component of total shareholders’ equity on the ~~title is to eventually transfer~~consolidated balance sheets and the consolidated net loss attributable to the ~~Company. The periodic rent payments made during~~its noncontrolling interest be clearly identified and presented on the ~~lease term are allocated between a reduction in~~face of the ~~obligation~~consolidated statements of operations and ~~interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30,~~~~“Imputation of Interest”~~.comprehensive loss.

· ~~Net income per share~~
·
Net loss per share

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

· ~~Foreign currencies translation~~

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

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

· ~~Related parties~~

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

· ~~Segment reporting~~
·
Segment reporting

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in consolidated financial statements. ~~The~~For the nine months ended September 30, 2021 and 2020, the Company operates in one reportable operating segment in Hong Kong.

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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2017~~2021 AND 2020

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

(Unaudited)

·	Related parties

The Company follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The condensed consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

·	Commitments and contingencies

The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

·	Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

(Unaudited)

Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

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

·	Recent accounting pronouncements

~~Management believes, based~~

In January 2017, the Financial Accounting Standard Board (“FASB”) issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). ASU 2017-04 removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on its consolidated financial statements.

In June 2020, the FASB issued ASU 2020-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2020-07”), which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2020, including interim periods within those annual periods. Early adoption is permitted, but no earlier than a company’s adoption date of ASC 606. The Company does not believe that the adoption of ASU 2020-07 will have a material impact on the ~~current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.~~Company’s consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which amended its guidance for costs of implementing a cloud computing service arrangement to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new standard also requires customers to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. This new standard becomes effective for the Company in the first quarter of fiscal year 2020, with early adoption permitted. This new standard can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company ~~also follows~~is evaluating the ~~guidance~~impact of ~~the ASC Topic 820-10, “~~~~Fair Value Measurements and Disclosures~~~~” ("ASC 820-10"), with respect~~adopting this amendment to its consolidated financial ~~assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:~~

·	~~Level 1~~ ~~: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;~~

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

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

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

· ~~Recent accounting pronouncements~~statements.

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

~~NOTE~~ – 4

~~AMOUNTS DUE TO RELATED PARTIES~~

NOTE 4 - GOING CONCERN UNCERTAINTIES

September 30, 2017 December 31, 2016
(Unaudited) (Audited)
Balances due to related parties:
Koon Wing CHEUNG, Chief Executive Officer and Director $ – $ 41,306
Cosmos Links International Holding Limited 59,527 –
Asia Cosmos Group Limited 10,000 –
$ 69,527 $ 41,306

The ~~balances were unsecured, interest-free~~accompanying condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and ~~repayable upon demand. Imputed interest from related party loan is not significant.~~the satisfaction of liabilities in the normal course of business.

The Company has suffered from an accumulated deficit of $3,775,794 and working capital deficit of $1,907,801, at September 30, 2021. In addition, with respect to the ongoing and evolving coronavirus (COVID-19) outbreak, which was designated as a pandemic by the World Health Organization on March 11, 2020, the outbreak has caused substantial disruption in international economies and global trades and if repercussions of the outbreak are prolonged, could have a significant adverse impact on the Company’s business.


10	F-13

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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2017~~2021 AND 2020

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

(Unaudited)

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

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

The recent outbreak of COVID-19, which has been declared by the World Health Organization to be a pandemic, has spread across the globe and is impacting worldwide economic activity. The COVID-19 pandemic has significantly impacted health and economic conditions throughout the Asian region. National, regional and local governments took a variety of actions to contain the spread of COVID-19, including office and store closures, quarantining suspected COVID-19 patients, and capacity limitations. These developments have significantly impacted the results of operations, financial condition and cash flows of the Company included in this reporting. The impact included the difficulties of working remotely from home including slow Internet connection, the inability of our accounting and financial officers to collaborate as effectively as they would otherwise have in an office environment and issues arising from mandatory state quarantines.

While it is not possible at this time to estimate with sufficient certainty the impact that COVID-19 could have on the Company’s business, the continued spread of COVID-19 and the measures taken by federal, state, local and foreign governments could disrupt the operation of the Company’s business. The COVID-19 outbreak and mitigation measures have also had and may continue to have an adverse impact on global and domestic economic conditions, which could have an adverse effect on the Company’s business and financial condition, including on its potential to conduct financings on terms acceptable to the Company, if at all. In addition, the Company has taken temporary precautionary measures intended to help minimize the risk of the virus to its employees, including temporarily requiring employees to work remotely, and discouraging employee attendance at in-person work-related meetings, which could negatively affect the Company’s business. These measures are continuing. The extent to which the COVID-19 outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.

NOTE 5 - LOAN RECEIVABLES

The Company’s loan portfolio was as follows:

	September 30, 2021			December 31, 2020

Personal loans	$	16,738,437		$	11,083,189
Commercial loans		513,716			515,963
Mortgage loans		1,994,232			688,178
Total loans		19,246,385			12,287,330
Less: Allowance for loan losses		(74,772	)		(53,506	)
Loans receivables, net	$	19,171,613			12,233,824

Reclassifying as:
Current portion		18,005,477			11,943,595
Non-current portion		1,166,136			290,229

Total loans receivables	$	19,171,613		$	12,233,824

The interest rates on loans issued were ranged from 12% to 58% per annum for the nine months ended September 30, 2021 and 2020.

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COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

(Unaudited)

All loans are made to either business or individual customers in Hong Kong for a period of 1 week to 120 months.

Allowance for loan losses is estimated on an annual basis based on an assessment of specific evidence indicating doubtful collection, historical experience, loan balance aging and prevailing economic conditions.

Interest on loan receivable is accrued and credited to income as earned. The Company determines a loan’s past due status by the number of days that have elapsed since a borrower has failed to make a contractual loan payment. Accrual of interest is generally discontinued when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 180 days (The further extension of loan past due status is subject to management final approval and on case-by-case basis).

NOTE 6 - LOAN PAYABLES

The amounts represented temporary advances received from the third parties, which were unsecured, interest charged at 18% per annum and will become repayable within 1 year. The loan payable balance was $1,161,212 and $4,811,843 as of September 30, 2021 and December 31, 2020, respectively.

~~NOTE~~ – 5

~~OBLIGATION UNDER FINANCE LEASE~~

NOTE 7 - AMOUNTS DUE TO RELATED PARTIES

The amounts represented temporary advances from the directors/shareholders of the Company’s subsidiaries in the financing/money lending business for working capital purpose, which were unsecured, interest-free and had no fixed terms of repayments. The related parties balance was $20,474,746 and $9,648,400 as of September 30, 2021 and December 31, 2020, respectively.

NOTE 8 - LEASES

The Company ~~purchased~~entered into operating leases primarily for office premises with lease terms generally 2 years. The Company adopted Topic 842, using the modified-retrospective approach as discussed in Note 3, and as a ~~service vehicle under~~result, recognized a ~~finance~~right-of-use asset and a lease ~~agreement with~~liability. The Company uses a 5% rate to determine the ~~effective interest rate~~present value of ~~2.25% per annum, due through May 29, 2020, with principal and interest payable monthly.~~the lease payments. The ~~obligation under~~remaining life of the ~~finance~~ lease ~~is as follows:~~was two years.

September 30, 2017 December 31, 2016
(Unaudited) (Audited)

Finance lease $ 59,335 $ 71,022
Less: interest expense (6,002 ) (2,265 )

Net present value of finance lease $ 53,333 $ 68,757

Current portion $ 20,000 $ 20,124
Non-current portion 33,333 48,633

Total $ 53,333 $ 68,757

The Company excludes short-term leases (those with lease terms of less than one year at inception) from the measurement of lease liabilities or right-of-use assets.

As of September 30, ~~2017,~~2021, right-of-use assets were $368,947 and lease liabilities were $381,447.

For the ~~maturities~~nine months ended September 30, 2021 and 2020, the Company charged to operations lease as expenses of $69,918 and $90,219, respectively.

The maturity of the ~~finance~~Company’s lease obligations is presented below:

Year Ended September 30,	Operating lease amount

2022	$	267,591
2023		111,291
2024		18,542

Total		397,424
Less: interest		(15,977	)
Present value of lease liabilities – current liability	$	381,447

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Table of Contents

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

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

(Unaudited)

NOTE 9 - STOCKHOLDERS’ EQUITY

Authorized stock

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

Common stock outstanding

On June 17, 2021, the Company entered into a Share Exchange Agreement with the shareholders of Massive Treasure Limited (“MTL”). Pursuant to the Share Exchange Agreement, the Company agreed to issue 1,078,269,470 in exchange for 100% of MTL. MTL is a party to numerous agreements to acquire 12 additional business entities. As such, the Company further agreed to issue an additional 55,641,014 shares of common stock to complete the acquisition of 12 business entities concurrently. CHAN Man Chung, the Company’s director of MTL. This acquisition consummated on September 17, 2021 with 800,000,000 shares of common stock pending to be issued to Lee Ying Chiu Herbert, the director of the ~~three years are as follows:~~Company.

On July 23, 2021, the Company and Lee Ying Chiu Herbert entered into a Sale and Purchase Agreement pursuant to which the Company agreed to purchase fifty-five (55) sets of art collectibles for HK$10,344,000, payable through the issuance of 180,855 shares of common stock of the Company. The sale consummated on August 13, 2021.

Years ending September 30:
2018 $ 20,000
2019 20,000
2020 13,333

Total $ 53,333

Common stock to be issued

~~NOTE~~ – 6

~~INCOME TAXES~~

As of September 30, 2021, the Company had 800,000,000 shares of common stock to be issued to a director of the Company.

As of September 30, 2021 and December 31, 2020, the Company had a total of 355,628,272 and 333,910,484 shares of common stock issued and outstanding, respectively.

NOTE 10 - INCOME TAX

The provision for income taxes consisted of the following:

					Nine months ended September 30,
	Nine months ended September 30,				2021		2020
	2017		2016
Current tax	$	7,733	$	–	$	377,453	$	(6,051	)
Deferred tax		321		1,585		0		0
Income tax expense	$	8,054	$	1,585

Income tax expense (credit)					$	377,453	$	(6,051	)

~~COSG is registered~~The effective tax rate in the ~~State~~periods presented is the result of ~~Nevada~~the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company mainly operates in Singapore and Hong Kong that is subject to taxes in the ~~tax laws of United States of America.~~jurisdictions in which they operate, as follows:

As of September 30, 2017, the operation in the United States of America incurred $1,868,491 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2037, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $635,286 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

BVI

Under the current BVI law, the Company is not subject to tax on income.

Republic of Singapore

The Company’s subsidiaries are registered in Republic of Singapore and are subject to the Singapore corporate income tax at a standard income tax rate of 17% on the assessable income arising in Singapore during its tax year. The operation in Singapore incurred an operating loss and there is no provision for income tax for the nine months ended September 30, 2021 and 2020.


11	F-16

Table of Contents

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2017~~2021 AND 2020

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

(Unaudited)

Hong Kong

The ~~Company’s~~Company and subsidiaries operating in Hong Kong ~~are~~is subject to the Hong Kong Profits Tax at ~~a standard income~~the two-tiered profits tax ~~rate of~~rates from 8.25% to 16.5% on the estimated assessable ~~income~~profits arising in Hong Kong during ~~its~~the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the ~~nine~~Nine months ended September 30, ~~2017~~2021 and ~~2016~~2020 is as follows:

Nine months ended
September 30,
2017 2016

Income (loss) before income taxes from HK operation $ 79,154 $ (41,923 )
Statutory income tax rate 16.5% 16.5%
Income tax expense at statutory rate 13,060 (6,917 )
Tax effect from non-deductible items 2,454 2,469
Tax effect from deductible items (2,854 ) (4,054 )
Tax losses (4,927 ) 8,502
Income tax expense $ 7,733 $ –

	Nine months ended September 30,
	2021			2020

Income before income taxes	$	2,217,838		$	467,888
Statutory income tax rate		16.5	%		16.5	%
Income tax expense at statutory rate		365,943			77,202
Tax effect of non-deductible items		11,510			0
Tax effect of non-taxable items		0			(83,253	)

Income tax expense (credit)	$	377,453		$	(6,051	)

The following table sets forth the significant components of the deferred tax assets and liabilities of the Company as of September 30, ~~2017~~2021 and December 31, ~~2016:~~2020:

September 30, 2017 December 31, 2016
(Unaudited) (Audited)
Deferred tax liabilities:
Accelerated depreciation $ 13,191 $ 12,870

Deferred tax assets:
Net operating loss carryforwards – 5,026
Less: valuation allowance – (5,026 )
Deferred tax assets, net $ – $ –

~~NOTE – 7~~

~~STOCKHOLDERS’ EQUITY~~

	September 30, 2021		December 31, 2020
Deferred tax assets:
Net operating loss carry forward	$	0	$	190,595
Less: valuation allowance		0		(190,595	)
Deferred tax assets, net	$	0	$	0

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

~~On January 13, 2017, the Company issued 200,000,000 shares of its common stock for total proceed of $200,000 for work capital purpose.~~

On May 12, 2017, the Company completed the acquisition of 100% equity interest in Lee Tat Transportation International Limited in exchange of 219,222,938 shares of its common stock. These common stocks were subsequently issued to the shareholders of Lee Tat Transportation International Limited.

~~As of September 30, 2017, the Company had a total of 429,848,898 shares of its common stock issued and outstanding.~~

~~NOTE – 8~~

~~RELATED PARTY TRANSACTIONS~~

~~Advances from Stockholder~~NOTE 11 - RELATED PARTY TRANSACTIONS

From time to time, the ~~stockholder and director~~directors of the Company advanced funds to the Company for working capital purpose. Those advances ~~are~~were unsecured, non-interest bearing and ~~due on demand. The imputed interest on~~had no fixed terms of repayment.

For the ~~loan~~nine months ended September 30, 2021, the Company purchased fifty-five (55) sets of art collectibles from a ~~related party was not significant.~~director of the Company for a consideration of $1,334,710 (equivalent to HK$10,344,000), settled by the issuance of 180,855 shares of common stock of the Company.

For the nine months ended September 30, 2021, a company beneficially owned by a director charged management fee of $2,500,000 to the Group for the provision of finance, accounting, coordination, marketing, operational, advisory, and other administrative work and services.

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Table of Contents

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, ~~2017~~2021 AND 2020

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

(Unaudited)

~~Free Office Space from its Stockholder~~

~~The~~
For the nine months ended September 30, 2021, the Company ~~has been provided office space by its stockholder at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its consolidated financial statements.~~

incurred directors’ remuneration of $158,641.

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

~~NOTE – 9~~

~~CONCENTRATIONS OF RISK~~

NOTE 12 - CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

(a)	~~(a)~~ Major customers

For the three and nine months ended September 30, ~~2017~~2021 and ~~2016, the customers who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at period-end dates, are presented as follows:~~

Three months ended
September 30, 2017 September 30, 2017

Customers
Sales Percentage
of sales Accounts
receivable

Customer A $ 78,603 27% $ –
Customer B 86,205 29% –

Total: $ 164,808 56% Total: $ –

Nine months ended
September 30, 2017 September 30, 2017

Customers
Sales Percentage
of sales Accounts
receivable

Customer A $ 218,075 38% $ –
Customer B 143,507 25% –

Total: $ 361,582 63% Total: $ –

Three months ended
September 30, 2016 September 30, 2016
Sales Percentage
of sales Accounts
receivable

Customer A $ 21,816 24% $ –
Customer B 33,729 37% –

Total: $ 55,545 61% Total: $ –

~~COSMOS GROUP HOLDINGS INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

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

~~(Unaudited)~~

Nine months ended
September 30, 2016 September 30, 2016
Sales Percentage
of sales Accounts
receivable

Customer A $ 91,699 33% $ –
Customer B 40,887 15% –

Total: $ 132,586 48% $ –

~~All customers are located in Hong Kong.~~

~~(b) Major vendors~~

~~No vendor represented more than~~2020, there was no single customer whose revenue exceeded 10% of the ~~Company’s operating cost for the three and nine months ended September 30, 2017 and 2016.~~revenue.

~~All vendors are located in Hong Kong.~~

~~(c) Credit risk~~

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

~~(d) Interest rate risk~~

~~As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.~~
(b)
Economic and political risk

The Company’s ~~interest-rate risk arises from borrowing under notes~~major operations are conducted in Singapore and ~~bank borrowings.~~ Hong Kong. Accordingly, the political, economic, and legal environments in Singapore and Hong Kong, as well as the general state of Singapore and Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.

(c)	Exchange rate risk

The Company ~~manages interest~~cannot guarantee that the current exchange rate ~~risk by varying~~will remain steady; there is a possibility that the ~~issuance and maturity dates variable rate debt, limiting~~Company could post the same amount of ~~variable~~profit for two comparable periods and because of the fluctuating exchange rate ~~debt, and continually monitoring the effects~~actually post higher or lower profit depending on exchange rate of ~~market~~HKD converted to US$ on that date. The exchange rate could fluctuate depending on changes in ~~interest rates. As of September 30, 2017, borrowing under finance lease was at fixed rate.~~political and economic environments without notice.

~~NOTE~~ – 10

~~COMMITMENTS AND CONTINGENCIES~~

~~(a) Operating lease commitments~~NOTE 13 - COMMITMENTS AND CONTINGENCIES

As of September 30, ~~2017,~~2021, the Company has no material commitments ~~under operating leases.~~or contingencies.

~~(b) Capital commitment~~NOTE 14 - SUBSEQUENT EVENTS

~~As of September 30, 2017, the Company has no material capital commitments in the next twelve months.~~

~~COSMOS GROUP HOLDINGS INC.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017~~

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

~~(Unaudited)~~

~~NOTE – 11~~

~~SUBSEQUENT EVENTS~~

In accordance with ASC Topic 855,“~~Subsequent Events~~” “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, ~~2017,~~2021, up through the date the Company issued the unaudited condensed consolidated financial statements. ~~During~~The Company had the ~~period, the Company did not have any~~following material recognizable subsequent ~~events.~~events:

On October 15, 2021, Massive Treasure, a subsidiary of the Company, NFT Limited, a British Virgin Island limited liability company, and the shareholders of NFT Limited (collectively, the “NFT Shareholders”) agreed to entered into a Share Exchange Agreement Version 2021001 (the “Agreement”) which is available on the web site of http://www.coinllectibles.art, pursuant to which Massive Treasure agreed to acquire 51% of NFT Limited through the issuance of 2,350,229 shares of common stock of the Company (the “Shares”). The specifics of such share exchange are further set forth in that certain Confirmation dated October 15, 2021, by and among the Shareholders, NFT Limited, the Company and Massive Treasure (the “Confirmation”). The consummation of the Agreement occurs upon the issuance of the Shares to the NFT Shareholders on October 22, 2021.

On October 25, 2021, Coinllectibles Private Limited (“Coinllectibles”), a subsidiary of the Company, and the Company entered into two Sale and Purchase Agreements (the “Agreements”) with two artists, pursuant to which Coinllectibles agreed to purchase collectible art items for £260,000 and US$100,000, payable through the issuance of 43,633 and 12,500 shares of common stock of the Company (the “Shares”) respectively, at a per share price of $4.00, and £130,000 and US$50,000 in cash payable after the respective collectible art item has sold by Coinllectibles. The consummation of the Agreements occurs upon the issuance of the Shares to the respective artists on October 29, 2021.

F-18

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

~~Forward-looking statements~~

The following discussion and analysis of our Company’s financial condition and results of operations should be read in conjunction with ~~the~~our unaudited condensed consolidated financial statements and the related notes ~~thereto~~ included elsewhere in ~~this quarterly report on Form 10-Q.~~the report. This ~~quarterly report on Form 10-Q~~discussion contains ~~certain~~ forward-looking statements that involve risks and ~~our future operating~~uncertainties. Actual results and the timing of selected events could differ materially from those ~~discussed herein. Certain statements contained~~anticipated in this discussion, including, without limitation, statements containing the words "believes," "anticipates," "expects" and the like, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, as we issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are ineligible to rely on these ~~safe harbor provisions. Such~~ forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue relianceas a result of various factors. See “Cautionary Note Concerning Forward-Looking Statements” on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained herein to reflect future events or developments.page 2.

~~Currency and exchange rate~~

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

Overview

The Company, through its subsidiaries, is engaged in two business segments: (i) the physical arts and collectibles business, and (ii) the financing/money lending business. We ~~are~~conduct our physical arts and collectibles business through Coinllectibles Pte Ltd, a ~~specialty commercial logistic company that provides timely~~Singapore corporation (“Coinllectibles”), pursuant to which we provide authentication, valuation and ~~reliable logistics~~certification (AVC) service, sale and ~~delivery~~purchase, hire purchase, financing, custody, security and exhibition (CSE) services to ~~commercial clients~~art buyers through traditional methods as well as through leveraging blockchain technology through the creation of non-fungible tokens (NFTs). We initially intend to focus on customers located in Hong Kong and ~~Shanghai.~~expand throughout Asia. We ~~offer service~~conduct our financing/money lending business through the 9 subsidiaries of Coinllectibles DeFi Limited, our Hong Kong subsidiaries which are licensed under Hong Kong’s Money Lenders Ordinance. We primarily provide unsecured personal loan financings to private individuals. We also have a small portfolio of mortgage loans. Revenue is generated from interest received from the provision of loans to private individual customers.

We are not a Hong Kong operating company but a Nevada holding company with operations conducted through our wholly owned subsidiaries based in Singapore and Hong Kong.

We conduct our NFT operations from Singapore. In Singapore, cryptocurrencies and the custodianship of such cryptocurrencies are not specifically regulated. Cryptocurrency exchanges and trading of cryptocurrencies are legal, but not considered legal tender. To the extent that cryptocurrencies or tokens are considered “capital market products” such as securities, spot foreign exchange contracts, derivatives and the like, they will be subject to the ~~cable supply industry~~jurisdiction of the Monetary Authority of Singapore (MAS), Securities and Futures Act, anti-money laundering and combating the financing of terrorism laws and requirements. To the extent that tokens are deemed “digital payment tokens,” they will be subject to the Payment Services Act of 2019 which, among other things, require compliance with anti-money laundering and combating the financing of terrorism laws and requirements. According to the Payment Services Act of 2019, “digital payment token” means any digital representation of value (other than an excluded digital representation of value) that (a) is expressed as a unit; (b) is not denominated in any currency, and is not pegged by its issuer to any currency; (c) is, or is intended to be, a medium of exchange accepted by the public, or a section of the public, as payment for goods or services or for the discharge of a debt; (d) can be transferred, stored or traded electronically; and (e) satisfies such other characteristics as the Authority may prescribe; Our NFTs, therefore, are not securities or digital payment tokens subject to these acts.

We receive fiat and cryptocurrency from sale of collectibles and collection of royalty fees. In order to minimize the risk of price fluctuation in cryptocurrency, after we receive the fiat and crypto currencies we will immediately exchange them into US dollar or stable currencies that are pegged with US dollar.

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There may be prominent risks associated with our operations being in Hong Kong. We may be subject to the risks of uncertainty of any future actions of the PRC government including the risk that the PRC government could disallow our holding company structure, which may result in a material change in our operations, including our ability to continue our existing holding company structure, carry on our current business, accept foreign investments, and offer or continue to offer securities to our investors. These adverse actions could value the value of our common stock to significantly decline or become worthless. We may also be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the Chinese Securities Regulatory Commission, if we fail to comply with such rules and regulations, which could adversely affect the ability of the Company’s securities to continue to trade on the Over-the-Counter Bulletin Board, which may cause the value of our securities to significantly decline or become worthless.

As a U.S.-listed company with operations in Hong Kong, we may face heightened scrutiny, criticism and ~~provide small parcel delivery agency service~~negative publicity, which could result in ~~cities near Shanghai~~a material change in our operations and the ~~near future. We~~value of our common stock. It could also significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. Additionally, changes in Chinese internal regulatory mandates, such as the M&A rules, Anti-Monopoly Law, and the soon to be effective Data Security Law, may target the Company’s corporate structure and impact our ability to conduct ~~our~~ business ~~operations through Lee Tat Transportation Int’l Limited, our wholly owned Hong Kong subsidiary (“Lee Tat”). Lee was organized as a private limited liability company on August 11, 2014,~~ in Hong Kong, accept foreign investments, or list on an U.S. or other foreign exchange. For a detailed description of the risks facing the Company and the offering associated with our operations in Hong Kong, please refer to “Risk Factors – Risk Factors Relating to Our Operations in Hong Kong” as disclosed in our Current Report on Form 8-k filed with the Securities and Exchange Commission on September 17, 2021.

Our corporate chart is below:

On June 17, 2021, the Company entered into a Share Acquisition Agreement (the “Share Acquisition Agreement”), by and among the Company, Massive Treasure Limited, a British Virgin Islands corporation (“Massive Treasure”), and the holders of ordinary shares of Massive Treasure. Under the terms and conditions of the Share Acquisition Agreement, the Company offered to issue 1,078,269,470 shares of common stock of the Company, in consideration for all the issued and outstanding shares in Massive Treasure. Dr. Herbert Lee, our director, is the beneficial holder of 47,500 common shares, or 95%, of the issued and outstanding shares of Massive Treasure. The Company will also issue 55,641,014 shares to complete the acquisitions of 12 business entities with Massive Treasure has ~~n operating history dating back to 2000. We acquired Lee Tat on May 12, 2017.~~signed.

As of the date of this report, these acquisitions consummated on September ~~30 2017, we worked~~17, 2021 with ~~6 major subcontractor~~800,000,000 shares of common stock pending to ~~provide logistics services~~be issued to ~~commercial clients~~Dr. Herbert Lee.

Recent Purchases of Collectibles and Acquisition of subsidiaries

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

On October 15, 2021, Massive Treasure, a subsidiary of Cosmos Group Holdings Inc., the Company, NFT Limited, a British Virgin Island limited liability company (“NFT”), and the shareholders of NFT (collectively, the “NFT Shareholders”) agreed to entered into a Share Exchange Agreement Version 2021001 (the “Agreement”) which is available on the web site of http://www.coinllectibles.art, pursuant to which Massive Treasure agreed to acquire 51% of NFT Limited through the issuance of 2,350,229 shares of common stock of the Company (the “Shares”). The specifics of such share exchange are further set forth in that certain Confirmation dated October 15, 2021, by and among the Shareholders, NFT, the Company and Massive Treasure (the “Confirmation”). The consummation of the Agreement occurs upon the issuance of the Shares to the NFT Shareholders on October 22, 2021.

On October 25, 2021, Coinllectibles Private Limited ( “Coinllectibles”), a subsidiary of Cosmos Group Holdings Inc., and the Company entered into two Sale and Purchase Agreements (the “Agreements”) with two artists, pursuant to which Coinllectibles agreed to purchase collectible art items for £260,000 and US$100,000, payable through the issuance of 43,633 and 12,500 shares of common stock of the Company (the “Shares”) respectively, at a ~~competitive price. All~~per share price of $4.00, and £130,000 and US$50,000 in cash payable after the respective collectible art item has sold by Coinllectibles. The consummation of the Agreements occurs upon the issuance of the Shares to the respective artists on October 29, 2021.

Results of Operations.

The recent outbreak of COVID-19, which has been declared by the World Health Organization to be a pandemic, has spread across the globe and is impacting worldwide economic activity. The COVID-19 pandemic has significantly impacted health and economic conditions throughout Asian region. National, regional and local governments took a variety of actions to contain the spread of COVID-19, including office and store closures, quarantining suspected COVID-19 patients, and capacity limitations. These developments have significantly impacted the results of operations, financial condition and cash flows of the Company included in this reporting. The impact included the difficulties of working remotely from home including slow Internet connection, the inability of our ~~subcontractors are located~~accounting and financial officers to collaborate as effectively as they would otherwise have in ~~Hong Kong with the exception of one contractor located in Suzhau, which is near Shanghai.~~an office environment and issues arising from mandatory state quarantines.

~~During~~While it is not possible at this time to estimate with sufficient certainty the ~~course~~impact that COVID-19 could have on the Company’s business, the continued spread of COVID-19 and the measures taken by federal, state, local and foreign governments could disrupt the operation of the Company’s business. The COVID-19 outbreak and mitigation measures have also had and may continue to have an adverse impact on global and domestic economic conditions, which could have an adverse effect on the Company’s business and financial condition, including on its potential to conduct financings on terms acceptable to the Company, if at all. In addition, the Company has taken temporary precautionary measures intended to help minimize the risk of the virus to its employees, including temporarily requiring employees to work remotely, and discouraging employee attendance at in-person work-related meetings, which could negatively affect the Company’s business. These measures are continuing. The extent to which the COVID-19 outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.

Between October and November, 2021, we have made significant progress, including the completion of the acquisition of NFT Limited which beneficially owned Talk+ and the on boarding of two paintings from two renowned artists. Talk+ is a messaging and cryptocurrency-focused mobile application which aims at simplifying the crypto usage experience by allowing users to send crypto through instant messages to other individuals. This helps to flatten the learning curve for any new individual that is exploring the possibility to participate in the crypto community. Therefore, including Talk+ into our technological landscape enables us to attract more non-crypto native users. This thereby helps to broaden our community reach to not just the crypto community. Signing the Sale and Purchase Agreements with Hughes and Yeo is another milestone for us. By having the formal cooperation with these two famous artists, we can solidify our proof of concept in connecting physical artworks to the digital NFT world. This helps us to validate our business ~~we have collected data relating to consumer behavior. We hope to develop~~model and also establish a ~~proprietary database and provide data analytics regarding consumer behavior~~working partnership model with other artists in the ~~commercial logistics industry. We believe that we can leverage this database and accompanying analytics to refine our product and services offerings as well as provide relevant industry knowledge.~~future.

~~Prospects~~

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Looking forward, we expect the growth for Hong Kong’s freight forwarding industry to remain relatively stable, with pricing pressures arising from uncertainty related to trade protectionism, increasing labor, rental and fuel costs and increased competition.

To sustain business growth, we hope to launch a car sharing business in China through our wholly owned subsidiary Asia Cosmos Group (Hong Kong) Limited in the near future. The new business segment is expected to consist of a membership based prepaid car rental program and car rental service search engine. Our car sharing services n\will allow members to enjoy discounted car rentals in a global major city. On October 27, 2017, we held a soft launch event for our car sharing business in the City of Foshan and received a nonbinding intent of cooperation from Xi Yue Yi Car Rental Co, a car sharing service provider.

~~We also expect to create a proprietary database of information relating to our car sharing, which we hope to be synergistic with our existing logistic data~~

We are at a development stage company and reported a net loss of $8,808 for the nine months ended September 30, 2017, and $19,166 for the year ended December 31, 2016, respectively. We had current assets of $47,863 and current liabilities of $75,130 as of December 31, 2016. Our auditors have prepared our financial statements for the years ended December 31, 2016 and 2015 assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and public offerings, capital leases and short-term and long-term debts.

~~Results of Operations~~

Comparison of the three months ended September 30, ~~2017~~2021 and September 30, ~~2016~~2020

As of September 30, ~~2017,~~2021, we ~~suffered from~~had a working capital deficit of ~~$50,391.~~$1,907,801 and accumulated deficit of $3,775,794. As a result, our continuation as a going concern is dependent upon improving our profitability and ~~the continuing~~continued financial support from our stockholders or other capital sources. Management believes that ~~the continuing~~continued financial support from ~~the~~ existing shareholders and external financing will provide the additional cash necessary to meet our obligations as they become due. Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

The following table sets forth certain operational data for the three months ended September 30, ~~2017,~~2021, compared to the three months ended September 30, ~~2016:~~2020:

Three months ended September 30,
2017 2016

Revenue $ 292,944 $ 90,518
Cost of revenue (180,618 ) (44,865 )
Gross profit 112,326 45,653
General and administrative expenses (63,100 ) (202,402 )
Income (loss) from operation 49,226 (156,749 )
Total other expense (562 ) (462 )
Income tax expense (7,792 ) (454 )
NET INCOME/(LOSS) $ 40,872 $ (157,665 )

	Three months ended September 30,
	2021			2020

Revenue	$	2,282,399		$	1,554,251
Cost of revenue		(220,733	)		(327,845	)
Gross profit		2,061,666			1,226,406
Operating expenses		(4,485,656	)		(858,253	)
(Loss) income from operations		(2,423,990	)		368,153
Total other (expense) income		(34,291	)		28,667
Income tax (expense) credit		(163,524	)		3

NET (LOSS) INCOME	$	(2,621,805	)	$	396,823

Revenue. ~~We generated revenues of $292,944 and $90,518~~Revenue for the three months ended September 30, ~~2017~~2021 and ~~2016.~~2020 was $2,282,399 and $1,554,251. The increase in ~~revenue~~revenues of approximately $728,148 or 46.85% is ~~attributable~~primarily due to the ~~expansion~~soar from the loan interest income received and sales of our business into Shanghai and our contract with Shanghai Yunda Cargo Limited. We anticipate that our revenues will continue increase in the near future as we further develop our business in the China market.

collectibles. During the three months ended September 30, ~~2017,~~2021 and ~~2016,~~2020, revenues were mainly attributable to the ~~following customers accounted for 10% or more of our total net revenues:~~

Three months ended
September 30, 2017 September 30, 2017
Customer Revenues Percentage
of revenues Accounts
receivable
Peaceman Cable Engineering Limited $ 78,603 27% $ –
Hip Tung Cables Company Limited 86,205 29% –
Total: $ 164,808 56% Total: $ –

finance business segment representing 76.96% and 100%, respectively and collectible business segment representing 23.04% and 0%.

Three months ended
September 30, 2016 September 30, 2016
Customer Revenues Percentage
of revenues Accounts receivable
Peaceman Cable Engineering Limited $ 21,816 24% $ –
Hip Tung Cables Company Limited 33,729 37% –
Total: $ 55,545 61% Total: $ –

~~All customers are located in Hong Kong.~~

Cost of Revenue. Cost of revenue of approximately $220,733 for the three months ended September 30, ~~2017, was $180,618,~~2021 consisted primarily of interest expense and ~~as a percentage~~cost of ~~net revenue, approximately 61.7%.~~collectibles. Cost of revenue ~~for the same period ended September 30, 2016, was $44,865. Cost~~ of ~~revenue as a percentage of net revenue~~approximately $327,845 for the three months ended September 30, ~~2016~~2020. The decrease in cost of revenues of approximately $107,112 or 32.67% from the comparable period in 2020 was ~~approximately 49.6%. Cost~~mainly due to the repayment of ~~revenue increased primarily as a result of~~loan payable during the ~~increase~~period in ~~our business volume.~~which lead to decrease in interest expense.

For the three months ended September 30, 2017, and 2016, Tak Lee Transportation Co. accounted for $15,254, or 8.5 % of our operating costs, with accounts payable of $0 as of September 30, 2017. For the same period ended September 30, 2016, Tak Lee Transportation Co. accounted for $7,253, or 16.2% of our operating costs, with accounts payable of $0 as of September 30, 2016.

Gross Profit. We achieved a gross profit of ~~$112,326~~$2,061,666 and ~~$45,653~~$1,226,406 for the three months ended September 30, ~~2017,~~2021, and ~~2016,~~2020, respectively. The increase in gross profit for the three months ended September 30, 2021 was $835,260 or approximately 68.11%, the increase in gross profit is primarily attributable to an increase in our ~~increased operational efficiencies.~~collectible business volume.

~~General and Administrative~~Operating Expenses ~~(“G&A”)~~. We incurred ~~G&A~~operating expenses of ~~$63,100~~$4,485,656 and ~~$202,402~~$858,253 for the three months ended September 30, ~~2017,~~2021, and ~~2016,~~2020, respectively. ~~The decrease~~Operating expenses consist primarily of costs in ~~G&A is primarily reduce~~salary and benefits for our general administrative and management staff, facilities costs, depreciation expenses, professional fees, audit fees, and other miscellaneous expenses incurred in connection with general operations. Operating expenses increased by 422.65% or approximately $3,627,403 in the ~~attributable~~three months ended September 30, 2021 from $858,253 in the same period of 2020. The increase was primarily due to ~~professional, administrative~~the increase in consultancy fee, directors’ remuneration, and ~~other fees associated with being~~management fee charged by a ~~reporting act company.~~related company owned by the director of the Company.

~~G&A as a percentage~~Other Income (Expenses), net. We incurred net other income (expenses) of ~~net revenue was approximately 21.5%~~$(34,291) and ~~223.6%~~$28,667 for the three months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively. ~~As a general matter, we expect our G&A to~~The increase in net other income (expenses) is primarily attributable to the ~~foreseeable future as we expand our business operations, including an anticipated increase in employees.~~impairment loss on digital assets.

~~Other Expenses, net~~Income Tax (Expense) Credit. ~~We incurred net other expenses of $562~~Our income tax (expense) credit for the three months ended September 30, ~~2017, as compared to $462~~2021 and 2020 was $(163,524) and $3, respectively.

Net Income (Loss). During the three months ended September 30, 2021 and 2020, we incurred a net (loss) income of $(2,621,805) and $396,823, respectively. The decrease in net income for the three months ended September 30, ~~2016. Our net other expenses for~~2021 of $3,018,628 was mainly attributed from the ~~three~~increase in operating expenses.

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Comparison of the nine months ended September 30, ~~2017 and 2016 consisted primarily of interest expenses.~~

~~Income Tax Expense~~. Our income tax expenses for the three months ended September 30, 2017 and 2016 was $7,792 and $454, respectively. The increase in income tax expenses was primarily attributable to the larger net gain that we incurred as a result of lesser operating expenses.

~~Net Income/(Loss)~~. During the three months ended September 30, 2017, we incurred a net income/(loss) of $40,872, as compared to ($157,665) for the same period ended September 30, 2016. The increase in net income is primarily attributable to decreased general and administrative expenses resulting from being a reporting act company.

~~Comparison of the Nine months ended September 30, 2017~~2021 and September 30, ~~2016~~2020

The following table sets forth certain operational data for the nine months ended September 30, ~~2017,~~2021, compared to the nine months ended September 30, ~~2016:~~2020:

Nine months ended September 30,
2017 2016

Revenue $ 572,326 $ 276,299
Cost of revenue (381,598 ) (212,910 )
Gross profit 190,728 63,389
General and administrative expenses (189,937 ) (282,159 )
Income (loss) from operation 791 (218,770 )
Total other expense (1,545 ) (1,588 )
Income tax expense (8,054 ) (1,585 )
NET LOSS $ (8,808 ) $ (221,943 )

	Nine months ended September 30,
	2021			2020

Revenue	$	5,510,344		$	3,414,244
Cost of revenue		(997,679	)		(795,041	)
Gross profit		4,512,665			2,619,203
Operating Expenses		(6,177,734	)		(2,225,836	)
(Loss) income from operations		(1,665,069	)		393,367
Total other income		106,421			112,721
Income tax (expense) credit		(377,453	)		6,051
NET (LOSS) INCOME	$	(1,936,101	)	$	512,139

Revenue. ~~We generated revenues of $572,326 and $276,299~~Revenue for the nine months ended September 30, ~~2017~~2021 and ~~2016.~~2020 was $5,510,344 and $3,414,244. The increase in ~~revenue~~revenues of approximately $2,096,100 or 61.39% is ~~attributable~~due primarily to the ~~expansion~~soar from the loan interest income received and sales of our business into Shanghai and our contract with Shanghai Yunda Cargo Limited. We anticipate that our revenues will continue increase in the near future as we further develop our business in the China market.

collectibles. During the nine months ended September 30, ~~2017,~~2021 and ~~2016,~~2020, revenues were mainly attributable to the ~~following customers accounted for 10% or more of our total net revenues:~~

Nine months ended
September 30, 2017 September 30, 2017
Customer Revenues Percentage
of revenues Accounts
receivable
Peaceman Cable Engineering Limited $ 218,075 38% $ –
Hip Tung Cables Company Limited 143,507 25% –
Total: $ 361,582 63% Total: $ –

Nine months ended
September 30, 2016 September 30, 2016
Customer Revenues Percentage
of revenues Accounts receivable
Peaceman Cable Engineering Limited $ 91,699 33% $ –
Hip Tung Cables Company Limited 40,887 15% –
Total: $ 132,586 48% Total: $ –

~~All customers are located in Hong Kong.~~finance business segment representing 90.47% and 100%, respectively and collectible business segment representing 9.53% and 0%.

Cost of Revenue. Cost of revenue of approximately $997,679 for the nine months ended September 30, ~~2017, was $381,598,~~2021 consisted primarily of interest expense and ~~as a percentage~~cost of ~~net revenue, approximately 66.7%.~~collectibles. Cost of revenue ~~for the same period ended September 30, 2016, was $212,910. Cost~~ of ~~revenue as a percentage of net revenue for the quarter ended September 30, 2016 was~~ approximately ~~77.1%. Cost of revenue increased primarily as a result of the increase in our business volume.~~

For the nine months ended September 30, 2017, and 2016, Tak Lee Transportation Co. accounted for $29,472, or 7.7% of our operating costs, with accounts payable of $0 as of September 30, 2017. For the same period ended September 30, 2016, Tak Lee Transportation Co. accounted for $15,959, or 7.5% of our operating costs, with accounts payable of $0 as of September 30, 2016.

~~Gross Profit~~~~. We achieved a gross profit of $190,728 and $63,389~~$795,041 for the nine months ended September 30, ~~2017,~~2020 consisted primarily of interest expense. The increase in cost of revenues of approximately $202,638 or 25.49% from the comparable period in 2020 was due mainly to the increases of collectible revenue.

Gross Profit. We achieved a gross profit of $4,512,665 and ~~2016,~~$2,619,203 for the nine months ended September 30, 2021, and 2020, respectively. The increase in gross profit is primarily attributable to an increase in our ~~increased operational efficiencies.~~collectible business volume.

~~General and Administrative~~Operating Expenses ~~(“G&A”)~~. We incurred ~~G&A~~operating expenses of ~~$189,937~~$6,177,734 and ~~$282,159~~$2,225,836 for the nine months ended September 30, ~~2017,~~2021, and ~~2016,~~2020, respectively. ~~The decrease~~Operating expenses consist primarily of costs in ~~G&A is primarily reduce~~salary and benefits for our general administrative and management staff, consulting, management fees, facilities costs, depreciation expenses, professional fees, audit fees, and other miscellaneous expenses incurred in connection with general operations. Operating expenses increased by 177.55% or approximately $3,951,898 in the ~~attributable~~nine months ended September 30, 2021 from $2,225,836 in the same period of 2020. The increase was due to ~~professional, administrative~~the increase in management fee charged by a related company which owned by a director of the Company, consulting fees, and ~~other fees associated with being a reporting act company.~~salaries, wages and benefits.

~~G&A as a percentage~~Other Income, net. We incurred net other income of ~~net revenue was approximately 33.2%~~$106,421 and ~~102.1%~~$112,721 for the nine months ended September 30, ~~2017~~2021 and ~~2016,~~2020, respectively. ~~As a general matter, we expect our G&A to increase in the foreseeable future as we expand our business operations, including an anticipated increase in employees.~~

~~Other Expenses, net~~Income Tax (Expense) Credit. ~~We incurred net other expenses of $1,545~~Our income tax (expense) credit for the nine months ended September 30, ~~2017, as compared to $1,588 for the same period ended September 30, 2016. Our net other expenses for the nine months ended September 30, 2017~~2021 and ~~2016 consisted primarily of interest expenses.~~2020 was $(377,453) and $6,051, respectively.

Net Income ~~Tax Expense~~. Our income tax expenses for the nine months ended September 30, 2017 and 2016 was $8,054 and $1,585, respectively. The increase in income tax expenses was primarily attributable to the larger net gain that we incurred as a result of lesser operating expenses.

~~Net Loss~~(Loss). During the nine months ended September 30, ~~2017,~~2021 and 2020, we incurred a net ~~loss~~(loss) income of ~~$8,808, as compared to $221,943~~$(1,936,101) and $512,139, respectively. The decrease in net income for the ~~same period~~nine months ended September 30, ~~2016.~~2021 of $2,448,240 or approximately 478.04% due to the increase in operating expenses.

Liquidity and Capital Resources

As of September 30, ~~2017,~~2021 and December 31, 2020, we had cash and cash equivalents of ~~$20,195, accounts receivable of $38,178~~$2,703,539 and incurred a net loss of $8,808 for the nine months ended September 30, 2017. As of December 31, 2016, we had cash and cash equivalents of $1,581, accounts receivable of $46,282 and incurred a net loss of $221,943.$773,381.

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

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

Nine Months Ended September 30,
2017 2016
Net cash provided by (used in) operating activities $ 83,824 $ (173,593 )
Net cash (used in) provided by investing activities – –
Net cash (used in) provided by financing activities (65,210 ) 175,969

Going Concern Uncertainties

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

Nine Months Ended September 30,

2021

2020

Net cash used in operating activities

$ (5,533,265 )

$ (1,132,832 )
Net cash used in investing activities

(39,325 )

(17,034 )
Net cash provided by financing activities

$ 7,517,013

$ 1,264,379

Net Cash ~~Provided By (Used In)~~Used In Operating Activities.

For the nine months ended September 30, ~~2017,~~2021, net cash ~~provided by~~used in operating activities was ~~$83,824,~~$5,533,265 which consisted primarily of a net loss of ~~$8,808 offset by decrease in accounts receivable~~$1,936,101, gain from forgiveness of ~~$8,104,~~related party debts of $140,712, digital assets received of $257,977, loss on written-off of property and equipment of $163,058, an increase in ~~accounts~~loan receivables of $6,991,052, an increase in loan interest and fee receivables of $752,839, an increase in inventory of $1,148,903, offset by issuance of common stock for goods and services rendered of $1,334,710, an increase in other payable and ~~accrued liabilities~~accruals of ~~$61,597~~$3,856,451, and ~~depreciation~~an increase in income tax payable of ~~property, plant and equipment of $14,876.~~$376,222.

For the nine months ended September 30, ~~2016,~~2020, net cash used in operating activities was ~~$173,593,~~$1,132,832, which consisted primarily of a net ~~loss~~income of ~~$221,943,~~$512,139, an ~~decrease~~increase in ~~accounts~~accrued liabilities and other payables of $100,603, offset by gain from forgiveness of related party debts of $52,143, an increase in loan receivables of $1,494,917, an increase in loan interest receivable of ~~$35,851~~$134,646, and ~~depreciation~~increase in prepayment and other receivables of ~~property, plant and equipment of $14,968, offset by a decrease in accounts payable and accrued liabilities of $4,054.~~$67,691.

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

Net Cash ~~(Used In) Provided By Financing~~Used In Investing Activities.

For the nine months ended September 30, ~~2017,~~2021 and 2020, net cash used in ~~financing~~investment activities was ~~$65,210 consisting primarily~~$39,325 and $17,034, respectively. The net cash used in investing activities for the nine months ended September 30, 2021 mainly consisted of ~~offset by advances from Koon Wing, CHEUNG, our Chief Executive Officer~~purchase of ~~$49,786~~intangible assets of $39,325. The net cash used in investing activities for the nine months ended September 30, 2020 mainly consisted of purchase of property and ~~repayments on a finance lease~~equipment of ~~$15,424.~~$17,034.

Net Cash Provided By Financing Activities.

For the nine months ended September 30, ~~2016,~~2021, net cash provided by financing activities was ~~$175,969,~~$7,517,013 consisting of advance from related parties of $11,146,695 and repayment of loan payable of $3,629,682.

For the nine months ended September 30, 2020, net cash provided by financing activities was $1,264,379 consisting primarily of advances from ~~Koon Wing, CHEUNG, our Chief Executive Officer,~~related parties of ~~$191,062, offset by repayment on a finance lease~~$168,304 and proceeds from loan payable of ~~$15,093.~~$1,096,075.

Off-Balance Sheet Arrangements

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

Contractual Obligations and Commercial Commitments

We ~~had the following~~have contractual obligations and commercial commitments as of September 30, ~~2017:~~2021.

Contractual Obligations Total Less than 1
Year 1-3 Years 3-5 Years More than 5
Years
$ $ $ $ $
Amounts due to related parties 69,527 69,527 – – –
Commercial commitments
Finance lease repayment 53,333 20,000 33,333 – –
Total obligations 122,860 89,527 33,333 – –

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On June 17, 2021, the Company entered into a Share Acquisition Agreement (the “Share Acquisition Agreement”), by and among the Company, Massive Treasure and the holders of common shares of Massive Treasure. Under the terms and conditions of the Share Acquisition Agreement, the Company offered to issue 1,078,269,470 shares of common stock of the Company, in consideration for all the issued and outstanding shares in Massive Treasure. Dr. Herbert Lee, our director, is the beneficial holder of 47,500 common shares, or 95%, of the issued and outstanding shares of Massive Treasure. As of September 30, 2021, there are 800,000,000 shares of common stock pending to be issued to Dr. Herbert Lee.

~~Off-Balance Sheet Arrangements~~

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

Critical Accounting Policies and Estimates

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

☐

Use of estimates and assumptions

☐

Basis of consolidation

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

· ~~Accounts receivable~~

· ~~Property, plant and equipment~~

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

	☐	~~Expected useful life~~		Digital assets
~~Service vehicle~~		~~8 years~~

~~Expenditure~~The Company’s digital assets represent the cryptocurrency of Ethereum and OEC Token. The Company accounts for ~~repairs and maintenance is expensed as incurred. When~~its digital assets ~~have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized~~ in ~~the results of operations.~~

~~Depreciation expense for the three months ended September 30, 2017 and 2016 was $4,959 and $4,988, respectively.~~

~~Depreciation expense for the nine months ended September 30, 2017 and 2016 was $14,876 and $14,968, respectively.~~

· ~~Impairment of long-lived assets~~

In accordance with ~~the provisions of~~Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill. ASC ~~Topic 360, “~~~~Impairment or Disposal of Long-Lived Assets~~”, all long-lived assets such as property, plant and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability ofSubtopic 350-30 requires assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured ~~by the amount by which the carrying amounts of the assets exceed~~based on the fair value of the ~~assets. There~~consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. The Company’s cryptocurrencies are deemed to have an indefinite useful life, therefore amounts are not amortized, but rather are assessed for impairment.

☐

Loan receivables, net

Loans are placed on nonaccrual status when they are past due 180 days or more as to contractual obligations or when other circumstances indicate that collection is not probable. When a loan is placed on nonaccrual status, any interest accrued but not received is reversed against interest income. Payments received on a nonaccrual loan are either applied to protective advances, the outstanding principal balance or recorded as interest income, depending on an assessment of the ability to collect the loan. A nonaccrual loan may be restored to accrual status when principal and interest payments have been brought current and the loan has ~~been no~~performed in accordance with its contractual terms for a reasonable period (generally six months).

If the Company determines that a loan is impaired, the Company next determines the amount of the impairment. The amount of impairment ~~charge~~on collateral dependent loans is charged off within the given fiscal quarter. Generally, the amount of the loan and negative escrow in excess of the appraised value less estimated selling costs, for the ~~three and nine months ended September 30, 2017.~~fair value of collateral valuation method, is charged off. For all other loans, impairment is measured as described below in Allowance for Loan Losses.

☐

Allowance for loan losses (“ALL”)

· ~~Revenue recognition~~

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~~In accordance with~~The adequacy of the ~~ASC Topic 605,~~~~“Revenue Recognition”~~~~, the Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price~~Company’s ALL is ~~fixed or determinable and collectability is reasonably assured.~~

~~Revenue is recognized in full upon completion of delivery to the receiver’s location.~~

· ~~Income taxes~~

~~Income taxes are~~ determined, in accordance with ASC Subtopics 450-20 Loss Contingencies includes management’s review of the ~~provisions~~Company’s loan portfolio, including the identification and review of ~~ASC Topic 740,~~~~“Income Taxes~~~~” (“ASC 740”). Under this method, deferred tax assets~~individual problem situations that may affect a borrower’s ability to repay. In addition, management reviews the overall portfolio quality through an analysis of delinquency and ~~liabilities are recognized for~~non-performing loan data, estimates of the ~~future tax consequences attributable to differences between~~value of underlying collateral, current charge-offs and other factors that may affect the ~~financial statement carrying amounts~~portfolio, including a review of ~~existing assets~~regulatory examinations, an assessment of current and ~~liabilities~~expected economic conditions and ~~their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income~~changes in the ~~years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets~~size and ~~liabilities~~composition of ~~a change in tax rates is recognized in income in~~ the ~~period that includes the enactment date.~~loan portfolio.

☐

Revenue recognition

Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ASC ~~740 prescribes a comprehensive model~~606”), establishes principles for ~~how companies should~~reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. The core principle requires an entity to recognize ~~measure, present, and disclose~~revenue to depict the transfer of goods or services to customers in ~~their financial statements uncertain tax positions taken or expected~~an amount that reflects the consideration that it expects to be ~~taken on a tax return. Under ASC 740, tax positions must initially~~entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized ~~in the financial statements when~~as it ~~is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount~~fulfills its obligations under each of ~~tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.~~its agreements:

•	identify the contract with a customer;
•	identify the performance obligations in the contract;
•	determine the transaction price;
•	allocate the transaction price to performance obligations in the contract; and
•	recognize revenue as the performance obligation is satisfied.

☐

Related parties

The Company ~~conducts major businesses~~follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.

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Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in ~~Hong Kong~~their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and ~~is subject to tax in this jurisdiction. As a result~~Income-sharing trusts that are managed by or under the trusteeship of ~~its business activities,~~management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company ~~files tax returns that are subject to examination by~~may deal if one party controls or can significantly influence the ~~foreign tax authority.~~

· ~~Finance leases~~

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

· ~~Foreign currencies translation~~

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

· ~~Related parties~~

· ~~Segment reporting~~

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

· ~~Fair value of financial instruments~~interests.

The ~~carrying~~condensed consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

☐

Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of ~~the Company’s~~its financial instruments ~~(excluding short-term bank borrowing~~ and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values becausehas adopted paragraph 820-10-35-37 of the ~~short-term nature of these financial instruments.~~

~~Management believes, based on the current market prices or interest rates for similar debt instruments,~~FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of ~~short-term bank borrowings~~its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and ~~note payable approximate~~expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the ~~carrying amount.~~FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

Level 1		Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2		Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3		Pricing inputs that are generally observable inputs and not corroborated by market data.

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The ~~Company also follows~~fair value hierarchy gives the ~~guidance of~~highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the ~~ASC Topic 820-10, “~~~~Fair Value Measurements and Disclosures~~~~” ("ASC 820-10"), with respect~~lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that ~~are measured at fair value. ASC 820-10 establishes a three-tier~~is significant to the fair value ~~hierarchy that prioritizes~~measurement of the ~~inputs used in measuring~~instrument.

☐

Recent accounting pronouncements

·	~~Level 1~~ ~~: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;~~

~~Fair value estimates are made at a specific point~~not to exceed the carrying amount of goodwill. This standard, which will be effective for the Company beginning in ~~time based~~the first quarter of fiscal year 2020, is required to be applied prospectively. Early adoption is permitted for interim or annual goodwill impairment tests performed on ~~relevant market information about~~testing dates after January 1, 2017. The Company is currently evaluating the impact this standard will have on its consolidated financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.statements.

· ~~Recent accounting pronouncements~~In June 2020, the FASB issued ASU 2020-07, Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2020-07”), which supersedes ASC 505-50 and expands the scope of ASC 718 to include all share-based payments arrangements related to the acquisition of goods and services from both employees and nonemployees. For public companies, the amendments are effective for annual reporting periods beginning after December 15, 2020, including interim periods within those annual periods. Early adoption is permitted, but no earlier than a company’s adoption date of ASC 606. The Company does not believe that the adoption of ASU 2020-07 will have a material impact on the Company’s consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract, which amended its guidance for costs of implementing a cloud computing service arrangement to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new standard also requires customers to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. This new standard becomes effective for the Company in the first quarter of fiscal year 2020, with early adoption permitted. This new standard can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is evaluating the impact of adopting this amendment to its consolidated financial statements.

ITEM 3 Quantitative and Qualitative Disclosures about Market Risk

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

ITEM 4 Controls and ~~Procedures~~Procedure

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures, subject to limitations as noted below, as of September 30, ~~2017,~~2021, and during the period prior to and including the date of this report, were ~~not~~ effective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Inherent Limitations

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

Changes in Internal Control over Financial Reporting

Subject to the foregoing disclosure, there were no changes in our internal control over financial reporting that occurred during our ~~last~~ fiscal quarter ended September 30, ~~2017,~~2021, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

ITEM 1 Legal Proceedings

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

ITEM 1A Risk Factors

~~None.~~We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3 Defaults upon Senior Securities

None.

ITEM 4 Mine Safety Disclosures

Not applicable.

ITEM 5 Other Information

Our subsidiaries are parties to ten office leases for premises located in Hong Kong and Singapore, and an art gallery lease located in Hong Kong, with an annual aggregate lease payment of approximately $380,362. The maturity of the annual lease payments is analyzed as below:

~~None.~~

~~ITEM 6 Exhibits~~

Leases expire:
Within one year	$	171,498
Between 2 and 5 years		208,864
		380,362

~~Exhibit No.~~		~~Description~~

~~3.1~~15

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ITEM 6 Exhibits

Exhibit No.		Description
3.1		Articles of Incorporation and Certificate of Amendment to Articles of Incorporation ~~(2)~~ (1)
3.2		Amended and Restated Bylaws ~~(1)~~ (2)
4.1		Specimen certificate evidencing shares of Common ~~Stock~~ ~~(2)~~Stock*
~~10.1~~ 4.2		~~Lee Tat Transportation Service Contract, effective May 1, 2017,~~ Description of Securities (3)
10.2		Consultancy Agreement, dated August 2, 2021, by and between ~~Lee Tat Transportation International Limited~~Cosmos Group Holdings Inc. and ~~Shanghai Yunda Cargo Co., Ltd.~~ ~~(2)~~CHAN Man Chung (4)
10.2		~~Lee Tat Transportation Service Contract, effective May 1, 2017,~~ Consultancy Agreement, dated August 2, 2021, by and between ~~Lee Tat Transportation International Limited~~Cosmos Group Holdings Inc. and ~~Suzhou Yuantong Logistic Company, Ltd.~~ ~~(3)~~TAN Tee Soo
~~10.3~~ 21		~~Employment Agreement, effective January 1, 2015, by and between Lee Tat Transportation International Limited and Koon Wing Cheung.~~ ~~(2)~~ Subsidiaries(4)
21 31.1		~~Subsidiaries~~*
~~31.1~~		Certification of Chief Executive Officer ~~required under Rule 13a-14(a)/15d-14(a) under the Exchange Act.~~*
~~31.2~~		~~Certification of~~and Chief Financial Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act.**
32.1		Certification of Chief Executive Officer ~~pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~.*
~~32.2~~		~~Certification of~~and Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS		XBRL Instance Document*
101.SCH		XBRL Schema Document*
101.CAL		XBRL Calculation Linkbase Document*
101.DEF		XBRL Definition Linkbase Document*
101.LAB		XBRL Label Linkbase Document*
101.PRE		XBRL Presentation Linkbase Document*

_________

*	Filed herewith

(1)	Incorporated by reference from our Form 10 filed with the Securities and Exchange Commission on May 23, 2017.
(2)	Incorporated by reference from our Form 10-SB filed with the Securities and Exchange Commission on January 19, 2000, under the name Interactive Marketing Technology, Inc.
(3)	Incorporated by reference to Exhibit 4.2 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 25, 2021.
(4)	Incorporated by reference to the Exhibits to the Current Report on Form 8-K filed with the Securities and Exchange Commission on September 17, 2021.

Table of Contents

* ~~Filed herewith~~

~~(1) Incorporated by reference from our Form 10-SB filed with the Securities and Exchange Commission on January 19, 2000, under the name Interactive Marketing Technology, Inc.~~

~~(2) Incorporated by reference from our Registration Statement on Form 10 filed with the Securities and Exchange Commission on May 23, 2017.~~

~~(3) Incorporated by reference from the Amendment No. 2 to our Registration Statement on Form 10 filed with the Securities and Exchange Commission on July 31, 2017.~~

SIGNATURES

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

	COSMOS GROUP HOLDINGS INC.

	By:	/s/ Man Chung Chan
		Man Chung Chan
		Chief Executive Officer, Chief Financial Officer, Secretary

Date: November 19, 2021


	17
	~~By:~~	~~/s/Koon Wing Cheung~~
		~~Koon Wing Cheung~~
		~~Chief Executive Officer~~




~~Date: November 14, 2017~~

	September 30, 2017			December 31, 2016
	(Unaudited)			(Audited)
ASSETS
Current assets:
Cash and cash equivalents	$	20,195		$	1,581
Amount due from a related party		63,794			–
Accounts receivable		38,178			46,282

Total current assets		122,167			47,863

Non-current assets:
Property, plant and equipment, net		108,521			124,161

TOTAL ASSETS	$	230,688		$	172,024

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	75,297		$	13,700
Amounts due to related parties		69,527			41,306
Income tax payable		7,734			–
Current portion of obligation under finance leases		20,000			20,124

Total current liabilities		172,558			75,130

Non-current liabilities:
Deferred tax liabilities		13,191			12,870
Obligation under finance leases		33,333			48,633

Total non-current liabilities		46,524			61,503

TOTAL LIABILITIES		219,082			136,633

Commitments and contingencies

Stockholders’ equity:
Common stock, $0.001 par value; 500,000,000 shares authorized; 429,848,898 and 219,222,938 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively		429,849			219,223
Accumulated losses		(418,243	)		(183,832	)

Total stockholders’ equity		11,606			35,391

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	230,688		$	172,024

	Common stock				Accumulated			Total stockholders’
	No. of shares		Amount		losses			equity

Balance as of January 1, 2017 (restated)		219,222,938	$	219,223	$	(183,832	)	$	35,391

Shares issued for acquisition		210,625,960		210,626		(225,603	)		(14,977	)

Net loss for the period		–		–		(8,808	)		(8,808	)

Balance as of September 30, 2017		429,848,898		429,849	$	(418,243	)	$	11,606

Years ending September 30:
2018	$	20,000
2019		20,000
2020		13,333

Total	$	53,333

	Three months ended September 30, 2017					September 30, 2017
Customers	Sales		Percentage of sales			Accounts receivable

Customer A	$	78,603		27%		$	–
Customer B		86,205		29%			–

Total:	$	164,808		56%	Total:	$	–

	Nine months ended September 30, 2017					September 30, 2017
Customers	Sales		Percentage of sales			Accounts receivable

Customer A	$	218,075		38%		$	–
Customer B		143,507		25%			–

Total:	$	361,582		63%	Total:	$	–

	Three months ended September 30, 2016					September 30, 2016
	Sales		Percentage of sales			Accounts receivable

Customer A	$	21,816		24%		$	–
Customer B		33,729		37%			–

Total:	$	55,545		61%	Total:	$	–

	Nine months ended September 30, 2016				September 30, 2016
	Sales		Percentage of sales		Accounts receivable

Customer A	$	91,699		33%	$	–
Customer B		40,887		15%		–

Total:	$	132,586		48%	$	–

	Three months ended September 30,
	2017			2016

Revenue	$	292,944		$	90,518
Cost of revenue		(180,618	)		(44,865	)
Gross profit		112,326			45,653
General and administrative expenses		(63,100	)		(202,402	)
Income (loss) from operation		49,226			(156,749	)
Total other expense		(562	)		(462	)
Income tax expense		(7,792	)		(454	)
NET INCOME/(LOSS)	$	40,872		$	(157,665	)

	Three months ended September 30, 2017					September 30, 2017
Customer	Revenues		Percentage of revenues			Accounts receivable
Peaceman Cable Engineering Limited	$	78,603		27%		$	–
Hip Tung Cables Company Limited		86,205		29%			–
Total:	$	164,808		56%	Total:	$	–

Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years		More than 5 Years
	$		$		$		$		$
Amounts due to related parties		69,527		69,527		–		–		–
Commercial commitments
Finance lease repayment		53,333		20,000		33,333		–		–
Total obligations		122,860		89,527		33,333		–		–