| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States of America
(“US GAAP”). Interim
Financial Statements The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of
the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed consolidated financial statements do not
include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary to make the condensed consolidated financial statements not misleading
have been included. The
unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial
statements and the notes for the year ended December 31, 2021. The results of operations for the six and three months ended June 30,
2022, are not necessarily indicative of the results to be expected for the full year. Going
Concern The
financial statements have been prepared assuming that the Company will continue as a going concern. The Company incurred losses of $ 49,401
and $ 26,522
for the six months ended
June 30, 2022 and 2021, respectively. As of June 30, 2022, the Company had a working capital deficit of $ 14,732 ,
and an accumulated deficit of $ 9,528,601 .
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. Management believes
that the Company’s capital requirements will depend on many factors including the success of the Company’s efforts to complete
a merger or acquisition, and the Company’s efforts to raise capital. Management also believes the Company needs to raise additional
capital for working capital purposes. There is no assurance that such financing will be available on acceptable terms in the future.
The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going
concern. Use
of Estimates In
preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the
reported amounts of revenues and expenses during the reporting period. Significant estimates, required by management, include the recoverability
of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could
differ from these estimates. Cash
and Equivalents Cash
and equivalents include 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. Accounts
Receivable, net The
Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable
and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer
payment patterns to evaluate the adequacy of these reserves. Property
and Equipment, net Property
and equipment are stated at cost, less accumulated depreciation. Major repairs and betterments that significantly extend original useful
lives or improve productivity are capitalized and depreciated over the period benefited. Maintenance and repairs are expensed as incurred.
When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the
respective accounts, and any gain or loss is included in operations. Depreciation of property and equipment is computed using shorter
of useful lives of the property or the unit of depletion method. For shorter-lived assets the straight-line method over estimated lives
ranging from 3 to 5 years is used as follows: SUMMARY
OF PROPERTY AND EQUIPMENT ESTIMATED USEFUL LIVES
Office
Equipment 3 5 Impairment
of Long-Lived Assets Long-lived
assets, which include property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Recoverability
of long-lived assets to be held and used is measured by comparing the carrying amount of an asset to the estimated undiscounted future
cash flows expected to be generated by it. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an
impairment charge is recognized by the amount by which the carrying amount of the asset exceeds its fair value (“FV”). FV
is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. The Company
did not have any long-lived assets as of June 30, 2022 and December 31, 2021. Income
Taxes Income
taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences
in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end
based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable
income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The
Company follows ASC Topic 740, which prescribes a more-likely-than-not threshold for financial statement recognition and measurement
of a tax position taken or expected to be taken in a tax return. ASC Topic 740 also provides guidance on recognition of income tax assets
and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated
with tax positions, accounting for income taxes in interim periods, and income tax disclosures. Under
the provisions of ASC Topic 740, when tax returns are filed, it is likely that some positions taken would be sustained upon examination
by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position
that would be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which,
based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination,
including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.
Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more
than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated
with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits
in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon
examination. Interest associated with unrecognized tax benefits are classified as interest expense and penalties are classified in selling,
general and administrative expenses in the statements of income. At June 30, 2022 and December 31, 2021, the Company did not take any
uncertain positions that would necessitate recording a tax related liability. The
Company accounts for income taxes in interim periods in accordance with FASB ASC 740-270, “Interim Reporting.” The Company
has determined an estimated annual effective tax rate. The rate will be revised, if necessary, as of the end of each successive interim
period during the Company’s fiscal year to its best current estimate. The estimated annual effective tax rate is applied to the
year-to-date ordinary income (or loss) at the end of the interim period. Revenue
Recognition The
Company follows Accounting Standards Update (“ASU”) 2014-09 (and related amendments subsequently issued in 2016), Revenue
from Contracts with Customers (ASC 606). FASB
ASC Topic 606 requires use of a new five-step model to recognize revenue from customer contracts. The five-step model requires the Company
(i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction
price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate
the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies
each performance obligation. Fair
Value of Financial Instruments For
certain of the Company’s financial instruments, including cash and equivalents, accrued liabilities and accounts payable, carrying
amounts approximate their FV due to their short maturities. FASB ASC Topic 825, “Financial Instruments,” requires disclosure
of the FV of financial instruments held by the Company. The carrying amounts reported in the balance sheets for current liabilities each
qualify as financial instruments and are a reasonable estimate of their FVs because of the short period of time between the origination
of such instruments and their expected realization and the current market rate of interest. Fair
Value Measurements and Disclosures FASB
ASC Topic 820, “Fair Value Measurements and Disclosures,” defines FV, and establishes a three-level valuation hierarchy for
disclosures of fair value measurement that enhances disclosure requirements for FV measures. The three levels are defined as follow:
● Level
1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
● Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that
are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
● Level
3 inputs to the valuation methodology are unobservable and significant to the FV measurement. The
Company did not identify any assets and liabilities that are required to be presented on the balance sheet at FV. Foreign
Currency Translation and Comprehensive Income (Loss) Prior
to discontinuing the majority of its operation on March 31, 2019, the functional currency of the Company’s variable intertest entities
(the “VIEs”) is RMB. For financial reporting purposes, RMB is translated into USD as the reporting currency. Assets and liabilities
are translated at the exchange rate in effect at the balance sheet dates. Equity accounts are translated at historical rates. Revenues
and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation
adjustments from using different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated
other comprehensive income”. Gains and losses resulting from foreign currency transactions are included in income. There was no
significant fluctuation in the exchange rate for the conversion of RMB to USD after the balance sheet date. The
Company follows the FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income (loss) is comprised of net income and
all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital
and distributions to stockholders. Share-based
Compensation The
Company accounts for share-based compensation awards in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”.
We measure all share-based payments using the fair-value at grant date. We record forfeitures as they occur. The cost of services received
from employees and non-employees in exchange for awards of equity instruments is recognized in the statement of operations based on the
estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period. Earnings
(Loss) per Share (EPS) The
Company presents net income (loss) per share (“EPS”) in accordance with FASB ASC Topic 260, “Earning Per Share.”
Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS
is computed similar to basic EPS except that the denominator is increased to include the number of additional common shares that would
have been outstanding if all the potential common shares, warrants and stock options had been issued and if the additional common shares
were dilutive. Diluted EPS is based on the assumption that all dilutive convertible shares and stock options and warrants were converted
or exercised. Dilution is computed by applying the treasury stock method for the outstanding options and warrants, and the if-converted
method for the outstanding convertible instruments. Under the treasury stock method, options and warrants are assumed to be exercised
at the beginning of the period (or at the time of issuance, if later) and as if funds obtained thereby were used to purchase common stock
at the average market price during the period. Under the if-converted method, outstanding convertible instruments are assumed to be converted
into common stock at the beginning of the period (or at the time of issuance, if later). Segment
Reporting FASB
ASC Topic 280, “Segment Reporting”, requires use of the “management approach” model for segment reporting. The
management approach model is based on the way a company’s management organizes segments within the Company for making operating
decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure,
or any other manner in which management disaggregates a company. New
Accounting Pronouncements In
August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging
- Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s
Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities
and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing
guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features
and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception
from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s
own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises
the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments
by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an
instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal
years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier
than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after
December 15, 2023, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the
fiscal year of adoption and cannot adopt the guidance in an interim reporting period. The Company is currently evaluating the impact
that ASU 2020-06 may have on its financial statements and related disclosures . Other
recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public
Accountants, and the SEC did not or are not believed by management to have a material impact on the Company’s present or future
CFS. |
