Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 10, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 000-53537 | |
Entity Registrant Name | Value Exchange International, Inc. | |
Entity Central Index Key | 0001417664 | |
Entity Tax Identification Number | 26-3767331 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | Unit 602, Block B, 6 Floor | |
Entity Address, Address Line Two | Shatin Industrial Centre | |
Entity Address, Address Line Three | 5-7 Yuen Shun Circuit | |
Entity Address, City or Town | Shatin | |
Entity Address, Country | HK | |
Entity Address, Postal Zip Code | N.T | |
City Area Code | 852 | |
Local Phone Number | 29504288 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 36,156,130 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | |
CURRENT ASSETS | |||
Cash | $ 224,550 | $ 289,398 | |
Accounts receivable, less allowance for doubtful accounts | 1,500,203 | 858,617 | |
Amounts due from a related party | [1] | 1,745,860 | 1,642,488 |
Other receivables and prepayments | 362,019 | 314,650 | |
Inventories | 312,240 | 389,259 | |
Total current assets | 4,144,872 | 3,494,412 | |
NON-CURRENT ASSETS | |||
Plant and equipment, net | 558,094 | 547,930 | |
Deferred tax assets | 44,038 | 44,038 | |
Goodwill | 206,812 | 206,812 | |
Operating lease right-of-use assets, net | 487,215 | 437,822 | |
Total non-current assets | 1,296,159 | 1,236,602 | |
Total assets | 5,441,031 | 4,731,014 | |
CURRENT LIABILITIES | |||
Accounts payable | 903,986 | 689,535 | |
Other payables and accrued liabilities | 771,586 | 965,388 | |
Deferred income | 847,582 | 236,612 | |
Amounts due to related parties | 2,500 | ||
Operating lease liabilities, current | 310,240 | 258,647 | |
Current portion of long term bank loan and short term bank loan | 90,157 | 39,143 | |
Total current liabilities | 2,923,551 | 2,191,825 | |
NON-CURRENT LIABILITIES | |||
Deferred tax liabilities | 2,205 | 2,205 | |
Long term bank loan | 10,896 | 37,335 | |
Operating lease liabilities, non-current | 189,030 | 152,533 | |
Total non-current liabilities | 202,131 | 192,073 | |
Total liabilities | 3,125,682 | 2,383,898 | |
SHAREHOLDERS’ EQUITY | |||
Preferred stock, 100,000,000 shares authorized, $0.00001 par value; no shares issued and outstanding | |||
Common stock, 100,000,000 shares authorized, $0.00001 par value; 36,156,130 and 36,156,130 shares issued and outstanding, respectively | 362 | 362 | |
Additional paid-in capital | 1,340,524 | 1,340,524 | |
Statutory reserves | 11,835 | 11,835 | |
Retained earnings | 796,778 | 867,770 | |
Accumulated other comprehensive losses | 17,741 | 8,822 | |
Total shareholders’ equity | 2,167,240 | 2,229,313 | |
Non-controlling interest | 148,109 | 117,803 | |
2,315,349 | 2,347,116 | ||
Total liabilities and shareholders’ equity | $ 5,441,031 | $ 4,731,014 | |
[1] | Mr. Kenneth Tan and Ms. Bella Tsang, directors of the Company, are shareholders and a directors of Value Exchange International Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized | 100,000,000 | 100,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, issued | 36,156,130 | 36,156,130 |
Common stock, outstanding | 36,156,130 | 36,156,130 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
NET REVENUES | ||
Service income | $ 2,591,184 | $ 2,203,772 |
COST OF SERVICES | ||
Cost of service income | (2,251,060) | (1,466,232) |
GROSS PROFIT | 340,124 | 737,540 |
OPERATING EXPENSES: | ||
General and administrative expenses | (293,955) | (434,878) |
Foreign exchange loss | (155,712) | 2,719 |
TOTAL OPERATING EXPENSES | (449,667) | (432,159) |
(LOSS) PROFIT FROM OPERATIONS | (109,543) | 305,381 |
OTHER INCOME (EXPENSES): | ||
Interest income | 201 | 165 |
Finance cost | (3,370) | (4,308) |
VAT refund | 22,819 | 2,213 |
Management fee income | 43,042 | 46,326 |
Others | 6,810 | 30,731 |
Total other income (expenses), net | 69,502 | 75,127 |
(LOSS) PROFIT BEFORE PROVISION FOR INCOME TAXES | (40,041) | 380,508 |
INCOME TAXES EXPENSES | (2,188) | (3,897) |
NET (LOSS) INCOME | (42,229) | 376,611 |
ATTRIBUTABLE TO: | ||
Foreign currency translation adjustment | 8,919 | (5,435) |
COMPREHENSIVE INCOME | (33,310) | 371,176 |
Equity holders of the Company | (62,073) | 370,418 |
Non-controlling interests | $ 28,763 | $ 758 |
Earnings per share, basic and diluted | $ 0 | $ 0.01 |
Weighted average number of shares outstanding | 36,156,130 | 29,656,130 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net (loss) profit | $ (42,229) | $ 376,611 |
Adjustments to reconcile net (loss) profit to cash (used in) provided by operating activities: | ||
Depreciation | 54,439 | 33,663 |
Amortization | 85,703 | 90,515 |
Interest income | (201) | (165) |
Finance costs on Right-of-use assets | 3,370 | 4,308 |
Deferred income taxes | 19,648 | |
Changes in operating assets and liabilities | ||
Accounts receivable | (641,586) | (685,755) |
Other receivables and prepayments | (47,369) | 1,985 |
Amounts due from related parties | (103,372) | 88,879 |
Inventories | 77,019 | (6,400) |
Accounts payable | 214,451 | (465,730) |
Other payables and accrued liabilities | (193,802) | (151,700) |
Deferred income | 610,970 | 560,595 |
Amounts due to related parties | (2,500) | (47,170) |
Net cash provided by (used in) operating activities | 14,893 | (180,716) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of plant and equipment | (60,139) | (2,916) |
Interest received | 201 | 165 |
Net cash used in investing activities | (59,938) | (2,751) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from non-controlling interests | 35,349 | 18,600 |
Principal payments on operating leases | (50,813) | (89,368) |
Repayment of bank loan | (10,788) | (9,544) |
Net cash used in by financing activities | (26,252) | (80,312) |
EFFECT OF EXCHANGE RATE ON CASH | 6,449 | (6,025) |
DECREASE IN CASH | (64,848) | (269,804) |
CASH, beginning of period | 289,398 | 523,337 |
CASH, end of period | 224,550 | 253,533 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for income taxes | $ (664) | $ (3,897) |
Nature of Operations and Contin
Nature of Operations and Continuance of Business | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Continuance of Business | 1. Nature of Operations and Continuance of Business Value Exchange International, Inc. (“VEII”, “Company”, “we” or “us”) was incorporated in the State of Nevada June 26, 2007 On January 1, 2014, VEII received 100% of the issued and outstanding shares of in Value Exchange Int’l (China) Limited (“VEI CHN”) in exchange for i) newly issued 12,000,000 shares of VEII’s common stock to the majority stockholder of VEI CHN; and ii) 166,667 shares of our common stock held by VEI CHN to be transferred to the majority stockholder of VEI CHN (“Share Exchange”). This transaction resulted in the owners of VEI CHN obtaining a majority voting interest in VEII. The merger of VEI CHN into VEII, which has nominal net assets, resulted in VEI CHN having control of the combined entities. For financial reporting purposes, the transaction represents a "reverse merger" rather than a business combination and VEII is deemed to be the accounting acquiree in the transaction. The transaction is being accounted for as a reverse merger and recapitalization. VEII is the legal acquirer but accounting acquiree for financial reporting purposes and VEI CHN is the acquired company but accounting acquirer. Consequently, the assets and liabilities and the operations that will be reflected in the historical financial statements prior to the transaction will be those of VEI CHN and will be recorded at the historical cost basis of VEI CHN, and no goodwill was recognized in this transaction. The consolidated financial statements after completion of the transaction includes the assets and liabilities of VEI CHN and VEII, and the historical operations of VEII and the combined operations of VEI CHN from the initial closing date of the transaction. The Company provides IT Business’ services and solutions to the retail sector through three operating subsidiaries located in Hong Kong SAR and People’s Republic of China (“PRC”). On September 2, 2008 VEI CHN established its first operating subsidiary, Value Exchange Int’l (Shanghai) Limited (“VEI SHG”) in Shanghai, PRC, under the laws of the PRC. VEI SHG engages in software development, trading and servicing of computer hardware and software activities. On September 25, 2008, VEI CHN acquired its second operating subsidiary, TAP Services (HK) Limited in Hong Kong which subsequently changed its name to Value Exchange Int’l (Hong Kong) Limited (“VEI HKG”) on May 14, 2013. VEI HKG engages in software development, trading and servicing of computer hardware and software activities. On May 14, 2013, VEI CHN further established another operating subsidiary, Ke Dao Solutions Limited in Hong Kong, which subsequently changed its name to Cumberbuy.com Limited (“CUMBERBUY”) on May 26, 2017. CUMBERBUY conducts consultancy services for IT Services and Solutions activities. In January 2017, VEI CHN acquired 100 In January 2019, VEI SHG established an operating subsidiary, Value Exchange Int’l (Hunan) Limited (“VEI HN”) in Hunan, PRC, under the laws of the PRC. VEI HN engages in IT service call-center activities. In February 2020, VEI SHG established an operating subsidiary, Shanghai Zhaonan Hengan Information Technology Co., Limited (“SZH”) n Shanghai, PRC, under the laws of the PRC. SZH engages in IT services. As of March 31, 2022, the Company held four wholly-owned subsidiaries, and two subsidiaries with 51 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies a) Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and include the financial statements of the Company and all its wholly-owned subsidiaries that require consolidation. All material intercompany transactions and balances have been eliminated in the consolidation. The Company’s fiscal year end is December 31st. The following entities were consolidated as of March 31, 2022: Place of incorporation Ownership percentage Value Exchange International, Inc. USA Parent Company Value Exchange Int’l (China) Limited Hong Kong 100 Value Exchange Int’l (Shanghai) Limited PRC 100 Value Exchange Int’l (Hong Kong) Limited Hong Kong 100 TapServices, Inc. Philippines 100 Value Exchange Int’l (Hunan) Limited PRC 51 Shanghai Zhaonan Hengan Information Technology Co., Ltd. PRC 51 b) Use of Estimates Preparing consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring using management’s estimates and assumptions relate to the collectability of its receivables, the fair value and accounting treatment of financial instruments, the valuation of long-lived assets and valuation of deferred tax liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates. In addition, different assumptions or circumstances could reasonably be expected to yield different results. c) Cash and Cash Equivalents For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash includes cash on hand and demand deposits in accounts maintained with financial institutions or state-owned banks within the PRC and Hong Kong. d) Interim Financial Statements These interim unaudited consolidated financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. e) Accounts receivable and other receivables Receivables include trade accounts due from customers and other receivables such as cash advances to employees, utility deposits paid and advances to suppliers. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. As of March 31, 2022 and December 31, 2021, there was no allowance for uncollectible accounts receivable. Management believes that the remaining accounts receivable are collectable. f) Inventories Inventories are valued at the lower of cost and net realizable value. Cost for inventories is determined using the “first-in, first-out” method. Management reviews inventories for obsolescence or cost in excess of net realizable value periodically. The obsolescence, if any, is recorded as a provision against the inventory. The cost in excess of market value is written off and recorded as additional cost of sales. g) Plant and equipment Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Expenditures for maintenance and repairs are charged to earnings as incurred. Major additions are capitalized. When assets 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 plant and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows: Estimated Useful Life Leasehold improvements Lesser of lease term or the estimated useful lives of 5 years Computer equipment 5 years Computer software 5 years Office furniture and equipment 5 years Motor Vehicle 3 years Building 5 years h) Goodwill and intangibles Intangibles with a definite life, including customer relationships and goodwill were recorded in connection with the acquisition of TSI. Intangible assets are amortized based on their estimated economic lives using the straight-line method with estimated lives as follows: Estimated Economic Life Customer relationship 3 years Goodwill represents the excess of the cost of acquisition over the fair value of net assets acquired. Goodwill is not amortized, but is instead tested for impairment annually. i) Impairment of long-lived assets Property, Plant, and Equipment The Company evaluates long-lived assets, including equipment, for impairment at least once per year and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Based on the existence of one or more indicators of impairment, the Company measures any impairment of long-lived assets by comparing the asset's estimated fair value with its carrying value, based on cash flow methodology. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired and an impairment loss equal to an amount by which the carrying value exceeds the fair value of the asset is recognized. Impairment of Goodwill The carrying value of goodwill is evaluated annually or more frequently if events or circumstances indicate that an impairment loss may have occurred. Such circumstances could include, but are not limited to, a significant adverse change in business climate, increased competition or other economic conditions. Under FASB Accounting Standard Codification (ASC) Topic 350 “Intangibles - Goodwill and Other”, goodwill is tested at a reporting unit level. The impairment test involves a two-step process. The first step involves comparing the fair value of the reporting unit to which the goodwill is assigned to its carrying amount. If this comparison indicates that a reporting unit’s estimated fair value is less than its carrying value, a second step is required. If applicable, the second step requires us to allocate the estimated fair value of the reporting unit to the estimated fair value of the reporting unit’s net assets, with any fair value in excess of amounts allocated to such net assets representing the implied fair value of goodwill for that reporting unit. If the carrying value of the goodwill exceeds its fair value, the carrying value is written down by an amount equal to such excess. The goodwill impairment testing process involves the use of significant assumptions, estimates and judgments, and is subject to inherent uncertainties and subjectivity. Estimating a reporting unit’s discounted cash flows involves the use of significant assumptions, estimates and judgments with respect to a variety of factors, including sales, gross margin and selling, general and administrative rates, capital expenditures, cash flows and the selection of an appropriate discount rate. Projected sales, gross margin and selling, general and administrative expense rate assumptions and capital expenditures are based on our annual business plans and other forecasted results. Discount rates reflect market-based estimates of the risks associated with the projected cash flows of the reporting unit directly resulting from the use of its assets in its operations. These estimates are based on the best information available to us as of the date of the impairment assessment. j) Fair value of financial instruments The Company values its financial instruments as required by FASB ASC 320-12-65. The estimated fair value amounts have been determined by the Company, using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels: Level one — Quoted market prices in active markets for identical assets or liabilities; Level two — Inputs other than level one inputs that are either directly or indirectly observable; and Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The carrying values of the Company’s financial instruments; consisting of cash and cash equivalents, accounts receivable, accounts payable, other receivables and prepayments, other payables and accrued liabilities, balances with a related party, balances with related companies and amounts due to director approximate their fair values due to the short maturities of these instruments. There was no asset or liability measured at fair value on a non-recurring basis as of March 31, 2022 and December 31, 2021. k) Comprehensive income U.S. GAAP generally requires that recognized revenue, expenses, gains and losses be included in net income or loss. Although certain changes in assets and liabilities are reported as separate components of the equity section of the consolidated balance sheet, such items, along with net income, are components of comprehensive income or loss. The components of other comprehensive income or loss consist of foreign currency translation adjustments. l) Earnings per share The Company reports earnings per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. m) Revenue recognition Sales revenue is recognized when all of the following have occurred: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price is fixed or determinable, and (iv) the ability to collect is reasonably assured. The Company’s revenue is derived from three primary sources: (i) professional services for systems development and integration, including procurement of related hardware and software licenses on behalf of customers, if required; (ii) professional services for system maintenance normally for a period of one year; and (iii) sale of hardware and consumables during the service performed as stated above. Multiple-deliverable arrangements The Company derives revenue from fixed-price sale contracts with customers that may provide for the Company to procure hardware and software licenses with varied performance specifications specific to each customer and provide the technical services for systems development and integration of the hardware and software licenses. In instances where the contract price is inclusive of the technical services, the sale contracts include multiple deliverables. A multiple-element arrangement is separated into more than one unit of accounting if all of the following criteria are met: - The delivered item(s) has value to the customer on a stand-alone basis; - There is objective and reliable evidence of the fair value of the undelivered item(s); and - If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. The Company’s multiple-element contracts generally include customer-acceptance provisions which provide for the Company to carry out installation, test runs and performance tests at the Company’s cost until the systems as a whole can meet the performance specifications stated in the contracts. The delivered equipment and software licenses have no standalone value to the customer until they are installed, integrated and tested at the customer’s site by the Company in accordance with the performance specifications specific to each customer. In addition, under these multiple-element contracts, the Company has not sold the equipment and software licenses separately from the installation, integration and testing services, and hence there is no objective and reliable evidence of the fair value for each deliverable included in the arrangement. As a result, the equipment and the technical services for installation, integration and testing of the equipment are considered a single unit of accounting pursuant to ASC Subtopic 605-25, Revenue Recognition — Multiple-Element Arrangements. In addition, the arrangement generally includes customer acceptance criteria that cannot be tested before installation and integration at the customer’s site. Accordingly, revenue recognition is deferred until customer acceptance, indicated by an acceptance certificate signed off by the customer. Revenues of maintenance services are recognized when the services are performed in accordance with the contract term. Revenues of sale of software, if not bundled with other arrangements, are recognized when shipped and customer acceptance obtained if all other revenue recognition criteria are met. Costs associated with revenues are recognized when incurred. Revenues are recorded net of value-added taxes, sales discounts and returns. There were no sales returns during the three months period ended March 31, 2022 and 2021. Three Months Three Months US$ US$ (unaudited) (unaudited) NET REVENUES Service income - systems development and integration 88,029 34,077 - systems maintenance 1,921,189 1,608,466 - sales of hardware and consumables 581,966 561,229 2,591,184 2,203,772 Billings in excess of revenues recognized are recorded as deferred revenue. n) Income taxes The Company accounts for income taxes in accordance with the accounting standard issued by the Financial Accounting Standard Board (“FASB”) for income taxes. Under the asset and liability method as required by this accounting standard, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The charge for taxation is based on the results for the reporting period as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. The effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized. Under the accounting standard regarding accounting for uncertainty in income taxes, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. o) Operating leases Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases are charged to the statements of income on a straight-line basis over the lease periods. p) Advertising costs The Company expenses the cost of advertising as incurred in the period in which the advertisements and marketing activities are first run or over the life of the endorsement contract. Advertising and marketing expense for the three months ended March 31, 2022 and 2021 were insignificant. q) Shipping and handling Shipping and handling cost incurred to ship computer products to customers are included in selling expenses. Shipping and handling expenses for the three months ended March 31, 2022 and 2021 were insignificant. r) Research and development costs Research and development costs are expensed as incurred and are included in general and administrative expenses. Research and development costs for the three months ended March 31, 2022 and 2021 were insignificant. s) Foreign currency translation The functional currency and reporting currency of the Company is the U.S. Dollar. (“US$” or “$”). The functional currency of the Hong Kong subsidiaries is the Hong Kong Dollar. The functional currency of the PRC subsidiary is RMB. Results of operations and cash flow are translated at average exchange rates during the period, and assets and liabilities are translated at the exchange rate as quoted by the Hong Kong Monetary Authority (“HKMA”) at the end of the period. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Quarter ended March 31, 2022 March 31, 2021 RMB : USD exchange rate 6.3468 6.5152 average period ended HKD : USD exchange rate 7.800 7.800 average period ended PESO : USD exchange rate 50.4854 47.7064 average period ended Quarter ended March 31, 2022 December 31, 2021 RMB : USD exchange rate 6.3248 6.5864 HKD : USD exchange rate 7.800 7.800 PESO : USD exchange rate 50.4854 47.7064 t) Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. u) Commitments and contingencies The Company follows FASB ASC Subtopic 450-20, “Loss Contingencies” in determining its accruals and disclosures with respect to loss contingencies. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred. v) Segment Reporting The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operating results solely by monthly revenue from software development and maintenance services (but not by sub-services/product type or geographic area) and operating results of the Company and, as such, the Company has determined that the Company has one operating segment as defined by ASC Topic 280 “Segment Reporting”. w) Recent accounting pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses.” The ASU sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. Recently, the FASB issued the final ASU to delay adoption for smaller reporting companies to calendar year 2023. The Company intends to adopt this ASU in January 2022. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements and related disclosures. In January 2020, the FASB issued Accounting Standards Update No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (ASU 2020-01), which clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. This guidance will be effective for us in the first quarter of 2021 on a prospective basis, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This standard addresses the risks from the discontinuation of the London Interbank Offered Rate (LIBOR) and provides optional expedients and exceptions to contracts, hedging relationships and other transactions that reference LIBOR if certain criteria are met. This new guidance is effective and may be applied beginning March 12, 2020 through December 31, 2022. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In August 2020, the FASB issued ASU No. 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, which simplifies accounting for convertible instruments by eliminating the requirement to separately account for an embedded conversion feature as an equity component in certain circumstances. A convertible debt instrument will be reported as a single liability instrument with no separate accounting for an embedded conversion feature unless separate accounting is required for an embedded conversion feature as a derivative or under the substantial premium model. The ASU simplifies the diluted earnings per share calculation by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings per share calculations. Further, the ASU requires enhanced disclosures about convertible instruments. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. The ASU is effective for annual reporting periods 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. This update permits the use of either the modified retrospective or fully retrospective method of transition. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848),” which provides optional guidance to ease the potential accounting and financial reporting burden of reference rate reform, including the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The new guidance provides temporary optional expedients and exceptions for applying U.S. GAAP to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships, and the sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. Unlike other topics, the provisions of this update are only available until December 31, 2022, by which time the reference rate replacement activity is expected to be completed. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures and has yet to elect an adoption date. In August 2021, the FASB issued ASU No. 2021-06, “Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946).” The ASU includes Release No.33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses. This update amends certain SEC disclosure guidance that is included in the accounting standards codification to reflect the SEC’s recent issuance of rules intended to modernize and streamline disclosure requirements, including updates to business acquisition and disposition significance tests used, the significance thresholds for proforma statement disclosures, the number of preceding years of financial statements required for disclosure, and other provisions in the SEC releases. The guidance is effective upon its addition to the FASB codification. The Company is assessing the impact of ASU No. 2021-06 but does not expect that it will have a material impact on its consolidated financial statements and related disclosures. In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The ASU addresses diversity and inconsistency related to the recognition and measurement of contract assets and contract liabilities acquired in a business combination and require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. This standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption of the standard is permitted, including adoption in an interim period. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements and related disclosures. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Accounts receivable
Accounts receivable | 3 Months Ended |
Mar. 31, 2022 | |
Credit Loss [Abstract] | |
Accounts receivable | 3. Accounts receivable Accounts receivable consisted of the following as of March 31, 2022 and December 31, 2021: Schedule of Accounts Receivable March 31, December 31, US$ US$ (unaudited) Accounts receivable 1,500,203 858,617 All of the Company’s customers are located in the PRC, Hong Kong and Manila, Philippines. The Company provides credit in the normal course of business. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information. |
Other receivables and prepaymen
Other receivables and prepayments | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Other receivables and prepayments | 4. Other receivables and prepayments Other receivables and prepayments consisted of the following as of March 31, 2022 and December 31, 2021: Schedule of Other Receivables and Prepayments March 31, December 31, US$ US$ (unaudited) Deposits and prepaid expense 317,458 220,946 Others 44,561 93,704 362,019 314,650 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories Inventories as of March 31, 2022 and December 31, 2021 consisted of the following: Schedule of Inventories March 31, December 31, US$ US$ (unaudited) Finished goods 312,240 389,259 |
Plant and equipment, net
Plant and equipment, net | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Plant and equipment, net | 6. Plant and equipment, net Plant and equipment consisted of the following as of March 31, 2022 and December 31, 2021 March 31, December 31, US$ US$ (unaudited) Leasehold improvements 82,117 81,274 Office furniture and equipment 289,345 285,653 Computer equipment 380,926 364,740 Computer software 283,072 279,985 Motor Vehicle 184,662 140,102 Building 65,443 65,443 Total 1,285,565 1,217,197 Less: accumulated depreciation (727,471 ) (669,267 ) Plant and equipment, net 558,094 547,930 Depreciation expense for the three months period ended March 31, 2022 and 2021 amounted to $ 54,439 33,663 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 7. Goodwill Goodwill consisted of the following as of March 31, 2022 and December 31, 2021 Schedule of Goodwill March 31, December 31, 2021 US$ US$ (unaudited) Goodwill arising from acquisition of TSI 206,812 206,812 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | 8. Leases We have entered into various non-cancelable operating lease agreements for certain of our offices. Our leases have original lease periods expiring between the remainder of 2022 and 2024. Many leases include option to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants March 31, December 31, US$ US$ (unaudited) Operating lease right-of-use assets, net 487,215 437,822 The components of operating lease liabilities are as follows: March 31, December 31, US$ US$ (unaudited) Lease liabilities, current 310,240 258,647 Lease liabilities, non-current 189,030 152,533 Present value of lease liabilities 499,270 411,180 Total operating lease cost for the three months period ended March 31, 2022 and 2021 amounted to $ 50,813 89,368 1.36 3 The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2021: March 31, December 31, US$ US$ (unaudited) Year one 320,440 266,924 Year two 190,842 152,183 Year three - 2,483 Year four - - Thereafter - - Total undiscounted cash flows 511,282 421,590 Less: Imputed interest (12,012 ) (10,410 ) Present value of lease liabilities 499,270 411,180 |
Bank loan
Bank loan | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Bank loan | 9. Bank loan Bank loan and accruals consisted of the following as of March 31, 2022 and December 31, 2021: Schedule of Bank Loan March 31, December 31, US$ US$ (unaudited) Long term bank loan 101,053 76,478 Less: Current portion of long term bank loan (90,157 ) (39,143 ) 10,896 37,335 Current portion of long term bank loan 90,157 39,143 As of March 31, 2022 and December 31, 2021, the above bank loan secured by property and equipment 47,221 38,959 |
Other payables and accrued liab
Other payables and accrued liabilities | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Other payables and accrued liabilities | 10. Other payables and accrued liabilities Other payables and accruals consisted of the following as of March 31, 2022 and December 31, 2021: Schedule of Other Payables and Accrued Liabilities March 31, December 31, US$ US$ (unaudited) Accrual 686,356 878,532 Income taxes payable 85,230 86,856 771,586 965,388 Accrual mainly represents salary payables and fringe and social security accruals. According to the prevailing laws and regulations of the PRC, all eligible employees of the Company’s subsidiary are entitled to staff welfare benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a PRC government-mandated multi-employer defined contribution plan. The Company’s subsidiaries are required to accrue for these benefits based on certain percentages of the qualified employees’ salaries. The Company’s subsidiary is required to make contributions to the plans out of the amounts accrued. The Company’s subsidiaries incorporated in Hong Kong manage a defined contribution Mandatory Provident Fund (the “MPF Scheme”) under the Mandatory Provident Fund Schemes Ordinance, for all of its employees in Hong Kong. The Company is required to contribute 5% of the monthly salaries for all Hong Kong based employees to the MPF Scheme up to a maximum statutory limit. |
Deferred income
Deferred income | 3 Months Ended |
Mar. 31, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred income | 11. Deferred income Deferred income consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, US$ US$ (unaudited) Service fees received in advance 847,582 236,612 |
Statutory reserves
Statutory reserves | 3 Months Ended |
Mar. 31, 2022 | |
Extractive Industries [Abstract] | |
Statutory reserves | 12. Statutory reserves Statutory reserves The laws and regulations of the PRC require that before an enterprise distributes profits to its owners, it must first satisfy all tax liabilities, provide for losses in previous years, and make allocations in proportions determined at the discretion of the Board of Directors after the statutory reserves. As stipulated by the Company Law of the PRC, as applicable to Chinese companies with foreign ownership, net income after taxation can only be distributed as dividends after appropriation has been made for the following: 1. Making up cumulative prior years’ losses, if any; 2. Allocations to the “Statutory surplus reserve” of at least 10 50 3. Allocations to the discretionary surplus reserve, if approved in the shareholders’ general meeting. The statutory reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any. It may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25 |
Related party and shareholder t
Related party and shareholder transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related party and shareholder transactions | 13. Related party and shareholder transactions Other than disclosed elsewhere in these financial statements, the Company also had the following related party balances and transactions: Related party balances March 31, December 31, US$ US$ (unaudited) Due from related parties Value Exchange International Limited (i) 1,497,867 1,369,968 Cucumbuy.com Limited (ii) 19,566 2,564 SmartMyWays Co., Limited (iii) 93,346 61,539 Retail Intelligent Unit Limited (iv) 51,026 24,615 AppMyWays Co., Limited (v) 79,583 159,643 TAP Technology (HK) Limited (vi) 4,472 24,159 1,745,860 1,642,488 Due to related parties Mr. Johan Pehrson (vii) - 2,500 Related party transactions: Three Months Three Months US$ US$ (unaudited) (unaudited) Service income received from Value Exchange International Limited (i) 211,468 - AppMyWays Co., Limited (v) 31,748 24,910 Subcontracting fees paid to Value Exchange International Limited (i) (67,925 ) - Cucumbuy.com Limited (ii) (3,846 ) - TAP Technology (HK) Limited (vi) (27,523 ) - Value E Consultant International (M) Sdn. Bhd (viii) - (16,747 ) Management fees received from Value Exchange International Limited (i) 15,927 20,127 Cucumbuy.com Limited (ii) 7,692 7,692 SmartMyWays Co., Limited (iii) 7,692 7,692 Retail Intelligent Unit Limited (iv) 3,077 3,077 TAP Technology (HK) Limited (vi) 7,692 7,692 (i) Mr. Kenneth Tan and Ms. Bella Tsang, directors of the Company, are shareholders and a directors of Value Exchange International Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. VALUE EXCHANGE INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ii) Ms. Bella Tsang, a director of the Company, is a shareholder and a director of Cucumbuy.com Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. (iii) Ms. Bella Tsang, a director of the Company, is a shareholder and a director of SmartMyWays Co., Limited, a company incorporated in Hong Kong. Mr. Kenneth Tan, a director of the Company, is a director of SmartMyWays Co., Limited. The balance is unsecured, interest free and repayable on demand. (iv) Ms. Bella Tsang, a director of the Company, is a shareholder and a director of Retail Intelligent Unit Limited, a company incorporated in Hong Kong. Mr. Kenneth Tan, a director of the Company, is a director of Retail Intelligent Unit Limited. The balance is unsecured, interest free and repayable on demand. (v) Ms. Bella Tsang, a director of the Company, is a shareholder and a director of AppMyWays Co., Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. (vi) Ms. Bella Tsang, a director of the Company, is a shareholder and a director of TAP Technology (HK) Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. (vii) Mr. Johan Pehrson is a director of the Company. The balance is unsecured, interest free and repayable on demand. (viii) Ms. Bella Tsang, a director of the Company, is a shareholder of Value E Consultant International (M) Sdn. Bhd, a company incorporated in Malaysia. The balance is unsecured, interest free and repayable on demand. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | a) Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and include the financial statements of the Company and all its wholly-owned subsidiaries that require consolidation. All material intercompany transactions and balances have been eliminated in the consolidation. The Company’s fiscal year end is December 31st. The following entities were consolidated as of March 31, 2022: Place of incorporation Ownership percentage Value Exchange International, Inc. USA Parent Company Value Exchange Int’l (China) Limited Hong Kong 100 Value Exchange Int’l (Shanghai) Limited PRC 100 Value Exchange Int’l (Hong Kong) Limited Hong Kong 100 TapServices, Inc. Philippines 100 Value Exchange Int’l (Hunan) Limited PRC 51 Shanghai Zhaonan Hengan Information Technology Co., Ltd. PRC 51 |
Use of Estimates, Policy [Policy Text Block] | b) Use of Estimates Preparing consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The more significant areas requiring using management’s estimates and assumptions relate to the collectability of its receivables, the fair value and accounting treatment of financial instruments, the valuation of long-lived assets and valuation of deferred tax liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates. In addition, different assumptions or circumstances could reasonably be expected to yield different results. |
Cash and Cash Equivalents | c) Cash and Cash Equivalents For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash includes cash on hand and demand deposits in accounts maintained with financial institutions or state-owned banks within the PRC and Hong Kong. |
Interim Financial Statements | d) Interim Financial Statements These interim unaudited consolidated financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s consolidated financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period. |
Accounts receivable and other receivables | e) Accounts receivable and other receivables Receivables include trade accounts due from customers and other receivables such as cash advances to employees, utility deposits paid and advances to suppliers. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentration, customer credit worthiness, current economic trends and changes in customer payment patterns to determine if the allowance for doubtful accounts is adequate. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Delinquent account balances are written-off after management has determined that the likelihood of collection is not probable and known bad debts are written off against the allowance for doubtful accounts when identified. As of March 31, 2022 and December 31, 2021, there was no allowance for uncollectible accounts receivable. Management believes that the remaining accounts receivable are collectable. |
Inventories | f) Inventories Inventories are valued at the lower of cost and net realizable value. Cost for inventories is determined using the “first-in, first-out” method. Management reviews inventories for obsolescence or cost in excess of net realizable value periodically. The obsolescence, if any, is recorded as a provision against the inventory. The cost in excess of market value is written off and recorded as additional cost of sales. |
Plant and equipment | g) Plant and equipment Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Expenditures for maintenance and repairs are charged to earnings as incurred. Major additions are capitalized. When assets 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 plant and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows: Estimated Useful Life Leasehold improvements Lesser of lease term or the estimated useful lives of 5 years Computer equipment 5 years Computer software 5 years Office furniture and equipment 5 years Motor Vehicle 3 years Building 5 years |
Goodwill and intangibles | h) Goodwill and intangibles Intangibles with a definite life, including customer relationships and goodwill were recorded in connection with the acquisition of TSI. Intangible assets are amortized based on their estimated economic lives using the straight-line method with estimated lives as follows: Estimated Economic Life Customer relationship 3 years Goodwill represents the excess of the cost of acquisition over the fair value of net assets acquired. Goodwill is not amortized, but is instead tested for impairment annually. |
Impairment of long-lived assets | i) Impairment of long-lived assets Property, Plant, and Equipment The Company evaluates long-lived assets, including equipment, for impairment at least once per year and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Based on the existence of one or more indicators of impairment, the Company measures any impairment of long-lived assets by comparing the asset's estimated fair value with its carrying value, based on cash flow methodology. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired and an impairment loss equal to an amount by which the carrying value exceeds the fair value of the asset is recognized. Impairment of Goodwill The carrying value of goodwill is evaluated annually or more frequently if events or circumstances indicate that an impairment loss may have occurred. Such circumstances could include, but are not limited to, a significant adverse change in business climate, increased competition or other economic conditions. Under FASB Accounting Standard Codification (ASC) Topic 350 “Intangibles - Goodwill and Other”, goodwill is tested at a reporting unit level. The impairment test involves a two-step process. The first step involves comparing the fair value of the reporting unit to which the goodwill is assigned to its carrying amount. If this comparison indicates that a reporting unit’s estimated fair value is less than its carrying value, a second step is required. If applicable, the second step requires us to allocate the estimated fair value of the reporting unit to the estimated fair value of the reporting unit’s net assets, with any fair value in excess of amounts allocated to such net assets representing the implied fair value of goodwill for that reporting unit. If the carrying value of the goodwill exceeds its fair value, the carrying value is written down by an amount equal to such excess. The goodwill impairment testing process involves the use of significant assumptions, estimates and judgments, and is subject to inherent uncertainties and subjectivity. Estimating a reporting unit’s discounted cash flows involves the use of significant assumptions, estimates and judgments with respect to a variety of factors, including sales, gross margin and selling, general and administrative rates, capital expenditures, cash flows and the selection of an appropriate discount rate. Projected sales, gross margin and selling, general and administrative expense rate assumptions and capital expenditures are based on our annual business plans and other forecasted results. Discount rates reflect market-based estimates of the risks associated with the projected cash flows of the reporting unit directly resulting from the use of its assets in its operations. These estimates are based on the best information available to us as of the date of the impairment assessment. |
Fair value of financial instruments | j) Fair value of financial instruments The Company values its financial instruments as required by FASB ASC 320-12-65. The estimated fair value amounts have been determined by the Company, using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting market data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange. ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels: Level one — Quoted market prices in active markets for identical assets or liabilities; Level two — Inputs other than level one inputs that are either directly or indirectly observable; and Level three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The carrying values of the Company’s financial instruments; consisting of cash and cash equivalents, accounts receivable, accounts payable, other receivables and prepayments, other payables and accrued liabilities, balances with a related party, balances with related companies and amounts due to director approximate their fair values due to the short maturities of these instruments. There was no asset or liability measured at fair value on a non-recurring basis as of March 31, 2022 and December 31, 2021. |
Comprehensive income | k) Comprehensive income U.S. GAAP generally requires that recognized revenue, expenses, gains and losses be included in net income or loss. Although certain changes in assets and liabilities are reported as separate components of the equity section of the consolidated balance sheet, such items, along with net income, are components of comprehensive income or loss. The components of other comprehensive income or loss consist of foreign currency translation adjustments. |
Earnings per share | l) Earnings per share The Company reports earnings per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. |
Revenue recognition | m) Revenue recognition Sales revenue is recognized when all of the following have occurred: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the price is fixed or determinable, and (iv) the ability to collect is reasonably assured. The Company’s revenue is derived from three primary sources: (i) professional services for systems development and integration, including procurement of related hardware and software licenses on behalf of customers, if required; (ii) professional services for system maintenance normally for a period of one year; and (iii) sale of hardware and consumables during the service performed as stated above. Multiple-deliverable arrangements The Company derives revenue from fixed-price sale contracts with customers that may provide for the Company to procure hardware and software licenses with varied performance specifications specific to each customer and provide the technical services for systems development and integration of the hardware and software licenses. In instances where the contract price is inclusive of the technical services, the sale contracts include multiple deliverables. A multiple-element arrangement is separated into more than one unit of accounting if all of the following criteria are met: - The delivered item(s) has value to the customer on a stand-alone basis; - There is objective and reliable evidence of the fair value of the undelivered item(s); and - If the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company. The Company’s multiple-element contracts generally include customer-acceptance provisions which provide for the Company to carry out installation, test runs and performance tests at the Company’s cost until the systems as a whole can meet the performance specifications stated in the contracts. The delivered equipment and software licenses have no standalone value to the customer until they are installed, integrated and tested at the customer’s site by the Company in accordance with the performance specifications specific to each customer. In addition, under these multiple-element contracts, the Company has not sold the equipment and software licenses separately from the installation, integration and testing services, and hence there is no objective and reliable evidence of the fair value for each deliverable included in the arrangement. As a result, the equipment and the technical services for installation, integration and testing of the equipment are considered a single unit of accounting pursuant to ASC Subtopic 605-25, Revenue Recognition — Multiple-Element Arrangements. In addition, the arrangement generally includes customer acceptance criteria that cannot be tested before installation and integration at the customer’s site. Accordingly, revenue recognition is deferred until customer acceptance, indicated by an acceptance certificate signed off by the customer. Revenues of maintenance services are recognized when the services are performed in accordance with the contract term. Revenues of sale of software, if not bundled with other arrangements, are recognized when shipped and customer acceptance obtained if all other revenue recognition criteria are met. Costs associated with revenues are recognized when incurred. Revenues are recorded net of value-added taxes, sales discounts and returns. There were no sales returns during the three months period ended March 31, 2022 and 2021. Three Months Three Months US$ US$ (unaudited) (unaudited) NET REVENUES Service income - systems development and integration 88,029 34,077 - systems maintenance 1,921,189 1,608,466 - sales of hardware and consumables 581,966 561,229 2,591,184 2,203,772 Billings in excess of revenues recognized are recorded as deferred revenue. |
Income taxes | n) Income taxes The Company accounts for income taxes in accordance with the accounting standard issued by the Financial Accounting Standard Board (“FASB”) for income taxes. Under the asset and liability method as required by this accounting standard, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The charge for taxation is based on the results for the reporting period as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. The effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized. Under the accounting standard regarding accounting for uncertainty in income taxes, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. |
Operating leases | o) Operating leases Leases where substantially all the rewards and risks of ownership of assets remain with the leasing company are accounted for as operating leases. Payments made under operating leases are charged to the statements of income on a straight-line basis over the lease periods. |
Advertising costs | p) Advertising costs The Company expenses the cost of advertising as incurred in the period in which the advertisements and marketing activities are first run or over the life of the endorsement contract. Advertising and marketing expense for the three months ended March 31, 2022 and 2021 were insignificant. |
Shipping and handling | q) Shipping and handling Shipping and handling cost incurred to ship computer products to customers are included in selling expenses. Shipping and handling expenses for the three months ended March 31, 2022 and 2021 were insignificant. |
Research and development costs | r) Research and development costs Research and development costs are expensed as incurred and are included in general and administrative expenses. Research and development costs for the three months ended March 31, 2022 and 2021 were insignificant. |
Foreign currency translation | s) Foreign currency translation The functional currency and reporting currency of the Company is the U.S. Dollar. (“US$” or “$”). The functional currency of the Hong Kong subsidiaries is the Hong Kong Dollar. The functional currency of the PRC subsidiary is RMB. Results of operations and cash flow are translated at average exchange rates during the period, and assets and liabilities are translated at the exchange rate as quoted by the Hong Kong Monetary Authority (“HKMA”) at the end of the period. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Quarter ended March 31, 2022 March 31, 2021 RMB : USD exchange rate 6.3468 6.5152 average period ended HKD : USD exchange rate 7.800 7.800 average period ended PESO : USD exchange rate 50.4854 47.7064 average period ended Quarter ended March 31, 2022 December 31, 2021 RMB : USD exchange rate 6.3248 6.5864 HKD : USD exchange rate 7.800 7.800 PESO : USD exchange rate 50.4854 47.7064 |
Stock-based Compensation | t) Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation - Stock Compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. |
Commitments and contingencies | u) Commitments and contingencies The Company follows FASB ASC Subtopic 450-20, “Loss Contingencies” in determining its accruals and disclosures with respect to loss contingencies. Accordingly, estimated losses from loss contingencies are accrued by a charge to income when information available prior to issuance of the financial statements indicates that it is probable that a liability could be incurred and the amount of the loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. If a loss contingency is not probable or reasonably estimable, disclosure of the loss contingency is made in the financial statements when it is at least reasonably possible that a material loss could be incurred. |
Segment Reporting | v) Segment Reporting The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operating results solely by monthly revenue from software development and maintenance services (but not by sub-services/product type or geographic area) and operating results of the Company and, as such, the Company has determined that the Company has one operating segment as defined by ASC Topic 280 “Segment Reporting”. |
Recent accounting pronouncements | w) Recent accounting pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses.” The ASU sets forth a “current expected credit loss” model which requires the Company to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU was effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. Recently, the FASB issued the final ASU to delay adoption for smaller reporting companies to calendar year 2023. The Company intends to adopt this ASU in January 2022. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements and related disclosures. In January 2020, the FASB issued Accounting Standards Update No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (ASU 2020-01), which clarifies the interaction of the accounting for equity securities under Topic 321, the accounting for equity method investments in Topic 323, and the accounting for certain forward contracts and purchased options in Topic 815. This guidance will be effective for us in the first quarter of 2021 on a prospective basis, with early adoption permitted. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This standard addresses the risks from the discontinuation of the London Interbank Offered Rate (LIBOR) and provides optional expedients and exceptions to contracts, hedging relationships and other transactions that reference LIBOR if certain criteria are met. This new guidance is effective and may be applied beginning March 12, 2020 through December 31, 2022. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In August 2020, the FASB issued ASU No. 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, which simplifies accounting for convertible instruments by eliminating the requirement to separately account for an embedded conversion feature as an equity component in certain circumstances. A convertible debt instrument will be reported as a single liability instrument with no separate accounting for an embedded conversion feature unless separate accounting is required for an embedded conversion feature as a derivative or under the substantial premium model. The ASU simplifies the diluted earnings per share calculation by requiring that an entity use the if-converted method and that the effect of potential share settlement be included in diluted earnings per share calculations. Further, the ASU requires enhanced disclosures about convertible instruments. The ASU also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception. The ASU is effective for annual reporting periods 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. This update permits the use of either the modified retrospective or fully retrospective method of transition. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848),” which provides optional guidance to ease the potential accounting and financial reporting burden of reference rate reform, including the expected market transition from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The new guidance provides temporary optional expedients and exceptions for applying U.S. GAAP to transactions affected by reference rate reform if certain criteria are met. These transactions include contract modifications, hedging relationships, and the sale or transfer of debt securities classified as held-to-maturity. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. Unlike other topics, the provisions of this update are only available until December 31, 2022, by which time the reference rate replacement activity is expected to be completed. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures and has yet to elect an adoption date. In August 2021, the FASB issued ASU No. 2021-06, “Presentation of Financial Statements (Topic 205), Financial Services—Depository and Lending (Topic 942), and Financial Services—Investment Companies (Topic 946).” The ASU includes Release No.33-10786, Amendments to Financial Disclosures about Acquired and Disposed Businesses. This update amends certain SEC disclosure guidance that is included in the accounting standards codification to reflect the SEC’s recent issuance of rules intended to modernize and streamline disclosure requirements, including updates to business acquisition and disposition significance tests used, the significance thresholds for proforma statement disclosures, the number of preceding years of financial statements required for disclosure, and other provisions in the SEC releases. The guidance is effective upon its addition to the FASB codification. The Company is assessing the impact of ASU No. 2021-06 but does not expect that it will have a material impact on its consolidated financial statements and related disclosures. In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The ASU addresses diversity and inconsistency related to the recognition and measurement of contract assets and contract liabilities acquired in a business combination and require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. This standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and should be applied prospectively to business combinations occurring on or after the effective date of the amendments. Early adoption of the standard is permitted, including adoption in an interim period. The adoption of this standard update is not expected to have a material impact on the Company's consolidated financial statements and related disclosures. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and include the financial statements of the Company and all its wholly-owned subsidiaries that require consolidation. All material intercompany transactions and balances have been eliminated in the consolidation. The Company’s fiscal year end is December 31st. The following entities were consolidated as of March 31, 2022: | The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and include the financial statements of the Company and all its wholly-owned subsidiaries that require consolidation. All material intercompany transactions and balances have been eliminated in the consolidation. The Company’s fiscal year end is December 31st. The following entities were consolidated as of March 31, 2022: Place of incorporation Ownership percentage Value Exchange International, Inc. USA Parent Company Value Exchange Int’l (China) Limited Hong Kong 100 Value Exchange Int’l (Shanghai) Limited PRC 100 Value Exchange Int’l (Hong Kong) Limited Hong Kong 100 TapServices, Inc. Philippines 100 Value Exchange Int’l (Hunan) Limited PRC 51 Shanghai Zhaonan Hengan Information Technology Co., Ltd. PRC 51 |
estimated lives as follows: | Plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses, if any. Expenditures for maintenance and repairs are charged to earnings as incurred. Major additions are capitalized. When assets 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 plant and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows: Estimated Useful Life Leasehold improvements Lesser of lease term or the estimated useful lives of 5 years Computer equipment 5 years Computer software 5 years Office furniture and equipment 5 years Motor Vehicle 3 years Building 5 years |
Intangible assets are amortized based on their estimated economic lives using the straight-line method with estimated lives as follows: | Intangibles with a definite life, including customer relationships and goodwill were recorded in connection with the acquisition of TSI. Intangible assets are amortized based on their estimated economic lives using the straight-line method with estimated lives as follows: Estimated Economic Life Customer relationship 3 years |
Revenues are recorded net of value-added taxes, sales discounts and returns. There were no sales returns during the three months period ended March 31, 2022 and 2021. | Revenues are recorded net of value-added taxes, sales discounts and returns. There were no sales returns during the three months period ended March 31, 2022 and 2021. Three Months Three Months US$ US$ (unaudited) (unaudited) NET REVENUES Service income - systems development and integration 88,029 34,077 - systems maintenance 1,921,189 1,608,466 - sales of hardware and consumables 581,966 561,229 2,591,184 2,203,772 |
Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. | The functional currency and reporting currency of the Company is the U.S. Dollar. (“US$” or “$”). The functional currency of the Hong Kong subsidiaries is the Hong Kong Dollar. The functional currency of the PRC subsidiary is RMB. Results of operations and cash flow are translated at average exchange rates during the period, and assets and liabilities are translated at the exchange rate as quoted by the Hong Kong Monetary Authority (“HKMA”) at the end of the period. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Quarter ended March 31, 2022 March 31, 2021 RMB : USD exchange rate 6.3468 6.5152 average period ended HKD : USD exchange rate 7.800 7.800 average period ended PESO : USD exchange rate 50.4854 47.7064 average period ended Quarter ended March 31, 2022 December 31, 2021 RMB : USD exchange rate 6.3248 6.5864 HKD : USD exchange rate 7.800 7.800 PESO : USD exchange rate 50.4854 47.7064 |
Accounts receivable (Tables)
Accounts receivable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Credit Loss [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consisted of the following as of March 31, 2022 and December 31, 2021: Schedule of Accounts Receivable March 31, December 31, US$ US$ (unaudited) Accounts receivable 1,500,203 858,617 |
Other receivables and prepaym_2
Other receivables and prepayments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Other Receivables and Prepayments | Other receivables and prepayments consisted of the following as of March 31, 2022 and December 31, 2021: Schedule of Other Receivables and Prepayments March 31, December 31, US$ US$ (unaudited) Deposits and prepaid expense 317,458 220,946 Others 44,561 93,704 362,019 314,650 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories as of March 31, 2022 and December 31, 2021 consisted of the following: Schedule of Inventories March 31, December 31, US$ US$ (unaudited) Finished goods 312,240 389,259 |
Plant and equipment, net (Table
Plant and equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Plant and equipment consisted of the following as of March 31, 2022 and December 31, 2021 | Plant and equipment consisted of the following as of March 31, 2022 and December 31, 2021 March 31, December 31, US$ US$ (unaudited) Leasehold improvements 82,117 81,274 Office furniture and equipment 289,345 285,653 Computer equipment 380,926 364,740 Computer software 283,072 279,985 Motor Vehicle 184,662 140,102 Building 65,443 65,443 Total 1,285,565 1,217,197 Less: accumulated depreciation (727,471 ) (669,267 ) Plant and equipment, net 558,094 547,930 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill consisted of the following as of March 31, 2022 and December 31, 2021 Schedule of Goodwill March 31, December 31, 2021 US$ US$ (unaudited) Goodwill arising from acquisition of TSI 206,812 206,812 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants | We have entered into various non-cancelable operating lease agreements for certain of our offices. Our leases have original lease periods expiring between the remainder of 2022 and 2024. Many leases include option to renew. We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants March 31, December 31, US$ US$ (unaudited) Operating lease right-of-use assets, net 487,215 437,822 |
The components of operating lease liabilities are as follows: | The components of operating lease liabilities are as follows: March 31, December 31, US$ US$ (unaudited) Lease liabilities, current 310,240 258,647 Lease liabilities, non-current 189,030 152,533 Present value of lease liabilities 499,270 411,180 |
The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2021: | The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2021: March 31, December 31, US$ US$ (unaudited) Year one 320,440 266,924 Year two 190,842 152,183 Year three - 2,483 Year four - - Thereafter - - Total undiscounted cash flows 511,282 421,590 Less: Imputed interest (12,012 ) (10,410 ) Present value of lease liabilities 499,270 411,180 |
Bank loan (Tables)
Bank loan (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Bank Loan | Bank loan and accruals consisted of the following as of March 31, 2022 and December 31, 2021: Schedule of Bank Loan March 31, December 31, US$ US$ (unaudited) Long term bank loan 101,053 76,478 Less: Current portion of long term bank loan (90,157 ) (39,143 ) 10,896 37,335 Current portion of long term bank loan 90,157 39,143 |
Other payables and accrued li_2
Other payables and accrued liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Other Payables and Accrued Liabilities | Other payables and accruals consisted of the following as of March 31, 2022 and December 31, 2021: Schedule of Other Payables and Accrued Liabilities March 31, December 31, US$ US$ (unaudited) Accrual 686,356 878,532 Income taxes payable 85,230 86,856 771,586 965,388 |
Deferred income (Tables)
Deferred income (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Deferred income consisted of the following as of March 31, 2022 and December 31, 2021: | Deferred income consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, US$ US$ (unaudited) Service fees received in advance 847,582 236,612 |
Related party and shareholder_2
Related party and shareholder transactions (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Other than disclosed elsewhere in these financial statements, the Company also had the following related party balances and transactions: | Other than disclosed elsewhere in these financial statements, the Company also had the following related party balances and transactions: Related party balances March 31, December 31, US$ US$ (unaudited) Due from related parties Value Exchange International Limited (i) 1,497,867 1,369,968 Cucumbuy.com Limited (ii) 19,566 2,564 SmartMyWays Co., Limited (iii) 93,346 61,539 Retail Intelligent Unit Limited (iv) 51,026 24,615 AppMyWays Co., Limited (v) 79,583 159,643 TAP Technology (HK) Limited (vi) 4,472 24,159 1,745,860 1,642,488 Due to related parties Mr. Johan Pehrson (vii) - 2,500 |
Related party transactions: | Related party transactions: Three Months Three Months US$ US$ (unaudited) (unaudited) Service income received from Value Exchange International Limited (i) 211,468 - AppMyWays Co., Limited (v) 31,748 24,910 Subcontracting fees paid to Value Exchange International Limited (i) (67,925 ) - Cucumbuy.com Limited (ii) (3,846 ) - TAP Technology (HK) Limited (vi) (27,523 ) - Value E Consultant International (M) Sdn. Bhd (viii) - (16,747 ) Management fees received from Value Exchange International Limited (i) 15,927 20,127 Cucumbuy.com Limited (ii) 7,692 7,692 SmartMyWays Co., Limited (iii) 7,692 7,692 Retail Intelligent Unit Limited (iv) 3,077 3,077 TAP Technology (HK) Limited (vi) 7,692 7,692 (i) Mr. Kenneth Tan and Ms. Bella Tsang, directors of the Company, are shareholders and a directors of Value Exchange International Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. VALUE EXCHANGE INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (ii) Ms. Bella Tsang, a director of the Company, is a shareholder and a director of Cucumbuy.com Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. (iii) Ms. Bella Tsang, a director of the Company, is a shareholder and a director of SmartMyWays Co., Limited, a company incorporated in Hong Kong. Mr. Kenneth Tan, a director of the Company, is a director of SmartMyWays Co., Limited. The balance is unsecured, interest free and repayable on demand. (iv) Ms. Bella Tsang, a director of the Company, is a shareholder and a director of Retail Intelligent Unit Limited, a company incorporated in Hong Kong. Mr. Kenneth Tan, a director of the Company, is a director of Retail Intelligent Unit Limited. The balance is unsecured, interest free and repayable on demand. (v) Ms. Bella Tsang, a director of the Company, is a shareholder and a director of AppMyWays Co., Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. (vi) Ms. Bella Tsang, a director of the Company, is a shareholder and a director of TAP Technology (HK) Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. (vii) Mr. Johan Pehrson is a director of the Company. The balance is unsecured, interest free and repayable on demand. (viii) Ms. Bella Tsang, a director of the Company, is a shareholder of Value E Consultant International (M) Sdn. Bhd, a company incorporated in Malaysia. The balance is unsecured, interest free and repayable on demand. |
Nature of Operations and Cont_2
Nature of Operations and Continuance of Business (Details Narrative) | 3 Months Ended | |
Mar. 31, 2022 | Jan. 31, 2017 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Entity Incorporation, State or Country Code | NV | |
Entity Incorporation, Date of Incorporation | Jun. 26, 2007 | |
Tap Services Inc [Member] | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Ownership percentage | 51.00% | 100.00% |
The accompanying consolidated f
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and include the financial statements of the Company and all its wholly-owned s (Details) | 3 Months Ended | |
Mar. 31, 2022 | Jan. 31, 2017 | |
Value Exchange International Inc [Member] | ||
Business Acquisition, Name of Acquired Entity | Value Exchange International, Inc. | |
Place of Incorporation | USA | |
Value Exchange Intl China Limite [Member] | HONG KONG | ||
Business Acquisition, Name of Acquired Entity | Value Exchange Int’l (China) Limited | |
Place of Incorporation | Hong Kong | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | |
Value Exchange Intl Shanghai Limited [Member] | CHINA | ||
Business Acquisition, Name of Acquired Entity | Value Exchange Int’l (Shanghai) Limited | |
Place of Incorporation | PRC | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | |
Value Exchange Intl Hong Kong Limited [Member] | HONG KONG | ||
Business Acquisition, Name of Acquired Entity | Value Exchange Int’l (Hong Kong) Limited | |
Place of Incorporation | Hong Kong | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | |
Tap Services Inc [Member] | ||
Noncontrolling Interest, Ownership Percentage by Parent | 51.00% | 100.00% |
Tap Services Inc [Member] | PHILIPPINES | ||
Business Acquisition, Name of Acquired Entity | TapServices, Inc. | |
Place of Incorporation | Philippines | |
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | |
Value Exchange Intl Hunan Limited [Member] | CHINA | ||
Business Acquisition, Name of Acquired Entity | Value Exchange Int’l (Hunan) Limited | |
Place of Incorporation | PRC | |
Noncontrolling Interest, Ownership Percentage by Parent | 51.00% | |
Shanghai Zhaonan Hengan Information Technology Co Ltd [Member] | CHINA | ||
Business Acquisition, Name of Acquired Entity | Shanghai Zhaonan Hengan Information | |
Place of Incorporation | PRC | |
Noncontrolling Interest, Ownership Percentage by Parent | 51.00% |
estimated lives as follows_ (De
estimated lives as follows: (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Software and Software Development Costs [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Vehicles [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Intangible assets are amortized
Intangible assets are amortized based on their estimated economic lives using the straight-line method with estimated lives as follows: (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Customer Relationships [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated Economic Life | 3 years |
Revenues are recorded net of va
Revenues are recorded net of value-added taxes, sales discounts and returns. There were no sales returns during the three months period ended March 31, 2022 and 2021. (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues | $ 2,591,184 | $ 2,203,772 |
Systems Development And Integration [Member] | ||
Revenues | 88,029 | 34,077 |
Systems Maintenance [Member] | ||
Revenues | 1,921,189 | 1,608,466 |
Sales Of Hardware And Consumables [Member] | ||
Revenues | $ 581,966 | $ 561,229 |
Translation adjustments resulti
Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currenc (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
China, Yuan Renminbi | |||
PESO : USD exchange rate | 6.3468 | 6.5152 | |
PESO : USD exchange rate | 6.3248 | 6.5864 | |
Hong Kong, Dollars | |||
PESO : USD exchange rate | 7.800 | 7.800 | |
PESO : USD exchange rate | 7.800 | 7.800 | |
Philippines, Pesos | |||
PESO : USD exchange rate | 50.4854 | 47.7064 | |
PESO : USD exchange rate | 50.4854 | 47.7064 |
Schedule of Accounts Receivable
Schedule of Accounts Receivable (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Credit Loss [Abstract] | ||
Accounts receivable | $ 1,500,203 | $ 858,617 |
Schedule of Other Receivables a
Schedule of Other Receivables and Prepayments (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Deposits and prepaid expense | $ 317,458 | $ 220,946 |
Others | 44,561 | 93,704 |
Other receivables and prepayments | $ 362,019 | $ 314,650 |
Schedule of Inventories (Detail
Schedule of Inventories (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 312,240 | $ 389,259 |
Plant and equipment consisted o
Plant and equipment consisted of the following as of March 31, 2022 and December 31, 2021 (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 1,285,565 | $ 1,217,197 |
Less: accumulated depreciation | (727,471) | (669,267) |
Plant and equipment, net | 558,094 | 547,930 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 82,117 | 81,274 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 289,345 | 285,653 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 380,926 | 364,740 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 283,072 | 279,985 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 184,662 | 140,102 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 65,443 | $ 65,443 |
Plant and equipment, net (Detai
Plant and equipment, net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 54,439 | $ 33,663 |
Schedule of Goodwill (Details)
Schedule of Goodwill (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill arising from acquisition of TSI | $ 206,812 | $ 206,812 |
We do not assume renewals in ou
We do not assume renewals in our determination of the lease term unless the renewals are deemed to be reasonably assured. Our lease agreements generally do not contain any material residual value guarantees or material restrictive covenants (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Operating lease right-of-use assets, net | $ 487,215 | $ 437,822 |
The components of operating lea
The components of operating lease liabilities are as follows: (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Lease liabilities, current | $ 310,240 | $ 258,647 |
Lease liabilities, non-current | 189,030 | 152,533 |
Present value of lease liabilities | $ 499,270 | $ 411,180 |
The following is a schedule, by
The following is a schedule, by years, of maturities of lease liabilities as of December 31, 2021: (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
Year one | $ 320,440 | $ 266,924 |
Year two | 190,842 | 152,183 |
Year three | 2,483 | |
Year four | ||
Thereafter | ||
Total undiscounted cash flows | 511,282 | 421,590 |
Less: Imputed interest | (12,012) | (10,410) |
Present value of lease liabilities | $ 499,270 | $ 411,180 |
Leases (Details Narrative)
Leases (Details Narrative) | 3 Months Ended | |
Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | |
Leases [Abstract] | ||
Total operating lease cost | $ 50,813 | $ 89,368 |
Weighted average lease | 1 year 4 months 9 days | |
Weighted average discount | 0.03 |
Schedule of Bank Loan (Details)
Schedule of Bank Loan (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Long term bank loan | $ 101,053 | $ 76,478 |
Less: Current portion of long term bank loan | (90,157) | (39,143) |
Total | 10,896 | 37,335 |
Current portion of long term bank loan | $ 90,157 | $ 39,143 |
Bank loan (Details Narrative)
Bank loan (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Bank collateral | bank loan secured by property and equipment | |
Bank loan secured | $ 47,221 | $ 38,959 |
Schedule of Other Payables and
Schedule of Other Payables and Accrued Liabilities (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrual | $ 686,356 | $ 878,532 |
Income taxes payable | 85,230 | 86,856 |
Accrued liabilities, current | $ 771,586 | $ 965,388 |
Deferred income consisted of th
Deferred income consisted of the following as of March 31, 2022 and December 31, 2021: (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Revenue Recognition and Deferred Revenue [Abstract] | ||
Service fees received in advance | $ 847,582 | $ 236,612 |
Statutory reserves (Details Nar
Statutory reserves (Details Narrative) | 3 Months Ended |
Mar. 31, 2022 | |
Remaining reserve percent | 25.00% |
Minimum [Member] | |
Banking Regulation, Maximum Payout Ratio | 0.10 |
Maximum [Member] | |
Banking Regulation, Maximum Payout Ratio | 0.50 |
Other than disclosed elsewhere
Other than disclosed elsewhere in these financial statements, the Company also had the following related party balances and transactions: (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Due from related parties | [1] | $ 1,745,860 | $ 1,642,488 |
Value Exchange International Limited I [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | [1] | 1,497,867 | 1,369,968 |
Cucumbuy Com Limited Ii [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | [2] | 19,566 | 2,564 |
Smartmyways Co Limited Iii [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | [3] | 93,346 | 61,539 |
Retail Intelligent Unit Limited Iv [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | [4] | 51,026 | 24,615 |
Appmyways Co Limited V [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | [5] | 79,583 | 159,643 |
Tap Technology Hk Limited Vi [Member] | |||
Related Party Transaction [Line Items] | |||
Due from related parties | [6] | 4,472 | 24,159 |
Mr Johan Pehrson Vii [Member] | |||
Related Party Transaction [Line Items] | |||
Due to related parties | [7] | $ 2,500 | |
[1] | Mr. Kenneth Tan and Ms. Bella Tsang, directors of the Company, are shareholders and a directors of Value Exchange International Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. | ||
[2] | Ms. Bella Tsang, a director of the Company, is a shareholder and a director of Cucumbuy.com Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. | ||
[3] | Ms. Bella Tsang, a director of the Company, is a shareholder and a director of SmartMyWays Co., Limited, a company incorporated in Hong Kong. Mr. Kenneth Tan, a director of the Company, is a director of SmartMyWays Co., Limited. The balance is unsecured, interest free and repayable on demand. | ||
[4] | Ms. Bella Tsang, a director of the Company, is a shareholder and a director of Retail Intelligent Unit Limited, a company incorporated in Hong Kong. Mr. Kenneth Tan, a director of the Company, is a director of Retail Intelligent Unit Limited. The balance is unsecured, interest free and repayable on demand. | ||
[5] | Ms. Bella Tsang, a director of the Company, is a shareholder and a director of AppMyWays Co., Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. | ||
[6] | Ms. Bella Tsang, a director of the Company, is a shareholder and a director of TAP Technology (HK) Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. | ||
[7] | Mr. Johan Pehrson is a director of the Company. The balance is unsecured, interest free and repayable on demand. |
Related party transactions_ (De
Related party transactions: (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | ||
Value Exchange International Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Service income received | [1] | $ 211,468 | |
Subcontracting fees payable | [1] | (67,925) | |
Management fees received | [1] | 15,927 | $ 20,127 |
App My Ways Co Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Service income received | [2] | 31,748 | 24,910 |
Cucumbuycom Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Subcontracting fees payable | [3] | (3,846) | |
Management fees received | [3] | 7,692 | 7,692 |
T A P Technology H K Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Subcontracting fees payable | [4] | (27,523) | |
Management fees received | [4] | 7,692 | 7,692 |
Value E Consultant International Sdn Bhd [Member] | |||
Related Party Transaction [Line Items] | |||
Subcontracting fees payable | [5] | (16,747) | |
Smart My Ways Co Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Management fees received | [6] | 7,692 | 7,692 |
Retail Intelligent Unit Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Management fees received | [7] | $ 3,077 | $ 3,077 |
[1] | Mr. Kenneth Tan and Ms. Bella Tsang, directors of the Company, are shareholders and a directors of Value Exchange International Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. | ||
[2] | Ms. Bella Tsang, a director of the Company, is a shareholder and a director of AppMyWays Co., Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. | ||
[3] | Ms. Bella Tsang, a director of the Company, is a shareholder and a director of Cucumbuy.com Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. | ||
[4] | Ms. Bella Tsang, a director of the Company, is a shareholder and a director of TAP Technology (HK) Limited, a company incorporated in Hong Kong. The balance is unsecured, interest free and repayable on demand. | ||
[5] | Ms. Bella Tsang, a director of the Company, is a shareholder of Value E Consultant International (M) Sdn. Bhd, a company incorporated in Malaysia. The balance is unsecured, interest free and repayable on demand. | ||
[6] | Ms. Bella Tsang, a director of the Company, is a shareholder and a director of SmartMyWays Co., Limited, a company incorporated in Hong Kong. Mr. Kenneth Tan, a director of the Company, is a director of SmartMyWays Co., Limited. The balance is unsecured, interest free and repayable on demand. | ||
[7] | Ms. Bella Tsang, a director of the Company, is a shareholder and a director of Retail Intelligent Unit Limited, a company incorporated in Hong Kong. Mr. Kenneth Tan, a director of the Company, is a director of Retail Intelligent Unit Limited. The balance is unsecured, interest free and repayable on demand. |