Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | QHY GROUP | |
Entity Central Index Key | 0001423723 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity File Number | 000-55933 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | NV | |
Entity Common Stock, Shares Outstanding | 87,269,789 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash | $ 226 | $ 116 |
Inventories | 292,500 | 292,500 |
Due from a related party | 2,196,500 | 2,196,500 |
Prepaid expenses and other current assets | 152,912 | 458,537 |
Total assets | 2,642,138 | 2,947,653 |
Current liabilities | ||
Accounts payable | 212,115 | 90,575 |
Advance from a customer - related party | 292,500 | 292,500 |
Due to related parties | 624,095 | 182,500 |
Other current liabilities | 18,338 | 10,188 |
Total current liabilities | 1,147,048 | 575,763 |
Long-term loan from a shareholder and interest payable | 298,716 | |
Total liabilities | 1,147,048 | 874,479 |
Stockholders' deficit | ||
Preferred stock, 5,000,000 shares authorized, 0 shares outstanding | ||
Common stock, $0.001 par value; 1,000,000,000 shares authorized, 87,269,789 shares issued and outstanding at June 30, 2019 and December 31, 2018 | 87,270 | 87,270 |
Additional paid in capital | 7,243,001 | 7,243,001 |
Accumulated deficit | (5,835,181) | (5,257,097) |
Total stockholders’ equity | 1,495,090 | 2,073,174 |
Total liabilities and stockholders' equity | $ 2,642,138 | $ 2,947,653 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 87,269,789 | 87,269,789 |
Common stock, shares outstanding | 87,269,789 | 87,269,789 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | ||||
Cost of Revenue | ||||
Gross profit | ||||
Expenses | ||||
Listing fees | 3,350 | 3,545 | 4,900 | 3,596 |
Professional fees | 35,510 | 15,559 | 18,584 | 35,510 |
Professional fees - related party | 28,500 | 28,500 | 57,000 | 38,000 |
License and royalty-related party | 12,500 | 12,500 | 25,000 | 25,000 |
General and administrative | 28,933 | 296,250 | 457,987 | 35,450 |
Total operating expenses | 108,793 | 356,354 | 563,471 | 137,556 |
Other expenses | ||||
Cost of issuing warrants for credit loan | 4,540,000 | 4,540,000 | ||
Interest expenses | 3,324 | 7,583 | 14,613 | 3,324 |
Total other expenses | 4,543,324 | 7,583 | 14,613 | 4,543,324 |
Net loss | (4,652,117) | (363,937) | (578,084) | (4,680,880) |
Net loss attributable to non-controlling interest | 281 | 281 | ||
Net loss attributable to controlling interest | (4,651,836) | (363,937) | (578,084) | (4,680,599) |
Other comprehensive income | ||||
Total comprehensive income | $ (4,651,836) | $ (363,937) | $ (578,084) | $ (4,680,599) |
Earnings per share - basic and diluted | $ (0.351) | $ (0.004) | $ (0.007) | $ (0.353) |
Weighted average number of shares outstanding - basic and diluted | 13,259,600 | 87,269,789 | 87,269,789 | 13,259,600 |
Unaudited Statements of Changes
Unaudited Statements of Changes in Stockholders' Equity/ (Deficit) - USD ($) | Common Stock | Additional Paid-In Capital | Retained Earnings | Total |
Balance at Dec. 31, 2018 | $ 87,270 | $ 7,243,001 | $ (5,257,097) | $ 2,073,174 |
Balance, shares at Dec. 31, 2018 | 87,269,789 | |||
Net loss | (214,147) | (214,147) | ||
Balance at Mar. 31, 2019 | $ 87,270 | 7,243,001 | (5,471,244) | 1,859,027 |
Balance, shares at Mar. 31, 2019 | 87,269,789 | |||
Balance at Dec. 31, 2018 | $ 87,270 | 7,243,001 | (5,257,097) | 2,073,174 |
Balance, shares at Dec. 31, 2018 | 87,269,789 | |||
Net loss | (578,084) | |||
Balance at Jun. 30, 2019 | $ 87,270 | 7,243,001 | (5,835,181) | 1,495,090 |
Balance, shares at Jun. 30, 2019 | 87,269,789 | |||
Balance at Mar. 31, 2019 | $ 87,270 | 7,243,001 | (5,471,244) | 1,859,027 |
Balance, shares at Mar. 31, 2019 | 87,269,789 | |||
Net loss | (363,937) | (4,651,836) | ||
Balance at Jun. 30, 2019 | $ 87,270 | $ 7,243,001 | $ (5,835,181) | $ 1,495,090 |
Balance, shares at Jun. 30, 2019 | 87,269,789 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (578,084) | $ (4,680,880) |
Interest expenses | 14,613 | 3,324 |
Cost of issuing warrants for credit loan | 4,540,000 | |
Consulting fee paid by common shares | 313,776 | |
Changes in operating assets and liabilities: | ||
Accounts payable | 121,539 | (54,861) |
License fee payable - related party | 25,000 | |
Professional fee payable - related party | 57,000 | |
Net cash used in operating activities | (46,156) | (192,417) |
Net cash provided by investing activities | ||
Cash flows from financing activities | ||
Cash proceeds from shareholder loan | 46,266 | 192,417 |
Net cash provided by financing activities | 46,266 | 192,417 |
Net decrease in cash and cash equivalents | (110) | |
Cash and cash equivalents at beginning of period | 116 | |
Cash and cash equivalents at end of period | 226 | |
Supplemental disclosure of cash flow information | ||
Income taxes paid | ||
Interest paid |
Organization and Principal Acti
Organization and Principal Activities | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and principal activities | 1. Organization and principal activities QHY Group (the "Company", or "we"), formerly named Yakun International Investment and Holding Group ("Yakun International"), was . On September 13, 2011, the Company consummated a Share Exchange Agreement with the shareholders of Vast Glory, pursuant to which it acquired 100% of the outstanding capital stock of Vast Glory in exchange for 8,250,000 shares of the Company's common stock, which constituted approximately 68% of its issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the acquisition pursuant to the Exchange Agreement (the "Acquisition"). The Acquisition was accounted for as a reorganization of entities under common control. On July 23, 2014, the Company entered into a Share Transfer Agreement with a third party and sold all shares of Vast Glory for consideration of $1. In consequence of the agreements, Yakun International In November 2017, Yakun International entered into a Share Exchange Agreement (the "PBG SEA") with PBG Water Solutions International Inc. (the "PBG Water Solutions") and its shareholders, pursuant to which Yakun International acquired 100% of the outstanding shares of PBG Water Solutions in exchange for 46,839,439 shares of common stock of the Company and 19,000 shares of Series A Convertible Preferred Stock (each Series A Convertible Preferred Stock is convertible into 1,000 shares of common stock) of the Company, which constituted approximately 83% of the Company's issued and outstanding capital stock on a fully-diluted basis as of and immediately after the consummation of the acquisition. PBG Water Solutions was incorporated under the law of the State of Delaware on August 4, 2016, and in October 2017, it merged into a company with the same name incorporated under the law of the State of Nevada. On January 15, 2018, all parties to the SEA agreed to amend the original agreement and consummate the transaction forthwith. Shareholders of PBG Water solutions took control of Yakun International on the same date, and completed Yakun International's registry of new officers and directors as of the issuance of these financial statements. PBG Water Solutions has not generated revenue as of today. The transaction was accounted for as a "reverse acquisition" since, immediately following completion of the transaction, the shareholders of PBG Water Solutions effectively controlled the post-combination Company. For accounting purposes, PBG Water Solutions was deemed to be the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of PBG Water Solutions (i.e., a capital transaction involving the issuance of shares by the Company for the shares of PBG Water Solutions). Accordingly, the consolidated assets, liabilities and results of operations of PBG Water Solutions and Yakun International became the historical financial statements of Yakun International and its subsidiaries, and the Company's assets, liabilities and results of operations were consolidated with PBG Water Solutions beginning on the acquisition date. No step-up in basis or intangible assets or goodwill were recorded in this transaction. On December 21, 2017, Yakun International incorporated QHY Water Solutions International Corp ("QHY Water Solutions") under the law of State of Nevada as its wholly owned subsidiary. QHY Water Solutions, QHY Oceania and QHY NZ have not generated any revenue since their inception. On July 31, 2018, the Company filed an amendment to articles of incorporation changing its corporate name to QHY Group. The amendment became effective August 31, 2018. In October 2018, QHY Water solutions transferred all of the outstanding shares of QHY Oceania and QHY NZ it owned to a non-affiliate for $100. Since both QHY Oceania and QHY NZ had no business or assets as of the disposal date, the transaction was accounted as an asset disposal, and an investment income of $100 was recorded. In December 2018, the Company issued 1,515,000 shares of common stock to certain consultants for services rendered or to be rendered (See Note 9). In December 2018, the Company entered into a series of securities purchase agreements with certain non-affiliate investors for the sale of 6,655,750 shares of the Company's common stock for aggregate consideration of $2,196,500. Of the shares sold, 5,972,582 were issued to six investors for $1,851,500 and the remaining 683,168 shares were sold to a single investor for $345,000. |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2019 | |
Going Concern [Abstract] | |
Going concern | 2. Going concern The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Successful completion of the Company's engagement in water solutions business and its transition to attaining profitable operations, is dependent upon obtaining additional financing. The Company plans to improve its future liquidity by obtaining additional financing through the issuance of financial instruments such as equity and warrants or through credit loans. Additional financing may not be available on acceptable terms or at all. If the Company issues additional equity securities to raise funds, the ownership percentage of existing stockholders would be reduced. New investors may demand rights, preferences or privileges senior to those of existing holders of common stock. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | 3. Summary of significant accounting policies (a) Basis of presentation and principles of consolidation The unaudited consolidated interim financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The unaudited consolidated interim financial information as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures, which are normally included in complete consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited consolidated interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K filed on April 1, 2019. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company's consolidated financial position as of June 30, 2019, its consolidated results of operations for the three and six months ended June 30, 2019 and 2018, and its consolidated cash flows for the six months ended June 30, 2019 and 2018, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods. The consolidated interim financial statements include the financial statements of all the subsidiaries of the Company. All accounts and balances between the Company and its subsidiaries have been eliminated upon consolidation. (b) Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ from those estimates. (c) Loss per share Basic loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted loss per share is computed using the weighted average number of common shares and potential common shares outstanding during the period for options and restricted shares under treasury stock method and for convertible debts under if-convertible method, if dilutive. Potential common shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded. Three Months Ended Three Months Ended Dilutive shares not included June 30, June 30, June 30, in loss per share computation 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Warrants 50,000,000 50,000,000 50,000,000 50,000,000 (k) Recently issued accounting standards not yet adopted The company does not expect the adoption of any recent accounting standards to have a material impact on its financial statements except for: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13) ("ASU 2018-13"). ASU 2018-13 modifies certain disclosure requirements on fair value measurements, including (i) clarifying narrative disclosure regarding measurement uncertainty from the use of unobservable inputs, if those inputs reasonably could have been different as of the reporting date, (ii) adding certain quantitative disclosures, including (a) changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (b) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and (iii) removing certain fair value measurement disclosure requirements, including (a) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (b) the policy for timing of transfers between levels of the fair value hierarchy and (c) the valuation processes for Level 3 fair value measurements. The amendments in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until their effective date. Management does not plan to early adopt this guidance and is currently evaluating the impact of adopting ASU No. 2018-13 on its consolidated financial statements. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2019 | |
Inventories [Abstract] | |
Inventories | 4. Inventories Inventories of $292,500 as of June 30, 2019 and December 31, 2018 represented an integrated wastewater treatment module PBG Water Solutions purchased from Beijing QHY Environment S & T Co., Ltd. ("Beijing QHY"), a related party of the Company. As of June 30, 2019, the Company had not transferred title to the equipment to its customer. (See Note 8) |
Due from a Related Party
Due from a Related Party | 6 Months Ended |
Jun. 30, 2019 | |
Due From Related Party [Abstract] | |
Due from a related party | 5. Due from a related party Renminbi (the "RMB") equivalent to $2,196,500 as proceeds from issuing 6,655,750 shares of the Company's common stock (see Note 9) was collected by Beijing QHY on behalf of the Company. The monies are considered held by Beijing QHY for the benefit of the Company. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2019 | |
Prepaid Expenses And Other Current Assets [Abstract] | |
Prepaid expenses and other current assets | 6. Prepaid expenses and other current assets The balance mainly consisted of $152,913 prepaid to several consultants to the Company in form of the Company's common stock (see Note 9) pursuant to agreements with remaining services terms of less than 12-months as of June 30, 2019. |
Advance from a Customer
Advance from a Customer | 6 Months Ended |
Jun. 30, 2019 | |
Advance From Customer [Abstract] | |
Advance from a customer | 7. Advance from a customer $292,500 advance from a customer represented the amount QHY Water Solutions received from QHY Oceania for a portion of the full price for a wastewater treatment module QHY Oceania purchased from QHY Water Solutions. |
Related Party Transactions and
Related Party Transactions and Balances | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related party transactions and balances | 8. Related party transactions and balances a) Related party transactions Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Loan from a shareholder $ 28,092 $ 24,489 $ 46,266 $ 39,480 Interest expense to a shareholder 7,583 3,324 14,613 3,324 Fair value of warrants issued to a shareholder - 4,540,000 - 4,540,000 Fee for professional services provided by related parties 28,500 84,260 57,000 93,760 License fee expense to a related party $ 12,500 $ 12,500 $ 25,000 $ 25,000 b) Related party payables June 30, December 31, (Unaudited) Loan from a shareholder $ 329,986 $ 283,720 Interest payable to a shareholder 29,608 14,996 Payable to a related party for license fee 112,500 87,500 Professional fee payable to related parties 152,000 95,000 Due from a related party 2,196,500 2,196,500 Advance from a related party $ 292,500 $ 292,500 On May 1, 2018, PBG Water Solutions and Yakun International (subsequently renamed "QHY Group"), entered into a Credit Loan Agreement with a 20.8% shareholder of QHY Group (the "Lender"). The Lender had provided operating capital to PBG Water Solutions since its inception, and to the Company since the consummation of PBG SEA. Pursuant to the Credit Loan Agreement, the Lender will provide a loan of $500,000 to the Company for 2 years with 10% annual interest which shall be applied from the date of the Credit Loan Agreement. In compensation for the loan credit, the Company issued to the Lender a 3-year cashless warrant, which entitles the Lender to purchase 50 million (50,000,000) shares of the Company's common stock at an exercise price of $0.01. The warrant cannot be exercised before June 1, 2019, and shall be void and non-exercisable if the Company (i) raises more than $20 million in equity or (ii) has revenue in excess of $100 million in any fiscal year. As of June 30, 2019 and December 31, 2018, the Lender has provided $329,986 and $283,720 to the Company, respectively. During the three months ended June 30, 2019 and 2018 the Lender provided $28,092 and $24,489 to the Company, respective. During the six months ended June 30, 2019 and 2018 the Lender provided $46,266 and $39,480 to the Company, respective. During the three months ended June 30, 2019 and 2018, the Company recorded $7,583 and $3,324 interest expenses incurred from the loan. During the six months ended June 30, 2019 and 2018, the Company recorded $14,613 and $3,324 interest expenses incurred from the loan. In February 2018, PBG Water Solutions entered into a financial advisory agreement with Rebus Capital Group (the "Rebus"), an entity affiliated with a shareholder of the Company, pursuant to which PBG Water Solutions will pay Rebus $30,000 per quarter. The agreement has a term of five years from March 2018 but is cancellable by either party on sixty days' notice. The service fee for the first 3 months was waived by Rebus. Professional service expense related to this agreement was $28,500 and $38,000 for the three and six months ended June 30, 2018, respectively. Professional service expense related to this agreement was $28,500 and $57,000 for the three and six months ended June 30, 2019, respectively. In April 2017, PBG Water Solutions entered into a License and Supply Agreement with an individual shareholder who owned 50% of PBG Water Solutions' common stock and the shareholder's majority owned company Beijing QHY Environment S & T Co., Ltd. (Beijing QHY). Pursuant to the License and Supply Agreement and its Amendment entered into in June 2017, the individual shareholder and Beijing QHY (the "Licensor") granted PBG the exclusive use of 21 patents in any area outside the People's Republic of China (the "PRC") for 20 years. A one-time fee of $1 million shall be paid before December 31, 2021, and royalties of 1% of the net revenue received by PBG from the sale, license or other distribution of the licensed products shall be paid annually. In addition, the Licensor shall supply PBG Water Solutions licensed products at prices agreed upon from time to time by the Licensor and PBG Water Solutions. During the year ended December 31, 2018, QHY Water Solutions purchased an integrated wastewater treatment equipment from Beijing QHY for $292,500. The Company, QHY Water Solutions and PBG Water Solutions didn't generate any net revenue from the licensed equipment or products yet during the year ended December 31, 2018. The Company recorded a $12,500 and $25,000 license fee expense for the three and six months ended June 30, 2019, respectively, and made no payment of license fees as of June 30, 2019. The Company recorded a $12,500 and $25,000 license fee expense for the three and six months ended June 30, 2018, respectively. The shareholder/licensor owned 41.6% of the Company's common stock after giving effect to the PBG SEA and owns 47.15% of the Company's common stock as of June 30, 2019. QHY Oceania which was 51% owned by QHY Water Solutions from its inception until QHY Water Solutions sold all of the outstanding shares it owned to a non-affiliate party in October 2018. During the year ended December 31, 2018, QHY Oceania issued a purchase order to QHY Water Solutions for an integrated wastewater treatment module and paid $292,500 in advance, a portion of the purchase price. The equipment had not been transferred to QHY Oceania as of June 30, 2019. In December 2018, the Company issued 6,655,750 shares of the Company's common stock for aggregate consideration of $2,196,500. Beijing QHY collected the subscription on behalf of the Company in RMB. The monies are considered held by Beijing QHY for the benefit of the Company as of June 30, 2019. |
Stockholder's Equity
Stockholder's Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholder's equity | 9. Stockholder's equity Common stock In April 2018, the Company increased its authorized common stock from 70 million to 1 billion shares. The Company issued 46,839,439 shares of common stock and 19,000 shares of Series A Convertible Preferred Stock to the shareholders of PBG Water Solutions pursuant to PBG SEA. The 19,000 shares of Series A Convertible Preferred Stock were converted into 19,000,000 shares of common stock upon increase in the number of shares of authorized common stock. In October 2018, the Company hired certain consultants to provide services related but not limited to: general advisory services relating to the Company operating as a publicly traded enterprise, strategic planning and execution, corporate governance and financial reporting. Pursuant to each agreement, the service term is 12 months and the Company shall pay the Consultants an aggregate of 1,500,000 shares of the Company's common stock which was delivered at inception of the Agreements. The shares were issued in December 2018. In November 2018, the Company hired a consultant for investor relations and strategic planning, pursuant to an agreement whereby the Company shall issue to the consultant 20,000 shares of the Company's common stock each month. As of June 30, 2019, the Company has issued 15,000 shares of common stock to the consultant. Cost for the consulting service was measured based on the fair value of the Company's common stock at the date of the consulting agreement since the common stock was vested and non-forfeitable upon the entry into the agreement. The fair value of the common stock was estimated to be $0.4075, and resulted in $617,550 for the fair value of the 1,515,000 common shares issued. $152,813 and $160,963 consulting expense was incurred during the three and six months ended June 30, 2019, respectively. In December 2018, the Company issued 6,655,750 shares of the Company's common stock for aggregate consideration of $2,196,500. Warrants On May 1, 2018, the Company issued warrants to a shareholder pursuant to the Credit Loan Agreement (See Note 8). The warrants issued by the Company are classified as equity. The fair value of the warrants was recorded as additional-paid-in-capital, and no further adjustments are made. The fair value of the stock warrants granted was estimated at $4,540,000 on the date granted using the Black-Scholes pricing model, with the following assumptions used for the valuation: exercise price of $ 0.01 per share, average risk-free interest rate of 2.66%, expected dividend yield of zero, expected lives of 3 years and an average expected volatility of 35%. A summary of the status of the Company's warrants as of June 30, 2019 is presented below: Number of warrants (Unaudited) Warrants as at December 31, 2018 - Warrants granted 50,000,000 Exercised, forfeited or expired - Outstanding at June 30, 2019 50,000,000 Exercisable at June 30, 2019 - The following table summarizes information about the Company's warrants as of June : Warrants Warrants Exercise Number Weighted Weighted average Number Weighted (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ 0.01 50,000,000 2.92 $ 0.01 50,000,000 $ 0.01 Equity Incentive Plan In July 2018, the Company adopted the 2018 Equity Incentive Plan (the "2018 Plan") which provides for the grant of stock options, stock appreciation rights, restricted stock, stock units, bonus stock, dividend equivalents, other stock related awards and performance awards. The maximum aggregate number of shares that may be subject to awards under the 2018 Plan is 10,000,000. Following is a reconciliation of the shares available to be issued under the 2018 Plan as of June 30, 2019: Shares (Unaudited) Balance as of December 31, 2018 8,485,000 Stock awards granted - Stock awards forfeited - Balance as of June 30, 2019 8,485,000 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 10. Income taxes The Company did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because it has experienced operating losses. When it is more likely than not that a tax asset cannot be realized through future income, the Company must take a full valuation allowance for this future tax benefit. The Company provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carryforwards, because management has determined that it is more likely than not that the Company will not earn income sufficient to realize the deferred tax assets during the carryforward period. The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the six months ended June 30, 2019, or during the prior three years applicable under FASB ASC 740. The Company did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet. All tax returns have been appropriately filed by the Company. Three Months Ended Six Months Ended 2018 2019 2018 2019 Loss before income taxes $ (4,652,117 ) $ (363,937 ) $ (4,680,880 ) $ (578,084 ) Income tax expenses - - - - Effective income tax rate 0 % 0 % 0 % 0 % The effective income tax rates for the three and six months ended June 30, 2018 and 2019 were 0% and 0%, respectively. The effective income tax rate for the three and six months ended June 30, 2018 and 2019 differs from the U.S. Federal statutory corporate income tax rate of 21% is primarily due to the increase in valuation allowance The Company did not pay any income taxes during the six months ended June 30, 2019 and 2018. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent events | 11. Subsequent events In accordance with FASB standards, the Company evaluated subsequent events through the date it filed this report with the Securities and Exchange Commission ("SEC") and no subsequent events occurred that required disclosure in the accompanying consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | (a) Basis of presentation and principles of consolidation The unaudited consolidated interim financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The unaudited consolidated interim financial information as of June 30, 2019 and for the three and six months ended June 30, 2019 and 2018 have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and footnote disclosures, which are normally included in complete consolidated financial statements prepared in accordance with U.S. GAAP, have been omitted pursuant to those rules and regulations. The unaudited consolidated interim financial information should be read in conjunction with the audited financial statements and the notes thereto, included in the Form 10-K filed on April 1, 2019. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair statement of the Company's consolidated financial position as of June 30, 2019, its consolidated results of operations for the three and six months ended June 30, 2019 and 2018, and its consolidated cash flows for the six months ended June 30, 2019 and 2018, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods. The consolidated interim financial statements include the financial statements of all the subsidiaries of the Company. All accounts and balances between the Company and its subsidiaries have been eliminated upon consolidation. |
Use of estimates | (b) Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ from those estimates. |
Loss per share | (c) Loss per share Basic loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted loss per share is computed using the weighted average number of common shares and potential common shares outstanding during the period for options and restricted shares under treasury stock method and for convertible debts under if-convertible method, if dilutive. Potential common shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive, such as in a period in which a net loss is recorded. Three Months Ended Three Months Ended Dilutive shares not included June 30, June 30, June 30, in loss per share computation 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Warrants 50,000,000 50,000,000 50,000,000 50,000,000 |
Recently issued accounting standards not yet adopted | (k) Recently issued accounting standards not yet adopted The company does not expect the adoption of any recent accounting standards to have a material impact on its financial statements except for: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13) ("ASU 2018-13"). ASU 2018-13 modifies certain disclosure requirements on fair value measurements, including (i) clarifying narrative disclosure regarding measurement uncertainty from the use of unobservable inputs, if those inputs reasonably could have been different as of the reporting date, (ii) adding certain quantitative disclosures, including (a) changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and (b) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and (iii) removing certain fair value measurement disclosure requirements, including (a) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, (b) the policy for timing of transfers between levels of the fair value hierarchy and (c) the valuation processes for Level 3 fair value measurements. The amendments in ASU 2018-13 are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is permitted to early adopt any removed or modified disclosures and delay adoption of the additional disclosures until their effective date. Management does not plan to early adopt this guidance and is currently evaluating the impact of adopting ASU No. 2018-13 on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of dilutive shares not included loss per share | Three Months Ended Three Months Ended Dilutive shares not included June 30, June 30, June 30, in loss per share computation 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Warrants 50,000,000 50,000,000 50,000,000 50,000,000 |
Related Party Transactions an_2
Related Party Transactions and Balances (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Three Months Ended Six Months Ended June 30, June 30, 2019 2018 2019 2018 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Loan from a shareholder $ 28,092 $ 24,489 $ 46,266 $ 39,480 Interest expense to a shareholder 7,583 3,324 14,613 3,324 Fair value of warrants issued to a shareholder - 4,540,000 - 4,540,000 Fee for professional services provided by related parties 28,500 84,260 57,000 93,760 License fee expense to a related party $ 12,500 $ 12,500 $ 25,000 $ 25,000 |
Schedule of related party payables | June 30, December 31, (Unaudited) Loan from a shareholder $ 329,986 $ 283,720 Interest payable to a shareholder 29,608 14,996 Payable to a related party for license fee 112,500 87,500 Professional fee payable to related parties 152,000 95,000 Due from a related party 2,196,500 2,196,500 Advance from a related party $ 292,500 $ 292,500 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of warrants | Number of warrants (Unaudited) Warrants as at December 31, 2018 - Warrants granted 50,000,000 Exercised, forfeited or expired - Outstanding at June 30, 2019 50,000,000 Exercisable at June 30, 2019 - |
Schedule of information about outstanding warrants | Warrants Warrants Exercise Number Weighted Weighted average Number Weighted (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ 0.01 50,000,000 2.92 $ 0.01 50,000,000 $ 0.01 |
Schedule of reconciliation of the shares available to be issued | Shares (Unaudited) Balance as of December 31, 2018 8,485,000 Stock awards granted - Stock awards forfeited - Balance as of June 30, 2019 8,485,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of effective income tax rate reconciliation | Three Months Ended Six Months Ended 2018 2019 2018 2019 Loss before income taxes $ (4,652,117 ) $ (363,937 ) $ (4,680,880 ) $ (578,084 ) Income tax expenses - - - - Effective income tax rate 0 % 0 % 0 % 0 % |
Organization and Principal Ac_2
Organization and Principal Activities (Details) - USD ($) | Sep. 13, 2011 | Oct. 31, 2018 | Nov. 30, 2017 | Jul. 23, 2014 | Jun. 30, 2019 | Dec. 31, 2018 | May 01, 2018 | Apr. 30, 2018 |
Sale of stock consideration, amount | $ 1 | |||||||
Investment income | $ 100 | |||||||
Shares of common stock to certain consultants for services rendered | 1,515,000 | |||||||
Securities purchase agreements, description | The Company entered into a series of securities purchase agreements with certain non-affiliate investors for the sale of 6,655,750 shares of the Company’s common stock for aggregate consideration of $2,196,500. Of the shares sold, 5,972,582 were issued to six investors for $1,851,500 and the remaining 683,168 shares were sold to a single investor for $345,000. | |||||||
Vast Glory Holdings Limited [Member] | ||||||||
Percentage of acquired outstanding capital stock | 100.00% | |||||||
Exchange for shares of our common stock | 8,250,000 | |||||||
Percentage of issued and outstanding capital stock | 68.00% | |||||||
PBG Water Solutions International Inc. [Member] | ||||||||
Percentage of acquired outstanding capital stock | 100.00% | |||||||
Exchange for shares of our common stock | 46,839,439 | |||||||
Percentage of issued and outstanding capital stock | 83.00% | |||||||
PBG Water Solutions International Inc. [Member] | Series A Preferred Stock [Member] | ||||||||
Exchange for shares of our common stock | 19,000 | |||||||
Convertible preferred stock convertible into shares of common stock | 1,000 | |||||||
Credit Loan Agreement [Member] | ||||||||
Ownership percentage | 20.80% | |||||||
PBG Water Solutions International Inc. [Member] | Series A Preferred Stock [Member] | ||||||||
Convertible preferred stock convertible into shares of common stock | 19,000,000 | |||||||
QHY Water Solutions [Member] | ||||||||
Investment income | $ 100 | |||||||
Outstanding shares issued to non-affiliate, value | $ 100 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Warrants [Member] | ||||
Dilutive shares not included in loss per share computation | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 |
Inventories (Details)
Inventories (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Inventories (Textual) | ||
Inventories | $ 292,500 | $ 292,500 |
Due from a Related Party (Detai
Due from a Related Party (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Jun. 30, 2019 | |
Due From a Related Party (Textual) | ||
Due from a related party | $ 2,196,500 | $ 2,196,500 |
Common stock [Member] | ||
Due From a Related Party (Textual) | ||
Issue common shares for capital, shares | 6,655,750 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Prepaid Expenses and Other Current Assets (Textual) | ||
Prepaid expenses and other current assets | $ 152,912 | $ 458,537 |
Advance from a Customer (Detail
Advance from a Customer (Details) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Advance From a Customer (Textual) | ||
Advance from a customer - related party | $ 292,500 | $ 292,500 |
Related Party Transactions an_3
Related Party Transactions and Balances (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Related Party Transactions [Abstract] | ||||
Loan from a shareholder | $ 28,092 | $ 24,489 | $ 46,266 | $ 39,480 |
Interest expense to a shareholder | 7,583 | 3,324 | 14,613 | 3,324 |
Fair value of warrants issued to a shareholder | $ 4,540,000 | $ 4,540,000 | ||
Fee for professional services provided by related parties | 28,500 | 84,260 | 57,000 | 93,760 |
License fee expense to a related party | $ 12,500 | $ 12,500 | $ 25,000 | $ 25,000 |
Related Party Transactions an_4
Related Party Transactions and Balances (Details 1) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Related Party Transactions [Abstract] | ||
Loan from a shareholder | $ 329,986 | $ 283,720 |
Interest payable to a shareholder | 29,608 | 14,996 |
Payable to a related party for license fee | 112,500 | 87,500 |
Professional fee payable to related parties | 152,000 | 95,000 |
Due from a related party | $ 2,196,500 | $ 2,196,500 |
Advance from a related party | $ 292,500 | $ 292,500 |
Related Party Transactions an_5
Related Party Transactions and Balances (Details Textual) - USD ($) | May 01, 2018 | Feb. 28, 2018 | Apr. 30, 2017 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Oct. 31, 2018 |
Related Party Transactions and Balances (Textual) | |||||||||
Fee for professional service provided by related parties | $ 28,500 | $ 84,260 | $ 57,000 | $ 93,760 | |||||
License fee expense | 12,500 | 12,500 | 25,000 | 25,000 | |||||
Interest expenses loan | 7,583 | 3,324 | 14,613 | 3,324 | |||||
Lender provided to related party | 28,092 | $ 24,489 | 46,266 | $ 39,480 | |||||
Advance from a customer - related party | 292,500 | 292,500 | $ 292,500 | ||||||
Due from a related party | 2,196,500 | 2,196,500 | 2,196,500 | ||||||
Long-term loan from a shareholder | $ 329,986 | $ 329,986 | $ 283,720 | ||||||
Interest payable to a shareholder | 29,608 | 29,608 | 14,996 | ||||||
Consulting expense | $ 152,813 | $ 160,963 | |||||||
Fair value of common shares | 1,515,000 | ||||||||
Common Stock [ Member] | |||||||||
Related Party Transactions and Balances (Textual) | |||||||||
Issue common shares for capital, shares | 6,655,750 | ||||||||
Shareholder [Member] | |||||||||
Related Party Transactions and Balances (Textual) | |||||||||
Ownership percentage | 41.60% | 41.60% | |||||||
Credit Loan Agreement [Member] | |||||||||
Related Party Transactions and Balances (Textual) | |||||||||
Ownership percentage | 20.80% | ||||||||
Loan amount | $ 500,000 | ||||||||
Credit loan term | 2 Years | ||||||||
Annual interest rate | 10.00% | ||||||||
Cash less warrant to purchase of common stock | 50,000,000 | ||||||||
Exercise price | $ 0.01 | ||||||||
Warrant exercisable, description | (i) raises more than $20 million in equity or (ii) has revenue in excess of $100 million in any fiscal year. | ||||||||
Lender cashless warrant term | 3 years | ||||||||
PBG Water Solutions International Inc. [Member] | |||||||||
Related Party Transactions and Balances (Textual) | |||||||||
Financial advisory agreement, description | PBG Water Solutions will pay Rebus $30,000 per quarter. The agreement has a term of five years from March 2018 but is cancellable by either party on sixty days' notice. The service fee for the first 3 months was waived by Rebus. | ||||||||
License and supply agreement, description | PBG Water Solutions entered into a License and Supply Agreement with an individual shareholder who owned 50% of PBG Water Solutions' common stock and the shareholder's majority owned company Beijing QHY Environment S & T Co., Ltd. (Beijing QHY). Pursuant to the License and Supply Agreement and its Amendment entered into in June 2017, the individual shareholder and Beijing QHY (the "Licensor") granted PBG the exclusive use of 21 patents in any area outside the People's Republic of China (the "PRC") for 20 years. A one-time fee of $1 million shall be paid before December 31, 2021, and royalties of 1% of the net revenue received by PBG from the sale, license or other distribution of the licensed products shall be paid annually. | ||||||||
PBG Water Solutions International Inc. [Member] | Shareholder [Member] | |||||||||
Related Party Transactions and Balances (Textual) | |||||||||
Ownership percentage | 47.15% | 47.15% | |||||||
QHY Water Solutions [Member] | |||||||||
Related Party Transactions and Balances (Textual) | |||||||||
Ownership percentage | 51.00% | ||||||||
Equipment for wastewater treatment | $ 292,500 | ||||||||
Advance from a customer - related party | $ 292,500 |
Stockholder's Equity (Details)
Stockholder's Equity (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2019shares | |
Number of Warrants, Beginning | |
Number of Warrants, Granted | 50,000,000 |
Number of Warrants, Exercised, forfeited or expired | |
Number of Warrants, Outstanding, Ending | 50,000,000 |
Number of Warrants, Exercisable |
Stockholder's Equity (Details 1
Stockholder's Equity (Details 1) - Warrant [Member] - $ / shares | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Exercise price | $ 0.01 | |
Warrants outstanding, Number outstanding | 50,000,000 | |
Warrants outstanding, Weighted average remaining contractual life (in years) | 2 years 11 months 1 day | |
Warrants outstanding, Weighted average exercise price | $ 0.01 | |
Warrants exercisable, Number exercisable | 50,000,000 | |
Warrants exercisable, Weighted average exercise price | 0.01 |
Stockholder's Equity (Details 2
Stockholder's Equity (Details 2) - Shares Available for Grant [Member] | 6 Months Ended |
Jun. 30, 2019shares | |
Balance, beginning | 8,485,000 |
Stock awards granted | |
Stock awards forfeited | |
Balance, ending | 8,485,000 |
Stockholder's Equity (Details T
Stockholder's Equity (Details Textual) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Nov. 30, 2018 | Oct. 31, 2018 | Apr. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | Jul. 31, 2018 | |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 | |||||
Expected volatility rate | 35.00% | ||||||
Expected dividend yield | 0.00% | ||||||
Expected term | 3 years | ||||||
Average risk-free interest rate | 2.66% | ||||||
Exercise price | $ 0.01 | ||||||
Fair value of stock warrant granted | $ 4,540,000 | ||||||
Shares of common stock to certain consultants for services rendered | 1,515,000 | ||||||
Consulting expense | 313,776 | ||||||
Due from a related party | $ 2,196,500 | $ 2,196,500 | |||||
Estimated stock of fair value | $ 0.4075 | ||||||
Fair value of common stock | $ 617,550 | ||||||
2018 Plan [Member] | |||||||
Aggregate number of shares | 10,000,000 | ||||||
Series A Convertible Preferred Stock [Member] | |||||||
Shares issued of common stock | 19,000 | ||||||
Series A Convertible Preferred Stock [Member] | PBG Water Solutions [Member] | |||||||
Preferred stock converted into common stock | 19,000,000 | ||||||
Common Stock [ Member] | |||||||
Shares issued of common stock | 20,000 | 46,839,439 | 15,000 | ||||
Issue common shares for capital, shares | 6,655,750 | ||||||
Issue common shares for capital | $ 2,196,500 | ||||||
Common stock agreement, Description | The Company hired certain consultants to provide services related but not limited to: general advisory services relating to the Company operating as a publicly traded enterprise, strategic planning and execution, corporate governance and financial reporting. Pursuant to each agreement, the service term is 12 months and the Company shall pay the Consultants an aggregate of 1,500,000 shares of the Company's common stock which was delivered at inception of the Agreements. | ||||||
Maximum [Member] | |||||||
Common stock, shares authorized | 1,000,000,000 | ||||||
Minimum [Member] | |||||||
Common stock, shares authorized | 70,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Loss before income taxes | $ (363,937) | $ (4,652,117) | $ (578,084) | $ (4,680,880) |
Income tax expenses | ||||
Effective income tax rate | 0.00% | 0.00% | 0.00% | 0.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expenses |
Income Taxes (Details Textual)
Income Taxes (Details Textual) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income taxes (Textual) | ||||
Tax at statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
Effective income tax rate | 0.00% | 0.00% | 0.00% | 0.00% |