Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 16, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | TAKUNG ART CO., LTD | |
Trading Symbol | TKAT | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 34,991,886 | |
Amendment Flag | false | |
Entity Central Index Key | 0001491487 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38036 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-4731758 | |
Entity Address, Address Line One | Office Q 11th Floor | |
Entity Address, Address Line Two | Kings Wing Plaza 2 | |
Entity Address, Address Line Three | No. 1 Kwan Street | |
Entity Address, City or Town | Sha Tin | |
Entity Address, Country | HK | |
City Area Code | +86 | |
Local Phone Number | 13020144962 | |
Title of 12(b) Security | Common Stock | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes | |
Entity Address, Postal Zip Code | NA |
Interim Condensed Consolidated
Interim Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 62,764,182 | $ 1,503,153 |
Restricted cash | 3,239,525 | |
Account receivables, net | 120,000 | |
Prepayment and other current assets, net | 5,557 | 169,908 |
Current assets – discontinued operations | 1,323,575 | 373,479 |
Total current assets | 67,332,839 | 2,166,540 |
Non-current assets | ||
Property and equipment, net | 6,883 | |
Intangible assets | 140 | 140 |
Non-marketable investment, net | 3,030,928 | 9,296,614 |
Non-current assets – discontinued operations | 105,206 | 183,559 |
Total non-current assets | 3,136,274 | 9,487,196 |
Total assets | 70,469,113 | 11,653,736 |
Current liabilities | ||
Accrued expenses and other payables | 2,432,361 | 143,429 |
Current liabilities - discontinued operations | 8,904,974 | 8,733,624 |
Advance from customers | 3,239,525 | |
Tax payables | 239,758 | |
Total current liabilities | 14,816,618 | 8,877,053 |
Non-current liabilities | ||
Operating lease liabilities, non-current | ||
Total non-current liabilities | ||
Total liabilities | 14,816,618 | 8,877,053 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ EQUITY | ||
Common stock (1,000,000,000 shares authorized; $0.001 par value; 34,991,886 shares issued and outstanding as of September 30, 2022; 14,372,353 shares issued and outstanding as of December 31, 2021) | 34,992 | 14,372 |
Additional paid-in capital | 92,526,972 | 32,547,585 |
Accumulated deficit | (36,548,912) | (29,444,185) |
Accumulated other comprehensive loss | (360,557) | (341,089) |
Total shareholders’ equity | 55,652,495 | 2,776,683 |
Total liabilities and shareholders’ equity | $ 70,469,113 | $ 11,653,736 |
Interim Condensed Consolidate_2
Interim Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, shares Issued | 34,991,886 | 14,372,353 |
Common stock, shares outstanding | 34,991,886 | 14,372,353 |
Interim Condensed Consolidate_3
Interim Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | ||||
Listing fee-Continuing operations | ||||
Listing fee-Discontinued operations | 320,173 | 877,267 | ||
Commission-Continuing operations | 1,634,960 | 2,329,135 | ||
Commission-Discontinued operations | 1,083,976 | 2,090,372 | ||
Management fee-Continuing operations | ||||
Management fee-Discontinued operations | 1,124,528 | 1,483,641 | ||
Consultancy fee-Continuing operations | ||||
Consultancy fee-Discontinued operations | 80,000 | 80,000 | ||
Revenue-Continuing operations | 1,634,960 | 2,329,135 | ||
Revenue-Discontinued operations | 2,608,677 | 4,531,280 | ||
Cost of revenue-continuing operations | (216,930) | (367,860) | ||
Cost of revenue-discontinued operations | (719,826) | (1,424,528) | ||
Gross profit-continuing operations | 1,418,030 | 1,961,275 | ||
Gross profit-discontinued operations | 1,888,851 | 3,106,752 | ||
Operating expenses: | ||||
General and administrative expenses-Continuing operations | (330,535) | (910,817) | (8,142,254) | (8,453,469) |
General and administrative expenses-Discontinued operations | (60,729) | (2,906,818) | (691,927) | (4,329,638) |
Selling expenses-Continuing operations | ||||
Selling expenses-Discontinued operations | (48,511) | (284,980) | ||
Total operating expenses - Continuing operations | (330,535) | (910,817) | (8,142,254) | (8,453,469) |
Total operating expenses - Discontinued operations | (60,729) | (2,955,329) | (691,927) | (4,614,618) |
Profit/(Loss) from continuing operations | 1,087,495 | (910,817) | (6,180,979) | (8,453,469) |
Other income and expenses: | ||||
Other(expenses) income-Continuing operations | (175) | 57,635 | (451) | 219,345 |
Other(expenses) income-Discontinued operations | 8,552 | 10,872 | 8,387 | 41,376 |
Profit/(Loss) before income taxes-Continuing operations | 1,087,320 | (853,182) | (6,181,430) | (8,234,124) |
Income tax expenses-Continuing operations | (190,762) | (239,758) | ||
Net Profit/(loss) from continuing operations | 896,558 | (853,182) | (6,421,188) | (8,234,124) |
Loss from discontinued operations | (52,177) | (1,055,606) | (683,540) | (1,466,490) |
Income tax expenses-Discontinued operations | ||||
Tax expense | (83,892) | (90,485) | ||
Deferred tax benefit | ||||
Net Loss from discontinued operations | (52,177) | (1,139,498) | (683,540) | (1,556,975) |
Net profit/(loss) | 844,381 | (1,992,680) | (7,104,728) | (9,791,099) |
Foreign currency translation adjustment | (221,165) | (34,280) | (19,467) | (68,110) |
Comprehensive income/(loss) | $ 623,216 | $ (2,026,960) | $ (7,124,195) | $ (9,859,209) |
Profit/(Loss) from continuing operations per common share - basic (in Dollars per share) | $ 0.03 | $ (0.07) | $ (0.3) | $ (0.69) |
Profit/(Loss) from continuing operations per common share - Diluted (in Dollars per share) | 0.01 | (0.07) | (0.15) | (0.69) |
Loss from discontinued operations per common share - basic (in Dollars per share) | 0 | (0.09) | (0.03) | (0.13) |
Loss from discontinued operations per common share - Diluted (in Dollars per share) | $ 0 | $ (0.09) | $ (0.02) | $ (0.13) |
Weighted average number of common shares outstanding-basic (in Shares) | 26,529,422 | 12,689,317 | 21,357,138 | 11,897,019 |
Weighted average number of common shares outstanding-diluted (in Shares) | 61,082,469 | 12,689,317 | 41,665,082 | 11,897,019 |
Interim Condensed Consolidate_4
Interim Condensed Consolidated Statements of Changes in Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in capital | Accumulated deficit | Accumulated other comprehensive loss | Total |
Balance at Dec. 31, 2020 | $ 11,271 | $ 6,358,115 | $ (226,311) | $ (328,030) | $ 5,815,045 |
Balance (in Shares) at Dec. 31, 2020 | 11,271,379 | ||||
Shared-based compensation | 3,717 | 3,717 | |||
Net loss from continuing operations | (360,042) | (360,042) | |||
Net loss from discontinued operations | (212,546) | (212,546) | |||
Foreign currency translation adjustment | (37,763) | (37,763) | |||
Balance at Mar. 31, 2021 | $ 11,271 | 6,361,832 | (798,899) | (365,793) | 5,208,411 |
Balance (in Shares) at Mar. 31, 2021 | 11,271,379 | ||||
Balance at Dec. 31, 2020 | $ 11,271 | 6,358,115 | (226,311) | (328,030) | 5,815,045 |
Balance (in Shares) at Dec. 31, 2020 | 11,271,379 | ||||
Net loss from continuing operations | (8,234,124) | ||||
Balance at Sep. 30, 2021 | $ 15,397 | 30,431,500 | (10,017,410) | (396,140) | 20,033,347 |
Balance (in Shares) at Sep. 30, 2021 | 13,957,353 | ||||
Balance at Mar. 31, 2021 | $ 11,271 | 6,361,832 | (798,899) | (365,793) | 5,208,411 |
Balance (in Shares) at Mar. 31, 2021 | 11,271,379 | ||||
Issuance of ordinary shares for restricted stock award | $ 335 | 6,863,814 | 6,864,149 | ||
Issuance of ordinary shares for restricted stock award (in Shares) | 335,000 | ||||
Exercised of stock options | $ 61 | 180,424 | 180,485 | ||
Exercised of stock options (in Shares) | 61,065 | ||||
Net loss from continuing operations | (7,020,900) | (7,020,900) | |||
Net loss from discontinued operations | (204,931) | (204,931) | |||
Foreign currency translation adjustment | 3,933 | 3,933 | |||
Balance at Jun. 30, 2021 | $ 11,667 | 13,406,070 | (8,024,730) | (361,860) | 5,031,147 |
Balance (in Shares) at Jun. 30, 2021 | 11,667,444 | ||||
Issuance of ordinary shares for restricted stock award | $ 1,600 | 1,897,440 | 1,899,040 | ||
Issuance of ordinary shares for restricted stock award (in Shares) | 160,000 | ||||
Exercised of stock options | $ 571 | 4,999,429 | 5,000,000 | ||
Exercised of stock options (in Shares) | 571,429 | ||||
Shared-based compensation | $ 1,559 | 10,128,561 | 10,130,120 | ||
Shared-based compensation (in Shares) | 1,558,480 | ||||
Net loss from continuing operations | (853,182) | (853,182) | |||
Net loss from discontinued operations | (1,139,498) | (1,139,498) | |||
Foreign currency translation adjustment | (34,280) | (34,280) | |||
Balance at Sep. 30, 2021 | $ 15,397 | 30,431,500 | (10,017,410) | (396,140) | 20,033,347 |
Balance (in Shares) at Sep. 30, 2021 | 13,957,353 | ||||
Balance at Dec. 31, 2021 | $ 14,372 | 32,547,585 | (29,444,185) | (341,089) | 2,776,683 |
Balance (in Shares) at Dec. 31, 2021 | 14,372,353 | ||||
Net loss from continuing operations | (611,574) | (611,574) | |||
Net loss from discontinued operations | (179,765) | (179,765) | |||
Foreign currency translation adjustment | 21,059 | 21,059 | |||
Balance at Mar. 31, 2022 | $ 14,372 | 32,547,585 | (30,235,524) | (320,030) | 2,006,403 |
Balance (in Shares) at Mar. 31, 2022 | 14,372,353 | ||||
Balance at Dec. 31, 2021 | $ 14,372 | 32,547,585 | (29,444,185) | (341,089) | 2,776,683 |
Balance (in Shares) at Dec. 31, 2021 | 14,372,353 | ||||
Net loss from continuing operations | (6,421,188) | ||||
Balance at Sep. 30, 2022 | $ 34,992 | 92,526,972 | (36,548,913) | (360,556) | 55,652,495 |
Balance (in Shares) at Sep. 30, 2022 | 34,991,886 | ||||
Balance at Mar. 31, 2022 | $ 14,372 | 32,547,585 | (30,235,524) | (320,030) | 2,006,403 |
Balance (in Shares) at Mar. 31, 2022 | 14,372,353 | ||||
Issuance of ordinary shares for restricted stock award | $ 10,239 | 29,989,768 | 30,000,007 | ||
Issuance of ordinary shares for restricted stock award (in Shares) | 10,238,910 | ||||
Net loss from continuing operations | (6,706,172) | (6,706,172) | |||
Net loss from discontinued operations | (451,598) | (451,598) | |||
Foreign currency translation adjustment | 180,638 | 180,638 | |||
Balance at Jun. 30, 2022 | $ 24,611 | 62,537,353 | (37,393,294) | (139,392) | 25,029,278 |
Balance (in Shares) at Jun. 30, 2022 | 24,611,263 | ||||
Private placement | $ 10,381 | 29,989,619 | 30,000,000 | ||
Private placement (in Shares) | 10,380,623 | ||||
Net loss from continuing operations | 896,558 | 896,558 | |||
Net loss from discontinued operations | (52,177) | (52,177) | |||
Foreign currency translation adjustment | (221,164) | (221,164) | |||
Balance at Sep. 30, 2022 | $ 34,992 | $ 92,526,972 | $ (36,548,913) | $ (360,556) | $ 55,652,495 |
Balance (in Shares) at Sep. 30, 2022 | 34,991,886 |
Interim Condensed Consolidate_5
Interim Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss from continuing operations | $ (6,421,188) | $ (8,234,124) |
Net loss from discontinued operations | (683,540) | (1,556,975) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation | 225,389 | |
Impairment loss | 6,265,686 | |
Share-based compensation | 8,761,415 | |
Changes in operating assets and liabilities(decrease)increase in: | ||
Accounts receivable, net | (79,372) | |
Prepayment and other current assets | 124,869 | |
Accrued expenses and other payables | 1,132,411 | 345,707 |
Advance from customer | 3,239,525 | 4,483 |
Net cash provided by operating activities-continuing operations | 4,216,434 | 1,148,367 |
Net cash provided by operating activities-discontinued operations | 814,295 | 42,322,860 |
Net cash provided by operating activities | 5,030,729 | 43,471,227 |
Cash flows from investing activities: | ||
Net cash used in investing activities-continuing operations | (500,000) | |
Net cash used in investing activities-discontinued operations | 85,236 | 388,229 |
Net cash used in investing activities | 85,236 | (111,771) |
Cash flows from financing activities: | ||
Proceeds from a short-term borrowing from a third party | 300,000 | |
Net cash provided by financing activities-continuing operations | 60,000,007 | |
Net cash provided by financing activities-discontinued operations | 5,180,485 | |
Net cash provided by financing activities | 60,300,007 | 5,180,485 |
Effect of exchange rate change on cash, cash equivalents and restricted cash from continuing operations | (15,888) | |
Effect of exchange rate change on cash, cash equivalents and restricted cash from discontinued operations | (3,579) | (281,110) |
Net change in cash and cash equivalents, and restricted cash from continuing operations | 64,500,553 | 648,367 |
Net change in cash and cash equivalents, and restricted cash from discontinued operations | 895,952 | 47,610,464 |
Cash and cash equivalents, and restricted cash beginning balance from continuing operations | 1,503,153 | 31,188 |
Cash and cash equivalents, and restricted cash beginning balance from discontinued operations | 338,542 | 13,811,557 |
Cash and cash equivalents, and restricted cash beginning balance | 1,841,695 | 13,842,745 |
Cash and cash equivalents, and restricted cash ending balance from continuing operations | 66,003,706 | 679,555 |
Cash and cash equivalents and restricted cash ending balance from discontinued operations | 1,234,494 | 61,422,021 |
Cash and cash equivalents and restricted cash ending balance | 67,238,201 | 62,101,576 |
Cash and cash equivalents-continuing operations | 62,764,182 | 679,555 |
Restricted cash-continuing operations | 3,239,525 | |
Total cash, cash equivalents and restricted cash-continuing operations | 66,003,707 | 679,555 |
Cash and cash equivalents-discontinued operations | 1,234,494 | 8,180,310 |
Restricted cash - discontinued operations | 53,241,711 | |
Total cash, cash equivalents and restricted cash-discontinued operations | 1,234,494 | 61,422,021 |
Supplemental cash flows information: | ||
Cash paid for interest-continuing operations | ||
Cash paid for interest-discontinued operations | 86,823 | |
Cash paid for income taxes-continuing operations | ||
Cash paid for income taxes-discontinued operations | $ 112,429 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization and Description of Business [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Takung Art Co., Ltd and Subsidiaries (“Takung”, “Company”), a Delaware corporation (formerly Cardigant Medical Inc.) through Hong Kong Takung Art Company Limited (“Hong Kong Takung”), a Hong Kong company and its wholly owned subsidiary, operates an electronic online platform located at www.takungae.com for artists, art dealers and art investors to offer and trade in valuable artwork. Hong Kong Takung was incorporated in Hong Kong on September 17, 2012 and operates an electronic online platform for offering and trading artwork. The Company generates revenue from its services in connection with the offering and trading of artwork on its system, primarily consisting of listing fees, trading commissions, and management fees. The Company conducts business primarily in Hong Kong, People’s Republic of China. Takung (Shanghai) Co., Ltd (“Shanghai Takung”) is a limited liability company, with a registered capital of $1 million, located in the Shanghai Pilot Free Trade Zone. Shanghai Takung was incorporated on July 28, 2015. It is engaged in providing services to its parent company Hong Kong Takung by receiving deposits from and making payments to online artwork traders of Takung for and on behalf of Takung. Shanghai Takung was deregistered on May 8, 2020 and the Company merged the operations of Shanghai Takung with Takung Cultural Development (Tianjin) Co., Ltd. Takung Cultural Development (Tianjin) Co., Ltd (“Tianjin Takung”) provides technology development services to Hong Kong Takung and also carries out marketing and promotion activities in mainland China. It is engaged in providing services to its parent company Hong Kong Takung by receiving deposits from and making payments to online artwork traders of Takung for and on behalf of Takung when Shanghai Takung was deregistered. On November 8, 2021, the Management became aware of the suspension of the operation of Tianjin Takung by the local authority. Hong Kong Takung Art Holdings Company Limited (“Takung Art Holdings”) was formed in Hong Kong on July 20, 2018 and operates as a holding company to control an online platform for offering, selling and trading whole piece of artwork. Takung Art Holdings was deregistered on April 29, 2020 due to deregistration of its wholly-owned subsidiary, Art Era Internet Technology (Tianjin) Co., Ltd., on June 18, 2019. Hong Kong MQ Group Limited (“Hong Kong MQ”) was formed in Hong Kong on November 27, 2018, and is engaged in blockchain and non-fungible tokens (“NFT”) businesses, including consultancy service for NFT launch projects, developing its own NFT marketplace to facilitate users to buy and sell NFTs, as well as development of block chain-based online games. On June 19, 2019, as a result of a private transaction, one (1) share of common stock of Hong Kong MQ was transferred from Ms. Hiu Ngai Ma to the Company. The net asset of Hong Kong MQ was $ nil MQ (Tianjin) Enterprise Management Consulting Co., Ltd. (“Tianjin MQ”) was incorporated in Tianjin, PRC on July 9, 2019 and is a directly wholly owned subsidiary of Hong Kong MQ. It was established as a limited liability company with a registered capital of $100,000 located in the Pilot Free Trade Zone in Tianjin. Tianjin MQ focused on exploring business opportunities and promoting its artwork trading business. Tianjin MQ was deregistered on August 10, 2020 due to the Company streamlining its operation. NFT Digital Technology Limited (“NFT Digital”) was incorporated in Albany, New York on December 13, 2021 and is a wholly-owned subsidiary of Takung. This entity primarily provides administrative and technical supports for the development of NFT projects. NFT Exchange Limited (“NFT Exchange”) was incorporated in Wyoming on January 7, 2022 and is wholly owned by Takung. This entity facilitates the business and operation of the new NFT exchange market. Metaverse Digital Payment Co., Limited (“Metaverse”) was formed in Hong Kong on January 27, 2022, and is wholly owned by NFT Exchange. This entity is engaged in digital payment service. Cultural Objects Provenance Holdings Limited Cultural Objects Provenance Holdings Limited is an investment holding company. Its wholly-owned subsidiary is headquartered in Hong Kong, with global outposts in China (Shenzhen), Europe (Germany), and USA (NY/LA). It is an artwork authentication platform powered by blockchain. According to company home page, the subsidiary is the official technology partner for NANZUKA Gallery in Tokyo, Japan. It authenticated some sought-after editions and limited edition works from some of the world’s most prolific artists, including Hajime Sorayama, Javier Calleja, Daniel Arsham, James Jarvis, and more. On May 28, 2021, Takung entered into a Securities Purchase Agreement (the “SPA”) with Cultural Objects Provenance Holdings Limited (“Cultural Objects”), a British Virgin Islands company with a wholly-owned subsidiary in Hong Kong engaging in an operation of an artwork authentication platform powered by blockchain with global presence in China, Germany and the United States. Takung shall invest in Cultural Objects through paying certain purchase that consists of cash consideration, $500,000 and issuance of 282,000 shares of common stock of Takung in exchange for 54,100 shares of common stock of Cultural Objects and 290,000 unvested restricted shares of common stock of Takung to Cultural Objects in exchange for 32,460 unvested shares of common stock of Cultural Objects. On August 21, 2021, Takung and Cultural Objects entered to an amendment to the SPA. The amendment provides that the original purchase price was amended to be $500,000 in cash and the issuance of 771,040 restricted shares of common stock of Takung to Cultural Objects in exchange for 54,100 shares of common stock of Cultural Objects, and, subject to the satisfaction of the conditions stipulated in the SPA, the issuance of 787,440 unvested restricted shares of common stock of Takung to Cultural Objects in exchange for 32,460 unvested shares of common stock of Cultural Objects. The cash consideration of $500,000 was paid to Cultural Objects by the end of August 2021. On September 9, 2021, an aggregate amount of 1,558,480 restricted shares of common stock of Takung issued to Cultural Objects in an exchange for an aggregate 86,560 shares of common stock of Cultural Objects. Together with the cash consideration paid $500,000 and the total value of the restricted shares issued to Cultural Objects, $10,130,120, the total value of the investment in Cultural Objects was $10,630,120. As of September 30, 2022 the initial cost of this investment was adjusted to $3,030,928 after a further impairment charge, $6,265,686 was recorded (see Note 5). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Organization and Description of Business [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The interim condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles in the United States (“U.S. GAAP”). This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. dollars. Use of estimates The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP 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 interim condensed consolidated financial statements and the amount of revenues and expenses during the reporting periods. Actual results could differ materially from those results. Basis of consolidation The interim condensed consolidated financial statements include the financial statements of the Company, and its subsidiaries, NFT Exchange, NFT Digital, Metaverse Payment, Hong Kong Takung, Tianjin Takung and Hong Kong MQ. All intercompany transactions and balances have been eliminated on consolidation. Discontinued operations The Company has adopted ASC Topic 205 “Presentation of Financial Statements” Subtopic 20-45, in determining whether any of its business component(s) classified as held for sale, disposed of by sale or other than by sale is required to be reported in discontinued operations. In accordance with ASC Topic 205-20-45-1, a discontinued operation may include a component of an entity or a group of components of an entity, or a business or non-profit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). For the component disposed of other than by sale in accordance with paragraph 360-10-45-15, the Company adopted ASC Topic 205-20-45-3 and reported the results of operations of the discontinued operations, less applicable income tax expenses or benefits as a separate component in in the statement where net income (loss) is reported for current and all prior periods presented. Due to the suspension of the operation of Tianjin Takung by the local authority in the fourth quarter of 2021, Hong Kong Takung lost its control over Tianjin Takung. The Company plans to dispose Hong Kong Takung, and is actively seeking buyers for Hong Kong Takung and related operations in order to focus on its blockchain and NFT business operation. As of September 30, 2022 and December 31, 2021, the operation of Hong Kong Takung was classified as a discontinued operation and as of December 31, 2021, the operation Tianjin Takung was deconsolidated. For the nine months ended September 30, 2022, the operation of Hong Kong Takung was presented in discontinued operations. HKMQ is a part of the legacy business, which shall be discontinued and transferred to NFT service. Deconsolidation Under the ASC Subtopic 810-10-40, “Consolidation-Overall-Derecognition”, a reporting entity will deconsolidate a subsidiary in the period when the loss of control over such subsidiary incurred as a result of one or more of the following events: (i) a parent sells all or part of its ownership interest in its subsidiary; (ii) the expiration of a contractual agreement that gave control of the subsidiary to the parent; (iii) the subsidiary issues shares which reduces the parent’s ownership interest in the subsidiary to an extent that the parent no longer has a controlling financial interest in such subsidiary; (iv) the subsidiary becomes subject to the control of a government, court, administrator, or regulator. Upon deconsolidation, the reporting entity would no longer include the subsidiary’s assets, liabilities and results of operations in its consolidated financial statements. Due to the suspension of the operation of Tianjin Takung by the local authority. The financial information of Tianjin Takung was deconsolidated as of December 31, 2021. Fair value measurements The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of non-financial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of September 30, 2022 and December 31, 2021. Comprehensive loss The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 220 “Reporting Comprehensive Income” and establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. For the nine months ended September 30, 2022 and 2021, the Company’s comprehensive loss includes net loss and foreign currency translation adjustment. Foreign currency translation and transaction The functional currency of Metaverse Payment, Hong Kong Takung, Hong Kong MQ and Tianjin Takung are in Hong Kong Dollar (“HKD”); NFT Digital and NFT Exchange are in United States Dollar (“USD”) The reporting currency of the Company is USD. Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on re-translation of monetary items at period-end are included in income statement of the period. For the purpose of presenting these financial statements, the Company’s assets and liabilities with functional currency of HKD are expressed in USD at the exchange rate on the balance sheet’s dates, which is 7.8510 and 7.7996 as of September 30, 2022 and December 31, 2021, respectively; The resulting translation adjustments are reported under accumulated other comprehensive loss in the stockholders’ equity section of the balance sheets. Cash and cash equivalents Cash and cash equivalents consist of cash on hand, cash in bank with no restrictions, as well as highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when initially purchased. Restricted cash Restricted cash represents the cash deposited by the NFT traders into a specific bank account under Takung (“the broker’s account”) in order to facilitate the trading of NFT in our online NFT platform. After the user’s registration is successful, the customer deposits must be transferred to the designated account of the platform through the bank account added by the user before the transaction starts, and a transfer application is submitted on the platform, which can enter the buyer’s platform account after financial review. Except for instructing the bank to deduct the commission, Takung has no right to use any funds in the broker’s account. Our restricted cash is denominated in USD. As of September 30, 2022, the ending balance of our restricted cash was $3,239,525. Accounts receivable and allowance for doubtful accounts Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. The Company makes estimates for the allowance for doubtful accounts based upon the assessment of various factors, including historical, experience, the age of the accounts receivable balances, credit quality of the customers, current economic conditions, and other factors that may affect customers’ ability to pay. Prepayment and other current assets, net Prepayment and other current assets mainly consist of the prepayment for income taxes, maintenance of online trading system, advertising and promotional services, insurances, financial advisory, professional services, rental deposits, as well as other current assets. Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains or losses on dispositions of property and equipment are included in operating income or expense. Major additions, renewals and betterments are capitalized, while maintenance and repairs are expensed as incurred. Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. The Company developed systems and solutions for solely internal use. Certain costs incurred in connection with developing or obtaining internal use software are capitalized. Unamortized capitalized costs are included in computer trading and clearing system, within property and equipment, net in the Consolidated Balance Sheets. Capitalized software costs are amortized on a straight-line basis over the estimated useful lives of the software of 5 years. Amortization of these costs is included in depreciation and amortization expense in the Consolidated Statements of Operations. Estimated useful lives are as follows, taking into account the assets’ estimated residual value: Classification Estimated Furniture, fixtures and equipment 5 years Leasehold improvements Shorter of the remaining lease Computer trading and clearing system 5 years Long-lived assets The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When these events occur, the Company assesses the recoverability of these long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the future undiscounted cash flow is less than the carrying amount of the assets, the Company recognizes an impairment equal to the difference between the carrying amount and fair value of these assets. During 2021, we recorded $16.5million in asset impairments due to the deconsolidation of Tianjin Takung as a result of the loss of control in this entity. Please refer to Note 6 for details. In addition, we determined that the future undiscounted cash flow was less than the carrying cost of our non-marketable investment and recognized an impairment charge of $1,333,506 for twelve months ended December 31, 2021 and a further charge of $6,265,686 for nine months ended September 30, 2022 against our non-marketable investment. Please refer to Note 5 for details. Intangible assets Intangible assets represent the licensing cost for the trademark registration. For intangible assets with indefinite lives, the Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. For intangible assets with definite lives, they are amortized over estimated useful lives, and are reviewed annually for impairment. The Company has not recorded impairment of intangible assets as of September 30, 2022 and December 31, 2021. Advance from customers Advance from customers represent the cash deposited by the traders into a specific bank account under Takung (“the broker’s account”) in order to facilitate the trading ownership units of the NFT. The traders are required to have their funds transferred to the broker’s account before the trading take place. Revenue Recognition Under ASC 606, an entity recognizes revenue as the Company satisfies a performance obligation when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. The Company recognizes revenue when control of the promised services is transferred to the traders. Revenue is measured at the transaction price, which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised services to the traders. Our discontinued operations generated revenue from its services in connection with the offering and trading of artworks on the Company’s legacy online trading system primarily consisted of listing fee, commission fee and management fee. Listing fee The Company recognizes the listing fee revenue at a point in time when the ownership units of the artwork are listed and available for trading on the Company’s system, at an amount of an agreed percentage of the total offering price. The amount is collected from the money raised from the issuance of such units. Commission The Company generates commission fee from non-VIP traders and selected traders. For non-VIP traders, the commission is calculated based on a percentage of transaction value of artworks when there is purchase and sale of the ownership shares of the artworks. The commission revenue is recognized at a point in time when each purchase and sale transaction is completed. For selected traders, starting from April 1, 2016, the Company charged a predetermined monthly commission fee which allows the selected traders to conduct unlimited trades for specific artworks. The commission revenue is recognized on a monthly basis as the Company continuously satisfied its performance obligation. Management fee The Company provides custody and insurance service for artworks listed and traded on the Company’s platform. Management fee is calculated at a rate of $0.0013 (HK$0.01) per 100 artwork units per day. The management fee is recognized and is deducted from proceeds from the sale of artwork ownership shares when there is a purchase and sale transaction. A discount program is offered to waive the management fee during certain promotion periods. Such discounts are recognized as a reduction of the revenue. Beginning in the fourth quarter 2021, we introduced consultancy service and setup NFT business through our subsidiaries, NFT Exchange and NFT Digital. In early May 2022, we launched a NFT trading platform at www.nftoeo.com. Through the new NFT platform, we introduced three main revenue categories: (i) Listing fee, (ii) Commission, and (iii) Management fee. Cost of revenue The Company’s cost of revenue primarily consists of expenses associated with the delivery of its service of our continued operations. These include expenses related to the operation of the data centers, such as facility and lease of the server equipment, development and maintenance of the platform system, as well as the cost of insurance, storage and transportation of the artworks. Cost of revenue also includes commission paid to service agent. The Company has elected to apply the practical expedient in ASC 606-10 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. The contract liabilities are the Company’s obligation to transfer services to traders for which the Company has received consideration from the traders. All contract liabilities are expected to be recognized as revenue within one month and are presented in Advance from Customers in the Interim Condensed Consolidated Balance Sheet. Leases In February 2016, the FASB issued ASU 2016-12, Leases (ASC Topic 842), which amends the leases requirements in ASC Topic 840, Leases. Under the new lease accounting standard, a lessee will be required to recognize a right-of-use asset and lease liability for most leases on the balance sheet. The new standard also modifies the classification criteria and accounting for sales-type and direct financing leases, and enhances the disclosure requirements. Leases will continue to be classified as either finance or operating leases. The Company determines if an arrangement is a lease at inception. The lease payments under the lease arrangements are fixed. Non-lease components include payments for building management, utilities and property tax. It separates the non-lease components from the lease components to which they relate. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate, because the interest rate implicit in the leases is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company generally uses the base, non-cancellable, lease term when determining the lease assets and liabilities. Income taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. Under ASC 740, 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 evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition. The Company accounts for an unrecognized tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities. The Company considers and estimates interest and penalties related to the gross unrecognized tax benefits and includes as part of its income tax provision based on the applicable income tax regulations. The Company did not accrue any liability, interest or penalties related to uncertain tax positions in the provision for income taxes line of the interim condensed consolidated statements of operations for the nine months ended September 30, 2022 and as of December 31, 2021. Earnings (loss) per share Basic net income (loss) per share (EPS) is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the year. Diluted income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period adjusted to include the effect of potentially dilutive securities. Potentially dilutive securities are excluded from the computation of dilutive EPS in periods in which the effect would be antidilutive. Concentration of risks Concentration of credit risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, account receivables. The carrying values of the financial instruments approximate their fair values due to their short-term maturities. The Company places its cash and cash equivalents and restricted cash with financial institutions with high-credit ratings and quality. Account receivables primarily comprise of amounts receivable from the trader customers. With respect to the prepayment to service suppliers, the Company performs on-going credit evaluations of the financial condition of these suppliers. The Company establishes an allowance for doubtful accounts based upon estimates, factors surrounding the credit risk of specific service providers and other information. Concentration of customers There were no revenues from customers that individually represent greater than 10% of the total revenues during the nine months ended September 30, 2022 and 2021. Concentration of customer deposits As of September 30, 2022 and December 31, 2021, there were no traders that individually accounted for greater than 10% of the Company’s total customer deposits. Accounting standards adopted on January 1, 2021 Income Taxes: Accounting pronouncements issued but not yet adopted Financial Instruments - Credit Losses: The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. |
Prepayment and Other Current As
Prepayment and Other Current Assets, Net | 9 Months Ended |
Sep. 30, 2022 | |
Prepayment And Other Current Assets Net Abstract | |
PREPAYMENT AND OTHER CURRENT ASSETS, NET | 3. PREPAYMENT AND OTHER CURRENT ASSETS, NET Prepayment and other current assets mainly consist of the prepaid tax, prepaid service fees, as well as staff advance. September 30, December 31, 2022 2021 (Unaudited) Prepaid service fees $ - $ 196,497 Deposit 5,557 5,557 Other current assets - 2,791 Subtotal 5,557 204,845 Less: Prepayment and other current assets, net-discontinued operations - (34,937 ) Prepayment and other current assets, net $ 5,557 $ 169,908 No provision for doubtful accounts was recognized for the three and nine months ended September 30, 2022 and 2021, respectively. |
Account Receivables, Net
Account Receivables, Net | 9 Months Ended |
Sep. 30, 2022 | |
Account Receivables, Net [Abstract] | |
ACCOUNT RECEIVABLES, NET | 4. ACCOUNT RECEIVABLES, NET Account receivables consisted of the following: September 30, December 31, 2022 2021 (Unaudited) Listing fee $ - $ 154,771 Consultancy service - 120,000 Less: allowance for doubtful accounts - (154,771 ) Account receivables, net $ - $ 120,000 No provision for doubtful accounts was recognized for the three and nine months ended September 30, 2022 and 2021, respectively. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
INVESTMENTS | 5. INVESTMENTS We adopted ASU 2016-01 on January 1, 2018. This guidance requires us to measure all equity investments that are not accounted for under the equity method or result in consolidation at fair value and recognize any changes in net income. For equity investments with readily determinable and observable fair values, we use quoted market prices to determine the fair value of equity securities. For equity investments without readily determinable fair values, we have elected the measurement alternative under which we measure these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Equity investments with readily determinable fair values that are not accounted for under the equity method classified as trading are not assessed for impairment, since they are carried at fair value with the change in fair value included in net income. Similarly, prior to the adoption of ASU 2016-01, equity investment classified as trading was not tested for impairment. Equity investments without readily determinable fair values are reviewed each reporting period to determine whether a significant event or change in circumstances has occurred that may have an adverse effect on the fair value of each investment. When such events or changes occur, we assess the fair value compared to our cost basis in the investment. We also perform this assessment every reporting period for each investment for which our cost basis has exceeded the fair value. For investments in privately-held companies, management’s assessment of fair value is based on valuation methodologies such as discounted cash flows, estimates of revenue and appraisals, as applicable. We consider and apply the assumptions that we believe market participants would use in evaluating estimated future cash flows when utilizing the discounted cash flow or estimates of revenue valuation methodologies. In the event the fair value of an investment declines below our cost basis, management determines if the decline in fair value is other than temporary and records an impairment accordingly. As of December 31, 2021, our investment merely includes a non-marketable investment in a privately held company incorporated in British Virgin Islands without readily determinable market values. We elected the measurement alternative under which we measured the investment at cost minus impairment with an adjustment to the changes from observable price changes in orderly transactions for the similar investments of the same issuer. Management considered market conditions as the result of the global pandemic and other global macroeconomic conditions and the potential impact on the value of the Company’s investment; accordingly, management conducted a review of each of its investments. After its review management determined that the future undiscounted cash flows were less than the carrying cost of our non-marketable investment and recognized an impairment charge, $7,599,192 against our non-marketable investment. Management estimated future revenues and costs, and the related cash flows regarding this investment, as well as applying assumptions regarding the proper inputs into the weighted average cost of capital which included the consideration of comparable market participants and the Company’s own capital structure in developing a discounted flow model to determine an update carrying value for the private-held investment. The carrying value is measured as the total initial cost minus impairment. The carrying value for our non-marketable investment is summarized below: September 30, December 31, 2022 2021 (Unaudited) Total initial cost $ 10,630,120 $ 10,630,120 Cumulative net gain (loss) - - Provision for impairment (7,599,192 ) (1,333,506 ) Total carrying value $ 3,030,928 $ 9,296,614 We recorded an unrealized loss in connection with the non-marketable investment, a further impairment loss of $6,265,686 was recognized for nine months ended September 30, 2022. |
Asset Impairments
Asset Impairments | 9 Months Ended |
Sep. 30, 2022 | |
Asset Impairment Charges [Abstract] | |
ASSET IMPAIRMENTS | 6. ASSET IMPAIRMENTS Our subsidiary, Hong Kong Takung, recorded an asset impairment charge of $16,538,781, as a result of the deconsolidation of Tianjin Takung due to the loss of control of Tianjin Takung in the fourth quarter of 2021. Hong Kong Takung considered the receivables from Tianjin Takung to be uncollectible and wrote off its investment in Tianjin Takung. These charges have been included in the net loss from discontinued operations for the year ended December 31, 2021. As of the September 30, 2022, we did not incur additional receivable balances nor impairments. The following represents the detail of the asset impairments as of September 30, 2022 and December 31, 2021. September 30, December 31, 2022 2021 (Unaudited) Receivables from Tianjin Takung $ - $ 16,388,254 Investment in Tianjin Takung - 150,527 Subtotal - 16,538,781 Less: asset impairments – discontinued operations $ - $ (16,538,781 ) Total - - |
Property and Equipment, Net
Property and Equipment, Net | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: September 30, December 31, 2022 2021 (Unaudited) Furniture, fixtures and equipment $ 68,910 $ 63,392 Leasehold improvements 22,938 23,078 Computer trading and clearing system 2,410,388 2,429,883 Sub-total 2,502,236 2,516,353 Less: accumulated depreciation (2,443,694 ) (2,428,936 ) Sub-total $ 58,542 $ 87,417 Less: Property and equipment, net-discontinued operations (58,542 ) (80,534 ) Property and equipment, net - 6,883 |
Accrued Expenses and Other Paya
Accrued Expenses and Other Payables | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER PAYABLES | 8. ACCRUED EXPENSES AND OTHER PAYABLES Accrued expenses and other payables as of September 30, 2022 and December 31, 2021 consisted of the following: The nature of other payables for continuing operations is manpower cost,IT hardware and Software fees. September 30, December 31, 2022 2021 (Unaudited) Accruals for professional fees $ 5,652 $ 90,642 Accruals for consulting fees 264,102 266,304 Payroll payables - 55,964 Trading and clearing system - 2,364 Other payables 2,976,232 1,546 Subtotal $ 3,245,986 $ 416,820 Less: Accrued expenses and other payables-discontinued operations (813,625 ) (273,391 ) Total accrued expenses and other payables 2,432,361 143,429 |
Related Party Balances and Tran
Related Party Balances and Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY BALANCES AND TRANSACTIONS | 9. RELATED PARTY BALANCES AND TRANSACTIONS On May 29, 2021, our discontinued operation, Hong Kong Takung, entered into an interest-free loan agreement (the “HK Dollar Working Capital Loan”) with Sze Chan (“Chan”), Vice President of Hong Kong Takung, for the loan of $6,371,699 (HK$50,000,000) to Hong Kong Takung. The purpose of the loan is to provide Hong Kong Takung with sufficient Hong Kong Dollar-denominated currency to meet its working capital requirements with the maturity date of the loan as May 15, 2022. In April 2022 Chan assigned loan receivables in Hong Kong Takung to Jin Wang, one of the members of management team and it was still outstanding as at September 30, 2022. The ending balance of the amount due to a related party as of respective period is indicated as follows: September 30, December 31, 2022 2021 (Unaudited) Chan $ - $ 6,410,585 Wang 6,371,699 - Subtotal $ 6,371,699 $ 6,410,585 Less: amount due to related party – discontinued operations (6,371,699 ) (6,410,585 ) Total - - |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 10. INCOME TAXES Takung, NFT Exchange and NFT Digital were incorporated in the State of Delaware, Wyoming and New York, respectively; therefore, are subject to United States income tax. Metaverse Payment, Hong Kong Takung and Hong Kong MQ were incorporated in Hong Kong S.A.R. and are subject to Hong Kong profits tax. Tianjin Takung was incorporated in the PRC and is subject to the Enterprise Tax. United States of America Takung, NFT Exchange and NFT Digital are subject to the U.S. federal and state corporate income taxes. The federal corporate income tax rate is 21%. Corporate entities are required to file state income taxes in accordance with the applicable state corporate income regulations. Hong Kong Two-tier Profits Tax Rates The two-tier profits tax rates system was introduced under the Inland Revenue (Amendment)(No.3) Ordinance 2018 (“the Ordinance”) of Hong Kong became effective for the assessment year 2018/2019. Under the two-tier profit tax rates regime, the profits tax rate for the first HKD 2 million (approximately $257,311) of assessable profits of a corporation will be subject to the lowered tax rate, 8.25% while the remaining assessable profits will be subject to the legacy tax rate, 16.5%. The Ordinance only allows one entity within a group of “connected entities” is eligible for the two-tier tax rate benefit. An entity is a connected entity of another entity if (1) one of them has control over the other; (2) both of them are under the control (more than 50% of the issued share capital) of the same entity; (3) in the case of the first entity being a natural person carrying on a sole proprietorship business-the other entity is the same person carrying on another sole proprietorship business. Since Hong Kong Takung, Takung Art Holdings and Hong Kong MQ are wholly owned and under the control of Takung U.S, these entities are connected entities. Under the Ordinance, it is an entity’s election to nominate the entity that will be subject to the two-tier profits tax rates on its profits tax return. The election is irrevocable. The Company elected Hong Kong Takung to be subject to the two-tier profits tax rates. The provision for current income and deferred taxes of Hong Kong Takung has been calculated by applying the new tax rate of 8.25%. Hong Kong MQ still apply the original tax rate of 16.5% for its provision for current income and deferred taxes. PRC In accordance with the relevant tax laws and regulations of the PRC, a company registered in the PRC is subject to income taxes within the PRC at the applicable tax rate on taxable income. All the PRC subsidiaries were subject to income tax at a rate of 25%. The income tax provision consists of the following components: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current: Federal $ - $ - $ - $ - State - - - - Foreign 190,762 83,892 239,758 90,485 Total Current $ 190,762 $ 83,892 $ 239,758 $ 90,485 Deferred: Federal $ - $ - $ - $ - State - - - - Foreign - - - Total Deferred $ - $ - $ - $ - Total income tax expense $ 190,762 $ 83,892 $ 239,758 $ 90,485 A reconciliation between the Company’s actual provision for income taxes and the provision at the Hong Kong statutory rate is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Loss before income tax expense $ 1,035,143 $ (1,908,788 ) $ (6,864,970 ) $ (9,700,614 ) Computed tax benefit with statutory tax rate 108,859 (400,844 ) (980,713 ) (2,037,129 ) Impact of different tax rates in other jurisdictions (52,026 ) 766 (65,388 ) 1,864 Impact of preferred tax rate 66,988 (158,079 ) 339,386 (152,689 ) U.S. tax on foreign entities - 213,238 - 213,238 Tax effect of non-deductible expenses - 31,084 - 95,459 Changes in valuation allowance 66,940 524,905 946,473 2,098,066 Others - (127,178 ) - (128,324 ) Total income tax expense $ 190,761 $ 83,892 $ 239,758 $ 90,485 Uncertain tax positions The reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions is as follows: September 30, December 31, 2022 2021 (Unaudited) Uncertain tax liabilities, beginning of period $ - $ 101,789 Settlements with tax authority during current year - (101,789 ) Uncertain tax liabilities, end of period $ - $ - The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by the respective jurisdictions, where applicable. The statute of limitations for the tax returns varies by jurisdictions. The amounts of uncertain tax liabilities listed above are based on the recognition and measurement criteria of ASC Topic 740, and the balance is presented as current liability in the consolidated financial statements as of March 31, 2022 and December 31, 2021. The Company anticipated that the settlements with the taxing authority are remitted within one year. Our policy is to include interest and penalty charges related to uncertain tax liabilities as necessary in the provision for income taxes. The Company has a liability for accrued interest of $ nil Our discontinued operation, Hong Kong Takung, was selected for routine examination for its tax years ended December 31, 2016 through 2018 by Hong Kong Inland Revenue Department (“IRD”) during the fiscal year ended 2020. The examination had been concluded in May 2021 and the ultimate resolution of the tax examination concurred with the uncertain tax liabilities previously accrued. Hong Kong Takung settled the entire tax liabilities in September 2021. The Company does not expect the position of uncertain tax liabilities will significantly fluctuate within the next twelve months. The statute of limitations for the Internal Revenue Services to assess the income tax returns on a taxpayer expires three years from the due date of the profits tax return or the date on which it was filed, whichever is later. In accordance with the Hong Kong profits tax regulations, a tax assessment by the IRD may be initiated within six years after the relevant year of assessment, but extendable to 10 years in the case of potential willful underpayment or evasion. In accordance with PRC Tax Administration Law on the Levying and Collection of Taxes, the PRC tax authorities generally have up to five years to assess underpaid tax plus penalties and interest for PRC entities’ tax filings. In the case of tax evasion, which is not clearly defined in the law, there is no limitation on the tax years open for investigation. Accordingly, the PRC entities remain subject to examination by the tax authorities based on the above. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | 11. LEASES The Company has operating leases for its office facilities and artwork storages. The Company’s leases have remaining terms of less than one year to approximately four years. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not separate non-lease components from the lease components to which they relate, and instead accounts for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes. The following table provides a summary of leases by balance sheet location as of September 30, 2022 and December 31, 2021 respectively: As of As of September 30, December 31, Assets/liabilities Classification 2022 2021 (Unaudited) Assets Operating lease right-of-use assets Operating lease assets $ 13,710 $ 62,397 Liabilities Current Operating lease liability - current Current operating lease liabilities $ 13,710 $ 62,397 Long-term Operating lease liability - non-current Long-term operating lease liabilities - - Total lease liabilities $ 13,710 $ 62, 397 The operating lease expenses for the three months and nine months ended September 30, 2022 and 2021 were as follows: Three Months Ended Nine Months Ended Lease Cost Classification 2022 2021 2022 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Operating lease cost Cost of revenue, general and administrative expenses $ 28,322 $ 127,173 $ 50,165 $ 294,399 Total lease cost $ 28,322 $ 127,173 $ 50,165 $ 294,399 Operating lease cost-discontinued operations Cost of revenue, general and administrative expenses (28,322 ) (127,173 ) (50,165 ) (294,399 ) Total lease cost - - - - Maturities of operating lease liabilities at September 30, 2022 were as follows: Operating Maturity of Lease Liabilities Leases 2022 $ 13,873 2023 - 2024 - 2025 - Thereafter - Total lease payments $ 13,873 Less: interest 163 Present value of lease payments $ 13, 710 |
Earnings_(Loss) Per Share
Earnings/(Loss) Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS/(LOSS) PER SHARE | 12. EARNINGS/(LOSS) PER SHARE The computation of the Company’s basic and diluted net earnings/(loss) per share is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Numerator: Net profit/(loss) - continuing operations $ 896,558 $ (853,182 ) $ (6,421,188 ) $ (8,234,124 ) Net loss - discontinued operations (52,177 ) (1,139,498 ) (683,540 ) (1,556,975 ) Total net income/(loss ) 844,381 (1,992,680 ) (7,104,728 ) (9,791,099 ) Denominator: Weighted-average shares outstanding - Basic 26,529,422 12,689,317 21,357,138 11,897,019 Stock options and restricted shares - - - - Weighted-average shares outstanding - Diluted 61,082,469 12,689,317 41,665,082 11,897,019 Loss per share-continuing operations -Basic 0.03 (0.07 ) (0.30 ) (0.69 ) -Diluted 0.01 (0.07 ) (0.15 ) (0.69 ) Loss per share-discontinued operations -Basic (0.00 ) (0.09 ) (0.03 ) (0.13 ) -Diluted (0.00 ) (0.09 ) (0.02 ) (0.13 ) Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. As of September 30, 2022 and December 31, 2021, there were no outstanding stock options, but there were warrants attached to PIPE executed on April 14, 2022 and July 27, 2022 securities that would potentially be converted to additional shares of common stock that would have been outstanding if the dilutive potential shares of common stock had been issued were excluded from the calculation of diluted net loss per share. NFT Exchange LIMITED has received 30 million USD proceeds on September 1,2022 for PIPE executed on July 27,2022 and NFT Exchange LIMITED has received 30 million USD proceeds on April 6,2022 for PIPE executed on April 14,2022. NFT Exchange LIMITED receives funds on behalf of Takung Art Co., Ltd. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS On November 1, 2022, the Company, TKHK, TKMQ and Fecundity Capital Investment Ltd. (“Fecundity”) entered into a certain share purchase agreement (the “Disposition SPA”) to purchase TKTJ, TKHK and TKMQ for cash consideration of $1 million (the “Disposition”). The closing of the Disposition is subject to certain closing conditions including the payment of the Purchase Price, the receipt of a fairness opinion from Access Partner Consultancy & Appraisals and the approval of the Company’s shareholders. On November 1, 2022, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with NFT Limited (“NFT”), a Cayman Islands exempt company and wholly owned subsidiary of the Company, pursuant to which the Company will merge with and into NFT, with NFT continuing as the surviving entity (the “Redomicile”). The Redomicile will become effective at such time on the closing date as the certificate of merger is duly filed with the Secretary of State of the State of Delaware or at such other time specified in the Certificate of Merger (the “Effective Time”). From and after the Effective Time, each share of the Company’s stock, either common stock or preferred stock issued and outstanding prior to the Effective Time (excluding certain excluding shares and dissenting shares, if any) will be automatically converted into Class A Ordinary Shares of NFT on a pro rata basis. Each share of NFT stock held immediately prior to the Effective Time by the Company will be automatically cancelled and no payment will be made with respect thereto. The closing of the Redomicile is subject to the satisfaction or waiver of customary conditions by the respective parties, including the approval of the Merger Agreement and the contemplated transactions by the Company’s shareholders. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization and Description of Business [Abstract] | |
Basis of presentation | Basis of presentation The interim condensed consolidated financial statements have been prepared in accordance with the generally accepted accounting principles in the United States (“U.S. GAAP”). This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. dollars. |
Use of estimates | Use of estimates The preparation of interim condensed consolidated financial statements in conformity with U.S. GAAP 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 interim condensed consolidated financial statements and the amount of revenues and expenses during the reporting periods. Actual results could differ materially from those results. |
Basis of consolidation | Basis of consolidation The interim condensed consolidated financial statements include the financial statements of the Company, and its subsidiaries, NFT Exchange, NFT Digital, Metaverse Payment, Hong Kong Takung, Tianjin Takung and Hong Kong MQ. All intercompany transactions and balances have been eliminated on consolidation. |
Discontinued operations | Discontinued operations The Company has adopted ASC Topic 205 “Presentation of Financial Statements” Subtopic 20-45, in determining whether any of its business component(s) classified as held for sale, disposed of by sale or other than by sale is required to be reported in discontinued operations. In accordance with ASC Topic 205-20-45-1, a discontinued operation may include a component of an entity or a group of components of an entity, or a business or non-profit activity. A disposal of a component of an entity or a group of components of an entity is required to be reported in discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when any of the following occurs: (1) the component of an entity or group of components of an entity meets the criteria to be classified as held for sale; (2) the component of an entity or group of components of an entity is disposed of by sale; (3) the component of an entity or group of components of an entity is disposed of other than by sale (for example, by abandonment or in a distribution to owners in a spinoff). For the component disposed of other than by sale in accordance with paragraph 360-10-45-15, the Company adopted ASC Topic 205-20-45-3 and reported the results of operations of the discontinued operations, less applicable income tax expenses or benefits as a separate component in in the statement where net income (loss) is reported for current and all prior periods presented. Due to the suspension of the operation of Tianjin Takung by the local authority in the fourth quarter of 2021, Hong Kong Takung lost its control over Tianjin Takung. The Company plans to dispose Hong Kong Takung, and is actively seeking buyers for Hong Kong Takung and related operations in order to focus on its blockchain and NFT business operation. As of September 30, 2022 and December 31, 2021, the operation of Hong Kong Takung was classified as a discontinued operation and as of December 31, 2021, the operation Tianjin Takung was deconsolidated. For the nine months ended September 30, 2022, the operation of Hong Kong Takung was presented in discontinued operations. HKMQ is a part of the legacy business, which shall be discontinued and transferred to NFT service. |
Deconsolidation | Deconsolidation Under the ASC Subtopic 810-10-40, “Consolidation-Overall-Derecognition”, a reporting entity will deconsolidate a subsidiary in the period when the loss of control over such subsidiary incurred as a result of one or more of the following events: (i) a parent sells all or part of its ownership interest in its subsidiary; (ii) the expiration of a contractual agreement that gave control of the subsidiary to the parent; (iii) the subsidiary issues shares which reduces the parent’s ownership interest in the subsidiary to an extent that the parent no longer has a controlling financial interest in such subsidiary; (iv) the subsidiary becomes subject to the control of a government, court, administrator, or regulator. Upon deconsolidation, the reporting entity would no longer include the subsidiary’s assets, liabilities and results of operations in its consolidated financial statements. Due to the suspension of the operation of Tianjin Takung by the local authority. The financial information of Tianjin Takung was deconsolidated as of December 31, 2021. |
Fair value measurements | Fair value measurements The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of non-financial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of September 30, 2022 and December 31, 2021. |
Comprehensive loss | Comprehensive loss The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 220 “Reporting Comprehensive Income” and establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. For the nine months ended September 30, 2022 and 2021, the Company’s comprehensive loss includes net loss and foreign currency translation adjustment. |
Foreign currency translation and transaction | Foreign currency translation and transaction The functional currency of Metaverse Payment, Hong Kong Takung, Hong Kong MQ and Tianjin Takung are in Hong Kong Dollar (“HKD”); NFT Digital and NFT Exchange are in United States Dollar (“USD”) The reporting currency of the Company is USD. Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on re-translation of monetary items at period-end are included in income statement of the period. For the purpose of presenting these financial statements, the Company’s assets and liabilities with functional currency of HKD are expressed in USD at the exchange rate on the balance sheet’s dates, which is 7.8510 and 7.7996 as of September 30, 2022 and December 31, 2021, respectively; |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash on hand, cash in bank with no restrictions, as well as highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less when initially purchased. |
Restricted cash | Restricted cash Restricted cash represents the cash deposited by the NFT traders into a specific bank account under Takung (“the broker’s account”) in order to facilitate the trading of NFT in our online NFT platform. After the user’s registration is successful, the customer deposits must be transferred to the designated account of the platform through the bank account added by the user before the transaction starts, and a transfer application is submitted on the platform, which can enter the buyer’s platform account after financial review. Except for instructing the bank to deduct the commission, Takung has no right to use any funds in the broker’s account. Our restricted cash is denominated in USD. As of September 30, 2022, the ending balance of our restricted cash was $3,239,525. |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. The Company makes estimates for the allowance for doubtful accounts based upon the assessment of various factors, including historical, experience, the age of the accounts receivable balances, credit quality of the customers, current economic conditions, and other factors that may affect customers’ ability to pay. |
Prepayment and other current assets, net | Prepayment and other current assets, net Prepayment and other current assets mainly consist of the prepayment for income taxes, maintenance of online trading system, advertising and promotional services, insurances, financial advisory, professional services, rental deposits, as well as other current assets. |
Property and equipment, net | Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment losses. Gains or losses on dispositions of property and equipment are included in operating income or expense. Major additions, renewals and betterments are capitalized, while maintenance and repairs are expensed as incurred. Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. The Company developed systems and solutions for solely internal use. Certain costs incurred in connection with developing or obtaining internal use software are capitalized. Unamortized capitalized costs are included in computer trading and clearing system, within property and equipment, net in the Consolidated Balance Sheets. Capitalized software costs are amortized on a straight-line basis over the estimated useful lives of the software of 5 years. Amortization of these costs is included in depreciation and amortization expense in the Consolidated Statements of Operations. Estimated useful lives are as follows, taking into account the assets’ estimated residual value: Classification Estimated Furniture, fixtures and equipment 5 years Leasehold improvements Shorter of the remaining lease Computer trading and clearing system 5 years |
Long-lived assets | Long-lived assets The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When these events occur, the Company assesses the recoverability of these long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the future undiscounted cash flow is less than the carrying amount of the assets, the Company recognizes an impairment equal to the difference between the carrying amount and fair value of these assets. During 2021, we recorded $16.5million in asset impairments due to the deconsolidation of Tianjin Takung as a result of the loss of control in this entity. Please refer to Note 6 for details. In addition, we determined that the future undiscounted cash flow was less than the carrying cost of our non-marketable investment and recognized an impairment charge of $1,333,506 for twelve months ended December 31, 2021 and a further charge of $6,265,686 for nine months ended September 30, 2022 against our non-marketable investment. Please refer to Note 5 for details. |
Intangible assets | Intangible assets Intangible assets represent the licensing cost for the trademark registration. For intangible assets with indefinite lives, the Company evaluates intangible assets for impairment at least annually and more often whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. For intangible assets with definite lives, they are amortized over estimated useful lives, and are reviewed annually for impairment. The Company has not recorded impairment of intangible assets as of September 30, 2022 and December 31, 2021. |
Advance from customers | Advance from customers Advance from customers represent the cash deposited by the traders into a specific bank account under Takung (“the broker’s account”) in order to facilitate the trading ownership units of the NFT. The traders are required to have their funds transferred to the broker’s account before the trading take place. |
Revenue Recognition | Revenue Recognition Under ASC 606, an entity recognizes revenue as the Company satisfies a performance obligation when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. The Company recognizes revenue when control of the promised services is transferred to the traders. Revenue is measured at the transaction price, which is based on the amount of consideration that the Company expects to receive in exchange for transferring the promised services to the traders. Our discontinued operations generated revenue from its services in connection with the offering and trading of artworks on the Company’s legacy online trading system primarily consisted of listing fee, commission fee and management fee. Listing fee The Company recognizes the listing fee revenue at a point in time when the ownership units of the artwork are listed and available for trading on the Company’s system, at an amount of an agreed percentage of the total offering price. The amount is collected from the money raised from the issuance of such units. Commission The Company generates commission fee from non-VIP traders and selected traders. For non-VIP traders, the commission is calculated based on a percentage of transaction value of artworks when there is purchase and sale of the ownership shares of the artworks. The commission revenue is recognized at a point in time when each purchase and sale transaction is completed. For selected traders, starting from April 1, 2016, the Company charged a predetermined monthly commission fee which allows the selected traders to conduct unlimited trades for specific artworks. The commission revenue is recognized on a monthly basis as the Company continuously satisfied its performance obligation. Management fee The Company provides custody and insurance service for artworks listed and traded on the Company’s platform. Management fee is calculated at a rate of $0.0013 (HK$0.01) per 100 artwork units per day. The management fee is recognized and is deducted from proceeds from the sale of artwork ownership shares when there is a purchase and sale transaction. A discount program is offered to waive the management fee during certain promotion periods. Such discounts are recognized as a reduction of the revenue. Beginning in the fourth quarter 2021, we introduced consultancy service and setup NFT business through our subsidiaries, NFT Exchange and NFT Digital. In early May 2022, we launched a NFT trading platform at www.nftoeo.com. Through the new NFT platform, we introduced three main revenue categories: (i) Listing fee, (ii) Commission, and (iii) Management fee. |
Cost of revenue | Cost of revenue The Company’s cost of revenue primarily consists of expenses associated with the delivery of its service of our continued operations. These include expenses related to the operation of the data centers, such as facility and lease of the server equipment, development and maintenance of the platform system, as well as the cost of insurance, storage and transportation of the artworks. Cost of revenue also includes commission paid to service agent. The Company has elected to apply the practical expedient in ASC 606-10 and does not disclose information about remaining performance obligations that have original expected durations of one year or less. The contract liabilities are the Company’s obligation to transfer services to traders for which the Company has received consideration from the traders. All contract liabilities are expected to be recognized as revenue within one month and are presented in Advance from Customers in the Interim Condensed Consolidated Balance Sheet. |
Leases | Leases In February 2016, the FASB issued ASU 2016-12, Leases (ASC Topic 842), which amends the leases requirements in ASC Topic 840, Leases. Under the new lease accounting standard, a lessee will be required to recognize a right-of-use asset and lease liability for most leases on the balance sheet. The new standard also modifies the classification criteria and accounting for sales-type and direct financing leases, and enhances the disclosure requirements. Leases will continue to be classified as either finance or operating leases. The Company determines if an arrangement is a lease at inception. The lease payments under the lease arrangements are fixed. Non-lease components include payments for building management, utilities and property tax. It separates the non-lease components from the lease components to which they relate. Lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is the Company’s incremental borrowing rate, because the interest rate implicit in the leases is not readily determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in economic environments where the leased asset is located. The lease terms include periods under options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company generally uses the base, non-cancellable, lease term when determining the lease assets and liabilities. |
Income taxes | Income taxes The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not that these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. Under ASC 740, 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 evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred. GAAP also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transition. The Company accounts for an unrecognized tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities. The Company considers and estimates interest and penalties related to the gross unrecognized tax benefits and includes as part of its income tax provision based on the applicable income tax regulations. The Company did not accrue any liability, interest or penalties related to uncertain tax positions in the provision for income taxes line of the interim condensed consolidated statements of operations for the nine months ended September 30, 2022 and as of December 31, 2021. |
Earnings (loss) per share | Earnings (loss) per share Basic net income (loss) per share (EPS) is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the year. Diluted income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period adjusted to include the effect of potentially dilutive securities. Potentially dilutive securities are excluded from the computation of dilutive EPS in periods in which the effect would be antidilutive. |
Concentration of risks | Concentration of risks Concentration of credit risk Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, account receivables. The carrying values of the financial instruments approximate their fair values due to their short-term maturities. The Company places its cash and cash equivalents and restricted cash with financial institutions with high-credit ratings and quality. Account receivables primarily comprise of amounts receivable from the trader customers. With respect to the prepayment to service suppliers, the Company performs on-going credit evaluations of the financial condition of these suppliers. The Company establishes an allowance for doubtful accounts based upon estimates, factors surrounding the credit risk of specific service providers and other information. Concentration of customers There were no revenues from customers that individually represent greater than 10% of the total revenues during the nine months ended September 30, 2022 and 2021. Concentration of customer deposits As of September 30, 2022 and December 31, 2021, there were no traders that individually accounted for greater than 10% of the Company’s total customer deposits. |
Accounting standards adopted on January 1, 2021 | Accounting standards adopted on January 1, 2021 Income Taxes: |
Accounting pronouncements issued but not yet adopted | Accounting pronouncements issued but not yet adopted Financial Instruments - Credit Losses: The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization and Description of Business [Abstract] | |
Schedule of estimated residual value | Classification Estimated Furniture, fixtures and equipment 5 years Leasehold improvements Shorter of the remaining lease Computer trading and clearing system 5 years |
Prepayment and Other Current _2
Prepayment and Other Current Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Prepayment And Other Current Assets Net Abstract | |
Schedule of prepayment and other current assets | September 30, December 31, 2022 2021 (Unaudited) Prepaid service fees $ - $ 196,497 Deposit 5,557 5,557 Other current assets - 2,791 Subtotal 5,557 204,845 Less: Prepayment and other current assets, net-discontinued operations - (34,937 ) Prepayment and other current assets, net $ 5,557 $ 169,908 |
Account Receivables, Net (Table
Account Receivables, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Account Receivables, Net [Abstract] | |
Schedule of account receivables | September 30, December 31, 2022 2021 (Unaudited) Listing fee $ - $ 154,771 Consultancy service - 120,000 Less: allowance for doubtful accounts - (154,771 ) Account receivables, net $ - $ 120,000 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
Schedule of non-marketable investment | September 30, December 31, 2022 2021 (Unaudited) Total initial cost $ 10,630,120 $ 10,630,120 Cumulative net gain (loss) - - Provision for impairment (7,599,192 ) (1,333,506 ) Total carrying value $ 3,030,928 $ 9,296,614 |
Asset Impairments (Tables)
Asset Impairments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Asset Impairments (Tables) [Line Items] | |
Schedule of asset impairments | September 30, December 31, 2022 2021 (Unaudited) Receivables from Tianjin Takung $ - $ 16,388,254 Investment in Tianjin Takung - 150,527 Subtotal - 16,538,781 Less: asset impairments – discontinued operations $ - $ (16,538,781 ) Total - - |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | September 30, December 31, 2022 2021 (Unaudited) Furniture, fixtures and equipment $ 68,910 $ 63,392 Leasehold improvements 22,938 23,078 Computer trading and clearing system 2,410,388 2,429,883 Sub-total 2,502,236 2,516,353 Less: accumulated depreciation (2,443,694 ) (2,428,936 ) Sub-total $ 58,542 $ 87,417 Less: Property and equipment, net-discontinued operations (58,542 ) (80,534 ) Property and equipment, net - 6,883 |
Accrued Expenses and Other Pa_2
Accrued Expenses and Other Payables (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other payables | September 30, December 31, 2022 2021 (Unaudited) Accruals for professional fees $ 5,652 $ 90,642 Accruals for consulting fees 264,102 266,304 Payroll payables - 55,964 Trading and clearing system - 2,364 Other payables 2,976,232 1,546 Subtotal $ 3,245,986 $ 416,820 Less: Accrued expenses and other payables-discontinued operations (813,625 ) (273,391 ) Total accrued expenses and other payables 2,432,361 143,429 |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Schedule of amount due to related parties | September 30, December 31, 2022 2021 (Unaudited) Chan $ - $ 6,410,585 Wang 6,371,699 - Subtotal $ 6,371,699 $ 6,410,585 Less: amount due to related party – discontinued operations (6,371,699 ) (6,410,585 ) Total - - |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Current: Federal $ - $ - $ - $ - State - - - - Foreign 190,762 83,892 239,758 90,485 Total Current $ 190,762 $ 83,892 $ 239,758 $ 90,485 Deferred: Federal $ - $ - $ - $ - State - - - - Foreign - - - Total Deferred $ - $ - $ - $ - Total income tax expense $ 190,762 $ 83,892 $ 239,758 $ 90,485 |
Schedule of actual provision for income taxes and the provision at the Hong Kong statutory rate | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Loss before income tax expense $ 1,035,143 $ (1,908,788 ) $ (6,864,970 ) $ (9,700,614 ) Computed tax benefit with statutory tax rate 108,859 (400,844 ) (980,713 ) (2,037,129 ) Impact of different tax rates in other jurisdictions (52,026 ) 766 (65,388 ) 1,864 Impact of preferred tax rate 66,988 (158,079 ) 339,386 (152,689 ) U.S. tax on foreign entities - 213,238 - 213,238 Tax effect of non-deductible expenses - 31,084 - 95,459 Changes in valuation allowance 66,940 524,905 946,473 2,098,066 Others - (127,178 ) - (128,324 ) Total income tax expense $ 190,761 $ 83,892 $ 239,758 $ 90,485 |
Schedule of reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions | September 30, December 31, 2022 2021 (Unaudited) Uncertain tax liabilities, beginning of period $ - $ 101,789 Settlements with tax authority during current year - (101,789 ) Uncertain tax liabilities, end of period $ - $ - |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of leases | As of As of September 30, December 31, Assets/liabilities Classification 2022 2021 (Unaudited) Assets Operating lease right-of-use assets Operating lease assets $ 13,710 $ 62,397 Liabilities Current Operating lease liability - current Current operating lease liabilities $ 13,710 $ 62,397 Long-term Operating lease liability - non-current Long-term operating lease liabilities - - Total lease liabilities $ 13,710 $ 62, 397 |
Schedule of operating lease expenses | Three Months Ended Nine Months Ended Lease Cost Classification 2022 2021 2022 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Operating lease cost Cost of revenue, general and administrative expenses $ 28,322 $ 127,173 $ 50,165 $ 294,399 Total lease cost $ 28,322 $ 127,173 $ 50,165 $ 294,399 Operating lease cost-discontinued operations Cost of revenue, general and administrative expenses (28,322 ) (127,173 ) (50,165 ) (294,399 ) Total lease cost - - - - |
Schedule of maturities operating lease liabilities | Operating Maturity of Lease Liabilities Leases 2022 $ 13,873 2023 - 2024 - 2025 - Thereafter - Total lease payments $ 13,873 Less: interest 163 Present value of lease payments $ 13, 710 |
Earnings_(Loss) Per Share (Tabl
Earnings/(Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net loss per share | Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Numerator: Net profit/(loss) - continuing operations $ 896,558 $ (853,182 ) $ (6,421,188 ) $ (8,234,124 ) Net loss - discontinued operations (52,177 ) (1,139,498 ) (683,540 ) (1,556,975 ) Total net income/(loss ) 844,381 (1,992,680 ) (7,104,728 ) (9,791,099 ) Denominator: Weighted-average shares outstanding - Basic 26,529,422 12,689,317 21,357,138 11,897,019 Stock options and restricted shares - - - - Weighted-average shares outstanding - Diluted 61,082,469 12,689,317 41,665,082 11,897,019 Loss per share-continuing operations -Basic 0.03 (0.07 ) (0.30 ) (0.69 ) -Diluted 0.01 (0.07 ) (0.15 ) (0.69 ) Loss per share-discontinued operations -Basic (0.00 ) (0.09 ) (0.03 ) (0.13 ) -Diluted (0.00 ) (0.09 ) (0.02 ) (0.13 ) |
Organization and Description _2
Organization and Description of Business (Details) | 9 Months Ended | |||||
Sep. 09, 2021 shares | Aug. 31, 2021 USD ($) | Aug. 21, 2021 USD ($) shares | May 28, 2021 USD ($) shares | Sep. 30, 2022 USD ($) shares | Sep. 30, 2022 HKD ($) shares | |
Organization and Description of Business (Details) [Line Items] | ||||||
Registered capital (in Dollars) | $ | $ 100,000 | |||||
Exchange of common stock shares | 86,560 | |||||
Investment total amount (in Dollars) | $ | 10,630,120 | |||||
Investment initial cost (in Dollars) | $ | 3,030,928 | |||||
Impairment charges (in Dollars) | $ | 6,265,686 | |||||
Takung Shanghai Co Ltd [Member] | ||||||
Organization and Description of Business (Details) [Line Items] | ||||||
Capital value (in Dollars) | $ | 1 | |||||
Hong Kong MQ [Member] | ||||||
Organization and Description of Business (Details) [Line Items] | ||||||
Net asset (in Dollars) | $ | ||||||
Percentage of issued and outstanding | 100% | |||||
Cash consideration | $ 0.13 | $ 1 | ||||
Takung Cultural Development Tianjin Co Ltd [Member] | ||||||
Organization and Description of Business (Details) [Line Items] | ||||||
Restricted shares issued | 10,130,120 | 10,130,120 | ||||
Securities Purchase Agreement [Member] | ||||||
Organization and Description of Business (Details) [Line Items] | ||||||
Cash consideration | $ | $ 500,000 | $ 500,000 | ||||
Issuance of common stock shares | 282,000 | |||||
Exchange of common stock shares | 54,100 | |||||
Unvested restricted shares | 290,000 | |||||
Issuance of unvested common shares exchange | 32,460 | 32,460 | ||||
Original purchase price (in Dollars) | $ | $ 500,000 | |||||
Issuance of restricted common stock shares | 771,040 | 500,000 | 500,000 | |||
Issuance of unvested common shares exchange | 787,440 | |||||
Restricted shares issued | 1,558,480 | |||||
Takung Shanghai Co Ltd [Member] | ||||||
Organization and Description of Business (Details) [Line Items] | ||||||
Exchange of common stock shares | 54,100 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 USD ($) | Sep. 30, 2021 | Dec. 31, 2021 USD ($) | |
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Restricted cash (in Dollars) | $ 3,239,525 | ||
Straight-line basis over the estimated useful live | 5 years | ||
Asset impairments due (in Dollars) | 16,000,000 | ||
Impairment charge (in Dollars) | $ 6,265,686 | $ 1,333,506 | |
Concentration of customers percentage | 10% | 10% | |
Total customer deposits percentage | 10% | 10% | |
HKD [Member] | |||
Summary of Significant Accounting Policies (Details) [Line Items] | |||
Exchange rate | 7.851 | 7.7996 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of estimated residual value | 9 Months Ended |
Sep. 30, 2022 | |
Furniture, fixtures and equipment [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated residual value [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Leasehold improvements [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated residual value [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | Shorter of the remaining lease terms and the estimated 3 years |
Computer trading and clearing system [Member] | |
Summary of Significant Accounting Policies (Details) - Schedule of estimated residual value [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Prepayment and Other Current _3
Prepayment and Other Current Assets, Net (Details) - Schedule of prepayment and other current assets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of prepayment and other current assets [Abstract] | ||
Prepaid service fees | $ 196,497 | |
Deposit | 5,557 | 5,557 |
Other current assets | 2,791 | |
Subtotal | 5,557 | 204,845 |
Less: Prepayment and other current assets, net-discontinued operations | (34,937) | |
Prepayment and other current assets, net | $ 5,557 | $ 169,908 |
Account Receivables, Net (Detai
Account Receivables, Net (Details) - Schedule of account receivables - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of Account Receivables [Abstract] | ||
Listing fee | $ 154,771 | |
Consultancy service | 120,000 | |
Less: allowance for doubtful accounts | (154,771) | |
Account receivables, net | $ 120,000 |
Investments (Details)
Investments (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Investments [Abstract] | |
Impairment charge | $ 7,599,192 |
Impairment loss | $ 6,265,686 |
Investments (Details) - Schedul
Investments (Details) - Schedule of non-marketable investment - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Non Marketable Investment [Abstract] | ||
Total initial cost | $ 10,630,120 | $ 10,630,120 |
Cumulative net gain (loss) | ||
Provision for impairment | (7,599,192) | (1,333,506) |
Total carrying value | $ 3,030,928 | $ 9,296,614 |
Asset Impairments (Details)
Asset Impairments (Details) | 12 Months Ended |
Dec. 31, 2021 USD ($) | |
Asset Impairment Charges [Abstract] | |
Asset impairment charge | $ 16,538,781 |
Asset Impairments (Details) - S
Asset Impairments (Details) - Schedule of asset impairments - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of Asset Impairments [Abstract] | ||
Receivables from Tianjin Takung | $ 16,388,254 | |
Investment in Tianjin Takung | 150,527 | |
Subtotal | 16,538,781 | |
Less: asset impairments – discontinued operations | (16,538,781) | |
Total |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - Schedule of property and equipment - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Property And Equipment [Abstract] | ||
Furniture, fixtures and equipment | $ 68,910 | $ 63,392 |
Leasehold improvements | 22,938 | 23,078 |
Computer trading and clearing system | 2,410,388 | 2,429,883 |
Sub-total | 2,502,236 | 2,516,353 |
Less: accumulated depreciation | (2,443,694) | (2,428,936) |
Sub-total | 58,542 | 87,417 |
Less: Property and equipment, net-discontinued operations | (58,542) | (80,534) |
Property and equipment, net | $ 6,883 |
Accrued Expenses and Other Pa_3
Accrued Expenses and Other Payables (Details) - Schedule of accrued expenses and other payables - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Accrued Expenses And Other Payables Abstract | ||
Accruals for professional fees | $ 5,652 | $ 90,642 |
Accruals for consulting fees | 264,102 | 266,304 |
Payroll payables | 55,964 | |
Trading and clearing system | 2,364 | |
Other payables | 2,976,232 | 1,546 |
Subtotal | 3,245,986 | 416,820 |
Less: Accrued expenses and other payables-discontinued operations | (813,625) | (273,391) |
Total accrued expenses and other payables | $ 2,432,361 | $ 143,429 |
Related Party Balances and Tr_3
Related Party Balances and Transactions (Details) | 9 Months Ended | ||
Sep. 30, 2022 | May 29, 2021 USD ($) | May 29, 2021 HKD ($) | |
Related Party Transactions [Abstract] | |||
Interest-free loan | $ 6,371,699 | $ 50,000,000 | |
Maturity date of the loan | May 15, 2022 |
Related Party Balances and Tr_4
Related Party Balances and Transactions (Details) - Schedule of amount due to related parties - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Schedule of Amount Due to Related Parties [Abstract] | ||
Chan | $ 6,410,585 | |
Wang | 6,371,699 | |
Subtotal | 6,371,699 | 6,410,585 |
Less: amount due to related party – discontinued operations | (6,371,699) | (6,410,585) |
Total |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2022 HKD ($) | Dec. 31, 2021 USD ($) | |
Income Taxes (Details) [Line Items] | |||
Income tax percentage | 21% | 21% | |
Profit tax rate | $ 257,311 | $ 2 | |
Issued share capital percentage | 50% | 50% | |
Accrued interest (in Dollars) | |||
Taxpayer expires term | 3 years | 3 years | |
Tax assessment years | 6 years | 6 years | |
Tax assessment extendable term | 10 years | 10 years | |
Tax authorities general term | 5 years | 5 years | |
Income Tax Slab One Rate [Member] | Hong Kong Subsidiaries [Member] | |||
Income Taxes (Details) [Line Items] | |||
Tax rate percentage | 8.25% | 8.25% | |
New tax rate | 8.25% | 8.25% | |
Income Tax Slab Two Rate [Member] | Hong Kong Subsidiaries [Member] | |||
Income Taxes (Details) [Line Items] | |||
Tax rate percentage | 16.50% | 16.50% | |
New tax rate | 16.50% | 16.50% | |
PRC [Member] | |||
Income Taxes (Details) [Line Items] | |||
Tax rate percentage | 25% | 25% |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of income tax provision - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Current: | ||||
Federal | ||||
State | ||||
Foreign | 190,762 | 83,892 | 239,758 | 90,485 |
Total Current | 190,762 | 83,892 | 239,758 | 90,485 |
Deferred: | ||||
Federal | ||||
State | ||||
Foreign | ||||
Total Deferred | ||||
Total income tax expense | $ 190,762 | $ 83,892 | $ 239,758 | $ 90,485 |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of actual provision for income taxes and the provision at the Hong Kong statutory rate - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Schedule Of Actual Provision For Income Taxes And The Provision At The Hong Kong Statutory Rate Abstract | ||||
Loss before income tax expense | $ 1,035,143 | $ (1,908,788) | $ (6,864,970) | $ (9,700,614) |
Computed tax benefit with statutory tax rate | 108,859 | (400,844) | (980,713) | (2,037,129) |
Impact of different tax rates in other jurisdictions | (52,026) | 766 | (65,388) | 1,864 |
Impact of preferred tax rate | 66,988 | (158,079) | 339,386 | (152,689) |
U.S. tax on foreign entities | 213,238 | 213,238 | ||
Tax effect of non-deductible expenses | 31,084 | 95,459 | ||
Changes in valuation allowance | 66,940 | 524,905 | 946,473 | 2,098,066 |
Others | (127,178) | (128,324) | ||
Total income tax expense | $ 190,761 | $ 83,892 | $ 239,758 | $ 90,485 |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of reconciliation of the beginning and ending amount of liabilities associated with uncertain tax positions - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Schedule Of Reconciliation Of The Beginning And Ending Amount Of Liabilities Associated With Uncertain Tax Positions Abstract | ||
Uncertain tax liabilities, beginning of period | $ 101,789 | |
Settlements with tax authority during current year | (101,789) | |
Uncertain tax liabilities, end of period |
Leases (Details)
Leases (Details) | Sep. 30, 2022 |
Minimum [Member] | |
Leases (Details) [Line Items] | |
Leases remaining terms | 1 year |
Maximum [Member] | |
Leases (Details) [Line Items] | |
Leases remaining terms | 4 years |
Leases (Details) - Schedule of
Leases (Details) - Schedule of leases - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Operating lease right-of-use assets, Classification | Operating lease assets | |
Operating lease right-of-use assets | $ 13,710 | $ 62,397 |
Current | ||
Operating lease liability - current, Classification | Current operating lease liabilities | |
Operating lease liability - current | $ 13,710 | 62,397 |
Long-term | ||
Operating lease liability - non-current, Classification | Long-term operating lease liabilities | |
Operating lease liability - non-current | ||
Total lease liabilities | $ 13,710 | $ 62,397 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of operating lease expenses - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Schedule Of Operating Lease Expenses Abstract | |||||
Operating lease cost, description | Cost of revenue, general and administrative expenses | ||||
Operating lease cost | $ 28,322 | $ 127,173 | $ 50,165 | $ 294,399 | |
Total lease cost | 28,322 | 127,173 | 50,165 | 294,399 | |
Operating lease cost-discontinued operations, description | Cost of revenue, general and administrative expenses | ||||
Operating lease cost-discontinued operations | (28,322) | (127,173) | (50,165) | (294,399) | |
Total lease cost |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of maturities operating lease liabilities | Sep. 30, 2022 USD ($) |
Schedule Of Maturities Operating Lease Liabilities Abstract | |
2022 | $ 13,873 |
2023 | |
2024 | |
2025 | |
Thereafter | |
Total lease payments | 13,873 |
Less: interest | 163 |
Present value of lease payments | $ 13,710 |
Earnings_(Loss) Per Share (Deta
Earnings/(Loss) Per Share (Details) - USD ($) $ in Millions | Sep. 01, 2022 | Apr. 06, 2022 |
Earnings Per Share [Abstract] | ||
Cash Proceeds | $ 30 | $ 30 |
Earnings_(Loss) Per Share (De_2
Earnings/(Loss) Per Share (Details) - Schedule of basic and diluted net loss per share - Common Stock [Member] - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net profit/(loss) - continuing operations (in Dollars) | $ 896,558 | $ (853,182) | $ (6,421,188) | $ (8,234,124) |
Net loss - discontinued operations (in Dollars) | (52,177) | (1,139,498) | (683,540) | (1,556,975) |
Total net income/(loss ) (in Dollars) | $ 844,381 | $ (1,992,680) | $ (7,104,728) | $ (9,791,099) |
Denominator: | ||||
Weighted-average shares outstanding - Basic (in Shares) | 26,529,422 | 12,689,317 | 21,357,138 | 11,897,019 |
Stock options and restricted shares (in Shares) | ||||
Weighted-average shares outstanding - Diluted (in Shares) | 61,082,469 | 12,689,317 | 41,665,082 | 11,897,019 |
Loss per share-continuing operations | ||||
Basic | $ 0.03 | $ (0.07) | $ (0.3) | $ (0.69) |
Diluted | 0.01 | (0.07) | (0.15) | (0.69) |
Loss per share-discontinued operations | ||||
Basic | 0 | (0.09) | (0.03) | (0.13) |
Diluted | $ 0 | $ (0.09) | $ (0.02) | $ (0.13) |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Nov. 01, 2022 USD ($) |
Subsequent Event [Member] | |
Subsequent Events (Details) [Line Items] | |
Cash consideration | $ 1 |