Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 15, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Global Seed Corp | |
Entity Central Index Key | 0001524829 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | TX | |
Entity File Number | 000-55199 | |
Entity Common Stock, Shares Outstanding | 257,874,025 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 30,489 | $ 8,717 |
Accounts receivable, net | 42,287 | 7,307 |
Other receivables, net | 27,313 | 5,494 |
Inventories | 305,943 | 24,794 |
Prepaid tax | 1,448 | 12,763 |
Prepayment | 130,660 | |
Related party receivable | 16,742 | |
Total Current Assets | 538,140 | 75,817 |
Property, plant and equipment, net | 44,142 | 22,185 |
Intangible assets, net | 4,828 | |
Total Assets | 582,282 | 102,830 |
Current Liabilities: | ||
Accounts payable and accrued payables | 78,785 | 30,538 |
Advances from customers | 381,826 | 81,410 |
Due to related party | 1,051,346 | 270,021 |
Taxes payable | 68 | |
Total Current Liabilities | 1,511,957 | 382,037 |
Total Liabilities | 1,511,957 | 382,037 |
Stockholders' Equity: | ||
Common stock (8,999,886,999 shares authorized, 257,874,025 issued and outstanding at December 31, 2018, on a pro forma basis) | 25,787 | 25,787 |
Paid in capital | 91,863 | 91,863 |
Accumulated deficit | (1,089,104) | (405,989) |
Accumulated other comprehensive loss | 43,612 | 10,626 |
Total Stockholders' deficit | (927,842) | (277,713) |
Non-controlling interest | (1,833) | (1,494) |
Total Deficit | (929,675) | (279,207) |
Total Liabilities and Stockholders' Equity | $ 582,282 | $ 102,830 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 8,999,886,999 | 8,999,886,999 |
Common stock, shares issued | 257,874,025 | 257,874,025 |
Common stock, shares outstanding | 257,874,025 | 257,874,025 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net revenues | $ 27,811 | $ 76 | $ 85,799 | $ 14,070 |
Cost of revenues | 14,044 | 4,381 | 52,901 | 8,073 |
Gross profit | 13,767 | (4,305) | 32,898 | 5,997 |
Operating expenses: | ||||
Selling and marketing expenses | 13,506 | 6,486 | 29,369 | 6,486 |
General and administrative expenses | 339,645 | 220,116 | 686,437 | 295,200 |
Total operating expenses | 353,151 | 226,602 | 715,806 | 301,686 |
Operating loss | (339,384) | (230,907) | (682,908) | (295,689) |
Other income (expenses): | ||||
Interest income | 11 | 29 | ||
Interest expenses | 1,637 | |||
Other income | 1,399 | (405) | 341 | |
Other expenses | (683) | (14) | (683) | (14) |
Total other income and (expenses) | 727 | 1,218 | (313) | (14) |
Loss before tax | (338,657) | (229,689) | (683,221) | (295,703) |
Income tax | 195 | (151) | 233 | 110 |
Net loss | (338,852) | (229,538) | (683,454) | (295,813) |
Non-controlling interest | 949 | (339) | ||
Net loss attributable to stockholder | (339,801) | (229,538) | (683,115) | (295,813) |
Other comprehensive income: | ||||
Foreign currency translation income | 27,372 | 1,307 | 32,986 | 6,921 |
Comprehensive loss | $ (312,429) | $ (228,231) | $ (650,129) | $ (288,892) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock | Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Non Controlling Interest | Total |
Balance at Dec. 31, 2017 | $ 500 | $ 51,758 | $ (74,139) | $ (21,881) | ||
Capital contribution | 28,337 | 28,337 | ||||
Net income/loss | (14,045) | (295,813) | ||||
Foreign currency translation adjustment | 6,921 | |||||
Balance at Sep. 30, 2018 | 500 | 80,095 | (88,184) | (7,589) | ||
Balance at Dec. 31, 2018 | 25,787 | 91,863 | (405,989) | 10,626 | (1,494) | (279,207) |
Net income/loss | (683,115) | (339) | (683,454) | |||
Foreign currency translation adjustment | 32,986 | 32,986 | ||||
Balance at Sep. 30, 2019 | $ 25,787 | $ 91,863 | $ (1,089,104) | $ 43,612 | $ (1,833) | $ (929,675) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (683,454) | $ (295,813) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 6,222 | 1,619 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (34,980) | (44,604) |
Inventories | (281,149) | (13,983) |
Prepayment and deposits | (130,660) | (26,407) |
Other receivables | (21,819) | |
Accounts payable and accrued payables | 48,247 | 99,195 |
Advances from customers | 300,416 | |
Net cash used in operating activities | (797,177) | (279,993) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property, plant and equipment | (28,746) | (23,642) |
Net cash used in investing activities | (28,746) | (23,642) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Changes in related party balances, net | 798,067 | 162,461 |
Capital contribution from shareholders | 157,949 | |
Net cash provided by financing activities | 798,067 | 320,410 |
EFFECT OF EXCHANGE RATE ON CASH | 49,628 | |
NET INCREASE (DECREASE) IN CASH | 21,772 | 16,775 |
CASH, BEGINNING OF PERIOD | 8,717 | 1,887 |
CASH, END OF PERIOD | 30,489 | 17,986 |
Cash paid during the period for: | ||
Cash paid for interest expense, net of capitalized interest | ||
Cash paid for income tax | $ 110 |
Organization and Nature of Oper
Organization and Nature of Operations | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS Global Seed Corporation (the "Company") was incorporated on July 13, 2010 in the State of Texas. A substantial portion of the Company's initial business activities had involved developing a business plan and establishing contacts and visibility in the Asian communities in Houston, Texas. The Company had a change in control on June 2, 2018. On October 1, 2019, the Company entered into a share exchange agreement (the "Share Exchange Agreement") with Well Benefit International Limited ("Well Benefit") and all of its shareholders (the "Shareholders"), whereby the Company agreed to newly issue 252,874,025 shares of its common stock to the Shareholders in exchange for all of the outstanding ordinary shares of Well Benefit (such transaction, the "Reverse Merger"). On October 30, 2019, the Reverse Merger contemplated under the Share Exchange Agreement was closed. This transaction has been accounted for a reverse takeover transaction and a recapitalization of the Company whereby the Company, the legal acquirer, is the accounting acquiree, and Well Benefit, the legal acquiree, is the accounting acquirer. As a result, the Company elects to consolidate the financial statements of Well Benefit, including those of Zhenghao, into the Company as if the Reverse Merger were consummated from the beginning of the periods covered by this report. Well Benefit is a company formed in the British Virgin Islands on September 3, 2018. Well Benefit is a holding company. Its primary business activities are conducted through its wholly owned subsidiaries in Guangdong province in the People's Republic of China ("PRC"). Well Benefit primarily sells coffee capsules, capsules for healthy drinks and coffee brewing machines through wholesale and retail. Agility International Holding Limited ("Agility") was incorporated on July 8, 2018 in Hong Kong with limited liability. It is a wholly owned subsidiary of Well Benefit. On September 25, 2018 Shangshang (Guangzhou) Industrial Investment Company Limited ("Shangshang") was incorporated as wholly owned foreign entity in the PRC. It is a wholly owned subsidiary of Agility. Dongguan Zhenghao Industrial Investment Company Limited ("Zhenghao") was incorporated on January 26, 2017. Zhenghao was acquired by Shangshang on or about December 27, 2018; accordingly, Zhenghao became a wholly owned subsidiary of Shangshang. On September 7, 2018, Zhenghao registered Dongguan Kasule Food and Drink Company Limited with the local industrial and commercial bureau ("Dongguan Kasule") as its wholly owned subsidiary. On February 19, 2019, Zhenghao acquired Shenzhen Kasule Food and Drink Company Limited ("Shenzhen Kasule"). Liquidity and Going Concern The accompanying financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going-concern basis. The going-concern basis assumes that assets are realized, and liabilities are extinguished in the ordinary course of business at amounts disclosed in the financial statements. The Company's ability to continue as a going concern depends upon the liquidation of current assets. For the nine months ended September 30, 2019 and 2018, the Company reported net loss of $683,454 and $295,813, respectively. The Company had working capital deficit of approximately $973,817 and $306,220 as of September 30, 2019 and December 31, 2018, respectively. The Company had net cash outflow of $797,177 and $279,993 from its operating activities during the period ended September 30, 2019 and December 31, 2018. The Company had recurring loss from operation of $682,908 for the period ended September 30, 2019. The Company's management intends to raise working capital through the sale of securities via private placements. Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in conformity with US GAAP. The basis of accounting differs from that used in the statutory accounts of the Company, which are prepared in accordance with the accounting principles of the PRC ("PRC GAAP"). The differences between US GAAP and PRC GAAP have been adjusted in these financial statements. The Company's functional currency is the Chinese Renminbi ("RMB"); however, the accompanying financial statements have been translated and presented in United States Dollars ("USD"). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less, and unencumbered bank deposits to be cash equivalents. Accounts Receivable Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off against allowances. Inventories Inventories consist of raw materials and finished goods are stated at the lower of cost or market value. Finished goods costs include: materials, direct labor, inbound shipping costs, and allocated overhead. The Company applies the weighted average cost method to its inventory. Advances and prepayments to suppliers The Company makes advance payment to suppliers and vendors for the procurement of raw materials. Upon physical receipt and inspection of the raw materials from suppliers the applicable amount is reclassified from advances and prepayments to suppliers to inventory. Property, Plant and Equipment Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. The Company's typically applies a salvage value of 0% to 10%. The estimated useful lives of the plant and equipment are as follows: Machinery and equipment 5-10 years The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss are included in the Company's results of operations. The costs of maintenance and repairs are recognized to expenses as incurred; significant renewals and betterments are capitalized. Accounting for the impairment of long-lived assets The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize the long-lived assets to generate the adequate profits. Impairment is present if the carrying amount of an asset is less than its expected future undiscounted cash flows. If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed are reported at the lower of the carrying amount or fair value less costs to sell. Statutory reserves Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise's PRC registered capital. Foreign currency translation The accompanying financial statements are presented in United States dollars. The functional currencies of the Company are in Renminbi (RMB) and Hong Kong Dollar (HKD). The Company's assets and liabilities are translated into United States dollars from RMB and HKD at year-end exchange rates, and its revenues and expenses are translated at the average exchange rate during the year. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. 2019 2018 Year end RMB: US$ exchange rate 7.1360 6.8665 Annual average RMB: US$ exchange rate 6.8618 6.5137 Year end HKD: US$ exchange rate 7.8396 7.8277 Annual average HKD: US$ exchange rate 7.8380 7.8398 The RMB and HKD are not freely convertible into foreign currencies and all foreign exchange transactions must be conducted through authorized financial institutions. Advances from customers Advances from customers consist of prepayments from customers for merchandise that had not yet been shipped. The Company will recognize the deposits as revenue as customers take delivery of the goods and title to the assets is transferred to customers in accordance with the Company's revenue recognition policy. Revenue recognition The Company recognizes revenue when all the following criteria have been met: it has negotiated the terms of the transaction with the customer which includes setting a fixed sales price, it has transferred of possession of the product to the customer, the customer does not have the right to return the product, the customer is able to further sell or transfer the product onto others for economic benefit without any other obligation to be fulfilled by the Company, and the Company is reasonably assured that funds have been or will be collected from the customer. The Company's the amount of revenue recognized to the books reflects the value of goods invoiced, net of any value-added tax (VAT) or excise tax. Income taxes The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred 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 these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain. Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. Accumulated other comprehensive income (loss) Comprehensive income (loss) comprised of net income (loss) and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. The Company's comprehensive income (loss) consists of net income (loss) and unrealized gains from foreign currency translation adjustments. Financial instruments The Company's financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, "Fair Value Measurements and Disclosures," requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, "Financial Instruments," defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: ● Level 1 - inputs to the valuation methodology used quoted prices for identical assets or liabilities in active markets. ● Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815. Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Recent accounting pronouncements In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption of this ASU would have a material effect on the Company's consolidated financial statements. Revenue recognition The Company recognizes revenue when all the following criteria have been met: it has negotiated the terms of the transaction with the customer which includes setting a fixed sales price, it has transferred of possession of the product to the customer, the customer does not have the right to return the product, the customer is able to further sell or transfer the product onto others for economic benefit without any other obligation to be fulfilled by the Company, and the Company is reasonably assured that funds have been or will be collected from the customer. The Company's amount of revenue recognized to the books reflects the value of goods invoiced, net of any VAT or excise tax. Advertising All advertising costs are expensed as incurred. Shipping and handling All outbound shipping and handling costs are expensed as incurred. Research and development All research and development costs are expensed as incurred. Retirement benefits Retirement benefits in the form of mandatory government sponsored defined contribution plans are charged to the either expenses as incurred or allocated to inventory as part of overhead. Comprehensive income The Company uses FASB ASC Topic 220, "Reporting Comprehensive Income". Comprehensive income is comprised of net income and all changes to the statements of stockholders' equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. Earnings per share The Company computes earnings per share ("EPS") in accordance with ASC Topic 260, "Earnings per share". Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive effects of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of options or warrants are calculated using the treasury stock method. Securities that are potentially an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 3 – INVENTORY The Company inventory was completely comprised of finished goods. No impairment was recorded. |
Plant and Equipment
Plant and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
PLANT AND EQUIPMENT | NOTE 4 – PLANT AND EQUIPMENT 2019 2018 At Cost: Machinery and equipment $ 52,987 $ 25,155 Less: (8,845 ) (2,970 ) $ 44,142 $ 22,185 Depreciation expense was $6,222 and $3,088 for the period ended September 30, 2019 and the year ended December 2018, respectively. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2019 | |
Accounts Receivable, after Allowance for Credit Loss [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 5 – ACCOUNTS RECEIVABLE The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. |
Prepayment
Prepayment | 9 Months Ended |
Sep. 30, 2019 | |
Prepayment [Abstract] | |
PREPAYMENT | NOTE 6 – PREPAYMENT The prepayment balance of $130,108 as of September 30, 2019 mainly represents the advanced payment to the suppliers for business purpose. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 7 – RELATED PARTY TRANSACTIONS At September 30, 2019 and December 31, 2018, the Company owed funds to the following related parties; these advances were unsecured and non-interest bearing and due on demand: Entity 2019 2018 Relationship Leung Kwok Hei $ 55,077 7,589 Shareholder of Global Seed Corporation Mo Qingtao $ 6,790 1,309 Director of Well Benefit Liang Guoxi $ 12,094 285 Director of Agility Chen Yuexiang $ 959,541 254,645 Authorized Representative of Zhenghao Liang Guoxi $ 3,854 2,036 Authorized Representative of Shangshang Chenyuexiang $ 13,990 - Director of Dongguan Kasule $ 1,051,346 $ 265,864 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Abstract] | |
INCOME TAXES | NOTE 8 – INCOME TAXES We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, "Income Taxes." Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented. Our effective tax rate for fiscal year 2019 will be 21%, which we expect to be fairly consistent in the near term. Our tax rate may also be affected by discrete items that may occur in any given year, but are not consistent from year to year. Income taxes are calculated and accrued for U.S. taxes only. The Company's subsidiaries formed in the British Virgin Islands is not subject to tax on its income or capital gains. In addition, upon payments of dividends by the Company to its shareholders, no withholding tax is imposed. The Company's subsidiary formed in Hong Kong is subject to the profits tax rate at 16.5% for income generated and operation in the special administrative region. The Company's subsidiaries incorporated in the PRC are subject to profits tax rate at 25% for income generated and operation in the country. The full realization of the tax benefit associated with the carry forward depends predominantly upon the Company's ability to generate taxable income during the carry forward period. The Company's subsidiaries incorporated in the PRC has unused net operating losses ("NOLs") available for carry forward to future years for PRC income tax reporting purposes up to five years. The Company recorded a deferred tax asset in the amount of $0 at September 30, 2019. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The following table reconciles the statutory rates to the Company's effective tax rate: 9/30/2019 9/30/2018 Statutory rates in the State of Texas - - Statutory rates in the British Virgin Islands - - Statutory rates in Hong Kong 16.50 % 16.50 % Statutory rates in PRC 25.00 % 25.00 % Non-deductible items in the PRC -0.03 % -0.03 % Foreign earned income not subject to taxes in the British Virgin Islands (41.50 )% (41.50 )% Effective income tax rate -0.03 % -0.03 % Loss before taxes: State of Texas (56,331 ) (11,630 ) British Virgin Islands - - Hong Kong (9,283 ) - PRC (617,607 ) (284,073 ) $ (683,221 ) (295,703 ) |
Risks
Risks | 9 Months Ended |
Sep. 30, 2019 | |
Risks and Uncertainties [Abstract] | |
RISKS | NOTE 9 – RISKS A. Credit risk The Company's deposits are made with banks located in the PRC. They do not carry federal deposit insurance and may be subject to loss if the banks become insolvent. Since the Company's inception, the age of account receivables has been less than one year indicating that the Company is subject to minimal risk borne from credit extended to customers. B. Interest risk The Company is subject to interest rate risk when short term loans become due and require refinancing. C. Economic and political risks The Company's operations are conducted in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC. The Company's operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company's results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things. D. Environmental risks The Company has procured environmental licenses required by the PRC government. The Company has both a water treatment facility for water used in its production process and secure transportation to remove waste off site. In the event of an accident, the Company has purchased insurance to cover potential damage to employees, equipment, and local environment. E. Inflation Risk Management monitors changes in prices levels. Historically inflation has not materially impacted the Company's financial statements; however, significant increases in the price of raw materials and labor that cannot be passed to the Company's customers could adversely impact the Company's results of operations. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 10 - SUBSEQUENT EVENTS On October 29, 2019, in connection with the Reverse Merger, the board of directors of the Company approved a change in the Company's fiscal year end from June 30 to December 31, effective immediately. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of three months or less, and unencumbered bank deposits to be cash equivalents. |
Accounts Receivable | Accounts Receivable Trade receivables are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off against allowances. |
Inventories | Inventories Inventories consist of raw materials and finished goods are stated at the lower of cost or market value. Finished goods costs include: materials, direct labor, inbound shipping costs, and allocated overhead. The Company applies the weighted average cost method to its inventory. |
Advances and prepayments to suppliers | Advances and prepayments to suppliers The Company makes advance payment to suppliers and vendors for the procurement of raw materials. Upon physical receipt and inspection of the raw materials from suppliers the applicable amount is reclassified from advances and prepayments to suppliers to inventory. |
Property, Plant and Equipment | Property, Plant and Equipment Plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. The Company's typically applies a salvage value of 0% to 10%. The estimated useful lives of the plant and equipment are as follows: Machinery and equipment 5-10 years The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts, and any gain or loss are included in the Company's results of operations. The costs of maintenance and repairs are recognized to expenses as incurred; significant renewals and betterments are capitalized. |
Accounting for the impairment of long-lived assets | Accounting for the impairment of long-lived assets The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry, introduction of new technologies, or if the Company has inadequate working capital to utilize the long-lived assets to generate the adequate profits. Impairment is present if the carrying amount of an asset is less than its expected future undiscounted cash flows. If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed are reported at the lower of the carrying amount or fair value less costs to sell. |
Statutory reserves | Statutory reserves Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise's PRC registered capital. |
Foreign currency translation | Foreign currency translation The accompanying financial statements are presented in United States dollars. The functional currencies of the Company are in Renminbi (RMB) and Hong Kong Dollar (HKD). The Company's assets and liabilities are translated into United States dollars from RMB and HKD at year-end exchange rates, and its revenues and expenses are translated at the average exchange rate during the year. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. 2019 2018 Year end RMB: US$ exchange rate 7.1360 6.8665 Annual average RMB: US$ exchange rate 6.8618 6.5137 Year end HKD: US$ exchange rate 7.8396 7.8277 Annual average HKD: US$ exchange rate 7.8380 7.8398 The RMB and HKD are not freely convertible into foreign currencies and all foreign exchange transactions must be conducted through authorized financial institutions. |
Advances from customers | Advances from customers Advances from customers consist of prepayments from customers for merchandise that had not yet been shipped. The Company will recognize the deposits as revenue as customers take delivery of the goods and title to the assets is transferred to customers in accordance with the Company's revenue recognition policy. |
Related parties | Related parties Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. |
Accumulated other comprehensive income (loss) | Accumulated other comprehensive income (loss) Comprehensive income (loss) comprised of net income (loss) and all changes to the statements of stockholders' equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. The Company's comprehensive income (loss) consists of net income (loss) and unrealized gains from foreign currency translation adjustments. |
Financial instruments | Financial instruments The Company's financial instruments, including cash and equivalents, accounts and other receivables, accounts and other payables, accrued liabilities and short-term debt, have carrying amounts that approximate their fair values due to their short maturities. ASC Topic 820, "Fair Value Measurements and Disclosures," requires disclosure of the fair value of financial instruments held by the Company. ASC Topic 825, "Financial Instruments," defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: ● Level 1 - inputs to the valuation methodology used quoted prices for identical assets or liabilities in active markets. ● Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company analyzes all financial instruments with features of both liabilities and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815. |
Recent accounting pronouncements | Recent accounting pronouncements In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in this Update affect any entity that is required to apply the provisions of Topic 220, Income Statement – Reporting Comprehensive Income, and has items of other comprehensive income for which the related tax effects are presented in other comprehensive income as required by GAAP. The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption of the amendments in this Update is permitted, including adoption in any interim period, (1) for public business entities for reporting periods for which financial statements have not yet been issued and (2) for all other entities for reporting periods for which financial statements have not yet been made available for issuance. The amendments in this Update should be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company does not believe the adoption of this ASU would have a material effect on the Company's consolidated financial statements. |
Revenue recognition | Revenue recognition The Company recognizes revenue when all the following criteria have been met: it has negotiated the terms of the transaction with the customer which includes setting a fixed sales price, it has transferred of possession of the product to the customer, the customer does not have the right to return the product, the customer is able to further sell or transfer the product onto others for economic benefit without any other obligation to be fulfilled by the Company, and the Company is reasonably assured that funds have been or will be collected from the customer. The Company's amount of revenue recognized to the books reflects the value of goods invoiced, net of any VAT or excise tax. |
Advertising | Advertising All advertising costs are expensed as incurred. |
Shipping and handling | Shipping and handling All outbound shipping and handling costs are expensed as incurred. |
Research and development | Research and development All research and development costs are expensed as incurred. |
Retirement benefits | Retirement benefits Retirement benefits in the form of mandatory government sponsored defined contribution plans are charged to the either expenses as incurred or allocated to inventory as part of overhead. |
Comprehensive income | Comprehensive income The Company uses FASB ASC Topic 220, "Reporting Comprehensive Income". Comprehensive income is comprised of net income and all changes to the statements of stockholders' equity, except the changes in paid-in capital and distributions to stockholders due to investments by stockholders. |
Earnings per share | Earnings per share The Company computes earnings per share ("EPS") in accordance with ASC Topic 260, "Earnings per share". Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis from the potential conversion of convertible securities or the exercise of options and or warrants; the dilutive effects of potentially convertible securities are calculated using the as-if method; the potentially dilutive effect of options or warrants are calculated using the treasury stock method. Securities that are potentially an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. |
Commitments and contingencies | Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of exchange rates when the capital transactions occurred | 2019 2018 Year end RMB: US$ exchange rate 7.1360 6.8665 Annual average RMB: US$ exchange rate 6.8618 6.5137 Year end HKD: US$ exchange rate 7.8396 7.8277 Annual average HKD: US$ exchange rate 7.8380 7.8398 |
Plant and Equipment (Tables)
Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of plant and equipment | 2019 2018 At Cost: Machinery and equipment $ 52,987 $ 25,155 Less: (8,845 ) (2,970 ) $ 44,142 $ 22,185 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Entity 2019 2018 Relationship Leung Kwok Hei $ 55,077 7,589 Shareholder of Global Seed Corporation Mo Qingtao $ 6,790 1,309 Director of Well Benefit Liang Guoxi $ 12,094 285 Director of Agility Chen Yuexiang $ 959,541 254,645 Authorized Representative of Zhenghao Liang Guoxi $ 3,854 2,036 Authorized Representative of Shangshang Chenyuexiang $ 13,990 - Director of Dongguan Kasule $ 1,051,346 $ 265,864 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Taxes [Abstract] | |
Schedule of reconciles the statutory rates to the effective tax rate | 9/30/2019 9/30/2018 Statutory rates in the State of Texas - - Statutory rates in the British Virgin Islands - - Statutory rates in Hong Kong 16.50 % 16.50 % Statutory rates in PRC 25.00 % 25.00 % Non-deductible items in the PRC -0.03 % -0.03 % Foreign earned income not subject to taxes in the British Virgin Islands (41.50 )% (41.50 )% Effective income tax rate -0.03 % -0.03 % Loss before taxes: State of Texas (56,331 ) (11,630 ) British Virgin Islands - - Hong Kong (9,283 ) - PRC (617,607 ) (284,073 ) $ (683,221 ) (295,703 ) |
Organization and Nature of Op_2
Organization and Nature of Operations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Oct. 01, 2019 | |
Common Stock, shares issued | 257,874,025 | 257,874,025 | 257,874,025 | |||
Net loss | $ (338,852) | $ (229,538) | $ (683,454) | $ (295,813) | ||
Working capital deficit | $ 973,817 | 973,817 | $ 306,220 | |||
Net cash for operation activities | (797,177) | $ (279,993) | $ (279,993) | |||
Recurring loss from operation | $ 682,908 | |||||
Subsequent Event [Member] | ||||||
Issued new shares | 252,874,025 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | Sep. 30, 2019 | Sep. 30, 2018 |
Year end RMB: US$ exchange rate [Member] | ||
Foreign currency translation rate | 7.1360 | 6.8665 |
Annual average RMB: US$ exchange rate [Member] | ||
Foreign currency translation rate | 6.8618 | 6.5137 |
Year end HKD: US$ exchange rate [Member] | ||
Foreign currency translation rate | 7.8396 | 7.8277 |
Annual average HKD: US$ exchange rate [Member] | ||
Foreign currency translation rate | 7.8380 | 7.8398 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Textual) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies (Textual) | |
Description of statutory reserves | An enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise's PRC registered capital. |
Maximum [Member] | |
Summary of Significant Accounting Policies (Textual) | |
Salvage value | 10.00% |
Estimated useful lives | 10 years |
Minimum [Member] | |
Summary of Significant Accounting Policies (Textual) | |
Salvage value | 0.00% |
Estimated useful lives | 5 years |
Plant and Equipment (Details)
Plant and Equipment (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
At Cost: | |||
Machinery and equipment | $ 52,987 | $ 25,155 | |
Less: Accumulated depreciation | (8,845) | (2,970) | |
Property, plant and equipment, net | $ 44,142 | $ 22,185 | $ 22,185 |
Plant and Equipment (Details Te
Plant and Equipment (Details Textual) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Plant and Equipment (Textual) | ||
Depreciation expense | $ 6,222 | $ 3,088 |
Prepayment (Details)
Prepayment (Details) | Sep. 30, 2019USD ($) |
Prepayment (Textual) | |
Prepayment balance | $ 130,108 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Related party due to unsecured and non-interest bearing | $ 1,051,346 | $ 265,864 |
Leung Kwok Hei [Member] | ||
Related party due to unsecured and non-interest bearing | $ 55,077 | 7,589 |
Related party transaction, description | Shareholder of Global Seed Corporation | |
Mo Qingtao [Member] | ||
Related party due to unsecured and non-interest bearing | $ 6,790 | 1,309 |
Related party transaction, description | Director of Well Benefit | |
Liang Guoxi [Member] | ||
Related party due to unsecured and non-interest bearing | $ 12,094 | 285 |
Related party transaction, description | Director of Agility | |
Chen Yuexiang [Member] | ||
Related party due to unsecured and non-interest bearing | $ 959,541 | 254,645 |
Related party transaction, description | Authorized Representative of Zhenghao | |
Liang Guoxi One [Member] | ||
Related party due to unsecured and non-interest bearing | $ 3,854 | 2,036 |
Related party transaction, description | Authorized Representative of Shangshang | |
Chenyuexiang One [Member] | ||
Related party due to unsecured and non-interest bearing | $ 13,990 | |
Related party transaction, description | Director of Dongguan Kasule |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Non-deductible items in the PRC | (0.03%) | (0.03%) |
Foreign earned income not subject to taxes in the British Virgin Islands | (41.50%) | (41.50%) |
Total effective income tax rate | (0.03%) | (0.03%) |
Loss before taxes: | ||
Total effective income tax, amount | $ (683,221) | $ (295,703) |
Statutory rates in the State of Texas [Member] | ||
Effective income tax rate | ||
Statutory rates in the British Virgin Islands [Member] | ||
Effective income tax rate | ||
Statutory rates in Hong Kong [Member] | ||
Effective income tax rate | 16.50% | 16.50% |
Statutory rates in PRC [Member] | ||
Effective income tax rate | 25.00% | 25.00% |
State of Texas [Member] | ||
Loss before taxes: | ||
Effective income tax rate, amount | $ (56,331) | $ (11,630) |
British Virgin Islands [Member] | ||
Loss before taxes: | ||
Effective income tax rate, amount | ||
Hong Kong [Member] | ||
Total effective income tax rate | 16.50% | |
Loss before taxes: | ||
Effective income tax rate, amount | $ (9,283) | |
PRC [Member] | ||
Total effective income tax rate | 25.00% | |
Loss before taxes: | ||
Effective income tax rate, amount | $ (617,607) | $ (284,073) |
Income Taxes (Details Textuals)
Income Taxes (Details Textuals) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2019 | |
Income Taxes (Textual) | |||
Effective tax rate consistent | 21.00% | ||
Subsidiaries subject to profits tax rate | (0.03%) | (0.03%) | |
Hong Kong [Member] | |||
Income Taxes (Textual) | |||
Subsidiaries subject to profits tax rate | 16.50% | ||
PRC [Member] | |||
Income Taxes (Textual) | |||
Subsidiaries subject to profits tax rate | 25.00% | ||
Deferred tax asset | $ 0 | ||
Income tax reporting for future period | 5 years |