Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 11, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | MAKINGORG, INC. | ||
Entity Central Index Key | 0001569083 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 42,035,834 | ||
Entity Common Stock, Shares Outstanding | 35,540,000 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 57,372 | $ 37,605 |
Accounts receivable | 50,979 | |
Inventories (net of inventory reserve of $11,101 and $nil) | 22,201 | 32,155 |
Prepaid expenses and other current assets | 4,500 | 17,176 |
Total Current Assets | 84,073 | 137,915 |
Intangible assets | 522 | |
Deposit | 2,000 | |
Total Assets | 86,073 | 138,437 |
Current Liabilities | ||
Accounts payable | 638 | |
Interest payable | 56,000 | 32,000 |
Accrued liabilities | 1,554 | 11,597 |
Due to related party | 230,903 | 125,779 |
Convertible note payable, net of discount $26,667 and $12,953 | 173,333 | 187,047 |
Total Current Liabilities | 461,790 | 357,061 |
Deferred rent | 625 | |
TOTAL LIABILITIES | 462,415 | 357,061 |
Commitments and Contingencies | ||
Stockholders' Deficit | ||
Preferred stock, par value $0.001; 50,000,000 shares authorized, zero shares issued and outstanding | ||
Common stock, par value $0.001; 150,000,000 shares authorized, 35,430,000 shares issued and outstanding | 35,430 | 35,430 |
Additional paid-in capital | 67,592 | 27,592 |
Accumulated other comprehensive income (loss) | (713) | 927 |
Accumulated deficit | (478,651) | (282,573) |
Total Stockholders' Deficit | (376,342) | (218,624) |
Total Liabilities and Stockholders' Deficit | $ 86,073 | $ 138,437 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Inventory reserve | $ 11,101 | |
Current Liabilities | ||
Debt discount of convertible note payable | $ 26,667 | $ 12,953 |
Stockholders' Deficit | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 35,430,000 | 35,430,000 |
Common stock, shares outstanding | 35,430,000 | 35,430,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements Of Operations And Comprehensive Loss | ||
Net Sales | $ 54,605 | |
Cost of Sales | 33,571 | |
Gross Profit | 21,034 | |
OPERATING EXPENSES | ||
Selling, general and administrative | 33,373 | 34,463 |
Professional fees | 89,932 | 84,447 |
TOTAL OPERATING EXPENSES | 123,305 | 118,910 |
LOSS FROM OPERATIONS | (123,305) | (97,876) |
OTHER INCOME (EXPENSE) | ||
Interest income | 80 | |
Interest expense | (50,286) | (43,427) |
Loss on inventories write-down | (11,101) | |
Loss on inventories write-off | (10,666) | |
TOTAL OTHER INCOME (EXPENSE) | (71,973) | (43,427) |
LOSS BEFORE INCOME TAX | (195,278) | (141,303) |
Income tax | 800 | 5,606 |
NET LOSS | (196,078) | (146,909) |
OTHER COMPREHENSIVE ITEM: | ||
Foreign currency translation income (loss) | (1,640) | 927 |
TOTAL COMPREHENSIVE LOSS | $ (197,718) | $ (145,982) |
NET LOSS PER COMMON SHARE: BASIC AND DILUTED | $ (0.006) | $ (0.004) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC AND DILUTED | 35,430,000 | 35,430,000 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS DEFICIT - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2016 | 35,430,000 | ||||
Beginning Balance, Amount at Dec. 31, 2016 | $ 35,430 | $ 27,592 | $ (135,664) | $ (72,642) | |
Foreign currency translation income | 927 | 927 | |||
Net loss | (146,909) | (146,909) | |||
Ending Balance, Shares at Dec. 31, 2017 | 35,430,000 | ||||
Ending Balance, Amount at Dec. 31, 2017 | $ 35,430 | 27,592 | 927 | (282,573) | (218,624) |
Issuance of promissory note | 40,000 | 40,000 | |||
Foreign currency translation income | (1,640) | (1,640) | |||
Net loss | (196,078) | (196,078) | |||
Ending Balance, Shares at Dec. 31, 2018 | 35,430,000 | ||||
Ending Balance, Amount at Dec. 31, 2018 | $ 35,430 | $ 67,592 | $ (713) | $ (478,651) | $ (376,342) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (196,078) | $ (146,909) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Loss on inventory write-down | 11,101 | |
Loss on inventory write-off | 10,666 | |
Amortization expense | 513 | |
Amortization of debt discount | 26,286 | 19,428 |
Changes in assets and liabilities: | ||
Accounts receivable | 50,145 | (49,088) |
Inventories | (11,813) | (32,155) |
Prepaid expenses and other current assets | 12,676 | (5,026) |
Depsoit | (2,000) | |
Accounts payable | (627) | 614 |
Accrued liabilities | 14,208 | 35,093 |
Deferred rent | 625 | |
CASH FLOWS USED IN OPERATING ACTIVITIES | (84,298) | (178,043) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of intangible assets | (502) | |
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES | (502) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Loan from related party | 105,124 | 51,200 |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES | 105,124 | 51,200 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (1,059) | (531) |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 19,767 | (127,876) |
Cash and cash equivalents, beginning of period | 37,605 | 165,481 |
Cash and cash equivalents, end of period | 57,372 | 37,605 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Interest paid | ||
Income taxes paid | 2,111 | 800 |
NON-CASH FINANCING ACTIVITIES: | ||
Beneficial conversion feature recognition | $ (40,000) |
ORGANIZATION AND NATURE OF BUSI
ORGANIZATION AND NATURE OF BUSINESS | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS | MakingORG, Inc. (“MakingORG”) was incorporated under the laws of the State of Nevada on August 10, 2012. The trading symbol is “CQCQ” and the fiscal year end is December 31. On October 20, 2016, MakingORG filed documents registering its intention to transact interstate business in the state of California. On November 29, 2016, MakingORG incorporated HK Feng Wang Group Limited (“HKFW”) under the laws of Hong Kong. On August 22, 2017, HKFW incorporated Chongqing Beauty Kenner Biotechnology Co., Ltd (“CBKB”) under the laws of the People’s Republic of China (“PRC”). MaingORG, Inc. and subsidiaries (“the Company”) purchase Acer truncatum bunge seed oil from China, outsource to third party to manufacture Acer truncatum bunge related health product, and sell to end user and distributor in the United States and PRC. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 2 - GOING CONCERN | Pursuant to ASU 2014-15, the Company has assessed its ability to continue as a going concern for a period of one year from the date of the issuance of these consolidated financial statements. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year from the financial statement issuance date. The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern. The Company currently suffered recurring loss, generated negative cash flow from operating activities and has an accumulated deficit and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. These conditions raise substantial doubt as to its ability to continue as a going concern. These consolidated financial statements do not include adjustments relating to the recoverability and classification of reported asset amounts or the amount and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses. The Company may seek additional funding through additional issuance of common stock and/or borrowings from financial institutions or the majority shareholder to support its normal business operations. In light of management’s efforts, there is no assurance that the Company will be successful in this or any of its endeavors or become financially viable to continue as a going concern. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Principles of Consolidation The Company’s consolidated financial statements refer to MakingORG, Inc. and its subsidiaries. All intercompany transactions and balances were eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Company’s consolidated financial statement date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are reported realizable value, net of allowance for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded. Accounts receivable consists principally of receivables from distributor or end user, arising from the sale of the Company’s product. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Management evaluated that there was no allowance for doubtful accounts as of December 31, 2018 and 2017, respectively. Inventories Inventories consist of (a) packing materials (b) raw materials and (b) finished goods, which are stated at the lower of cost or net realizable value under the first-in-first-out method. The Company reviews its inventories periodically for possible excess and obsolescence to determine if any reserves are necessary. As of December 31, 2018 and 2017, inventory reserve amounted to $11,101 and $nil, respectively. Revenue Recognition Effective January 1, 2018, the Company adopted Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption. In general, the Company’s performance obligation is to transfer it products to its end user or distributor. Revenues from product sales are recognized when the customer obtains control of the Company’s finished goods product, which occurs at a point in time, typically upon delivery to the customer. The Company's revenue mainly generates from sale of acer truncatum bunge related health products, such as Nervonic Acid Oil, coffee and tea. The Company evaluated its product sales contracts and determined that those contracts are generally capable of being distinct and accounted for as separate performance obligations. Performance obligation is satisfied when the finished goods product delivered to the customer. Shipping and handling costs paid by the Company are included in cost of sales. During the years ended December 31, 2018 and 2017, the Company recognized revenue from sale of acer truncatum bunge related health products in an amount of $nil and $54,605, respectively. Advertising Expenses Advertising costs are expensed as incurred. Advertising expenses incurred for the years ended December 31, 2018 and 2017 totaled $7,555 and $9,285, respectively. Research and Development Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statement of operations and totaled $nil and $7,000 for the years ended December 31, 2018 and 2017, respectively. Income Taxes Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are using enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, if more likely than not that the company will not realize tax assets through future operation. On December 22, 2017, the U.S. enacted the 2017 Tax Cuts and Jobs Act which contains several key tax provisions that affect the Company, including, but not limited to, a one-time mandatory transition tax on accumulated foreign earnings, changes in the sourcing and calculation of foreign income, and a reduction of the corporate income tax rate to 21% effective January 1, 2018. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring its U.S. deferred tax assets and liabilities as well as reassessing the net realizability of its deferred tax assets and liabilities. Basic Income (Loss) Per Share Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Foreign Currency Transactions The functional currency for MakingORG and HKFW is the US dollar. The functional currency for the China subsidiary (CBKB) is the Renminbi (RMB). Assets and liabilities of the China operation are translated from RMB into U.S. dollars at period-end rates, while the statements of operations and cash flows are translated at the weighted-average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income/(loss) within shareholders’ deficit. Related Parties The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. Segment Reporting The Company follows FASB ASC Topic 280, “ Segment Reporting Fair Value of Financial Instruments Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including the Company’s own credit risk. In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The carrying amounts of financial assets and liabilities in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and due to related party approximate their fair value due to the short-term duration of those instruments. Notes payable are recorded at agreed values. Recent Accounting Pronouncements In July 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-10, Codification Improvements to Topic 842, Leases, or ASU 2018-10. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued Accounting Standards Update No. 2016-02, Leases (Topic 842), or ASU 2016-02 and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2016-02 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. In July 2018, the FASB has also issued the following standards which clarify ASU 2016-02 and have the same effective date as the original standard: ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842): Targeted Improvements, amending certain aspects of the new leasing standard. The Company plans to adopt this ASU 2016-02 on January 1, 2019. The Company is currently evaluating the effects the adoption of ASU 2016-02 will have on its consolidated financial statements. Management has considered all other recent accounting pronouncements issued since the last audit of the Company’s consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 4 - INVENTORIES | The components of the Company’s inventories were packaging materials, raw materials and finished goods. Inventory consisted of the following as of December 31, 2018 and 2017: December 31, 2018 2017 Packaging materials $ - $ 10,020 Raw materials - 22,135 Finished goods 33,302 - Inventory reserve (11,101 ) - Total inventory $ 22,201 $ 32,155 |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 5 - PREPAID EXPENSES AND OTHER CURRENT ASSETS | Prepaid expenses and other current assets include primarily prepaid consulting fee, deposit for packaging materials and security deposit for rent. As of December 31, 2018 and 2017, prepaid expenses and other current assets was $4,500 and $17,176, respectively. |
DUE TO RELATED PARTY
DUE TO RELATED PARTY | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 6 - DUE TO RELATED PARTY | During the years ended December 31, 2018 and 2017, the Company’s sole officer loaned the Company $105,124 and $51,200, respectively. As of December 31, 2018 and 2017, the Company was obligated to the officer, for an unsecured, non-interest bearing demand loan with a balance of $230,903 and $125,779, respectively. |
CONVERTIBLE NOTE PAYABLE
CONVERTIBLE NOTE PAYABLE | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 7 - CONVERTIBLE NOTE PAYABLE | On September 1, 2016, the Company entered into a Convertible Note Agreement in the principal amount of $200,000 with an unrelated party. The note bears interest at 12% per annum and the holder is able to convert all unpaid interest and principal into common shares at $3.50 per share. The note matures on September 1, 2018. The Company recognized a discount on the note of $38,857 at the agreement date. The interest expense was due every six months commencing on March 1, 2017 until the principal amount of this convertible note is paid in full. On September 1, 2018, the Company entered into an Amended and Restated 12% Convertible Promissory Note. Pursuant to an Amended and Restated 12% Convertible Promissory Note, both parties agreed to extend a Convertible Note Agreement to September 1, 2019 with no additional consideration. The Company recognized a discount on the note of $40,000 at the amended agreement date. The Company recognized interest expense related to the convertible note of $50,286 and $43,427, respectively, for the years ended December 31, 2018 and 2017. The unamortized debt discount at December 31, 2018 and 2017 was $26,667 and $12,953, respectively. As of December 31, 2018, and 2017, net balance of the convertible note amounted to $173,333 and $187,047, respectively. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 8 - COMMITMENTS | Operating Lease The Company has operating leases for its office. Rental expenses for the years ended December 31, 2018 and 2017 were $10,875 and $12,000, respectively. As of December 31, 2018, total future minimum annual lease payments under operating lease was as follows, by years: Twelve months ending December 31, 2019 $ 8,625 Twelve months ending December 31, 2020 5,750 Thereafter - Total $ 14,375 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 10 - INCOME TAXES | The Company accounts for income taxes under ASC 740, “Income Taxes”. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company is subject to taxation in the United States and certain state jurisdictions. The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 21% to the net loss before provision for income taxes. HKFW in Hong Kong are governed by the Inland Revenue Ordinance Tax Law of Hong Kong, and are generally subject to a profits tax at the rate of 16.5% on the estimated assessable profits. CBNB in the PRC is governed by the Income Tax Law of the PRC concerning the private enterprises, which are generally subject to tax at 25% on income reported in the statutory financial statements after appropriated adjustments. Provision (benefit) for income tax for the year ended December 31, 2018 consisted of: Year ended December 31, 2018 Federal State Foreign Total Current $ - $ 800 $ - $ 800 Deferred - - - - Total $ - $ 800 $ - $ 800 Provision (benefit) for income tax for the year ended December 31, 2017 consisted of: Year ended December 31, 2017 Federal State Foreign Total Current $ - $ 800 $ 4,806 $ 5,606 Deferred - - - - Total $ - $ 800 $ 4,806 $ 5,606 Net deferred tax assets consist of the following components as of: December 31, 2018 2017 Deferred tax asset: Net operating loss carry forwards $ 92,639 $ 62,353 Valuation allowance (92,639 ) (62,353 ) Net deferred tax asset $ - $ - Due to the change in ownership provisions of the Income Tax laws of United States of America, net operating loss carry forwards of approximately $351,000, which expires in 2032, for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years. Tax filings for the Company for the years after 2014 and 2015 are available for examination by state tax jurisdictions and federal tax purposes. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 12 Months Ended |
Dec. 31, 2018 | |
Notes to Financial Statements | |
NOTE 11 - SUBSEQUENT EVENT | On January 4, 2019, the Company entered into an Independent Consulting Agreement with an unrelated party. The agreement term is from January 4, 2019 to January 3, 2020. Pursuant to the Independent Consulting Agreement, the Company agreed to issue 110,000 shares of the Company’s common stock to an unrelated party to devote appropriate time and attention to providing advice to the Company in regards to sales and marketing for China; or such other services as the Company and the Consultant may agree. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary Of Significant Accounting Policies | |
Principles of Consolidation | The Company’s consolidated financial statements refer to MakingORG, Inc. and its subsidiaries. All intercompany transactions and balances were eliminated in consolidation. |
Use of Estimates | The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the Company’s consolidated financial statement date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with the original maturities of three months or less to be cash equivalents. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable are reported realizable value, net of allowance for contractual credits and doubtful accounts, which are recognized in the period the related revenue is recorded. Accounts receivable consists principally of receivables from distributor or end user, arising from the sale of the Company’s product. The Company provides an allowance for doubtful accounts equal to the estimated uncollectible amounts. The Management evaluated that there was no allowance for doubtful accounts as of December 31, 2018 and 2017, respectively. |
Inventories | Inventories consist of (a) packing materials (b) raw materials and (b) finished goods, which are stated at the lower of cost or net realizable value under the first-in-first-out method. The Company reviews its inventories periodically for possible excess and obsolescence to determine if any reserves are necessary. As of December 31, 2018 and 2017, inventory reserve amounted to $11,101 and $nil, respectively. |
Revenue Recognition | Effective January 1, 2018, the Company adopted Topic 606, Revenue from Contracts with Customers, using the modified retrospective transition method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the majority of its revenues continue to be recognized when the customer takes control of its product. As the Company did not identify any accounting changes that impacted the amount of reported revenues with respect to its product revenues, no adjustment to retained earnings was required upon adoption. In general, the Company’s performance obligation is to transfer it products to its end user or distributor. Revenues from product sales are recognized when the customer obtains control of the Company’s finished goods product, which occurs at a point in time, typically upon delivery to the customer. The Company's revenue mainly generates from sale of acer truncatum bunge related health products, such as Nervonic Acid Oil, coffee and tea. The Company evaluated its product sales contracts and determined that those contracts are generally capable of being distinct and accounted for as separate performance obligations. Performance obligation is satisfied when the finished goods product delivered to the customer. Shipping and handling costs paid by the Company are included in cost of sales. During the years ended December 31, 2018 and 2017, the Company recognized revenue from sale of acer truncatum bunge related health products in an amount of $nil and $54,605, respectively. |
Advertising Expenses | Advertising costs are expensed as incurred. Advertising expenses incurred for the years ended December 31, 2018 and 2017 totaled $7,555 and $9,285, respectively. |
Research and Development | Research and development costs are expensed as incurred and are included in general and administrative expenses in the accompanying consolidated statement of operations and totaled $nil and $7,000 for the years ended December 31, 2018 and 2017, respectively. |
Income Taxes | Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are using enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, if more likely than not that the company will not realize tax assets through future operation. On December 22, 2017, the U.S. enacted the 2017 Tax Cuts and Jobs Act which contains several key tax provisions that affect the Company, including, but not limited to, a one-time mandatory transition tax on accumulated foreign earnings, changes in the sourcing and calculation of foreign income, and a reduction of the corporate income tax rate to 21% effective January 1, 2018. The Company is required to recognize the effect of the tax law changes in the period of enactment, such as determining the transition tax, remeasuring its U.S. deferred tax assets and liabilities as well as reassessing the net realizability of its deferred tax assets and liabilities. |
Basic Income (Loss) Per Share | Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. |
Foreign Currency Transactions | The functional currency for MakingORG and HKFW is the US dollar. The functional currency for the China subsidiary (CBKB) is the Renminbi (RMB). Assets and liabilities of the China operation are translated from RMB into U.S. dollars at period-end rates, while the statements of operations and cash flows are translated at the weighted-average exchange rates for the period. The related translation adjustments are reflected as a foreign currency translation adjustment in accumulated other comprehensive income/(loss) within shareholders’ deficit. |
Related Parties | The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. |
Segment Reporting | The Company follows FASB ASC Topic 280, “ Segment Reporting |
Fair Value of Financial Instruments | Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk including the Company’s own credit risk. In addition to defining fair value, the standard expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels which are determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 – inputs are based upon significant observable inputs other than quoted prices included in Level 1, such as quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. The carrying amounts of financial assets and liabilities in the consolidated balance sheets for cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and due to related party approximate their fair value due to the short-term duration of those instruments. Notes payable are recorded at agreed values. |
Recent Accounting Pronouncements | In July 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-10, Codification Improvements to Topic 842, Leases, or ASU 2018-10. The amendments in ASU 2018-10 provide additional clarification and implementation guidance on certain aspects of the previously issued Accounting Standards Update No. 2016-02, Leases (Topic 842), or ASU 2016-02 and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2016-02 will supersede the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2016-02 is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative periods presented in the financial statements. In July 2018, the FASB has also issued the following standards which clarify ASU 2016-02 and have the same effective date as the original standard: ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842): Targeted Improvements, amending certain aspects of the new leasing standard. The Company plans to adopt this ASU 2016-02 on January 1, 2019. The Company is currently evaluating the effects the adoption of ASU 2016-02 will have on its consolidated financial statements. Management has considered all other recent accounting pronouncements issued since the last audit of the Company’s consolidated financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s consolidated financial statements. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventories Tables Abstract | |
Schedule of Inventories | December 31, 2018 2017 Packaging materials $ - $ 10,020 Raw materials - 22,135 Finished goods 33,302 - Inventory reserve (11,101 ) - Total inventory $ 22,201 $ 32,155 |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments | |
Schedule of Future Minimum Rental Payments for Operating Leases | Twelve months ending December 31, 2019 $ 8,625 Twelve months ending December 31, 2020 5,750 Thereafter - Total $ 14,375 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes Tables Abstract | |
Schedule of Provision (benefit) for income tax | Provision (benefit) for income tax for the year ended December 31, 2018 consisted of: Year ended December 31, 2018 Federal State Foreign Total Current $ - $ 800 $ - $ 800 Deferred - - - - Total $ - $ 800 $ - $ 800 Provision (benefit) for income tax for the year ended December 31, 2017 consisted of: Year ended December 31, 2017 Federal State Foreign Total Current $ - $ 800 $ 4,806 $ 5,606 Deferred - - - - Total $ - $ 800 $ 4,806 $ 5,606 |
Schedule of Deferred tax assets and liabilities | December 31, 2018 2017 Deferred tax asset: Net operating loss carry forwards $ 92,639 $ 62,353 Valuation allowance (92,639 ) (62,353 ) Net deferred tax asset $ - $ - |
ORGANIZATION AND NATURE OF BU_2
ORGANIZATION AND NATURE OF BUSINESS (Details Narrative) | 12 Months Ended |
Dec. 31, 2018 | |
Organization And Nature Of Business | |
State of incorporation | Nevada |
Date of incorporation | Aug. 10, 2012 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Summary Of Significant Accounting Policies Details Narrative Abstract | |||
Inventory reserve | $ 11,101 | ||
Net Sales | 54,605 | ||
Advertising expenses | 7,555 | 9,285 | |
Research and development costs | $ 7,000 | ||
Statutory federal income tax rate | 21.00% |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Inventories Details Abstract | ||
Packaging materials | $ 10,020 | |
Raw materials | 22,135 | |
Finished goods | 33,302 | |
Inventory reserve | (11,101) | |
Total inventory | $ 22,201 | $ 32,155 |
PREPAID EXPENSES AND OTHER CU_2
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details Narrative) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Prepaid Expenses And Other Current Assets | ||
Prepaid expenses and other current assets | $ 4,500 | $ 17,176 |
DUE TO RELATED PARTY (Details N
DUE TO RELATED PARTY (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Due to related party | $ 230,903 | $ 125,779 |
Loan from related party | 105,124 | 51,200 |
Officer [Member] | ||
Due to related party | 230,903 | 125,779 |
Loan from related party | $ 105,124 | $ 51,200 |
CONVERTIBLE NOTE PAYABLE (Detai
CONVERTIBLE NOTE PAYABLE (Details Narrative) - USD ($) | Sep. 01, 2018 | Sep. 01, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Interest expense | $ 50,286 | $ 43,427 | ||
Unamortized debt discount | 26,667 | 12,953 | ||
Convertible note payable, net of discount current | $ 173,333 | $ 187,047 | ||
Convertible Note Agreement [Member] | ||||
Principal amount | $ 200,000 | |||
Interest rate | 12.00% | |||
Share price | $ 3.50 | |||
Maturity date | Sep. 1, 2018 | |||
Discount on convertible note payable | $ 38,857 | |||
Amended Agreement [Member] | ||||
Convertible note payable, net of discount current | $ 40,000 | |||
Amended agreement description | On September 1, 2018, the Company entered into an Amended and Restated 12% Convertible Promissory Note. Pursuant to an Amended and Restated 12% Convertible Promissory Note, both parties agreed to extend a Convertible Note Agreement to September 1, 2019 with no additional consideration. |
COMMITMENTS (Details)
COMMITMENTS (Details) | Dec. 31, 2018USD ($) |
Commitments Details Abstract | |
Twelve months ending December 31, 2019 | $ 8,625 |
Twelve months ending December 31, 2020 | 5,750 |
Thereafter | |
Total | $ 14,375 |
COMMITMENTS (Details Narrative)
COMMITMENTS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments Details Narrative Abstract | ||
Rental expenses | $ 10,875 | $ 12,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current | $ 800 | $ 5,606 |
Deferred | ||
Total | 800 | 5,606 |
Federal [Member] | ||
Current | ||
Deferred | ||
Total | ||
State [Member] | ||
Current | 800 | 800 |
Deferred | ||
Total | 800 | 800 |
Foreign [Member] | ||
Current | 4,806 | |
Deferred | ||
Total | $ 4,806 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax asset: | ||
Net operating loss carry forwards | $ 92,639 | $ 62,353 |
Valuation allowance | (92,639) | (62,353) |
Net deferred tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended |
Dec. 22, 2017 | Dec. 31, 2018 | |
Statutory federal income tax rate | 21.00% | |
Operating loss carry forwards | $ 351,000 | |
Operating loss carry forwards expiration year | 2032 | |
Hong Kong [Member] | ||
Statutory federal income tax rate | 16.50% | |
PRC [Member] | ||
Statutory federal income tax rate | 25.00% |
SUBSEQUENT EVENT (Details Narra
SUBSEQUENT EVENT (Details Narrative) | Jan. 04, 2019shares |
Subsequent Event [Member] | Independent Consulting Agreement [Member] | |
Common stock shares issued to unrelated party | 110,000 |