Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Apr. 14, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Entity Registrant Name | ACRO BIOMEDICAL CO., LTD. | ||
Entity Central Index Key | 0001622996 | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Current Reporting Status | Yes | ||
Document Period End Date | Dec. 31, 2021 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2021 | ||
Entity Common Stock Shares Outstanding | 60,042,000 | ||
Entity Public Float | $ 69,998,000 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 000-55643 | ||
Entity Incorporation State Country Code | NV | ||
Entity Tax Identification Number | 47-1950356 | ||
Entity Address Address Line 1 | 12175 Visionary Way | ||
Entity Address Address Line 2 | Suite 1160 | ||
Entity Address City Or Town | Fishers | ||
Entity Address State Or Province | IN | ||
Entity Address Postal Zip Code | 46038 | ||
City Area Code | 317 | ||
Auditor Name | Prager Metis CPAs, LLC | ||
Auditor Location | Hackensack, New Jersey | ||
Auditor Firm Id | 273 | ||
Local Phone Number | 286-6788 | ||
Security 12g Title | Common Stock, par value $0.001 per share | ||
Entity Interactive Data Current | Yes | ||
Icfr Auditor Attestation Flag | false |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash | $ 95,248 | $ 18,123 |
Accounts receivable | 598,000 | 0 |
Inventories | 0 | 938,000 |
Purchase deposit for inventory | 12,000 | 12,000 |
Prepaid expenses | 1,167 | 1,000 |
Security deposit | 0 | 4,230 |
Total Current Assets | 706,415 | 973,353 |
Operating lease right of use asset | 50,432 | 24,700 |
Security deposits | 4,230 | 0 |
TOTAL ASSETS | 761,077 | 998,053 |
Current Liabilities | ||
Accounts payable and accrued expenses | 26,197 | 24,734 |
Deferred revenue | 20,000 | 20,000 |
Due to related parties | 20,741 | 242,951 |
Operating lease liabilities - current | 24,713 | 24,500 |
Total Current Liabilities | 91,651 | 312,185 |
Operating lease liabilities - noncurrent | 25,719 | 0 |
TOTAL LIABILITIES | 117,370 | 312,185 |
Stockholders' Equity | ||
Preferred stock: 25,000,000 authorized; $0.001 par value; no shares issued and outstanding | 0 | 0 |
Common stock: 100,000,000 authorized; $0.001 par value; 60,042,000 and 47,760,000 shares issued and outstanding as of December 31, 2021 and 2020, respectively | 60,042 | 47,760 |
Additional paid-in capital | 32,293,530 | 876,762 |
Deferred stock compensation | (23,773,383) | 0 |
Accumulated deficit | (7,936,482) | (238,654) |
Total Stockholders' Equity | 643,707 | 685,868 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 761,077 | $ 998,053 |
Balance Sheets (Parentheticals)
Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Balance Sheets | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 60,042,000 | 60,042,000 |
Common stock, shares outstanding | 47,760,000 | 47,760,000 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statements of Operations | ||
Revenues | $ 1,197,500 | $ 687,964 |
Cost of revenues | 938,000 | 528,560 |
Gross profit | 259,500 | 159,404 |
Operating expenses | ||
Selling, general and administrative | 2,667,903 | 289,867 |
Research and development | 5,285,175 | 0 |
Total operating expenses | 7,953,078 | 289,867 |
Loss from operations | (7,693,578) | (130,463) |
Other expense | ||
Interest expense - related party | 4,250 | 5,082 |
Total other expenses | 4,250 | 5,082 |
Loss before income tax credit | (7,697,828) | (135,545) |
Income taxes credit from prior period | 0 | (18,092) |
Net loss | $ (7,697,828) | $ (117,453) |
Basic and diluted loss per share of common stock | $ (0.14) | $ 0 |
Weighted average number of shares of common stock outstanding | 53,838,855 | 47,760,000 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Deferred stock compensation | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2019 | 47,760,000 | |||||
Balance, amount at Dec. 31, 2019 | $ 798,239 | $ 0 | $ 47,760 | $ 871,680 | $ 0 | $ (121,201) |
Imputed interest on related party loans | 5,082 | 0 | 0 | 5,082 | 0 | 0 |
Net loss | (117,453) | 0 | $ 0 | 0 | 0 | (117,453) |
Balance, shares at Dec. 31, 2020 | 47,760,000 | |||||
Balance, amount at Dec. 31, 2020 | 685,868 | 0 | $ 47,760 | 876,762 | 0 | (238,654) |
Imputed interest on related party loans | 4,250 | 0 | 0 | 4,250 | 0 | 0 |
Net loss | (7,697,828) | 0 | $ 0 | 0 | 0 | (7,697,828) |
Share issuance for service, shares | 12,282,000 | |||||
Share issuance for service, amount | 7,651,417 | 0 | $ 12,282 | 31,412,518 | (23,773,383) | 0 |
Balance, shares at Dec. 31, 2021 | 60,042,000 | |||||
Balance, amount at Dec. 31, 2021 | $ 643,707 | $ 0 | $ 60,042 | $ 32,293,530 | $ (23,773,383) | $ (7,936,482) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (7,697,828) | $ (117,453) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Imputed interest - related parties | 4,250 | 5,082 |
Stock based compensation | 7,651,417 | 0 |
Change of ROU and lease liabilities | 200 | 1,915 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (598,000) | 0 |
Inventories | 938,000 | (59,440) |
Purchase deposit for inventory | 0 | (12,000) |
Prepaid expenses | (167) | (1,000) |
Accounts payable and accrued expenses | 1,463 | 900 |
Deferred revenue | 0 | (17,464) |
Net cash provided by (used in) operating activities | 299,335 | (199,460) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Advances from related parties | 19,641 | 216,672 |
Repayment to related parties | (241,851) | 0 |
Net cash provided by (used in) financing activities | (222,210) | 216,672 |
Net change in cash | 77,125 | 17,212 |
Cash at beginning of year | 18,123 | 911 |
Cash at end of year | 95,248 | 18,123 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 0 | 0 |
Cash paid for interest | 0 | 0 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Increase in the right-of-use asset and lease liability | $ 50,432 | $ 0 |
ORGANIZATION AND DESCRIPTION OF
ORGANIZATION AND DESCRIPTION OF BUSINESS | 12 Months Ended |
Dec. 31, 2021 | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | |
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 -ORGANIZATION AND DESCRIPTION OF BUSINESS Acro Biomedical Co., Ltd. (the “Company”) is a Nevada corporation incorporated on September 24, 2014 under the name Killer Waves Hawaii, Inc. On January 30, 2017, the Company’s corporate name was changed to Acro Biomedical Co., Ltd. The Company’s business is the sale of cordyceps related products. Cordyceps is a fungus that is used in traditional Chinese medicine. During the second and third quarters of 2021, the Company engaged consultants to take the initial steps to develop and implement a research and development and marketing program. These consultants are working independently and report to the chief executive officer. The Company cannot give any assurance that the marketing and research development activities will generate any new product or new marketing opportunities or generate any significant revenue. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. Use of Estimates The preparation of financial statements in conformity with GAAP in the United States of America 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. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments. Cash and Cash Equivalents Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. Accounts Receivable Accounts receivable are recorded in accordance with ASC 310, “Receivables.” Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company does not currently have any amount recorded as an allowance for doubtful accounts. Based on management’s estimate and based on all accounts being current, the Company has not deemed it necessary to reserve for doubtful accounts at this time. Inventories Inventories consist of finished goods. Inventories are valued at the lower of cost or net realizable value. The Company determines cost on the basis of first-in, first-out methods. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are written down or written off. Although the Company believes that the assumptions it uses to estimate inventory write-downs are reasonable, future changes in these assumptions could provide a significantly different result. No inventory markdown was recorded for the years ended December 31, 2021 and 2020. Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our balance sheets if the lease term is more than one year. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Leases with a lease term of 12 months or less at inception are not recorded on our balance sheet and are expensed on a straight- line basis over the lease term in our statement of operations. Net Income (Loss) Per Share of Common Stock The Company has adopted ASC Topic 260, ”Earnings per Share” Concentrations of Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables that it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high creditworthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. Financial Instruments The Company follows ASC 820, “ Fair Value Measurements and Disclosures, Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The carrying values of our financial instruments, including, cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses and due to related parties approximate their fair values due to the short-term maturities of these financial instruments. Stock-Based Compensation The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee and non-employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the option-pricing model for stock options and the quoted price of its common stock for unrestricted shares; the expense is recognized over the service period for awards expected to vest. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. Deferred Income Taxes and Valuation Allowance The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize the deferred tax assets through future operations. Related Parties The Company follows ASC 850, ”Related Party Disclosures,” Revenue Recognition The Company recognizes revenue in accordance with Topic 606, which requires revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: • identify the contract with a customer; • identify the performance obligations in the contract; • determine the transaction price; • allocate the transaction price to performance obligations in the contract; and • recognize revenue as the performance obligation is satisfied. The Company recognizes revenue when products are delivered to customers in accordance with the written sales terms. Deferred Revenue The Company sells products pursuant to agreements for the delivery of products to customers. The Company receives cash in advance and records it as deferred revenue. Deferred revenue at December 31, 2021 and 2020, was $20,000, respectively. Recent Accounting Pronouncements The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements. COVID 19 Since our products are purchased by customers in the Republic of China (Taiwan) and Hong Kong who sold products to their customers in the People’s Republic of China (the “PRC”), our business was impacted by the effects of the COVID-19 pandemic and the actions taken by the governments of the PRC, the Republic of China (Taiwan) and Hong Kong. We cannot predict the effect on our business of the COVID-19 pandemic and the steps taken by governments to address the pandemic. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company. Factors relating to COVID-19 which significantly contributed to the lack of revenue in the third quarters of 2021 and the modest level our revenue in 2021, most of which was in the fourth quarter, and the failure to generate any of revenue in the second, third and fourth quarters of 2020 may continue affect us and the market for our products which include, but are not limited to, the following. As the population of China, Hong Kong and Taiwan becomes vaccinated and restrictions that had been imposed to address the pandemic are lifted, we cannot assure you that our sales will increase as a result of the reduction of such restrictions. The effects of the Delta and Omicron variation and any other variations which may develop as well as other illnesses which may affect a broad segment of the population and the governmental and public response to these developments may impair the market for our products, including the recent lockdown in a number of provinces and municipalities in China. As the world has begun to open following closures as a result of the pandemic, two other factors are facing businesses and consumers, which are considered to be related to the effects of the COVID-19 pandemic. These are inflation and supply chain issues, which have been exacerbated by the recent Russian invasion of Ukraine. We cannot estimate the effect of these factors on our business. To the extent that these factors result in increased prices, we may not be able to pass along the increases to our customers. Any shortages of cordyceps would effect our ability to generate sales of our products. Further, to the extent our customers use our products as an ingredient in their own products, the inability of a potential customer to obtain other raw materials as well as cost increases for such products, could affect the timing and the amount of purchases from us. We cannot assure you that our business will not be impaired by the effects of inflation and supply chain issues. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 2021 | |
GOING CONCERN | |
NOTE 3 - GOING CONCERN | NOTE 3 – GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company had minimal cash as of December 31, 2021, had limited gross profit and incurred a loss from operations for the year ended December 31, 2021 and past few years. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company proposes to fund operations through sales of its products and equity financing arrangements. However, because of the lack of sales and the absence of any active trading market for its common stock, its financial condition and its lack of an operating history, the Company may not be able to raise funds for capital expenditures, working capital and other cash requirements and will have to rely on advances from a minority stockholder and our officer. If the Company cannot generate revenue from its products, it may not be able to continue in its business. |
EQUITY
EQUITY | 12 Months Ended |
Dec. 31, 2021 | |
EQUITY | |
NOTE 6 - EQUITY | NOTE 4 - EQUITY Common Stock The Company issued a total of 6,776,000 and 5,506,000 shares of common stock to consultants as stock grants pursuant to agreements with the consultants in May 2021 and August 2021, respectively, of which 11,912,000 shares were issued pursuant to the 2020 equity incentive plan. (the “Plan”) and 370,000 were issued as restricted stock outside of the Plan. The agreements provide for the consultants to perform services described in the contracts for the two-year period commencing May 25, 2021 and August 23, 2021. The shares were valued at $19,311,600 and $12,113,200, based on the market price of the common stock on the respective dates of the agreements, which was $2.85 and $2.20 per share, respectively, and is being amortized over two-year period starting from the date of the agreement using the straight-line method. During the year ended December 31, 2021, the Company recorded stock-based compensation of $7,651,417 and had deferred stock compensation of $23,773,383 as of December 31, 2021 which will be recognized over the balance of the agreements. During the year ended 2020, the Company did not issue any common stock. 2020 Long-Term Incentive Plan On August 7, 2020, the Company’s board of directors adopted, and on August 8, 2020, the Company’s stockholders approved, by a written consent signed by the Company’s principal stockholder who is the Company’s sole executive and director and who held 62.8% of the Company’s common stock, the Company’s 2020 Long-Term Incentive Plan, pursuant to which a maximum of 12,000,000 shares of common stock may be issued pursuant to restricted stock grants, incentive stock options, non-qualified stock options and other equity-based incentives may be granted. Awards under the plan may be issued to employees, directors of the Company or its affiliates or consultants. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAX | |
NOTE 8 - INCOME TAX | NOTE 5 - INCOME TAXES The reconciliation of income tax expense at the U.S. statutory rate of 21% to the Company’s effective tax rate is as follows: Years ended December 31, 2021 2020 Income tax expense (credit) at statutory rate $ (1,616,544 ) $ (28,464 ) Income tax adjustment Imputed interest 893 1,067 Operating losses utilized - (18,092 ) Change of valuation allowance 1,615,651 27,397 Income tax expense (credit) $ - $ (18,092 ) Net deferred tax assets consist of the following components as of: December 31, December 31, 2021 2020 Operating loss carry forward $ 1,682,296 $ 66,645 Valuation allowance (1,682,296 ) (66,645 ) Deferred tax asset $ - $ - The Company has approximately $8 million net operating loss carryforwards that are available to reduce future taxable income. 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 projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets for the year ended December 31, 2021 and 2020 because it is more likely than not that all of the deferred tax assets will not be realized. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
NOTE 4 - RELATED PARTY TRANSACTIONS | NOTE 6 - RELATED PARTY TRANSACTIONS During the years ended December 31, 2021 and 2020, our chief executive officer and a minority stockholder paid expenses of $19,641 and $216,672 on behalf of the Company, and the Company repaid $241,851 and $0, respectively, of expenses advanced by the minority shareholder, respectively. At December 31, 2021 and 2020, the Company owed $1,100 and $1,100 to our CEO for non-interest-bearing advances made to or on behalf of the Company, respectively. These advances are due on demand. At December 31, 2021 and 2020, the Company owed $19,641 and $241,851 to a stockholder who is not a 5% stockholder for non-interest-bearing advances made to or on behalf of the Company, respectively. These advances are due on demand. The Company has imputed interest at the rate of 4% on the advances made to or on behalf of the Company. Imputed interest amounted to $4,250 and $5,082, during the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the Company had amounts due to related parties of $20,741 and $242,951, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
NOTE 5 - LEASES | NOTE 7 – LEASES On December 27, 2019, the Company entered into a lease agreement to rent a storage facility in Hong Kong for a two-year term at HK$16,500 (approximately $2,115) per month. A stockholder paid HK$33,000 (approximately $4,230) as a security deposit and HK$16,500 (approximately $2,115) as prepaid rent on behalf of the Company. The lease expired in December 2021. On November 3, 2021, the Company entered into a lease agreement to rent a storage facility in Hong Kong for a two-year term at HK$17,000 (approximately $2,190) per month and HK$33,000 (approximately $4,230) as a security deposit. These payments were paid by the stockholder on behalf of the Company. In accordance with ASC 842, the Company recognized operating lease ROU assets and lease liabilities as follows: December 31, December 31, 2021 2020 Operating lease ROU asset $ 50,432 $ 24,700 December 31, December 31, 2021 2020 Operating lease liabilities Current portion $ 24,713 $ 24,500 Non-current portion 25,719 - Total $ 50,432 $ 24,500 Future minimum lease payments under operating leases at December 31, 2021 were as follows: 2022 $ 26,280 2023 26,280 Thereafter - Total $ 52,560 The Company recognized total lease expense of $25,140 and $26,141 for the years ended December 31, 2021 and 2020, respectively. |
CONCENTRATION
CONCENTRATION | 12 Months Ended |
Dec. 31, 2021 | |
CONCENTRATION | |
NOTE 7 - CONCENTRATION | NOTE 8 – CONCENTRATION Revenue During the year ended December 31, 2021, all revenues were derived from three customers where for a first customer was 58.5%, a second customer was 33.2%, and a third customer was 8.3%. During the year ended December 31, 2020, all revenues were derived from one customer. Purchase During the year ended December 31, 2021, we did not purchase inventory. During the year ended December 31, 2020, we purchased inventory from one supplier. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
NOTE 9 - SUBSEQUENT EVENTS | NOTE 9 - SUBSEQUENT EVENTS The Company has evaluated subsequent events that have occurred after the date of the balance sheet through the date of issuance of these financial statements and determined that no subsequent event requires recognition or disclosure to the financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | The financial statements have been prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States. |
Use of Estimates | The preparation of financial statements in conformity with GAAP in the United States of America 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. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments. |
Cash and Cash Equivalents | Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. |
Accounts Receivable | Accounts receivable are recorded in accordance with ASC 310, “Receivables.” Accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company does not currently have any amount recorded as an allowance for doubtful accounts. Based on management’s estimate and based on all accounts being current, the Company has not deemed it necessary to reserve for doubtful accounts at this time. |
Inventories | Inventories consist of finished goods. Inventories are valued at the lower of cost or net realizable value. The Company determines cost on the basis of first-in, first-out methods. The Company periodically reviews inventories for obsolescence and any inventories identified as obsolete are written down or written off. Although the Company believes that the assumptions it uses to estimate inventory write-downs are reasonable, future changes in these assumptions could provide a significantly different result. No inventory markdown was recorded for the years ended December 31, 2021 and 2020. |
Leases | We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our balance sheets if the lease term is more than one year. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Leases with a lease term of 12 months or less at inception are not recorded on our balance sheet and are expensed on a straight- line basis over the lease term in our statement of operations. |
Net Income (Loss) Per Share of Common Stock | The Company has adopted ASC Topic 260, ”Earnings per Share” |
Concentrations of Credit Risk | The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables that it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high creditworthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. |
Financial Instruments | The Company follows ASC 820, “ Fair Value Measurements and Disclosures, Level 1 Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The carrying values of our financial instruments, including, cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses and due to related parties approximate their fair values due to the short-term maturities of these financial instruments. |
Stock-Based Compensation | The Company recognizes compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee and non-employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the option-pricing model for stock options and the quoted price of its common stock for unrestricted shares; the expense is recognized over the service period for awards expected to vest. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. |
Related Parties | The Company follows ASC 850, ”Related Party Disclosures,” |
Revenue Recognition | The Company recognizes revenue in accordance with Topic 606, which requires revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements: • identify the contract with a customer; • identify the performance obligations in the contract; • determine the transaction price; • allocate the transaction price to performance obligations in the contract; and • recognize revenue as the performance obligation is satisfied. The Company recognizes revenue when products are delivered to customers in accordance with the written sales terms. |
Deferred Revenue | The Company sells products pursuant to agreements for the delivery of products to customers. The Company receives cash in advance and records it as deferred revenue. Deferred revenue at December 31, 2021 and 2020, was $20,000, respectively. |
Recent Accounting Pronouncements | The Company has reviewed all other recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on our financial statements. |
Deferred Income Taxes and Valuation Allowance | The Company accounts for income taxes under ASC 740 “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. 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 income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize the deferred tax assets through future operations. |
COVID-19 | Since our products are purchased by customers in the Republic of China (Taiwan) and Hong Kong who sold products to their customers in the People’s Republic of China (the “PRC”), our business was impacted by the effects of the COVID-19 pandemic and the actions taken by the governments of the PRC, the Republic of China (Taiwan) and Hong Kong. We cannot predict the effect on our business of the COVID-19 pandemic and the steps taken by governments to address the pandemic. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company. Factors relating to COVID-19 which significantly contributed to the lack of revenue in the third quarters of 2021 and the modest level our revenue in 2021, most of which was in the fourth quarter, and the failure to generate any of revenue in the second, third and fourth quarters of 2020 may continue affect us and the market for our products which include, but are not limited to, the following. As the population of China, Hong Kong and Taiwan becomes vaccinated and restrictions that had been imposed to address the pandemic are lifted, we cannot assure you that our sales will increase as a result of the reduction of such restrictions. The effects of the Delta and Omicron variation and any other variations which may develop as well as other illnesses which may affect a broad segment of the population and the governmental and public response to these developments may impair the market for our products, including the recent lockdown in a number of provinces and municipalities in China. As the world has begun to open following closures as a result of the pandemic, two other factors are facing businesses and consumers, which are considered to be related to the effects of the COVID-19 pandemic. These are inflation and supply chain issues, which have been exacerbated by the recent Russian invasion of Ukraine. We cannot estimate the effect of these factors on our business. To the extent that these factors result in increased prices, we may not be able to pass along the increases to our customers. Any shortages of cordyceps would effect our ability to generate sales of our products. Further, to the extent our customers use our products as an ingredient in their own products, the inability of a potential customer to obtain other raw materials as well as cost increases for such products, could affect the timing and the amount of purchases from us. We cannot assure you that our business will not be impaired by the effects of inflation and supply chain issues. |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAX | |
Schedule of reconciliation of income tax credit | Years ended December 31, 2021 2020 Income tax expense (credit) at statutory rate $ (1,616,544 ) $ (28,464 ) Income tax adjustment Imputed interest 893 1,067 Operating losses utilized - (18,092 ) Change of valuation allowance 1,615,651 27,397 Income tax expense (credit) $ - $ (18,092 ) |
Schedule of net deferred tax assets | December 31, December 31, 2021 2020 Operating loss carry forward $ 1,682,296 $ 66,645 Valuation allowance (1,682,296 ) (66,645 ) Deferred tax asset $ - $ - |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LEASES | |
Schedule of operating lease | December 31, December 31, 2021 2020 Operating lease ROU asset $ 50,432 $ 24,700 December 31, December 31, 2021 2020 Operating lease liabilities Current portion $ 24,713 $ 24,500 Non-current portion 25,719 - Total $ 50,432 $ 24,500 |
Schedule of future minimum lease payments | 2022 $ 26,280 2023 26,280 Thereafter - Total $ 52,560 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Narrative) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Deferred revenue | $ 20,000 | $ 20,000 |
EQUITY (Detail Narrative)
EQUITY (Detail Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Aug. 07, 2020 | |
Stock based compensation expenses | $ 7,651,417 | $ 0 | |
August 23, 2021 [Member] | |||
Common stock share stock grants, value | $ 12,113,200 | ||
Common stock shares price per share | $ 2.20 | ||
Common stock share stock grants, share | 5,506,000 | ||
May 25, 2021 [Member] | |||
Common stock shares price per share | $ 2.85 | ||
Common stock share stock grants, share | 6,776,000 | ||
Common stock share stock grants, value | $ 19,311,600 | ||
Represents information of Long-Term Incentive Plan 2020. | Director [Member] | |||
Deferred stock compensation | 23,773,383 | ||
Percentage of ownership interest owned | 62.80% | ||
Maximum number of shares of common stock may be issued | 12,000,000 | ||
Stock based compensation expenses | $ 7,651,417 | ||
2020 Equity Incentive Plan [Member] | |||
Common stock share stock grants | 11,912,000 | ||
Agreements description | The agreements provide for the consultants to perform services described in the contracts for the two-year period commencing May 25, 2021 and August 23, 2021. |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAX | ||
Income tax expense (credit) at statutory rate | $ (1,616,544) | $ (28,464) |
Imputed interest | 893 | 1,067 |
Operating losses utilized | 0 | (18,092) |
Change of valuation allowance | 1,615,651 | 27,397 |
Income tax expense (credit) | $ 0 | $ (18,092) |
INCOME TAX (Details 1)
INCOME TAX (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
INCOME TAX | ||
Operating loss carry forward | $ 1,682,296 | $ 66,645 |
Valuation allowance | (1,682,296) | (66,645) |
Deferred tax asset | $ 0 | $ 0 |
INCOME TAX (Details Narrative)
INCOME TAX (Details Narrative) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
INCOME TAX | |
Statutory federal income tax rate | 21.00% |
Net operating losses carried forward | $ 8,025,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Due to related parties | $ 19,641 | $ 241,851 |
Non interest-bearing | 5.00% | |
Imputed interest - related parties | $ 4,250 | 5,082 |
Percentage of inputed interest | 4.00% | |
Amounts due to related parties | $ 20,741 | 242,951 |
Advances from related parties | 19,641 | 216,672 |
Repayment to related parties | 241,851 | 0 |
CEO [Member] | ||
Due to related parties | 1,100 | 1,100 |
Chief Executive Officer [Member] | ||
Advances from related parties | 19,641 | 216,672 |
Repayment to related parties | $ (241,851) | $ 0 |
LEASES (Details)
LEASES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
LEASES | ||
Operating lease ROU asset | $ 50,432 | $ 24,700 |
LEASES (Details 1)
LEASES (Details 1) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
LEASES | ||
Operating lease liability - Current portion | $ 24,713 | $ 24,500 |
Operating lease liability - Non-current portion | 25,719 | 0 |
Operating Lease, Liability, Total | $ 50,432 | $ 24,500 |
LEASES (Details 2)
LEASES (Details 2) | Dec. 31, 2020USD ($) |
LEASES | |
2022 | $ 26,280 |
2023 | 26,280 |
Thereafter | 0 |
Total | $ 52,560 |
LEASES (Details Narrative)
LEASES (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||
Dec. 27, 2019 | Dec. 31, 2021USD ($) | Dec. 31, 2021HKD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021HKD ($) | |
Security deposit | $ 0 | $ 4,230 | $ 4,230 | |||
Prepaid rent | $ 2,190 | |||||
Rent expenses | 2,115 | |||||
Total lease expenses | $ 25,140 | $ 26,141 | ||||
Hong Kong [Member] | Lease Agreement [Member] | ||||||
Security deposit | $ 33,000 | |||||
Prepaid rent | $ 16,500 | |||||
Rent expenses | $ 16,500 | |||||
Lease term | 2 years |
CONCENTRATION (Details Narrativ
CONCENTRATION (Details Narrative) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue [Member] | Customer Second [Member] | |
Concentration credit risk | 33.20% |
Revenue [Member] | Customer First [Member] | |
Concentration credit risk | 58.50% |
Revenue [Member] | Customer concentration risk [Member] | |
Concentration risk, customer | one customer |
Revenue [Member] | Customer Third [Member] | |
Concentration credit risk | 8.30% |
Purchase [Member] | Customer concentration risk [Member] | |
Concentration risk, customer | one supplier |