Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 13, 2020 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Entity Registrant Name | AMERICAN EDUCATION CENTER, INC. | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 57,497,113 | |
Entity Central Index Key | 0001626556 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Current assets: | ||
Cash | $ 741,693 | $ 1,035,395 |
Accounts receivable, net of allowance for doubtful accounts of $3,938,680 and $2,605,348 at September 30, 2020 and December 31, 2019, respectively | 645,012 | 2,874,125 |
Prepaid expenses | 213,711 | 253,530 |
Total current assets | 1,600,416 | 4,163,050 |
Noncurrent assets: | ||
Other assets | 25,922 | |
Fixed Asset, net | 8,174 | 6,226 |
Deferred income taxes | 883,939 | 557,615 |
Intangible asset, net | 161,091 | 272,226 |
Goodwill | 139,725 | |
Operating lease right-of-use asset | 322,560 | 2,149,710 |
Security deposits | 16,851 | 285,041 |
Total noncurrent assets | 1,558,262 | 3,270,818 |
Total assets of continuing operations | 3,158,678 | 7,433,868 |
Assets of discontinued operations, net | 0 | |
TOTAL ASSETS | 3,158,678 | 7,433,868 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,332,908 | 2,867,133 |
Taxes payable | 1,383 | 60,511 |
Deferred revenue | 94,558 | 215,500 |
Advances from clients | 0 | 60 |
Short-term loan from related party | 883,704 | 574,564 |
Short-term loan due within a year | 0 | 98,433 |
Operating lease liability - current portion | 76,693 | 331,670 |
Total current liabilities | 3,389,246 | 4,147,871 |
Noncurrent liabilities: | ||
Operating lease liability | 260,195 | 2,067,504 |
Long-term loan | 236,588 | |
Total liabilities of continuing operations | 3,886,029 | 6,215,375 |
Liabilities of discontinued operations | 0 | |
Total liabilities | 3,886,029 | 6,215,375 |
Stockholders' equity: | ||
Common stock, $0.001 par value; 450,000,000 shares authorized;59,137,803 shares and 55,797,113 shares outstanding at September 30, 2020 and December 31, 2019 respectively | 60,138 | 56,797 |
Additional paid-in capital | 8,535,659 | 8,267,930 |
Treasury stock at cost, 1,000,000 shares at 0.66 per share | (660,000) | (660,000) |
Subscription receivables | (592,305) | (592,305) |
Retained earnings | (8,116,592) | (5,924,231) |
Accumulated other comprehensive income | (24,808) | (4,678) |
Total controlling interest | (772,908) | 1,168,513 |
Noncontrolling Interest | 45,557 | 49,980 |
Total stockholders' equity | (727,351) | 1,218,493 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 3,158,678 | 7,433,868 |
Series B Preferred Stock | ||
Stockholders' equity: | ||
Preferred stock | 25,000 | 25,000 |
Total stockholders' equity | 25,000 | 25,000 |
Series A Preferred Stock | ||
Stockholders' equity: | ||
Preferred stock |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Allowance for Doubtful Accounts Receivable (in dollars) | $ 3,938,680 | $ 2,605,348 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 450,000,000 | 450,000,000 |
Common Stock, Shares, Outstanding | 59,137,803 | 55,797,113 |
Treasury stock at cost (shares) | 1,000,000 | 1,000,000 |
Treasury stock at cost (in dollars per share) | $ 0.66 | $ 0.66 |
Series A Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Series B Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 25,000,000 | 25,000,000 |
Preferred Stock, Shares Issued | 25,000,000 | 0 |
Preferred Stock, Shares Outstanding | 25,000,000 | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) | ||||
Revenues | $ 865 | $ 1,564,681 | $ 277,047 | $ 4,704,472 |
Cost of revenues | 1,614 | 880,389 | 167,668 | 2,649,076 |
Gross profit | (749) | 684,292 | 109,379 | 2,055,396 |
Operating expenses: | ||||
Selling and marketing | 4 | 116,008 | 74,119 | 317,257 |
Research and development expenses | 37,454 | 37,454 | 0 | |
General and administrative | 1,394,113 | 953,872 | 2,819,229 | 2,405,750 |
Total operating expenses | 1,431,571 | 1,069,880 | 2,930,802 | 2,723,007 |
(Loss) from operations | (1,432,320) | (385,588) | (2,821,423) | (667,611) |
Other income | 239,537 | 7 | 239,854 | 1,304 |
(Loss) before provision for income taxes | (1,192,783) | (385,581) | (2,581,569) | (666,307) |
Provision for income taxes (benefit) | (22,632) | (105,656) | (384,785) | 260,420 |
Net (loss) from continuing operations including noncontrolling interest | (1,170,151) | (279,925) | (2,196,784) | (926,727) |
Net income (loss) from discontinued operations, net of income taxes benefit | 0 | 561,807 | ||
Net (loss) including noncontrolling interest | (1,170,151) | (279,925) | (2,196,784) | (364,920) |
Less: Net (loss) attributable to noncontrolling interest | (1,470) | (1,470) | (4,423) | (4,410) |
Net (loss) attributable to American Education Center | (1,168,681) | (278,455) | (2,192,361) | (360,510) |
Net (loss) including noncontrolling interest | (1,170,151) | (279,925) | (2,196,784) | (364,920) |
Other comprehensive (loss) | ||||
Foreign currency translation income (loss) | (25,928) | 5,588 | (20,130) | 6,759 |
Comprehensive (loss) including noncontrolling interest | (1,196,079) | (274,337) | (2,216,914) | (358,161) |
Less: Comprehensive (loss) attributable to noncontrolling interest | (1,470) | (1,470) | (4,423) | (4,410) |
Comprehensive (loss) attributable to American Education Center | $ (1,194,609) | $ (272,867) | $ (2,212,491) | $ (353,751) |
Income (loss) earnings per common share - basic and diluted | ||||
Income (loss) from continuing operations | $ (0.02) | $ 0 | $ (0.04) | $ (0.02) |
(Loss) from discontinued operations | 0 | $ 0 | 0 | 0.01 |
Net income (loss) earnings per common share - basic and diluted | $ (0.02) | $ (0.04) | $ (0.01) | |
Weighted average shares | ||||
Outstanding, basic and diluted | 56,538,385 | 56,058,483 | 56,538,385 | 56,058,483 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | May 01, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||||||||
Net (loss) | $ (1,170,151) | $ (493,688) | $ (279,925) | $ 82,426 | $ (2,196,784) | $ (364,920) | |||
Loss from discontinued operation, net of income taxes | $ 366,667 | 0 | (561,807) | $ 5,255,215 | |||||
Adjustments to reconcile net (loss) including noncontrolling interest to net cash (Used in) operating activities: | |||||||||
Deferred tax provision (benefit) | (326,323) | 176,278 | |||||||
Stock-based compensation expense | 7,000 | 62,000 | |||||||
Provision for doubtful accounts | 1,333,332 | 763,311 | $ 1,557,201 | ||||||
Depreciation expense for fixed assets | 552 | 262 | 1,898 | 262 | |||||
Gain from disposal of the discontinued operation, net of income taxes | 0 | (561,807) | |||||||
Amortization expense for learning platform | 9,000 | 9,000 | |||||||
Amortization expense | 102,136 | 102,135 | |||||||
Change in operating assets and liabilities: | |||||||||
in other assets and liabilities | (235,328) | 20,681 | |||||||
in accounts receivable | 894,962 | (1,695,043) | |||||||
in prepaid expenses | 42,906 | (95,219) | |||||||
in security deposits | 268,672 | (18,523) | |||||||
in accounts payable and accrued expenses | (533,785) | (46,495) | |||||||
in taxes payable | (61,355) | 56,754 | |||||||
in deferred revenue | (120,500) | 82,675 | |||||||
in lease liabilities | 0 | 0 | |||||||
in advances from clients | (504) | (34,833) | |||||||
Net cash (used in) continuing operating activities | (814,673) | (1,543,744) | |||||||
Net cash (used in) discontinued operating activities | 0 | 0 | |||||||
Net cash (used in) operating activities | (814,673) | (1,543,744) | |||||||
Cash flows from investing activities: | |||||||||
Acquistion of business, net of cash received | 97,785 | 0 | |||||||
Fixed assets purchased by Qianhai | 0 | (5,361) | |||||||
Net cash used for by investing activities | 97,785 | (5,361) | |||||||
Cash flows from financing activities: | |||||||||
(Repayment) of short-term loan | (98,434) | 0 | |||||||
Proceeds from SBA Loan | 236,588 | 0 | |||||||
Loan from stockholder | 294,568 | 547,286 | |||||||
Net cash provided by continuing financing activities | 432,722 | 547,286 | |||||||
Net cash provided by discontinued financing activities | 0 | 0 | |||||||
Net cash provided by financing activities | 432,722 | 547,286 | |||||||
Effect of exchange rates changes on cash | (9,536) | 6,759 | |||||||
Net change in cash | (293,702) | (995,060) | |||||||
Cash at beginning of period | $ 1,035,395 | $ 1,985,133 | 1,985,133 | 1,035,395 | 1,985,133 | 1,985,133 | |||
Cash at end of period | 741,693 | 990,073 | 741,693 | 990,073 | $ 1,035,395 | 1,985,133 | |||
Less cash of discontinued operations - end of period | 0 | 0 | $ 391 | 0 | 0 | $ 391 | |||
Cash of continuing operations - end of period | $ 741,693 | $ 990,073 | 741,693 | 990,073 | |||||
Supplemental disclosure of cash flow information | |||||||||
Cash paid for income taxes | 20,796 | 39,829 | |||||||
Cash paid for interest | 1,566 | 14,558 | |||||||
Non-Cash investing and financing activities: | |||||||||
Purchase of business by issuing 2,640,690 shares of common stock | 264,070 | 0 | |||||||
Disposal of subsidiary by reacquiring 1,000,000 shares of common stock and debt forgiven | $ 0 | $ 928,475 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||
Business issuing of common stock | 2,640,690 | |
Disposal of subsidiary by reacquiring shares of common stock and debt forgiven | 1,000,000 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Series B Preferred Stock | Common stock | Additional paid-in capital | Treasury Stock | Subscription Receivables | Retained earnings | Accumulated other comprehensive income | Noncontrolling Interest | Total |
Balance at Dec. 31, 2018 | $ 25,000 | $ 56,597 | $ 8,206,130 | $ (719,911) | $ (5,714,688) | $ (13,865) | $ 55,860 | $ 1,895,123 | |
Balance (in shares) at Dec. 31, 2018 | 25,000,000 | 56,597,113 | |||||||
Net (loss) | 83,896 | (1,470) | 82,426 | ||||||
Foreign currency translation income | 1,165 | 1,165 | |||||||
Balance at Mar. 31, 2019 | $ 25,000 | $ 56,597 | 8,206,130 | (719,911) | (5,630,792) | (12,700) | 54,390 | 1,978,714 | |
Balance (in shares) at Mar. 31, 2019 | 25,000,000 | 56,597,113 | |||||||
Balance at Dec. 31, 2018 | $ 25,000 | $ 56,597 | 8,206,130 | (719,911) | (5,714,688) | (13,865) | 55,860 | 1,895,123 | |
Balance (in shares) at Dec. 31, 2018 | 25,000,000 | 56,597,113 | |||||||
Net (loss) | (364,920) | ||||||||
Foreign currency translation income | 6,759 | ||||||||
Balance at Sep. 30, 2019 | $ 25,000 | $ 56,797 | 8,267,930 | $ (660,000) | (592,305) | (5,012,657) | (7,106) | 51,450 | 2,129,109 |
Balance (in shares) at Sep. 30, 2019 | 25,000,000 | 55,797,113 | 1,000,000 | ||||||
Balance at Mar. 31, 2019 | $ 25,000 | $ 56,597 | 8,206,130 | (719,911) | (5,630,792) | (12,700) | 54,390 | 1,978,714 | |
Balance (in shares) at Mar. 31, 2019 | 25,000,000 | 56,597,113 | |||||||
Net (loss) | (165,951) | (1,470) | (167,421) | ||||||
Foreign currency translation income | 6 | 6 | |||||||
Realization upon disposal of subsidiary by reacquiring stock | $ (660,000) | 1,062,541 | |||||||
Realization upon disposal of subsidiary by reacquiring stock (in shares) | (1,000,000) | 1,000,000 | |||||||
Realization upon disposal of subsidiary by reacquiring stock | 402,541 | ||||||||
Issuance of common stock for services | $ 200 | 61,800 | 62,000 | ||||||
Issuance of common stock for services (in shares) | 200,000 | ||||||||
Issuance of common stock for cash | 143,982 | 143,982 | |||||||
Balance at Jun. 30, 2019 | $ 25,000 | $ 56,797 | 8,267,930 | $ (660,000) | (575,929) | (4,734,202) | (12,694) | 52,920 | 2,419,822 |
Balance (in shares) at Jun. 30, 2019 | 25,000,000 | 55,797,113 | 1,000,000 | ||||||
Net (loss) | (278,455) | (1,470) | (279,925) | ||||||
Foreign currency translation income | 5,588 | 5,588 | |||||||
Issuance of common stock for cash | (16,376) | (16,376) | |||||||
Balance at Sep. 30, 2019 | $ 25,000 | $ 56,797 | 8,267,930 | $ (660,000) | (592,305) | (5,012,657) | (7,106) | 51,450 | 2,129,109 |
Balance (in shares) at Sep. 30, 2019 | 25,000,000 | 55,797,113 | 1,000,000 | ||||||
Balance at Dec. 31, 2019 | $ 25,000 | $ 56,797 | 8,267,930 | $ (660,000) | (592,305) | (5,924,231) | (4,678) | 49,980 | 1,218,493 |
Balance (in shares) at Dec. 31, 2019 | 25,000,000 | 55,797,113 | 1,000,000 | ||||||
Net (loss) | (492,205) | (1,483) | (493,688) | ||||||
Foreign currency translation income | 7,232 | 7,232 | |||||||
Issuance of common stock for services | $ 700 | 6,300 | 7,000 | ||||||
Issuance of common stock for services (in shares) | 700,000 | ||||||||
Balance at Mar. 31, 2020 | $ 25,000 | $ 57,497 | 8,274,230 | $ (660,000) | (592,305) | (6,416,436) | 2,554 | 48,497 | 739,037 |
Balance (in shares) at Mar. 31, 2020 | 25,000,000 | 56,497,113 | 1,000,000 | ||||||
Balance at Dec. 31, 2019 | $ 25,000 | $ 56,797 | 8,267,930 | $ (660,000) | (592,305) | (5,924,231) | (4,678) | 49,980 | 1,218,493 |
Balance (in shares) at Dec. 31, 2019 | 25,000,000 | 55,797,113 | 1,000,000 | ||||||
Net (loss) | (2,196,784) | ||||||||
Foreign currency translation income | (20,130) | ||||||||
Balance at Sep. 30, 2020 | $ 25,000 | $ 60,138 | 8,535,659 | $ (660,000) | (592,305) | (8,116,592) | (24,808) | 45,557 | (727,351) |
Balance (in shares) at Sep. 30, 2020 | 25,000,000 | 59,137,803 | 1,000,000 | ||||||
Balance at Mar. 31, 2020 | $ 25,000 | $ 57,497 | 8,274,230 | $ (660,000) | (592,305) | (6,416,436) | 2,554 | 48,497 | 739,037 |
Balance (in shares) at Mar. 31, 2020 | 25,000,000 | 56,497,113 | 1,000,000 | ||||||
Net (loss) | (531,475) | (1,470) | (532,945) | ||||||
Foreign currency translation income | (1,434) | (1,434) | |||||||
Balance at Jun. 30, 2020 | $ 25,000 | $ 57,497 | 8,274,230 | $ (660,000) | (592,305) | (6,947,911) | 1,120 | 47,027 | 204,658 |
Balance (in shares) at Jun. 30, 2020 | 25,000,000 | 56,497,113 | 1,000,000 | ||||||
Net (loss) | (1,168,681) | (1,470) | (1,170,151) | ||||||
Foreign currency translation income | (25,928) | (25,928) | |||||||
Shares issued for acquisition of business asset | $ 2,641 | 261,429 | 264,070 | ||||||
Shares issued for acquisition of business assets (in shares) | 2,640,690 | ||||||||
Balance at Sep. 30, 2020 | $ 25,000 | $ 60,138 | $ 8,535,659 | $ (660,000) | $ (592,305) | $ (8,116,592) | $ (24,808) | $ 45,557 | $ (727,351) |
Balance (in shares) at Sep. 30, 2020 | 25,000,000 | 59,137,803 | 1,000,000 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 9 Months Ended |
Sep. 30, 2020 | |
ORGANIZATION AND BUSINESS | |
ORGANIZATION AND BUSINESS | 1. ORGANIZATION AND BUSINESS American Education Center, Inc. (“AEC New York”) is a New York corporation incorporated on November 8, 1999 and is licensed by the Department of the State of New York to engage in education related consulting services. On May 7, 2014, the President and then sole shareholder of AEC New York formed a new company, American Education Center, Inc. in the State of Nevada ("AEC Nevada"). On May 31, 2014, the President and the sole shareholder of AEC New York exchanged his 200 shares for 10,563,000 shares of AEC Nevada. The share exchange resulted in AEC New York becoming a wholly owned subsidiary of AEC Nevada (hereinafter the “Company”). On October 31, 2016, the Company completed an acquisition transaction through a share exchange with two stockholders, Rongxia Wang and Ye Tian, of AEC Southern Management Co., Ltd. (“AEC Southern UK”), a company formed in December 2015 pursuant to the laws of England and Wales. The Company acquired 100% of the outstanding shares of AEC Southern UK in exchange for 1,500,000 shares of its common stock valued at $210,000 (the “AEC Southern UK Share Exchange”). As a result of the AEC Southern UK Share Exchange, AEC Southern UK became a wholly owned subsidiary of the Company. AEC Southern UK held 100% of the equity interests in AEC Southern Management Limited, a Hong Kong company (“AEC Southern HK”) formed on December 29, 2015. AEC Southern HK then formed Qianhai Meijiao Education Consulting Management Co., Ltd. (“AEC Southern Shenzhen”) on March 29, 2016 pursuant to PRC laws, with a registered capital of RMB 5,000,000. Therefore, under PRC laws, AEC Southern Shenzhen was a foreign wholly owned subsidiary of AEC Southern UK. On July 13, 2018, pursuant to a Business Purchase Agreement (the “Purchase Agreement”), the Company acquired 51% of the issued and outstanding equity interests of American Institute of Financial Intelligence LLC (“AIFI”), a New Jersey limited liability company formed on May 10, 2017, in exchange for 100,000 shares of the Company common stock issued to the then sole shareholder of AIFI. As a result, AIFI became a 51% majority owned subsidiary of the Company. On October 23, 2018, AEC Nevada incorporated a subsidiary, AEC Management Ltd. (“AEC BVI”) in the British Virgin Islands, pursuant to the laws of British Virgin Islands. AEC BVI is a wholly owned subsidiary of AEC Nevada, and as of the date of this report, does not have significant business activities. On April 22, 2019, AEC Southern UK sold 100% of the equity interests of AEC Southern HK to AEC BVI and AEC Southern HK and its subsidiary became wholly-owned subsidiaries of AEC BVI. On May 1, 2019, the Company sold 100% of the equity interest in AEC Southern UK to three individuals who were Ye Tian, Rongxia Wang and Weishou Li, and received a consideration of 1,000,000 shares of outstanding shares of AEC Nevada. On May 22, 2020, AEC Southern HK formed Yiqilai (Shenzhen) Consulting Management Co., Ltd. ("AEC YQL") in Shenzhen, China on May 22, 2020 pursuant to PRC laws. AEC YQL is a wholly owned subsidiary of AEC Southern HK, and as of the date of this report, does not have significant business activities. On August 18, 2020, AEC YQL entered into a series of contractual arrangements, including an Equity Pledge Agreement, Exclusive Management Consulting Agreement, Exclusive Option Agreement, and Irrevocable Power of Attorney (collectively, the "VIE Agreements"), with Shenzhen Zhongwei Technology Co., Ltd. ("Zhongwei"), a PRC company, and Ding Xiang (Shenzhen) Investment Co., Ltd., a PRC company ("Pledgor"), the sole shareholder of Zhongwei controlled by Dewei Li and Bin Liu (collectively."Ding Xiang Shareholders"). Pursuant to the VIE Agreements, AEC YQL gained control over Zhongwei. Zhongwei is involved in, among other things, e-commerce, and our company plans to leverage Zhongwei's current e-commerce platform, and to engage in business such as online education e-commerce. In consideration for entering into the transactions contemplated by the VIE Agreements, on August 18, 2020, the Company entered into a Share Issuance Agreement (the "Share Issuance Agreement") with the Ding Xiang Shareholders, whereby the Company agreed to issue to the Ding Xiang Shareholders an aggregate of 2,640,690 shares of the Company's common stock, par value $0.001. The transactions underlying the Share Issuance Agreement is closed in August 2020. As of September 30, 2020, the Company’s corporate structure is as follows: Headquartered in New York with operations in the People’s Republic of China (“PRC”), the Company covers two market segments through two subsidiaries: (1) AEC New York capitalizes on the rising demand of middle-class families in China for quality education and work experiences in the United States (“US”) and delivers customized high school and college placement and career advisory services to Chinese students wishing to study in the US. Its advisory services include language training, college admission advisory, on-campus advisory, internship and start-up advisory as well as student and family services. (2) AEC BVI delivers customized high school and college placement and career advisory services to Chinese students wishing to study in the U.S. Currently, the revenue of AEC Southern is all generated from AEC Southern Shenzhen. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments considered necessary to give a fair presentation have been included. Interim results are not necessarily indicative of full-year results. Certain prior year balances have been reclassified to conform to the current year’s presentation; none of these reclassifications had an impact on reported financial position or cash flows for any of the periods presented. The information in this Form 10-Q should be read in conjunction with information included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC. Cash Cash consists of all cash balances and liquid investments with an original maturity of three months or less are considered as cash equivalents. Accounts Receivable Accounts receivable are carried at net realizable value. The Company maintains an allowance for doubtful accounts, periodically evaluates its accounts receivable balances and makes general and/or specific allowances when there is doubt as to their collectability. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balances, customers’ historical payment history, their current credit-worthiness and current economic trends. Accounts receivable are written off against the allowance only after exhaustive collection efforts. Foreign Currency Translation The Company’s functional currency is US dollars. The Company has three bank accounts located in the PRC and one located in Hong Kong. Translation adjustments arising from the use of different exchange rates, in the circumstance any subsidiary’s functional currency is not US dollars, from period to period are included as a separate component of accumulated other comprehensive income included in statements of changes in stockholders’ equity. Gain and losses from foreign currency transactions are included in the consolidated statements of operations and comprehensive income. Revenue Recognition The Company adopted ASU No. 2014-09, Topic 606 on January 1, 2018, using the modified retrospective method. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. AEC New York delivers customized high school and college placement, career advisory as well as student and family services. Fees related to such advisory services that are collected from individuals are generally paid to the Company in advance and they are recorded as deferred revenue. Revenues are recognized proportionally as services are rendered or upon completion. Fees related to our advisory services provided by AEC New York to corporate customers (such as staffing agencies and placement agencies) are generally collected after services are provided, and are recorded as accounts receivable. AEC Shenzhen delivers customized high school and college placement and career advisory services. Fees related to such advisory services are generally paid to the Company in advance and they are recorded as deferred revenue. Revenues are recognized proportionally as services are rendered or upon completion. For the nine months ended September 30, 2020, approximately $104,000, or more than 38%, of the revenue was realized as accounts receivable and approximately $173,047 of the revenue was realized from services completed. Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Estimated useful lives (years) Office furniture 5 Electronic equipment 3 Goodwill and Intangible Asset Goodwill arises from business acquisition and is generally determined as the excess of fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquire, over the fair value of the nets assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently in events and circumstances exists that indicate that a goodwill impairment test should be performed. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet. The Company’s finite-lived intangible asset consists of a customized online campus system that was acquired from a third party. The system is used to provide online training for career advisory services and corporate training and advisory services. The asset was recorded at cost on the acquisition date and is amortized on a straight-line basis over its economic useful life. The Company reviews its finite-lived intangible asset for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset to be held and used is measured by a comparison of the carrying amount of an asset to its undiscounted future net cash flows expected to be generated by the asset. If such asset is not recoverable, a potential impairment loss is recognized to the extent the carrying amount of the asset exceeds its fair value. Fair value is generally determined using a discounted cash flow approach. Acquired intangible assets other than goodwill with finite lives are stated at cost less accumulated amortization if there is any. Intangible assets mainly represent the software development in progress of R&D at cost, less accumulated amortization on a straight-line basis over an estimated life of ten years. Residual value Estimated useful lives Intangible Asset rate (years) Software % 3 Impairment of Long-lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset's estimated fair value and carrying amount. S tock-Based Compensation The Company uses the fair value-based method for stock issued for services rendered and therefore all awards to employees and non-employees will be recorded at the market price on the date of the grant and expensed over the required period of services to be rendered. The fair value of stock options issued to third party consultants and to employees, officers and directors are recorded in accordance with the measurement and recognition criteria of FASB ASC 505‑50, “Equity-Based Payments to Non-Employees” and FASB ASC 718, “Compensation – Stock Based Compensation,” respectively. The options are valued using the Black-Scholes valuation model. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include but are not limited to the Company’s expected stock price volatility over the expected term of the awards, and actual and projected stock option and warrant exercise behaviors and forfeitures. Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes,” which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. Deferred tax assets and liabilities represent the future tax consequences for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. ASC 740 also addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is “more likely than not” that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. At September 30, 2020 and December 31, 2019, the Company does not have a liability for any unrecognized tax benefits. The income tax laws of various jurisdictions in which the Company and its subsidiaries operate are summarized as follows: United States (“US”) On December 22, 2017, the U.S. Tax Cuts and Jobs Act (TCJA) was signed into law. The TCJA results in significant revisions to the U.S. corporate income tax system, including a reduction in the U.S. corporate income tax rate, implementation of a territorial system and a one-time deemed repatriation tax on untaxed foreign earnings. Generally, the impacts of the new legislation would be required to be recorded in the period of enactment. The Company is subject to Federal corporate income tax in the US at 21%. Provisions for income taxes for the United States have been made for the nine months ended September 30, 2020. British Virgin Island (“BVI”) According to BVI corporate taxation, there is a zero-rated income tax regime for all BVI-domiciled corporate entities, and there is no concept of residence applicable to BVI corporate taxation. AEC BVI was incorporated in the BVI and is governed by the laws of the BVI. Hong Kong AEC Southern HK was formed in Hong Kong. Pursuant to the income tax laws of Hong Kong, the Company is not subject to tax on non-Hong Kong source income. The People’s Republic of China (“PRC”) AEC Southern Shenzhen, AEC YQL and Zhongwei were incorporated in the PRC. Pursuant to the income tax laws of China, the Company is not subject to tax on non-China source income. The Company is subject to corporate tax in China at 25% for the net taxable income. AEC Southern Shenzhen has no income tax for the nine months ended September 30, 2020 due to the net operating loss for the period. The provisions of ASC 740‑10‑25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This ASC also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. Fair Value Measurements FASB ASC 820, “Fair Value Measurement,” specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy: Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements. FASB ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company did not identify any assets or liabilities that are required to be presented at fair value on a recurring basis. Non-derivative financial instruments include cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses, taxes payable, and loan from stockholders. As of September 30, 2020 and December 31, 2019, respectively, the carrying values of these financial instruments approximated their fair values due to their short-term nature. COVID-19 Outbreak In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. The COVID-19 pandemic has negatively impacted the global economy, workforces, customers, and created significant volatility and disruption of financial markets. It has also disrupted the normal operations of many businesses, including ours. This outbreak could decrease spending, adversely affect demand for our services and harm our business and results of operations. It is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or results of operations at this time. Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain 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. Actual results could differ from those estimates. Earnings (Loss) per Share Earnings (loss) per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.” Basic earnings (loss) per share is based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share is based on the assumption that all dilutive convertible shares and stock options are converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Options and warrants are only dilutive when the average market price of the underlying common stock exceeds the exercise price of the options or warrants because it is unlikely that they would be exercised if the exercise price were higher than the market price. Related Party Transactions A related party is generally defined as (i) any person and or their immediate family hold 10% or more of the company's securities (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business. Related parties may be individuals or corporate entities. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature. Selling and Marketing Selling and marketing costs are related to promoting, advertising, and other marketing activities, and are expensed as incurred. For the periods ended September 30, 2020 and 2019, the marketing and advertising expenses were $74,119 and $317,257, respectively. Noncontrolling interest According to Financial Accounting Standards Board (FASB) Statement No. 160, the noncontrolling interest shall be reported in the consolidated statement of financial position within equity, separately from the parent’s equity. That amount shall be clearly identified and labeled, for example, as noncontrolling interest in subsidiaries. An entity with noncontrolling interests in more than one subsidiary may present those interests in aggregate in the consolidated financial statements. Bargain Purchase According to Financial Accounting Standards Board (FASB) Accounting Standards, a barging purchase is defined as a business combination in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any noncontrolling interest in the acquiree, and it requires the acquirer to recognize that excess in earnings as a gain attributable to the acquire. Contingent Consideration The Company recognizes the fair value of any contingent consideration that is transferred to the seller in a business combination on the date at which control of the acquiree is obtained. This value is generally determined through a probability-weighted analysis of the expected cash flows. Contingent consideration is classified as a liability or as equity on the basis of the definitions of an equity instrument and a financial liability. The contingent consideration is payable in cash and, accordingly, the Company classified its contingent consideration as a liability. It is not remeasured, and any gain or loss on settlement at an amount different from its carrying value will be recognized in net income in the period during which it is settled. Leases On January 1, 2019, the Company adopted Accounting Standards Update No. 2016‑02, Leases (Topic 842) (ASU 2016‑02), as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. The Company adopted the new guidance using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while accounting for finance leases remained substantially unchanged. The Company determined if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and short- and long-term lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. As of adoption of ASC 842 and as of January 1, 2019, the Company was not a party to finance lease arrangements. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s 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 the leases do not provide an implicit rate, the Company use the industry incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Under the available practical expedient, the Company account for the lease and non-lease components as a single lease component. Adoption of the standard resulted in the recognition of $2,016,142 of ROU assets and $2,237,583 of lease liabilities for leases on our consolidated balance sheet at adoption on January 1, 2019 related to office space lease commitment on March 1, 2015 and which was terminated on August 31, 2020. The Company recognized a gain of $239,537 in according Lease Topic 842-10-25-13 for the difference between the balances of the lease asset and liability as of the date of termination on August 31, 2020. For the lease commitment on May 1, 2019, the company initially recognized $414,157 (RMB2,899,099) of ROU assets and lease liabilities of $399,048 (RMB2,793,341). The difference between the ROU assets and lease liabilities was due to prepaid rent and initial direct cost. |
RECENTLY ISSUED ACCOUNTING STAN
RECENTLY ISSUED ACCOUNTING STANDARDS | 9 Months Ended |
Sep. 30, 2020 | |
RECENTLY ISSUED ACCOUNTING STANDARDS | |
RECENTLY ISSUED ACCOUNTING STANDARDS | 3. RECENTLY ISSUED ACCOUNTING STANDARDS In January 2017, the FASB issued accounting standard update which simplifies the test for goodwill impairment. To address concerns over the cost and complexity of the two-step goodwill impairment test, the amendments in this update remove the second step of the test. An entity will apply a one-step quantitative test and record the amount of goodwill impairment as the excess of a reporting unit’s carrying amount over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The new guidance does not amend the optional qualitative assessment of goodwill impairment. This update is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the update in the fourth quarter of 2018. The adoption of the new standard did not have an impact on our consolidated financial statements. In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810): Targeted Improvements to the Related Party Guidance for Variable Interest Entities. ASU 2018-17 changes how entities evaluate decision-making fees under the variable interest entity guidance. To determine whether decision-making fees represent a variable interest, an entity considers indirect interests held through related parties under common control on a proportional basis, rather than in their entirety. This guidance will be adopted using a retrospective approach and is effective for the Company on January 1, 2020. The Company has evaluated the effect of the adoption of this ASU and the standard did not have an impact on its consolidated financial statements and related disclosures from the adoption of the new guidance. In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The standard is effective for the Company for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. |
ACCOUNTS RECEIVABLES
ACCOUNTS RECEIVABLES | 9 Months Ended |
Sep. 30, 2020 | |
ACCOUNTS RECEIVABLES | |
ACCOUNTS RECEIVABLES | 4. ACCOUNTS RECEIVABLES Activity in the allowance for doubtful accounts was as followings: September 30, December 31, 2020 2019 Accounts receivable $ 4,583,692 $ 5,479,473 Allowance for bad debts (3,938,680) (2,605,348) Accounts receivable, net $ 645,012 $ 2,874,125 Balance, beginning of year $ 2,605,348 $ 1,189,147 Provision (net of recover) 1,333,332 1,557,201 Amounts written off, net of recoveries — (141,000) Balance, end of year $ 3,938,680 $ 2,605,348 |
FIXED ASSET, NET
FIXED ASSET, NET | 9 Months Ended |
Sep. 30, 2020 | |
FIXED ASSET, NET | |
FIXED ASSET, NET | 5. FIXED ASSET, NET As of September 30, 2020, and December 31, 2019, fixed asset, net as follows: September 30, December 31, 2020 2019 Electronic equipment $ 10,872 $ 6,194 Office furniture 838 817 Less: accumulated depreciation (3,536) (785) Fixed asset - net $ 8,174 $ 6,226 For the three and nine months ended September 30, 2020 and 2019, depreciation expense was $552 and $1,898, $262 and $262 respectively. |
INTANGIBLE ASSET, NET
INTANGIBLE ASSET, NET | 9 Months Ended |
Sep. 30, 2020 | |
INTANGIBLE ASSET, NET | |
INTANGIBLE ASSET, NET | 6. INTANGIBLE ASSET, NET The gross carrying amount and accumulated amortization of this asset as of September 30, 2020 and December 31, 2019 are as follows: September 30, December 31, 2020 2019 Intangible asset: online campus system $ 612,814 $ 612,814 Intangible asset: learning platform 120,000 120,000 Less: accumulated amortization (571,732) (460,588) Intangible asset - net $ 161,091 $ 272,226 The Company’s customized online campus system is being amortized on a straight-line basis over four and a half years. For the three and nine months ended September 30, 2020 and 2019, amortization expense was $34,045, $74,090 and $37,045, $74,090, respectively. The following table is the future amortization expense to be recognized: Year Ending December 31, 2020 $ 2021 2022 2022 $ |
GOODWILL
GOODWILL | 9 Months Ended |
Sep. 30, 2020 | |
GOODWILL | |
GOODWILL | 7. GOODWILL The Company recognized goodwill in the amount of $139,725 which represents the amount of total consideration transferred in excess of the fair value assigned to identifiable assets acquired and liabilities assumed in a business acquisition. The Company performed testing of goodwill impairment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Based on the assessments, the Company did not recognize an impairment of its goodwill for the period ended September 30, 2020. |
DEFERRED COMPENSATION
DEFERRED COMPENSATION | 9 Months Ended |
Sep. 30, 2020 | |
DEFERRED COMPENSATION | |
DEFERRED COMPENSATION | 8. DEFERRED COMPENSATION On October 31, 2016, 1,500,000 shares of common stock of the Company were granted and issued to AEC Southern UK’s CEO who would provide service over a three-year period commencing November 1, 2016. The shares were valued using the market price of the Company’s common stock on the grant date of $0.14 per share. On the grant date, $210,000 was recognized as deferred compensation, which was expensed over the three-year period using the straight-line method. On December 31, 2017, the remaining balance of $198,333.33 deferred compensation was expensed due to the resignation of AEC Southern UK’s CEO. On December 31, 2016, the Company granted and issued 6,000,000 shares of common stock to AEC Southern UK’s Chairman who would provide services over a three-year period commencing November 1, 2016. The shares were valued using the market price of the Company’s common stock on the grant date of $0.55 per share. On the grant date, $3,300,000 was recognized as deferred compensation, which was expensed over a three-year period using the straight-line method. The Company decided not to cancel or retrieve the shares issued to the CEO of AEC Southern UK as compensation and recognized the remaining of the compensation as part of the loss from disposal during 2019. |
SECURITY DEPOSITS
SECURITY DEPOSITS | 9 Months Ended |
Sep. 30, 2020 | |
SECURITY DEPOSITS | |
SECURITY DEPOSITS | 9. SECURITY DEPOSITS The Company has security deposits with the landlord for its offices of $16,851 and $285,041 as of September 30, 2020 and December 31, 2019 respectively. The Company terminated the lease of its New York office in August and the landlord retained the entire security deposits to offset the rent payable on the termination date of August 31, 2020. As of September 30, 2020, AEC New York has security deposits of $0 and AEC Shenzhen has security deposits of $16,851 (translation from RMB114,412). |
CONCENTRATION OF CREDIT AND BUS
CONCENTRATION OF CREDIT AND BUSINESS RISK | 9 Months Ended |
Sep. 30, 2020 | |
CONCENTRATION OF CREDIT AND BUSINESS RISK | |
CONCENTRATION OF CREDIT AND BUSINESS RISK | 10. CONCENTRATION OF CREDIT AND BUSINESS RISK The Company maintains its cash accounts at two commercial banks in the US, three commercial banks in the PRC and one commercial bank in Hong Kong. Funds held in US banks and insured by Federal Deposit Insurance Corporation up to $250,000 per depositor, per insured bank, for each account ownership category. Funds held in the PRC banks are covered by Deposit Insurance Ordinance (index: 000014349/2015‑00031) that insures RMB500,000 for the total of all depository accounts. Funds held in HK banks are insured by Hong Kong Deposit Protection Board covers up to HK$500,000 per bank for the total of all depository accounts. The Company performs ongoing evaluation of its financial institutions to limit its concentration of risk exposure. Management believes this risk is not significant due to the financial strength of the financial institutions utilized by the Company. The following table represents major customers that individually accounted for more than 10% of the Company’s gross revenue for the nine months ended September 30, 2020 and 2019: September 30, 2020 Gross Accounts Revenue Percentage Receivable Percentage Customer 1 $ 146,982 53.1 % $ 1,359,521 30.3 % September 30, 2019 Gross Accounts Revenue Percentage Receivable Percentage Customer 1 $ 2,223,080 47.3 % $ 1,976,639 34.3 % Customer 2 1,141,900 24.3 % 1,723,520 29.9 % |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2020 | |
DISCONTINUED OPERATIONS | |
DISCONTINUED OPERATIONS | 11. DISCONTINUED OPERATIONS On May 1, 2019, AEC Nevada sold 100% of the equity interest in AEC Southern UK to three individuals, Ye Tian, Rongxia Wang and Weishou Li, and received a consideration of 1,000,000 shares of outstanding shares of AEC Nevada which was valued at $660,000 and the debt owed to AEC Southern UK in the amount of $268,475 was forgiven by AEC Southern UK. The Company has classified the results of AEC Southern UK as discontinued operations in the unaudited consolidated statement of income for all periods presented. The Company decided not to cancel or retrieve the shares issued to the CEO of AEC UK as compensation and recognized the remaining of the compensation as part of the loss from disposal. Additionally, the related assets and liabilities associated with the discontinued operations in the prior year consolidated balance sheet are classified as discontinued operations. The Company recognized a gain of $561,808 from the disposition. Pursuant to ASC Topic 205‑20, Presentation of Financial Statements - Discontinued Operations, the results of operations for the year ended December 31, 2019 and year ended December 31, 2018 from discontinued operations have been classified to loss from discontinued operations line on the accompanying consolidated statements of operations and comprehensive loss presented herein. The assets and liabilities also have been classified as discontinued operations in the Company’s consolidated financial statements as of December 31, 2019 and 2018. The carrying amount of the major classes of assets and liabilities of discontinued operation as of May 1, 2019 and December 31, 2018 consist of the following: May 1, 2019 December 31, 2018 Assets of discontinued operation: Current assets: Cash and cash equivalents $ 391 $ 391 Accounts receivable 4,864,297 4,595,823 Allowance for doubtful account (4,595,823) (4,595,823) Deferred compensation — 916,668 Total assets of discontinued operation $ 268,865 $ 917,059 Liabilities of discontinued operation: $ — Current liabilities: Accounts payable $ 1,881,404 $ 1,881,404 Other payables — — Total liabilities of discontinued operation $ 1,881,404 $ 1,881,404 The summarized operating result of discontinued operation included in the Company’s consolidated statements of operation consist of the following: From From January 1 January 1 to to May 1, 2019 December 31, 2018 Revenues $ — $ — Cost of revenues — — Gross profit — — Operating expenses (366,667) (5,587,406) Other income (expenses), net — 4 Loss before income tax (366,667) (5,587,402) Income tax expense (benefit) — (332,187) Loss from discontinued operation (366,667) (5,255,215) Total loss from discontinued operations, net of income taxes $ (366,667) $ (5,255,215) |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2020 | |
SEGMENT REPORTING | |
SEGMENT REPORTING | 12. SEGMENT REPORTING Operating segments have been determined on the basis of reports reviewed by the Company's Chief Executive Officer (CEO) who is the chief operating decision maker of the Company. The CEO evaluates the business from a geographic perspective, assesses performance and allocates resources on this basis. The reportable segments are as follows: After the discontinued operations of AEC Southern UK, the Company has two operating segments: AEC New York and AEC BVI. · AEC New York delivers placement, career and other advisory services Its advisory services include language training, admission advisory, on-campus advisory, internship and start-up advisory as well as other advisory services. · AEC BVI delivers customized high school and college placement and career advisory services to Chinese students wishing to study in the U.S. Currently, the revenue of AEC BVI all generated from AEC Southern Shenzhen. The following table shows an analysis by segment of the assets and liabilities of continuing operations as of September 30, 2020 and December 31,2019: September 30, 2020 AEC New York AEC BVI Total Segment assets and liabilities: Segment assets Segment assets from continuing operations $ 2,392,514 $ 766,164 $ 3,158,678 Segment assets of discontinued operations — — — Segment assets $ 2,392,514 $ 766,164 $ 3,158,678 Segment liabilities Segment liabilities from continuing operations $ 2,652,562 $ 1,233,467 $ 3,886,029 Segment liabilities of discontinued operations — — — Segment liabilities $ 2,652,562 $ 1,233,467 $ 3,886,029 December 31, 2019 AEC New York AEC BVI Total Segment assets and liabilities: Segment assets Segment assets from continuing operations $ 6,661,058 $ 772,810 $ 7,433,868 Segment assets of discontinued operations — — — Segment assets $ 6,661,058 $ 772,810 $ 7,433,868 Segment liabilities Segment liabilities from continuing operations $ 5,249,953 $ 965,422 $ 6,215,375 Segment liabilities of discontinued operations — — — Segment liabilities $ 5,249,953 $ 965,422 $ 6,215,375 Revenues from external customers, and gross profit for each business are as follows: For the three months ended September 30, 2020 AEC New York AEC BVI Total Segment revenue: Placement advisory $ — $ 865 $ 865 Career advisory — — — Student & Family advisory — — — Other advisory — — — Total revenue from continued operations $ — $ 865 $ 865 Total revenue from discontinued operations — — — Gross profit $ — $ (749) $ (749) For the nine months ended September 30, 2020 AEC New York AEC BVI Total Segment revenue: Placement advisory $ — $ 42,349 $ 42,349 Career advisory 234,191 — 234,191 Student & Family advisory — — — Other advisory 507 — 507 Total revenue from continued operations $ 234,698 $ 42,349 $ 277,047 Total revenue from discontinued operations — — — Gross profit $ 71,808 $ 37,571 $ 109,379 For the three months ended September 30, 2019 AEC New York AEC BVI Total Segment revenue: Placement advisory $ 343,100 $ 89,271 $ 432,371 Career advisory 731,610 — 731,610 Student & Family advisory 400,700 — 400,700 Other advisory — — Total revenue from continued operations $ 1,475,410 $ 89,271 $ 1,564,681 Total revenue from discontinued operations — — — Gross profit $ 607,896 $ 76,396 $ 684,292 For the nine months ended September 30, 2019 AEC New York AEC BVI Total Segment revenue: Placement advisory $ 1,141,900 $ 122,987 $ 1,264,887 Career advisory 2,548,885 — 2,548,885 Student & Family advisory 887,700 — 887,700 Other advisory 3,000 — 3,000 Total revenue from continued operations $ 4,581,485 $ 122,987 $ 4,704,472 Total revenue from discontinued operations - - - Gross profit $ 1,945,284 $ 110,112 $ 2,055,396 |
DEFERRED REVENUE
DEFERRED REVENUE | 9 Months Ended |
Sep. 30, 2020 | |
DEFERRED REVENUE | |
DEFERRED REVENUE | 13. DEFERRED REVENUE The Company receives advance payments for services to be performed and recognizes revenue when services have been rendered. The deferred revenues as of September 30, 2020 and December 31, 2019 were $94,558 and $215,500, respectively. |
RELATED-PARTY TRANSACTIONS
RELATED-PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2020 | |
RELATED-PARTY TRANSACTIONS | |
RELATED-PARTY TRANSACTIONS | 14. RELATED-PARTY TRANSACTIONS The Company’s CEO has a 34% interest in Columbia International College, Inc. (“CIC”). The Company prepaid CIC $48,000 for student consulting services which are expected to be fully delivered and accounted for in 2020. The Company’s CEO has a 40% interest in Wall Street Innovation Center, Inc. (“WSIC”), a corporation incorporated in the state of New York that focuses on career and business development activities. In the course of delivering career advisory services, the Company has engaged WSIC to assist in certain career development activities. The Company prepaid WSIC $50,000 for business consulting services to be delivered and completed in 2020. The Company’s CEO received 12,500,000 shares of Series B Convertible Preferred Stock of the Company (“Series B Preferred Stock”), par value $0.001 per share as a reward for his dedicated services to the Company on November 26, 2018. The Company borrowed $283,082 (translated from RMB2,000,000) from a shareholder of the Company during the nine months ended September 30, 2020. The amounts due to this related party were $883,704 and $574,564 as of September 30, 2020 and December 31, 2019, respectively. The amounts are non-interest bearing, non-secure and due on demand. |
LONG-TERM LOAN
LONG-TERM LOAN | 9 Months Ended |
Sep. 30, 2020 | |
LONG-TERM LOAN | |
LONG-TERM LOAN | 15. LONG-TERM LOAN On December 1, 2014, an unrelated party loaned the Company $295,579, with interest at 10%. The Company repaid $150,000 on November 10, 2017. The loan was fully paid off as of June 30, 2020. Interest expenses for the three and nine months ended September 30, 2020 and 2019 were $0, $527 and $3,639, 14,558 respectively. The Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted on March 27, 2020 in the United States. On May 4, 2020, Company was informed by its lender, Bank of America, N.A (the “Bank”), that the Bank received approval from the U.S. Small Business Administration (“SBA”) to fund the Company’s request for a loan under the SBA’s Paycheck Protection Program (“PPP Loan”) created as part of the recently enacted CARES Act administered by the SBA. Per the terms of the PPP Loan, Company received total proceeds of $77,588 from the Bank. In accordance with the requirements of the CARES Act, the Company intends to use the proceeds from the PPP Loan primarily for payroll costs. The PPP Loan has a 1.00% interest rate, and is subject to the terms and conditions applicable to all loans made pursuant to the Paycheck Protection Program as administered by the SBA under the CARES Act. The loan forgiveness amount will be reduced for any EIDL advance that the Company receives. The amount of loan forgiveness will be further reduced if the borrower terminates employees or reduces salaries during the twenty-four-week period. Company currently believes that its use of the loan proceeds met the conditions for forgiveness of the loan. On April 24, 2020, AEC New York received an advance in the amount of $9,000 from the U.S. Small Business Administration (“SBA”) under the Economic Injury Disaster Loan (“EIDL”) program administered by the SBA, which program was expanded pursuant to the CARES Act. On June 1, 2020, Company received approval for a loan under the SBA’s EIDL program from SBA. Per the terms of the EIDL, Company received total proceeds of $150,000. The EIDL loan has a 3.75% interest rate, and is subject to the terms and conditions applicable to all loans made pursuant to the EIDL Program as administered by the SBA. The Company has used all the proceeds of this loan as working capital to alleviate economic injury caused by COVID-19 occurring in 2020. |
LEASE COMMITMENTS
LEASE COMMITMENTS | 9 Months Ended |
Sep. 30, 2020 | |
LEASE COMMITMENTS | |
LEASE COMMITMENTS | 16. LEASE COMMITMENTS The Company currently has two operating leases for offices in different cities. In December 2014, the Company entered into a lease for 10,086 square feet of office space in New York, NY, with an unrelated party, expiring on July 31, 2025. The lease commenced on March 1, 2015 and the Company received two months of free rent. Due to free rent and escalating monthly rental payments, utilities, real estate taxes, insurance and other operating expenses, the lease is being recognized on a straight-line basis of $34,065 per month for financial statement purposes. In August 2020, the Company entered into a lease termination agreement with the landlord of this office. We determined the present value of the future lease payments using a discount rate of 8.05%, our incremental borrowing rate based on SBA loan rate, resulting in an initial right-of-use asset of $2,016,142 and lease liability of $2,237,583 on the adoption date of January 1, 2019, which are being amortized ratably over the term of the lease. In May 2019, the Company entered into a lease of office space in Shenzhen, Guangdong, PRC with an unrelated party, expiring on April 30, 2024. The lease commenced on May 1, 2019. We determined the present value of the future lease payment using a discount rate of 8.16%, our incremental borrowing rate based on SBA loan borrowing rate, resulting in an initial right-of-use asset of $414,157 (RMB2,899,099) and lease liability of $399,048 (RMB2,793,341) on the commenced date of May 1, 2019, which are being amortized ratably over the term of the lease. As of September 30, 2020, the balance of net right-of-use asset was $322,560, and lease liability was $336,888 (including $76,693 for current portion and $260,195 for noncurrent portion). Future minimum lease commitments are as follows on September 30, 2020: Gross Lease Year Ending December 31, Payment 2020 24,568 2021 102,205 2022 and thereafter 262,190 $ 388,963 Less: Present value adjustment (52,075) Operating lease liability $ 336,888 Payments under operating leases are expensed on a straight-line basis over the periods of their respective leases. The total rent expense was approximately $129,110, $356,376 and $133,155, $358,232 for the three and nine months ended September 30, 2020 and 2019, respectively. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
INCOME TAXES | |
INCOME TAXES | 17. INCOME TAXES The component of deferred tax assets at September 30, 2020 and 2019 are as follows: September 30, December 31, 2020 2019 Net operating loss carryforwards $ 709,273 $ 471,404 Allowance for bad debt 1,036,517 558,397 Accelerated Depreciation — — Allowance for deferred tax asset (861,851) (472,186) Deferred tax asset, net $ 883,939 $ 557,615 The provision for income taxes and deferred income taxes for three and nine months ended September 30, 2020 and 2019 are as follows: For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Current: Federal $ — $ (1,013) $ — $ 43,654 State — 4,952 — 40,488 Foreign — (265) — — Total current — 3,674 — 84,142 Deferred: Federal (44,592) (61,092) (256,697) 103,230 State 21,960 (48,238) (128,106) 73,048 Foreign — — — — Total deferred (22,632) (109,330) (384,785) 176,278 Total $ (22,632) $ (105,656) $ (384,785) $ 260,420 The Company conducts business globally and, as a result, files income tax returns in the US federal jurisdiction, state and city, and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world, including jurisdictions in the US. The Company is subject to income tax examination of US federal, state, and city tax returns for 2019, 2018 and 2017 tax years. The Company, to its knowledge, is not currently under examination nor has it been notified by the authorities. A reconciliation of the provision for income taxes, with the amount computed by applying the statutory effective income tax rate for the three and nine months ended September 30, 2020 and 2019 is as follows: For the three months ended For the nine months ended September 30, September 30, 2020 2019 2020 2019 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % 21.0 % State and local taxes, net of federal benefit 11.0 11.0 11.0 11.0 PRC statutory income tax rate 25.0 — 25.0 — Non-deductible/ non-taxable items — — — — Total 57 % 32 % 57 % 32 % |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2020 | |
FINANCIAL INSTRUMENTS | |
FINANCIAL INSTRUMENTS | 18. FINANCIAL INSTRUMENTS Fair values The Company’s financial instruments from continuing operations approximate include cash and cash equivalents and prepaid expenses and other current assets which approximate to fair value due to their short-term nature and include cash accounts. The Company’s borrowings approximate fair value as the rates of interest are similar to what they would receive from other financial institutions. The carrying amounts of these financial assets and liabilities are a reasonable estimate of their fair values because of their current nature. The Company’s financial instruments from discontinued operations include cash and cash equivalents, net accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses and other current liabilities, advance from customers, and income tax payable. The carrying amounts of these financial instruments are a reasonable estimate of their fair values because of their current nature. The following table summarizes the carrying values of the Company’s financial assets and liabilities: September 30, December 31, 2020 2019 Cash and cash equivalents of continuing operations $ 741,693 $ 1,035,395 Accounts receivable, prepaid expenses and other current assets 858,723 3,127,655 Other assets of discontinued operations — — Other financial liabilities (i) 3,389,246 4,147,871 Liabilities of discontinued operations $ — $ — (i) The Company classifies its fair value measurements in accordance with the three-level fair value hierarchy as follows: Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly (i.e. as prices) or indirectly (i.e. derived from prices), and Level 3 – Inputs that are not based on observable market data. The financial assets and liabilities carried at fair value on a recurring basis at September 30, 2020 are as follows: Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents of continuing operations $ $ — $ — $ Cash and cash equivalents of discontinued operations — — — — Other financial assets of continuing operations — — — — Other financial assets of discontinued operations — — — — Total Financial assets $ $ — $ — $ Financial Liabilities Other liabilities of continuing operations $ $ — $ — $ Other liabilities of discontinued operations — — — — Total Financial Liabilities $ $ — $ — $ The financial assets and liabilities carried at fair value on a recurring basis at December 31, 2019 are as follows: Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents of continuing operations $ 1,035,395 $ — $ — $ 1,035,395 Cash and cash equivalents of discontinued operations — — — — Other financial assets of continuing operations — — — — Other financial assets of discontinued operations — — — — Total Financial Assets $ 1,035,395 $ — $ — $ 1,035,395 Financial Liabilities Other liabilities of continuing operations $ 4,147,871 $ — $ — $ 4,147,871 Other liabilities of discontinued operations — — — — Total Financial Liabilities $ 4,147,871 $ — $ — $ 4,147,871 Interest rate and credit risk Financial instruments that potentially subject the Company to concentrations of credit risks consist principally of cash and cash equivalents, and net accounts receivable. The Company minimizes the interest rate and credit risk of cash by placing deposits with financial institutions located in the United States and Mainland China. Management believes that there is no significant credit risk arising from the Company’s financial instruments. Financial assets past due The following table provides information regarding the aging of financial assets that are past due, but which are not impaired at September 30, 2020: Less than 90 days to Over Carrying 90 days 1 year 1 year Value Accounts receivable, net $ — $ 549,042 $ — $ 549,042 Other receivable $ 3,968 $ 92,002 $ — $ 95,970 Total accounts receivable, net $ 3,968 $ 641,044 $ — $ 645,012 The Company determines past due amounts by reference to terms agreed with individual clients. None of the net amounts outstanding have been challenged by the respective clients and the Company continues to conduct business with them on an ongoing basis and does not consider its current accounts receivable to be past due. |
STOCK OPTIONS
STOCK OPTIONS | 9 Months Ended |
Sep. 30, 2020 | |
STOCK OPTIONS | |
STOCK OPTIONS | 19. STOCK OPTIONS The Company did not grant any stock options during the nine months ended September 30, 2020. The following is a summary of stock option activities: Weighted- Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Life Value Outstanding at December 31, 2019 3,200,000 $ 0.89 1.44 years $ — Granted — — — — Exercised — — — — Cancelled and expired — — — — Forfeited — — — — Outstanding at September 30, 2020 3,200,000 $ 2.45 3.12 years $ — Vested and expected to vest at September 30, 2020 3,200,000 $ 0.89 1.08 years $ — Exercisable at September 30, 2020 3,200,000 $ 0.89 1.08 years $ — The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s common stock. There were no options exercised during the three months ended September 30, 2020 and 2019. The estimated fair value of these options was $0, therefore no compensation expense was booked for the periods ended September 30, 2020 and December 31, 2019. |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Sep. 30, 2020 | |
COMMON STOCK | |
COMMON STOCK | 20. COMMON STOCK Certificate of Amendment to Increase Authorized Stock On November 6, 2018, the board of directors of the Company, with the written consent of a majority of the holders of the shares of the Company’s Common Stock issued and outstanding and the Company’s preferred stock issued and outstanding, voting together as a single class, authorized the Company to (i) increase the number of authorized shares of Common Stock from 180,000,000 to 450,000,000 and the number of authorized shares of preferred stock from 20,000,000 to 50,000,000 (the “Authorized Stock Increase”), and (ii) file a Certificate of Amendment with the Secretary of State of the State of Nevada to effect the Authorized Stock Increase. On November 8, 2018, the Company filed a Certificate of Amendment with the Secretary of State of the State of Nevada to affect the Authorized Stock Increase, which became effective upon filing. Stocks issued for business acquisition On July 10, 2018, the Company issued 100,000 shares of the Company’s common stock (the “Consideration Shares”) to FIFPAC, Inc, the 100% equity owner of AIFI, at a purchase price of $0.48 per share, in exchange for 51% equity ownership of the AIFI pursuant to the Purchase Agreement. Refer to Footnote 21 Business Acquisition. Stocks issued to employees and for services In July and August 2018, the Company entered into agreements pursuant to which it issued an aggregate of 448,000 shares of the Company’s common stock to 18 individuals who are either employees of the Company or have been service providers to the Company, for employment-based compensation or services provided, respectively. Subsequently, pursuant to such agreements, the Company issued an aggregate of 433,000 shares of the Company’s common stock to 10 out of the 18 individuals in the amount of $199,840 and 15,000 shares of the Company’s common stock for services rendered in the amount of $7,000, prior to December 31, 2018. In May 2019, the Company entered into agreements pursuant to which it issued an aggregate of 200,000 shares of the Company’s common stock in the amount of $62,000 to 4 individuals who have been service providers to the Company for services provided, prior to December 31, 2019. In January 2020, the Company entered into agreements pursuant to which it issued an aggregate of 700,000 shares of the Company's common stock to 2 individuals who are either employees of the Company or have been service providers to the Company, for employment-based compensation or services provided, respectively. Stocks issued for cash investment On November 26, 2018, the Company, entered into a Share Issuance Agreement (the “Share Issuance Agreement”) with China Cultural Finance Holdings Company Limited, a British Virgin Islands company and a shareholder of the Company (the “Holder”), whereby the Company agreed to issue 7,199,113 of shares of the Company’s common stock at $0.10 per share, to the Holder in exchange for an RMB5,000,000 investment (the “CCFH Investment”) in the Company’s subsidiary, AEC Southern Shenzhen. The transactions underlying the Share Issuance Agreement were closed on the same day and the shares of common stock were issued to the Holder (the “CCFH Share Issuance”). The Company received $127,606 (HKD 1,000,000) as of December 31, 2019. Stocks issued for business acquisition On August 18, 2020, AEC YQL entered into a series of contractual arrangements, including Equity Pledge Agreement, Exclusive Management Consulting Agreement, Exclusive Option Agreement, and Irrevocable Power of Attorney (collectively, the "VIE Agreements"), with Shenzhen Zhongwei Technology Co., Ltd. ("Zhongwei"), a PRC company, and Ding Xiang (Shenzhen) Investment Co., Ltd., a PRC company ("Pledgor"), the sole shareholder of Zhongwei. Pursuant to the VIE Agreements, the Company entered into a Share Issuance Agreement (the "Share Issuance Agreement") with the Ding Xiang Shareholders, whereby the Company agreed to issue to the Ding Xiang Shareholders an aggregate of 2,640,690 shares of the Company's common stock, par value $0.001. The transactions underlying the Share Issuance Agreement is closed in August 2020. |
SERIES B PREFERRED STOCK
SERIES B PREFERRED STOCK | 9 Months Ended |
Sep. 30, 2020 | |
SERIES B PREFERRED STOCK | |
SERIES B PREFERRED STOCK | 21 . SERIES B PREFERRED STOCK Designation of Series B Convertible Preferred Stock On November 13, 2018, the Company filed with the Secretary of State of the State of Nevada a Certificate of Designation of Series B Convertible Preferred Stock (the “Certificate of Designation”), which became effective upon filing. The Certificate of Designation established and designated the Series B Convertible Preferred Stock (“Series B Preferred Stock”) and the rights, preferences, privileges, and limitations thereof, summarized in the following: The Company designated 25,000,000 shares as Series B Preferred Stock out of the 50,000,000 unissued shares of preferred stock of the Company, par value $0.001 per share. Series B Preferred Stock is senior in rights of payment, including dividend rights and liquidation preference, to the Company’s common stock but junior to Series A Preferred Stock with respect to liquidation preference. Holders of shares of Series B Preferred Stock are entitled to vote with shareholders of the Company’s common stock, voting together as a single class, except on matters that require a separate vote of the holders of Series B Preferred Stock. In any such vote, each share of Series B Preferred Stock is entitled to 20 votes per share. Each share of Series B Preferred Stock shall, upon the approval of the board of directors of the Company and without the payment of additional consideration by such holder thereof, be convertible into one fully paid and non-assessable share of the Company’s common stock at a conversion price of $1 per share. Manager Share Issuance On November 26, 2018, the Company entered into a Manager Share Issuance Agreement (the “Manager Share Issuance Agreement”) with Mr. Max P. Chen, the Chief Executive Officer, President, and Chairman of the Board of the Company (“Mr. Chen”), whereby the Company agreed to reward Mr. Chen for his dedicated services to the Company by issuing 12,500,000 shares of Series B Preferred Stock to him with resale restrictions. The transactions underlying the Manager Share Issuance Agreement closed on the same day and 12,500,000 shares of Series B Preferred Stock were issued to Mr. Chen. The Company recognized stock compensation expense of $1,250,000 for the year ended December 31, 2018. Stocks issued for exchange agreement On November 26, 2018, the Company entered into an Exchange Agreement (the “Exchange Agreement”) with the Holder, whereby the Company agreed to issue 12,500,000 shares of Series B Convertible Preferred Stock of the Company (“Series B Preferred Stock”), par value $0.001 per share, and 7,500,000 shares of common stock with resale restrictions to the Holder in exchange for 500,000 shares of Series A Convertible Preferred Stock of the Company, par value $0.001 per share (the “Series A Preferred Stock”), held by the Holder. The transactions underlying the Exchange Agreement closed on the same day and 12,500,000 shares of Series B Preferred Stock and 7,500,000 shares of Common Stock were issued to the Holder. The Series A Preferred Stock were returned to the Company and cancelled. |
BUSINESS ACQUISITION
BUSINESS ACQUISITION | 9 Months Ended |
Sep. 30, 2020 | |
BUSINESS ACQUISITION | |
BUSINESS ACQUISITION | 22. BUSINESS ACQUISITION On July 10, 2018, the Company entered into the Purchase Agreement with the 100% owner of AIFI which closed on the same date. Pursuant to the Purchase Agreement, on July 10, 2018, the Company issued the Consideration Shares to the Seller, for a purchase price of $0.48 per share, in exchange for a 51% equity ownership of AIFI. Pursuant to ASC 805, the Company recognized a gain of $13,200 on the effective date of July 10, 2018. According to the Purchase Agreement, the contingent consideration consisted of compensatory arrangement for services to be performed by the owner of the acquiree, and such amounts are to be determined in the future by both parties; therefore, the fair value cannot be determined at the acquisition date. The Company as an acquirer did not recognize a liability at the acquisition date. The following table summarizes the consideration paid and the amounts of net assets acquired as of the date of acquisition: Fair value of net asset acquired (AIFI’s net identified assets) $ 120,000 Less: Fair value of consideration transferred (FMV of AEC’s 100k shares issued) (48,000) Fair value of noncontrolling interest (120k x 49%) (58,800) $ (106,800) Gain on bargain purchase $ 13,200 On August 18, 2020, the Company entered into a series of contractual arrangements, including Equity Pledge Agreement, Exclusive Management Consulting Agreement, Exclusive Option Agreement, and Irrevocable Power of Attorney (collectively, the "VIE Agreements"), with Shenzhen Zhongwei Technology Co., Ltd. ("Zhongwei"), a PRC company, and Ding Xiang (Shenzhen) Investment Co., Ltd., a PRC company ("Pledgor"), the sole shareholder of Zhongwei. Pursuant to the VIE Agreements, the Company entered into a Share Issuance Agreement (the "Share Issuance Agreement") with the Ding Xiang Shareholders, whereby the Company agreed to issue to the Ding Xiang Shareholders an aggregate of 2,640,690 shares at $0.1 per share for total $264,070 of the Company's common stock, par value $0.001. The Acquisition has been accounted for as a business combination, under the acquisition method of accounting, which results in acquired assets and assumed liabilities being measured at their fair values as of the Acquisition Date. As of the Acquisition Date, goodwill is measured as the excess of consideration transferred, which is also generally measured at fair value of the net acquisition date fair values of the assets acquired and liabilities assumed. Based upon the purchase price allocations, the following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the Acquisition Date: Cash $ 94,425 Accounts receivable, net — R&D (software development in progress) 25,428 Other current assets 812 Property and equipment 3,684 Total assets acquired on the book value $ 124,349 Other payables $ (4) Total liabilities assumed (4) Net assets acquired on the book value 124,345 Goodwill 139,725 Total purchase price $ 264,070 |
COMMITMENTS & CONTINGENCY
COMMITMENTS & CONTINGENCY | 9 Months Ended |
Sep. 30, 2020 | |
COMMITMENTS & CONTINGENCY | |
COMMITMENTS & CONTINGENCY | 23. COMMITMENTS & CONTINGENCY A contingency should be recognized at its acquisition date fair value if that value can be determined. (The guidance in Topic 820 is used to determine fair value). If the acquisition-date fair value of contingency cannot be determined, then an asset or liability is recognized for the contingency if it’s probable at the acquisition date that such asset or liability exists and if its amount is reasonable estimable. A contingency is not recognized for a contingency in the accounting for a business combination if: a) its fair value cannot be determined and b) the probable and reasonably estimate criteria are not met. Instead, the contingency is disclosed and accounted for subsequent to the acquisition date in accordance with Topic 450. Pursuant to the Purchase Agreement, the contingent consideration consisted of compensatory arrangement for services to be performed by the officers of the acquiree, and such amounts are to be determined in the future by both parties; therefore, the fair value cannot be determined at the acquisition date. The Company as an acquirer did not recognize a liability at the acquisition date. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2020 | |
GOING CONCERN | |
GOING CONCERN | 24. GOING CONCERN Substantial doubt about the Company’s ability to continue as a going concern exists when 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 after the date that the financial statements are issued. Our current operating results indicate that substantial doubt exists related to the Company's ability to continue as a going concern. We believe that the new education platforms acquired may mitigate the substantial doubt raised by our current operating results and with additional funding from a shareholder of the Company will be sufficient to meet its anticipated needs for working capital and satisfying our estimated liquidity needs 12 months from the date of the financial statements. However, we cannot predict, with certainty, the outcome of our actions to generate liquidity, including the availability of additional debt financing, or whether such actions would generate the expected liquidity as currently planned. |
SUBSEQUENT EVENT
SUBSEQUENT EVENT | 9 Months Ended |
Sep. 30, 2020 | |
SUBSEQUENT EVENT | |
SUBSEQUENT EVENT | 25. SUBSEQUENT EVENT The Company’s management has performed subsequent events procedures through the date the financial statements were available to be issued. There were no subsequent events requiring adjustment to or disclosure in the consolidated financial statements. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Consolidation and Presentation | Basis of Consolidation and Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. In the opinion of management, all adjustments considered necessary to give a fair presentation have been included. Interim results are not necessarily indicative of full-year results. Certain prior year balances have been reclassified to conform to the current year’s presentation; none of these reclassifications had an impact on reported financial position or cash flows for any of the periods presented. The information in this Form 10-Q should be read in conjunction with information included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC. |
Cash | Cash Cash consists of all cash balances and liquid investments with an original maturity of three months or less are considered as cash equivalents. |
Accounts Receivable | Accounts Receivable Accounts receivable are carried at net realizable value. The Company maintains an allowance for doubtful accounts, periodically evaluates its accounts receivable balances and makes general and/or specific allowances when there is doubt as to their collectability. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balances, customers’ historical payment history, their current credit-worthiness and current economic trends. Accounts receivable are written off against the allowance only after exhaustive collection efforts. |
Foreign Currency Translation | Foreign Currency Translation The Company’s functional currency is US dollars. The Company has three bank accounts located in the PRC and one located in Hong Kong. Translation adjustments arising from the use of different exchange rates, in the circumstance any subsidiary’s functional currency is not US dollars, from period to period are included as a separate component of accumulated other comprehensive income included in statements of changes in stockholders’ equity. Gain and losses from foreign currency transactions are included in the consolidated statements of operations and comprehensive income. |
Revenue Recognition | Revenue Recognition The Company adopted ASU No. 2014-09, Topic 606 on January 1, 2018, using the modified retrospective method. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. AEC New York delivers customized high school and college placement, career advisory as well as student and family services. Fees related to such advisory services that are collected from individuals are generally paid to the Company in advance and they are recorded as deferred revenue. Revenues are recognized proportionally as services are rendered or upon completion. Fees related to our advisory services provided by AEC New York to corporate customers (such as staffing agencies and placement agencies) are generally collected after services are provided, and are recorded as accounts receivable. AEC Shenzhen delivers customized high school and college placement and career advisory services. Fees related to such advisory services are generally paid to the Company in advance and they are recorded as deferred revenue. Revenues are recognized proportionally as services are rendered or upon completion. For the nine months ended September 30, 2020, approximately $104,000, or more than 38%, of the revenue was realized as accounts receivable and approximately $173,047 of the revenue was realized from services completed. |
Property and equipment, net | Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows: Estimated useful lives (years) Office furniture 5 Electronic equipment 3 |
Goodwill and Intangible Asset | Goodwill and Intangible Asset Goodwill arises from business acquisition and is generally determined as the excess of fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquire, over the fair value of the nets assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently in events and circumstances exists that indicate that a goodwill impairment test should be performed. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet. The Company’s finite-lived intangible asset consists of a customized online campus system that was acquired from a third party. The system is used to provide online training for career advisory services and corporate training and advisory services. The asset was recorded at cost on the acquisition date and is amortized on a straight-line basis over its economic useful life. The Company reviews its finite-lived intangible asset for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the asset to be held and used is measured by a comparison of the carrying amount of an asset to its undiscounted future net cash flows expected to be generated by the asset. If such asset is not recoverable, a potential impairment loss is recognized to the extent the carrying amount of the asset exceeds its fair value. Fair value is generally determined using a discounted cash flow approach. Acquired intangible assets other than goodwill with finite lives are stated at cost less accumulated amortization if there is any. Intangible assets mainly represent the software development in progress of R&D at cost, less accumulated amortization on a straight-line basis over an estimated life of ten years. Residual value Estimated useful lives Intangible Asset rate (years) Software % 3 |
Impairment of Long-lived Assets | Impairment of Long-lived Assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset's estimated fair value and carrying amount. |
Stock-Based Compensation | S tock-Based Compensation The Company uses the fair value-based method for stock issued for services rendered and therefore all awards to employees and non-employees will be recorded at the market price on the date of the grant and expensed over the required period of services to be rendered. The fair value of stock options issued to third party consultants and to employees, officers and directors are recorded in accordance with the measurement and recognition criteria of FASB ASC 505‑50, “Equity-Based Payments to Non-Employees” and FASB ASC 718, “Compensation – Stock Based Compensation,” respectively. The options are valued using the Black-Scholes valuation model. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include but are not limited to the Company’s expected stock price volatility over the expected term of the awards, and actual and projected stock option and warrant exercise behaviors and forfeitures. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes,” which requires the recognition of deferred income taxes for differences between the basis of assets and liabilities for financial statement and income tax purposes. Deferred tax assets and liabilities represent the future tax consequences for those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. ASC 740 also addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Company may recognize the tax benefit from an uncertain tax position only if it is “more likely than not” that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position would be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on derecognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions. At September 30, 2020 and December 31, 2019, the Company does not have a liability for any unrecognized tax benefits. The income tax laws of various jurisdictions in which the Company and its subsidiaries operate are summarized as follows: United States (“US”) On December 22, 2017, the U.S. Tax Cuts and Jobs Act (TCJA) was signed into law. The TCJA results in significant revisions to the U.S. corporate income tax system, including a reduction in the U.S. corporate income tax rate, implementation of a territorial system and a one-time deemed repatriation tax on untaxed foreign earnings. Generally, the impacts of the new legislation would be required to be recorded in the period of enactment. The Company is subject to Federal corporate income tax in the US at 21%. Provisions for income taxes for the United States have been made for the nine months ended September 30, 2020. British Virgin Island (“BVI”) According to BVI corporate taxation, there is a zero-rated income tax regime for all BVI-domiciled corporate entities, and there is no concept of residence applicable to BVI corporate taxation. AEC BVI was incorporated in the BVI and is governed by the laws of the BVI. Hong Kong AEC Southern HK was formed in Hong Kong. Pursuant to the income tax laws of Hong Kong, the Company is not subject to tax on non-Hong Kong source income. The People’s Republic of China (“PRC”) AEC Southern Shenzhen, AEC YQL and Zhongwei were incorporated in the PRC. Pursuant to the income tax laws of China, the Company is not subject to tax on non-China source income. The Company is subject to corporate tax in China at 25% for the net taxable income. AEC Southern Shenzhen has no income tax for the nine months ended September 30, 2020 due to the net operating loss for the period. The provisions of ASC 740‑10‑25, “Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This ASC also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. |
Fair Value Measurements | Fair Value Measurements FASB ASC 820, “Fair Value Measurement,” specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy: Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access. Level 2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly. Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements. FASB ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company did not identify any assets or liabilities that are required to be presented at fair value on a recurring basis. Non-derivative financial instruments include cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses, taxes payable, and loan from stockholders. As of September 30, 2020 and December 31, 2019, respectively, the carrying values of these financial instruments approximated their fair values due to their short-term nature. COVID-19 Outbreak In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. The COVID-19 pandemic has negatively impacted the global economy, workforces, customers, and created significant volatility and disruption of financial markets. It has also disrupted the normal operations of many businesses, including ours. This outbreak could decrease spending, adversely affect demand for our services and harm our business and results of operations. It is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or results of operations at this time. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect certain 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. Actual results could differ from those estimates. |
Earnings (Loss) per Share | Earnings (Loss) per Share Earnings (loss) per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.” Basic earnings (loss) per share is based upon the weighted average number of common shares outstanding during the period. Diluted earnings per share is based on the assumption that all dilutive convertible shares and stock options are converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Options and warrants are only dilutive when the average market price of the underlying common stock exceeds the exercise price of the options or warrants because it is unlikely that they would be exercised if the exercise price were higher than the market price. |
Related Party Transactions | Related Party Transactions A related party is generally defined as (i) any person and or their immediate family hold 10% or more of the company's securities (ii) the Company's management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business. Related parties may be individuals or corporate entities. Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due from/to related parties due to their related party nature. |
Selling and Marketing | Selling and Marketing Selling and marketing costs are related to promoting, advertising, and other marketing activities, and are expensed as incurred. For the periods ended September 30, 2020 and 2019, the marketing and advertising expenses were $74,119 and $317,257, respectively. |
Noncontrolling interest | Noncontrolling interest According to Financial Accounting Standards Board (FASB) Statement No. 160, the noncontrolling interest shall be reported in the consolidated statement of financial position within equity, separately from the parent’s equity. That amount shall be clearly identified and labeled, for example, as noncontrolling interest in subsidiaries. An entity with noncontrolling interests in more than one subsidiary may present those interests in aggregate in the consolidated financial statements. |
Bargain Purchase | Bargain Purchase According to Financial Accounting Standards Board (FASB) Accounting Standards, a barging purchase is defined as a business combination in which the total acquisition-date fair value of the identifiable net assets acquired exceeds the fair value of the consideration transferred plus any noncontrolling interest in the acquiree, and it requires the acquirer to recognize that excess in earnings as a gain attributable to the acquire. |
Leases | Leases On January 1, 2019, the Company adopted Accounting Standards Update No. 2016‑02, Leases (Topic 842) (ASU 2016‑02), as amended, which supersedes the lease accounting guidance under Topic 840, and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. The Company adopted the new guidance using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application and not restating comparative periods. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while accounting for finance leases remained substantially unchanged. The Company determined if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and short- and long-term lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. As of adoption of ASC 842 and as of January 1, 2019, the Company was not a party to finance lease arrangements. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s 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 the leases do not provide an implicit rate, the Company use the industry incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Under the available practical expedient, the Company account for the lease and non-lease components as a single lease component. Adoption of the standard resulted in the recognition of $2,016,142 of ROU assets and $2,237,583 of lease liabilities for leases on our consolidated balance sheet at adoption on January 1, 2019 related to office space lease commitment on March 1, 2015 and which was terminated on August 31, 2020. The Company recognized a gain of $239,537 in according Lease Topic 842-10-25-13 for the difference between the balances of the lease asset and liability as of the date of termination on August 31, 2020. For the lease commitment on May 1, 2019, the company initially recognized $414,157 (RMB2,899,099) of ROU assets and lease liabilities of $399,048 (RMB2,793,341). The difference between the ROU assets and lease liabilities was due to prepaid rent and initial direct cost. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of property and equipment, net | Estimated useful lives (years) Office furniture 5 Electronic equipment 3 |
Schedule of intangible asset | Residual value Estimated useful lives Intangible Asset rate (years) Software % 3 |
ACCOUNTS RECEIVABLES (Tables)
ACCOUNTS RECEIVABLES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
ACCOUNTS RECEIVABLES | |
Schedule of accounts receivables | Activity in the allowance for doubtful accounts was as followings: September 30, December 31, 2020 2019 Accounts receivable $ 4,583,692 $ 5,479,473 Allowance for bad debts (3,938,680) (2,605,348) Accounts receivable, net $ 645,012 $ 2,874,125 Balance, beginning of year $ 2,605,348 $ 1,189,147 Provision (net of recover) 1,333,332 1,557,201 Amounts written off, net of recoveries — (141,000) Balance, end of year $ 3,938,680 $ 2,605,348 |
FIXED ASSETS, NET (Tables)
FIXED ASSETS, NET (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FIXED ASSET, NET | |
Schedule of Fixed asset net | As of September 30, 2020, and December 31, 2019, fixed asset, net as follows: September 30, December 31, 2020 2019 Electronic equipment $ 10,872 $ 6,194 Office furniture 838 817 Less: accumulated depreciation (3,536) (785) Fixed asset - net $ 8,174 $ 6,226 |
INTANGIBLE ASSET, NET (Tables)
INTANGIBLE ASSET, NET (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
INTANGIBLE ASSET, NET | |
Schedule of gross carrying amount and accumulated amortization | The gross carrying amount and accumulated amortization of this asset as of September 30, 2020 and December 31, 2019 are as follows: September 30, December 31, 2020 2019 Intangible asset: online campus system $ 612,814 $ 612,814 Intangible asset: learning platform 120,000 120,000 Less: accumulated amortization (571,732) (460,588) Intangible asset - net $ 161,091 $ 272,226 |
Schedule of future amortization expense to be recognized | The following table is the future amortization expense to be recognized: Year Ending December 31, 2020 $ 2021 2022 2022 $ |
CONCENTRATION OF CREDIT AND B_2
CONCENTRATION OF CREDIT AND BUSINESS RISK (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
CONCENTRATION OF CREDIT AND BUSINESS RISK | |
Schedule of major customers that individually accounted for more than 10% of gross revenue | The following table represents major customers that individually accounted for more than 10% of the Company’s gross revenue for the nine months ended September 30, 2020 and 2019: September 30, 2020 Gross Accounts Revenue Percentage Receivable Percentage Customer 1 $ 146,982 53.1 % $ 1,359,521 30.3 % September 30, 2019 Gross Accounts Revenue Percentage Receivable Percentage Customer 1 $ 2,223,080 47.3 % $ 1,976,639 34.3 % Customer 2 1,141,900 24.3 % 1,723,520 29.9 % |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
DISCONTINUED OPERATIONS | |
Schedule of amount of the major classes of assets and liabilities of discontinued operation | The carrying amount of the major classes of assets and liabilities of discontinued operation as of May 1, 2019 and December 31, 2018 consist of the following: May 1, 2019 December 31, 2018 Assets of discontinued operation: Current assets: Cash and cash equivalents $ 391 $ 391 Accounts receivable 4,864,297 4,595,823 Allowance for doubtful account (4,595,823) (4,595,823) Deferred compensation — 916,668 Total assets of discontinued operation $ 268,865 $ 917,059 Liabilities of discontinued operation: $ — Current liabilities: Accounts payable $ 1,881,404 $ 1,881,404 Other payables — — Total liabilities of discontinued operation $ 1,881,404 $ 1,881,404 |
Schedule of operating result discontinued operation included in consolidated statements of operation | The summarized operating result of discontinued operation included in the Company’s consolidated statements of operation consist of the following: From From January 1 January 1 to to May 1, 2019 December 31, 2018 Revenues $ — $ — Cost of revenues — — Gross profit — — Operating expenses (366,667) (5,587,406) Other income (expenses), net — 4 Loss before income tax (366,667) (5,587,402) Income tax expense (benefit) — (332,187) Loss from discontinued operation (366,667) (5,255,215) Total loss from discontinued operations, net of income taxes $ (366,667) $ (5,255,215) |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
SEGMENT REPORTING | |
Schedule of segment reporting assets and liabilities | The following table shows an analysis by segment of the assets and liabilities of continuing operations as of September 30, 2020 and December 31,2019: September 30, 2020 AEC New York AEC BVI Total Segment assets and liabilities: Segment assets Segment assets from continuing operations $ 2,392,514 $ 766,164 $ 3,158,678 Segment assets of discontinued operations — — — Segment assets $ 2,392,514 $ 766,164 $ 3,158,678 Segment liabilities Segment liabilities from continuing operations $ 2,652,562 $ 1,233,467 $ 3,886,029 Segment liabilities of discontinued operations — — — Segment liabilities $ 2,652,562 $ 1,233,467 $ 3,886,029 December 31, 2019 AEC New York AEC BVI Total Segment assets and liabilities: Segment assets Segment assets from continuing operations $ 6,661,058 $ 772,810 $ 7,433,868 Segment assets of discontinued operations — — — Segment assets $ 6,661,058 $ 772,810 $ 7,433,868 Segment liabilities Segment liabilities from continuing operations $ 5,249,953 $ 965,422 $ 6,215,375 Segment liabilities of discontinued operations — — — Segment liabilities $ 5,249,953 $ 965,422 $ 6,215,375 |
Schedule of segment reporting revenue from external customers | Revenues from external customers, and gross profit for each business are as follows: For the three months ended September 30, 2020 AEC New York AEC BVI Total Segment revenue: Placement advisory $ — $ 865 $ 865 Career advisory — — — Student & Family advisory — — — Other advisory — — — Total revenue from continued operations $ — $ 865 $ 865 Total revenue from discontinued operations — — — Gross profit $ — $ (749) $ (749) For the nine months ended September 30, 2020 AEC New York AEC BVI Total Segment revenue: Placement advisory $ — $ 42,349 $ 42,349 Career advisory 234,191 — 234,191 Student & Family advisory — — — Other advisory 507 — 507 Total revenue from continued operations $ 234,698 $ 42,349 $ 277,047 Total revenue from discontinued operations — — — Gross profit $ 71,808 $ 37,571 $ 109,379 For the three months ended September 30, 2019 AEC New York AEC BVI Total Segment revenue: Placement advisory $ 343,100 $ 89,271 $ 432,371 Career advisory 731,610 — 731,610 Student & Family advisory 400,700 — 400,700 Other advisory — — Total revenue from continued operations $ 1,475,410 $ 89,271 $ 1,564,681 Total revenue from discontinued operations — — — Gross profit $ 607,896 $ 76,396 $ 684,292 For the nine months ended September 30, 2019 AEC New York AEC BVI Total Segment revenue: Placement advisory $ 1,141,900 $ 122,987 $ 1,264,887 Career advisory 2,548,885 — 2,548,885 Student & Family advisory 887,700 — 887,700 Other advisory 3,000 — 3,000 Total revenue from continued operations $ 4,581,485 $ 122,987 $ 4,704,472 Total revenue from discontinued operations - - - Gross profit $ 1,945,284 $ 110,112 $ 2,055,396 |
LEASE COMMITMENTS (Tables)
LEASE COMMITMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
LEASE COMMITMENTS | |
Schedule of future minimum lease commitments | Future minimum lease commitments are as follows on September 30, 2020: Gross Lease Year Ending December 31, Payment 2020 24,568 2021 102,205 2022 and thereafter 262,190 $ 388,963 Less: Present value adjustment (52,075) Operating lease liability $ 336,888 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
INCOME TAXES | |
Schedule of component of deferred tax assets | The component of deferred tax assets at September 30, 2020 and 2019 are as follows: September 30, December 31, 2020 2019 Net operating loss carryforwards $ 709,273 $ 471,404 Allowance for bad debt 1,036,517 558,397 Accelerated Depreciation — — Allowance for deferred tax asset (861,851) (472,186) Deferred tax asset, net $ 883,939 $ 557,615 |
Schedule of provision for income taxes and deferred income taxes | The provision for income taxes and deferred income taxes for three and nine months ended September 30, 2020 and 2019 are as follows: For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Current: Federal $ — $ (1,013) $ — $ 43,654 State — 4,952 — 40,488 Foreign — (265) — — Total current — 3,674 — 84,142 Deferred: Federal (44,592) (61,092) (256,697) 103,230 State 21,960 (48,238) (128,106) 73,048 Foreign — — — — Total deferred (22,632) (109,330) (384,785) 176,278 Total $ (22,632) $ (105,656) $ (384,785) $ 260,420 |
Schedule of reconciliation of the provision for income taxes | A reconciliation of the provision for income taxes, with the amount computed by applying the statutory effective income tax rate for the three and nine months ended September 30, 2020 and 2019 is as follows: For the three months ended For the nine months ended September 30, September 30, 2020 2019 2020 2019 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % 21.0 % State and local taxes, net of federal benefit 11.0 11.0 11.0 11.0 PRC statutory income tax rate 25.0 — 25.0 — Non-deductible/ non-taxable items — — — — Total 57 % 32 % 57 % 32 % |
FINANCIAL INSTRUMENTS (Tables)
FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
FINANCIAL INSTRUMENTS | |
Schedule of carrying value financial assets and liabilities | September 30, December 31, 2020 2019 Cash and cash equivalents of continuing operations $ 741,693 $ 1,035,395 Accounts receivable, prepaid expenses and other current assets 858,723 3,127,655 Other assets of discontinued operations — — Other financial liabilities (i) 3,389,246 4,147,871 Liabilities of discontinued operations $ — $ — (i) |
Schedule of financial assets and liabilities carried at fair value on a recurring basis | The financial assets and liabilities carried at fair value on a recurring basis at September 30, 2020 are as follows: Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents of continuing operations $ $ — $ — $ Cash and cash equivalents of discontinued operations — — — — Other financial assets of continuing operations — — — — Other financial assets of discontinued operations — — — — Total Financial assets $ $ — $ — $ Financial Liabilities Other liabilities of continuing operations $ $ — $ — $ Other liabilities of discontinued operations — — — — Total Financial Liabilities $ $ — $ — $ The financial assets and liabilities carried at fair value on a recurring basis at December 31, 2019 are as follows: Level 1 Level 2 Level 3 Total Financial Assets Cash and cash equivalents of continuing operations $ 1,035,395 $ — $ — $ 1,035,395 Cash and cash equivalents of discontinued operations — — — — Other financial assets of continuing operations — — — — Other financial assets of discontinued operations — — — — Total Financial Assets $ 1,035,395 $ — $ — $ 1,035,395 Financial Liabilities Other liabilities of continuing operations $ 4,147,871 $ — $ — $ 4,147,871 Other liabilities of discontinued operations — — — — Total Financial Liabilities $ 4,147,871 $ — $ — $ 4,147,871 |
Schedule of financial assets past due | The following table provides information regarding the aging of financial assets that are past due, but which are not impaired at September 30, 2020: Less than 90 days to Over Carrying 90 days 1 year 1 year Value Accounts receivable, net $ — $ 549,042 $ — $ 549,042 Other receivable $ 3,968 $ 92,002 $ — $ 95,970 Total accounts receivable, net $ 3,968 $ 641,044 $ — $ 645,012 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
STOCK OPTIONS | |
Schedule of stock option activities | The following is a summary of stock option activities: Weighted- Weighted Average Average Remaining Aggregate Exercise Contractual Intrinsic Shares Price Life Value Outstanding at December 31, 2019 3,200,000 $ 0.89 1.44 years $ — Granted — — — — Exercised — — — — Cancelled and expired — — — — Forfeited — — — — Outstanding at September 30, 2020 3,200,000 $ 2.45 3.12 years $ — Vested and expected to vest at September 30, 2020 3,200,000 $ 0.89 1.08 years $ — Exercisable at September 30, 2020 3,200,000 $ 0.89 1.08 years $ — |
BUSINESS ACQUISITION (Tables)
BUSINESS ACQUISITION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
BUSINESS ACQUISITION | |
Schedule of consideration paid and the amounts of net assets acquired | The following table summarizes the consideration paid and the amounts of net assets acquired as of the date of acquisition: Fair value of net asset acquired (AIFI’s net identified assets) $ 120,000 Less: Fair value of consideration transferred (FMV of AEC’s 100k shares issued) (48,000) Fair value of noncontrolling interest (120k x 49%) (58,800) $ (106,800) Gain on bargain purchase $ 13,200 |
Schedule of estimated fair value of the assets acquired and liabilities assumed | Based upon the purchase price allocations, the following table summarizes the estimated fair value of the assets acquired and liabilities assumed at the Acquisition Date: Cash $ 94,425 Accounts receivable, net — R&D (software development in progress) 25,428 Other current assets 812 Property and equipment 3,684 Total assets acquired on the book value $ 124,349 Other payables $ (4) Total liabilities assumed (4) Net assets acquired on the book value 124,345 Goodwill 139,725 Total purchase price $ 264,070 |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details) | May 01, 2019shares | Apr. 22, 2019 | Jul. 10, 2018shares | Oct. 31, 2016USD ($)shares | May 31, 2014shares | Sep. 30, 2020USD ($)segment | Aug. 18, 2020$ / sharesshares | Dec. 31, 2019USD ($) | Jul. 13, 2018shares | Mar. 29, 2016CNY (¥) |
ORGANIZATION AND BUSINESS | ||||||||||
Common Stock, Value, Issued | $ | $ 60,138 | $ 56,797 | ||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 100 | 1,500,000 | ||||||||
Equity Method Investment, Ownership Percentage | 51.00% | |||||||||
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned | $ | $ 210,000 | |||||||||
Common Stock, Capital Shares Reserved for Future Issuance | 100,000 | |||||||||
Number of Marketing Segments | segment | 2 | |||||||||
Rongxia Wang [Member] | ||||||||||
ORGANIZATION AND BUSINESS | ||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||||||||
AEC New York | ||||||||||
ORGANIZATION AND BUSINESS | ||||||||||
Shares Exchanged By Shareholder | 200 | |||||||||
AEC Nevada [Member] | ||||||||||
ORGANIZATION AND BUSINESS | ||||||||||
Shares Exchanged By Shareholder | 10,563,000 | |||||||||
AEC Southern Management Co [Member] | ||||||||||
ORGANIZATION AND BUSINESS | ||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 100.00% | |||||||||
Qianhai Education Consulting Management Co., Ltd [Member] | Capital Units [Member] | ||||||||||
ORGANIZATION AND BUSINESS | ||||||||||
Common Stock, Value, Issued | ¥ | ¥ 5,000,000 | |||||||||
Shenzhen Zhongwei Technology Co., Ltd [Member] | ||||||||||
ORGANIZATION AND BUSINESS | ||||||||||
Number of shares agree to issue | 2,640,690 | |||||||||
Shares Issued, Price Per Share | $ / shares | $ 0.001 | |||||||||
AEC Southern UK [Member] | ||||||||||
ORGANIZATION AND BUSINESS | ||||||||||
Temporary Equity, Shares Outstanding | 1,000,000 | |||||||||
Business Acquisition, Percentage of Voting Interests Sold | 100.00% | 100.00% | ||||||||
AEC Southern UK [Member] | AEC Nevada [Member] | ||||||||||
ORGANIZATION AND BUSINESS | ||||||||||
Temporary Equity, Shares Outstanding | 1,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Aug. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | May 31, 2019CNY (¥) | May 31, 2019USD ($) | Jan. 01, 2019USD ($) | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | 21.00% | 21.00% | 21.00% | |||||
Tax benefits recognized, percentage | 50.00% | ||||||||
Gross Revenue | $ 865 | $ 1,564,681 | $ 277,047 | $ 4,704,472 | |||||
Percentage | 10.00% | 10.00% | |||||||
Operating Lease, Right-of-Use Asset | 322,560 | $ 322,560 | $ 2,149,710 | ¥ 2,899,099 | $ 414,157 | $ 2,016,142 | |||
Operating Lease, Liability | $ 336,888 | 336,888 | ¥ 2,793,341 | $ 399,048 | $ 2,237,583 | ||||
Marketing and advertising expenses | $ 74,119 | ||||||||
Gain on termination of lease | $ 239,537 | $ 317,257 | |||||||
Income tax rate | 57.00% | 32.00% | 57.00% | 32.00% | |||||
(Benefit) provision for income taxes | $ (22,632) | $ (105,656) | $ (384,785) | $ 260,420 | |||||
Related Party Transaction | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
Percentage | 10.00% | ||||||||
UNITED STATES | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||||||||
Gross Revenue | 0 | $ 1,475,410 | $ 234,698 | $ 4,581,485 | |||||
The People's Republic of China | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
Income tax rate | 25.00% | ||||||||
The People's Republic of China | AEC Southern Shenzhen | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
(Benefit) provision for income taxes | $ 0 | ||||||||
Gross Revenue [Member] | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
Gross Revenue | $ 104,000 | ||||||||
Percentage | 38.00% | ||||||||
Accounts Receivable [Member] | |||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||
Accounts Receivable, Net | $ 173,047 | $ 173,047 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of estimated useful lives of property and equipment (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Office furniture | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Electronic equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible Asset (Details) - Software | 9 Months Ended |
Sep. 30, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Acquired intangible asset useful life | 10 years |
Residual value rate | 0.00% |
Finite-Lived Intangible Asset, Useful Life | 3 years |
ACCOUNTS RECEIVABLES (Details)
ACCOUNTS RECEIVABLES (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
ACCOUNTS RECEIVABLES | |||||
Accounts receivable | $ 4,583,692 | $ 5,479,473 | |||
Allowance for bad debts | $ (2,605,348) | $ (1,189,147) | $ (1,189,147) | (3,938,680) | (2,605,348) |
Accounts receivable, net | $ 645,012 | $ 2,874,125 | |||
Activity in the allowance for doubtful accounts | |||||
Balance, beginning of year | 2,605,348 | 1,189,147 | 1,189,147 | ||
Provision (net of recover) | 1,333,332 | $ 763,311 | 1,557,201 | ||
Amounts written off, net of recoveries | 0 | (141,000) | |||
Balance, end of year | $ 3,938,680 | $ 2,605,348 |
FIXED ASSETS, NET - Fixed Asset
FIXED ASSETS, NET - Fixed Assets, Net (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (3,536) | $ (785) |
Fixed asset - net | 8,174 | 6,226 |
Electronic equipment | ||
Property, Plant and Equipment [Line Items] | ||
Fixed asset - Gross | 10,872 | 6,194 |
Office furniture | ||
Property, Plant and Equipment [Line Items] | ||
Fixed asset - Gross | $ 838 | $ 817 |
FIXED ASSETS, NET - Additional
FIXED ASSETS, NET - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
FIXED ASSET, NET | ||||
Depreciation expense for fixed assets | $ 552 | $ 262 | $ 1,898 | $ 262 |
INTANGIBLE ASSET, NET - Gross C
INTANGIBLE ASSET, NET - Gross Carrying Amount and Accumulated Amortization (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Less: accumulated amortization | $ (571,732) | $ (460,588) |
Intangible asset - net | 161,091 | 272,226 |
Intangible asset: online campus system | ||
Intangible asset, gross | 612,814 | 612,814 |
Intangible asset: learning platform | ||
Intangible asset, gross | $ 120,000 | $ 120,000 |
INTANGIBLE ASSET, NET - Future
INTANGIBLE ASSET, NET - Future Amortization Expense (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
INTANGIBLE ASSET, NET | ||
2020 | $ 37,046 | |
2021 | 46,045 | |
2022 | 12,000 | |
2022 | 66,000 | |
Intangible asset - net | $ 161,091 | $ 272,226 |
INTANGIBLE ASSET, NET - Additio
INTANGIBLE ASSET, NET - Additional Disclosure (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
INTANGIBLE ASSET, NET | ||||
Amortization of Intangible Assets | $ 34,045 | $ 37,045 | $ 74,090 | $ 74,090 |
GOODWILL (Details)
GOODWILL (Details) | Sep. 30, 2020USD ($) |
GOODWILL | |
Goodwill | $ 139,725 |
DEFERRED COMPENSATION (Details)
DEFERRED COMPENSATION (Details) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | Oct. 31, 2016USD ($)$ / sharesshares | Sep. 30, 2020$ / shares | Dec. 31, 2019$ / shares |
Share Price | $ / shares | $ 0.66 | $ 0.66 | |||
AEC Southern Management Co., Ltd. [Member] | Chief Executive Officer [Member] | |||||
Deferred Compensation Arrangement with Individual, Shares Issued | shares | 1,500,000 | ||||
Service period | 3 years | ||||
Share Price | $ / shares | $ 0.14 | ||||
Deferred Compensation Arrangement with Individual, Allocated Share-based Compensation Expense | $ | 198,333.33 | ||||
Deferred Compensation Arrangement with Individual, Recorded Liability | $ | $ 210,000 | ||||
AEC Southern Management Co., Ltd. [Member] | Board of Directors Chairman [Member] | |||||
Deferred Compensation Arrangement with Individual, Shares Issued | shares | 6,000,000 | ||||
Service period | 3 years | ||||
Share Price | $ / shares | $ 0.55 | ||||
Deferred Compensation Equity | $ | $ 3,300,000 |
SECURITY DEPOSITS (Details)
SECURITY DEPOSITS (Details) | Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
SECURITY DEPOSITS | |||
Deposits Assets, Noncurrent | $ 16,851 | $ 285,041 | |
AEC New York | |||
SECURITY DEPOSITS | |||
Deposits Assets, Noncurrent | 0 | ||
AEC Shenzhen | |||
SECURITY DEPOSITS | |||
Deposits Assets, Noncurrent | ¥ 114,412 | $ 16,851 |
CONCENTRATION OF CREDIT AND B_3
CONCENTRATION OF CREDIT AND BUSINESS RISK (Details) | 9 Months Ended | |||
Sep. 30, 2020HKD ($)item | Sep. 30, 2019 | Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($) | |
Cash, FDIC Insured Amount | $ | $ 250,000 | |||
Cash, Uninsured Amount | $ 500,000 | ¥ 500,000 | ||
Concentration Risk, Percentage | 10.00% | 10.00% | ||
UNITED STATES | ||||
Number of commercial banks cash accounts | 2 | |||
The People's Republic of China | ||||
Number of commercial banks cash accounts | 3 | |||
Hong Kong | ||||
Number of commercial banks cash accounts | 1 |
CONCENTRATION OF CREDIT AND B_4
CONCENTRATION OF CREDIT AND BUSINESS RISK - Customers Gross Revenue (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Gross Revenue | $ 865 | $ 1,564,681 | $ 277,047 | $ 4,704,472 |
Percentage | 10.00% | 10.00% | ||
Gross Revenue [Member] | ||||
Gross Revenue | $ 104,000 | |||
Percentage | 38.00% | |||
Accounts Receivable [Member] | ||||
Total accounts receivable | 173,047 | $ 173,047 | ||
Customer 1 [Member] | Gross Revenue [Member] | ||||
Gross Revenue | $ 146,982 | $ 2,223,080 | ||
Percentage | 53.10% | 47.30% | ||
Customer 1 [Member] | Accounts Receivable [Member] | ||||
Total accounts receivable | $ 1,359,521 | 1,976,639 | $ 1,359,521 | $ 1,976,639 |
Percentage | 30.30% | 34.30% | ||
Customer 2 [Member] | Gross Revenue [Member] | ||||
Gross Revenue | $ 1,141,900 | |||
Percentage | 24.30% | |||
Customer 2 [Member] | Accounts Receivable [Member] | ||||
Total accounts receivable | $ 1,723,520 | $ 1,723,520 | ||
Percentage | 29.90% |
DISCONTINUED OPERATIONS - Class
DISCONTINUED OPERATIONS - Classes of Assets and Liabilities (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | May 01, 2019 | Dec. 31, 2018 |
Current assets: | ||||
Cash and cash equivalents | $ 0 | $ 0 | $ 391 | $ 391 |
Accounts receivable | 4,864,297 | 4,595,823 | ||
Allowance for doubtful account | (4,595,823) | (4,595,823) | ||
Deferred compensation | 0 | 916,668 | ||
Total assets of discontinued operation | 0 | 268,865 | 917,059 | |
Current liabilities: | ||||
Accounts payable | 1,881,404 | 1,881,404 | ||
Other payables | 0 | 0 | ||
Total liabilities of discontinued operation | $ 0 | $ 1,881,404 | $ 1,881,404 |
DISCONTINUED OPERATIONS - Summa
DISCONTINUED OPERATIONS - Summarized Operating Result (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | May 01, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | |
DISCONTINUED OPERATIONS | |||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 | |
Cost of revenues | 0 | 0 | |||
Gross profit | 0 | 0 | |||
Operating expenses | (366,667) | (5,587,406) | |||
Other income (expenses), net | 0 | 4 | |||
Loss before income tax | (366,667) | (5,587,402) | |||
Income tax expense (benefit) | 0 | (332,187) | |||
Loss from discontinued operation | (366,667) | $ 0 | $ 561,807 | (5,255,215) | |
Total loss from discontinued operations, net of income taxes | $ (366,667) | $ (5,255,215) |
DISCONTINUED OPERATIONS - Addit
DISCONTINUED OPERATIONS - Additional Disclosure (Details) - USD ($) | May 01, 2019 | Apr. 22, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Gain from disposal of the discontinued operation, net of income taxes | $ 0 | $ 561,807 | ||
AEC Southern UK [Member] | ||||
Noncontrolling Interest, Description | AEC Nevada sold 100% of the equity interest in AEC Southern UK to three individuals, Ye Tian, Rongxia Wang and Weishou Li, and received a consideration of 1,000,000 shares of outstanding shares of AEC Nevada which was valued at $660,000 and the debt owed to AEC Southern UK in the amount of $268,475 was forgiven by AEC Southern UK. | |||
Business Acquisition Percentage Of Voting Interests Sold | 100.00% | 100.00% | ||
Temporary Equity, Shares Outstanding | 1,000,000 | |||
Temporary Equity, Shares Outstanding Value | $ 660,000 | |||
Temporary Equity, Debt Owned | $ 268,475 |
SEGMENT REPORTING - Segment ass
SEGMENT REPORTING - Segment assets and liabilities of continuing and discontinued operations (Details) - USD ($) | 3 Months Ended | 4 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | May 01, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Segment revenue: | |||||||
Total revenue | $ 865 | $ 1,564,681 | $ 277,047 | $ 4,704,472 | |||
Total revenue from discontinued operations | 0 | $ 0 | 0 | $ 0 | |||
Gross profit | (749) | 684,292 | 109,379 | 2,055,396 | |||
SEGMENT REPORTING | |||||||
Segment assets | 3,158,678 | 3,158,678 | $ 7,433,868 | ||||
Segment liabilities | 3,886,029 | 3,886,029 | 6,215,375 | ||||
Continuing operations | |||||||
SEGMENT REPORTING | |||||||
Segment assets | 3,158,678 | 3,158,678 | 7,433,868 | ||||
Segment liabilities | 3,886,029 | 3,886,029 | 6,215,375 | ||||
UNITED STATES | |||||||
Segment revenue: | |||||||
Total revenue | 0 | 1,475,410 | 234,698 | 4,581,485 | |||
Total revenue from discontinued operations | 0 | 0 | |||||
Gross profit | 0 | 607,896 | 71,808 | 1,945,284 | |||
SEGMENT REPORTING | |||||||
Segment assets | 2,392,514 | 2,392,514 | 6,661,058 | ||||
Segment liabilities | 2,652,562 | 2,652,562 | 5,249,953 | ||||
UNITED STATES | Continuing operations | |||||||
SEGMENT REPORTING | |||||||
Segment assets | 2,392,514 | 2,392,514 | 6,661,058 | ||||
Segment liabilities | 2,652,562 | 2,652,562 | 5,249,953 | ||||
BRITISH VIRGIN ISLAND | |||||||
Segment revenue: | |||||||
Total revenue | 865 | 89,271 | 42,349 | 122,987 | |||
Total revenue from discontinued operations | 0 | 0 | |||||
Gross profit | (749) | 76,396 | 37,571 | 110,112 | |||
SEGMENT REPORTING | |||||||
Segment assets | 766,164 | 766,164 | 772,810 | ||||
Segment liabilities | 1,233,467 | 1,233,467 | 965,422 | ||||
BRITISH VIRGIN ISLAND | Continuing operations | |||||||
SEGMENT REPORTING | |||||||
Segment assets | 766,164 | 766,164 | 772,810 | ||||
Segment liabilities | 1,233,467 | 1,233,467 | $ 965,422 | ||||
Placement advisory [Member] | |||||||
Segment revenue: | |||||||
Total revenue | 865 | 432,371 | 42,349 | 1,264,887 | |||
Placement advisory [Member] | UNITED STATES | |||||||
Segment revenue: | |||||||
Total revenue | 0 | 343,100 | 0 | 1,141,900 | |||
Placement advisory [Member] | BRITISH VIRGIN ISLAND | |||||||
Segment revenue: | |||||||
Total revenue | 865 | 89,271 | 42,349 | 122,987 | |||
Career advisory [Member] | |||||||
Segment revenue: | |||||||
Total revenue | 0 | 731,610 | 234,191 | 2,548,885 | |||
Career advisory [Member] | UNITED STATES | |||||||
Segment revenue: | |||||||
Total revenue | 0 | 731,610 | 234,191 | 2,548,885 | |||
Career advisory [Member] | BRITISH VIRGIN ISLAND | |||||||
Segment revenue: | |||||||
Total revenue | 0 | 0 | |||||
Student & Family advisory [Member] | |||||||
Segment revenue: | |||||||
Total revenue | 0 | 400,700 | 0 | 887,700 | |||
Student & Family advisory [Member] | UNITED STATES | |||||||
Segment revenue: | |||||||
Total revenue | 0 | $ 400,700 | 0 | 887,700 | |||
Student & Family advisory [Member] | BRITISH VIRGIN ISLAND | |||||||
Segment revenue: | |||||||
Total revenue | 0 | 0 | |||||
Other advisory [member] | |||||||
Segment revenue: | |||||||
Total revenue | 0 | 507 | 3,000 | ||||
Other advisory [member] | UNITED STATES | |||||||
Segment revenue: | |||||||
Total revenue | 0 | 507 | $ 3,000 | ||||
Other advisory [member] | BRITISH VIRGIN ISLAND | |||||||
Segment revenue: | |||||||
Total revenue | $ 0 | $ 0 |
SEGMENT REPORTING - Additional
SEGMENT REPORTING - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020segment | |
SEGMENT REPORTING | |
Number of Operating Segments | 2 |
DEFERRED REVENUE (Details)
DEFERRED REVENUE (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
DEFERRED REVENUE | ||
Deferred Revenue, Current | $ 94,558 | $ 215,500 |
RELATED-PARTY TRANSACTIONS (Det
RELATED-PARTY TRANSACTIONS (Details) | 9 Months Ended | ||||
Sep. 30, 2020CNY (¥) | Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Nov. 26, 2018$ / sharesshares | Nov. 13, 2018$ / shares | |
RELATED-PARTY TRANSACTIONS | |||||
Prepaid Expense Current | $ 213,711 | $ 253,530 | |||
Due to Related Parties, Current | $ 0 | $ 98,433 | |||
Series B Preferred Stock | |||||
RELATED-PARTY TRANSACTIONS | |||||
Preferred Stock, Shares Issued | shares | 25,000,000 | 0 | |||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||
Series B Preferred Stock | Chief Executive Officer [Member] | |||||
RELATED-PARTY TRANSACTIONS | |||||
Preferred Stock, Shares Issued | shares | 12,500,000 | ||||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | ||||
Student Consulting [Member] | |||||
RELATED-PARTY TRANSACTIONS | |||||
Prepaid Expense Current | $ 48,000 | ||||
Business Consulting Services [Member] | |||||
RELATED-PARTY TRANSACTIONS | |||||
Prepaid Expense Current | $ 50,000 | ||||
Columbia International College, Inc [Member] | |||||
RELATED-PARTY TRANSACTIONS | |||||
Related Party Transaction, Rate | 34.00% | 34.00% | |||
Wall Street Innovation Center, Inc [Member] | |||||
RELATED-PARTY TRANSACTIONS | |||||
Related Party Transaction, Rate | 40.00% | 40.00% | |||
Stockholder [Member] | |||||
RELATED-PARTY TRANSACTIONS | |||||
Proceeds from Related Party Debt | ¥ 2,000,000 | $ 283,082 | |||
Due to Related Parties, Current | $ 883,704 | $ 574,564 |
LONG-TERM LOAN (Details)
LONG-TERM LOAN (Details) - USD ($) | Apr. 24, 2020 | Nov. 10, 2017 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 01, 2020 | May 04, 2020 | Dec. 01, 2014 |
LONG-TERM LOAN | |||||||||
Long-term Debt, Excluding Current Maturities | $ 236,588 | $ 236,588 | $ 295,579 | ||||||
Debt Instrument, Interest Rate, Effective Percentage | 10.00% | ||||||||
Repayments of Long-term Debt | $ 150,000 | ||||||||
Interest Expense, Debt | $ 0 | $ 3,639 | $ 527 | $ 14,558 | |||||
Paycheck Protection Program Loan | |||||||||
LONG-TERM LOAN | |||||||||
Loan amount approved and received | $ 77,588 | ||||||||
Interest rate (in percentage) | 1.00% | ||||||||
Economic Injury Disaster Loan | |||||||||
LONG-TERM LOAN | |||||||||
Loan amount approved and received | $ 150,000 | ||||||||
Interest rate (in percentage) | 3.75% | ||||||||
Economic Injury Disaster Loan | AEC New York | |||||||||
LONG-TERM LOAN | |||||||||
Loan proceeds received | $ 9,000 |
LEASE COMMITMENTS - Future Mini
LEASE COMMITMENTS - Future Minimum Lease Commitments (Details) | Sep. 30, 2020USD ($) | May 31, 2019CNY (¥) | May 31, 2019USD ($) | Jan. 01, 2019USD ($) |
LEASE COMMITMENTS | ||||
2020 | $ 24,568 | |||
2021 | 102,205 | |||
2022 and thereafter | 262,190 | |||
Total | 388,963 | |||
Less: Present value adjustment | (52,075) | |||
Operating lease liability | $ 336,888 | ¥ 2,793,341 | $ 399,048 | $ 2,237,583 |
LEASE COMMITMENTS - Additional
LEASE COMMITMENTS - Additional Disclosure (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Dec. 31, 2014ft²lease | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | May 31, 2019CNY (¥) | May 31, 2019USD ($) | Jan. 01, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |||||||||
Operating Lease, Weighted Average Discount Rate, Percent | 8.05% | 8.05% | 8.16% | 8.16% | |||||
Operating Lease, Right-of-Use Asset | $ 322,560 | $ 322,560 | $ 2,149,710 | ¥ 2,899,099 | $ 414,157 | $ 2,016,142 | |||
Operating Lease, Liability | 336,888 | 336,888 | ¥ 2,793,341 | $ 399,048 | 2,237,583 | ||||
Operating Lease, Liability, Current | 76,693 | 76,693 | 331,670 | ||||||
Operating Lease, Liability, Noncurrent | 260,195 | 260,195 | $ 2,067,504 | ||||||
Operating Leases, Rent Expense | $ 129,110 | $ 133,155 | 356,376 | $ 358,232 | |||||
SBA Loan [Member] | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Operating Lease, Right-of-Use Asset | 2,016,142 | ||||||||
Operating Lease, Liability | $ 2,237,583 | ||||||||
Unrelated Party [Member] | |||||||||
Lessee, Lease, Description [Line Items] | |||||||||
Lease Expiration Date | Jul. 31, 2025 | ||||||||
Number of Operating Lease | lease | 2 | ||||||||
Straight Line Rent | $ 34,065 | ||||||||
Area of Land | ft² | 10,086 |
INCOME TAXES - Component of Def
INCOME TAXES - Component of Deferred Tax Assets (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
INCOME TAXES | ||
Net operating loss carryforwards | $ 709,273 | $ 471,404 |
Allowance for bad debt | 1,036,517 | 558,397 |
Accelerated Depreciation | 0 | 0 |
Allowance for deferred tax asset | (861,851) | (472,186) |
Deferred tax asset, net | $ 883,939 | $ 557,615 |
INCOME TAXES - Provision For In
INCOME TAXES - Provision For Income Taxes And Deferred Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Current: | ||||
Federal | $ 0 | $ (1,013) | $ 0 | $ 43,654 |
State | 0 | 4,952 | 0 | 40,488 |
Foreign | 0 | (265) | 0 | 0 |
Total Current | 0 | 3,674 | 0 | 84,142 |
Deferred: | ||||
Federal | (44,592) | (61,092) | (256,697) | 103,230 |
State | 21,960 | (48,238) | (128,106) | 73,048 |
Foreign | 0 | 0 | 0 | 0 |
Total deferred | (22,632) | (109,330) | (384,785) | 176,278 |
Income Tax Expense (Benefit) | $ (22,632) | $ (105,656) | $ (384,785) | $ 260,420 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of The Provision For Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
INCOME TAXES | ||||
Tax at federal statutory rate | 21.00% | 21.00% | 21.00% | 21.00% |
State and local taxes, net of federal benefit | 11.00% | 11.00% | 11.00% | 11.00% |
PRC statutory income tax rate | 25.00% | 0.00% | 25.00% | 0.00% |
Non-deductible/ non-taxable items | 0.00% | 0.00% | 0.00% | 0.00% |
Total | 57.00% | 32.00% | 57.00% | 32.00% |
FINANCIAL INSTRUMENTS - Summari
FINANCIAL INSTRUMENTS - Summarizes Carrying values (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Cash and cash equivalents | $ 741,693 | $ 1,035,395 |
Liabilities | 3,389,246 | 4,147,871 |
Continuing operations | ||
Cash and cash equivalents | 741,693 | 1,035,395 |
Accounts receivable, prepaid expenses and other current assets | 858,723 | 3,127,655 |
Other financial liabilities | 3,389,246 | 4,147,871 |
Discontinued operations | ||
Other assets | 0 | 0 |
Liabilities | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS - Fair Va
FINANCIAL INSTRUMENTS - Fair Value on A Recurring Basis (Details) - Recurring basis - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Assets, Fair Value Disclosure | ||
Total Financial assets | $ 741,693 | $ 1,035,395 |
Liabilities, Fair Value Disclosure | ||
Total Financial Liabilities | 3,389,247 | 4,147,871 |
Continuing operations | ||
Assets, Fair Value Disclosure | ||
Cash and cash equivalents | 741,693 | 1,035,395 |
Other financial assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Other liabilities | 3,389,247 | 4,147,871 |
Discontinued operations | ||
Assets, Fair Value Disclosure | ||
Cash and cash equivalents | 0 | 0 |
Other financial assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Other liabilities | 0 | 0 |
Level 1 | ||
Assets, Fair Value Disclosure | ||
Total Financial assets | 741,693 | 1,035,395 |
Liabilities, Fair Value Disclosure | ||
Total Financial Liabilities | 3,389,246 | 4,147,871 |
Level 1 | Continuing operations | ||
Assets, Fair Value Disclosure | ||
Cash and cash equivalents | 741,693 | 1,035,395 |
Other financial assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Other liabilities | 3,389,246 | 4,147,871 |
Level 1 | Discontinued operations | ||
Assets, Fair Value Disclosure | ||
Cash and cash equivalents | 0 | 0 |
Other financial assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Other liabilities | 0 | 0 |
Level 2 | ||
Assets, Fair Value Disclosure | ||
Total Financial assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Total Financial Liabilities | 0 | 0 |
Level 2 | Continuing operations | ||
Assets, Fair Value Disclosure | ||
Cash and cash equivalents | 0 | 0 |
Other financial assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Other liabilities | 0 | 0 |
Level 2 | Discontinued operations | ||
Assets, Fair Value Disclosure | ||
Cash and cash equivalents | 0 | 0 |
Other financial assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Other liabilities | 0 | 0 |
Level 3 | ||
Assets, Fair Value Disclosure | ||
Total Financial assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Total Financial Liabilities | 0 | 0 |
Level 3 | Continuing operations | ||
Assets, Fair Value Disclosure | ||
Cash and cash equivalents | 0 | 0 |
Other financial assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Other liabilities | 0 | 0 |
Level 3 | Discontinued operations | ||
Assets, Fair Value Disclosure | ||
Cash and cash equivalents | 0 | 0 |
Other financial assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Other liabilities | $ 0 | $ 0 |
FINANCIAL INSTRUMENTS - Financi
FINANCIAL INSTRUMENTS - Financial Assets Past Due (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
FINANCIAL INSTRUMENTS | ||
Accounts receivable, net | $ 549,042 | |
Other receivable | 95,970 | |
Total accounts receivable, net | 645,012 | $ 2,874,125 |
Net amounts outstanding | 0 | |
Less than 90 days | ||
FINANCIAL INSTRUMENTS | ||
Accounts receivable, net | 0 | |
Other receivable | 3,968 | |
Total accounts receivable, net | 3,968 | |
90 days to 1 year | ||
FINANCIAL INSTRUMENTS | ||
Accounts receivable, net | 549,042 | |
Other receivable | 92,002 | |
Total accounts receivable, net | 641,044 | |
Over 1 year | ||
FINANCIAL INSTRUMENTS | ||
Accounts receivable, net | 0 | |
Other receivable | 0 | |
Total accounts receivable, net | $ 0 |
STOCK OPTIONS (Details)
STOCK OPTIONS (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
STOCK OPTIONS | |||
Shares, Outstanding at Beginning | 3,200,000 | ||
Shares, Granted | 0 | ||
Shares, Exercised | 0 | 0 | |
Shares, Cancelled and expired | 0 | ||
Shares, Forfeited | 0 | ||
Shares, Outstanding at Ending | 3,200,000 | 3,200,000 | |
Shares, Vested and expected to vest at Sep 30, 2020 | 3,200,000 | ||
Shares, Exercisable at Sep 30, 2020 | 3,200,000 | ||
Weighted Average Exercise, Outstanding at Beginning | $ 0.89 | ||
Weighted Average Exercise Price, Granted | 0 | ||
Weighted Average Exercise Price, Exercised | 0 | ||
Weighted Average Exercise Price, Cancelled and expired | 0 | ||
Weighted Average Exercise Price, Forfeited | 0 | ||
Weighted Average Exercise Price, Outstanding at Ending | 2.45 | $ 0.89 | |
Weighted Average Exercise Price, Vested and expected to vest at Sep 30, 2020 | 0.89 | ||
Weighted Average Exercise Price, Exercisable at Sep 30, 2020 | $ 0.89 | ||
Weighted- Average Remaining Contractual Life, Outstanding | 3 years 1 month 13 days | 1 year 5 months 9 days | |
Weighted- Average Remaining Contractual Life, Vested and expected to vest at Sep 30, 2020 | 1 year 29 days | ||
Weighted- Average Remaining Contractual Life, Exercisable at Sep 30, 2020 | 1 year 29 days | ||
Aggregate Intrinsic Value, Outstanding | $ 0 | $ 0 | |
Aggregate Intrinsic Value, Vested and expected to vest at Sep 30, 2020 | 0 | ||
Aggregate Intrinsic Value, Exercisable at Sep 30, 2020 | 0 | ||
Estimated fair value of options | 0 | 0 | |
Compensation expense | $ 0 | $ 0 |
COMMON STOCK (Details)
COMMON STOCK (Details) | Jul. 10, 2018$ / sharesshares | Jan. 31, 2020shares | May 31, 2019USD ($)shares | Aug. 31, 2018USD ($)shares | Jul. 31, 2018USD ($)shares | Aug. 31, 2018shares | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019HKD ($) | Dec. 31, 2019USD ($)$ / sharesshares | Sep. 30, 2020$ / sharesshares | Aug. 18, 2020$ / sharesshares | Nov. 26, 2018CNY (¥)shares | Nov. 26, 2018$ / shares | Nov. 06, 2018shares | Jul. 13, 2018 |
Class of Stock [Line Items] | ||||||||||||||||
Equity Method Investment, Ownership Percentage | 51.00% | |||||||||||||||
Stock To Be Issued During Period Shares Issued for Services And Employees | 700,000 | 15,000 | 433,000 | 448,000 | ||||||||||||
Stock To Be Issued During Period Shares Issued for Services | 200,000 | |||||||||||||||
Stock To Be Issued During Period Value Issued For Services | $ | $ 62,000 | |||||||||||||||
Stock to be Issued During Period Value Issued for Services and Employees | $ | $ 7,000 | $ 199,840 | ||||||||||||||
Stock Issued During Period, Value, New Issues | $ | $ (16,376) | $ 143,982 | ||||||||||||||
Common Stock, Shares Authorized | 450,000,000 | 450,000,000 | 450,000,000 | |||||||||||||
Preferred Stock, Shares Authorized | 50,000,000 | |||||||||||||||
Treasury stock at cost (in dollars per share) | $ / shares | $ 0.66 | $ 0.66 | ||||||||||||||
Previously Reported [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Common Stock, Shares Authorized | 180,000,000 | |||||||||||||||
Preferred Stock, Shares Authorized | 20,000,000 | |||||||||||||||
CCFH Investment [Member] | Share Issuance Agreement [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Equity Method Investments | ¥ | ¥ 5,000,000 | |||||||||||||||
Consideration received upon issuance of common stock | $ 1,000,000 | $ 127,606 | ||||||||||||||
American Institute Of Financial Intelligence LLC [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares Issued, Price Per Share | $ / shares | $ 0.48 | |||||||||||||||
Business Acquisition, Percentage of Voting Interests Acquired | 51.00% | |||||||||||||||
Stock Issued During Period, Shares, Acquisitions | 100,000 | |||||||||||||||
American Institute Of Financial Intelligence LLC [Member] | FIFPAC Inc [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Equity Method Investment, Ownership Percentage | 100.00% | |||||||||||||||
Shenzhen Zhongwei Technology Co., Ltd [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Shares Issued, Price Per Share | $ / shares | $ 0.001 | |||||||||||||||
Number of shares agree to issue | 2,640,690 | |||||||||||||||
China Cultural Finance Holdings Company Limited [Member] | Share Issuance Agreement [Member] | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of shares agree to issue | 7,199,113 | |||||||||||||||
Treasury stock at cost (in dollars per share) | $ / shares | $ 0.10 |
SERIES B PREFERRED STOCK (Detai
SERIES B PREFERRED STOCK (Details) - USD ($) | Nov. 26, 2018 | Nov. 13, 2018 | Sep. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Class of Stock [Line Items] | |||||
Preferred Stock, Shares Subscribed but Unissued | 50,000,000 | ||||
Share-based Compensation | $ 0 | $ 0 | |||
Mr Max P Chen [Member] | |||||
Class of Stock [Line Items] | |||||
Share-based Compensation | $ 1,250,000 | ||||
Exchange Agreement [Member] | |||||
Class of Stock [Line Items] | |||||
Common Stock, Shares, Issued | 7,500,000 | ||||
Convertible Preferred Stock, Shares Reserved for Future Issuance | 7,500,000 | ||||
Series B Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Shares Issued | 25,000,000 | 0 | |||
Preferred Stock, Shares Subscribed but Unissued | 25,000,000 | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Preferred Stock Convertible Conversion price | $ 1 | ||||
Preferred Stock, Voting Rights | Holders of shares of Series B Preferred Stock are entitled to vote with shareholders of the Company's common stock, voting together as a single class, except on matters that require a separate vote of the holders of Series B Preferred Stock. In any such vote, each share of Series B Preferred Stock is entitled to 20 votes per share. | ||||
Series B Preferred Stock | Mr Max P Chen [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Shares Issued | 12,500,000 | ||||
Series B Preferred Stock | Exchange Agreement [Member] | |||||
Class of Stock [Line Items] | |||||
Stock Issued During Period, Shares, New Issues | 12,500,000 | ||||
Convertible Preferred Stock, Shares Reserved for Future Issuance | 12,500,000 | ||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | ||||
Series A Preferred Stock | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Shares Issued | 0 | 0 | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Series A Preferred Stock | Exchange Agreement [Member] | |||||
Class of Stock [Line Items] | |||||
Convertible Preferred Stock Number of Shares Converted | 500,000 |
BUSINESS ACQUISITION - Consider
BUSINESS ACQUISITION - Consideration Paid And The Amounts of Net Assets Acquired (Details) - USD ($) | Jul. 10, 2018 | Oct. 31, 2016 | Sep. 30, 2020 |
BUSINESS ACQUISITION | |||
Fair value of net asset acquired (AIFI's net identified assets) | $ 120,000 | $ 124,349 | |
Fair value of consideration transferred (FMV of AEC's 100k shares issued) | (48,000) | ||
Fair value of noncontrolling interest (120k x 49%) | (58,800) | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest | (106,800) | ||
Gain on bargain purchase | $ 13,200 | ||
Number of shares issued | 100 | 1,500,000 | |
AEC Southern UK [Member] | |||
BUSINESS ACQUISITION | |||
Percentage of noncontrolling interest | 49.00% |
BUSINESS ACQUISITION - Estimate
BUSINESS ACQUISITION - Estimated fair value of the assets acquired and liabilities assumed (Details) - USD ($) | Sep. 30, 2020 | Jul. 10, 2018 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||
Cash | $ 94,425 | |
R&D (software development in progress) | 25,428 | |
Other current assets | 812 | |
Property and equipment | 3,684 | |
Total assets acquired on the book value | 124,349 | $ 120,000 |
Other payables | (4) | |
Total liabilities assumed | (4) | |
Net assets acquired on the book value | 124,345 | |
Goodwill | 139,725 | |
Total purchase price | $ 264,070 |
BUSINESS ACQUISITION - Addition
BUSINESS ACQUISITION - Additional Disclosure (Details) - USD ($) | Aug. 18, 2020 | Jul. 10, 2018 | Jul. 13, 2018 |
Equity Method Investment, Ownership Percentage | 51.00% | ||
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 13,200 | ||
American Institute Of Financial Intelligence LLC [Member] | |||
Shares Issued, Price Per Share | $ 0.48 | ||
Business Acquisition, Percentage of Voting Interests Acquired | 51.00% | ||
Business Combination, Bargain Purchase, Gain Recognized, Amount | $ 13,200 | ||
American Institute Of Financial Intelligence LLC [Member] | FIFPAC Inc [Member] | |||
Equity Method Investment, Ownership Percentage | 100.00% | ||
Shenzhen Zhongwei Technology Co., Ltd [Member] | |||
Shares Issued, Price Per Share | $ 0.001 | ||
Number of shares agree to issue | 2,640,690 | ||
Aggregate value of share under agreement | $ 264,070 | ||
Shares at, per share | $ 0.1 |