Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 20, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | GD CULTURE GROUP LIMITED | |
Trading Symbol | GDC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 4,489,816 | |
Amendment Flag | false | |
Entity Central Index Key | 0001641398 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-37513 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 47-3709051 | |
Entity Address, Address Line One | 22F - 810 | |
Entity Address, Address Line Two | Seventh Avenue | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10019 | |
City Area Code | +1-347- | |
Local Phone Number | 2590292 | |
Title of 12(b) Security | Common Stock, par value $0.0001 | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 1,647,148 | $ 389,108 |
Accounts receivable, net | 150,000 | 194,520 |
Other receivables, net | 146,575 | 1,026,293 |
Prepayments | 4,582,684 | |
Total current assets | 6,626,407 | 1,609,921 |
NON-CURRENT ASSETS | ||
Plant and equipment, net | 8,866 | 502 |
Operating lease right-of-use assets, net | 1,683,518 | |
Goodwill | 2,190,485 | |
Intangible assets, net | 3,087,500 | |
Long-term investments, net | 2,500,000 | |
Total non-current assets | 7,279,884 | 2,190,987 |
Total assets | 13,906,291 | 3,800,908 |
CURRENT LIABILITIES | ||
Accounts payable | 3,838 | 127,475 |
Other payables and accrued liabilities | 2,729 | 2,099 |
Current portion of operating lease liabilities | 324,162 | |
Taxes payable | 8,478 | |
Total current liabilities | 330,729 | 333,784 |
NON-CURRENT LIABILITIES | ||
Non-current portion of operating lease liabilities | 1,388,238 | |
Total non-current liabilities | 1,388,238 | |
Total liabilities | 1,718,967 | 333,784 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ EQUITY | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 3,053,563 and 1,844,877 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 305 | 184 |
Stock subscription receivable | (1,370,614) | |
Additional paid-in capital | 68,544,206 | 60,124,087 |
Statutory reserves | 4,467 | 4,467 |
Accumulated deficit | (60,446,156) | (56,841,074) |
Accumulated other comprehensive income | 71,468 | 179,460 |
Total GD Culture Group Limited shareholders’ equity | 6,803,676 | 3,467,124 |
Noncontrolling interest | 5,383,648 | |
Total shareholders’ equity | 12,187,324 | 3,467,124 |
Total liabilities and shareholders’ equity | 13,906,291 | 3,800,908 |
Related Party | ||
CURRENT ASSETS | ||
Prepaid expense - related party | 100,000 | |
CURRENT LIABILITIES | ||
Other payables - related parties | $ 195,732 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 3,053,563 | 1,844,877 |
Common stock, shares outstanding | 3,053,563 | 1,844,877 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
REVENUES | ||||
Enterprise brand management services | $ 150,000 | |||
Software copyright | ||||
TOTAL REVENUES | 150,000 | |||
COST OF REVENUES | ||||
TOTAL COST OF REVENUES | ||||
GROSS PROFIT | ||||
OPERATING EXPENSES | ||||
Selling, general and administrative | 3,667,011 | 64,041 | 3,942,947 | 6,800,079 |
Impairment of prepayments | 12,949,329 | |||
TOTAL OPERATING EXPENSES | 3,667,011 | 64,041 | 3,942,947 | 19,749,408 |
LOSS FROM OPERATIONS | (3,667,011) | (64,041) | (3,792,947) | (19,749,408) |
OTHER INCOME (EXPENSE) | ||||
Interest income | 46,891 | 47,070 | ||
Interest expense | (52) | (52) | ||
Other income | 100,000 | |||
Total other income, net | 46,839 | 147,018 | ||
LOSS BEFORE INCOME TAXES FROM CONTINUING OPERATIONS | (3,620,172) | (64,041) | (3,645,929) | (19,749,408) |
PROVISION FOR INCOME TAXES | ||||
LOSS FROM CONTINUING OPERATIONS | (3,620,172) | (64,041) | (3,645,929) | (19,749,408) |
Net loss attributable to noncontrolling interest | (102,485) | (102,485) | ||
LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO GD CULTURE GROUP LIMITED | (3,517,687) | (64,041) | (3,543,444) | (19,749,408) |
Loss from discontinued operations, net of taxes | (10,358) | (61,408) | 303,089 | |
Loss on disposal, net of taxes | (230) | (4,027,930) | (230) | (4,027,930) |
Net loss | (3,528,275) | (4,091,971) | (3,605,082) | (23,474,249) |
OTHER COMPREHENSIVE LOSS | ||||
Foreign currency translation adjustment | 4,291 | (261,985) | (107,992) | (118,184) |
COMPREHENSIVE LOSS | $ (3,523,984) | $ (4,353,956) | $ (3,713,074) | $ (23,592,433) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES | ||||
Weighted Average Number of Common Shares Basic (in Shares) | 3,053,563 | 1,427,927 | 2,447,446 | 1,427,927 |
Loss per share from continuing operations Basic (in Dollars per share) | $ (1.15) | $ (0.04) | $ (1.45) | $ (13.83) |
Loss per share from discontinued operations Basic (in Dollars per share) | 0 | (2.82) | (0.03) | (2.61) |
Loss per share available to common shareholders Basic (in Dollars per share) | $ (1.16) | $ (2.87) | $ (1.47) | $ (16.44) |
Enterprise Brand Management Services | ||||
COST OF REVENUES | ||||
Enterprise brand management services |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Loss and Comprehensive Loss (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement [Abstract] | ||||
Weighted Average Number of Common Shares Diluted (in Shares) | 3,053,563 | 1,427,927 | 2,447,446 | 1,427,927 |
Loss per share from continuing operations Diluted | $ (1.15) | $ (0.04) | $ (1.45) | $ (13.83) |
Loss per share from discontinued operations Diluted | 0 | (2.82) | (0.03) | (2.61) |
Loss per share available to common shareholders Diluted | $ (1.16) | $ (2.87) | $ (1.47) | $ (16.44) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Stock Subscription Receivable | Retained Earnings (Accumulated Deficit) Statutory Reserves | Retained Earnings (Accumulated Deficit) Unrestricted | Accumulated Other Comprehensive Income (Loss) | Total GD Culture Group Limited Shareholders’ Equity | Noncontrolling interest | Total |
Balance at Dec. 31, 2021 | $ 154 | $ 83,038,827 | $ (25,165,728) | $ (26,019,119) | $ 225,857 | $ 32,079,991 | ||||
Balance (in Shares) at Dec. 31, 2021 | 1,543,793 | |||||||||
Net loss | (23,474,249) | (23,474,249) | ||||||||
Issuance of common stock for acquisition Yuanma | $ 26 | 7,679,974 | 7,680,000 | |||||||
Issuance of common stock for acquisition Yuanma (in Shares) | 256,000 | |||||||||
Issuance of common stock for acquisition Highlight Media | $ 30 | 2,249,970 | 4,467 | 2,254,467 | ||||||
Issuance of common stock for acquisition Highlight Media (in Shares) | 300,000 | |||||||||
The cancellation of the common stock (in Shares) | (254,916) | |||||||||
The cancellation of the common stock | $ (26) | (32,844,684) | (32,844,710) | |||||||
Stock subscription receivable from issuance of common stock | 25,165,728 | 25,165,728 | ||||||||
Foreign currency translation | (118,184) | (118,184) | ||||||||
BALANCE, September 30, 2022 (Unaudited) at Sep. 30, 2022 | $ 184 | 60,124,087 | 4,467 | (49,493,368) | 107,673 | 10,743,043 | ||||
BALANCE, September 30, 2022 (Unaudited) (in Shares) at Sep. 30, 2022 | 1,844,877 | |||||||||
Balance at Jun. 30, 2022 | $ 154 | 74,276,715 | (16,403,618) | (45,401,397) | 369,658 | 12,841,512 | ||||
Balance (in Shares) at Jun. 30, 2022 | 1,544,877 | |||||||||
Net loss | (4,091,971) | (4,091,971) | ||||||||
Issuance of common stock for acquisition Yuanma | ||||||||||
Issuance of common stock for acquisition Highlight Media | $ 30 | 2,249,970 | 4,467 | 2,254,467 | ||||||
Issuance of common stock for acquisition Highlight Media (in Shares) | 300,000 | |||||||||
The cancellation of the common stock | (16,402,598) | (16,402,598) | ||||||||
Stock subscription receivable from issuance of common stock | 16,403,618 | 16,403,618 | ||||||||
Foreign currency translation | (261,985) | (261,985) | ||||||||
BALANCE, September 30, 2022 (Unaudited) at Sep. 30, 2022 | $ 184 | 60,124,087 | 4,467 | (49,493,368) | 107,673 | 10,743,043 | ||||
BALANCE, September 30, 2022 (Unaudited) (in Shares) at Sep. 30, 2022 | 1,844,877 | |||||||||
Balance at Dec. 31, 2022 | $ 184 | 60,124,087 | 4,467 | (56,841,074) | 179,460 | $ 3,467,124 | 3,467,124 | |||
Balance (in Shares) at Dec. 31, 2022 | 1,844,877 | |||||||||
Net loss | (3,605,082) | (3,605,082) | (102,485) | (3,707,567) | ||||||
Reclassification of disposal of TMSR | $ 115 | 8,618,125 | 8,618,240 | 8,618,240 | ||||||
(in Shares) | 1,154,519 | |||||||||
Contribution by noncontrolling shareholder | 5,486,133 | 5,486,133 | ||||||||
Issuance of common stock for acquisition right, title, and interest in and to the certain software | $ 19 | 749,981 | 750,000 | 750,000 | ||||||
Issuance of common stock for acquisition right, title, and interest in and to the certain software (in Shares) | 187,500 | |||||||||
The cancellation of the common stock (in Shares) | (133,333) | |||||||||
The cancellation of the common stock | $ (13) | (947,987) | (948,000) | (948,000) | ||||||
Stock subscription receivable from issuance of common stock | (1,370,614) | (1,370,614) | (1,370,614) | |||||||
Foreign currency translation | (107,992) | (107,992) | (107,992) | |||||||
BALANCE, September 30, 2022 (Unaudited) at Sep. 30, 2023 | $ 305 | 68,544,206 | (1,370,614) | 4,467 | (60,446,156) | 71,468 | 6,803,676 | 5,383,648 | 12,187,324 | |
BALANCE, September 30, 2022 (Unaudited) (in Shares) at Sep. 30, 2023 | 3,053,563 | |||||||||
Balance at Jun. 30, 2023 | $ 305 | 68,544,206 | 4,467 | (56,917,881) | 67,177 | 11,698,274 | 11,698,274 | |||
Balance (in Shares) at Jun. 30, 2023 | 3,053,563 | |||||||||
Net loss | (3,528,275) | (3,528,275) | (102,485) | (3,630,760) | ||||||
Reclassification of disposal of TMSR | ||||||||||
Contribution by noncontrolling shareholder | 5,486,133 | 5,486,133 | ||||||||
Issuance of common stock for acquisition right, title, and interest in and to the certain software | ||||||||||
The cancellation of the common stock | ||||||||||
Stock subscription receivable from issuance of common stock | (1,370,614) | (1,370,614) | (1,370,614) | |||||||
Foreign currency translation | 4,291 | 4,291 | 4,291 | |||||||
BALANCE, September 30, 2022 (Unaudited) at Sep. 30, 2023 | $ 305 | $ 68,544,206 | $ (1,370,614) | $ 4,467 | $ (60,446,156) | $ 71,468 | $ 6,803,676 | $ 5,383,648 | $ 12,187,324 | |
BALANCE, September 30, 2022 (Unaudited) (in Shares) at Sep. 30, 2023 | 3,053,563 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (3,707,567) | $ (23,474,249) |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation of plant and equipment | 751 | 33,192 |
Amortization of intangible assets | 162,500 | 98 |
Lease expenses of right-of-use assets | 60,224 | |
Impairment of prepayments | 12,949,329 | |
Disposal of the company | 230 | 4,027,930 |
Goodwill impairments | 2,070,753 | 6,590,339 |
Change in operating assets and liabilities | ||
Accounts receivables | (52,196) | |
Other receivables | (51,399) | 757 |
Prepaid expense - related party | (100,000) | 192,863 |
Inventories | (3,001) | |
Prepayments | (4,610,398) | (68,962) |
Accounts payable | (91,273) | 196,417 |
Other payables and accrued liabilities | (16,410) | (99,892) |
Customer deposits | 68,531 | (2,156,462) |
Lease liabilities | (31,342) | |
Taxes payable | (6,994) | (493) |
Other payables - related parties | (160,760) | 845,389 |
Net cash used in operating activities | (6,465,350) | (966,745) |
CASH FLOWS FROM INVESTING ACTIVITY: | ||
Net increase in cash from acquisition of Highlight Media | 47,498 | |
Net decrease in cash from disposal of discontinued operations | (12,316,416) | |
Purchase of intangible assets | (2,500,000) | |
Purchase of equipment | (9,617) | (6,689) |
Purchase of convertible notes | (2,500,000) | |
Net cash used in investing activity | (5,009,617) | (12,275,607) |
CASH FLOWS FROM FINANCING ACTIVITY: | ||
Proceeds from issuance of common stock | 8,618,240 | |
Contribution by noncontrolling shareholder | 4,115,519 | |
Net cash provided by financing activity | 12,733,759 | |
EFFECT OF EXCHANGE RATE ON CASH | (752) | (1,095,699) |
NET INCREASE/(DECREASE) IN CASH | 1,258,040 | (14,338,051) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 389,108 | 14,588,330 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 1,647,148 | 250,279 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 935 | |
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES | ||
Issuance of common stock for acquisition Yuanma | 7,680,000 | |
Issuance of common stock for acquisition Highlight Media | 2,250,000 | |
Issuance of common stock for acquisition right, title, and interest in and to the certain software | 750,000 | |
The cancellation of the common stock | 948,000 | 32,844,710 |
Initial recognition of right-of-use assets and lease liabilities | $ 1,731,824 |
Nature of Business and Organiza
Nature of Business and Organization | 9 Months Ended |
Sep. 30, 2023 | |
Nature of Business and Organization [Abstract] | |
Nature of business and organization | Note 1 – Nature of business and organization GD Culture Group Limited (“GDC” or the “Company”), formerly known as Code Chain New Continent Limited, TMSR Holding Company Limited and JM Global Holding Company, is a Nevada corporation and a holding company that has no material operation of its own. The Company’s current subsidiaries, Citi Profit Investment Holding Limited (“Citi Profit”), Highlights Culture Holding Co., Limited (“Highlight HK”), Shanghai Highlight Entertainment Co., Ltd. (“Highlight WFOE”), and previous subsidiaries, TMSR Holdings Limited (“TMSR HK”) and Makesi IoT Technology (Shanghai) Co., Ltd. (“Makesi WFOE”) are also holding companies with no material operations. Shanghai Xianzhui Technology Co., Ltd. (“SH Xianzhui”) was incorporated by Highlight WFOE and other two shareholders on August 10, 2023. SH Xianzhui is principally engaged in the provision of social media marketing agency service. Highlight WFOE owns 60% of the total equity interest of SH Xianzhui. AI Catalysis Corp. (“AI Catalysis”) is a Nevada corporation, incorporated on May 18, 2023. AI Catalysis is expected to bridge the realms of the internet, media, and artificial intelligence (“AI”) technologies. Positioned at the crossroads of traditional and streaming media, AI Catalysis plans to elevate the experience of media with AI-based interactive and smart content, aiming to transform the whole media landscape. At present, AI Catalysis' primary focus is the application of AI digital human technology with the sectors of e-commerce and entertainment to improve the interaction experiences online. AI Catalysis strives to deliver stable interactive livestreaming products to AI Catalysis' users. AI Catalysis foresees future expansion to a variety of business sectors with AI applications in different scenarios. AI Catalysis plans to enter into the livestreaming market with a focus on e-commerce and livestreaming interactive game. Prior to September 28, 2022, we also conducted business through Sichuan Wuge Network Games Co., Ltd. (“Wuge”). Makesi WFOE had a series of contractual arrangement with Wuge that established a VIE structure. For accounting purposes, Makesi WFOE was the primary beneficiary of Wuge. Accordingly, under U.S. GAAP, GDC treated Wuge as the consolidated affiliated entity and has consolidated Yuanma’s financial results in Wuge’s financial statements prior to September 28, 2022. Wuge focused its business on research, development and application of Internet of Things (IoT) and electronic tokens Wuge digital door signs. On September 28, 2022, Makesi WFOE entered into a termination agreement with Wuge and the shareholders of Wuge to terminate the VIE Agreements and to cancel the shares previously issued to the shareholders of Wuge, based on the average closing price of $0.237 per share of the Company during the 30 trading days immediately prior to the date of the termination agreement. As a result of such termination, the Company no longer treats Wuge as a consolidated affiliated entity or consolidates the financial results and balance sheet of Wuge in the Company’s consolidated financial statements under U.S. GAAP. Prior to June 26, 2023, we had a subsidiary TMSR HK, which owns 100% equity interest in Makesi WFOE. Makesi WFOE had a series of contractual arrangement with Shanghai Yuanma Food and Beverage Management Co., Ltd. (“Yuanma”) that established a VIE structure. For accounting purposes, Makesi WFOE was the primary beneficiary of Yuanma. Accordingly, under U.S. GAAP, GDC treated Yuanma as the consolidated affiliated entity and has consolidated Yuanma’s financial results in GDC’s financial statements prior to June 26, 2023. On June 26, 2023, GDC entered into a share purchase agreement with a buyer unaffiliated with the Company. Pursuant to the agreement, the Company agreed to sell and the buyer agreed to purchase all the issued and outstanding equity interest in TMSR HK. The purchase price for the transaction contemplated by the Agreement was $100,000. The sale of TMSR HK included the sale of Makesi WFOE and Yuanma. None of TMSR HK, Makesi WFOE or Yuanma had any assets, employees or operation. The sale of TMSR HK did not have any material impact on the Company’s consolidated financial statements. Prior to September 26, 2023, we also conducted business through Shanghai Highlight Media Co., Ltd. (“Highlight Media”). Highlight WFOE had a series of contractual arrangement with Highlight Media. For accounting purposes, Highlight WFOE was the primary beneficiary of Highlight Media. Accordingly, under U.S. GAAP, GDC treated Highlight Media as the consolidated affiliated entity and has consolidated Highlight Media’s financial results in GDC’s financial statements prior to September 26, 2023. Highlight Media was an integrated marketing service agency, focusing on enterprise brand management, crisis public relations, intelligent public opinion monitoring, media PR, financial and economic we-media operation, digital face application, large-scale exhibition services and other businesses. On September 26, 2023, Highlight WFOE entered into a termination agreement with Highlight Media and the shareholders of Highlight Media to terminate the VIE Agreements and sold the interest in the VIE Agreements for a purchase price of $100,000. As a result of such termination, the Company no longer treats Highlight Media as a consolidated affiliated entity or consolidates the financial results and balance sheet of Highlight Media in the Company’s consolidated financial statements under U.S. GAAP. The accompanying consolidated financial statements reflect the activities of GDC and each of the following entities: Name Background Ownership Citi Profit BVI ● A British Virgin Island company Incorporated on April 2019 100% owned by the Company TMSR HK2 ● A Hong Kong company 100% owned by Citi Profit BVI Highlight HK ● A Hong Kong company ● Incorporated on November 2022 100% owned by Citi Profit BVI Makesi WFOE 2 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (WFOE) ● Incorporated on December 2020 100% owned by TMSR HK Highlight WFOE ● A PRC limited liability company and deemed a wholly foreign owned enterprise (WFOE) ● Incorporated on January 2023 100% owned by Highlight HK Wuge 1 ● A PRC limited liability company ● Incorporated on July 4, 2019 VIE of Makesi WFOE Highlight Media 3 ● A PRC limited liability company ● Incorporated on September 16, 2022 VIE of Highlight WFOE AI Catalysis ● A Nevada company ● Incorporated on May 2023 100% owned by the Company SH Xianzhui ● A PRC limited liability company ● Incorporated on May 2023 60% owned by Highlight WFOE 1 Disposed on September 28, 2022 2 Disposed on June 26, 2023 3 Disposed on September 26, 2023 Contractual Arran ements Wuge, Yuanma, Highlight Media is controlled through contractual agreements in lieu of direct equity ownership by the Company or any of its subsidiaries. Such contractual arrangements consist of a series of five agreements, consulting services agreement, equity pledge agreement, call option agreement, voting rights proxy agreement, and operating agreement. Material terms of each of the VIE agreements with Wuge are described below. The VIE agreements with Wuge were terminated and the Company disposed Wuge as of September 28, 2022. Technical Consultation and Services Agreement. Pursuant to the technical consultation and services agreement between Wuge and Tongrong Technology (Jiangsu) Co., Ltd., a then indirect subsidiary of the Company (“Tongrong WFOE”), dated January 3, 2020, Tongrong WFOE has the exclusive right to provide consultation services to Wuge relating to Wuge’s business, including but not limited to business consultation services, human resources development, and business development. Tongrong WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. Tongrong WFOE has the right to determine the service fees based on Wuge’s actual operation on a quarterly basis. This agreement will be effective as long as Wuge exists. Tongrong WFOE may terminate this agreement at any time by giving 30 days’ prior written notice to Wuge. Equity Pledge Agreement. Under the equity pledge agreement among Tongrong WFOE, Wuge and the shareholders of Wuge dated January 3, 2020, the shareholders of Wuge pledged all of their equity interests in Wuge to Tongrong WFOE to guarantee Wuge’s performance of relevant obligations and indebtedness under the technical consultation and services agreement. In addition, the shareholders of Wuge will complete the registration of the equity pledge under the agreement with the competent local authority. If Wuge breaches its obligation under the technical consultation and services agreement, Tongrong WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. This pledge will remain effective until all the guaranteed obligations are performed or the shareholders of Wuge cease to be shareholders of Wuge. Equity Option Agreement. Under the equity option agreement among Tongrong WFOE, Wuge and the shareholders of Wuge dated January 3, 2020, each of the shareholders of Wuge irrevocably granted to Tongrong WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Wuge. Also, Tongrong WFOE or its designee has the right to acquire any and all of its assets of Wuge. Without Tongrong WFOE’s prior written consent, Wuge’s shareholders cannot transfer their equity interests in Wuge and Wuge cannot transfer its assets. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option. This pledge will remain effective until all options have been exercised. Voting Rights Proxy and Financial Support Agreement. Under the voting rights proxy and financial support agreement among Tongrong WFOE, Wuge and the shareholders of Wuge dated January 3, 2020, each Wuge Shareholder irrevocably appointed Tongrong WFOE as its attorney-in-fact to exercise on such shareholder’s behalf any and all rights that such shareholder has in respect of his equity interests in Wuge, including but not limited to the power to vote on its behalf on all matters of Wuge requiring shareholder approval in accordance with the articles of association of Wuge. The proxy agreement is for a term of 20 years and can be extended by Tongrong WFOE unilaterally by prior written notice to the other parties. On January 11, 2021, Makesi WFOE entered into a series of assignment agreements with Tongrong WFOE, Wuge and the shareholders of Wuge, pursuant to which Tongrong WFOE assign all its rights and obligations under the VIE agreements to Makesi WFOE. The VIE agreements and the assignment agreements granted Makesi WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Wuge, including absolute rights to control the management, operations, assets, property and revenue of Wuge. The assignment did not have any impact on Company’s consolidated financial statements. On September 28, 2022, Makesi WFOE entered into a termination agreement with Wuge and the shareholders of Wuge to terminate the VIE agreements and to cancel the shares previously issued to the shareholders of Wuge, based on the average closing price of $0.237 per share of the Company during the 30 trading days immediately prior to the date of the termination agreement. As a result of such termination, the Company no longer treats Wuge as a consolidated affiliated entity or consolidates the financial results and balance sheet of Wuge in the Company’s consolidated financial statements under U.S. GAAP. Material terms of each of the VIE agreements with Yuanma are described below. The Company disposed TMSR HK, Makesi WFOE and Yuanma on June 26, 2023. Technical Consultation and Services Agreement. Pursuant to the technical consultation and services agreement between WFOE and Yuanma dated June 21, 2022, WFOE has the exclusive right to provide consultation services to Yuanma relating to Yuanma’s business, including but not limited to business consultation services, human resources development, and business development. WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. WFOE has the right to determine the service fees based on Yuanma’s actual operation on a quarterly basis. This agreement will be effective for 20 years and can be extended by WFOE unilaterally by prior written notice to the other parties. WFOE may terminate this agreement at any time by giving a 30 days’ prior written notice to Yuanma. If any party breaches the agreement and fails to cure within 30 days from the written notice from the non-breach party, the non-breach party may (i) terminate the agreement and request the breaching party to compensate the non-breaching party’s loss or (ii) request special performance by the breaching party and the breaching party to compensate the non-breaching party’s loss. Equity Pledge Agreement. Under the equity pledge agreement among WFOE, Yuanma and Yuanma Shareholders dated June 21, 2022, Yuanma Shareholders pledged all of their equity interests in Yuanma to WFOE to guarantee Yuanma’s performance of relevant obligations and indebtedness under the technical consultation and services agreement. In addition, Yuanma Shareholders will complete the registration of the equity pledge under the agreement with the competent local authority. If Yuanma breaches its obligation under the technical consultation and services agreement, WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. This pledge will remain effective until all the guaranteed obligations are performed or the Yuanma Shareholders cease to be shareholders of Yuanma. Equity Option Agreement. Under the equity option agreement among WFOE, Yuanma and Yuanma Shareholders dated June 21, 2022, each of Yuanma Shareholders irrevocably granted to WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Yuanma. Also, WFOE or its designee has the right to acquire any and all of its assets of Yuanma. Without WFOE’s prior written consent, Yuanma’s shareholders cannot transfer their equity interests in Yuanma and Yuanma cannot transfer its assets. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option. This pledge will remain effective until all options have been exercised. Voting Rights Proxy and Financial Support Agreement. Under the voting rights proxy and financial support agreement among WFOE, Yuanma and Yuanma Shareholders dated June 21, 2022, each Yuanma Shareholder irrevocably appointed WFOE as its attorney-in-fact to exercise on such shareholder’s behalf any and all rights that such shareholder has in respect of his equity interests in Yuanma, including but not limited to the power to vote on its behalf on all matters of Yuanma requiring shareholder approval in accordance with the articles of association of Yuanma. The proxy agreement is for a term of 20 years and can be extended by WFOE unilaterally by prior written notice to the other parties. On June 26, 2023, the Company entered into a share purchase agreement with a buyer unaffiliated with the Company. Pursuant to the agreement, the Company agreed to sell and the buyer agreed to purchase all the issued and outstanding equity interest in TMSR HK. The purchase price for the transaction contemplated by the Agreement was $100,000. TMSR HK has a direct wholly-owned subsidiary, Makesi WFOE, and an indirect wholly-owned subsidiary, Yuanma. The sale of TMSR included the sale of Makesi WFOE and Yuanma. None of TMSR HK, Makesi WFOE or Yuanma had any assets, employees or operation. The sale of TMSR did not have any material impact on the Company’s consolidated financial statements. Material terms of each of the VIE agreements with Highlight Media are described below. The VIE agreements with Highlight Media were terminated and the Company disposed Highlight Media as of September 26, 2023. Technical Consultation and Services Agreement. Pursuant to the technical consultation and services agreement between Highlight Media and Makesi WFOE dated September 16, 2022, Makesi WFOE has the exclusive right to provide consultation services to Highlight Media relating to Highlight Media’s business, including but not limited to business consultation services, human resources development, and business development. Makesi WFOE exclusively owns any intellectual property rights arising from the performance of this agreement. Makesi WFOE has the right to determine the service fees based on Highlight Media’s actual operation on a quarterly basis. This agreement will be effective as long as Highlight Media exists. Makesi WFOE may terminate this agreement at any time by giving a 30 days’ prior written notice to Highlight Media. Equity Pledge Agreement. Under the equity pledge agreement among Makesi WFOE, Highlight Media and the shareholders of Highlight Media dated September 16, 2022, the shareholders of Highlight Media pledged all of their equity interests in Highlight Media to Makesi WFOE to guarantee Highlight Media’s performance of relevant obligations and indebtedness under the technical consultation and services agreement. In addition, the shareholders of Highlight Media will complete the registration of the equity pledge under the agreement with the competent local authority. If Highlight Media breaches its obligation under the technical consultation and services agreement, Makesi WFOE, as pledgee, will be entitled to certain rights, including the right to sell the pledged equity interests. This pledge will remain effective until all the guaranteed obligations are performed or the shareholders of Highlight Media cease to be shareholders of Highlight Media. Equity Option Agreement. Under the equity option agreement among Makesi WFOE, Highlight Media and the shareholders of Highlight Media dated September 16, 2022, each of the shareholders of Highlight Media irrevocably granted to Makesi WFOE or its designee an option to purchase at any time, to the extent permitted under PRC law, all or a portion of his equity interests in Highlight Media. Also, Makesi WFOE or its designee has the right to acquire any and all of its assets of Highlight Media. Without Makesi WFOE’s prior written consent, Highlight Media’s shareholders cannot transfer their equity interests in Highlight Media and Highlight Media cannot transfer its assets. The acquisition price for the shares or assets will be the minimum amount of consideration permitted under the PRC law at the time of the exercise of the option. This pledge will remain effective until all options have been exercised. Voting Rights Proxy and Financial Support Agreement. Under the voting rights proxy and financial support agreement among Makesi WFOE, Highlight Media and the shareholders of Highlight Media dated September 16, 2022, each Highlight Media Shareholder irrevocably appointed Makesi WFOE as its attorney-in-fact to exercise on such shareholder’s behalf any and all rights that such shareholder has in respect of his equity interests in Highlight Media, including but not limited to the power to vote on its behalf on all matters of Highlight Media requiring shareholder approval in accordance with the articles of association of Highlight Media. The proxy agreement is for a term of 20 years and can be extended by Makesi WFOE unilaterally by prior written notice to the other parties. On February 27, 2023, Highlight WFOE entered into a series of assignment agreements with Makesi WFOE, Highlight Media and Highlight Shareholders, pursuant to which Makesi WFOE assign all its rights and obligations under the VIE agreements to Highlight WFOE. The VIE agreements and the assignment agreements grant Highlight WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Highlight Media, including absolute rights to control the management, operations, assets, property and revenue of Highlight Media. The assignment does not have any impact on Company’s consolidated financial statements. On September 26, 2023, Highlight WFOE entered into a termination agreement with Highlight Media and the shareholders of Highlight Media to terminate the VIE Agreements and sold the interest in the VIE Agreements for a purchase price of $100,000. As a result of such termination, the Company no longer treats Highlight Media as a consolidated affiliated entity or consolidates the financial results and balance sheet of Highlight Media in the Company’s consolidated financial statements under U.S. GAAP. As of the date of this report, the Company primary operations are focused on the Highlight Media business that is in enterprise brand management service in China, and on the AI Catalysis business that is in the livestreaming market with focus on e-commerce and livestreaming interactive game in the United States. All Wuge digital door signs business have been disposed. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of significant accounting policies | Note 2 – Summary of significant accounting policies Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). Principles of consolidation The unaudited condensed financial statements of the Company include the accounts of GDC and its wholly owned subsidiaries and VIE. All intercompany transactions and balances are eliminated upon consolidation. Use of estimates and assumptions The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of intangible assets, deferred revenues and plant and equipment, impairment of long-lived assets, collectability of receivables, present value and lease liabilities. Actual results could differ from these estimates. Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive income amounted to $71,468 and $179,460 as of September 30, 2023 and December 31, 2022, respectively. The balance sheet amounts, with the exception of shareholders’ equity at September 30, 2023 and December 31, 2022 were translated at 7.30 RMB and 6.38 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the nine months ended September 30, 2023 and 2022 were 7.03 RMB and 6.61 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. Accounts receivable, net Accounts receivable include trade accounts due from customers. An allowance for doubtful accounts may be established and recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. Prepayments Prepayments are funds deposited or advanced to outside vendors for future inventory or services purchases. As a standard practice in China, many of the Company’s vendors require a certain amount to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require any outstanding prepayments to be returned to the Company when the contract ends. Plant and equipment Plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method after consideration of the estimated useful lives of the assets and estimated residual value. The estimated useful lives and residual value are as follows: Useful Life Estimated Office equipment and furnishing 5 years 5 % The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Intangible assets Intangible assets represent software, and it is stated at cost, less accumulated amortization. Research and development costs associated with internally developed patents are expensed when incurred. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. The software has finite useful lives and is amortized using a straight-line method that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The Company amortizes the cost of software, over their useful life using the straight-line method. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances revised estimates of useful lives. The estimated useful life is as follows: Useful Life Software 5 years Lease The Company determines if an arrangement is a lease at inception. Leases that transfer substantially all of the benefits and risks incidental to the ownership of assets are accounted for as finance leases as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases. The Company has no significant finance leases. The Company recognizes lease liabilities and corresponding right-of-use assets on the balance sheet for leases. Operating lease right- of-use assets are included in non-current prepayments, receivables and other assets and operating lease liabilities are included in current accrued expenses, accounts payable and other liabilities and other non-current liabilities on the consolidated balance sheets. Operating lease right-of-use assets and operating lease liabilities are initially recognized based on the present value of future lease payments at lease commencement. The operating lease right-of-use asset also includes any lease payments made prior to lease commencement and the initial direct costs incurred by the lessee and is recorded net of any lease incentives received. As the interest rates implicit in most of the leases are not readily determinable, the Company uses the incremental borrowing rates based on the information available at lease commencement to determine the present value of the future lease payments. Operating lease expenses are recognized on a straight-line basis over the term of the lease. Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. In accordance with ASC 350, the Company may first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In the qualitative assessment, the Company considers factors such as macroeconomic conditions, industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations, business plans and strategies of the reporting unit, including consideration of the impact of the COVID-19 pandemic. Based on the qualitative assessment, if it is more likely than not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is performed. The Company may also bypass the qualitative assessment and proceed directly to perform the quantitative impairment test. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized as impairment. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, allocation of assets, liabilities and goodwill to reporting units, and determination of the fair value of each reporting unit. Impairment for long-lived assets Long-lived assets, including plant, equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. Fair value measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, notes receivable, accounts receivable, other receivables, prepayments, accounts payable, other payables and accrued liabilities, customer deposits and taxes payable to approximate their fair values because of their short term nature. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Customer deposits Highlight Media typically receives customer deposits for services to be rendered from its customers. As Highlight Media delivers the services, it will recognize these deposits to results of operations in accordance to its revenue recognition policy. Revenue recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained earnings upon adoption of this new guidance as the Company’s revenue, other than retainage revenues, was recognized based on the amount of consideration we expect to receive in exchange for satisfying the performance obligations. However, the impact of the Company’s retainage revenue was not material as of the date of adoption, and as a result, did not result in an adjustment. The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time. The ASU 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. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition except its retainage revenues. An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does not control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange. The company, as a principal, provides services to clients under separate contracts, generating revenue. The pricing terms specified in the contracts are fixed. An obligation to perform is identified in contracts with clients. Revenue is recognized over the period in which the services are earned. Payments received prior to the relevant criteria for revenue recognition are met, are recorded as customer deposits. The Company’s disaggregate revenue streams from continuing operations are summarized as follows: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 Software copyright $ - $ - $ 150,000 $ - Total revenues $ - $ - $ 150,000 $ - Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes is accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company incurred no such penalties and interest for the three months ended September 30, 2023 and 2022. As of September 30, 2023, the Company’s PRC tax returns filed for 2020, 2021 and 2022 remain subject to examination by any applicable tax authorities. Earnings per share Basic earnings per share are computed by dividing income available to common shareholders of the Company by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares. 9,079,348 and 10,500,000 of outstanding warrants which is equivalent to convertible of 4,539,674 and 5,250,000 common shares were excluded from the diluted earnings per share calculation due to its antidilutive effect for the three months ended September 30, 2023 and 2022, respectively. 824,000 of outstanding options were excluded from the diluted earnings per share calculation due to its antidilutive effect for the three months ended September 30, 2023 and 2022. Reclassification Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings (loss) or and financial position. Recently accounting pronouncements In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The new amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments, with early adoption permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for fiscal years beginning after 15 December 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on the financial position, results of operations and cash flows. In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for the Company for the year ending March 31, 2025 and interim reporting periods during the year ending March 31, 2025. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on the financial position, results of operations and cash flows. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
Business Combination and Restru
Business Combination and Restructuring | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Restructuring [Abstract] | |
Business combination and restructuring | Note 3 – Business combination and restructuring Highlight Media On September 16, 2022, the Company entered into a share purchase agreement with Highlight Media and all the shareholders of Highlight Media (“Highlight Media Shareholders”). Pursuant to the share purchase agreement, the Company agreed to issue an aggregate of 9,000,000 shares of the Company’s common stock to the Highlight Media Shareholders, in exchange for Highlight Media Shareholders’ agreement to enter into, and their agreement to cause Highlight Media to enter into, certain VIE agreements (“VIE Agreements”) with Makesi WFOE the Company’s indirectly owned subsidiary, through which Makesi WFOE shall have the right to control, manage and operate Highlight Media in return for a service fee equal to 100% of Highlight Media’s net income (the “Acquisition”). On September 16, 2022, Makesi WFOE entered into a series of VIE Agreements with Highlight Media and the Highlight Media Shareholders. The VIE Agreements are designed to provide Makesi WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Highlight Media, including absolute rights to control the management, operations, assets, property and revenue of Highlight Media. Highlight Media, founded in 2016, is an integrated marketing service agency, focusing on enterprise brand management, crisis public relations, intelligent public opinion monitoring, media PR, financial and economic we-media operation, digital face application, large-scale exhibition services and other businesses. It is committed to becoming a modern science and technology media organization that fully empowers the development of customer enterprises in the era of artificial intelligence and big data. The Acquisition closed on September 29, 2022. On February 27, 2023, Highlight WFOE entered into a series of assignment agreements (the “Assignment Agreements”) with Makesi WFOE, Highlight Media and Highlight Shareholders, pursuant to which Makesi WFOE assign all its rights and obligations under the VIE Agreements to Highlight WFOE (the “Assignment”). The VIE Agreements and the Assignment Agreements grant Highlight WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Highlight Media, including absolute rights to control the management, operations, assets, property and revenue of Highlight Media. The Assignment does not have any impact on Company’s consolidated financial statements. The Company’s acquisition of Highlight Media was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Highlight Media based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Other current assets and current liabilities were valued using the cost approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, plant and equipment, and intangible assets identified as of the acquisition date and considered a number of factors including valuations from independent appraisers. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expenses. The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Highlight Media based on a valuation performed by an independent valuation firm engaged by the Company: Total consideration at fair value $ 2,250,000 Fair Value Cash $ 47,498 Other current assets 107,828 Plant and equipment 1,205 Other noncurrent assets - Goodwill 2,121,947 Total asset 2,278,478 Accounts payable 14,170 Taxes Payable 363 Other Payable 13,945 Total liabilities 28,478 Net asset acquired $ 2,250,000 Approximately $2.1 million of goodwill arising from the acquisition consists largely of synergies expected from combining the operations of the Company and Highlight Media. None |
Variable Interest Entity
Variable Interest Entity | 9 Months Ended |
Sep. 30, 2023 | |
Variable Interest Entity [Abstract] | |
Variable interest entity | Note 4 – Variable interest entity Wuge On January 3, 2020, Tongrong WFOE entered into contractual arrangements with Wuge and its shareholders. The significant terms of these contractual arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classified Wuge as VIE. On January 11, 2021, Makesi WFOE entered into a series of assignment agreements with Tongrong WFOE, Wuge and the shareholders of Wuge, pursuant to which Tongrong WFOE assign all its rights and obligations under the VIE agreements to Makesi WFOE. The VIE agreements and the assignment agreements granted Makesi WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Wuge, including absolute rights to control the management, operations, assets, property and revenue of Wuge. The assignment did not have any impact on Company’s consolidated financial statements. On September 28, 2022, Makesi WFOE entered into a termination agreement with Wuge and the shareholders of Wuge to terminate the VIE agreements and to cancel the shares previously issued to the shareholders of Wuge, based on the average closing price of $0.237 per share of the Company during the 30 trading days immediately prior to the date of the termination agreement. As a result of such termination, the Company no longer treats Wuge as a consolidated affiliated entity or consolidates the financial results and balance sheet of Wuge in the Company’s consolidated financial statements under U.S. GAAP. Yuanma On June 21, 2022, Makesi WFOE entered into a series of contractual arrangements with Yuanma and its shareholders. The significant terms of these contractual arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classified Yuanma as VIE. On June 26, 2023, GDC entered into a share purchase agreement with a buyer unaffiliated with the Company. Pursuant to the agreement, the Company agreed to sell and the buyer agreed to purchase all the issued and outstanding equity interest in TMSR HK. The purchase price for the transaction contemplated by the Agreement was $100,000. The sale of TMSR HK included the sale of Makesi WFOE and Yuanma. None of TMSR HK, Makesi WFOE or Yuanma had any assets, employees or operation. The sale of TMSR HK did not have any material impact on the Company’s consolidated financial statements. Highlight Media On September 16, 2022, Makesi WFOE entered into contractual arrangements with Highlight Media and its shareholders. The significant terms of these contractual arrangements are summarized in “Note 1 - Nature of business and organization” above. As a result, the Company classifies Highlight Media as VIE. On February 27, 2023, Highlight WFOE entered into a series of assignment agreements with Makesi WFOE, Highlight Media and Highlight Shareholders, pursuant to which Makesi WFOE assign all its rights and obligations under the VIE agreements to Highlight WFOE. The VIE agreements and the assignment agreements granted Highlight WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole equity holder of Highlight Media, including absolute rights to control the management, operations, assets, property and revenue of Highlight Media. The assignment did not have any impact on Company’s consolidated financial statements. A VIE is an entity that has either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary and must consolidate the VIE. Makesi WFOE is deemed to have a controlling financial interest and be the primary beneficiary of Highlight Media because it has both of the following characteristics: (1) The power to direct activities at Highlight Media that most significantly impact such entity’s economic performance, and (2) The obligation to absorb losses of, and the right to receive benefits from Highlight Media that could potentially be significant to such entity. Accordingly, the accounts of Highlight Media are consolidated in the accompanying financial statements pursuant to ASC 810-10, Consolidation. In addition, its financial positions and results of operations are included in the Company’s consolidated financial statements prior to September 30, 2023. On September 26, 2023, Highlight WFOE entered into a termination agreement with Highlight Media and the shareholders of Highlight Media to terminate the VIE Agreements and sell the interest in the VIE Agreements for a purchase price of $100,000. As a result of such termination, the Company no longer treats Highlight Media as a consolidated affiliated entity or consolidates the financial results and balance sheet of Highlight Media in the Company’s consolidated financial statements under U.S. GAAP. The carrying amount of the VIE’s assets and liabilities are as follows: September 30, December 31, 2023 2022 Cash and cash equivalents - 215,880 Accounts receivable, net - 194,520 Other receivables, net - 78,293 Prepayments - - Total current assets $ - $ 488,693 Plants and equipment - 502 Goodwill - 2,190,485 Total assets - 2,679,680 Current liabilities - 333,784 Non-current liabilities - - Total liabilities - 333,784 Net assets $ - $ 2,345,896 Accounts payable $ - $ 116,105 Other payables and accrued liabilities - 13,469 Other payables – related party - - Tax payables - 195,732 Customer Advances - 8,478 Wages payable - - Total current liabilities - 333,784 Lease liabilities – non-current - - Total liabilities $ - $ 333,784 The summarized operating results of the VIE’s are as follows: For the 2023 Operating revenues $ - Gross profit - Income from operations - Net loss $ - |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2023 | |
Accounts Receivable [Abstract] | |
Accounts receivable | Note 5 – Accounts receivable Accounts receivable consist of the following: September 30, December 31, Accounts receivable $ 150,000 $ 197,640 Less: Allowance for doubtful accounts - (3,120 ) Total accounts receivable, net $ 150,000 $ 194,520 Movement of allowance for doubtful accounts is as follows: September 30, December 31, Beginning balance $ (3,120 ) $ - Addition - (3,120 ) Disposal of Highlight Media 2,949 - Exchange rate effect 171 - Ending balance $ - $ (3,120 ) |
Other Receivables
Other Receivables | 9 Months Ended |
Sep. 30, 2023 | |
Other Receivables [Abstract] | |
Other receivables | Note 6 – Other receivables September 30, December 31, Receivable from disposal of Wuge $ - $ 948,000 Receivable from disposal of Highlight Media 100,000 - Interest receivable from convertible notes 46,575 - Others - 78,293 Total other receivables, net $ 146,575 $ 1,026,293 The balance of $100,000 on September 30, 2023 is the consideration required to be received upon disposal of Highlight Media. The balance of $948,000 on December 31, 2022 is the consideration required to be received upon disposal of Wuge, the shares that have cancelled their corresponding value on March 9, 2023. |
Plant and Equipment, Net
Plant and Equipment, Net | 9 Months Ended |
Sep. 30, 2023 | |
Plant and Equipment, Net [Abstract] | |
Plant and equipment, net | Note 7 – Plant and equipment, net Plant and equipment consist of the following: September 30, December 31, Office equipment and furniture $ 9,617 $ 10,039 Subtotal 9,617 10,039 Less: accumulated depreciation (751 ) (9,537 ) Total $ 8,866 $ 502 Depreciation expense for the nine months ended September 30, 2023 and 2022 amounted to $751 and $33,192, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2023 | |
Intangible Assets, Net [Abstract] | |
Intangible assets, net | Note 8 – Intangible assets, net Intangible assets consist of the following: September 30, December 31, Software $ 3,250,000 $ - Subtotal 3,250,000 - Less: accumulated amortization (162,500 ) - Total $ 3,087,500 $ - Amortization expense for the nine months ended September 30, 2023 and 2022 amounted to $162,500 and $98, respectively. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill [Abstract] | |
Goodwill | Note 9 – Goodwill The changes in the carrying amount of goodwill by business units are as follows: Highlight Total Balance as of December 31, 2022 $ 2,190,485 $ 2,190,485 Impairment (2,070,753 ) (2,070,753 ) Foreign currency translation adjustment (119,732 ) (119,732 ) Balance as of September 30, 2023 $ - $ - |
Related Party Balances and Tran
Related Party Balances and Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Balances and Transactions [Abstract] | |
Related Party Balances and Transactions | Note 10 – Related party balances and transactions Related party balances Prepaid expense – related party: Name of related party Relationship September 30, December 31, XIAO JIAN WANG Chief Executive Officer of the Company $ 100,000 $ - Total $ 100,000 $ - The above balances represent travel advances to the Chief Executive Officer of the Company. Other payables – related parties: Name of related party Relationship September 30, December 31, Shanghai Highlight Asset Management Co. LTD A company in which shareholder hold shares $ - $ 195,732 Total $ - $ 195,732 The above payables represent interest free loans and advances. These loans and advances are unsecured and due on demand. |
Long-Term Investment, Net
Long-Term Investment, Net | 9 Months Ended |
Sep. 30, 2023 | |
Long-term investment, net [Abstract] | |
Long-term investment, net | Note 11 – Long-term investment, net The Company’s long-term investments consisted of the following: September 30, 2023 December 31, Available-for-sale debt investments $ 2,500,000 $ - Total $ 2,500,000 $ - As of September 30, 2023, the Company subscribed to a total of $2,500,000 in convertible notes of Liquid Marketplace Corp and DigiTrax Entertainment Inc. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Note 12 – Leases Leases are classified as operating leases or finance leases in accordance with ASC 842. The Company’s operating leases mainly related to the rights to use building and office facilities. For leases with terms greater than 12 months, the Company records the related asset and liability at the present value of lease payments over the term. Certain leases include rental escalation clauses, renewal options and/or termination options, which are factored into the Company’s determination of lease payments when appropriate. September 30, December 31, Weighted average discount rate: Operating lease 5.25 years N/A Weighted average discount rate: Operating lease 4.24 % N/A The balances for the operating leases where the Group is the lessee are presented as follows within the consolidated balance sheets: September 30, 2023 December 31, Operating lease right-of-use assets, net Operating lease 1,683,518 - Lease liabilities Current portion of operating lease liabilities 324,162 - Non-current portion of operating lease liabilities 1,388,238 - 1,712,400 - Future lease payments under operating leases as of September 30, 2023 were as follows: Operating Leases FY2024 344,768 FY2025 383,632 FY2026 391,305 FY2027 399,131 FY2028 407,114 Total lease payments 1,925,949 Less: imputed interest 213,549 Present value of lease liabilities (1) 1,712,400 (1) Present value of future operating lease payments consisted of current portion of operating lease liabilities and non-current portion of operating lease liabilities, amounting to $324,162 and $1,388,238 for the nine months ended September 30, 2023, respectively. |
Taxes
Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Taxes [Abstract] | |
Taxes | Note 13 – Taxes Income tax United States GDC was organized in the state of Delaware in April 2015 and the nine months ended September 30, 2023 amounted to nil On December 22, 2017, the “Tax Cuts and Jobs Act” (“The 2017 Tax Act”) was enacted in the United States. Under the provisions of the Act, the U.S. corporate tax rate decreased from 34% to 21%. The 2017 Tax Act imposed a global intangible low-taxed income tax (“GILTI”), which is a new tax on certain off-shore earnings at an effective rate of 10.5% for tax years beginning after December 31, 2017 (increasing to 13.125% for tax years beginning after December 31, 2025) with a partial offset for foreign tax credits. The Company determined that there is no impact of GILTI for the nine months ended September 30, 2023 and 2022, which the Company believes that it will be imposed a minimum tax rate of 10.5% and to the extent foreign tax credits are available to reduce its US corporate tax, which may result in no additional US federal income tax being due. Cayman Islands China Sunlong is incorporated in the Cayman Islands and are not subject to tax on income or capital gains under current Cayman Islands law. In addition, upon payments of dividends by China Sunlong to its shareholders, no Cayman Islands withholding tax will be imposed. British Virgin Islands Citi Profit BVI is incorporated in the British Virgin Islands and are not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed. Hong Kong TMSR HK and Highlight HK are incorporated in Hong Kong and are subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5% in Hong Kong. The Company did not make any provisions for Hong Kong profit tax as there were no assessable profits derived from or earned in Hong Kong since inception. Under Hong Kong tax law, TMSR HK is exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends. PRC Makesi WFOE, Highlight WFOE, Highlight Media and SH Xianzhui are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), Chinese enterprises are subject to income tax at a rate of 25% after appropriate tax adjustments. Deferred tax assets Bad debt allowances must be approved by the Chinese tax authority prior to being deducted as an expense item on the tax return. Significant components of deferred tax assets were as follows: September 30, December 31, Net operating losses carried forward – U.S. $ 276,982 $ 4,574,581 Valuation allowance (276,982 ) (4,574,581 ) Deferred tax assets, net $ - $ - Value added tax Enterprises or individuals who sell commodities, engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax in accordance with PRC laws. The value added tax (“VAT”) standard rates are 6% to 17% of the gross sales price and changed to 6% to 16% of gross sales starting in May 2018. The VAT standard rates changed to 6% to 13% of the gross sales prices starting in April 2019. A credit is available whereby VAT paid on the purchases of semi-finished products or raw materials used in the production of the Company’s finished products can be used to offset the VAT due on sales of the finished products and services. Taxes payable consisted of the following: September 30, December 31, VAT taxes payable $ - $ 8,478 Other taxes payable - - Total $ - $ 8,478 |
Concentration of Risk
Concentration of Risk | 9 Months Ended |
Sep. 30, 2023 | |
Concentration of Risk [Abstract] | |
Concentration of risk | Note 14 – Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and accounts receivable. As of September 30, 2023 and December 31, 2022, $1,143,611 and $215,880 and were deposited with various financial institutions located in the PRC, respectively. As of September 30, 2023 and December 31, 2022, $503,537 and $173,228 were deposited with one financial institution located in the U.S., respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. Accounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Equity | Note 15 – Equity Restricted net assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by Highlight WFOE only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying unaudited condensed consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Highlight WFOE. Highlight WFOE and Highlight Media are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Highlight WFOE may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. Highlight Media may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange. As a result of the foregoing restrictions, Highlight WFOE and Highlight Media are restricted in their ability to transfer their net assets to the Company. Foreign exchange and other regulation in the PRC may further restrict Highlight WFOE and Highlight Media from transferring funds to Highlight HK in the form of dividends, loans and advances. As of September 30, 2023 and December 31, 2022, amounts restricted are the net assets of Highlight WFOE and Highlight Media which amounted to nil Common stock On May 4, 2023, the Company sold an aggregate of 310,168 shares of common stock of the Company, par value $0.0001 per share, and pre-funded warrants to purchase up to an aggregate of 844,351 shares of common stock are sold to certain purchasers, pursuant to a securities purchase agreement, dated May 1, 2023, as amended on May 16, 2023. The purchase price of each share of common stock is $8.35. The purchase price of each pre-funded warrant is $8.349, which equals the price per share of common stock being sold to the public in this offering, minus $0.001. The RD Offering is being made pursuant to a shelf registration statement (No. 333-254366) on Form S-3, which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on March 26, 2021, and related prospectus supplement. In the concurrent PIPE offering, the Company sold warrants to purchase up to 1,154,519 shares of common stock to the Purchasers, pursuant to a private warrant securities purchase agreement, dated May 1, 2023. In connection with the offering, the Company paid Univest Securities, LLC, the placement agent, a total cash fee equal to 7.0% of the aggregate gross proceeds received in the offering, a non-accountable expense allowance equal to 1% of the aggregate gross proceeds, and reimbursement for certain out-of-pocket accountable expenses incurred in this offering in the amount of $150,000. In addition, the Company issued to the placement agent warrants to purchase up to 115,452 shares of common stock at an exercise price of $10.02 per share, which represents 120% of the offering price of each share. The net proceeds from the Offering, after deducting placement agent discounts and commissions and estimated offering expenses payable by the Company, are approximately $8.5 million (assuming the warrants are not exercised). The Company used the net proceeds from the Offering for working capital and general corporate purposes. On June 22, 2023, the Company entered into a software purchase agreement with Northeast Management LLC, a seller unaffiliated with the Company. Pursuant to the agreement, the Company agreed to purchase and the seller agreed to sell all of seller’s right, title, and interest in and to the certain software. The purchase price of the software shall be $750,000, payable in the form of issuance of 187,500 shares of common stock of the Company, valued at $4.00 per share. The Company plans to use the software to develop video games. On June 26, 2023, the Company issued the shares to the seller’s designees and the transaction was completed. Warrants and options On July 29, 2015, the Company sold 10,000,000 units at a purchase price of $5.00 per unit (“Public Units”) in its initial public offering. Each Public Unit consists of one share of the Company’s common stock, $0.0001 par value, and one warrant. Each warrant will entitle the holder to purchase one-half of one share of common stock at an exercise price of $2.88 per half share ($5.75 per whole share). Warrants may be exercised only for a whole number of shares of common stock. No fractional shares will be issued upon exercise of the warrants. The warrants will become exercisable on 30 days after the consummation of its initial Business Combination with China Sunlong on February 6, 2018. The warrants expired on February 5, 2023. The warrants will be redeemable by the Company at a price of $0.01 per warrant upon 30 days prior written notice after the warrants become exercisable, only in the event that the last sale price of the common stock equals or exceeds $12.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which notice of redemption is given. The sponsor of the Company purchased, simultaneously with the closing of the Public Offering on July 29, 2015, 500,000 units at $5.00 per unit in a private placement for an aggregate price of $2,500,000. Each unit purchased is substantially identical to the units sold in the Public Offering. The Company sold to the underwriter (and/or its designees), for $100, as additional compensation, an option to purchase up to a total of 800,000 units exercisable at $5.00 per unit (or an aggregate exercise price of $4,000,000) upon the closing of the Public Offering. Since the option is not exercisable until the earliest on the closing the initial Business Combination, the option will effectively represent the right to purchase up to 800,000 shares of common stock and 800,000 warrants to purchase 400,000 shares at $5.75 per full share for an aggregate maximum amount of $6,300,000. The units issuable upon exercise of this option are identical to those issued in the Public Offering. The aforementioned warrants and options are deemed to be effective on February 6, 2018, the date of the consummation of its initial business combination with China Sunlong, as the Company was deemed to be the accounting acquiree in the transaction and the transaction was treated as a recapitalization of China Sunlong. After the 1-for-30 reverse stock split effective on November 9, 2022, all options, warrants and other convertible securities of the Company outstanding immediately prior to the reverse stock split were adjusted by dividing the number of shares of common stock into which the options, warrants and other convertible securities are exercisable or convertible by thirty (30) and multiplying the exercise or conversion price thereof by thirty (30), all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share. On February 18, 2021, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain purchasers, pursuant to which, on February 22, 2021, we sold (i) 138,889 shares of common stock, (ii) registered warrants (the “Registered Warrants”) to purchase an aggregate of up to 54,646 shares of common stock and (iii) unregistered warrants (the “Unregistered Warrants”) to purchase up to 84,244 shares (the “Warrant Shares”) of common stock in a registered direct offering (the “Registered Direct Offering”) and a concurrent private placement (the “Private Placement,” and together with the Registered Direct Offering, the “Offering”). The terms of the Offering were previously reported in a Form 8-K filed with the SEC on February 18, 2021 and the closing of the Offering was reported in a Form 8-K filed with the Commission on February 22, 2021. The Registered Warrants have a term of five years and are exercisable immediately at an exercise price of $201.60 per share, subject to adjustments thereunder, including a reduction in the exercise price, in the event of a subsequent offering at a price less than the then current exercise price, to the same price as the price in such offering (a “Price Protection Adjustment”). The Unregistered Warrants have a term of five and one-half years and are first exercisable on the date that is the earlier of (i) six months after the date of issuance or (ii) the date on which the Company obtains stockholder approval approving the sale of the securities sold under the Securities Purchase Agreement, to purchase an aggregate of up to 84,244 shares of common stock. The Unregistered Warrants have an exercise price of $201.60 per share, subject to adjustments thereunder, including (x) a Price Protection Adjustment and (y) in the event the exercise price is more than $183.00, a reduction of the exercise price to $183.00, upon obtaining such stockholder approval. The Offering was conducted pursuant to a placement agency agreement, dated February 18, 2021 (the “Placement Agency Agreement”), between the Company and Univest Securities, LLC (the “Placement Agent”), on a “reasonable best efforts” basis. The Company paid the Placement Agent a cash fee of $2,310,000, including $2,000,000 in commission which was equal to eight percent (8.0%) of the aggregate gross proceeds raised in this Offering, $250,000 in non-accountable expense which was equal to one percent (1%) of the aggregate gross proceeds raised in the Offering, and $60,000 in accountable expenses. Additionally, the Company issued to the Placement Agent warrants to purchase up to 6,945 shares of common stock, with a term of five years first exercisable six months after the date of issuance and at an exercise price of $180.00 per share. Pursuant to the Securities Purchase Agreement, we are required to hold a meeting of our stockholders not later than April 29, 2021 to seek such approval as may be required from our stockholders (the “Stockholder Approval”), in accordance with applicable law, the applicable rules and regulations of the Nasdaq Stock Market, our certificate of incorporation and bylaws and the Nevada Revised Statutes with respect to the issuance of the securities in the Offering, including the Warrants sold in the Private Placement, so that the issuance by us of shares of common stock in excess of the 231,802 shares (19.99% of the shares of common stock outstanding as of February 17, 2021, the date prior to entering into the Securities Purchase Agreement) in the aggregate (the “Issuable Maximum”), will be in compliance with Nasdaq Listing Rules 5635(a) and 5635(d) as described herein, and investors in the Offering will be able to exercise the Warrants prior to six months after the closing of the Offering. On April 29, 2021, we held a special meeting of stockholders and approved the issuance of shares of common stock in excess of the 231,802 shares. The exercise price of the Unregistered Warrants was reduced to $183.00. On May 1, 2023, the Company entered into a placement agency agreement, as amended on May 16, 2023 (the “Placement Agency Agreement”), with Univest Securities, LLC (the “Placement Agent”). Pursuant to the Placement Agency Agreement, the Placement Agent agrees to use its reasonable best efforts to sell the Company’s common stock in a registered direct offering (the “RD Offering”), and a concurrent private placement (the “PIPE Offering”, together with the RD Offering, collectively the “Offering”). The Placement Agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of securities. In the RD Offering, an aggregate of 310,168 shares of common stock (the “Common Shares”) of the Company, par value $0.0001 per share, and pre-funded warrants to purchase up to an aggregate of 844,351 shares of common stock (the “Pre-Funded Warrants”, and the common stock underlying such warrants, the “Pre-Funded Warrant Shares”) are sold to certain purchasers (the “Purchasers”), pursuant to a securities purchase agreement, dated May 1, 2023, as amended on May 16, 2023 (the “RD Securities Purchase Agreement”). The purchase price of each Common Share is $8.35. The purchase price of each Pre-funded Warrant is $8.349, which equals the price per Common Share being sold to the public in the Offering, minus $0.001. The RD Offering is being made pursuant to a shelf registration statement (No. 333-254366) on Form S-3, which was declared effective by the U.S. Securities and Exchange Commission on March 26, 2021, and related prospectus supplement. In connection with the Pre-Funded Warrant Shares, “Pre-funded” refers to the fact that the purchase price of the warrants in the offering includes almost the entire exercise price that will be paid under the Pre-funded Warrants, except for a nominal remaining exercise price of $0.001. The purpose of the Pre-funded Warrants is to enable Purchasers that may have restrictions on their ability to beneficially own more than 4.99% (or, upon election of the holder, 9.99%) of the Company’s outstanding common stock following the consummation of the offering the opportunity to make an investment in the Company without triggering their ownership restrictions, by receiving Pre-funded Warrants in lieu of the Company’s common stock which would result in such ownership of more than 4.99% (or 9.99%), and receive the ability to exercise their option to purchase the shares underlying the Pre-funded Warrants at such nominal price at a later date. In the RD Offering, each Pre-funded Warrant is exercisable for one share of our common stock, with an exercise price equal to $0.001 per share, at any time that the Pre-funded Warrant is outstanding. The Pre-funded Warrants will be exercisable immediately after issuance and will expire five (5) years from the date of issuance. The holder of a Pre-funded Warrant will not be deemed a holder of our underlying common stock until the Pre-funded Warrant is exercised. In the concurrent PIPE Offering, warrants to purchase up to 1,154,519 shares of common stock (the “Unregistered Warrants”, and the common stock underlying such warrants, the “Unregistered Warrant Shares”) are also sold to the Purchasers, pursuant to a private warrant securities purchase agreement, dated May 1, 2023. The Unregistered Warrants are exercisable immediately after issuance and will expire five (5) years from the date of issuance. The Exercise Price of the Unregistered Warrants is $8.35, subject to adjustment as provided in the form of Unregistered Warrants. The Company also paid the Placement Agent a total cash fee equal to 7.0% of the aggregate gross proceeds received in the Offering and a non-accountable expense allowance equal to 1% of the aggregate gross proceeds. The Placement Agent were also reimbursed for certain out-of-pocket accountable expenses incurred in this offering up to $150,000. The Placement Agent also received warrants to purchase up to 115,452 shares of common stock (equal to 5.0% of the aggregate number of Common Shares, Pre-Funded Warrant Shares, and the Unregistered Warrant Shares) at an exercise price of $10.02 per share, which represents 120% of the offering price of each Common Share. The Placement Agent’s warrants will have substantially the same terms as the Unregistered Warrants. The summary of warrant activity is as follows: Warrants Exercisable Weighted Average Exercise Average Remaining Contractual Outstanding Shares Price Life December 31, 2022 4,539,674 151,323 172.5 0.10 Granted/Acquired 2,114,322 844,351 $ 8.53 4.63 Expired 164,675 5,488 $ 172.5 0.10 Exercised 844,351 844,351 0.001 - September 30, 2023 5,644,970 145,835 $ 25.03 4.34 The summary of option activity is as follows: Options Exercisable Weighted Average Exercise Average Remaining Contractual Outstanding Shares Price Life December 31, 2022 824,000 27,467 $ 150.00 0.10 Granted/Acquired - - $ - - Expired 824,000 27,467 $ 150.00 0.10 Exercised - - - - September 30, 2023 - - $ - - |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies [Abstract] | |
Commitments and contingencies | Note 16 – Commitments and contingencies Contingencies From time to time, the Company may be subject to certain legal proceedings, claims and disputes that arise in the ordinary course of business. Although the outcomes of these legal proceedings cannot be predicted, the Company does not believe these actions, in the aggregate, will have a material adverse impact on its financial position, results of operations or liquidity. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment reporting | Note 17 – Segment reporting The Company follows ASC 280, Segment Reporting, which requires that companies disclose segment data based on how management makes decision about allocating resources to segments and evaluating their performance. The Company’s chief operating decision maker evaluates performance and determines resource allocations based on a number of factors, the primary measure being income from operations. The Company’s remain business segment and operations are Highlight Media (prior to September 30, 2023) and AI Catalysis. The Company’s consolidated results of operations and consolidated financial position from continuing operations are almost all attributable to Highlight Media and AI Catalysis; accordingly, management believes that the consolidated balance sheets and statement of operations provide the relevant information to assess Highlight Media and AI Catalysis’s performance. The following represents assets by division as of: Total assets as of September 30, 2023 December 31, 2022 Highlight Media $ - $ 489,195 SH Xianzhui 3,871,388 - GDC, AI Catalysis, Citi Profit BVI , TMSR HK , Highlight HK, Highlight WFOE and Makesi WFOE 10,034,903 3,311,713 Total Assets $ 13,906,291 $ 3,800,908 For the Nine Months Ended Total revenues of 2023 2022 Highlight Media $ - $ - SH Xianzhui GDC, AI Catalysis, Citi Profit BVI , TMSR HK , Highlight HK, Highlight WFOE and Makesi WFOE 150,000 - Total revenues $ 150,000 $ - |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations [Abstract] | |
Discontinued Operations | Note 18 – Discontinued Operations The following depicts the result of operations for the discounted operations of Highlight Media for the nine months ended September 30, 2023 and Wuge for the nine months ended September 30, 2022, respectively. For the Nine Months Ended 2023 2022 REVENUES Enterprise brand management services 165,993 - Wuge digital door signs - 7,616,615 TOTAL REVENUES 165,993 7,616,615 COST OF REVENUES Enterprise brand management services 114,247 - Wuge digital door signs - 5,527,950 TOTAL COST OF REVENUES 114,247 5,527,950 GROSS PROFIT 51,746 2,088,665 OPERATING EXPENSES Selling, general and administrative 113,552 1,605,935 TOTAL OPERATING EXPENSES 113,552 1,605,935 (LOSS) INCOME FROM OPERATIONS (61,806 ) 482,730 OTHER INCOME (EXPENSE) Interest income 49 65,251 Interest expense (248 ) (935 ) Other income, net 709 70,830 Total other expense, net 510 135,146 (LOSS) INCOME BEFORE INCOME TAXES FROM CONTINUING OPERATIONS (61,296 ) 617,876 PROVISION FOR INCOME TAXES 112 314,787 (LOSS) INCOME FROM CONTINUING OPERATIONS (61,408 ) 303,089 Net loss attributable to noncontrolling interest - - (LOSS) INCOME FROM CONTINUING OPERATIONS OF GD CULTURE GROUP LIMITED (61,408 ) 303,089 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 19 – Subsequent events (i) Investment in JV On October 27, 2023, the Company entered into an equity purchase agreement with Highlight WFOE and Beijing Hehe, which was amended on November 10, 2023 (such equity purchase agreement, as amended, the “Agreement” for purpose of this section “Investment in JV”), pursuant to which the Highlight WFOE agreed to purchase 13.3333% equity interest in SH Xianzhui from Beijing Hehe and the Company agreed to issue 400,000 shares of common stock of the Company, valued at $2.7820 per share, the average closing bid price of the common stock of GDC as of the five trading days immediately preceding the date of the Agreement, to Beijing Hehe or its assigns. The closing of the transaction shall take place within thirty (30) days from the execution of the Agreement. The Agreement is effective for thirty (30) days from the date of the Agreement, which can be extended for additional thirty (30) days upon all parties’ written agreement. The Company or Highlight WFOE may terminate the Agreement at any time with a three (3) day advance written notice to Beijing Hehe. (ii) November 2023 Registered Direct Offering On November 1, 2023, the Company entered into a placement agency agreement (the “Placement Agency Agreement”), with Univest Securities, LLC (the “Placement Agent” or “Univest”). Pursuant to the Placement Agency Agreement, the Placement Agent agrees to use its reasonable best efforts to sell the Company’s common stock (the “Common Stock”) in a registered direct offering (the “Offering”). The Placement Agent has no obligation to buy any of the securities from us or to arrange for the purchase or sale of any specific number or dollar amount of securities. In the Offering, (i) an aggregate of 1,436,253 shares of common stock (the “Common Shares”) of the Company, par value $0.0001 per share, (ii) pre-funded warrants to purchase up to an aggregate of 1,876,103 shares of common stock (the “Pre-Funded Warrants”, and the common stock underlying such warrants, the “Pre-Funded Warrant Shares”), and (iii) registered warrants to purchase up to an aggregate of 3,312,356 shares of common stock (the “Registered Warrants”, and the common stock underlying such warrants, the “Registered Warrant Shares”) are sold to certain purchasers (the “Purchasers”), pursuant to a securities purchase agreement, dated October 31, 2023 (the “Securities Purchase Agreement”). The purchase price of each Common Share is $3.019. The purchase price of each Pre-funded Warrant is $3.018, which equals the price per Common Share being sold in this Offering, minus $0.001. The Pre-funded Warrants will be exercisable immediately after issuance and will expire five (5) years from the date of issuance. The Registered Warrants will be exercisable immediately and will expire five (5) years from the date of issuance. The Offering is being made pursuant to a shelf registration statement (No. 333-254366) on Form S-3, which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on March 26, 2021, and related prospectus supplement. The net proceeds from the Offering, after deducting placement agent discounts and commissions and estimated offering expenses payable by the Company, are approximately $9.05 million (assuming the Registered Warrants are not exercised). The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes. Pursuant to the Placement Agency Agreement, the Company has agreed to pay the Placement Agent a total cash fee equal to 7.0% of the aggregate gross proceeds received in the Offering. The Company also agreed to reimburse the Placement Agent certain out-of-pocket accountable expenses incurred in this Offering up to $150,000. In concurrent with the Offering, on November 1, 2023, the Company entered into certain warrant exchange agreements (the “Warrant Exchange Agreements”) with certain holders of warrants issued by the Company on May 16, 2023 in a private placement (the “Existing Warrants”), to purchase up to 1,154,519 shares of the Company’s Common Stock (the “Holders”). Pursuant to the Warrant Exchange Agreements, the Holders shall surrender the Existing Warrants, and the Company shall cancel the Existing Warrants and shall issue to Holders pre-funded warrants to purchase up to 577,260 shares of the Company’s Common Stock (the “Exchange Warrants”). The Exchange Warrants were issued to Holders on November 3, 2023 and the warrant exchange closed on the same day. On November 17, 2023, the Company entered into an amendment to the Securities Purchase Agreement with the Purchasers, pursuant to which Exhibit B to the Securities Purchase Agreement (form of Registered Warrants) was deleted and replaced with an amended and restated the Form of Registered Warrant, to remove Section 2(b) Adjustment Upon Issuance of Common Stock and Section 2(e) Other Events. The Registered Warrants that were issued to Purchasers under the Securities Purchase Agreement were returned to and cancelled by the Company on November 17, 2023. Concurrently, the Company issued amended and restated Registered Warrants to each Purchaser. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). |
Principles of consolidation | Principles of consolidation The unaudited condensed financial statements of the Company include the accounts of GDC and its wholly owned subsidiaries and VIE. All intercompany transactions and balances are eliminated upon consolidation. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of intangible assets, deferred revenues and plant and equipment, impairment of long-lived assets, collectability of receivables, present value and lease liabilities. Actual results could differ from these estimates. |
Foreign currency translation and transaction | Foreign currency translation and transaction The reporting currency of the Company is the U.S. dollar. The Company in China conducts its businesses in the local currency, Renminbi (RMB), as its functional currency. Assets and liabilities are translated at the unified exchange rate as quoted by the People’s Bank of China at the end of the period. The statement of income accounts are translated at the average translation rates and the equity accounts are translated at historical rates. Translation adjustments resulting from this process are included in accumulated other comprehensive income. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation adjustments included in accumulated other comprehensive income amounted to $71,468 and $179,460 as of September 30, 2023 and December 31, 2022, respectively. The balance sheet amounts, with the exception of shareholders’ equity at September 30, 2023 and December 31, 2022 were translated at 7.30 RMB and 6.38 RMB to $1.00, respectively. The shareholders’ equity accounts were stated at their historical rate. The average translation rates applied to statement of income accounts for the nine months ended September 30, 2023 and 2022 were 7.03 RMB and 6.61 RMB, respectively. Cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The PRC government imposes significant exchange restrictions on fund transfers out of the PRC that are not related to business operations. These restrictions have not had a material impact on the Company because it has not engaged in any significant transactions that are subject to the restrictions. |
Accounts receivable, net | Accounts receivable, net Accounts receivable include trade accounts due from customers. An allowance for doubtful accounts may be established and recorded based on management’s assessment of potential losses based on the credit history and relationships with the customers. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. |
Prepayments | Prepayments Prepayments are funds deposited or advanced to outside vendors for future inventory or services purchases. As a standard practice in China, many of the Company’s vendors require a certain amount to be deposited with them as a guarantee that the Company will complete its purchases on a timely basis. This amount is refundable and bears no interest. The Company has legally binding contracts with its vendors, which require any outstanding prepayments to be returned to the Company when the contract ends. |
Plant and equipment | Plant and equipment Plant and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method after consideration of the estimated useful lives of the assets and estimated residual value. The estimated useful lives and residual value are as follows: Useful Life Estimated Office equipment and furnishing 5 years 5 % The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. |
Intangible assets | Intangible assets Intangible assets represent software, and it is stated at cost, less accumulated amortization. Research and development costs associated with internally developed patents are expensed when incurred. Amortization expense is recognized on the straight-line basis over the estimated useful lives of the assets. The software has finite useful lives and is amortized using a straight-line method that reflects the estimated pattern in which the economic benefits of the intangible asset are to be consumed. The Company amortizes the cost of software, over their useful life using the straight-line method. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances revised estimates of useful lives. The estimated useful life is as follows: Useful Life Software 5 years |
Lease | Lease The Company determines if an arrangement is a lease at inception. Leases that transfer substantially all of the benefits and risks incidental to the ownership of assets are accounted for as finance leases as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases. The Company has no significant finance leases. The Company recognizes lease liabilities and corresponding right-of-use assets on the balance sheet for leases. Operating lease right- of-use assets are included in non-current prepayments, receivables and other assets and operating lease liabilities are included in current accrued expenses, accounts payable and other liabilities and other non-current liabilities on the consolidated balance sheets. Operating lease right-of-use assets and operating lease liabilities are initially recognized based on the present value of future lease payments at lease commencement. The operating lease right-of-use asset also includes any lease payments made prior to lease commencement and the initial direct costs incurred by the lessee and is recorded net of any lease incentives received. As the interest rates implicit in most of the leases are not readily determinable, the Company uses the incremental borrowing rates based on the information available at lease commencement to determine the present value of the future lease payments. Operating lease expenses are recognized on a straight-line basis over the term of the lease. |
Goodwill | Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. In accordance with ASC 350, the Company may first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. In the qualitative assessment, the Company considers factors such as macroeconomic conditions, industry and market considerations, overall financial performance of the reporting unit, and other specific information related to the operations, business plans and strategies of the reporting unit, including consideration of the impact of the COVID-19 pandemic. Based on the qualitative assessment, if it is more likely than not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is performed. The Company may also bypass the qualitative assessment and proceed directly to perform the quantitative impairment test. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized as impairment. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, allocation of assets, liabilities and goodwill to reporting units, and determination of the fair value of each reporting unit. |
Impairment for long-lived assets | Impairment for long-lived assets Long-lived assets, including plant, equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. |
Fair value measurement | Fair value measurement The accounting standard regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. The Company considers the carrying amount of cash, notes receivable, accounts receivable, other receivables, prepayments, accounts payable, other payables and accrued liabilities, customer deposits and taxes payable to approximate their fair values because of their short term nature. The accounting standards define fair value, establish a three-level valuation hierarchy for disclosures of fair value measurement and enhance disclosure requirements for fair value measures. The three levels are defined as follow: ● Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. |
Customer deposits | Customer deposits Highlight Media typically receives customer deposits for services to be rendered from its customers. As Highlight Media delivers the services, it will recognize these deposits to results of operations in accordance to its revenue recognition policy. |
Revenue recognition | Revenue recognition On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (ASC 606) using the modified retrospective method for contracts that were not completed as of January 1, 2018. This did not result in an adjustment to retained earnings upon adoption of this new guidance as the Company’s revenue, other than retainage revenues, was recognized based on the amount of consideration we expect to receive in exchange for satisfying the performance obligations. However, the impact of the Company’s retainage revenue was not material as of the date of adoption, and as a result, did not result in an adjustment. The core principle underlying the revenue recognition ASU is that the Company will recognize revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. The Company’s revenue streams are primarily recognized at a point in time. The ASU 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. The application of the five-step model to the revenue streams compared to the prior guidance did not result in significant changes in the way the Company records its revenue. Upon adoption, the Company evaluated its revenue recognition policy for all revenue streams within the scope of the ASU under previous standards and using the five-step model under the new guidance and confirmed that there were no differences in the pattern of revenue recognition except its retainage revenues. An entity will also be required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the entity controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the entity simply arranges but does not control the goods or services being transferred to the customer, will result in the recognition of the net amount the entity is entitled to retain in the exchange. The company, as a principal, provides services to clients under separate contracts, generating revenue. The pricing terms specified in the contracts are fixed. An obligation to perform is identified in contracts with clients. Revenue is recognized over the period in which the services are earned. Payments received prior to the relevant criteria for revenue recognition are met, are recorded as customer deposits. The Company’s disaggregate revenue streams from continuing operations are summarized as follows: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 Software copyright $ - $ - $ 150,000 $ - Total revenues $ - $ - $ 150,000 $ - |
Income taxes | Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes is accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. The Company incurred no such penalties and interest for the three months ended September 30, 2023 and 2022. As of September 30, 2023, the Company’s PRC tax returns filed for 2020, 2021 and 2022 remain subject to examination by any applicable tax authorities. |
Earnings per share | Earnings per share Basic earnings per share are computed by dividing income available to common shareholders of the Company by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common shares were exercised and converted into common shares. 9,079,348 and 10,500,000 of outstanding warrants which is equivalent to convertible of 4,539,674 and 5,250,000 common shares were excluded from the diluted earnings per share calculation due to its antidilutive effect for the three months ended September 30, 2023 and 2022, respectively. 824,000 of outstanding options were excluded from the diluted earnings per share calculation due to its antidilutive effect for the three months ended September 30, 2023 and 2022. |
Recently accounting pronouncements | Recently accounting pronouncements In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (ASU 2021-08), which clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The new amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. The amendments should be applied prospectively to business combinations occurring on or after the effective date of the amendments, with early adoption permitted. The Company is currently evaluating the impact of the new guidance on the consolidated financial statements. In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for fiscal years beginning after 15 December 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on the financial position, results of operations and cash flows. In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”, which clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The amendments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction. This guidance also requires certain disclosures for equity securities subject to contractual sale restrictions. The new guidance is required to be applied prospectively with any adjustments from the adoption of the amendments recognized in earnings and disclosed on the date of adoption. This guidance is effective for the Company for the year ending March 31, 2025 and interim reporting periods during the year ending March 31, 2025. Early adoption is permitted. The Company does not expect that the adoption of this guidance will have a material impact on the financial position, results of operations and cash flows. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
Reclassification | Reclassification Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings (loss) or and financial position. |
Nature of Business and Organi_2
Nature of Business and Organization (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Nature of Business and Organization [Abstract] | |
Schedule of Consolidated Financial Statements Reflect the Activities of CCNC | The accompanying consolidated financial statements reflect the activities of GDC and each of the following entities: Name Background Ownership Citi Profit BVI ● A British Virgin Island company Incorporated on April 2019 100% owned by the Company TMSR HK2 ● A Hong Kong company 100% owned by Citi Profit BVI Highlight HK ● A Hong Kong company ● Incorporated on November 2022 100% owned by Citi Profit BVI Makesi WFOE 2 ● A PRC limited liability company and deemed a wholly foreign owned enterprise (WFOE) ● Incorporated on December 2020 100% owned by TMSR HK Highlight WFOE ● A PRC limited liability company and deemed a wholly foreign owned enterprise (WFOE) ● Incorporated on January 2023 100% owned by Highlight HK Wuge 1 ● A PRC limited liability company ● Incorporated on July 4, 2019 VIE of Makesi WFOE Highlight Media 3 ● A PRC limited liability company ● Incorporated on September 16, 2022 VIE of Highlight WFOE AI Catalysis ● A Nevada company ● Incorporated on May 2023 100% owned by the Company SH Xianzhui ● A PRC limited liability company ● Incorporated on May 2023 60% owned by Highlight WFOE 1 Disposed on September 28, 2022 2 Disposed on June 26, 2023 3 Disposed on September 26, 2023 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Plant and Equipment | The estimated useful lives and residual value are as follows: Useful Life Estimated Office equipment and furnishing 5 years 5 % |
Schedule of Estimated Useful Lives of Intangible Assets | The estimated useful life is as follows: Useful Life Software 5 years |
Schedule of Disaggregate Revenue | The Company’s disaggregate revenue streams from continuing operations are summarized as follows: For the Three Months Ended For the Nine Months Ended 2023 2022 2023 2022 Software copyright $ - $ - $ 150,000 $ - Total revenues $ - $ - $ 150,000 $ - |
Business Combination and Rest_2
Business Combination and Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combination and Restructuring [Abstract] | |
Schedule of Net Purchase Price Allocation | The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of Highlight Media based on a valuation performed by an independent valuation firm engaged by the Company: Total consideration at fair value $ 2,250,000 |
Schedule of the Fair Value of the Identifiable Assets Acquired and Liabilities Assumed at the Acquisition Date | Fair Value Cash $ 47,498 Other current assets 107,828 Plant and equipment 1,205 Other noncurrent assets - Goodwill 2,121,947 Total asset 2,278,478 Accounts payable 14,170 Taxes Payable 363 Other Payable 13,945 Total liabilities 28,478 Net asset acquired $ 2,250,000 |
Variable Interest Entity (Table
Variable Interest Entity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Variable Interest Entity [Abstract] | |
Schedule of Carrying Amount of the VIE’s Assets and Liabilities | The carrying amount of the VIE’s assets and liabilities are as follows: September 30, December 31, 2023 2022 Cash and cash equivalents - 215,880 Accounts receivable, net - 194,520 Other receivables, net - 78,293 Prepayments - - Total current assets $ - $ 488,693 Plants and equipment - 502 Goodwill - 2,190,485 Total assets - 2,679,680 Current liabilities - 333,784 Non-current liabilities - - Total liabilities - 333,784 Net assets $ - $ 2,345,896 Accounts payable $ - $ 116,105 Other payables and accrued liabilities - 13,469 Other payables – related party - - Tax payables - 195,732 Customer Advances - 8,478 Wages payable - - Total current liabilities - 333,784 Lease liabilities – non-current - - Total liabilities $ - $ 333,784 |
Schedule of Summarized Operating Results of the VIE’s | The summarized operating results of the VIE’s are as follows: For the 2023 Operating revenues $ - Gross profit - Income from operations - Net loss $ - |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounts Receivable [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable consist of the following: September 30, December 31, Accounts receivable $ 150,000 $ 197,640 Less: Allowance for doubtful accounts - (3,120 ) Total accounts receivable, net $ 150,000 $ 194,520 |
Schedule of Movement of Allowance for Doubtful Accounts | Movement of allowance for doubtful accounts is as follows: September 30, December 31, Beginning balance $ (3,120 ) $ - Addition - (3,120 ) Disposal of Highlight Media 2,949 - Exchange rate effect 171 - Ending balance $ - $ (3,120 ) |
Other Receivables (Tables)
Other Receivables (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Other Receivables [Abstract] | |
Schedule of Other Receivables | September 30, December 31, Receivable from disposal of Wuge $ - $ 948,000 Receivable from disposal of Highlight Media 100,000 - Interest receivable from convertible notes 46,575 - Others - 78,293 Total other receivables, net $ 146,575 $ 1,026,293 |
Plant and Equipment, Net (Table
Plant and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Plant and Equipment, Net [Abstract] | |
Schedule of Plant and Equipment, Net | Plant and equipment consist of the following: September 30, December 31, Office equipment and furniture $ 9,617 $ 10,039 Subtotal 9,617 10,039 Less: accumulated depreciation (751 ) (9,537 ) Total $ 8,866 $ 502 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Intangible Assets, Net [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets consist of the following: September 30, December 31, Software $ 3,250,000 $ - Subtotal 3,250,000 - Less: accumulated amortization (162,500 ) - Total $ 3,087,500 $ - |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill [Abstract] | |
Schedule of Carrying Amount of Goodwill Business Units | The changes in the carrying amount of goodwill by business units are as follows: Highlight Total Balance as of December 31, 2022 $ 2,190,485 $ 2,190,485 Impairment (2,070,753 ) (2,070,753 ) Foreign currency translation adjustment (119,732 ) (119,732 ) Balance as of September 30, 2023 $ - $ - |
Related Party Balances and Tr_2
Related Party Balances and Transactions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Balances and Transactions [Abstract] | |
Schedule of Prepaid Expense – Related Party | Prepaid expense – related party: Name of related party Relationship September 30, December 31, XIAO JIAN WANG Chief Executive Officer of the Company $ 100,000 $ - Total $ 100,000 $ - Name of related party Relationship September 30, December 31, Shanghai Highlight Asset Management Co. LTD A company in which shareholder hold shares $ - $ 195,732 Total $ - $ 195,732 |
Long-Term Investment, Net (Tabl
Long-Term Investment, Net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Long-term investment, net [Abstract] | |
Schedule of Long-Term Investments Consisted | The Company’s long-term investments consisted of the following: September 30, 2023 December 31, Available-for-sale debt investments $ 2,500,000 $ - Total $ 2,500,000 $ - |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Lease Payments Over the Term | For leases with terms greater than 12 months, the Company records the related asset and liability at the present value of lease payments over the term. September 30, December 31, Weighted average discount rate: Operating lease 5.25 years N/A Weighted average discount rate: Operating lease 4.24 % N/A |
Schedule of Balances for the Operating Leases | The balances for the operating leases where the Group is the lessee are presented as follows within the consolidated balance sheets: September 30, 2023 December 31, Operating lease right-of-use assets, net Operating lease 1,683,518 - Lease liabilities Current portion of operating lease liabilities 324,162 - Non-current portion of operating lease liabilities 1,388,238 - 1,712,400 - |
Schedule of Future Lease Payments under Operating Leases | Future lease payments under operating leases as of September 30, 2023 were as follows: Operating Leases FY2024 344,768 FY2025 383,632 FY2026 391,305 FY2027 399,131 FY2028 407,114 Total lease payments 1,925,949 Less: imputed interest 213,549 Present value of lease liabilities (1) 1,712,400 (1) Present value of future operating lease payments consisted of current portion of operating lease liabilities and non-current portion of operating lease liabilities, amounting to $324,162 and $1,388,238 for the nine months ended September 30, 2023, respectively. |
Taxes (Tables)
Taxes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Taxes [Abstract] | |
Schedule of Deferred Tax Assets | Bad debt allowances must be approved by the Chinese tax authority prior to being deducted as an expense item on the tax return. Significant components of deferred tax assets were as follows: September 30, December 31, Net operating losses carried forward – U.S. $ 276,982 $ 4,574,581 Valuation allowance (276,982 ) (4,574,581 ) Deferred tax assets, net $ - $ - |
Schedule of Taxes Payable | Taxes payable consisted of the following: September 30, December 31, VAT taxes payable $ - $ 8,478 Other taxes payable - - Total $ - $ 8,478 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of e Summary of Warrant Activity | The summary of warrant activity is as follows: Warrants Exercisable Weighted Average Exercise Average Remaining Contractual Outstanding Shares Price Life December 31, 2022 4,539,674 151,323 172.5 0.10 Granted/Acquired 2,114,322 844,351 $ 8.53 4.63 Expired 164,675 5,488 $ 172.5 0.10 Exercised 844,351 844,351 0.001 - September 30, 2023 5,644,970 145,835 $ 25.03 4.34 Options Exercisable Weighted Average Exercise Average Remaining Contractual Outstanding Shares Price Life December 31, 2022 824,000 27,467 $ 150.00 0.10 Granted/Acquired - - $ - - Expired 824,000 27,467 $ 150.00 0.10 Exercised - - - - September 30, 2023 - - $ - - |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Assets by Division | The following represents assets by division as of: Total assets as of September 30, 2023 December 31, 2022 Highlight Media $ - $ 489,195 SH Xianzhui 3,871,388 - GDC, AI Catalysis, Citi Profit BVI , TMSR HK , Highlight HK, Highlight WFOE and Makesi WFOE 10,034,903 3,311,713 Total Assets $ 13,906,291 $ 3,800,908 For the Nine Months Ended Total revenues of 2023 2022 Highlight Media $ - $ - SH Xianzhui GDC, AI Catalysis, Citi Profit BVI , TMSR HK , Highlight HK, Highlight WFOE and Makesi WFOE 150,000 - Total revenues $ 150,000 $ - |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations [Abstract] | |
Schedule of Financial Position for the Discounted Operations | The following depicts the result of operations for the discounted operations of Highlight Media for the nine months ended September 30, 2023 and Wuge for the nine months ended September 30, 2022, respectively. For the Nine Months Ended 2023 2022 REVENUES Enterprise brand management services 165,993 - Wuge digital door signs - 7,616,615 TOTAL REVENUES 165,993 7,616,615 COST OF REVENUES Enterprise brand management services 114,247 - Wuge digital door signs - 5,527,950 TOTAL COST OF REVENUES 114,247 5,527,950 GROSS PROFIT 51,746 2,088,665 OPERATING EXPENSES Selling, general and administrative 113,552 1,605,935 TOTAL OPERATING EXPENSES 113,552 1,605,935 (LOSS) INCOME FROM OPERATIONS (61,806 ) 482,730 OTHER INCOME (EXPENSE) Interest income 49 65,251 Interest expense (248 ) (935 ) Other income, net 709 70,830 Total other expense, net 510 135,146 (LOSS) INCOME BEFORE INCOME TAXES FROM CONTINUING OPERATIONS (61,296 ) 617,876 PROVISION FOR INCOME TAXES 112 314,787 (LOSS) INCOME FROM CONTINUING OPERATIONS (61,408 ) 303,089 Net loss attributable to noncontrolling interest - - (LOSS) INCOME FROM CONTINUING OPERATIONS OF GD CULTURE GROUP LIMITED (61,408 ) 303,089 |
Nature of Business and Organi_3
Nature of Business and Organization (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 26, 2023 | Jun. 26, 2023 | Sep. 28, 2022 | |
Purchase price | $ 100,000 | |||
Agreement term | 20 years | |||
Makesi WFOE [Member] | ||||
Agreement term | 20 years | |||
Voting Rights Proxy and Financial Support Agreement [Member] | ||||
Agreement term | 20 years | |||
SH Xianzhui [Member] | ||||
Equity interest percentage | 60% | |||
Wuge Member | ||||
Average closing price (in Dollars per share) | $ 0.237 | $ 0.237 | ||
Shanghai Yuanma Food and Beverage Management Co., Ltd. [Member] | ||||
Equity interest percentage | 100% | |||
TMSR HK [Member] | ||||
Purchase price | $ 100,000 | |||
TMSR HK [Member] | Share Purchase Agreement [Member] | ||||
Purchase price | $ 100,000 | |||
Highlight WFOE [Member] | VIE Agreements [Member] | ||||
Purchase price | $ 100,000 |
Nature of Business and Organi_4
Nature of Business and Organization (Details) - Schedule of Consolidated Financial Statements Reflect the Activities of CCNC | 9 Months Ended | |
Sep. 30, 2023 | ||
Citi Profit BVI [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | ● A British Virgin Island company Incorporated on April 2019 | |
Ownership | 100% owned by the Company | |
TMSR HK2 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | ● A Hong Kong company ● Incorporated on April 2019 | [1] |
Ownership | 100% owned by Citi Profit BVI | [1] |
Highlight HK [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | ● A Hong Kong company ● Incorporated on November 2022 | |
Ownership | 100% owned by Citi Profit BVI | |
Makesi WFOE2 [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | ● A PRC limited liability company and deemed a wholly foreign owned enterprise (WFOE) ● Incorporated on December 2020 | [1] |
Ownership | 100% owned by TMSR HK | [1] |
Highlight WFOE [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | ● A PRC limited liability company and deemed a wholly foreign owned enterprise (WFOE) ● Incorporated on January 2023 | |
Ownership | 100% owned by Highlight HK | |
Wuge [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | ● A PRC limited liability company ● Incorporated on July 4, 2019 | [2] |
Ownership | VIE of Makesi WFOE | [2] |
Highlight Media [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | ● A PRC limited liability company ● Incorporated on September 16, 2022 | [3] |
Ownership | VIE of Highlight WFOE | [3] |
AI Catalysis [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | ● A Nevada company ● Incorporated on May 2023 | |
Ownership | 100% owned by the Company | |
SH Xianzhui [Member] | ||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
Background | ● A PRC limited liability company ● Incorporated on May 2023 | |
Ownership | 60% owned by Highlight WFOE | |
[1]Disposed on June 26, 2023[2]Disposed on September 28, 2022[3]Disposed on September 26, 2023 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 9 Months Ended | ||
Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 shares | Dec. 31, 2022 USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |||
Accumulated other comprehensive income | $ | $ 71,468 | $ 179,460 | |
Tax benefits, description | The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. | ||
Outstanding warrants | 9,079,348 | 10,500,000 | |
Antidilutive effect | 4,539,674 | 5,250,000 | |
Options [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Antidilutive effect | 824,000 | 824,000 | |
RMB [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Translation rate | 7.3 | 6.38 | |
RMB [Member] | Average Translation Rates [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Translation rate | 7.03 | 6.61 | |
USD [Member] | |||
Summary of Significant Accounting Policies [Line Items] | |||
Translation rate | 1 | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of Estimated Useful Lives of Plant and Equipment - Office equipment and furnishing [Member] | Sep. 30, 2023 |
Plant and equipment, Useful Life | 5 years |
Plant and equipment, Estimated Residual Value | 5% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of Estimated Useful Lives of Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Software [Member] | |
Schedule of estimated useful lives of intangible assets [Abstract] | |
Useful Life | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of Disaggregate Revenue - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Total revenues | $ 150,000 | |||
Software Copyright [Member] | ||||
Total revenues | $ 150,000 |
Business Combination and Rest_3
Business Combination and Restructuring (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 16, 2022 | Apr. 29, 2021 |
Business Combination and Restructuring [Line Items] | ||||
Shares issued (in Shares) | 3,053,563 | 1,844,877 | 231,802 | |
Highlight Media [Member] | ||||
Business Combination and Restructuring [Line Items] | ||||
Service fee percentage | 100% | |||
Goodwill | $ 2.1 | |||
Goodwill deductible for income tax purposes | ||||
Purchase Agreement [Member] | ||||
Business Combination and Restructuring [Line Items] | ||||
Shares issued (in Shares) | 9,000,000 |
Business Combination and Rest_4
Business Combination and Restructuring (Details) - Schedule of Net Purchase Price Allocation | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Highlight Media [Member] | |
Total consideration at fair value | $ 2,250,000 |
Business Combination and Rest_5
Business Combination and Restructuring (Details) - Schedule of the Fair Value of the Identifiable Assets Acquired and Liabilities Assumed at the Acquisition Date - Wuge Member | Sep. 30, 2023 USD ($) |
Cash | $ 47,498 |
Other current assets | 107,828 |
Plant and equipment | 1,205 |
Other noncurrent assets | |
Goodwill | 2,121,947 |
Total asset | 2,278,478 |
Accounts payable | 14,170 |
Taxes Payable | 363 |
Other Payable | 13,945 |
Total liabilities | 28,478 |
Net asset acquired | $ 2,250,000 |
Variable Interest Entity (Detai
Variable Interest Entity (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2023 | Jun. 26, 2023 | Sep. 28, 2022 | |
Variable Interest Entity (Details) [Line Items] | |||
Purchase price | $ 100,000 | ||
Wuge [Member] | |||
Variable Interest Entity (Details) [Line Items] | |||
Average closing price (in Dollars per share) | $ 0.237 | $ 0.237 | |
Yuanma [Member] | |||
Variable Interest Entity (Details) [Line Items] | |||
Purchase price for transaction | $ 100,000 |
Variable Interest Entity (Det_2
Variable Interest Entity (Details) - Schedule of Carrying Amount of the VIE’s Assets and Liabilities - Variable Interest Entities [Member] - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Variable Interest Entity [Line Items] | ||
Cash and cash equivalents | $ 215,880 | |
Accounts receivable, net | 194,520 | |
Other receivables, net | 78,293 | |
Prepayments | ||
Total current assets | 488,693 | |
Plants and equipment | 502 | |
Goodwill | 2,190,485 | |
Total assets | 2,679,680 | |
Current liabilities | 333,784 | |
Non-current liabilities | ||
Total liabilities | 333,784 | |
Net assets | 2,345,896 | |
Accounts payable | 116,105 | |
Other payables and accrued liabilities | 13,469 | |
Tax payables | 195,732 | |
Customer Advances | 8,478 | |
Wages payable | ||
Total current liabilities | 333,784 | |
Lease liabilities – non-current | ||
Total liabilities | 333,784 | |
Related Party [Member] | ||
Variable Interest Entity [Line Items] | ||
Other payables – related party |
Variable Interest Entity (Det_3
Variable Interest Entity (Details) - Schedule of Summarized Operating Results of the VIE’s - Variable Interest Entities Member | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Variable Interest Entity (Details) - Schedule of Summarized Operating Results of the VIE’s [Line Items] | |
Operating revenues | |
Gross profit | |
Income from operations | |
Net loss |
Accounts Receivable (Details) -
Accounts Receivable (Details) - Schedule of Accounts Receivable - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Accounts Receivable [Abstract] | ||
Accounts receivable | $ 150,000 | $ 197,640 |
Less: Allowance for doubtful accounts | (3,120) | |
Total accounts receivable, net | $ 150,000 | $ 194,520 |
Accounts Receivable (Details)_2
Accounts Receivable (Details) - Schedule of Movement of Allowance for Doubtful Accounts - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Schedule of Movement of Allowance for Doubtful Accounts [Abstract] | ||
Beginning balance | $ (3,120) | |
Addition | $ (3,120) | |
Disposal of Highlight Media | 2,949 | |
Exchange rate effect | $ 171 | |
Ending balance | $ (3,120) |
Other Receivables (Details)
Other Receivables (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Highlight Media [Member] | ||
Other Receivables (Details) [Line Items] | ||
Consideration amount | $ 100,000 | |
Wuge [Member] | ||
Other Receivables (Details) [Line Items] | ||
Consideration amount | $ 948,000 |
Other Receivables (Details) - S
Other Receivables (Details) - Schedule of Other Receivables - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Other Receivables [Abstract] | ||
Receivable from disposal of Wuge | $ 948,000 | |
Receivable from disposal of Highlight Media | 100,000 | |
Interest receivable from convertible notes | 46,575 | |
Others | 78,293 | |
Total other receivables, net | $ 146,575 | $ 1,026,293 |
Plant and Equipment, Net (Detai
Plant and Equipment, Net (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Plant and Equipment, Net [Abstract] | ||
Depreciation and expense | $ 751 | $ 33,192 |
Plant and Equipment, Net (Det_2
Plant and Equipment, Net (Details) - Schedule of Plant and Equipment, Net - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 9,617 | $ 10,039 |
Less: accumulated depreciation | (751) | (9,537) |
Total | 8,866 | 502 |
Office equipment and furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Subtotal | $ 9,617 | $ 10,039 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | Sep. 30, 2023 | Sep. 30, 2022 |
Intangible Assets, Net [Abstract] | ||
Amortization expense | $ (162,500) | $ 98 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of Intangible Assets, Net - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 |
Finite-Lived Intangible Assets [Line Items] | |||
Subtotal | $ 3,250,000 | ||
Less: accumulated amortization | (162,500) | $ 98 | |
Total | 3,087,500 | ||
Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Subtotal | $ 3,250,000 |
Goodwill (Details) - Schedule o
Goodwill (Details) - Schedule of Carrying Amount of Goodwill Business Units - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Goodwill [Line Items] | ||
Balance as beginning | $ 2,190,485 | |
Impairment | (2,070,753) | $ (6,590,339) |
Foreign currency translation adjustment | (119,732) | |
Balance as ending | ||
Highlight Media [Member] | ||
Goodwill [Line Items] | ||
Balance as beginning | 2,190,485 | |
Impairment | (2,070,753) | |
Foreign currency translation adjustment | (119,732) | |
Balance as ending |
Related Party Balances and Tr_3
Related Party Balances and Transactions (Details) - Schedule of Prepaid Expense – Related Party - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
XIAO JIAN WANG [Member] | ||
Related Party Balances and Transactions (Details) - Schedule of Prepaid Expense – Related Party [Line Items] | ||
Relationship | Chief Executive Officer of the Company | |
Other payables - related parties | $ 100,000 | |
Shanghai Highlight Asset Management Co. LTD [Member] | ||
Related Party Balances and Transactions (Details) - Schedule of Prepaid Expense – Related Party [Line Items] | ||
Relationship | A company in which shareholder hold shares | |
Other payables - related parties | $ 195,732 |
Long-Term Investment, Net (Deta
Long-Term Investment, Net (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Long-term investment, net [Abstract] | ||
Convertible notes | $ 2,500,000 |
Long-Term Investment, Net (De_2
Long-Term Investment, Net (Details) - Schedule of Long-Term Investments Consisted - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Schedule of Long Term Investments Consisted [Abstract] | ||
Available-for-sale debt investments | $ 2,500,000 | |
Total | $ 2,500,000 |
Leases (Details)
Leases (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Line Items] | ||
Current portion of operating lease liabilities | $ 324,162 | |
Non-current portion of operating lease liabilities | $ 1,388,238 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of Lease Payments Over the Term | Sep. 30, 2023 | Dec. 31, 2022 |
Weighted average discount rate: | ||
Operating lease, weighted average Lease Term | 5 years 3 months | |
Weighted average discount rate: | ||
Operating lease, weighted average discount rate | 4.24% |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of Balances for the Operating Leases - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | |
Operating lease right-of-use assets, net | |||
Operating lease | $ 1,683,518 | ||
Lease liabilities | |||
Current portion of operating lease liabilities | 324,162 | ||
Non-current portion of operating lease liabilities | 1,388,238 | ||
Total | $ 1,712,400 | [1] | |
[1]Present value of future operating lease payments consisted of current portion of operating lease liabilities and non-current portion of operating lease liabilities, amounting to $324,162 and $1,388,238 for the nine months ended September 30, 2023, respectively. |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of Future Lease Payments under Operating Leases - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | |
Schedule Of Future Lease Payments Under Operating Leases Abstract | |||
FY2024 | $ 344,768 | ||
FY2025 | 383,632 | ||
FY2026 | 391,305 | ||
FY2027 | 399,131 | ||
FY2028 | 407,114 | ||
Total lease payments | 1,925,949 | ||
Less: imputed interest | 213,549 | ||
Present value of lease liabilities | $ 1,712,400 | [1] | |
[1]Present value of future operating lease payments consisted of current portion of operating lease liabilities and non-current portion of operating lease liabilities, amounting to $324,162 and $1,388,238 for the nine months ended September 30, 2023, respectively. |
Taxes (Details)
Taxes (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Apr. 30, 2019 | May 31, 2018 | Dec. 22, 2017 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Taxes (Details) [Line Items] | |||||||
GDC amounted (in Dollars) | |||||||
Valuation allowance | 100% | ||||||
Effective rate percentage | 10.50% | ||||||
Maximum [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Corporate tax rate | 34% | ||||||
Effective rate percentage | 13.125% | ||||||
Value added tax | 13% | 17% | |||||
Value Added Tax Standard rates on gross sales price | 16% | ||||||
Minimum [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Corporate tax rate | 21% | ||||||
Effective rate percentage | 10.50% | 10.50% | |||||
Value added tax | 6% | 6% | |||||
Value Added Tax Standard rates on gross sales price | 6% | ||||||
United States [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
GDC amounted (in Dollars) | |||||||
Operating loss carry forward (in Dollars) | $ 0 | $ 0 | |||||
Hong Kong [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Foreign tax rate, percentage | 16.50% | ||||||
PRC [Member] | |||||||
Taxes (Details) [Line Items] | |||||||
Foreign tax rate, percentage | 25% |
Taxes (Details) - Schedule of D
Taxes (Details) - Schedule of Deferred Tax Assets - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Tax Assets [Abstract] | ||
Net operating losses carried forward – U.S. | $ 276,982 | $ 4,574,581 |
Valuation allowance | (276,982) | (4,574,581) |
Deferred tax assets, net |
Taxes (Details) - Schedule of T
Taxes (Details) - Schedule of Taxes Payable - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Schedule of Taxes Payable [Abstract] | ||
VAT taxes payable | $ 8,478 | |
Other taxes payable | ||
Total | $ 8,478 |
Concentration of Risk (Details)
Concentration of Risk (Details) - Cash and Accounts Receivable [Member] - Credit Concentration Risk [Member] - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
PRC [Member] | ||
Concentration of Risk (Details) [Line Items] | ||
Deposited with various financial institutions | $ 1,143,611 | $ 215,880 |
UNITED STATES [Member] | ||
Concentration of Risk (Details) [Line Items] | ||
Deposited with various financial institutions | $ 503,537 | $ 173,228 |
Equity (Details)
Equity (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||
Jun. 22, 2023 | Feb. 22, 2021 | Feb. 17, 2021 | Jul. 29, 2015 | Sep. 30, 2023 | May 16, 2023 | Dec. 31, 2022 | Apr. 29, 2021 | |
Equity (Details) [Line Items] | ||||||||
Tax profits percentage | 10% | |||||||
Registered capital percentage | 50% | |||||||
Restricted net assets | $ 492,315 | |||||||
Asset purchase agreement, description | In the concurrent PIPE offering, the Company sold warrants to purchase up to 1,154,519 shares of common stock to the Purchasers, pursuant to a private warrant securities purchase agreement, dated May 1, 2023. In connection with the offering, the Company paid Univest Securities, LLC, the placement agent, a total cash fee equal to 7.0% of the aggregate gross proceeds received in the offering, a non-accountable expense allowance equal to 1% of the aggregate gross proceeds, and reimbursement for certain out-of-pocket accountable expenses incurred in this offering in the amount of $150,000. In addition, the Company issued to the placement agent warrants to purchase up to 115,452 shares of common stock at an exercise price of $10.02 per share, which represents 120% of the offering price of each share. The net proceeds from the Offering, after deducting placement agent discounts and commissions and estimated offering expenses payable by the Company, are approximately $8.5 million (assuming the warrants are not exercised). | |||||||
Price per share | $ 4 | $ 0.0001 | ||||||
Common stock, shares issued | 3,053,563 | 1,844,877 | 231,802 | |||||
Purchase shares | 84,244 | |||||||
Exercise price | $ 201.6 | $ 183 | ||||||
Purchase price per share | $ 183 | |||||||
Cash | $ 2,310,000 | |||||||
Aggregate gross proceeds percentage | 120% | |||||||
Non-accountable expense | $ 250,000 | |||||||
Accountable expenses | $ 60,000 | |||||||
Options granted | 180 | |||||||
Common stock shares outstanding, percentage | 19.99% | 9.99% | ||||||
Aggregate common stock shares | 310,168 | |||||||
Pre-funded warrant | $ 8.349 | |||||||
Public offering price per sahre | $ 0.001 | |||||||
Exercise price per share | 0.001 | |||||||
Warrant is outstanding price per share | $ 0.001 | |||||||
Warrants to purchase shares | 1,154,519 | |||||||
Aggregate percentage | 7% | |||||||
Incurred offering cost | $ 150,000 | |||||||
Common stock, shares issued | 115,452 | |||||||
Minimum [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Outstanding common stock, percentage | 4.99% | |||||||
Maximum [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Outstanding common stock, percentage | 9.99% | |||||||
Warrant [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Warrants and options | On July 29, 2015, the Company sold 10,000,000 units at a purchase price of $5.00 per unit (“Public Units”) in its initial public offering. Each Public Unit consists of one share of the Company’s common stock, $0.0001 par value, and one warrant. Each warrant will entitle the holder to purchase one-half of one share of common stock at an exercise price of $2.88 per half share ($5.75 per whole share). Warrants may be exercised only for a whole number of shares of common stock. No fractional shares will be issued upon exercise of the warrants. The warrants will become exercisable on 30 days after the consummation of its initial Business Combination with China Sunlong on February 6, 2018. The warrants expired on February 5, 2023. The warrants will be redeemable by the Company at a price of $0.01 per warrant upon 30 days prior written notice after the warrants become exercisable, only in the event that the last sale price of the common stock equals or exceeds $12.00 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the date on which notice of redemption is given. | |||||||
Warrant [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Aggregate gross proceeds percentage | 1% | |||||||
Software [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Purchase price | $ 750,000 | |||||||
Common Stock [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
issuance of shares of common stock as purchase consideration | 187,500 | |||||||
Price per share | $ 10.02 | |||||||
Common stock, shares issued | 84,244 | |||||||
Aggregate gross proceeds percentage | 5% | |||||||
Securities Purchase Agreement [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Common stock, description | On May 4, 2023, the Company sold an aggregate of 310,168 shares of common stock of the Company, par value $0.0001 per share, and pre-funded warrants to purchase up to an aggregate of 844,351 shares of common stock are sold to certain purchasers, pursuant to a securities purchase agreement, dated May 1, 2023, as amended on May 16, 2023. The purchase price of each share of common stock is $8.35. The purchase price of each pre-funded warrant is $8.349, which equals the price per share of common stock being sold to the public in this offering, minus $0.001. The RD Offering is being made pursuant to a shelf registration statement (No. 333-254366) on Form S-3, which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on March 26, 2021, and related prospectus supplement. | |||||||
Common stock, shares issued | 138,889 | |||||||
Unregistered Warrants [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Common stock, shares issued | 54,646 | |||||||
Exercise price | $ 8.35 | |||||||
Price Protection Adjustment [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Exercise price | 201.6 | |||||||
Stockholder Approval [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Common stock, shares issued | 231,802 | |||||||
Purchase price per share | $ 183 | |||||||
Placement Agency Agreement [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Common stock, shares issued | 6,945 | |||||||
Commission fee | $ 2,000,000 | |||||||
Aggregate gross proceeds percentage | 8% | |||||||
Pre-Funded Warrants [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Common stock shares outstanding, percentage | 4.99% | |||||||
Aggregate common stock shares | 844,351 | |||||||
RD Securities Purchase Agreement [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Purchase price per share | $ 8.35 | |||||||
Placement Agent [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Aggregate gross proceeds percentage | 1% | |||||||
Sponsor [Member] | ||||||||
Equity (Details) [Line Items] | ||||||||
Number of shares in a unit | 500,000 | |||||||
PricePerUnit | $ 5 | |||||||
Aggregate price | $ 2,500,000 | |||||||
Underwriter Member | ||||||||
Equity (Details) [Line Items] | ||||||||
Common stock, description | The Company sold to the underwriter (and/or its designees), for $100, as additional compensation, an option to purchase up to a total of 800,000 units exercisable at $5.00 per unit (or an aggregate exercise price of $4,000,000) upon the closing of the Public Offering. Since the option is not exercisable until the earliest on the closing the initial Business Combination, the option will effectively represent the right to purchase up to 800,000 shares of common stock and 800,000 warrants to purchase 400,000 shares at $5.75 per full share for an aggregate maximum amount of $6,300,000. |
Equity (Details) - Schedule of
Equity (Details) - Schedule of e Summary of Warrant Activity | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Warrant Activity [Member] | |
Schedule of Warrant and Option Activity [Abstract] | |
Outstanding, Beginning balance | 4,539,674 |
Exercisable Into Number of Shares, Beginning balance | 151,323 |
Weighted Average Exercise Price, Beginning balance (in Dollars per share) | $ / shares | $ 172.5 |
Average Remaining Contractual Life, Beginning balance | 1 month 6 days |
Outstanding, Ending balance | 5,644,970 |
Exercisable Into Number of Shares, Ending balance | 145,835 |
Weighted Average Exercise Price, Ending balance (in Dollars per share) | $ / shares | $ 25.03 |
Average Remaining Contractual Life, Ending balance | 4 years 4 months 2 days |
Outstanding, Granted/Acquired | 2,114,322 |
Exercisable Into Number of Shares, Granted/Acquired | 844,351 |
Weighted Average Exercise Price, Granted/Acquired (in Dollars per share) | $ / shares | $ 8.53 |
Average Remaining Contractual Life, Granted/Acquired | 4 years 7 months 17 days |
Outstanding, Expired | 164,675 |
Exercisable Into Number of Shares, Expired | 5,488 |
Weighted Average Exercise Price, Expired (in Dollars per share) | $ / shares | $ 172.5 |
Average Remaining Contractual Life, Expired | 1 month 6 days |
Outstanding, Exercised | 844,351 |
Exercisable Into Number of Shares, Exercised | 844,351 |
Weighted Average Exercise Price, Exercised (in Dollars per share) | $ / shares | $ 0.001 |
Average Remaining Contractual Life, Exercised | |
Option Activity [Member] | |
Schedule of Warrant and Option Activity [Abstract] | |
Outstanding, Beginning balance | 824,000 |
Exercisable Into Number of Shares, Beginning balance | 27,467 |
Weighted Average Exercise Price, Beginning balance (in Dollars per share) | $ / shares | $ 150 |
Average Remaining Contractual Life, Beginning balance | 1 month 6 days |
Average Remaining Contractual Life, Ending balance | |
Outstanding, Granted/Acquired | |
Exercisable Into Number of Shares, Granted/Acquired | |
Weighted Average Exercise Price, Granted/Acquired (in Dollars per share) | $ / shares | |
Average Remaining Contractual Life, Granted/Acquired | |
Outstanding, Expired | 824,000 |
Exercisable Into Number of Shares, Expired | 27,467 |
Weighted Average Exercise Price, Expired (in Dollars per share) | $ / shares | $ 150 |
Average Remaining Contractual Life, Expired | 1 month 6 days |
Outstanding, Exercised | |
Exercisable Into Number of Shares, Exercised | |
Weighted Average Exercise Price, Exercised (in Dollars per share) | $ / shares | |
Average Remaining Contractual Life, Exercised |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of Assets by Division - Other Segments [Member] - USD ($) | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Total Assets | $ 13,906,291 | $ 3,800,908 | |
Total revenues | 150,000 | ||
Highlight Media [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 489,195 | ||
Total revenues | |||
SH Xianzhui [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 3,871,388 | ||
GDC, AI Catalysis, Citi Profit BVI , TMSR HK , Highlight HK, Highlight WFOE and Makesi WFOE [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Assets | 10,034,903 | $ 3,311,713 | |
Total revenues | $ 150,000 |
Discontinued Operations (Detail
Discontinued Operations (Details) - Schedule of Financial Position for the Discounted Operations - Discounted operations [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
REVENUES | ||
TOTAL REVENUES | $ 165,993 | $ 7,616,615 |
COST OF REVENUES | ||
TOTAL COST OF REVENUES | 114,247 | 5,527,950 |
GROSS PROFIT | 51,746 | 2,088,665 |
OPERATING EXPENSES | ||
Selling, general and administrative | 113,552 | 1,605,935 |
TOTAL OPERATING EXPENSES | 113,552 | 1,605,935 |
(LOSS) INCOME FROM OPERATIONS | (61,806) | 482,730 |
OTHER INCOME (EXPENSE) | ||
Interest income | 49 | 65,251 |
Interest expense | (248) | (935) |
Other income, net | 709 | 70,830 |
Total other expense, net | 510 | 135,146 |
(LOSS) INCOME BEFORE INCOME TAXES FROM CONTINUING OPERATIONS | (61,296) | 617,876 |
PROVISION FOR INCOME TAXES | 112 | 314,787 |
(LOSS) INCOME FROM CONTINUING OPERATIONS | (61,408) | 303,089 |
Net loss attributable to noncontrolling interest | ||
(LOSS) INCOME FROM CONTINUING OPERATIONS OF GD CULTURE GROUP LIMITED | (61,408) | 303,089 |
Discontinued Operations [Member] | ||
REVENUES | ||
Enterprise brand management services | 165,993 | |
Wuge digital door signs | 7,616,615 | |
COST OF REVENUES | ||
Enterprise brand management services | 114,247 | |
Wuge digital door signs | $ 5,527,950 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Nov. 01, 2023 | Oct. 27, 2023 | Sep. 30, 2023 | May 16, 2023 | Apr. 29, 2021 |
Subsequent Events [Line Items] | |||||
Common stock shares | 115,452 | ||||
Purchase price (in Dollars per share) | $ 183 | ||||
Warrant purchase price (in Dollars per share) | $ 201.6 | $ 183 | |||
Offering cost (in Dollars) | $ 150,000 | ||||
November 2023 Registered Direct Offering [Member] | Private Placement [Member] | |||||
Subsequent Events [Line Items] | |||||
Common stock shares | 1,154,519 | ||||
Subsequent Event [Member] | |||||
Subsequent Events [Line Items] | |||||
Common stock shares | 400,000 | ||||
Common stock per value (in Dollars per share) | $ 2.782 | ||||
Subsequent Event [Member] | November 2023 Registered Direct Offering [Member] | |||||
Subsequent Events [Line Items] | |||||
Common stock per value (in Dollars per share) | $ 0.001 | ||||
Purchase price (in Dollars per share) | $ 3.019 | ||||
Net proceeds from Offering (in Dollars) | $ 9,050,000 | ||||
Gross proceeds received percentage | 7% | ||||
Offering cost (in Dollars) | $ 150,000 | ||||
Subsequent Event [Member] | November 2023 Registered Direct Offering [Member] | Pre-Funded Warrants [Member] | |||||
Subsequent Events [Line Items] | |||||
Common stock shares | 1,876,103 | ||||
Warrant purchase price (in Dollars per share) | $ 3.018 | ||||
Subsequent Event [Member] | November 2023 Registered Direct Offering [Member] | Registered Warrants [Member] | |||||
Subsequent Events [Line Items] | |||||
Common stock shares | 3,312,356 | ||||
Subsequent Event [Member] | November 2023 Registered Direct Offering [Member] | Exchange Warrants [Member] | |||||
Subsequent Events [Line Items] | |||||
Common stock shares | 577,260 | ||||
Subsequent Event [Member] | Common Stock [Member] | November 2023 Registered Direct Offering [Member] | |||||
Subsequent Events [Line Items] | |||||
Common stock shares | 1,436,253 | ||||
Common stock per value (in Dollars per share) | $ 0.0001 | ||||
Subsequent Event [Member] | Highlight WFOE [Member] | |||||
Subsequent Events [Line Items] | |||||
Purchase of equity interest | 13.3333% |