EOS 10Q/A 2024 Q1 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q/A

Amendment No. 1

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED:

March 31

, 2024

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

FOR THE TRANSITION PERIOD FROM __________ TO __________

Commission File Number: 000-55661

EOS Inc.

(Exact name of registrant as specified in its charter)

Nevada		30-0873246
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2F., No. 157, Sec. 2, Nanjing E. Rd., Zhongshan Dist.,

Taipei City 104075 Taiwan (Republic of China)

(Address of principal executive offices, Zip Code)

+8862-2586-8300

(Registrant’s telephone number, including area code)

	N/A
	(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
None		None		None

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes

As of

May

202

, the number of shares of registrant’s common stock outstanding is 604,781,560.

Explanatory Note

On May 21, 2024, EOS Inc. (the “Company”) filed its Quarterly

Report on Form 10-Q (the “Original Form 10-Q”) for the period ended March 31, 202

The purpose of this Amendment No. 1 (the “Amendment”) is to include revised disclosure regarding Accounts Receivable (AR) and the movements of provision for doubtful debts, which were

clerical errors

the original filing. This amendment does not reflect any changes to the financial statements, the movements of provision for doubtful debts have been included in the financial statements and properly accounted for in the original filing.

XBRL has been updated in this Amendment solely with respect to the cover page, and Exhibit 104 has been added to include the Cover Page Interactive Data File (formatted as inline XBRL and included as Exhibit 101)

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the Company is including with this Amendment currently dated certifications from its principal executive and principal financial officer as Exhibits 31.1

/31.2

and 32.1/32.2

No other items of the Original Form 10-

are being amended and this Amendment does not reflect any events occurring after the filing of the Original Form 10-

EOS, Inc.

Table of Contents

ART I — FINANCIAL INFORMATION

tem 1. Financial Statements.

The following unaudited interim condensed consolidated financial statements of EOS Inc. are included in this Quarterly Report on Form 10-Q:

INDEX TO FINANCIAL STATEMENT

Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 (unaudited)	F-2

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2024 and 2023 (unaudited)	F-3

Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2024 and 2023 (unaudited)	F-4

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited)	F-5

Notes to Condensed Consolidated Financial Statements for the three months ended March 31, 2024 and 2023 (unaudited)	F-6

F-1

EOS, INC. AND SUBSIDIARIES

Condensed

onsolidated Balance Sheets

As of March 31, 2024 and December 31, 2023

(In U.S. Dollars, except share data or otherwise stated)

Unaudited

	March 31,			December 31,
	20 24			202 3
ASSETS
Current Assets
Cash and cash equivalents	$	64,506		$	14,307
Accounts receivable		51,424			224,590
Inventory, net		46,837			79,482
Advances to suppliers		164,098			161,179
Security deposits		76			3,802
Prepaid expenses and other current assets		3,703			3,959
Total Current Assets	$	330,644			487,319
Non-Current Assets
Property, plant and equipment, net	$	5,413		$	5,660
Operating lease right of use asset		3,393			4,192

Total Non-Current Assets	$	8,806		$	9,852
Total Assets	$	339,450		$	497,171
LIABILITIES AN D SHAREHOLDERS’ DEFICIT
Current Liabilities
Accounts payable	$	-		$	9,761
Other payable and accrued expenses		206,640			309,103
Due to shareholders		8,513			74,065
Income taxes payable		43,810			45,318
Other current liabilities		1,062,500			1,000,000
Operating lease liabilities - current		2,260			2,818
Current portion of long-term loan payables		49,876			53,165
Total Current Liabilities	$	1,373,599		$	1,494,230
Non-Current Liabilities
Long-term loan payables	$	50,976		$	65,210
Operating lease liabilities - non-current		1,133			1,374
Total Non-Current Liabilities	$	52,109		$	66,584
Total Liabilities	$	1,425,708		$	1,560,814
Commitments and Contingencies
Shareholders’ Deficit
Preferred stock ($ 0.001 par value, 5,000,000 shares authorized, 1,500,000 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)	$	1,500		$	1,500
Common stock ($0.001 par value; 1,000,000,000 shares authorized, 604,781,560 shares issued and outstanding as of March 31, 2024 and December 31, 2 0 23, respectively)		604,781			604,781
Additional paid in capital		175,268			175,268
Deferred stock compensation		(40,674	)		(40,674	)
Accumulated loss		(1,845,903	)		(1,802,695	)
Accumulated other comprehensive income (loss)		18,770			(1,823	)
Total S hareholders’ Deficit	$	(1,086,258	)	$	(1,063,643	)
Total Liabilities and Shareholders’ Deficit	$	339,450		$	497,171

F-2

EOS, INC. AND SUBSIDIARIES

Condensed

onsolidated Statements of Income and Comprehensive

Loss

For the Three Months Ended March 31, 2024 and 202

(In U.S. Dollars, except share data

otherwise stated)

Unaudited

	Three Months Ended			Three Months Ended
	March 31,			March 31,
	202 4			202 3
Net sales	$	54,124		$	171,079
Cost of sales		(50,506	)		(58,173	)
Gross profit		3,618			112,906
Selling, general and administrative expenses		(205,644	)		(242,326	)
Loss from operations		(202,026	)		(129,420	)
Other income (expense)
Interest expense		(832	)		(1,383	)
Other income		159,650			666
Total other income (expense)		158,818			(717	)
Net loss before income tax		(43,208	)		(130,137	)
Income tax expense		-			-
Net Loss	$	(43,208	)	$	(130,137	)
Other Comprehensive Loss:
Net loss attributable to non-controlling interests		-			(1,900	)
Net loss attributable to EOS and subsidiaries		(43,208	)		(128,237	)
Foreign currency translation adjustment, net of tax		20,593			(794	)
Comprehensive loss	$	(22,615	)	$	(130,931	)
Net loss per share:
Basic and diluted		(0.000	)		(0.001	)
Weighted average number of common shares:
Basic and diluted		323,047,313			183,781,560

F-3

EOS, INC. AND SUBSIDIARIES

Condensed

onsolidated Statements of Changes in Shareholders’ Equity

For the Three Months Ended March 31, 2024 and 202

(In U.S. Dollars, except share data or otherwise stated)

Unaudited

	Common Stock				Preferred Stock
	Number of Shares		Amount		Number of Shares		Amount		Deferred Stock Compensation			Additional Paid-in Capital		Accumulated loss			Accumulated other Comprehensive Income (Loss)			Equity attributable to EOS, Inc.			Non- Controlling interest			Total Equity

Balance at December 31, 202 2		183,781,560	$	183,781	$	1,500,000	$	1,500	$	(40,674	)	$	67,249	$	(1,165,665	)	$	42,964		$	(910,845	)	$	(5,447	)	$	(916,292	)
Foreign currency translation adjustment		-		-		-		-		-			-		-			(727	)		(727	)		(67	)		(794	)
Net loss		-		-		-		-		-			-		(128,237	)					(128,237	)		(1,900	)		(130,137	)
Balance at March 31, 2023		183,781,560		183,781		1,500,000		1,500		(40,674	)		67,249		(1,293,902	)		42,237			(1,039,809	)		(7,414	)		(1,047,223	)

Balance at December 31, 2023		604,781,560		604,781		1,500,000		1,500		(40,674	)		175,268		(1,802,695	)		(1,823	)		(1,063,643	)		-			(1,063,643	)
Foreign currency translation adjustment		-		-		-		-		-			-		-			20,593			20,593			-			20,593
Net loss		-		-		-		-		-			-		(43,208	)					(43,208	)		-			(43,208	)
Balance at March 31, 2024		604,781,560	$	604,781	$	1,500,000	$	1,500	$	(40,674	)	$	175,268	$	(1,845,903	)	$	18,770		$	(1,086,258	)	$	-		$	(1,086,258	)

F-4

EOS, INC. AND SUBSIDIARIES

Condensed

onsolidated Statements of Cash Flows

For the Three Months Ended March 31, 2024 and 202

(In U.S. Dollars, except share data or otherwise stated)

Unaudited

	Three Months Ended			Three Months Ended
	March 31,			March 31,
	202 4			202 3
Cash flows from operating activities
Net loss	$	(43,208	)	$	(130,137	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation		241			192
Reversal of p rovision for doubtful debts		(129,364	)		-
Amortization of right-of-use asset		682			8,818
Changes in assets and liabilities
Decrease in accounts receivable		313,883			30,717
Decrease (increase) in inventory		29,836			(69,155	)
Decrease (increase) in advance to suppliers		(2,919	)		3,835
Decrease in security deposits and other assets		5,983			3,356
Increase (decrease) in accounts payable		(9,761	)		39,062
Increase (decrease) in accrued expenses		(39,963	)		33,486
Decrease in advances from customers		(2,001	)		(12,986	)
Increase (decrease) in income tax payable		(1,508	)		3,412
Decrease in operating lease liabilities		(799	)		(8,818	)
Net cash provided by (used in) operating acti viti es	$	121,102		$	(98,218	)
Cash flows from investing activit y
Purchase of equipment	$	-		$	(1,096	)
Net cash u s ed in investing activit y	$	-		$	(1,096	)
Cash flows from financing activities
Proceeds from related party	$	145,440			114,367
Repayment to related party		(183,004	)		-
Repayment to borrowings		(17,523	)		(18,301	)
Net cash (used in) provided by financing activities	$	(55,087	)	$	96,066
Effect of foreign currency translation on cash and cash equivalents		(15,816	)		109
Net increase (decrease) of cash and cash equivalents		50,199			(3,139	)
Cash and cash equivalents
Beginning		14,307			18,170
Ending	$	64,506		$	15,031

Supplemental Disclosure of Cash Flows
Cash paid during the periods for:
Interest	$	832		$	1,383
Income taxes	$	-		$	-

F-5

EOS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

ote 1. NATURE OF OPERATIONS AND SUMMARY OF ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial reporting and in accordance with instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, the unaudited consolidated financial statements contained in this report reflect all adjustments that are normal and recurring in nature and considered necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The year-end balance sheet data were derived from audited consolidated financial statements, but does not include all disclosures required by GAAP. The results of operations for the interim period are not necessarily indicative of the results expected for the full year. These unaudited consolidated financial statements, footnote disclosures, and other information should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Organization

EOS Inc. was incorporated on April 3, 2015 in the State of Nevada. The Company is a distributor of various consumer products, such as skin care products, dietary supplements, and water purifying machines.

mperor Star International Trade Co., Ltd., (“Emperor Star”), was incorporated on November 16, 2015 under the laws of Taiwan. Emperor Star is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers.

On May 3, 2017, the Company entered into and closed a Share Purchase and Sale Agreement (the “Purchase Agreement”) with Emperor Star and the shareholder of Emperor Star to acquire all issued and outstanding shares of Emperor Star in consideration of $30,562 in cash. As a result of the Purchase Agreement, Emperor Star became the Company’s wholly owned subsidiary. Upon consummation of the transaction, the Company has assumed the business of Emperor Star and ceased to be a shell company.

On September 20, 2018, the Company set up another wholly-owned subsidiary, EOS International Inc. (“EOS(BVI)”), under the laws of British Virgin Islands. EOS(BVI) is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers.

On March 1, 2019, EOS(BVI) set up a wholly-owned subsidiary, Shanghai Maosong Co., Ltd (“Maosong”), under the laws of People’s Republic of China. Maosong is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers in China. As of the date of this report, Maosong has a registered capital of USD $100,000, but no capital has actually been paid into Maosong.

On June 2, 2020, EOS(BVI) 83.33% owner, and Shanghai Qifan Qiye Management Co., Ltd. (“Qifan”) 16.67% owner of Maosong resolute to change the registered capital of Maosong to RMB 1,200,000,000 (1.2 billion) and that EOS to contribute certain Intellectual Property as registered capital of Shanghai Maosong. Intellectual Property owned by EOS International Inc was valued at RMB 1,000,000,000 (1 billion) and Intellectual Property owned by Qifan was valued at RMB 200,000,000 (200 million).

On July 13, 2021, EOS(BVI), MaoSong, and Qifan entered into a Shareholder Agreement where Qifan (i) delegate its 16.67% equity voting rights, powers, or benefits in Maosong to EOS(BVI); (ii) grant EOS(BVI) an irrevocable, unconditional, exclusive option to purchase Maosong’s equity interest; (iii) the right to receive any proceeds from the Maosong’s Equity Interest; (iv) pledge its existing or any prospective Maosong equity interest to EOS Int’l; as a result EOS(BVI) retains

100

% control of MaoSong and the 16.67% noncontrolling interest are consolidated.

On July 1, 2023, the Company assumes effective control of Emperor Star International Trade Co., Ltd (Emperor Star), a commerce and trade company, through

execution of declaration of trust for Emperor Star’s 100% share capital. The primary reason the Company completed the equity transaction within owners is to invest

resources, expand the operations and turn Emperor Star into a profitable business.

F-6

Principles of Consolidation

The accompanying consolidated financial statements, including the accounts of EOS Inc. and its wholly owned subsidiaries in Taiwan, British Virgin Islands, and People’s Republic of China, have been prepared in conformity with accounting principles generally accepted in the United States of America. Since the Company and Emperor Star are entities under common control prior to the acquisition of Emperor Star, the transaction is accounted for as a restructuring transaction. All assets and liabilities of Emperor Star were transferred to the Company at their respective carrying amounts on the date of transaction. The Company has recast prior period financial statements to reflect the conveyance of Emperor Star’s common shares as if the restructuring transaction had occurred as of the earliest date of the consolidated financial statements. All material intercompany accounts, transactions, and profits have been eliminated in consolidation. The nature of and effects on earnings per share (EPS) of non-recurring intra-entity transactions involving long-term assets and liabilities is not required to be eliminated and EPS amounts have been recast to include the earnings (or losses) of the transferred net assets.

The functional currency of the subsidiaries in Taiwan is the New Taiwan dollars and the subsidiary in People’s Republic of China is the Chinese Yuan, or Renminbi; however, the accompanying consolidated financial statements have been translated and presented in United States Dollars ($). In the accompanying consolidated financial statements and notes, “$”, “US$” and “U.S. dollars” mean United States dollars, “NT$” and “NT dollars” mean New Taiwan dollars, and “RMB” means Chinese Yuan, or Renminbi.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.

Accounts Receivable

Accounts receivable are amounts due from customers for goods sold or services performed in the ordinary course of business. They are generally due for settlement within 90 days and therefore all classified as current. Accounts receivable are stated at carrying value less estimates made for doubtful receivables. Accounts receivable are stated at the historical carrying amount net of allowance for expected credit losses.

Inventory

Inventory is stated at the lower of cost and net realizable value. Net realizable value (NRV) is defined as estimated selling prices less costs of completion, disposal, and transportation. Inventory consists mainly of finished goods held for resale. Cost is determined on a weighted average cost method. The Company periodically reviews the age and turnover of its inventory to determine whether any inventory has become obsolete or has declined in value, and incurs a charge to operations for known and anticipated inventory obsolescence.

F-7

Property and Equipment

Property and equipment are carried at cost net of accumulated depreciation. Expenditures that improve the functionality of the related asset or extend the useful life are capitalized. When property and equipment is retired or otherwise disposed of, the related gain or loss is included in operating income. Leasehold improvements are depreciated on the straight-line method over the shorter of the remaining lease term or estimated useful life of the asset. Depreciation is calculated on the straight-line method, including property and equipment under capital leases, generally over five years. Depreciation expense was $

241

and $192 for the three months ended March 31, 2024 and 202

, respectively.

Impairment of Long-Lived Assets

The Company has adopted Accounting Standards Codification subtopic 360-10, Property, Plant and Equipment (“ASC 360-10”). ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by the Company be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates its long-lived assets for impairment annually or more often if events and circumstances warrant. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve breakeven operating results over an extended period. The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. ASC 360-10 also requires assets to be disposed of be reported at the lower of the carrying amount or the fair value less costs to sell. Impairment loss on property and equipment was $nil and $nil for the three months ended March 31, 2024 and 202

, respectively.

Revenue Recognition

Pursuant to ASC 606, the Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines is within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customers. At inception of the contract, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

Merchandise sales: The Company recognizes sales revenues from merchandise sales when customers obtain control of the Company’s products, which typically occurs upon delivery to customer. Merchandise sales revenues are recorded at the sales price, or “transaction price”.

Software sales: The Company does not develop the software products on its own. When the Company receives a purchase order from the customer, the Company would engage with the third-party software company to customize and develop the software products. The Company recognizes software revenues upon completion of the installation and testing, and transfer the control of the software products to the customer. Software revenues are recorded at the fixed sales price, or “transaction price”, pursuant to the sales contracts. The Company may also charge the customer maintenance service fees on a straight-line basis over the service period pursuant to the sales contract. The Company concluded that the performance obligation for the maintenance service is distinct. Therefore, such maintenance service revenue can be separated from other elements in the arrangement.

Trade discount and allowances: The Company generally does not provide invoice discounts on product sales to its customers for prompt payment.

Product returns: The Company generally does not provide customers with the right to return a product for a full or partial refund, a credit, or an exchange for another product.

F-8

To date, product allowance and returns have been minimal and, based on its experience, the Company believes that returns of its products will continue to be minimal.

The following tables provide details of revenue by major products and by geography.

Revenue by Major Products

For the three months ended March 31, 2024:
Nutrition supplement	$	54,124
Total	$	54,124

For the three months ended March 31, 2023:
Nutrition supplement	$	164,628
Software		5,978
Other		473
Total	$	171,079

Revenue by Geography

Revenue from external customers

For the three months ended March 31, 2024:
Taiwan	$	1,908
Hong Kong		52,216
Total	$	54,124

For the three months ended March 31, 2023:
Taiwan	$	152,733
Hong Kong		18,346
Total	$	171,079

Leases

The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) using the modified retrospective approach, electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, the Company presented the disclosures which were required under ASC 842.

The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. The Company’s future minimum based payments used to determine the Company’s lease liabilities mainly include minimum based rent payments. As most of Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

F-9

In addition, the adoption of the standard did not have a material impact on the Company’s results of operations or cash flows. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in Selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur.

Advertising Costs

Advertising costs are expensed at the time such advertising commences. Advertising expenses were $nil and $nil for three months ended March 31, 2024 and 202

, respectively.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation (“ASC 718”). Under the fair value recognition provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as compensation expense on a straight-line basis over the requisite service period, based on the terms of the awards. The Company calculates the fair value of option grants utilizing the Black-Scholes pricing model and estimates the fair value of the stock based upon the estimated fair value of the common stock.

In June 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 expands the guidance in ASC 718 to include share-based payments for goods and services to non-employees and generally aligns it with the guidance for share-based payments to employees. In accordance with ASU 2018-07, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the underlying equity instrument. The fair value of the equity instrument is charged directly to compensation expense and additional-paid-in capital over the period during which services are rendered.

Post-retirement and Post-employment Benefits

The Company’s subsidiaries in Taiwan adopted the government mandated defined contribution plan pursuant to the Taiwan Labor Pension Act (the “Act”). Such labor regulations require that the rate of contribution made by an employer to the Labor Pension Fund per month shall not be less than 6% of the worker’s monthly salaries. Pursuant to the Act, the Company makes monthly contribution equal to 6% of employees’ salaries to the employees’ pension fund. The Company has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits, which were expensed as incurred, were $

961

and $1,175 for three months ended March 31, 2024 and 202

, respectively. Other than the above, the Company does not provide any other post-retirement or post-employment benefits.

F-10

Fair Value Measurements

FASB ASC 820, “Fair Value Measurements” defines fair value for certain financial and non-financial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. It requires that an entity measure its financial instruments to base fair value on exit price, maximize the use of observable units and minimize the use of unobservable inputs to determine the exit price. It establishes a hierarchy which prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy increases the consistency and comparability of fair value measurements and related disclosures by maximizing the use of observable inputs and minimizing the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the assets or liabilities based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy prioritizes the inputs into three broad levels based on the reliability of the inputs as follows:

Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Valuation of these instruments does not require a high degree of judgment as the valuations are based on quoted prices in active markets that are readily and regularly available.

Level 2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable as of the measurement date, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Valuations based on inputs that are unobservable and not corroborated by market data. The fair value for such assets and liabilities is generally determined using pricing models, discounted cash flow methodologies, or similar techniques that incorporate the assumptions a market participant would use in pricing the asset or liability.

The carrying values of certain assets and liabilities of the Company, such as cash and cash equivalents, accounts receivable, inventory, advance to suppliers, prepaid expenses, accounts payable, accrued expenses, and due to shareholders, approximate fair value because of to their relatively short maturities.

Earnings (Loss) Per Share

Basic income (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents, and potentially dilutive securities outstanding during each year. Dilutive shares are excluded the exercise price is greater than the average market price and when the Company incurred a net loss as the inclusion of such shares would have an anti-dilutive effect.

For the three months ended March 31, 2024 and 202

, warrants were excluded as dilutive shares as the Company incurred a net loss.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.

Foreign-currency Transactions

Foreign-currency transactions are recorded in New Taiwan dollars (“NTD”) and Renminbi (“RMB”) at the rates of exchange in effect when the transactions occur. Gains or losses resulting from the application of different foreign exchange rates when cash in foreign currency is converted into New Taiwan dollars and Renminbi, or when foreign-currency receivables or payables are settled, are credited or charged to income in the year of conversion or settlement. On the balance sheet dates, the balances of foreign-currency assets and liabilities are restated at the prevailing exchange rates and the resulting differences are charged to current income except for those foreign currencies denominated investments in shares of stock where such differences are accounted for as translation adjustments under stockholders’ equity.

Translation Adjustment

The accounts of the Company’s subsidiaries were maintained, and their financial statements were expressed in New Taiwan Dollar (“NTD”) and Chinese Yuan, or Renminbi (“RMB”). Such financial statements were translated into U.S. Dollars (“$” or “USD”) in accordance ASC 830, “Foreign Currency Matters”, with the NTD and RMB as the functional currency. According to the Statement, all assets and liabilities are translated at the current exchange rate, common stock and additional paid-in capital are translated at the historical rates, and income statement items are translated at an average exchange rate for the period. The resulting translation adjustments are reported under accumulated other comprehensive income (loss) as a component of stockholders’ equity.

F-11

Comprehensive Income (loss)

Comprehensive income (loss) includes accumulated foreign currency translation gains and losses. The Company has reported the components of comprehensive income (loss) on its consolidated statements of operations and other comprehensive income (loss).

Credit risk

(i) Risk management

The Company reviews the recoverability of its financial assets periodically to ensure that potential credit risk of the counterparty is managed at an early stage and sufficient provision for impairment allowance is made for possible defaults. In addition, receivable balances are monitored on an ongoing basis.

As of

31 March 2024 and 31 December 2023

, substantially all of the Group’s bank balances are deposited in major financial institutions. Management does not expect any losses from non-performance by these banks. The credit quality of bank balances has been assessed by reference to external credit ratings or to historical information about the counterparty default rates. The existing counterparties do not have defaults in the past.

The credit risk of the Group’s other financial assets, which comprises amounts advances to suppliers and security deposits and prepaid expenses and other current assets, arises from default of the counterparties, with a maximum exposure equal to the carrying amounts of these instruments.

(ii) Measurement of Credit Losses on Financial Instrument

The Company has Accounts receivable under Financial Instrument that are subject to the Measurement of Credit Losses.

The Company adopted ASU No. 2016-13, “Financial Instruments — Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments” on January 1, 2023 using a modified retrospective approach. To estimate expected credit losses, the Company has identified the relevant risk characteristics of its customers and the related receivables. The Company considers the past collection experience, current economic conditions, future economic conditions (external data and macroeconomic factors) and changes in the Company’s customer collection trends.

The

provision for impairment loss and corresponding receivables were written off when they are determined to be uncollectible.).

Concentration of Credit Risk

Cash and cash equivalents

: The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments in high quality credit institutions in Taiwan, but these investments may be in excess of the insurance limits of Taiwan Central Deposit Insurance Corporation (the “TCDIC”) NT$ 3 million. The Company does not enter into financial instruments for hedging, trading or speculative purposes. Concentration of credit risk with respect to trade and notes receivables is limited due to the wide variety of customers and markets in which the Company transacts business, as well as their dispersion across many geographical areas. As of March 31, 2024, the Company had approximately $nil in excess of TCDIC insured limits. The Company has not experienced any losses in such accounts.

Customers

: The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral.

For the three months ended March 31, 2024, two customers accounted for more than 10% of the Company’s total revenues.

Customer	Net sales for the three months ended March 31, 2024		% of Total			Accounts receivable balance as of March 31, 2024		% of Total
A	$	47,447		88	%	$	46,727		91	%
B	$	1,908		4	%		-		-	%
C	$	4,769		9	%	$	4,697		9	%

For the three months ended March 31, 2023, one

customer

accounted for more than 10% of the Company’s total revenues.

Customer	Net sales for the three months ended March 31, 2023		% of Total			Accounts receivable balance as of March 31, 2023		% of Total
A	$	5,978		3	%	$	82,506		63	%
B	$	150,957		88	%	$	10,330		8	%

Suppliers

: The Company’s inventory is purchased from various suppliers.

F-12

For the three months ended March 31, 2024, one supplier accounted for more than 10% of the Company’s total net purchase:

Supplier		Net purchase for the three months ended March 31, 2024				% of Total				Accounts payable balance as of March 31, 2024				% of Total
A		$	20,670				100	%		$	-				-

For the three months ended March 31, 2023, one supplier accounted for more than 10% of the Company’s total net purchase:

Supplier		Net purchase for the three months ended March 31, 2023				% of Total				Accounts payable balance as of March 31, 2023				% of Total
A		$	126,999				100	%		$	38,946				100	%

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This

pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require

the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit

loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be

collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and

reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December

15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for

private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL). The Company has adopted this

accounting standard in the financial year 2023, this new accounting standard has no significant impact to the Company.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.

Note 2. LEASE

As of March 31, 2024, the Company has operating lease agreement for its photocopier with remaining lease terms of

months, and office lease with remaining lease terms of

months, respectively. The Company does not have any other leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company accounts for the lease and non-lease components of its leases as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rate for each lease based primarily on its lease term in Taiwan which is approximately 2.44%.

Operating lease expenses were $

8,774

and $16,479 for the three months ended March 31, 2024 and 202

, respectively.

F-13

The components of lease expense and supplemental cash flow information related to leases for the three months ended are as follows:

Lease Cost	March 31, 202 4			March 31, 202 3
Operating lease cost (included in general and administrative expenses in the Company’s statement of operations)	$	716			9,535

Other Information
Right-of-use assets obtained in exchange for new operating leases liabilities		-			72,865
Cash paid for amounts included in the measurement of lease liabilities		-			-
Weighted average remaining lease ter m – operating leases (in years)		1.70			2.75
Average discount rate – operating lease		2.44	%		2.44	%

The supplemental balance sheet information related to leases for the period is as follows:

	March 31, 202 4		December 31, 202 3
Operating leases
Right-of-use assets, net	$	3,393	$	4,192

Operating lease liabilities	$	3,393	$	4,192

The future minimum lease payment schedule as follows:

For the years ending March 31,
202 4 (nine months remaining)			2,136
202 5			770
202 6			577

Total lease payments	3,483
Less: Interest	(90	)
Total	3,393

NOTE 3 – GOING CONCERN

The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the financial statements, the Company had net losses for the three months ended March 31, 2024, and had negative working capital and accumulated deficit as of March 31, 2024. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s cash position may not be sufficient to support the Company’s daily operations. Management has financed its operating costs with loans from director and officers. The Company intends to generate sufficient revenue and raise additional funds to support its operations, however there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further generate sufficient revenue and its ability to raise additional funds.

The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

F-14

Note 4. SECURITY DEPOSITS

On November 21, 2019, the Company and Shuang Hua International Culture Media Co, Ltd. (“Shuang Hua”), a corporation formed under laws of Taiwan, entered into an exclusive copyright and distribution agreement (the “Agreement”), pursuant to which, subject to the terms and condition therein, Shuang Hua granted the Company an exclusive right to produce, market, distribute and sell the bilingual films and electronic books of which the copyrights are owned by Shuang Hua. In accordance to the agreement, the Company shall pay Shuang Hua a refundable deposit of in the aggregate amount of

$2,894,000,

before December 31, 2021.

The

full deposit amounts have been provided for doubtful debt.

Note 5. ACCOUNTS RECEIVABLE

	March 31, 2024			December 31, 2023
Accounts Receivable	$	704,122		$	1,018,005
Less: Provision for doubtful debts		(652,698	)		(793,415	)
	$	51,424		$	224,590

The credit terms granted by the Company to its customers 90 days from the date of billing.

The movement on the Provision

for doubtful debts

as follow

：

	Provision for doubtful debts
Balance at December 31, 2022	$	944,215
Reversal of provision for doubtful debts recognised as other income		(148,452	)
Adjusting e xchange differences		(2,348	)
Balance at December 31, 202 3	$	793,415
Reversal of provision for doubtful debts recognised as other income		(129,364	)
Adjusting e xchange differences		(11,353	)
Balance at March 31, 20 2 4	$	652,698

We recognized significant

provision for doubtful debts

due to the economic impact of the COVID-19 pandemic. The

provision for doubtful debts

as of December 31, 2022, was $944,215, reflecting our estimate of potential losses based on historical experience, current economic conditions, and an assessment of specific customer credit risk. In the financial year 2023 and the first quarter of 2024, with the relaxation of COVID-19 restrictions, management undertook significant efforts to recover previously recognised credit losses, as a result, management recovered $129,364

of provision for doubtful debts subsequently to the period ended March 31, 2024 to the date of this report. additionally, management collected $41,423 of the net accounts receivable subsequent to the period ended March 31, 2024 to the date of this report.

Note 6. ADVANCES TO SUPPLIERS

The Company has advanced payments to suppliers for purchasing goods for sale. The amounts of advances vary from order to order; ranging from 30% to 100%. As of March 31, 2024, and December 31, 2023, there were $164,098 and $161,179 advance outstanding, respectively.

F-15

Note

HER PAYABLE AND ACCRUED EXPENSES

The supplemental balance sheet information related to Other Payable and Accrued Expenses for the years are as follows:

	March 31, 202 4		December 31, 2022
Accrued selling, general and administrative expenses	$	64,078	$	166,541
Payable to a third party from debt conversation		142,562		142,562
	$	206,640	$	309,103

Note

. RELATED PARTY TRANSACTIONS

Related parties of the Company during the three months ended March 31, 2024 and 202

consist of the following:

Name of Related Party		Nature of Relationship
Yu Cheng Yang		Majority Shareholder, Director and Officer of the Company
Co-Innovation Group Limited		Company under control of Yu Cheng Yang

Due to shareholders

The Company has advanced funds from its directors and shareholders Yu Cheng Yang for working capital purposes. As of March 31, 2024 and December 31, 2023, there were $8,513 and $74,065 advance outstanding, respectively. The Company has agreed that the outstanding balances bear 0% interest rate and are due upon demand after thirty days of written notice by the director and shareholder.

Mr. Yang advanced $145,440 to the Company as working capital, and the Company repaid $183,004 to Mr. Yang for the three months ended March 31, 2024.

Mr. Yang advanced $155,370 to the Company as working capital, and the Company repaid $41,343 to Mr. Yang for the three months ended March 31, 2023.

Note

. TERM LOAN

Loan from First Commercial Bank

On September 30, 2020, TWD 3,000,000 (approximately $107,750) term loan was granted to the Company for working capital with repayment period of 60 months. The term loan is subject to an interest charge at 1% per annum for the first 9 months of the term loan; interest charges on the term loan from 10

to 60

is 3.5% per annum.

On September 30, 2020, TWD 2,000,000 (approximately $71,833) term loan was granted to the Company for employee salary with repayment period of 3

months. The term loan is subject to an interest charge at 1.5% per annum for the first 9 months of the term loan; interest charges on the term loan from 10th to 36th is 1.845% per annum.

Loan from Bank of Taiwan

On May 7, 2021, TWD 4,000,000 (approximately $143,666) term loan was granted to the Company for employee salary with repayment period of 60 months. The term loan is subject to an interest charge at 1% per annum for the first 8 months of the term loan; interest charges on the term loan from 9

to 60

is 1.9% per annum.

On May 7, 2021, TWD 1,000,000 (approximately $35,917) term loan was granted to the Company for employee salary with repayment period of 60 months. The term loan is subject to an interest charge at 1.5% per annum for the first 8 months of the term loan; interest charges on the term loan from 9

to 60

is 2% per annum.

As of March 31, 2024, the outstanding balance of the term loan is $100,852, of which $49,876 is due within one year and classified as short term, and $50,976 is due after one year, and has classified as long term, respectively.

F-16

As of December 31, 2023, the outstanding balance of the term loan is $118,375, of which $53,165 is due within one year and classified as short term, and $65,210 is due after one year, and has classified as long term.

Interest expenses were $

798

and $1,383 for the three months ended March 31, 2024 and 202

, respectively.

Note

. STOCKHOLDERS’ EQUITY

Preferred Stock

On July 8, 2021, the board of directors of the Company amended its stock designation and the Company is authorized to issue 5,000,000 shares of Series A Preferred Stock with par value $0.001. Each stock is entitled to 1,000 votes of common stock without dividend rights.

As of March 31, 2024, the Company has 1,500,000 shares of Series A Preferred Stock issued and outstanding.

Common Stock

On May 19, 2022, the Company issued 3,601,306 shares of restricted common stock to non-employees, the amount is recorded as deferred (unearned) compensation of $38,534, due to the service has not been started.

On May 19, 2022, the Company issued 115,000 shares of restricted common stock to non-employees as compensation in the amount of $1,231.

ptember 7

, 2023, the Company issued 21,000,000 shares of freely tradable common stock to various non-employee Consultants inconsideration of the services to

be rendered to the Company. The services have all been rendered as of September 30, 2023, and therefore do not need to be deferred. The Management have decided

to not elect the definition of fair value as per ASC 718, Compensation - Stock Compensation as it believes it is not a fair representation of the value of the

Company's stocks. Therefore, the fair value of the stock is determined based on the fundamental value of the Company and is recorded as stock based compensation.

The amount recorded as stock based compensation is $41,019.

On December 5, 2023, the Company issued 345,000,000 shares of Common Stock at fair value $0.00122 per share to Co-Innovation Group Limited to convert

outstanding debt owed to Mr. Yu-Cheng YANG in the amount of $420,900.

On December 18, 2023, the Company issued 55,000,000 shares of Common Stock at fair value $0.00122 per share to non-employees to convert outstanding debt

owed to Mr. Yu-Cheng YANG in the amount of $67,100.

As of March 31, 2024, the Company has 604,781,560 shares of Common Stock issued and outstanding.

Warrants

On February 3, 2022, the Company granted the issuance of warrants to purchase 200,000 shares of the Company’s common stock at an exercise price of $2 per share with an expiration date of December 22, 2027 to a consultant or its designees as compensation. The warrants were fully vested upon issuance.

A summary of warrant activities as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)

Warrants outstanding at December 31, 2023		200,000	$	2.00		3.98
Granted		-		-		-
Exercised		-		-		-
Expired		-		-		-
Warrants outstanding at March 31, 2024		200,000	$	2.00		3.73
Warrants exercisable at March 31, 2024		200,000	$	2.00		3.73

F-17

Note

. STOCK BASED COMPENSATION

Freely Tradable Common Stock

September 7

, 2023, the Company issued 21,000,000 shares common stock to various non-employee consultants as compensation for services rendered. As these

services were fully provided by September 30, 2023, deferral of share based compensation is not necessary. In accordance with ASC 718, Compensation – Stock

Compensation, the fair value of the issued stock was determined using Level 3 Inputs.

The decision to use Level 3 Inputs was driven by management's assessment that Level 1 Inputs, namely the Company’s stock price on the OTC Pink market, do not

accurately represent the realizable value for consultants upon liquidation of their shares in this market. Additionally, Level 2 Inputs, which include prices of similarly

situated companies on the OTC Pink market, were also deemed unsuitable. This decision was based on the unique circumstances surrounding the Company.

Consequently, management elected to use Level 3 Inputs, employing a discounted cash flow model, to more accurately estimate the fair value of the Company's

stock granted to the consultants. This resulted in recording the stock-based compensation at an amount of $41,019. This approach reflects a comprehensive

assessment of the stock’s fair value, considering the specific context and market conditions relevant to the Company.

Restricted Stock

On May 19, 2022, the Company issued 115,000 shares of restricted common stock to non-employees as compensation in the amount of $1,231. The shares were fully vested upon issuance as there were no other conditions required for the shares to vest. The fair value of the shares was determined based on a contemporaneous valuation report.

Warrants

In accordance to ASC 815-40, an equity-linked financial instrument can be classified in equity only if it (1) is indexed to the reporting entity’s own stock and (2) meets all other conditions for equity classification. The warrants are classified as equity instruments because a fixed amount of cash is exchanged for a fixed amount of equity.

The fair value of the warrants was determined using the Black-Scholes option pricing model which requires the input of subjective assumptions, the expected life of the warrants, and the expected stock price volatility. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

The assumptions used to determine the fair value of the Warrants as follows:

	Years Ended December 31,
	202 3			202 2
Expected life (years)		3 .89			4.89
Risk-free interest rate		0.76	%		0.76	%
Expected volatility		329.86	%		329.86	%
Dividend yield		0	%		0	%

The expected life of the warrants was estimated using the “simplified method,” as the Company has no historical information to develop reasonable expectations about future exercise patterns for its warrant grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. The expected life of awards that vest immediately use the contractual maturity since they are vested when issued.

For stock price volatility, the Company calculated its expected volatility based on historical closing price of its common stock, par value $0.001 per share. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the warrant at the grant-date.

Stock based compensation were $nil and $nil for the three months ended March 31, 2024 and 202

, respectively.

Note

. INCOME TAXES

The Company has operations in various countries and is subject to tax in the jurisdictions in which they operate, as follows:

United States

EOS, Inc. is incorporated in the United States of America and is subject to United States federal taxation at tax rate of 21%. No provisions for income taxes have been made as the Company has no taxable income for the period. As of March 31, 2024, the Company had net operating loss carry forwards of $

1,668,312

that may be available to reduce future years’ taxable income. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements as their realization is determined not likely to occur and, accordingly, the Company has recorded a valuation allowance for the deferred tax asset relating to these tax loss carry-forwards. No tax benefit has been realized since a 100% valuation allowance has offset deferred tax asset resulting from the net operating losses.

F-18

British Virgin Islands

EOS International Inc. is incorporated in British Virgin Islands and are not required to pay income tax.

Taiwan

The subsidiary of EOS Inc. and Emperor Star is incorporated in Taiwan. According to the amendments to the “Taiwan Income Tax Act” enacted by the office of the President of Taiwan on February 7, 2018, statutory income tax rate increased from 17% to 20% and undistributed earning tax decreased from 10% to 5%, effective from January 1, 2018.

People’s Republic of China (“PRC”)

Under the Enterprise Income Tax (“EIT”) Law of the PRC, the standard EIT rate is 25%. The PRC subsidiary of the Company is subject to PRC income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which they operate. No provision for income taxes have been made as Maosong had no taxable income as of and for the three months ended March 31, 2024.

Provision for income tax consists of the following:

	Three months ended March 31,
	202 4			202 3
Current income tax (benefit)
U.S.	$	-		$	-
Taiwan		-			-
PRC		-			-
Sub total		-			-

Deferred income tax
Deferred tax assets for NOL carry-forwards		9,267			26,028
Valuation allowance		(9,267	)		(26,028	)
Other adjustments		-			-
Net changes in deferred income tax (benefit)		-			-
Total income tax provision	$	-		$	-

The net loss before income taxes and its provision for income taxes as follows:

`	Three months ended March 31,
	202 4			202 3
Net loss before income tax		(43,208	)		(130,137	)
Statutory tax rate		21	%		20	%
Income tax provision		(9,267	)		(26,028	)
Valuation allowance		9,267			26,028
Income tax expenses, net		-			-

Significant components of the Company’s deferred taxes assets as follows:

Deferred tax assets:	March 31, 202 4			December 31, 202 3
Net operating loss carry-forwards		9,267			129,243
Less: Valuation allowance		(9,267	)		(129,243	)
Deferred tax assets, net		-			-

F-19

Note 1

. COMMITMENTS AND CONTINGENCIES

Sales Collaboration Agreement

On June 1, 2020 ("the contract date"), the Company and Fortune King entered into a sales collaboration agreement (the “Sales Collaboration Agreement”), pursuant

to which, Fortune King agreed to a fee of $1,500,000 to provide promotion and marketing services for the Company’s products for a period of six years from January

2020 to December 2025 (“Service Period”). Fortune King is obligated to perform such service regardless of whether the Company sells products to Fortune King

during the designated period. Both parties agreed that the fee would be paid in 3,000,000 of the company's common stocks ("consideration stock"), and the contract

day would be the grant date of the consideration stocks.

According to the Supplementary Agreement signed on August 12, 2020, Fortune King entrusted the Company to assist in the transfer of the 3,000,000 EOS’s

stocks (“old shareholders stocks”) to 167 business promoters. The old shareholders stocks were from 11 independent shareholders.

The Company further signed the Agreement for Share Transfer and Repayment with the 11 shareholders individually. The Company recognized the marketing

expenses quarterly with $62,500 per quarter till the end of the Service Period and agreed to repay them in cash or other methods agreed upon by both the Company

and the old shareholders for the equivalent value at $0.5 per share. The repayments will be made upon demand from each Shareholder throughout the Service Period.

As such the Company recognized these marketing expenses quarterly and other current liabilities to the 11 shareholders. As of March 31, 2024 and December 31, 2023, the

other current liabilities were $

1,062,500

and $

1,000,000 respectively.

As of

March

31, 202

and December 31, 2023 the outstanding service commitment of Fortune King to the Company

is $

437,500

and $500,000 respectively

Note 1

. SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date which the financial statements are available to be issued. All subsequent events requiring recognition as of March 31, 2024 have been incorporated into these consolidated financial statements and there are no other subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

F-20

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation.

The following discussion and analysis of the results of operations and financial condition of EOS Inc. and its subsidiary(“EOS” or the “Company”) as of March 31, 2024 for the three months ended March 31, 2024 and 202

should be read in conjunction with our unaudited financial statements and the notes to those unaudited financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to EOS. This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions, are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based.

Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. Except as required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

U.S. Dollars are denoted herein by “USD,” “$” and “dollars”.

Overview

Emperor Star International Trade Co., Ltd., (“Emperor Star”), was incorporated on November 16, 2015 under the laws of Taiwan. Emperor Star is in the business of marketing and distribution of various products, including nutrition supplements, skin care products, and water purifiers.

On July 1, 2023, the Company assumes effective control of Emperor Star International Trade Co., Ltd (Emperor Star), a commerce and trade company, through execution of declaration of trust for Emperor Star’s 100% share capital. The primary reason the Company completed the equity transaction within owners is to invest resources, expand the operations and turn Emperor Star into a profitable business.

Results of Operation

The following presents the consolidated result of the Company for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Net sales

Net sales were $54,124 for three months ended March 31, 2024, representing a decrease of $116,955 or 68%, as compared to $171,079 for the three months ended March 31, 2023. The decrease was primarily due to the consumer demand for the products falling and the company phased out some old products such as automobile carbon reduction machines.

Cost of sales

Cost of sales was $50,506

for the three months ended March 31, 2024, representing a decrease of $7,667 or 1

%, as compared to $

58,173

for the three months ended March 31, 2023.

Gross profit

Gross profit was $3,618 for the three months ended March 31, 2024, with a gross profit margin ratio of 7% compared to gross profit of $112,906 with a gross profit margin ratio of 66% for the same period in 2023. The reduction in gross profit mainly due to the Company a clean-up sale with low selling prices to certain old inventories.

Selling, general and administrative expenses

Selling, general and administrative expenses consist primarily of office rent, salary and related costs for personnel and facilities, and professional service fees. Selling, general and administrative expenses were $205,644 for the three months ended March 31, 2024, representing a decrease of $36,682 or 15%, as compared to $242,326 for the three months ended March 31, 2023. The decrease was mainly due to lesser lease expenses due to the termination of its car in November 2023.

Loss

from operations

Loss from operations was $202,026 for the three months ended March 31, 2024, compared to loss from operations of $129,420 for the three months ended March 31, 2023, representing an increase of $72,606 or 56%. Such increase was primarily due to the reduction in sales and selling with a lower price for certain old inventories.

Other income

(expense)

There was other income of $158,818 for the three months ended March 31, 2024, a turnaround from other expense of $717 for the three months March 31, 2023. It was mainly due to that we recognized significant

provision for doubtful debt

due to the economic impact of the COVID-19 pandemic.

Net loss

As a result of the above factors, our net loss was $43,208 for the three months ended March 31, 2024, as compared to net loss of $130,137 for the three months ended March 31, 2023, representing a decrease in loss of $86,929 or 67%.

Liquidity and Capital Resources

Cash and cash equivalents were $64,506 on March 31, 2024 and $14,307 at December 31, 2023. Our total current assets were $330,644 on March 31, 2024, as compared to $487,319 on December 31, 2023. Our total current liabilities were

$1,373,599 on March 31, 2024, as compared to $1,494,230 at December 31, 2023.

We had a working capital deficit of $1,042,955

on March 31, 2024, compared to the working capital deficit of $1,006,911

on December 31, 2023. The

enlarge

in working capital deficit was primarily

due to a reduction in sales and a reduction in accounts receivable

Net cash

provided by operating activities was $121,102

during the three months ended March 31, 2024, as compared to

et cash

used in

operating activities

18 for the three months ended March 31, 2023.

The turnaround was mainly due to more accounts receivable were settled in cash the period.

investing activities

for

the three months ended March 31, 2024, as compared to

et cash used in investing activities

of $1,096

for the three months ended March 31, 2023.

Net cash

used in

financing activities was $

during the three months ended March 31, 2024, as compared to

et cash

provided by

financing activities $

for the three months ended March 31, 2023. The

turnaround

was

mainly

due to

repayment to r

elated party payable.

As a result of the above factors, net increase of cash and cash equivalents were $

,19

for the three months ended March 31, 2024, as compared to net

crease

of $3,139 for the three months ended March 31, 2023.

Critical Accounting Policies

Principles of Consolidation

Use of Estimates

Cash and Cash Equivalents

Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less.

Accounts Receivable

Accounts receivable are stated at carrying value less estimates made for doubtful receivables. An allowance for impairment of trade receivables is established if the collection of a receivable becomes doubtful. Such receivable becomes doubtful when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the receivable is impaired. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. An impairment loss is recognized in the statement of income, as are subsequent recoveries of previous impairments.

Inventory

Property and Equipment

and $

192

for the three months ended March 31, 2024 and 202

, respectively.

Impairment of Long-Lived Assets

, respectively.

Revenue Recognition

Trade discount and allowances: The Company generally does not provide invoice discounts on product sales to its customers for prompt payment.

Product returns: The Company generally does not provide customers with the right to return a product for a full or partial refund, a credit, or an exchange for another product.

To date, product allowance and returns have been minimal and, based on its experience, the Company believes that returns of its products will continue to be minimal.

Since COVID-19 pandemic hit globally in 2020 and throughout first three quarters of financial year ended December 31, 2021, management assessed that the market conditions that it operated in was worsening. Credit risk on customers was determined to have deteriorated significantly as the majority of its customers were located in the PRC. Accordingly, management took the position that revenue would only be recognized when the consideration is received as to satisfy revenue recognition criteria related to reasonable certainty of collections.

During the fourth quarter of financial year ended December 31, 2021, the Covid pandemic was effectively controlled in the PRC. Management re-assessed the market conditions and determined that the overall market conditions were improving, and the Company’s collection history in the prior three quarters was positive, and in fourth quarter of 2021 reached sustainable recovery rate comparable to pre-COVID-19 environment. Accordingly, management decided that due to the improved conditions collection is now reasonably certain, and revenue is now recognized when risk and rewards are transferred to its customers.

The following tables provide details of revenue by major products and by geography.

Revenue by Major Products

For the three months ended March 31, 2024:
Nutrition supplement	$	54,124
Total	$	54,124

For the three months ended March 31, 2023:
Nutrition supplement	$	164,628
Software		5,978
Others		473
Total	$	171,079

Revenue by Geography

Revenue from external customers

The Company’s customers are mainly located in Taiwan and Hong Kong.

For the three months ended March 31, 2024:
Hong Kong	$	52,216
Taiwan		1,908
Total	$	54,124

For the three months ended March 31, 2023:
Hong Kong	$	18 ,3 46
Taiwan		1 52 , 733
Total	$	171,079

Leases

Advertising Costs

Advertising costs are expensed at the time such advertising commences. Advertising expenses were $nil and $nil for three months ended March 31, 2024 and 202

, respectively.

Stock-Based Compensation

Post-retirement and Post-employment Benefits

and $1,175 for three months ended March 31, 2024 and 202

, respectively. Other than the above, the Company does not provide any other post-retirement or post-employment benefits.

Fair Value Measurements

Earnings (Loss) Per Share

For the three months ended March 31, 2024 and 202

, warrants were excluded as dilutive shares as the Company incurred a net loss.

Income Taxes

Foreign-currency Transactions

Translation Adjustment

Comprehensive Income (loss)

Concentration of Credit Risk

Cash and cash equivalents

Customers

: The Company performs ongoing credit evaluations of its customers’ financial condition and generally requires no collateral.

For the three months ended March 31, 2024,

two

customer

accounted for more than 10% of the Company’s total revenues.

Customer	Net sales for the three months ended March 31, 2024		% of Total			Accounts receivable balance as of March 31, 2024		% of Total
A	$	47,447		88	%	$	46,727		91	%
B		1,908		4	%		-		-
C	$	4 , 76 9		9	%	$	4,697		9	%

For the three months ended March 31, 2023, one customer accounted for more than 10% of the Company’s total revenues.

Customer	Net sales for the three months ended March 31, 2023		% of Total			Accounts receivable balance as of March 31, 2023		% of Total
A	$	5,978		3	%	$	82,506		63	%
B	$	150,957		88	%		10,330		8	%

Suppliers

: The Company’s inventory is purchased from various suppliers.

For the three months ended March 31, 2024, one supplier accounted for more than 10% of the Company’s total net purchase:

Supplier		Net purchase for the three months ended March 31, 2024				% of Total				Accounts payable balance as of March 31, 2024				% of Total
A		$	20,670				100	%		$	-				-

For the three months ended March 31, 2023, one supplier accounted for more than 10% of the Company’s total net purchase:

Supplier		Net purchase for the three months ended March 31, 2023				% of Total				Accounts payable balance as of March 31, 2023				% of Total
A		$	126,999				100	%		$	38,946				100	%

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL), the revised effective date is January 2023.

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

As a smaller reporting company, we are not required to provide this information.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that the information is accumulated and communicated to our management, including our Chief Executive Officer and interim Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. We performed an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. During our assessment of the effectiveness of internal control over financial reporting as of March 31, 2024, management identified material weaknesses related to (i) our internal audit functions (ii) inadequate levels of review of the financial statements, (iii) a lack of segregation of duties within accounting functions and (iv) the absence of any independent directors. Therefore, our internal controls over financial reporting were not effective as of March 31, 2024.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures is also based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Material Weaknesses and Corrective Actions

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during our last fiscal quarter to which this Quarterly Report on Form 10-Q relates that have materially affected, or are reasonably likely to materially affect our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, or proceeding by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or our subsidiary, threatened against or affecting our Company, our common stock, our subsidiary or of our companies or our subsidiary’s officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

As a smaller reporting company, we are not required to provide this information.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

There is no other information required to be disclosed under this item which has not been previously disclosed.

ITEM 6. EXHIBITS

The following exhibits are filed herewith:

Exhibit No.		Description

31.1		Certification of Chief Executive and Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1		Certification of Chief Executive and Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File - the cover page from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, is formatted in Inline XBRL.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	EOS Inc.

Date: May 30 , 202 4	By:	/s/ He-Siang Yang
		He-Siang Yang
		Principal Executive Officer, Principal Financial Officer, President and Chairman of the Board

Positive
Negative
Uncertain
Constraining
Legalese
Litigious
Readability	8th grade Bad

EOS (EOSS) 10-Q/A2024 Q1 Quarterly report (amended)

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