Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 13, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | United Royale Holdings Corp. | |
Entity Central Index Key | 0001652842 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 141,990,387 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 7,706 | $ 63,839 |
Prepaid expenses | 10,198 | 21,157 |
TOTAL CURRENT ASSETS | 17,904 | 84,996 |
NON-CURRENT ASSETS | ||
Plant and equipment, net | 1,203 | 2,006 |
Biological assets | 41,035 | 37,297 |
Operating lease right-of-use assets, net | 19,563 | |
TOTAL ASSETS | 60,142 | 143,862 |
CURRENT LIABILITIES | ||
Accrued liabilities | 13,303 | 20,698 |
Due to director | 45,887 | 11,284 |
Operating lease liabilities, current portion | 3,221 | |
TOTAL CURRENT LIABILITIES | 59,190 | 35,203 |
NON-CURRENT LIABILITIES | ||
Operating lease liabilities, net of current portion | 16,342 | |
TOTAL LIABILITIES | 59,190 | 51,545 |
STOCKHOLDERS' EQUITY | ||
Preferred stock - Par value $0.0001; Authorized: 200,000,000 None issued and outstanding | ||
Common stock - Par value $ 0.0001; Authorized: 600,000,000 Issued and outstanding: 141,990,387 shares as of September 30, 2020 and December 31, 2019 | 14,199 | 14,199 |
Additional paid-in capital | 789,468 | 789,468 |
Accumulated other comprehensive income/(loss) | (94) | 953 |
Accumulated deficit | (802,621) | (712,303) |
TOTAL STOCKHOLDERS' EQUITY | 952 | 92,317 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 60,142 | $ 143,862 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 141,990,387 | 141,990,387 |
Common stock, shares outstanding | 141,990,387 | 141,990,387 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
REVENUE | ||||
COST OF REVENUE | ||||
GROSS PROFIT | ||||
OPERATING EXPENSES: | ||||
General and administrative | (18,106) | (67,730) | (90,317) | (184,824) |
LOSS FROM OPERATIONS | (18,106) | (67,730) | (90,317) | (184,824) |
OTHER EXPENSE | ||||
Other income (expense), net | 1 | 349 | ||
LOSS BEFORE INCOME TAX | (18,106) | (67,729) | (90,317) | (184,475) |
INCOME TAX EXPENSE | ||||
NET LOSS | (18,106) | (67,729) | (90,317) | (184,475) |
Other comprehensive loss: | ||||
- Foreign currency translation income (loss) | 1,809 | 156 | (1,046) | 128 |
COMPREHENSIVE LOSS | $ (16,297) | $ (67,573) | $ (91,363) | $ (184,347) |
NET LOSS PER SHARE, BASIC AND DILUTED | $ 0 | $ 0 | $ 0 | $ 0 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 141,990,387 | 141,965,520 | 141,990,387 | 141,965,520 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2018 | $ 14,197 | $ 650,712 | $ (460) | $ (450,568) | $ 213,881 |
Beginning balance, shares at Dec. 31, 2018 | 141,965,520 | ||||
Net loss | (50,187) | (50,187) | |||
Foreign currency translation | (119) | (119) | |||
Ending balance at Mar. 31, 2019 | $ 14,197 | 650,712 | (579) | (500,755) | 163,575 |
Ending balance, shares at Mar. 31, 2019 | 141,965,520 | ||||
Beginning balance at Dec. 31, 2018 | $ 14,197 | 650,712 | (460) | (450,568) | 213,881 |
Beginning balance, shares at Dec. 31, 2018 | 141,965,520 | ||||
Net loss | (184,475) | ||||
Foreign currency translation | 128 | ||||
Ending balance at Sep. 30, 2019 | $ 14,197 | 650,712 | (333) | (635,043) | 29,533 |
Ending balance, shares at Sep. 30, 2019 | 141,965,520 | ||||
Beginning balance at Mar. 31, 2019 | $ 14,197 | 650,712 | (579) | (500,755) | 163,575 |
Beginning balance, shares at Mar. 31, 2019 | 141,965,520 | ||||
Net loss | (66,559) | (66,559) | |||
Foreign currency translation | 90 | 90 | |||
Ending balance at Jun. 30, 2019 | $ 14,197 | 650,712 | (489) | (567,314) | 97,106 |
Ending balance, shares at Jun. 30, 2019 | 141,965,520 | ||||
Net loss | (67,729) | (67,729) | |||
Foreign currency translation | 156 | 156 | |||
Ending balance at Sep. 30, 2019 | $ 14,197 | 650,712 | (333) | (635,043) | 29,533 |
Ending balance, shares at Sep. 30, 2019 | 141,965,520 | ||||
Beginning balance at Dec. 31, 2019 | $ 14,199 | 789,468 | 953 | (712,303) | 92,317 |
Beginning balance, shares at Dec. 31, 2019 | 141,990,387 | ||||
Net loss | (48,357) | (48,357) | |||
Foreign currency translation | (3,254) | (3,254) | |||
Ending balance at Mar. 31, 2020 | $ 14,199 | 789,468 | (2,301) | (760,660) | 40,706 |
Ending balance, shares at Mar. 31, 2020 | 141,990,387 | ||||
Beginning balance at Dec. 31, 2019 | $ 14,199 | 789,468 | 953 | (712,303) | 92,317 |
Beginning balance, shares at Dec. 31, 2019 | 141,990,387 | ||||
Net loss | (90,317) | ||||
Foreign currency translation | (1,046) | ||||
Ending balance at Sep. 30, 2020 | $ 14,199 | 789,468 | (94) | (802,621) | 952 |
Ending balance, shares at Sep. 30, 2020 | 141,990,387 | ||||
Beginning balance at Mar. 31, 2020 | $ 14,199 | 789,468 | (2,301) | (760,660) | 40,706 |
Beginning balance, shares at Mar. 31, 2020 | 141,990,387 | ||||
Net loss | (23,855) | (23,855) | |||
Foreign currency translation | 398 | 398 | |||
Ending balance at Jun. 30, 2020 | $ 14,199 | 789,468 | (1,903) | (784,515) | 17,249 |
Ending balance, shares at Jun. 30, 2020 | 141,990,387 | ||||
Net loss | (18,106) | (18,106) | |||
Foreign currency translation | 1,809 | 1,809 | |||
Ending balance at Sep. 30, 2020 | $ 14,199 | $ 789,468 | $ (94) | $ (802,621) | $ 952 |
Ending balance, shares at Sep. 30, 2020 | 141,990,387 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (90,317) | $ (184,475) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization expenses | 2,569 | 2,597 |
Increase in lease liabilities | (1,491) | |
Changes in operating assets and liabilities: | ||
Increase/ (Decrease) in accrued liabilities | (7,365) | (20,892) |
Decrease/ (Increase) in prepaid expenses | 10,947 | (104) |
Decrease in lease liabilities | (1,790) | |
Net cash flows used in operating activities | (85,956) | (204,365) |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ||
(Increase)/ Decrease in biological assets | (4,548) | (8,076) |
Net cash flows used in investing activities | (4,548) | (8,076) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Advance from directors | 34,557 | 12,734 |
Net cash provided by financing activities | 34,557 | 12,734 |
Effect of exchange rate changes in cash and cash equivalents | (186) | (45) |
Net changes in cash and cash equivalents | (56,133) | (199,752) |
Cash and cash equivalents, beginning of period | 63,839 | 261,930 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 7,706 | 62,178 |
SUPPLEMENTAL CASH FLOWS INFORMATION | ||
Income taxes paid | ||
Interest paid | ||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Initial recognition of operating lease right-of-use assets and operating lease obligations upon adoption of ASC Topic 842 | 21,330 | 21,330 |
Reversal Adjustment for operating lease right-of-use and operating lease obligation | $ 17,105 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 1. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. In the opinion of management, the balance sheet as of September 30, 2020 which has been derived from unaudited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2020 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2020 or for any future period. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Form 10-K for the year ended December 31, 2019. |
Description of Business and Org
Description of Business and Organization | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Description of Business and Organization | 2. DESCRIPTION OF BUSINESS AND ORGANIZATION United Royale Holdings Corp., formerly known as Bosy Holdings Corp. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on June 23, 2015. We intend to offer planting and cultivation services to land owners in regards to the planting and cultivation of Aquilaria Subintegra & Aquilaria Sinensis trees. We also intend to provide services relating to the extraction of Agarwood from such trees through a process known as “inoculation.” On September 30, 2018, the Company and Mr. CHEN Zheru, representing the sole shareholder of IV Enterprises Development Limited, a Seychelles corporation (“IVED”), entered into a Sale and Purchase Agreement, pursuant to which the Company acquired 100% (one hundred percent) of the shareholding of IVED. IVED provides tree nurseries, including planting, cultivation and inoculation services through its wholly-owned subsidiary, Oudh Tech Sdn Bhd, in Malaysia. The acquisition was completed on September 30, 2018. Mr. CHEN Zheru is the common director and major shareholder of the Company and IVED. As a result of this common ownership and in accordance with the FASB Accounting Standards Codification Section 805 “Business Combination” |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances were eliminated in consolidation. Below is the organization chart of the Group. Use of estimates Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheet, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates. Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the nine months ended September 30, 2020, the Company incurred a net loss of $90,317 and used cash in operations of $85,956. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2019 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. Despite the amount of funds that we have raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing. COVID-19 outbreak In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. The COVID-19 pandemic has negatively impacted the global economy, workforces, customers, and created significant volatility and disruption of financial markets. It has also disrupted the normal operations of many businesses, including ours. This outbreak could decrease spending, adversely affect demand for our services and harm our business and results of operations. It is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or results of operations at this time. Cash and cash equivalents Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. Our deposit in Hong Kong is currently deposit in HSBC Hong Kong, and there is a Deposit Protection Scheme protects our eligible deposits held with bank in Hong Kong which is members of the Scheme. The scheme will pay us a compensation up to a limit of HKD500,000, which is equivalent to $64,102, if HSBC Hong Kong fails. Our deposit in Malaysia is currently deposit in Malayan Banking Berhad, and there is a Perbadanan Insurans Deposit Malaysia protects our eligible deposits held with bank in Malaysia which is members of the Scheme. The scheme will pay a compensation up to a limit of Malaysia Ringgit (“MYR”) 250,000 per deposit per member bank, which is equivalent to $60,167, if the aforementioned banks fails. Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of plant, equipment and software are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows: Classification Useful Life Computer and Software 3 years Equipment 10 years The Company purchased 2 computers at the end of June 2017, and the computers has been subject to depreciation since the utilization in July 2017. Expenditures for maintenance and repairs will be expensed as incurred. Biological Assets Biological Assets of the Company comprise of agarwood sapling and plantation cost of agarwood. Pursuant to ASC 905-360-25-2, Biological Assets are planted and brought to production by the Company or on a contract basis. Saplings are usually purchased as nursery stock and transplanted into the farmland in the desired pattern. Cost of biological assets consists of accumulated planation development costs incurred from commencement of planting of seedlings up to maturity of the crop cultivated. Capitalization of planation development and other operating costs ceases upon commencement of commercial harvesting, which range from 7 to 9 years. Net proceeds from sales of products before commercial production begins shall be applied to the capitalized cost of the plants, trees, or vines. Biological Assets is measured using average cost, and is measured at the lower of cost and net realizable value. When evidence exists that the net realizable value of biological Assets is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. Impairment loss may be required, for example, due to damage, physical deterioration, obsolescence, changes in price levels, or other causes. Pursuant to ASC 905-360-35-4, when production in commercial quantities begins, the accumulated costs shall be depreciated over the estimated useful life of the particular farmland. Since August 1, 2020, the Company has stopped to accumulate the plantation cost of agarwood pursuant to the Inoculation Harvesting and Acquisition Agreement signed with Dadvance Agarwood Solutions Sdn. Bhd. Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations. The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. Hong Kong Dollars (“HK$”), which is the respective functional currencies for the Company as the deposit is currently kept in HSBC Hong Kong. In addition, the Company’s subsidiaries maintain their books and records in their respective local currency, which consists of the Hong Kong Dollars (“HK$”) and Malaysian Ringgit (“MYR”), which is also the respective functional currency of the subsidiaries. Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods: As of and for the nine months ended 2020 2019 (Unaudited) (Unaudited) Period-end MYR : US$1 exchange rate 4.15 4.19 Period-average MYR : US$1 exchange rate 4.23 4.13 Period-end / average HK$ : US$1 exchange rate 7.75 7.75 Income taxes The Company accounts for income taxes using the asset and liability method. The asset and liability method requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company’s assets and liabilities. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided on deferred taxes if it is determined that it is more likely than not that the asset will not be realized. The Company recognizes penalties and interest accrued related to income tax liabilities in the provision for income taxes in its Consolidated Statements of Income. Significant management judgment is required to determine the amount of benefit to be recognized in relation to an uncertain tax position. The Company uses a two-step process to evaluate tax positions. The first step requires an entity to determine whether it is more likely than not (greater than 50% chance) that the tax position will be sustained. The second step requires an entity to recognize in the financial statements the benefit of a tax position that meets the more-likely-than-not recognition criterion. The amounts ultimately paid upon resolution of issues raised by taxing authorities may differ materially from the amounts accrued and may materially impact the financial statements of the Company in future periods. Fair value of financial instruments The carrying value of the Company’s financial instruments: cash and cash equivalents, prepayments, amount due to a director and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments. The Company follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: ● Level 1 : Observable inputs such as quoted prices in active markets; ● Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions Lease Prior to January 1, 2019, the Company had not entered into formal lease agreement and the Company accounted for leases under ASC 840, Accounting for Leases. Effective July 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The implementation of ASC 842 did not have a material impact on the Company’s consolidated financial statements and did not have a significant impact on our liquidity or on our compliance with our financial covenants associated with our loans. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of operating lease right-of-use assets of $21,330, lease liabilities for operating leases of $21,330, and a zero cumulative-effect adjustment to accumulated deficit. See Note 8 for further information regarding the impact of the adoption of ASC 842 on the Company’s financial statements. On August 1, 2020, the tenancy agreement was transferred to Dadvance Agarwood Solutions Sdn Bhd. And the Company was no longer liable or responsible for the tenancy agreement since August 1, 2020, and the operating lease right-of-use and lease liabilities were offset on August 1, 2020. Recent accounting pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Prepaid Expenses
Prepaid Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses | 4. PREPAID EXPENSES The prepaid expenses as of September 30, 2020 included OTCQB annual fee of $3,000, deposit of $66 in transfer agent, deposit of $6,410 in the consulting service provider, and deposit of $722 in our farmland provider, while the prepaid expenses as of December 31, 2019 included OTCQB annual fee of $12,000, deposit of $2,013 and $6,410 in transfer agent and our consultancy firm, and deposit of $734 in our farmland provider. |
Plant and Equipment, Net
Plant and Equipment, Net | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Plant and Equipment, Net | 5. PLANT AND EQUIPMENT, NET As of As of (Unaudited) (Audited) Computer and Software $ 3,878 $ 3,878 Equipment 1,751 1,816 5,629 5,694 Less: Accumulated Depreciation (4,426 ) (3,688 ) Plant and equipment, net $ 1,203 $ 2,006 The Company acquired computers and a software at $3,878 in 2017, and the accumulated depreciations as of September 30, 2020 and December 31, 2019 were $3,878 and $3,232 respectively. The Company acquired Engine Pump at $1,816 in 2017. The accumulated depreciations as of September 30, 2020 and December 31, 2019 were $548 and $456 respectively. The depreciation expense for September 30, 2020 and 2019 were $795 and $1,106 respectively. |
Biological Assets
Biological Assets | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Biological Assets | 6. BIOLOGICAL ASSETS Biological Assets of the Company comprise of agarwood sapling and plantation cost of agarwood. The Company acquired the agarwood sapling at MYR98,800 (approximately $23,587) in 2017. The accumulated planation development costs incurred from commencement of planting of seedlings up to September 30, 2020 and December 31, 2019 were $41,035 and $37,297 respectively. The company would no longer accumulate the cost into biological assets after signing Inoculation Harvesting and Acquisition Agreement with Dadvance Agarwood Solutions Sdn. Bhd on August 1, 2020. The biological assets are expected to be harvested within 3 years, and the Company is entitled to 20% from the Agarwood proceeds as revenue. |
Amount Due to Director
Amount Due to Director | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Amount Due to Director | 7. AMOUNT DUE TO DIRECTOR As of September 30, 2020, and December 31, 2019, our directors has loaned to the Company $45,887 and $11,284 as working capital, respectively. This loan is unsecured, non-interest bearing and due on demand. We performed the calculation of imputed interest and believed the imputed interest is not significant when compare to our balance sheet size and total expense, and as a result, we didn’t capture this figure into our financial statements. |
Operating Lease
Operating Lease | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Operating Lease | 8. OPERATING LEASE The Company has an operating lease agreement for a farmland since April 1, 2019. The Company does not have any other leases. 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. On August 1, 2020, the Company entered into an Inoculation Harvesting and Acquisition Agreement (the “Acquisition Agreement”), to transfer the farmland tenancy agreement to Dadvance Agarwood Solutions Sdn. Bhd. After August 1, 2020, the Company was no longer liable or responsible for the farmland tenancy agreement with Halaman Girang Sdn. Bhd. On August 1, 2020, the operating lease right-of-use (“ROU”) assets and liabilities were off-set due to the transfer of ownership of the lease agreement. Lease expenses were $2,479 during the nine months ended September 30, 2020, and $2,177 incurred during the nine months ended September 30, 2019. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | 9. STOCKHOLDERS’ EQUITY As of September 30, 2020, and December 31, 2019, there were 141,990,387 and 141,990,387 shares of common stock issued and outstanding respectively. There were no stock options, warrants or other potentially dilutive securities outstanding as of September 30, 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances were eliminated in consolidation. Below is the organization chart of the Group. |
Use of Estimates | Use of estimates Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheet, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates. |
Going Concern | Going Concern The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the nine months ended September 30, 2020, the Company incurred a net loss of $90,317 and used cash in operations of $85,956. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2019 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. Despite the amount of funds that we have raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing. |
COVID-19 Outbreak | COVID-19 outbreak In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. The COVID-19 pandemic has negatively impacted the global economy, workforces, customers, and created significant volatility and disruption of financial markets. It has also disrupted the normal operations of many businesses, including ours. This outbreak could decrease spending, adversely affect demand for our services and harm our business and results of operations. It is not possible for us to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or results of operations at this time. |
Cash and Cash Equivalents | Cash and cash equivalents Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. Our deposit in Hong Kong is currently deposit in HSBC Hong Kong, and there is a Deposit Protection Scheme protects our eligible deposits held with bank in Hong Kong which is members of the Scheme. The scheme will pay us a compensation up to a limit of HKD500,000, which is equivalent to $64,102, if HSBC Hong Kong fails. Our deposit in Malaysia is currently deposit in Malayan Banking Berhad, and there is a Perbadanan Insurans Deposit Malaysia protects our eligible deposits held with bank in Malaysia which is members of the Scheme. The scheme will pay a compensation up to a limit of Malaysia Ringgit (“MYR”) 250,000 per deposit per member bank, which is equivalent to $60,167, if the aforementioned banks fails. |
Plant and Equipment | Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of plant, equipment and software are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows: Classification Useful Life Computer and Software 3 years Equipment 10 years The Company purchased 2 computers at the end of June 2017, and the computers has been subject to depreciation since the utilization in July 2017. Expenditures for maintenance and repairs will be expensed as incurred. |
Biological Assets | Biological Assets Biological Assets of the Company comprise of agarwood sapling and plantation cost of agarwood. Pursuant to ASC 905-360-25-2, Biological Assets are planted and brought to production by the Company or on a contract basis. Saplings are usually purchased as nursery stock and transplanted into the farmland in the desired pattern. Cost of biological assets consists of accumulated planation development costs incurred from commencement of planting of seedlings up to maturity of the crop cultivated. Capitalization of planation development and other operating costs ceases upon commencement of commercial harvesting, which range from 7 to 9 years. Net proceeds from sales of products before commercial production begins shall be applied to the capitalized cost of the plants, trees, or vines. Biological Assets is measured using average cost, and is measured at the lower of cost and net realizable value. When evidence exists that the net realizable value of biological Assets is lower than its cost, the difference shall be recognized as a loss in earnings in the period in which it occurs. Impairment loss may be required, for example, due to damage, physical deterioration, obsolescence, changes in price levels, or other causes. Pursuant to ASC 905-360-35-4, when production in commercial quantities begins, the accumulated costs shall be depreciated over the estimated useful life of the particular farmland. Since August 1, 2020, the Company has stopped to accumulate the plantation cost of agarwood pursuant to the Inoculation Harvesting and Acquisition Agreement signed with Dadvance Agarwood Solutions Sdn. Bhd. |
Foreign Currencies Translation | Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations. The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. Hong Kong Dollars (“HK$”), which is the respective functional currencies for the Company as the deposit is currently kept in HSBC Hong Kong. In addition, the Company’s subsidiaries maintain their books and records in their respective local currency, which consists of the Hong Kong Dollars (“HK$”) and Malaysian Ringgit (“MYR”), which is also the respective functional currency of the subsidiaries. Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods: As of and for the nine months ended 2020 2019 (Unaudited) (Unaudited) Period-end MYR : US$1 exchange rate 4.15 4.19 Period-average MYR : US$1 exchange rate 4.23 4.13 Period-end / average HK$ : US$1 exchange rate 7.75 7.75 |
Income Taxes | Income taxes The Company accounts for income taxes using the asset and liability method. The asset and liability method requires recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between tax bases and financial reporting bases of the Company’s assets and liabilities. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided on deferred taxes if it is determined that it is more likely than not that the asset will not be realized. The Company recognizes penalties and interest accrued related to income tax liabilities in the provision for income taxes in its Consolidated Statements of Income. Significant management judgment is required to determine the amount of benefit to be recognized in relation to an uncertain tax position. The Company uses a two-step process to evaluate tax positions. The first step requires an entity to determine whether it is more likely than not (greater than 50% chance) that the tax position will be sustained. The second step requires an entity to recognize in the financial statements the benefit of a tax position that meets the more-likely-than-not recognition criterion. The amounts ultimately paid upon resolution of issues raised by taxing authorities may differ materially from the amounts accrued and may materially impact the financial statements of the Company in future periods. |
Fair Value of Financial Instruments | Fair value of financial instruments The carrying value of the Company’s financial instruments: cash and cash equivalents, prepayments, amount due to a director and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments. The Company follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: ● Level 1 : Observable inputs such as quoted prices in active markets; ● Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and ● Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions |
Lease | Lease Prior to January 1, 2019, the Company had not entered into formal lease agreement and the Company accounted for leases under ASC 840, Accounting for Leases. Effective July 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The implementation of ASC 842 did not have a material impact on the Company’s consolidated financial statements and did not have a significant impact on our liquidity or on our compliance with our financial covenants associated with our loans. The Company adopted ASC 842 using a modified retrospective approach. As a result, the comparative financial information has not been updated and the required disclosures prior to the date of adoption have not been updated and continue to be reported under the accounting standards in effect for those periods. The adoption of ASC 842 on January 1, 2019 resulted in the recognition of operating lease right-of-use assets of $21,330, lease liabilities for operating leases of $21,330, and a zero cumulative-effect adjustment to accumulated deficit. See Note 8 for further information regarding the impact of the adoption of ASC 842 on the Company’s financial statements. On August 1, 2020, the tenancy agreement was transferred to Dadvance Agarwood Solutions Sdn Bhd. And the Company was no longer liable or responsible for the tenancy agreement since August 1, 2020, and the operating lease right-of-use and lease liabilities were offset on August 1, 2020. |
Recent Accounting Pronouncements | Recent accounting pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning January 1, 2023, and early adoption is permitted. The Company does not believe the potential impact of the new guidance and related codification improvements will be material to its financial position, results of operations and cash flows. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives of Plant and Equipment | Depreciation of plant, equipment and software are calculated on the straight-line method over their estimated useful lives or lease terms generally as follows: Classification Useful Life Computer and Software 3 years Equipment 10 years |
Schedule of Foreign Currency Translation | Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods: As of and for the nine months ended 2020 2019 (Unaudited) (Unaudited) Period-end MYR : US$1 exchange rate 4.15 4.19 Period-average MYR : US$1 exchange rate 4.23 4.13 Period-end / average HK$ : US$1 exchange rate 7.75 7.75 |
Plant and Equipment, Net (Table
Plant and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Plant and Equipment, Net | As of As of (Unaudited) (Audited) Computer and Software $ 3,878 $ 3,878 Equipment 1,751 1,816 5,629 5,694 Less: Accumulated Depreciation (4,426 ) (3,688 ) Plant and equipment, net $ 1,203 $ 2,006 |
Description of Business and O_2
Description of Business and Organization (Details Narrative) | Sep. 30, 2018 |
Mr. Chen Zheru [Member] | |
Acquisition percentage | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020HKD ($) | Sep. 30, 2020MYR (RM) | Dec. 31, 2019USD ($) | Jan. 02, 2019USD ($) | |
Net loss | $ (18,106) | $ (23,855) | $ (48,357) | $ (67,729) | $ (66,559) | $ (50,187) | $ (90,317) | $ (184,475) | ||||
Net cash flows used in operating activities | $ (85,956) | $ (204,365) | ||||||||||
Tax benefit likelihood percentage, description | The first step requires an entity to determine whether it is more likely than not (greater than 50% chance) that the tax position will be sustained. | |||||||||||
Operating lease right-of-use assets | $ 19,563 | |||||||||||
ASC 842 [Member] | ||||||||||||
Operating lease right-of-use assets | $ 21,330 | |||||||||||
Operating lease liability | $ 21,330 | |||||||||||
Maximum [Member] | ||||||||||||
Commercial harvesting term of biological assets | 9 years | |||||||||||
Minimum [Member] | ||||||||||||
Commercial harvesting term of biological assets | 7 years | |||||||||||
HSBC Hong Kong [Member] | ||||||||||||
Compensation balance, description | Our deposit in Hong Kong is currently deposit in HSBC Hong Kong, and there is a Deposit Protection Scheme protects our eligible deposits held with bank in Hong Kong which is members of the Scheme. The scheme will pay us a compensation up to a limit of HKD500,000, which is equivalent to $64,102, if HSBC Hong Kong fails. | |||||||||||
Compensation balance, amount | 64,102 | $ 64,102 | ||||||||||
HSBC Hong Kong [Member] | Maximum [Member] | HKD Currency [Member] | ||||||||||||
Compensation balance, amount | $ 500,000 | |||||||||||
Malayan Banking Berhad [Member] | ||||||||||||
Compensation balance, description | Our deposit in Malaysia is currently deposit in Malayan Banking Berhad, and there is a Perbadanan Insurans Deposit Malaysia protects our eligible deposits held with bank in Malaysia which is members of the Scheme. The scheme will pay a compensation up to a limit of Malaysia Ringgit ("MYR") 250,000 per deposit per member bank, which is equivalent to $60,167, if the aforementioned banks fails. | |||||||||||
Compensation balance, amount | $ 60,167 | $ 60,167 | ||||||||||
Malayan Banking Berhad [Member] | Maximum [Member] | MYR Currency [Member] | ||||||||||||
Compensation balance, amount | RM | RM 250,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Plant and Equipment (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Computer and Software [Member] | |
Plant and equipment useful life | 3 years |
Equipment [Member] | |
Plant and equipment useful life | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Foreign Currency Translation (Details) | Sep. 30, 2020 | Sep. 30, 2019 |
Period-End MYR [Member] | ||
Foreign currency exchange rate, translation | 4.15 | 4.19 |
Period-Average MYR [Member] | ||
Foreign currency exchange rate, translation | 4.23 | 4.13 |
Period-end / Average HK [Member] | ||
Foreign currency exchange rate, translation | 7.75 | 7.75 |
Prepaid Expenses (Details Narra
Prepaid Expenses (Details Narrative) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Transfer Agent [Member] | ||
Deposit | $ 66 | $ 2,013 |
Consulting Service Provider [Member] | ||
Deposit | 6,410 | |
Farmland Provider [Member] | ||
Deposit | 722 | 734 |
Consultancy Firm [Member] | ||
Deposit | 6,410 | |
OTCQB Annual Fee [Member] | ||
Prepaid expenses | $ 3,000 | $ 12,000 |
Plant and Equipment, Net (Detai
Plant and Equipment, Net (Details Narrative) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2017 | Dec. 31, 2019 | |
Accumulated depreciation | $ 4,426 | $ 3,688 | ||
Depreciation expense | 795 | $ 1,106 | ||
Computer and Software [Member] | ||||
Payments to acquire plant and equipment | $ 3,878 | |||
Accumulated depreciation | 3,878 | 3,232 | ||
Engine Pump [Member] | ||||
Payments to acquire plant and equipment | $ 1,816 | |||
Accumulated depreciation | $ 548 | $ 456 |
Plant and Equipment, Net - Sche
Plant and Equipment, Net - Schedule of Plant and Equipment, Net (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property and equipment, gross | $ 5,629 | $ 5,694 |
Less: Accumulated Depreciation | (4,426) | (3,688) |
Plant and equipment, net | 1,203 | 2,006 |
Computer and Software [Member] | ||
Property and equipment, gross | 3,878 | 3,878 |
Less: Accumulated Depreciation | (3,878) | (3,232) |
Equipment [Member] | ||
Property and equipment, gross | $ 1,751 | $ 1,816 |
Biological Assets (Details Narr
Biological Assets (Details Narrative) | Aug. 01, 2020 | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2017MYR (RM) |
Accumulated planation development costs | $ 41,035 | $ 37,297 | |||
Agarwood Sapling [Member] | |||||
Payment to acquire biological assets | $ 23,587 | ||||
Agarwood Sapling [Member] | Dadvance Agrawood Solutions Sdn.Bhd [Member] | Inoculation Harvesting and Acquisition Agreement [Member] | |||||
Expected harvested period of biological assets | 3 years | ||||
Percentage of revenue to entitled from harvesting of biological assets | 20.00% | ||||
Agarwood Sapling [Member] | MYR Currency [Member] | |||||
Payment to acquire biological assets | RM | RM 98,800 |
Amount Due to Director (Details
Amount Due to Director (Details Narrative) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Related Party Transactions [Abstract] | ||
Due to director | $ 45,887 | $ 11,284 |
Operating Lease (Details Narrat
Operating Lease (Details Narrative) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||
Lease expense | $ 2,479 | $ 2,177 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - shares | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Common stock, shares issued | 141,990,387 | 141,990,387 |
Common stock, shares outstanding | 141,990,387 | 141,990,387 |
Stock Options [Member] | ||
Dilutive securities outstanding | ||
Warrants [Member] | ||
Dilutive securities outstanding | ||
Other Potentially Dilutive Securities [Member] | ||
Dilutive securities outstanding |