Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 06, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | TGS INTERNATIONAL LTD | |
Entity Central Index Key | 0001701859 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2021 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 | |
Entity Common Stock Shares Outstanding | 14,962,298 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 333-217451 | |
Entity Incorporation State Country Code | K3 | |
Entity Tax Identification Number | 00-0000000 | |
Entity Address Address Line 1 | Unit N1, 3F | |
Entity Address Address Line 2 | W Luxe | |
Entity Address Address Line 3 | No.5 On Yiu Street | |
Entity Address City Or Town | Shatin, New Territories | |
Entity Address State Or Province | NV | |
Entity Address Postal Zip Code | 00000 | |
City Area Code | 852 | |
Local Phone Number | 2116-3863 | |
Security 12b Title | Common Stock | |
Trading Symbol | TGSI | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 133,522 | $ 69,401 |
Accounts receivable | 632,858 | 787,023 |
Other receivables | 570,568 | 532,943 |
Prepayments and deposits | 93,540 | 205,169 |
Total current assets | 1,430,488 | 1,594,536 |
Non-current assets | ||
Property, plant and equipment | 2,285,730 | 2,307,570 |
Intangible assets | 1,097,362 | 1,097,362 |
Deposit | 50,219 | 50,299 |
Total assets | 4,863,799 | 5,049,767 |
Current liabilities | ||
Accounts payable | 457,988 | 457,824 |
Accrued charges | 225,990 | 123,241 |
Other payables | 1,682,789 | 1,568,875 |
Income tax payable | 22,959 | 22,951 |
Amount due to a stockholder | 65,371 | 0 |
Amount due to a director | 0 | 77,964 |
Loan from a related person | 386,296 | 386,916 |
Convertible bond payable, net | 0 | 190,954 |
Other loans | 221,462 | 27,837 |
Total current liabilities | 3,062,855 | 2,856,562 |
Non-current liabilities | ||
Amounts due to stockholders | 360,001 | 376,246 |
Amount due to a director | 1,015,448 | 951,569 |
Other loans | 151,384 | 147,326 |
Provision for asset retirement obligations | 35,363 | 35,350 |
Provision for exploration asset compensation | 119,379 | 119,336 |
Total non-current liabilities | 1,681,575 | 1,629,827 |
Total liabilities | 4,744,430 | 4,486,389 |
Commitments | 0 | 0 |
Capital Stock | ||
-Preferred stock, $0.0001 par value; 100,000,000 shares authorized, nil issued and outstanding | 0 | 0 |
-Common stock, $0.0001 par value; 200,000,000 shares authorized, 14,962,298 shares issued and outstanding as of June 30, 2021 and December 31, 2020 | 1,496 | 1,496 |
Additional paid in capital | 11,483,220 | 11,483,220 |
Accumulated deficit | (11,395,036) | (10,951,630) |
Accumulated other comprehensive income | 29,689 | 30,292 |
Total stockholders' equity | 119,369 | 563,378 |
Total liabilities and stockholders' equity | $ 4,863,799 | $ 5,049,767 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Stockholders' equity | ||
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 14,962,298 | 14,962,298 |
Common stock, shares outstanding | 14,962,298 | 14,962,298 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) | ||||
Revenue | $ 0 | $ 38,760 | $ 0 | $ 92,723 |
Cost, expenses and other: | ||||
Exploration | (108,335) | (45,988) | (112,482) | (99,380) |
Selling and distribution | (6,967) | (9,991) | (15,527) | (56,628) |
Depreciation of factory equipment | (8,108) | (9,073) | (17,129) | (18,289) |
Administrative | (148,804) | (318,304) | (278,642) | (659,834) |
Loss from operations | (272,214) | (344,596) | (423,780) | (741,408) |
Other income | 23,205 | 15,591 | 23,206 | 15,593 |
Interest expense | (21,729) | (24,372) | (42,832) | (54,193) |
Loss before provision for income taxes | (270,738) | (353,377) | (443,406) | (780,008) |
Income tax | 0 | 0 | 0 | 0 |
Net loss | (270,738) | (353,377) | (443,406) | (780,008) |
Other comprehensive income, net of tax: | ||||
Foreign currency translation adjustments | (10,365) | 62,811 | (603) | 125,136 |
Comprehensive loss | $ (281,103) | $ (290,566) | $ (444,009) | $ (654,872) |
Net loss per share: | ||||
Basic and diluted net loss per share | $ (0.02) | $ (0.02) | $ (0.03) | $ (0.05) |
Weighted average number of common shares outstanding: | ||||
Basic and diluted | 14,962,298 | 14,903,177 | 14,962,298 | 14,868,292 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity (Unaudited) - 6 months ended Jun. 30, 2021 - USD ($) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated other comprehensive (loss)/income |
Balance, shares at Dec. 31, 2020 | 14,962,298 | ||||
Balance, amount at Dec. 31, 2020 | $ 563,378 | $ 1,496 | $ 11,483,220 | $ (10,951,630) | $ 30,292 |
Net loss | (443,406) | 0 | 0 | (443,406) | 0 |
Foreign currency translation adjustments | (603) | $ 0 | 0 | 0 | (603) |
Balance, shares at Jun. 30, 2021 | 14,962,298 | ||||
Balance, amount at Jun. 30, 2021 | $ 119,369 | $ 1,496 | $ 11,483,220 | $ (11,395,036) | $ 29,689 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities | ||
Net loss | $ (443,406) | $ (780,008) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of property, plant and equipment | 22,739 | 24,989 |
Loss on disposal of property, plant and equipment | 2,197 | 4,137 |
Net foreign exchange (gains)/losses | (7,479) | 260,097 |
Amortization of right-of-use asset | 0 | 104,288 |
Amortization of non-cash interest expenses and bond discount related to convertible bonds | 1,354 | 15,734 |
Non-cash interest expenses related to other loans | 9,908 | 8,598 |
Changes in assets and liabilities: | ||
Accounts receivable | 154,410 | (39,192) |
Other receivables | (37,751) | (65,012) |
Prepayments and deposits | 112,361 | 2,023 |
Accrued charges | 45,860 | (84,860) |
Accounts payable | 0 | 36,139 |
Other payables | 170,486 | (15,670) |
Lease liabilities | 0 | (104,288) |
Net cash generated from/(used in) operating activities | 30,679 | (633,025) |
Cash flows from investing activities | ||
Acquisition of property, plant and equipment | (3,048) | (16,769) |
Proceeds from disposal of property, plant and equipment | 351 | 1,077 |
Net cash used in investing activities | (2,697) | (15,692) |
Cash flows from financing activities | ||
Advances from stockholders | 48,553 | 316,050 |
Advances from a director | 66,122 | 11,789 |
Repayment to a director | (78,577) | (74,213) |
Proceeds from new loan - other | 0 | 25,641 |
Proceeds from issuance of convertible bonds | 0 | 333,332 |
Net cash provided by financing activities | 36,098 | 612,599 |
Net increase/(decrease) in cash and cash equivalents | 64,080 | (36,118) |
Effect of exchange rate changes on cash and cash equivalents | 41 | (2,718) |
Cash and cash equivalents, beginning of period | 69,401 | 106,850 |
Cash and cash equivalents, end of period | 133,522 | 68,014 |
Supplemental disclosures: | ||
Interest paid | 14,762 | 12,562 |
Income tax paid | 0 | 0 |
Cash paid for amounts included in measurement of lease liabilities | 0 | 104,288 |
Non-cash investing and financing transactions: | ||
Capitalization of advances from stockholders | 0 | 102,564 |
Conversion of convertible bond and accrued interest into common stock | 0 | 334,027 |
Recognition of Beneficial Conversion Feature ("BCF") discount at inception of convertible bonds | $ 0 | $ 7,624 |
NATURE OF OPERATIONS AND GOING
NATURE OF OPERATIONS AND GOING CONCERN | 6 Months Ended |
Jun. 30, 2021 | |
NATURE OF OPERATIONS AND GOING CONCERN | |
NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN | NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN TGS International Ltd. (“TGS”, “the Company”) was incorporated in the state of Nevada, United States on December 1, 2016. On September 14, 2018, the Company entered into a Share Exchange Agreement with Arcus Mining Holdings Limited (“Arcus”) and Mr. Chi Kin Loo, Billion Plus Limited, First Fortune Investment Limited, Great Win Limited and Master Value Holdings Limited (the “Selling Stockholders”), pursuant to which the Selling Stockholders agreed to sell all of their ordinary shares of Arcus to the Company in exchange for an aggregate of 7,000,000 shares of common stock of the Company. Arcus, which was incorporated in the Republic of Seychelles on June 17, 2014, and its subsidiaries are engaged in fluorite mining operations in Mongolia, including the processing and sales of fluorite products. Up to June 30, 2021 and the date of this report, the Company owns three mining rights in Mongolia (Mining license numbers: MV-009918, MV-016819 and MV-017305). The Company has adopted open-pit mining at Mine A which is located in Uulbayansoum, Sukhbaatar province (Mining license number: MV-009918). Due to COVID-19, the Mongolian Government has implemented various precautionary measures, including but not limited to closing all ports of entry from and into China (“Precautionary Measures”). The Company has not been able to perform any exploration work at Mine B which is located in Bayan-Ovoo soum, Khentii province (Mining license number: MV-016819) since early 2020. Basis of Presentation These accompanying unaudited Consolidated Financial Statements as of and for three and six months ended June 30, 2021 have been prepared in accordance with accounting principles generally accepted in United States of America (“U.S. GAAP”) for interim financial statements. Accordingly, the Consolidated Financial Statements do not include all the information and footnotes required by U.S. GAAP for complete annual consolidated financial statements. The information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the financial statements not misleading. The balance sheet as of December 31, 2020 has been derived from the Company’s annual financial statements that were audited by an independent registered public accounting firm. These Consolidated Financial Statements should be read in conjunction with the annual financial statements and notes thereto in the Company’s Form 10-K for the year ended December 31, 2020. The results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results expected for the full year or for any future periods. Going Concern The Company incurred an operating loss of $443,406 for the six months ended June 30, 2021, and as of that date, the Company’s current liabilities exceeded its current assets by $1,632,367. Notwithstanding the operating loss incurred for the six months ended June 30, 2021 and the net current liabilities as of June 30, 2021, the accompanying consolidated financial statements have been prepared on a going concern basis. Since the Company is currently in the exploration stage, it is still in the capital investing period. The management expects the formal production will gradually resume after the Precautionary Measures in Mongolia are relaxed. Management believes the Company will have sufficient working capital to meet its financing requirements for the next 12 months based on the financial support of certain stockholders, issuance of new convertible bonds, proceeds from unrelated party loans and upon their experience and their assessment of the Company’s projected performance, production ability and product market. The ability of the Company to emerge from the exploration stage depends upon the success management's plans. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. Comparative amounts Certain comparative figures have been reclassified to conform with the current period’s presentation and disclosures. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Recent issued accounting standards In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. In November 2018, FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”, which amends the scope and transition requirements of ASU 2016-13. Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. Topic 326 was originally to be effective for the Company beginning January 1, 2020, with early adoption permitted, on a modified retrospective approach. As a smaller reporting company, the effective date for the Company has been delayed until fiscal years beginning after December 15, 2022, in accordance with ASU 2019-10, although early adoption is still permitted. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. The amendments in this ASU simplify the accounting for income taxes, eliminate certain exceptions to the general principles in Topic 740 and clarify certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation. In August 2020, the FASB issued No. ASU 2020-06, ”Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. The Company has implemented all new accounting pronouncements that are in effect and that could impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued, but are not yet effective, that might have a material impact on the consolidated financial statements of the Company. |
OTHER PAYABLES
OTHER PAYABLES | 6 Months Ended |
Jun. 30, 2021 | |
OTHER PAYABLES | |
NOTE 3 - OTHER PAYABLES | NOTE 3 – OTHER PAYABLES June 30, 2021 December 31, 2020 Tax and social insurance payable $ 96,512 $ 86,601 Contract liabilities 258,663 296,657 Temporary receipts 735,982 739,948 Other 591,632 445,669 $ 1,682,789 $ 1,568,875 Other represents temporary fund transfers from employees to support short-term operations. |
CONVERTIBLE BONDS
CONVERTIBLE BONDS | 6 Months Ended |
Jun. 30, 2021 | |
CONVERTIBLE BONDS | |
NOTE 4 - CONVERTIBLE BONDS | NOTE 4 – CONVERTIBLE BONDS As of June 30, 2021 and December 31, 2020, the Company had the following convertible bonds outstanding: As of June 30, 2021 December 31, 2020 Principal Accrued Interest Principal Accrued Interest November 2019 HK$1.5 million (equivalent to $192,308) convertible into common shares at $3.60 per share, 5% interest, due April 30, 2021 $ - $ - $ 192,308 $ 10,564 Less: Bond discount - - (1,354 ) - $ - $ - $ 190,954 $ 10,564 Convertible bond agreements of HK$1.5 million On November 26, 2019, a convertible bond agreement was signed including a HK$1.5 million (equivalent to $192,308) loan bearing interest of 5% per annum for six months. The convertible bond had a maturity date of May 25, 2020 with a conversion price of $3.60 per share. In addition, the Company recognized a beneficial conversion feature discount to the bond of $5,342 that was amortized over the period using the effective interest method. On May 11, 2020, the Company signed an extension letter with the bondholder to extend the maturity date from May 25, 2020 to September 30, 2020. Therefore, the Company recognized an additional beneficial conversion feature discount to the bond of $234 that was amortized over the period using the effective interest method. On September 11, 2020, the Company signed an extension letter with the bondholder to further extend the maturity date from September 30, 2020 to April 30, 2021. Therefore, the Company further recognized an additional beneficial conversion feature discount to the bond of $147 that is being amortized over the period using the effective interest method. For the year ended December 31, 2020, the Company amortized $3,340 of the discount and recognized non-cash interest of $9,634 to interest expenses. The unamortized debt discount on the convertible bond as of December 31, 2020 was $1,354. For the six months and three months ended June 30, 2021, the Company amortized $1,354 and $341 of the discount and recognized non-cash interest of $3,161 and $790 to interest expenses. For the six months and three months ended June 30, 2020, the Company amortized $2,863 and $1,576 of the discount and recognized non-cash interest of $4,786 and $2,399 to interest expenses. All the debt discount on the convertible bond has been amortized as of June 30, 2021. On April 30, 2021, the Company signed a supplementary agreement with the bondholder to further extend the maturity date from April 30, 2021 to May 20, 2021, change the interest rate from 5% to 8%, and revoke the convertible option. As a result, the HK$1.5m is reclassified to other loans. The further development of the loan is disclosed in note 6. Other convertible bond agreements For the year ended December 31, 2020, four new convertible bond agreements were entered into between the Company, Arcus and third party investors. All of them matured during year 2020 and were settled by issuing 92,275 common shares at a price stated in the respective agreements, representing loans of HK$2.6 million and interest expenses of HK$5,521, for a total of HK$2,605,521 (equivalent to $334,027) (see note 8). In addition, the Company recognized a beneficial conversion feature discount to the bond of $7,390 that was amortized and recognized non-cash interest of $695 on these bonds during the year ended December 31, 2020. |
SIGNIFICANT TRANSACTIONS WITH R
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | 6 Months Ended |
Jun. 30, 2021 | |
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | |
NOTE 5 - SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES | NOTE 5 – SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (a) Loan from a related person As of June 30, 2021 and December 31, 2020, loan from a related person included HK$3 million (equivalent to $386,296 and $386,916, respectively) borrowed from the wife of one of the Company’s stockholders on May 21, 2018. The loan is unsecured, is guaranteed by three stockholders and carried interest at a monthly rate of 3.08% for the first month and a monthly rate of 1.08% for the rest of the term, repayable on May 20, 2019 and subsequently extended to May 20, 2020. The related party lender borrowed the funds that were loaned to Arcus Mining Holdings Limited (“Arcus”), a subsidiary of the Company. Arcus has guaranteed the repayment by the related party of the funds borrowed by the related party. On April 28, 2020, the repayment date was extended to May 20, 2021, and the interest changed to be at a monthly rate of 2.08% for the first month and a monthly rate of 1.08% for the rest of the term. As of the date of this report, no further agreements have been signed. Our management is negotiating the repayment schedule and/or renewal terms with the loan holder. Until such time as the negotiations achieve more favorable terms, the loan is repayable on demand. (b) Interest expense incurred to related persons During the six months ended June 30, 2021 and 2020, interest expense of HK$202,671 (equivalent to $26,108) and HK$225,000 (equivalent to $28,989), respectively, was incurred to related persons. During the three months ended June 30, 2021 and 2020, interest expense of HK$103,801 (equivalent to $13,369) and HK$97,897 (equivalent to $12,613), respectively, was incurred to related persons. (c) Amounts due to stockholders As of June 30, 2021, amount due to a stockholder, Kwing Chun Chu, was HK$507,671 (equivalent to $65,371). The amount due is unsecured, carries interest at 5% per annum and is repayable on September 11, 2021. As of June 30, 2021, amounts due to stockholders, Kwong Bun Mak, Xianqin Pan and Kwing Chun Chu, were $360,001, and as of December 31, 2020, amounts due to stockholders, Kwong Bun Mak, Xianqin Pan and Kwing Chun Chu, were $374,246. The stockholders advanced $48,553 of working capital to meet the financing requirements for the six months ended June 30, 2021. Amounts due to stockholders are unsecured, interest-free and there are no fixed terms for repayment. The stockholders have agreed not to demand repayment within the next 12 months from the balance sheet date. (d) Amount due to directors On December 10, 2020, Mr. Chi Kin Loo was appointed as a director of the Company. As of June 30, 2021 and December 31, 2020, there was an amount due to the director of HK$7,886,026 (equivalent to $1,015,448) and HK$7,378,106 (equivalent to $951,569), respectively. During the six months ended June 30, 2021, he advanced HK$513,300 (equivalent to $66,122) to the Company. The amount due is unsecured, interest-free and there are no fixed terms for repayment. The director has agreed not to demand repayment within 12 months of the balance sheet date. As of December 31, 2020, amount due to a director, Mr. Tak Shing Eddie Wong, of HK$604,500 (equivalent to $77,964) was unsecured, had no collateral or guaranty and was interest-free. The amount was fully repaid on March 3, 2021. Mr. Tak Shing Eddie Wong resigned as director on March 31, 2021. |
OTHER LOAN
OTHER LOAN | 6 Months Ended |
Jun. 30, 2021 | |
OTHER LOAN | |
NOTE 6 - OTHER LOAN | NOTE 6 – OTHER LOANS As of June 30, 2021 and December 31, 2020, a loan of HK$226,412 (equivalent to $29,154) and HK$217,133 (equivalent to $27,837), respectively was outstanding from an unrelated party. The loan is unsecured, has no collateral or guaranty, carries interest at 10% per annum, and repayable on June 23, 2021 and was further extended to December 23, 2021. On April 30, 2020, at the maturity of the convertible bond of HK$1,500,000 (equivalent to $192,308) (see note 4), the Company signed a supplementary agreement that revoked the conversion option and renewed the loan to May 20, 2021. As a result, the convertible bond has been reclassified to other loans, and on May 21, 2021, the Company signed an amended loan agreement with the unrelated party. The loan is repayable on May 31, 2021, carries interest at 8% per annum and is guaranteed by a director of the Company. As of the date of this report, no further agreements have been signed. Our management is negotiating the repayment schedule and/or renewal terms with the loan holder. Until such time as the negotiations achieve more favorable terms, the loan is repayable on demand. As of June 30, 2021 and December 31, 2020, a loan of $151,384 and $147,326, respectively was outstanding from an unrelated party. The loan is unsecured, has no collateral or guaranty, carries interest at 11.61% per annum and the indebtedness of $395,801 will be repaid on December 31, 2029. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2021 | |
Net loss per share: | |
NOTE 7 - NET LOSS PER SHARE | NOTE 7 – NET LOSS PER SHARE The following table presents the computation of basic and diluted net loss per share for the three and six months ended June 30, 2021 and 2020: Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Net loss per share – basic and diluted Net loss $ (270,738 ) $ (353,377 ) $ (443,406 ) $ (780,008 ) Weighted-average number of common shares outstanding – basic and diluted 14,962,298 14,903,177 14,962,298 14,868,292 Net loss per share Basic and diluted (Note) $ (0.02 ) $ (0.02 ) $ (0.03 ) $ (0.05 ) Note: During the three and six months ended June 30, 2021 and 2020, the Company had warrants outstanding which could potentially dilute basic loss per share in the future, but were excluded from the computation of diluted net loss per share, as their effect would have been anti-dilutive due to the net losses. |
CAPITAL STOCK
CAPITAL STOCK | 6 Months Ended |
Jun. 30, 2021 | |
Capital Stock | |
NOTE 8 - CAPITAL STOCK | NOTE 8 – CAPITAL STOCK For the year ended December 31, 2020, there was a total of four new convertible bond agreements entered into between the Company, Arcus, and third party investors. On January 2, 2020, a convertible bond agreement was entered into between the Company, Arcus and a third party investor. On February 1, 2020, the convertible bond matured and was settled by issuing 53,236 common shares at a price of $3.62 per share representing loans of HK$1.5 million and interest expenses of HK$3,185, for a total of HK$1,503,185 (equivalent to $192,708). On January 14, 2020, a convertible bond agreement was entered into between the Company, Arcus and a third party investor. On February 13, 2020, the convertible bond matured and was settled by issuing 14,196 common shares at a price of $3.62 per share representing loans of HK$400,000 and interest expenses of HK$849, for a total of HK$400,849 (equivalent to $51,389). On February 24, 2020, a convertible bond agreement was entered into between the Company, Arcus and a third party investor. On March 25, 2020, the convertible bond matured and was settled by issuing 7,098 common shares at a price of $3.62 per share representing loans of HK$200,000 and interest expenses of HK$425, for a total of HK$200,425 (equivalent to $25,695). On February 29, 2020, a convertible bond agreement was entered into between the Company, Arcus and a third party investor. On March 30, 2020, the convertible bond matured and was settled by issuing 17,745 common shares at a price of $3.62 per share representing loans of HK$500,000 and interest expenses of HK$1,062, for a total of HK$501,062 (equivalent to $64,235). |
WARRANT EQUITY
WARRANT EQUITY | 6 Months Ended |
Jun. 30, 2021 | |
WARRANT EQUITY | |
NOTE 9 - WARRANT EQUITY | NOTE 9 – WARRANT EQUITY In 2019, the Company issued Second Subscription Package of up to $825,000, consisting of 330,000 common shares and 66,000 warrants exercisable at $3.00 to purchase common stock within three years from the respective issuance dates, to accredited subscribers. The Company determined that these warrants are free standing financial instruments that are legally detachable and separately exercisable from the common stock included in the subscriptions. All of the Company’s outstanding warrants are considered to be indexed to the Company’s own stock and are therefore classified as equity under ASC 480. The warrants, in specified situations, provide for certain compensation remedies to a holder if the Company fails to timely deliver the shares underlying the warrants in accordance with the warrant terms. The warrants outstanding and fair values at each of the respective valuation dates are summarized below: Grant date Warrants Outstanding Fair Value per Share Fair Value $ 2019 66,000 1.91 125,900 As at June 30, 2021 and December 31, 2020 66,000 $ 125,900 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS | |
NOTE 10 - SUBSEQUENT EVENTS | NOTE 10 – SUBSEQUENT EVENTS The Company is dependent on its workforce, mainly Chinese workers, to perform the mining work, resume exploratory and construction work. The closure of borders implemented by the Mongolian Government has impacted the Company’s ability to deploy its workforce effectively. While expected to be temporary, prolonged workforce disruptions have negatively impacted sales in Mine B in subsequent periods and the Company’s overall liquidity. If these developments continue throughout 2021, we expect very limited sales and operations in Mine B in 2021 as well. However, the Mongolian office has liaised with the relevant government departments to prepare visa applications for the Chinese workers, in case workers are allowed to enter into Mongolia once the Precaution Measures were removed. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects on its results of operations, financial condition, or liquidity for the 2021 fiscal year. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Recent changes in accounting standards | In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. In November 2018, FASB issued ASU No. 2018-19, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses”, which amends the scope and transition requirements of ASU 2016-13. Topic 326 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. Topic 326 was originally to be effective for the Company beginning January 1, 2020, with early adoption permitted, on a modified retrospective approach. As a smaller reporting company, the effective date for the Company has been delayed until fiscal years beginning after December 15, 2022, in accordance with ASU 2019-10, although early adoption is still permitted. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. The amendments in this ASU simplify the accounting for income taxes, eliminate certain exceptions to the general principles in Topic 740 and clarify certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022, though early adoption is permitted, including adoption in any interim period for which financial statements have not yet been issued. This standard is not expected to have a material impact to the Company’s consolidated financial statements after evaluation. In August 2020, the FASB issued No. ASU 2020-06, ”Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)”. This ASU simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted no earlier than the fiscal year beginning after December 15, 2020. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements. The Company has implemented all new accounting pronouncements that are in effect and that could impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued, but are not yet effective, that might have a material impact on the consolidated financial statements of the Company. |
OTHER PAYABLES (Tables)
OTHER PAYABLES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
OTHER PAYABLES (Tables) | |
Schedule of other payables | June 30, 2021 December 31, 2020 Tax and social insurance payable $ 96,512 $ 86,601 Contract liabilities 258,663 296,657 Temporary receipts 735,982 739,948 Other 591,632 445,669 $ 1,682,789 $ 1,568,875 |
CONVERTIBLE BONDS (Tables)
CONVERTIBLE BONDS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
CONVERTIBLE BONDS | |
Schedule of convertible bond outstanding | As of June 30, 2021 December 31, 2020 Principal Accrued Interest Principal Accrued Interest November 2019 HK$1.5 million (equivalent to $192,308) convertible into common shares at $3.60 per share, 5% interest, due April 30, 2021 $ - $ - $ 192,308 $ 10,564 Less: Bond discount - - (1,354 ) - $ - $ - $ 190,954 $ 10,564 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
NET LOSS PER SHARE (Tables) | |
Schedule of Net loss per share basic and diluted | Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Net loss per share – basic and diluted Net loss $ (270,738 ) $ (353,377 ) $ (443,406 ) $ (780,008 ) Weighted-average number of common shares outstanding – basic and diluted 14,962,298 14,903,177 14,962,298 14,868,292 Net loss per share Basic and diluted (Note) $ (0.02 ) $ (0.02 ) $ (0.03 ) $ (0.05 ) |
WARRANT EQUITY (Tables)
WARRANT EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
WARRANT EQUITY (Tables) | |
Summary of major parameters adopted in valuation | Grant date Warrants Outstanding Fair Value per Share Fair Value $ 2019 66,000 1.91 125,900 As at June 30, 2021 and December 31, 2020 66,000 $ 125,900 |
NATURE OF OPERATIONS AND GOIN_2
NATURE OF OPERATIONS AND GOING CONCERN (Detail Narrative) - USD ($) | Sep. 14, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Current assets | $ 1,632,367 | $ 1,632,367 | |||
Net loss | $ (270,738) | $ (353,377) | $ (443,406) | $ (780,008) | |
Arcus [Member] | Share Exchange Agreement [Member] | |||||
Common stock shares issued for exchange shares | 7,000,000 |
OTHER PAYABLES (Details)
OTHER PAYABLES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Other payables | $ 1,682,789 | $ 1,568,875 |
Tax and social insurance payable [Member] | ||
Other payables | 96,512 | 86,601 |
Contract liabilities [Member] | ||
Other payables | 258,663 | 296,657 |
Temporary receipts [Member] | ||
Other payables | 735,982 | 739,948 |
Other payables [Member] | ||
Other payables | $ 591,632 | $ 445,669 |
CONVERTIBLE BONDS (Details)
CONVERTIBLE BONDS (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Convertible bond, gross | $ 334,027 | |
Convertible bond, net | $ 0 | 190,954 |
Principal [Member] | ||
Convertible bond, gross | 0 | 192,308 |
Less: Bond discount | 0 | (1,354) |
Convertible bond, net | 0 | 190,954 |
Accrued Interest [Member] | ||
Convertible bond, gross | 0 | 10,564 |
Less: Bond discount | 0 | 0 |
Convertible bond, net | $ 0 | $ 10,564 |
CONVERTIBLE BONDS (Details Narr
CONVERTIBLE BONDS (Details Narrative) - USD ($) | May 11, 2020 | Nov. 26, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Non cash interest expenses | $ 9,634 | ||||||
Debt instrument face amount | 334,027 | ||||||
Four convertible bond agreements [Member] | Arcus and third party investors [Member] | |||||||
Non cash interest expenses | $ 3,161 | 695 | |||||
Debt discount, beneficial conversion feature | $ 7,390 | ||||||
Debt conversion, converted instrument, share issued | 92,275 | ||||||
Convertible bond agreement [Member] | Convertible bond [Member] | |||||||
Non cash interest expenses | $ 790 | $ 2,399 | 3,161 | $ 4,786 | |||
Debt instrument face amount | $ 192,308 | ||||||
Debt discount, beneficial conversion feature | $ 234 | $ 5,342 | |||||
Debt instrument, unamortized discount | $ 1,354 | ||||||
Additional beneficial conversion feature | $ 147 | ||||||
Debt instrument, Maturity date | May 25, 2020 | ||||||
Amortization of debt discount | $ 341 | $ 1,576 | $ 1,354 | $ 2,863 | $ 3,340 | ||
Extended maturity date | Apr. 30, 2021 | ||||||
Debt instrument, interest rate | 5.00% | ||||||
Debt instrument, conversion price | $ 3.60 |
SIGNIFICANT TRANSACTIONS WITH_2
SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Apr. 28, 2020 | May 21, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Interest expense | $ 13,369 | $ 12,613 | $ 26,108 | $ 28,989 | |||
Loans from related parties | 386,296 | 386,296 | $ 386,916 | ||||
Wife of shareholder [Member] | Loans Payable [Member] | |||||||
Loans from related parties | 374,246 | 374,246 | 374,246 | ||||
Extended maturity date | May 20, 2021 | ||||||
Variation in interest rate, description | interest changed to be at a monthly rate of 2.08% for the first month and a monthly rate of 1.08% for the rest of the term | ||||||
Interest rate, description | interest at a monthly rate of 3.08% for the first month and a monthly rate of 1.08% for the rest of the term | ||||||
Maturity date | May 20, 2019 | ||||||
Kwong Bun Mak [Member] | |||||||
Loans from related parties | 360,001 | $ 360,001 | 36,001 | ||||
Debt repayment term, description | The stockholders have agreed not to demand repayment within the next 12 months from the balance sheet date | ||||||
Advance Working capital | 48,553 | $ 48,553 | |||||
Kwing Chun Chu [Member] | |||||||
Loans from related parties | 65,371 | $ 65,371 | |||||
Maturity date | Sep. 11, 2021 | ||||||
Interest rate | 5.00% | ||||||
Tak Shing Eddie Wong [Member] | Loans Payable [Member] | |||||||
Loans from related parties | 77,964 | ||||||
Mr. Chi Kin Loo [Member] | |||||||
Debt repayment term, description | The director has agreed not to demand repayment within 12 months of the balance sheet date | ||||||
Advance Working capital | 66,122 | $ 66,122 | |||||
Due to related party | $ 1,015,448 | 1,015,448 | $ 951,569 | ||||
RelatedParty [Member] | |||||||
Interest expense | $ 12,739 | $ 12,545 |
OTHER LOANS (Details Narrative)
OTHER LOANS (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Unrelated party [Member] | ||
Loan payable | $ 29,154 | $ 27,837 |
Interest rate | 10.00% | |
Maturity date | Jun. 23, 2021 | |
Unrelated party 1 [Member] | ||
Loan payable | $ 151,384 | $ 147,326 |
Interest rate | 11.61% | |
Maturity date | Dec. 31, 2029 | |
Indebtness amount | $ 395,801 | |
Other convertible loan amount | $ 192,308 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
NET LOSS PER SHARE (Details) | ||||
Net loss | $ (270,738) | $ (353,377) | $ (443,406) | $ (780,008) |
Net loss per share - basic and diluted | ||||
Weighted-average number of common shares outstanding - basic and diluted | 14,962,298 | 14,903,177 | 14,962,298 | 14,868,292 |
Net loss per share: Basic and diluted (Note) | $ (0.02) | $ (0.02) | $ (0.03) | $ (0.05) |
CAPITAL STOCK (Details Narrativ
CAPITAL STOCK (Details Narrative) | Jan. 14, 2020HKD ($)shares | Mar. 30, 2020HKD ($)shares | Mar. 30, 2020USD ($)shares | Mar. 25, 2020HKD ($)shares | Mar. 25, 2020USD ($)shares | Jun. 30, 2021HKD ($)shares | Jun. 30, 2021USD ($)$ / shares | Dec. 31, 2020USD ($) | Mar. 30, 2020$ / shares | Mar. 25, 2020$ / shares | Jan. 14, 2020USD ($)$ / shares |
Debt instrument face amount | $ 334,027 | ||||||||||
Convertible Bond Agreement [Member] | February 1, 2020 [Member] | |||||||||||
Conversion price | $ / shares | $ 3.62 | $ 3.62 | |||||||||
Debt conversion, converted instrument, shares issued | shares | 14,196 | 53,236 | |||||||||
Loans Payable | $ 400,000 | $ 1,500,000 | |||||||||
Interest expenses | $ 3,185 | ||||||||||
Debt instrument face amount | $ 192,708 | $ 51,389 | |||||||||
Arcus and third party investor [Member] | Convertible Bond Agreement [Member] | |||||||||||
Conversion price | $ / shares | $ 3.62 | $ 3.62 | |||||||||
Debt conversion, converted instrument, shares issued | shares | 17,745 | 17,745 | 7,098 | 7,098 | |||||||
Loans Payable | $ 500,000 | $ 200,000 | |||||||||
Interest expenses | $ 1,062 | $ 425 | |||||||||
Debt conversion, converted instrument, amount | $ 64,235 | $ 25,695 |
WARRANT EQUITY (Details )
WARRANT EQUITY (Details ) | 6 Months Ended |
Jun. 30, 2021USD ($)$ / sharesshares | |
Warrants outstanding | shares | 66,000 |
Fair value | $ | $ 125,900 |
2019 [Member] | |
Warrants outstanding | shares | 66,000 |
Fair value | $ | $ 125,900 |
Fair Value per share | $ / shares | $ 1.91 |
WARRANT EQUITY (Details Narrati
WARRANT EQUITY (Details Narrative) - Second Subscription package [Member] - In, 2019 [Member] | Jun. 30, 2021USD ($)$ / sharesshares |
Exercise price | $ / shares | $ 3 |
Amount of subscription package issued | $ | $ 825,000 |
Class of warrants or rights reserved for future issuance | 330,000 |
Common stock shares reserved for future issuance | 66,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) | 6 Months Ended |
Jun. 30, 2021 | |
SUBSEQUENT EVENTS | |
Description of extension letter with the bondholder | The Company signed a supplementary agreement with the bondholder to further extend the maturity date of the HK$1.5 million (equivalent to $192,308) convertible bonds from April 30, 2021 to May 20, 2021 |