Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 23, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 000-55930 | ||
Entity Registrant Name | Luduson G Inc. | ||
Entity Central Index Key | 0001737193 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 3,080,000 | ||
Entity Common Stock, Shares Outstanding | 28,110,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Current asset: | ||
Cash and cash equivalents | $ 40,447 | $ 269,691 |
Accounts receivable | 4,499,746 | 760,733 |
Deposits, prepayments and other receivables | 665,052 | 142,001 |
Operating lease right-of-use assets | 0 | 35,816 |
Total current assets | 5,205,245 | 1,208,241 |
Non-current asset: | ||
Plant and equipment | 422,414 | 9,172 |
TOTAL ASSETS | 5,627,659 | 1,217,413 |
Current liabilities: | ||
Accounts payable | 3,251 | 0 |
Accrued liabilities and other payables | 23,521 | 1,289 |
Tax payable | 743,562 | 139,804 |
Operating lease liabilities | 0 | 36,690 |
Amount due to a director | 28,290 | 0 |
Total current liabilities | 798,624 | 177,783 |
TOTAL LIABILITIES | 798,624 | 177,783 |
Commitments and contingencies | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding at December 31, 2020 and 2019, respectively | 0 | 0 |
Common stock, $.0001 par value, 100,000,000 shares authorized, 28,110,000 and 10,000,000 shares issued and outstanding at December 31, 2020 and 2019, respectively | 2,811 | 1,000 |
Additional paid in capital | 332,189 | 9,000 |
Accumulated other comprehensive income | 10,573 | 5,435 |
Retained earnings | 4,483,462 | 1,024,195 |
Stockholders' equity | 4,829,035 | 1,039,630 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 5,627,659 | $ 1,217,413 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ .0001 | $ 0.0001 |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ .0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 28,110,000 | 10,000,000 |
Common stock, shares outstanding | 28,110,000 | 10,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue, net | $ 5,935,720 | $ 1,426,354 |
Cost of revenue | (1,027,662) | (283,828) |
Gross profit | 4,908,058 | 1,142,526 |
Operating expenses: | ||
General and administrative expenses | (531,681) | (164,293) |
Professional fee | (127,416) | 0 |
Total operating expenses | (659,097) | (164,293) |
Other (expenses) income: | ||
Interest income | 40 | 2 |
Interest expenses | (1,938) | 0 |
Total other (expenses) income | (1,898) | 2 |
INCOME BEFORE INCOME TAXES | 4,247,063 | 978,235 |
Income tax expense | (602,877) | (138,959) |
NET INCOME | 3,644,186 | 839,276 |
Other comprehensive income: | ||
Foreign currency translation gain | 5,138 | 6,152 |
COMPREHENSIVE INCOME | $ 3,649,324 | $ 845,428 |
Basic and diluted net income per share | $ 0.18 | $ 0.08 |
Basic and diluted weighted average shares outstanding | 20,332,350 | 10,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flow from operating activities: | ||
Net income | $ 3,644,186 | $ 839,276 |
Adjustments to reconcile net income to net cash generated from operating activities: | ||
Depreciation of plant and equipment | 48,889 | 5,946 |
Stock-based compensation for services | 325,000 | 0 |
Non-cash lease expenses | 35,600 | 874 |
Change in operating assets and liabilities: | ||
Accounts receivable | (3,739,013) | (746,361) |
Deposits, prepayments and other receivables | (523,050) | (138,809) |
Accounts payable | 3,251 | 0 |
Accrued expenses and other payables | 22,232 | (2,554) |
Lease liabilities | 2,051 | 0 |
Tax payable | 603,758 | 138,959 |
Net cash generated from operating activities | 422,904 | 97,331 |
Cash flow from investing activity: | ||
Purchase of property, plant and equipment | (462,109) | 0 |
Net cash used in investing activities | (462,109) | 0 |
Cash flow from financing activities: | ||
Advance from a director | 28,290 | 138,596 |
Repayment of lease liabilities | (38,525) | 0 |
Dividend paid to former shareholders | (184,919) | 0 |
Net cash (used in) generated from financing activities | (195,154) | 138,596 |
Effect on exchange rate change on cash and cash equivalents | 5,115 | 6,949 |
Net change in cash and cash equivalents | (229,244) | 242,876 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 269,691 | 26,815 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 40,447 | 269,691 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for tax | 0 | 0 |
Cash paid for interest | $ 0 | $ 0 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Other Comprehensive Income / Loss | Retained Earnings / Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2018 | 10,000,000 | ||||
Beginning balance, value at Dec. 31, 2018 | $ 1,000 | $ 9,000 | $ (717) | $ 184,919 | $ 194,202 |
Foreign currency translation adjustment | 6,152 | 6,152 | |||
Net income | 839,276 | 839,276 | |||
Ending balance, shares at Dec. 31, 2019 | 10,000,000 | ||||
Ending balance, value at Dec. 31, 2019 | $ 1,000 | 9,000 | 5,435 | 1,024,195 | 1,039,630 |
Shares issued for acquisition of legal acquirer, shares | 15,610,000 | ||||
Shares issued for acquisition of legal acquirer, value | $ 1,561 | (1,561) | |||
Shares issued for services, shares | 2,500,000 | ||||
Shares issued for services, value | $ 250 | 324,750 | 325,000 | ||
Dividends paid to former shareholders | (184,919) | (184,919) | |||
Foreign currency translation adjustment | 5,138 | 5,138 | |||
Net income | 3,644,186 | 3,644,186 | |||
Ending balance, shares at Dec. 31, 2020 | 28,110,000 | ||||
Ending balance, value at Dec. 31, 2020 | $ 2,811 | $ 332,189 | $ 10,573 | $ 4,483,462 | $ 4,829,035 |
1. Description of Business and
1. Description of Business and Organization | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business and Organization | 1. DESCRIPTION OF BUSINESS AND ORGANIZATION Luduson G Inc. (formerly Baja Custom Designs, Inc., or "the Company" or "LDSN") was organized under the laws of the State of Delaware on March 6, 2014 under the name Jovanovic-Steele, Inc. The Company’s name was changed to Baja Custom Designs, Inc. on September 30, 2017. The Company was established as part of the Chapter 11 Plan of Reorganization of Pacific Shores Development, Inc. ("PSD"). The Company’s name was further changed to Luduson G Inc. on July 15, 2020. On April 15, 2020, Linda Master, the former Chief Executive Officer, President and majority owner of the Company, sold 14,960,000 shares of her common stock of the Company, or 95.8% of the issued and outstanding stock of the Company, to Lan Chan, the current Chief Executive Officer, Chief Financial Officer and Secretary of the Company. On May 8, 2020, the Company executed a Share Exchange Agreement with Luduson Holding Company Limited, a limited liability company organized under the laws of British Virgin Islands (“LHCL”), and the shareholders of LHCL. Pursuant to the Share Exchange Agreement, the Company purchased Ten Thousand (10,000) shares of LHCL (the “LHCL Shares”), representing all of the issued and outstanding shares of common stock of LHCL. As consideration, the Company agreed to issue to the shareholders of LHCL Ten Million (10,000,000) shares of its common stock, at a value of US$0.10 per share, for an aggregate value of US$1,000,000. The Company consummated the acquisition of LHCL on May 22, 2020. Because the Company is a shell company, LHCL will comprise the ongoing operations of the combined entity and its senior management will serve as the senior management of the combined entity, LHCL is deemed to be the accounting acquirer for accounting purposes. The transaction will be treated as a recapitalization of the Company. Accordingly, the consolidated assets, liabilities and results of operations of the Company will become the historical financial statements of LHCL, and the Company’s assets, liabilities and results of operations will be consolidated with LHCL beginning on the acquisition date. LHCL was the legal acquiree but deemed to be the accounting acquirer. The Company was the legal acquirer but deemed to be the accounting acquiree in the reverse merger. The historical financial statements prior to the acquisition are those of the accounting acquirer (LHCL). After completion of the Share Exchange Transaction, the Company’s consolidated financial statements include the assets and liabilities, the operations and cash flow of the accounting acquirer. Description of subsidiaries Name Place of incorporation and kind of legal entity Principal activities Particulars of registered/ paid up share capital Effective interest held Luduson Holding Company Limited British Virgin Island Investment holding 10,000 ordinary shares at par value of $1 100% Luduson Entertainment Limited Hong Kong Sales and marketing 10,000 ordinary shares for HK$10,000 100% G Music Asia Limited British Virgin Islands Event planning 2 ordinary shares at par value of US$1 100% The Company and its subsidiaries are hereinafter referred to as (the “Company”). |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes. l Basis of presentation These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). l Use of estimates and assumptions In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates. l Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation. l 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. l Accounts receivable Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer's financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of December 31, 2020 and 2019, there was no allowance for doubtful accounts. l Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values: Expected useful lives Leasehold improvement 3 years Computer equipment 3-5 years Furniture and equipment 5 years Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. l Revenue recognition The Company adopted Accounting Standards Codification (“ASC ”) 606 – Revenue from Contracts with Customers Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: • identify the contract with a customer; • identify the performance obligations in the contract; • determine the transaction price; • allocate the transaction price to performance obligations in the contract; and • recognize revenue as the performance obligation is satisfied. l Cost of revenue Cost of revenue consists primarily of the fees paid to contracted programmers and labor costs, which are directly attributable to the rendering of services and the production of contents. l Income taxes The Company adopted the ASC 740 Income tax The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. l Uncertain tax positions The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the years ended December 31, 2020 and 2019. l 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 consolidated statement of operations. The reporting currency of the Company is United States Dollar ("US$") and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong and maintain its books and record in its local currency, Hong Kong Dollars (“HKD”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement Translation of amounts from HKD into US$ has been made at the following exchange rates for the years ended December 31, 2020 and 2019: December 31,2020 December 31,2019 Year-end HKD:US$ exchange rate 0.12899 0.12842 Annual average HKD:US$ exchange rate 0.12894 0.12764 l Comprehensive income ASC Topic 220, “ Comprehensive Income l Retirement plan costs Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying statements of operation as the related employee service is provided. l Share-based compensation The Company follows ASC 718, Compensation—Stock Compensation l Leases The Company adopted Topic 842, Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (“ROU”) assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Lease expense is recognized on a straight-line basis over the lease terms. Lease expense includes amortization of the ROU assets and accretion of the lease liabilities. Amortization of ROU assets is calculated as the periodic lease cost less accretion of the lease liability. The amortized period for ROU assets is limited to the expected lease term. The Company has elected a practical expedient to combine the lease and non-lease components into a single lease component. The Company also elected the short-term lease measurement and recognition exemption and does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less. l Related parties The Company follows the ASC 850-10, Related Party Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. l Commitments and contingencies The Company follows the ASC 450-20, Commitments If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. l Fair value of financial instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, deposits, prepayment and other receivables, amount due from a director and operating lease right-of-use assets, approximate their fair values because of the short maturity of these instruments. l Recent accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Standards In June 2016, the FASB issued guidance that affects loans, trade receivables and any other financial assets that have the contractual right to receive cash. Under the new guidance, an entity is required to recognize expected credit losses rather than incurred losses for financial assets. The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company adopted the new guidance effective January 1, 2020, with no material impact to the Company’s consolidated financial position, results of operations or cash flows. In August 2018, the FASB issued guidance which modifies certain disclosure requirements over fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, including all interim periods within that fiscal year. The Company adopted the new guidance effective January 1, 2020. The Company does not currently classify any of its derivative contracts or restoration plan assets as Level 3 assets or liabilities, nor did the Company have any transfers amongst fair value levels during the year ended December 31, 2020. As a result, the guidance did not have an impact on Company’s the fair value measurement disclosures upon adoption. In January 2017, the FASB issued guidance which eliminates the second step from the traditional two-step goodwill impairment test. Under current guidance, an entity performed the first step of the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount; if an impairment loss was indicated, the entity computed the implied fair value of goodwill to determine whether an impairment loss existed, and if so, the amount to recognize. Under the new guidance, an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value (the Step 1 test), with no further testing required. Any impairment loss recognized is limited to the amount of goodwill allocated to the reporting unit. The new guidance is effective for public companies that are Securities and Exchange Commission (“SEC”) registrants for fiscal years beginning after December 15, 2019. The Company adopted the new guidance on January 1, 2020, and applied the guidance prospectively to its goodwill impairment tests. Accounting Standards Not Yet Adopted as of December 31, 2020 In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and also simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The new guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. In March 2020, the FASB issued guidance to address certain accounting consequences from the anticipated transition from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The new guidance contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based on matches the index of the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
3. Business Segment
3. Business Segment | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segment | 3. BUSINESS SEGMENT The Company considers its business activities to constitute two reportable segments. The segment analysis of the Company’s revenues is as follows: Years ended December 31, 2020 2019 Digital marketing $ 5,916,380 $ 502,324 Entertainment 19,340 924,030 $ 5,935,720 $ 1,426,354 |
4. Accounts Receivable
4. Accounts Receivable | 12 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
Accounts Receivable | 4. ACCOUNTS RECEIVABLE The majority of the Company’s sales are on open credit terms and in accordance with terms specified in the contracts governing the relevant transactions. The Company evaluates the need of an allowance for doubtful accounts based on specifically identified amounts that management believes to be uncollectible. If actual collections experience changes, revisions to the allowance may be required. Based upon the aforementioned criteria, the Company has not provided the allowance for the years ended December 31, 2020 and 2019. As of December 31, 2020 2019 Accounts receivable, cost $ 4,499,746 $ 760,733 Less: allowance for doubtful accounts – – Accounts receivable, net $ 4,499,746 $ 760,733 The Company expects these balances to be recovered in the next 12 months. |
5. Plant and Equipment
5. Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Plant and Equipment | 5. PLANT AND EQUIPMENT Plant and equipment consisted of the following: As of December 31, 2020 2019 Leasehold improvement $ 64,495 $ – Computer equipment 418,371 20,757 Furniture and equipment 6,908 6,908 Foreign translation difference 154 29 489,928 27,694 Less: accumulated depreciation (67,322 ) (18,433 ) Less: foreign translation difference (192 ) (89 ) $ 422,414 $ 9,172 Depreciation expense for the years ended December 31, 2020 and 2019 were $48,889 and $5,946, respectively. |
6. Deposits, Prepayments and Ot
6. Deposits, Prepayments and Other Receivables | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Deposits, Prepayments and Other Receivables | 6. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES Deposits, prepayments and other receivables consisted of the following, As of December 31, 2020 2019 Prepayment for business project $ 139,414 $ 138,791 Prepayment for vending machine 522,413 – Rental deposit 3,225 3,210 $ 665,052 $ 142,001 Prepayment for business project represents the security deposit to the project under the collaboration agreement, which is unsecured and non-refundable. The deposit will be charged to the project cost upon the commencement of its project in the next six months. Prepayment for vending machine represents the deposit of purchasing vending machines. The deposit will be charged to the project cost upon the use of the machine in the next twelve months. |
7. Lease
7. Lease | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease | 7. LEASE As of December 31, 2020, the Company entered into one workshop space operating lease with a lease term of 2 years, commencing from January 1, 2019. Right of use assets and lease liability – right of use are as follows: As of December 31 2020 2019 Right-of-use assets $ – $ 35,816 The lease liability – right of use is as follows: As of December 31 2020 2019 Current portion $ – $ 36,690 Non-current portion – – Total $ – $ 36,690 The lease was renewed on December 28, 2020 and extended for one additional year to December 31, 2021. |
8. Amount Due to a Related Part
8. Amount Due to a Related Party | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Amount Due to a Related Party | 8. AMOUNT DUE TO A RELATED PARTY As of December 31, 2020, the amount due to a related party represented temporary advances made by the Company’s director, Mr Wong Ka Leung, which was unsecured, interest-free with no fixed repayment term. Imputed interest on this amount is considered insignificant. |
9. Shareholders' Equity
9. Shareholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | 9. SHAREHOLDER’S EQUITY Authorized shares As of December 31, 2020 and 2019, the authorized share capital of the Company consisted of 100,000,000 shares of common stock with $0.0001 par value, and 20,000,000 shares of preferred stock also with $0.0001 par value. No other classes of stock are authorized. The Company's first issuance of common stock, totaling 580,000 shares, took place on March 6, 2014 pursuant to the Chapter 11 Plan of Reorganization confirmed by the U.S. Bankruptcy Court in the matter of Pacific Shores Development, Inc. ("PSD"). The Court ordered the distribution of shares in the Company to all general unsecured creditors of PSD, with these creditors to receive their Pro Rata share (according to amount of debt held) of a pool of 80,000 shares in the Company. The Court also ordered the distribution of shares in the Company to all administrative creditors of PSD, with these creditors to receive one share of common stock in the Company for each $0.10 of PSD's administrative debt which they held. A total of 500,000 shares were issued to PSD’s administrative creditors. The Court also ordered the distribution of 2,500,000 warrants in the Company to all administrative creditors of PSD, with these creditors to receive five warrants in the Company for each $0.10 of PSD's administrative debt which they held. These creditors received 2,500,000 warrants consisting of 500,000 "A Warrants" each convertible into one share of common stock at an exercise price of $4.00; 500,000 "B Warrants" each convertible into one share of common stock at an exercise price of $5.00; 500,000 "C Warrants" each convertible into one share of common stock at an exercise price of $6.00; 500,000 "D Warrants" each convertible into one share of common stock at an exercise price of $7.00; and 500,000 "E Warrants" each convertible into one share of common stock at an exercise price of $8.00. The exercise price of the warrants was reduced to $0.10 per share on April 7, 2020, and on April 15, 2020, the warrant expiration date was extended to August 30, 2025. As of the date of this report, no warrants have been exercised. On May 22, 2020, the Company consummated the acquisition of LHCL and agreed to issue to the shareholders of LHCL Ten Million (10,000,000) shares of its common stock, at a value of $0.10 per share, for an aggregate value of $1,000,000. Issued and outstanding shares On January 2, 2020, the Company declared and paid a dividend of $184,919 to its former shareholders. On May 8, 2020, the Company executed a Share Exchange Agreement (“the “Share Exchange Agreement”) with Luduson Holding Company Limited, a limited company organized under the laws of the British Virgin Islands (“LHCL”), and the shareholders of LHCL. Pursuant to the Share Exchange Agreement, the Company agreed to purchase Ten Thousand (10,000) ordinary shares representing 100% of the issued and outstanding ordinary shares of the LHCL (the “LHCL Shares”). As consideration, the Company agreed to issue to the shareholders of LHCL Ten Million (10,000,000) shares of its common stock, at a value of US$0.10 per share, for an aggregate value of US$1,000,000. The Company consummated the acquisition of LHCL on May 22, 2020. On September 9, 2020, the Company issued 2,500,000 shares of its common stock to five individuals of consultants and service providers for the IT programming and marketing services rendered to the Company, at the fair value of $0.13 per shares, totally $325,000. As of December 31, 2020, 28,110,000 common shares issued and outstanding and 2,500,000 warrants to acquire common shares issued and outstanding. |
10. Income Tax
10. Income Tax | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 10. INCOME TAX Income (loss) before income taxes within or outside the United States are shown below: Years ended December 31, 2020 2019 Domestic $ (343,616 ) $ – Foreign 4,590,679 978,235 Total $ 4,247,063 $ 978,235 The provision for income taxes as shown in the accompanying consolidated statements of income consists of the following: Years ended December 31, 2020 2019 Current: Domestic $ – $ – Foreign 602,877 138,959 Deferred: Domestic – – Foreign – – Provision for income taxes $ 602,877 $ 138,959 The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company operates in various countries: United States of America and Hong Kong that are subject to taxes in the jurisdictions in which they operate, as follows: United States of America LDSN is registered in the State of Delaware and is subject to US federal corporate income tax. The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were not material to its results of operations for the periods presented. Deferred tax asset is not provided for as the tax losses may not be able to carry forward after a change in substantial ownership of the Company in May 2020. As of December 31, 2020, the operations in the United States of America incurred $343,616 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2040, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $72,159 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future. ASC 740, Accounting for Income Taxes BVI Under the current BVI law, the Company is not subject to tax on income. Hong Kong The Company’s subsidiary operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the years ended December 31, 2020 and 2019 is as follows: Years ended December 31, 2020 2019 Income before income taxes $ 4,590,679 $ 978,235 Statutory income tax rate 16.5% 16.5% Income tax expense at statutory rate 757,462 161,408 Tax effect of non-deductible items 8,067 1,055 Tax effect of non-taxable items (138,797 ) (35 ) Tax concession (23,855 ) (23,469 ) Income tax expense $ 602,877 $ 138,959 |
11. Net Income Per Share
11. Net Income Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 11. NET INCOME PER SHARE Basic net income per share is computed using the weighted average number of common shares outstanding during the year. The dilutive effect of potential common shares outstanding is included in diluted net income per share. The following table sets forth the computation of basic and diluted net income per share for the years ended December 31, 2020 and 2019: Years ended December 31, 2020 2019 Net income attributable to common shareholders $ 3,644,186 $ 839,276 Weighted average common shares outstanding – Basic and diluted 20,332,350 10,000,000 Net income per share – Basic and diluted $ 0.18 $ 0.08 |
12. Pension Costs
12. Pension Costs | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Pension Costs | 12. PENSION COSTS The Company is required to make contribution under a defined contribution pension scheme for all of its eligible employees in Hong Kong. The Company is required to contribute a specified percentage of the participants' relevant income based on their ages and wages level. The total contributions made were $1,160 and $0 for the years ended December 31, 2020 and 2019, respectively. |
13. Related Party Transactions
13. Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. RELATED PARTY TRANSACTIONS Apart from the transactions and balances detailed elsewhere in these accompanying consolidated financial statements, the Company has no other significant or material related party transactions during the years presented. |
14. Concentrations of Risk
14. Concentrations of Risk | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Risk | 14. CONCENTRATIONS OF RISK The Company is exposed to the following concentrations of risk: (a) Major customers For the years ended December 31, 2020 and 2019, the individual customer who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at year-end dates, are presented as follows: Year ended December 31, 2020 December 31, 2020 Customers Revenues Percentage Accounts Customer A $ 3,284,657 55% $ 2,041,928 Customer B 1,448,086 24% 1,352,108 Customer C 1,183,637 20% 1,088,683 Total $ 5,916,380 99% $ 4,482,719 Year ended December 31, 2019 December 31, 2019 Customers Revenues Percentage Accounts Customer C $ 316,545 22% $ 132,268 Customer D 256,555 18% 139,331 Customer A 245,067 17% 169,508 Customer B 210,604 15% 94,000 Customer E 185,077 13% 105,301 Total $ 1,213,848 85% $ 640,408 All customers are located in the PRC and Hong Kong. (b) Economic and political risk The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations. (c) Exchange rate risk The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice. |
15. Commitments and Contingenci
15. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. COMMITMENTS AND CONTINGENCIES As of December 31, 2020, the Company has no material commitments or contingencies. |
16. Subsequent Events
16. Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. SUBSEQUENT EVENTS In accordance with ASC Topic 855, “ Subsequent Events |
2. Summary of Significant Acc_2
2. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | l Basis of presentation These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). |
Use of estimates and assumptions | l Use of estimates and assumptions In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates. |
Basis of consolidation | l Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation. |
Cash and cash equivalents | l 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. |
Accounts receivable | l Accounts receivable Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer's financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of December 31, 2020 and 2019, there was no allowance for doubtful accounts. |
Plant and equipment | l Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values: Expected useful lives Leasehold improvement 3 years Computer equipment 3-5 years Furniture and equipment 5 years Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations. |
Revenue recognition | l Revenue recognition The Company adopted Accounting Standards Codification (“ASC ”) 606 – Revenue from Contracts with Customers Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: • identify the contract with a customer; • identify the performance obligations in the contract; • determine the transaction price; • allocate the transaction price to performance obligations in the contract; and • recognize revenue as the performance obligation is satisfied. |
Cost of revenue | l Cost of revenue Cost of revenue consists primarily of the fees paid to contracted programmers and labor costs, which are directly attributable to the rendering of services and the production of contents. |
Income taxes | l Income taxes The Company adopted the ASC 740 Income tax The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. |
Uncertain tax positions | l Uncertain tax positions The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the years ended December 31, 2020 and 2019. |
Foreign currencies translation | l 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 consolidated statement of operations. The reporting currency of the Company is United States Dollar ("US$") and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong and maintain its books and record in its local currency, Hong Kong Dollars (“HKD”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement Translation of amounts from HKD into US$ has been made at the following exchange rates for the years ended December 31, 2020 and 2019: December 31,2020 December 31,2019 Year-end HKD:US$ exchange rate 0.12899 0.12842 Annual average HKD:US$ exchange rate 0.12894 0.12764 |
Comprehensive income | l Comprehensive income ASC Topic 220, “ Comprehensive Income |
Retirement plan costs | l Retirement plan costs Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying statements of operation as the related employee service is provided. |
Stock based compensation | l Share-based compensation The Company follows ASC 718, Compensation—Stock Compensation |
Leases | l Leases The Company adopted Topic 842, Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (“ROU”) assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Lease expense is recognized on a straight-line basis over the lease terms. Lease expense includes amortization of the ROU assets and accretion of the lease liabilities. Amortization of ROU assets is calculated as the periodic lease cost less accretion of the lease liability. The amortized period for ROU assets is limited to the expected lease term. The Company has elected a practical expedient to combine the lease and non-lease components into a single lease component. The Company also elected the short-term lease measurement and recognition exemption and does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less. |
Related parties | l Related parties The Company follows the ASC 850-10, Related Party Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. |
Commitments and contingencies | l Commitments and contingencies The Company follows the ASC 450-20, Commitments If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. |
Fair value of financial instruments | l Fair value of financial instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, deposits, prepayment and other receivables, amount due from a director and operating lease right-of-use assets, approximate their fair values because of the short maturity of these instruments. |
Recent accounting pronouncements | l Recent accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Standards In June 2016, the FASB issued guidance that affects loans, trade receivables and any other financial assets that have the contractual right to receive cash. Under the new guidance, an entity is required to recognize expected credit losses rather than incurred losses for financial assets. The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company adopted the new guidance effective January 1, 2020, with no material impact to the Company’s consolidated financial position, results of operations or cash flows. In August 2018, the FASB issued guidance which modifies certain disclosure requirements over fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, including all interim periods within that fiscal year. The Company adopted the new guidance effective January 1, 2020. The Company does not currently classify any of its derivative contracts or restoration plan assets as Level 3 assets or liabilities, nor did the Company have any transfers amongst fair value levels during the year ended December 31, 2020. As a result, the guidance did not have an impact on Company’s the fair value measurement disclosures upon adoption. In January 2017, the FASB issued guidance which eliminates the second step from the traditional two-step goodwill impairment test. Under current guidance, an entity performed the first step of the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount; if an impairment loss was indicated, the entity computed the implied fair value of goodwill to determine whether an impairment loss existed, and if so, the amount to recognize. Under the new guidance, an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value (the Step 1 test), with no further testing required. Any impairment loss recognized is limited to the amount of goodwill allocated to the reporting unit. The new guidance is effective for public companies that are Securities and Exchange Commission (“SEC”) registrants for fiscal years beginning after December 15, 2019. The Company adopted the new guidance on January 1, 2020, and applied the guidance prospectively to its goodwill impairment tests. Accounting Standards Not Yet Adopted as of December 31, 2020 In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and also simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The new guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. In March 2020, the FASB issued guidance to address certain accounting consequences from the anticipated transition from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The new guidance contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based on matches the index of the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
1. Description of Business an_2
1. Description of Business and Organization (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Subsidiaries | Description of subsidiaries Name Place of incorporation and kind of legal entity Principal activities Particulars of registered/ paid up share capital Effective interest held Luduson Holding Company Limited British Virgin Island Investment holding 10,000 ordinary shares at par value of $1 100% Luduson Entertainment Limited Hong Kong Sales and marketing 10,000 ordinary shares for HK$10,000 100% G Music Asia Limited British Virgin Islands Event planning 2 ordinary shares at par value of US$1 100% |
2. Summary of Significant Acc_3
2. Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of property and equipment useful lives | Expected useful lives Leasehold improvement 3 years Computer equipment 3-5 years Furniture and equipment 5 years |
Schedule of translation rates | Translation of amounts from HKD into US$ has been made at the following exchange rates for the years ended December 31, 2020 and 2019: December 31,2020 December 31,2019 Year-end HKD:US$ exchange rate 0.12899 0.12842 Annual average HKD:US$ exchange rate 0.12894 0.12764 |
3. Business Segment (Tables)
3. Business Segment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of revenues by segment | Years ended December 31, 2020 2019 Digital marketing $ 5,916,380 $ 502,324 Entertainment 19,340 924,030 $ 5,935,720 $ 1,426,354 |
4. Accounts Receivable (Tables)
4. Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Credit Loss [Abstract] | |
Schedule of accounts receivable | As of December 31, 2020 2019 Accounts receivable, cost $ 4,499,746 $ 760,733 Less: allowance for doubtful accounts – – Accounts receivable, net $ 4,499,746 $ 760,733 |
5. Plant and Equipment (Tables)
5. Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | As of December 31, 2020 2019 Leasehold improvement $ 64,495 $ – Computer equipment 418,371 20,757 Furniture and equipment 6,908 6,908 Foreign translation difference 154 29 489,928 27,694 Less: accumulated depreciation (67,322 ) (18,433 ) Less: foreign translation difference (192 ) (89 ) $ 422,414 $ 9,172 |
6. Deposits, Prepayments and _2
6. Deposits, Prepayments and Other Receivables (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of other receivables | As of December 31, 2020 2019 Prepayment for business project $ 139,414 $ 138,791 Prepayment for vending machine 522,413 – Rental deposit 3,225 3,210 $ 665,052 $ 142,001 |
7. Lease (Tables)
7. Lease (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease information | Right of use assets and lease liability – right of use are as follows: As of December 31 2020 2019 Right-of-use assets $ – $ 35,816 The lease liability – right of use is as follows: As of December 31 2020 2019 Current portion $ – $ 36,690 Non-current portion – – Total $ – $ 36,690 |
10. Income Tax (Tables)
10. Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes | Income (loss) before income taxes within or outside the United States are shown below: Years ended December 31, 2020 2019 Domestic $ (343,616 ) $ – Foreign 4,590,679 978,235 Total $ 4,247,063 $ 978,235 |
Current and deferred income taxes | The provision for income taxes as shown in the accompanying consolidated statements of income consists of the following: Years ended December 31, 2020 2019 Current: Domestic $ – $ – Foreign 602,877 138,959 Deferred: Domestic – – Foreign – – Provision for income taxes $ 602,877 $ 138,959 |
Reconciliation of income taxes | The reconciliation of income tax rate to the effective income tax rate for the years ended December 31, 2020 and 2019 is as follows: Years ended December 31, 2020 2019 Income before income taxes $ 4,590,679 $ 978,235 Statutory income tax rate 16.5% 16.5% Income tax expense at statutory rate 757,462 161,408 Tax effect of non-deductible items 8,067 1,055 Tax effect of non-taxable items (138,797 ) (35 ) Tax concession (23,855 ) (23,469 ) Income tax expense $ 602,877 $ 138,959 |
11. Net Income Per Share (Table
11. Net Income Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Computation of net income per share | Years ended December 31, 2020 2019 Net income attributable to common shareholders $ 3,644,186 $ 839,276 Weighted average common shares outstanding – Basic and diluted 20,332,350 10,000,000 Net income per share – Basic and diluted $ 0.18 $ 0.08 |
14. Concentrations of Risk (Tab
14. Concentrations of Risk (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentrations of risk | For the years ended December 31, 2020 and 2019, the individual customer who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at year-end dates, are presented as follows: Year ended December 31, 2020 December 31, 2020 Customers Revenues Percentage Accounts Customer A $ 3,284,657 55% $ 2,041,928 Customer B 1,448,086 24% 1,352,108 Customer C 1,183,637 20% 1,088,683 Total $ 5,916,380 99% $ 4,482,719 Year ended December 31, 2019 December 31, 2019 Customers Revenues Percentage Accounts Customer C $ 316,545 22% $ 132,268 Customer D 256,555 18% 139,331 Customer A 245,067 17% 169,508 Customer B 210,604 15% 94,000 Customer E 185,077 13% 105,301 Total $ 1,213,848 85% $ 640,408 All customers are located in the PRC and Hong Kong. |
1. Description of Business an_3
1. Description of Business and Organization (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Luduson Holding Company Limited [Member] | |
Name of subsidiary | Luduson Holding Company Limited |
Place of incorporation | British Virgin Islands |
Principal activity | Investment holding |
Share capital | 10,000 ordinary shares at par value of US$1 |
Luduson Entertainment Limited [Member] | |
Name of subsidiary | Luduson Entertainment Limited |
Place of incorporation | Hong Kong |
Principal activity | Sales and marketing |
Share capital | 10,000 ordinary shares for HK$10,000 |
Ownership percentage | 100.00% |
G Music Asia Limited [Member] | |
Name of subsidiary | G Music Asia Limited |
Place of incorporation | British Virgin Islands |
Principal activity | Event planning |
Share capital | 2 ordinary shares at par value of US$1 |
Ownership percentage | 100.00% |
2. Summary of Significant Acc_4
2. Summary of Significant Accounting Policies (Details - useful lives) | 12 Months Ended |
Dec. 31, 2020 | |
Leasehold Improvements [Member] | |
Property useful lives | 3 years |
Computer Equipment [Member] | |
Property useful lives | 3-5 years |
Furniture and Fixtures [Member] | |
Property useful lives | 5 years |
2. Summary of Significant Acc_5
2. Summary of Significant Accounting Policies (Details - Translation rates) - H K D | Dec. 31, 2020 | Dec. 31, 2019 |
Period End [Member] | ||
Translation rate | 0.12899 | 0.12842 |
Period Average [Member] | ||
Translation rate | 0.12894 | 0.12764 |
2. Summary of Significant Acc_6
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Allowance for doubtful accounts | $ 0 | $ 0 |
3. Business Segment (Details)
3. Business Segment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue, net | $ 5,935,720 | $ 1,426,354 |
Digital Marketing [Member] | ||
Revenue, net | 5,916,380 | 502,324 |
Entertainment [Member] | ||
Revenue, net | $ 19,340 | $ 924,030 |
4. Accounts Receivable (Details
4. Accounts Receivable (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Credit Loss [Abstract] | ||
Accounts receivable, gross | $ 4,499,746 | $ 760,733 |
Less: allowance for doubtful accounts | 0 | 0 |
Accounts receivable, net | $ 4,499,746 | $ 760,733 |
5. Plant and Equipment (Details
5. Plant and Equipment (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Property and equipment, gross | $ 489,928 | $ 27,694 |
Less: Accumulated depreciation | (67,322) | (18,433) |
Less: Foreign translation difference | (192) | (89) |
Property and equipment, net | 422,414 | 9,172 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 64,495 | 0 |
Computer Equipment [Member] | ||
Property and equipment, gross | 418,371 | 20,757 |
Furniture and Fixtures [Member] | ||
Property and equipment, gross | 6,908 | 6,908 |
Foreign Translation Difference [Member] | ||
Property and equipment, gross | $ 154 | $ 29 |
5. Plant and Equipment (Detai_2
5. Plant and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 48,889 | $ 5,946 |
6. Deposits, Prepayments and _3
6. Deposits, Prepayments and Other Receivables (Details Narrative) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deposits, prepayments and other receivables | $ 665,052 | $ 142,001 |
Prepayments for business project [Member] | ||
Deposits, prepayments and other receivables | 139,414 | 138,791 |
Prepayment for Vending Machine [Member] | ||
Deposits, prepayments and other receivables | 522,413 | 0 |
Rental deposit [Member] | ||
Deposits, prepayments and other receivables | $ 3,225 | $ 3,210 |
7. Lease Liability (Details)
7. Lease Liability (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Right of use assets | $ 0 | $ 35,816 |
Operating lease liability, current | 0 | 36,690 |
Operating lease liability, noncurrent | $ 0 | $ 0 |
7. Lease Liability (Details Nar
7. Lease Liability (Details Narrative) | Dec. 31, 2020 |
Leases [Abstract] | |
Lease term | 1 year |
9. Shareholders' Equity (Detail
9. Shareholders' Equity (Details Narrative) - USD ($) | Jan. 02, 2020 | May 22, 2020 | Sep. 09, 2020 | Dec. 31, 2020 |
Dividends declared and paid | $ 184,919 | $ 184,919 | ||
Stock issued for services, value | $ 325,000 | |||
Five individuals [Member] | ||||
Stock issued for services, shares | 2,500,000 | |||
Stock issued for services, value | $ 325,000 | |||
LHCL [Member] | ||||
Stock issued for acquisition, shares | 10,000,000 | |||
Stock issued for acquisition, value | $ 1,000,000 |
10. Income Tax (Details - Incom
10. Income Tax (Details - Income before taxes) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income before taxes | $ 4,247,063 | $ 978,235 |
Domestic [Member] | ||
Income before taxes | (343,616) | 0 |
Foreign [Member] | ||
Income before taxes | $ 4,590,679 | $ 978,235 |
10. Income Tax (Details - Provi
10. Income Tax (Details - Provision) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | ||
Foreign | $ 602,877 | $ 138,959 |
Deferred: | ||
Domestic | 0 | 0 |
Foreign | 0 | 0 |
Provision for income taxes | $ 602,877 | $ 138,959 |
10. Income Tax (Details - Effec
10. Income Tax (Details - Effective rate) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income before income taxes | $ 4,247,063 | $ 978,235 |
Income tax expense | 602,877 | 138,959 |
Inland Revenue, Hong Kong [Member] | ||
Income before income taxes | $ 4,590,679 | $ 978,235 |
Statutory income tax rate | 16.50% | 16.50% |
Income tax expense at statutory rate | $ 757,462 | $ 161,408 |
Tax effect of non-deductible items | 8,067 | 1,055 |
Tax effect of non-taxable items | (138,797) | (35) |
Tax concession | (23,855) | (23,469) |
Income tax expense | $ 602,877 | $ 138,959 |
10. Income Tax (Details Narrati
10. Income Tax (Details Narrative) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforward | $ 343,616 |
NOL beginning expiration date | Dec. 31, 2040 |
Deferred tax valuation allowance | $ 72,159 |
11. Net Income Per Share (Detai
11. Net Income Per Share (Details - Summary) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Net income attributable to common shareholders | $ 3,644,186 | $ 839,276 |
Weighted average common shares outstanding – Basic and diluted | 20,332,350 | 10,000,000 |
Net income per share – Basic and diluted | $ 0.18 | $ 0.08 |
12. Pension Costs (Details Narr
12. Pension Costs (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Pension contributions | $ 1,160 | $ 0 |
14. Concentrations of Risk (Det
14. Concentrations of Risk (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts receivable | $ 4,499,746 | $ 760,733 |
Sales Revenue Net [Member] | ||
Concentration risk percentage | 99.00% | |
Revenues | $ 5,916,380 | |
Sales Revenue Net [Member] | Customer A [Member] | ||
Concentration risk percentage | 55.00% | 17.00% |
Revenues | $ 3,284,657 | $ 245,067 |
Sales Revenue Net [Member] | Customer B [Member] | ||
Concentration risk percentage | 24.00% | 15.00% |
Revenues | $ 1,448,086 | $ 210,604 |
Sales Revenue Net [Member] | Customer C [Member] | ||
Concentration risk percentage | 20.00% | 22.00% |
Revenues | $ 1,183,637 | $ 316,545 |
Accounts receivable | 1,088,683 | |
Sales Revenue Net [Member] | Customer D [Member] | ||
Concentration risk percentage | 18.00% | |
Revenues | $ 256,555 | |
Sales Revenue Net [Member] | Customer E [Member] | ||
Concentration risk percentage | 13.00% | |
Revenues | $ 185,077 | |
Accounts Receivable [Member] | ||
Accounts receivable | 4,482,719 | |
Accounts Receivable [Member] | Customer A [Member] | ||
Accounts receivable | 2,041,928 | 245,067 |
Accounts Receivable [Member] | Customer B [Member] | ||
Accounts receivable | $ 1,352,108 | 94,000 |
Accounts Receivable [Member] | Customer C [Member] | ||
Accounts receivable | 132,268 | |
Accounts Receivable [Member] | Customer D [Member] | ||
Accounts receivable | 256,555 | |
Accounts Receivable [Member] | Customer E [Member] | ||
Accounts receivable | $ 105,301 |