Cover
Cover | 6 Months Ended |
Jun. 30, 2021 | |
Cover [Abstract] | |
Document Type | S-1/A |
Amendment Flag | false |
Entity Registrant Name | LUDUSON G INC. |
Entity Central Index Key | 0001737193 |
Entity Tax Identification Number | 82-3184409 |
Entity Incorporation, State or Country Code | DE |
Entity Address, Address Line One | 17/F |
Entity Address, Address Line Two | 80 Gloucester Road |
Entity Address, City or Town | Wanchai |
City Area Code | 852 |
Local Phone Number | 2818 7199 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Current asset: | ||
Cash and cash equivalents | $ 62,456 | $ 40,447 |
Accounts receivable | 4,900,739 | 4,499,746 |
Deposits, prepayments and other receivables | 831,398 | 665,052 |
Total current assets | 5,794,593 | 5,205,245 |
Non-current asset: | ||
Plant and equipment | 342,331 | 422,414 |
TOTAL ASSETS | 6,136,924 | 5,627,659 |
Current liabilities: | ||
Accrued liabilities and other payables | 40,407 | 26,772 |
Tax payable | 813,592 | 743,562 |
Amount due to a director | 47,592 | 28,290 |
Total current liabilities | 901,591 | 798,624 |
TOTAL LIABILITIES | 901,591 | 798,624 |
Commitments and contingencies | ||
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.0001 par value, 20,000,000 shares authorized, no shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively | 0 | 0 |
Common stock, $0.0001 par value, 100,000,000 shares authorized, 28,110,000 shares issued and outstanding at June 30, 2021 and December 31, 2020 | 2,811 | 2,811 |
Additional paid in capital | 332,189 | 332,189 |
Accumulated other comprehensive income | 2,564 | 10,573 |
Retained earnings | 4,897,769 | 4,483,462 |
Stockholders’ equity | 5,235,333 | 4,829,035 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 6,136,924 | $ 5,627,659 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 28,110,000 | 28,110,000 |
Common stock, shares outstanding | 28,110,000 | 28,110,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue, net | $ 463,755 | $ 1,024,510 | $ 657,131 | $ 1,121,029 |
Cost of revenue | (34,335) | (147,387) | (68,706) | (151,068) |
Gross profit | 429,420 | 877,123 | 588,425 | 969,961 |
Operating expenses: | ||||
General and administrative expenses | (64,001) | (30,865) | (102,854) | (67,557) |
Total operating expenses | (64,001) | (30,865) | (102,854) | (67,557) |
Other income: | ||||
Interest income | 0 | 34 | 0 | 34 |
INCOME BEFORE INCOME TAXES | 365,419 | 846,292 | 485,571 | 902,438 |
Income tax expense | (58,424) | (124,938) | (71,264) | (129,655) |
NET INCOME | 306,995 | 721,354 | 414,307 | 772,783 |
Other comprehensive (loss) income: | ||||
Foreign currency translation (loss) gain | 5,757 | 1,210 | (8,009) | 5,945 |
COMPREHENSIVE INCOME | $ 312,752 | $ 722,564 | $ 406,298 | $ 778,728 |
Net income per share | ||||
- Basic and diluted | $ 0.01 | $ 0.03 | $ 0.01 | $ 0.05 |
Weighted average shares outstanding | ||||
- Basic and diluted | 28,110,000 | 21,620,778 | 28,110,000 | 15,810,389 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flow from operating activities: | ||
Net income | $ 414,307 | $ 772,783 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation of plant and equipment | 79,443 | 2,510 |
Non-cash lease expenses | 0 | 9,445 |
Change in operating assets and liabilities: | ||
Accounts receivable | (400,993) | (360,814) |
Deposits and prepayments and other receivables | (166,346) | (445,701) |
Accrued expenses and other payables | 13,635 | 3,252 |
Lease liabilities | 0 | (9,677) |
Tax payable | 71,264 | 129,655 |
Net cash generated from operating activities | 11,310 | 101,453 |
Cash flow from financing activities: | ||
Advance from a director | 19,302 | 16,500 |
Dividends paid | 0 | (186,084) |
Net cash generated from (used in) financing activities | 19,302 | (169,584) |
Effect on exchange rate change on cash and cash equivalents | (8,603) | 6,765 |
Net change in cash and cash equivalents | 22,009 | (61,366) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 40,447 | 269,691 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 62,456 | 208,325 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for tax | 0 | 0 |
Cash paid for interest | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2019 | $ 1,000 | $ 9,000 | $ 5,435 | $ 1,024,195 | $ 1,039,630 |
Beginning balance, shares at Dec. 31, 2019 | 10,000,000 | ||||
Dividends paid | (186,084) | (186,084) | |||
Foreign currency translation adjustment | 4,735 | 4,735 | |||
Net income for the period | 51,429 | 51,429 | |||
Ending balance, value at Mar. 31, 2020 | $ 1,000 | 9,000 | 10,170 | 889,540 | 909,710 |
Ending balance, shares at Mar. 31, 2020 | 10,000,000 | ||||
Beginning balance, value at Dec. 31, 2019 | $ 1,000 | 9,000 | 5,435 | 1,024,195 | 1,039,630 |
Beginning balance, shares at Dec. 31, 2019 | 10,000,000 | ||||
Foreign currency translation adjustment | 5,945 | ||||
Net income for the period | 772,783 | ||||
Ending balance, value at Jun. 30, 2020 | $ 1,000 | 9,000 | 11,380 | 1,610,894 | 1,632,274 |
Ending balance, shares at Jun. 30, 2020 | 10,000,000 | ||||
Beginning balance, value at Mar. 31, 2020 | $ 1,000 | 9,000 | 10,170 | 889,540 | 909,710 |
Beginning balance, shares at Mar. 31, 2020 | 10,000,000 | ||||
Foreign currency translation adjustment | 1,210 | 1,210 | |||
Net income for the period | 721,354 | 721,354 | |||
Ending balance, value at Jun. 30, 2020 | $ 1,000 | 9,000 | 11,380 | 1,610,894 | 1,632,274 |
Ending balance, shares at Jun. 30, 2020 | 10,000,000 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 2,811 | 332,189 | 10,573 | 4,483,462 | 4,829,035 |
Beginning balance, shares at Dec. 31, 2020 | 28,110,000 | ||||
Foreign currency translation adjustment | (13,766) | (13,766) | |||
Net income for the period | 107,312 | 107,312 | |||
Ending balance, value at Mar. 31, 2021 | $ 2,811 | 332,189 | (3,193) | 4,590,774 | 4,922,581 |
Ending balance, shares at Mar. 31, 2021 | 28,110,000 | ||||
Beginning balance, value at Dec. 31, 2020 | $ 2,811 | 332,189 | 10,573 | 4,483,462 | 4,829,035 |
Beginning balance, shares at Dec. 31, 2020 | 28,110,000 | ||||
Foreign currency translation adjustment | (8,009) | ||||
Net income for the period | 414,307 | ||||
Ending balance, value at Jun. 30, 2021 | $ 2,811 | 332,189 | 2,564 | 4,897,769 | 5,235,333 |
Ending balance, shares at Jun. 30, 2021 | 28,110,000 | ||||
Beginning balance, value at Mar. 31, 2021 | $ 2,811 | 332,189 | (3,193) | 4,590,774 | 4,922,581 |
Beginning balance, shares at Mar. 31, 2021 | 28,110,000 | ||||
Foreign currency translation adjustment | 5,757 | 5,757 | |||
Net income for the period | 306,995 | 306,995 | |||
Ending balance, value at Jun. 30, 2021 | $ 2,811 | $ 332,189 | $ 2,564 | $ 4,897,769 | $ 5,235,333 |
Ending balance, shares at Jun. 30, 2021 | 28,110,000 |
DESCRIPTION OF BUSINESS AND ORG
DESCRIPTION OF BUSINESS AND ORGANIZATION | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS AND ORGANIZATION | NOTE – 1 DESCRIPTION OF BUSINESS AND ORGANIZATION Luduson G Inc. was organized under the laws of the State of Delaware on March 6, 2014. The Company changed its current name on July 15, 2020. Description of subsidiaries Description of Subsidiaries Name Place of incorporation and kind of legal entity Principal activities and place of operation Particulars of registered/paid up share capital Effective interest held Luduson Holding Company Limited British Virgin Island Investment holding 10,000 ordinary shares at US$1 par value 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"). |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE – 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying financial statements and notes. · Basis of presentation These accompanying condensed consolidated financial statements have been prepared in U.S. Dollars in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included. Operating results for the interim period ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis, and the financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on May 25, 2021. · Use of estimates and assumptions In preparing these condensed 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 periods reported. Actual results may differ from these estimates. · Basis of consolidation The condensed 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 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 and Six months or less as of the purchase date of such investments. · 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 June 30, 2021 and December 31, 2020, there was no · 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: Schedule of property and equipment useful lives Expected useful lives Computer equipment 3 Furniture and equipment 5 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. Depreciation expense for the three months ended June 30, 2021 and 2020 were $ 39,700 1,257 Depreciation expense for the six months ended June 30, 2021 and 2020 were $ 79,443 2,510 · Revenue recognition The Company adopted Accounting Standards Codification (“ASC ”) 606 – Revenue from Contracts with Customers • 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. · 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 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 six months ended June 30, 2021 and 2020. · 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 six months ended June 30, 2021 and 2020: Schedule of translation rates June 30, 2021 June 30, 2020 Period-end HKD:US$ exchange rate 0.12878 0.12903 Period average HKD:US$ exchange rate 0.12885 0.12885 · Comprehensive income ASC Topic 220, “ Comprehensive Income · 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 condensed 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 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 condensed 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 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, prepayments and other receivables and operating lease right-of-use assets approximate their fair values because of the short maturity of these instruments. · Recent accounting pronouncements In September 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments – Credit Losses (Topic 326)” On January 1, 2020, the Company adopted ASU No. 2017-04, “ Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment On January 1, 2020, the Company adopted ASU No. 2018-13, “ Fair Value Measurements (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement” All new accounting pronouncements issued but not yet effective are not expected to have a material impact on our results of operations, cash flows or financial position with the exception of the updated previously disclosed above, there have been no new accounting pronouncements not yet effective that have significance to the condensed consolidated financial statements. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE – 3 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 six months ended June 30, 2021 and 2020. Schedule of accounts receivable June 30, 2021 December 31, 2020 (Audited) Accounts receivable, cost $ 4,900,739 $ 4,499,746 Less: allowance for doubtful accounts – – Accounts receivable, net $ 4,900,739 $ 4,499,746 The Company expects these balances to be recovered in the next 12 months. Up to August 12, 2021, the Company has subsequently recovered from approximately 1% of accounts receivable as of June 30, 2021. |
DEPOSITS, PREPAYMENTS AND OTHER
DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES | NOTE – 4 DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES Deposits, prepayments and other receivables consisted of the following: Schedule of other receivables June 30, 2021 December 31, 2020 (Audited) Prepayments for business project $ 306,607 $ 139,414 Prepayments for vending machine 521,571 522,413 Rental deposit 3,220 3,225 $ 831,398 $ 665,052 Purchase deposits represent deposit payments made to vendors for procurement of equipment, which are interest-free, unsecured and relieved against accounts payable when goods are received by the Company. |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE – 5 STOCKHOLDERS’ EQUITY Authorized shares As of June 30, 2021 and December 31, 2020, 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 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 2,500,000 500,000 4.00 500,000 5.00 500,000 6.00 500,000 7.00 500,000 8.00 As of June 30, 2021, no warrants have been exercised. Issued and outstanding shares As of June 30, 2021 and December 31, 2020, 28,110,000 common shares issued and outstanding, and 2,500,000 warrants to acquire common shares issued and outstanding. |
INCOME TAX
INCOME TAX | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE – 6 INCOME TAX The Company mainly operates in Hong Kong that is subject to taxes in the governing jurisdictions in which it operates. The effective tax rate in the period presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate, as follows: 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 six months ended June 30, 2021 and 2020 is as follows: Reconciliation of income taxes Six months ended June 30, 2021 2020 Income before income taxes $ 485,571 $ 918,938 Statutory income tax rate 16.5% 16.5% Income tax expense at statutory rate 80,119 151,625 Tax effect of non-deductible items 13,108 1,897 Tax effect of deductible items (703 ) (28 ) Tax holiday (21,260 ) (23,839 ) Income tax expense $ 71,264 $ 129,655 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE – 7 RELATED PARTY TRANSACTIONS Apart from the transactions and balances detailed elsewhere in these accompanying condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented. |
CONCENTRATIONS OF RISK
CONCENTRATIONS OF RISK | 6 Months Ended |
Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS OF RISK | NOTE – 8 CONCENTRATIONS OF RISK The Company is exposed to the following concentrations of risk: (a) Major customers For the three and six months ended June 30, 2021 and 2020, the individual customer who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at period-end dates, are presented as follows: Concentrations of risk Three months ended June 30, 2021 June 30, 2021 Customer Revenues Percentage Accounts Customer A $ 386,463 84% $ 2,343,210 Customer B 38,646 8% 1,438,790 Customer C 38,646 8% 1,113,330 Total: $ 463,755 100% Total: $ 4,895,330 Three months ended June 30, 2020 June 30, 2020 Customer Revenues Percentage Accounts Customer A Total: $ 928,913 91% Total: $ 916,107 Six months ended June 30, 2021 June 30, 2021 Customer Revenues Percentage Accounts Customer A $ 502,513 76% $ 2,343,210 Customer B 77,309 12% 1,438,790 Customer C 77,309 12% 1,113,330 Total: $ 657,131 100% Total: $ 4,895,330 Six months ended June 30, 2020 June 30, 2020 Customer Revenues Percentage Accounts Customer A $ 966,404 86% $ 916,107 (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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 9. COMMITMENTS AND CONTINGENCIES As of June 30, 2021, the Company has no material commitments or contingencies. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 10. SUBSEQUENT EVENTS In accordance with ASC Topic 855, “ Subsequent Events |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | · Basis of presentation These accompanying condensed consolidated financial statements have been prepared in U.S. Dollars in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included. Operating results for the interim period ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis, and the financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on May 25, 2021. |
Use of estimates and assumptions | · Use of estimates and assumptions In preparing these condensed 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 periods reported. Actual results may differ from these estimates. |
Basis of consolidation | · Basis of consolidation The condensed 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 | · 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 and Six months or less as of the purchase date of such investments. |
Accounts receivable | · 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 June 30, 2021 and December 31, 2020, there was no |
Plant and equipment | · 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: Schedule of property and equipment useful lives Expected useful lives Computer equipment 3 Furniture and equipment 5 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. Depreciation expense for the three months ended June 30, 2021 and 2020 were $ 39,700 1,257 Depreciation expense for the six months ended June 30, 2021 and 2020 were $ 79,443 2,510 |
Revenue recognition | · Revenue recognition The Company adopted Accounting Standards Codification (“ASC ”) 606 – Revenue from Contracts with Customers • 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. |
Income taxes | · 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 | · 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 six months ended June 30, 2021 and 2020. |
Foreign currencies translation | · Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the 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 six months ended June 30, 2021 and 2020: Schedule of translation rates June 30, 2021 June 30, 2020 Period-end HKD:US$ exchange rate 0.12878 0.12903 Period average HKD:US$ exchange rate 0.12885 0.12885 |
Comprehensive income | · Comprehensive income ASC Topic 220, “ Comprehensive Income |
Commitments and contingencies | · 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 condensed 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 | · 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, prepayments and other receivables and operating lease right-of-use assets approximate their fair values because of the short maturity of these instruments. |
Recent accounting pronouncements | · Recent accounting pronouncements In September 2016, the FASB issued ASU No. 2016-13, “ Financial Instruments – Credit Losses (Topic 326)” On January 1, 2020, the Company adopted ASU No. 2017-04, “ Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment On January 1, 2020, the Company adopted ASU No. 2018-13, “ Fair Value Measurements (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement” All new accounting pronouncements issued but not yet effective are not expected to have a material impact on our results of operations, cash flows or financial position with the exception of the updated previously disclosed above, there have been no new accounting pronouncements not yet effective that have significance to the condensed consolidated financial statements. |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Schedule of accounts receivable | Schedule of accounts receivable June 30, 2021 December 31, 2020 (Audited) Accounts receivable, cost $ 4,900,739 $ 4,499,746 Less: allowance for doubtful accounts – – Accounts receivable, net $ 4,900,739 $ 4,499,746 |
DEPOSITS, PREPAYMENTS AND OTH_2
DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Schedule of other receivables | Schedule of other receivables June 30, 2021 December 31, 2020 (Audited) Prepayments for business project $ 306,607 $ 139,414 Prepayments for vending machine 521,571 522,413 Rental deposit 3,220 3,225 $ 831,398 $ 665,052 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of income taxes | Reconciliation of income taxes Six months ended June 30, 2021 2020 Income before income taxes $ 485,571 $ 918,938 Statutory income tax rate 16.5% 16.5% Income tax expense at statutory rate 80,119 151,625 Tax effect of non-deductible items 13,108 1,897 Tax effect of deductible items (703 ) (28 ) Tax holiday (21,260 ) (23,839 ) Income tax expense $ 71,264 $ 129,655 |
CONCENTRATIONS OF RISK (Tables)
CONCENTRATIONS OF RISK (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentrations of risk | Concentrations of risk Three months ended June 30, 2021 June 30, 2021 Customer Revenues Percentage Accounts Customer A $ 386,463 84% $ 2,343,210 Customer B 38,646 8% 1,438,790 Customer C 38,646 8% 1,113,330 Total: $ 463,755 100% Total: $ 4,895,330 Three months ended June 30, 2020 June 30, 2020 Customer Revenues Percentage Accounts Customer A Total: $ 928,913 91% Total: $ 916,107 Six months ended June 30, 2021 June 30, 2021 Customer Revenues Percentage Accounts Customer A $ 502,513 76% $ 2,343,210 Customer B 77,309 12% 1,438,790 Customer C 77,309 12% 1,113,330 Total: $ 657,131 100% Total: $ 4,895,330 Six months ended June 30, 2020 June 30, 2020 Customer Revenues Percentage Accounts Customer A $ 966,404 86% $ 916,107 |
DESCRIPTION OF BUSINESS AND O_2
DESCRIPTION OF BUSINESS AND ORGANIZATION (Details) | Jun. 30, 2021 |
Luduson Holding [Member] | |
Ownership percentage | 100.00% |
Luduson Entertainment [Member] | |
Ownership percentage | 100.00% |
G Music Asia [Member] | |
Ownership percentage | 100.00% |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - useful lives) | 6 Months Ended |
Jun. 30, 2021 | |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property useful lives | 3 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property useful lives | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Translation rates) - Hong Kong, Dollars | Jun. 30, 2021 | Jun. 30, 2020 |
Period End [Member] | ||
Intercompany Foreign Currency Balance [Line Items] | ||
Translation rate | 0.12878 | 0.12903 |
Period Average [Member] | ||
Intercompany Foreign Currency Balance [Line Items] | ||
Translation rate | 0.12885 | 0.12885 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||||
Allowance for doubtful accounts | $ 0 | $ 0 | $ 0 | ||
Depreciation | $ 39,700 | $ 1,257 | $ 79,443 | $ 2,510 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Receivables [Abstract] | ||
Accounts receivable, cost | $ 4,900,739 | $ 4,499,746 |
Less: allowance for doubtful accounts | ||
Accounts receivable, net | $ 4,900,739 | $ 4,499,746 |
DEPOSITS, PREPAYMENTS AND OTH_3
DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES (Details) - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 |
Deposits, prepayments and other receivables | $ 831,398 | $ 665,052 |
Prepayments Business [Member] | ||
Deposits, prepayments and other receivables | 306,607 | 139,414 |
Prepayments For Vending Machine [Member] | ||
Deposits, prepayments and other receivables | 521,571 | 522,413 |
Rental Deposit [Member] | ||
Deposits, prepayments and other receivables | $ 3,220 | $ 3,225 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) | Jun. 30, 2021$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants outstanding | 2,500,000 |
A Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants outstanding | 500,000 |
Warrant exercise price | $ / shares | $ 4 |
B Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants outstanding | 500,000 |
Warrant exercise price | $ / shares | $ 5 |
C Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants outstanding | 500,000 |
Warrant exercise price | $ / shares | $ 6 |
D Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants outstanding | 500,000 |
Warrant exercise price | $ / shares | $ 7 |
E Warrants [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants outstanding | 500,000 |
Warrant exercise price | $ / shares | $ 8 |
INCOME TAX (Details)
INCOME TAX (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 485,571 | $ 918,938 | ||
Statutory income tax rate | 16.50% | 16.50% | ||
Income tax expense at statutory rate | $ 80,119 | $ 151,625 | ||
Tax effect of non-deductible items | 13,108 | 1,897 | ||
Tax effect of deductible items | (703) | (28) | ||
Tax holiday | (21,260) | (23,839) | ||
Income tax expense | $ 58,424 | $ 124,938 | $ 71,264 | $ 129,655 |
CONCENTRATIONS OF RISK (Details
CONCENTRATIONS OF RISK (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | |||||
Revenues | $ 463,755 | $ 1,024,510 | $ 657,131 | $ 1,121,029 | |
Accounts receivable | 4,900,739 | 4,900,739 | $ 4,499,746 | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||
Concentration Risk [Line Items] | |||||
Revenues | $ 386,463 | $ 928,913 | $ 502,513 | $ 966,404 | |
Concentration Risk, Percentage | 84.00% | 91.00% | 76.00% | 86.00% | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||||
Concentration Risk [Line Items] | |||||
Revenues | $ 38,646 | $ 77,309 | |||
Concentration Risk, Percentage | 8.00% | 12.00% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||
Concentration Risk [Line Items] | |||||
Revenues | $ 38,646 | $ 77,309 | |||
Concentration Risk, Percentage | 8.00% | 12.00% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Total Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Revenues | $ 463,755 | $ 657,131 | |||
Concentration Risk, Percentage | 100.00% | 100.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts receivable | $ 2,343,210 | $ 916,107 | $ 2,343,210 | $ 916,107 | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts receivable | 1,438,790 | 1,438,790 | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts receivable | 1,113,330 | 1,113,330 | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Total Customers [Member] | |||||
Concentration Risk [Line Items] | |||||
Accounts receivable | $ 4,895,330 | $ 4,895,330 |