Cover
Cover | 3 Months Ended |
Mar. 31, 2023 shares | |
Document Type | 10-Q |
Amendment Flag | false |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Mar. 31, 2023 |
Document Fiscal Period Focus | Q1 |
Document Fiscal Year Focus | 2023 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 001-40519 |
Entity Registrant Name | MicroCloud Hologram Inc. |
Entity Central Index Key | 0001841209 |
Entity Tax Identification Number | 00-0000000 |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | Room 302 |
Entity Address, Address Line Two | Building A |
Entity Address, Address Line Three | Zhong Ke Na Neng Building |
Entity Address, Address Line Four | Yue Xing Sixth Road |
Entity Address, Address Line Five | Nanshan District |
Entity Address, City or Town | Shenzhen |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 518000 |
Country Region | 86 |
City Area Code | 0755 |
Local Phone Number | 2291 2036 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 50,812,035 |
Ordinary Shares, par value $0.0001 per share | |
Title of 12(b) Security | Ordinary Shares, par value $0.0001 per share |
Trading Symbol | HOLO |
Security Exchange Name | NASDAQ |
Warrants, each warrant exercisable for one-half ordinary share at an exercise price of $11.50 per share | |
Title of 12(b) Security | Warrants, each warrant exercisable for one-half ordinary share at an exercise price of $11.50 per share |
Trading Symbol | HOLOW |
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) ¥ in Thousands | Mar. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 20,328,906 | $ 21,910,338 |
Accounts receivable, net | 9,581,046 | 11,650,012 |
Prepayments and other current assets | 880,151 | 894,479 |
Due from related parties | 8,740 | |
Inventories, net | 274,828 | 254,879 |
Total current assets | 31,064,931 | 34,718,448 |
NON-CURRENT ASSETS | ||
Property and equipment, net | 245,863 | 238,920 |
Prepayment and deposits, net | 77,509 | 60,460 |
Intangible assets, net | 2,006,803 | 2,229,386 |
Investments in unconsolidated entities | 87,367 | |
Right-of-use assets, net | 531,765 | 589,301 |
Goodwill | 3,080,537 | 3,067,317 |
Total non-current assets | 6,029,844 | 6,185,384 |
Total assets | 37,094,775 | 40,903,832 |
CURRENT LIABILITIES | ||
Accounts payable | 8,850,864 | 8,874,369 |
Advance from customers | 374,715 | 493,539 |
Other payables and accrued liabilities | 1,969,638 | 1,964,501 |
Due to related parties | 50,745 | |
Operating lease liabilities - current | 226,213 | 231,483 |
Loan payable | 59,444 | |
Taxes payable | 82,547 | 87,319 |
Total current liabilities | 11,503,977 | 11,761,400 |
NON-CURRENT LIABILITIES | ||
Operating lease liabilities - noncurrent | 323,708 | 373,298 |
Deferred tax liabilities | 132,777 | 160,430 |
Warrant liabilities | 61,709 | 61,709 |
Total other liabilities | 518,194 | 595,437 |
Total liabilities | 12,022,171 | 12,356,837 |
SHAREHOLDERS EQUITY | ||
Ordinary shares, $0.0001 par value | 5,081 | 5,081 |
Additional paid-in capital | 36,701,010 | 36,701,010 |
Retained earnings | (12,619,652) | (9,119,628) |
Statutory reserves | 1,722,262 | 1,722,262 |
Accumulated other comprehensive loss | (664,865) | (805,112) |
Total MICROCLOUD HOLOGRAM INC. shareholders equity | 25,143,836 | 28,503,613 |
Non-controlling interest | (71,232) | 43,382 |
Total Equity | 25,072,604 | 28,546,995 |
Total liabilities and shareholders equity | $ 37,094,775 | $ 40,903,832 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME(Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
OPERATING REVENUES | ||
Total Operating Revenues | $ 6,579,731 | $ 24,215,211 |
COST OF REVENUES | ||
Total Cost of Revenues | (2,694,709) | (13,429,012) |
GROSS PROFIT | 3,885,022 | 10,786,199 |
OPERATING EXPENSES | ||
Provision for doubtful accounts | (2,119,725) | (20,534) |
Selling expenses | (354,583) | (252,503) |
General and administrative expenses | (1,108,925) | (684,577) |
Research and development expenses | (4,106,916) | (6,553,058) |
Total operating expenses | (7,690,149) | (7,510,672) |
(LOSS)/INCOME FROM OPERATIONS | (3,805,127) | 3,275,527 |
OTHER INCOME/(EXPENSE) | ||
Finance income, net | 104,183 | 35,098 |
Other income, net | 57,855 | 38,172 |
Total other income, net | 162,038 | 73,270 |
(LOSS)/PROFIT BEFORE INCOME TAXES | (3,643,089) | 3,348,797 |
BENEFIT FOR INCOME TAX | 28,450 | 56,710 |
NET (LOSS)/INCOME | (3,614,639) | 3,405,507 |
LESS: NET INCOME/(LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (114,614) | 9,523 |
NET (LOSS)/INCOME ATTRIBUTABLE TO MICROCLOUD HOLOGRAM INC. ORDINARY SHAREHOLDERS | (3,500,025) | 3,395,984 |
OTHER COMPREHENSIVE INCOME/(LOSS) | ||
Foreign currency translation adjustment | (1,226) | (8,136) |
COMPREHENSIVE (LOSS)/INCOME | (3,615,865) | 3,397,371 |
LESS: COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (114,614) | 9,523 |
COMPREHENSIVE (LOSS)/INCOME ATTRIBUTABLE TO MICROCLOUD HOLOGRAM INC. ORDINARY SHAREHOLDERS | $ (3,501,251) | $ 3,387,848 |
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES | ||
Weighted average number of ordinary shares outstanding-Basic and diluted | 20,071,595 | 132,000,000 |
EARNINGS PER SHARE ATTRIBUTABLE TO MICROCLOUD HOLOGRAM INC. ORDINARY SHAREHOLDERS | ||
(Loss)/Earnings per ordinary share - Basic and diluted | $ (0.17) | $ 0.03 |
Products [Member] | ||
OPERATING REVENUES | ||
Total Operating Revenues | $ 1,055,701 | $ 11,678,900 |
COST OF REVENUES | ||
Total Cost of Revenues | (721,648) | (11,090,989) |
Services [Member] | ||
OPERATING REVENUES | ||
Total Operating Revenues | 5,524,030 | 12,536,311 |
COST OF REVENUES | ||
Total Cost of Revenues | $ (1,973,061) | $ (2,338,023) |
UNAUDITED CONSOLIDATED STATEMEN
UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - 3 months ended Mar. 31, 2023 - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings Statutory [Member] | Retained Earnings Unrestricted [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance, value at Dec. 31, 2022 | $ 5,081 | $ 36,701,010 | $ 1,722,262 | $ (9,119,628) | $ (805,112) | $ 43,382 | $ 28,546,995 |
Beginning balance, shares at Dec. 31, 2022 | 50,812,035 | ||||||
Net (loss)/income | (3,500,024) | (114,614) | (3,614,638) | ||||
Foreign currency translation | 140,247 | 140,247 | |||||
Ending balance, value at Mar. 31, 2023 | $ 5,081 | $ 36,701,010 | $ 1,722,262 | $ (12,619,652) | $ (664,865) | $ (71,232) | $ 25,072,604 |
Ending balance, shares at Mar. 31, 2023 | 50,812,035 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net (loss)/income | $ (3,614,638) | $ 3,405,507 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 258,286 | 260,069 | |
Amortization of operating lease right-of-use assets | 60,298 | 61,210 | |
Provision for doubtful accounts | 2,119,725 | 20,534 | $ 442,335 |
Deferred tax benefits | (28,449) | (73,309) | |
Provision for inventory reserve | 22,753 | ||
Interest income | (39,603) | ||
Loss on disposal of fixed assets | 518 | ||
Change in operating assets and liabilities: | |||
Accounts receivable | 7,290 | (5,042,206) | |
Prepayment and other current assets | 18,250 | (779,959) | |
Inventories | (18,920) | 2,187 | |
Prepayments and deposits | (16,851) | (12,748) | |
Accounts payable | (61,982) | 2,631,067 | |
Operating lease liabilities | (57,679) | (56,115) | |
Advance from customers | (121,398) | 162,220 | |
Other payables and accrued liabilities | (3,342) | 38,174 | |
Taxes payable | (5,167) | (328,324) | |
Net cash (used in)/provided by operating activities | (1,464,577) | 271,975 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Short-term investment in time deposit | (1,575,746) | ||
Loan to third parties | (1,575,746) | ||
Loan repayment from third parties | 2,100,381 | ||
Investments in unconsolidated entities | (87,690) | ||
Purchases of property and equipment | (31,170) | (706) | |
Net cash provided by/(used in) investing activities | (118,860) | (1,051,817) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Amounts advanced from related parties | 63,562 | ||
Amounts advanced to related parties | (3,196) | ||
Repayments from related parties | 8,810 | ||
Repayments to related parties | (51,152) | (58) | |
Repayments of third-party loan | (59,921) | ||
Proceeds of third-party loan | 78,787 | ||
Net cash provided by/(used in) financing activities | (102,263) | 139,095 | |
EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS | 104,268 | (8,906) | |
CHANGE IN CASH AND CASH EQUIVALENTS | (1,581,432) | (649,653) | |
CASH AND CASH EQUIVALENTS, beginning of period | 21,910,338 | 7,564,681 | 7,564,681 |
CASH AND CASH EQUIVALENTS, end of period | 20,328,906 | 6,915,028 | $ 21,910,338 |
SUPPLEMENTAL CASH FLOW INFORMATION: | |||
Cash paid for income tax | 287 | ||
Cash paid for interest expense | 790 | ||
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||
Initial recognition of right-of-use assets and lease liabilities | $ 826,272 | $ 890,864 |
Nature of business and organiza
Nature of business and organization | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Nature of business and organization | Note 1 — Nature of business and organization MicroCloud Hologram Inc. (formerly known as Golden Path Acquisition Corporation (“Golden Path” or “the Company”)), a Cayman Islands exempted company, is a leading holographic digitalization technology service provider in China, which is committed to providing first-class holographic technology services to the customers worldwide. On September 16, 2022, the Company consummated the previously announced business combination pursuant to the Merger Agreement, by and among Golden Path, Golden Path Merger Sub, and MC. Pursuant to the Merger Agreement, MC merged with Golden Path Merger Sub, survived the merger and continued as the surviving company and a wholly owned subsidiary of Golden Path (the “Merger”, and, collectively with the other transactions described in the Merger Agreement, the “Business Combination”). Upon the closing of the Business Combination, Golden Path changed its name to MicroCloud Hologram Inc., pursuant to which Golden Path issued 44,554,455 2,182,470 50,812,035 6,020,500 33.2 As a result of the consummation of the Business Combination, MC is now a wholly owned subsidiary of the Company, which has changed its name to MicroCloud Hologram Inc. Following the Closing, on September 19, 2022, the ordinary shares and public warrants outstanding upon the Closing began trading on the NASDAQ Stock Exchange (the “NASDAQ”) under the symbols “HOLO” and “HOLOW,” respectively. The transaction was accounted for as a “reverse recapitalization” in accordance with accounting principles generally accepted in the United States (“GAAP”) because the primary assets of Golden Path would be nominal following the close of the Merger. Under this method of accounting, Golden Path was treated as the “acquired” company for financial reporting purposes and MC was determined to be the accounting acquirer based on the terms of the Merger and other factors including: (i) MC’s stockholders have a majority of the voting power of the combined company, (ii) MC comprises a majority of the governing body of the combined company, and MC’s senior management comprises all of the senior management of the combined company, and (iii) MC comprises all of the ongoing operations of the combined entity. Accordingly, for accounting purposes, this transaction was treated as the equivalent of the Company issuing shares for the net assets of Golden Path, accompanied by a recapitalization. The shares and net loss per common share, prior to the Reverse Recapitalization, have been retroactively restated as shares reflecting the Exchange Ratio established in the Reverse Recapitalization (one Golden Path share for one Company share). The net assets of Golden Path were recorded at historical costs, with no goodwill or other intangible assets recorded. Operations prior to the Reverse Recapitalization are those of MC. The accompanying consolidated financial statements reflect the activities of the Company and each of the following entities as of March 31, 2023: Schedule of accompanying consolidated financial statements Name Background Ownership MC Hologram Inc (“MC”) - A Cayman Islands company 100% owned by MicroCloud - Formed on November 10, 2020 - Registered capital of USD 50,000 Quantum Edge HK Limited (“Mengyun HK”) - A Hong Kong company 100% owned by MC - Formed on November 25, 2020 - Registered capital of HK 10,000 (USD 1,290) - A holding company Beijing Xihuiyun Technology Co., Ltd (“Beijing Xihuiyun”) - PRC limited liability company 100% owned by Mengyun HK - Formed on May 11, 2021 - Registered capital of RMB 207,048,000 (USD 30,000,000) - A holding company Shanghai Mengyun Holographic Technology Co., Ltd. (“Shanghai Mengyun”) - A PRC limited liability company 81.63% owned by Beijing Xihuiyun and 18.37% owned by Mengyun HK - Formed on March 24, 2016 - Registered capital of RMB 27,000,000 (USD 4,316,665) - Primarily engages in holographic integrated solutions. Shenzhen Mengyun Holographic Technology Co., Ltd. (“Shenzhen Mengyun”) - A PRC limited liability company 100% owned by Shanghai Mengyun - Formed on March 15, 2016 - Registered capital of RMB 10,000,000 (USD 1,538,461) - Primarily engages in holographic integrated solutions. Shenzhen Qianhai Youshi Technology Co., Ltd. (“Qianhai Youshi”) - A PRC limited liability company 100% owned by Shanghai Mengyun - Formed on August 14, 2014 - Registered capital of RMB 10,000,000 (USD 1,538,461) - Primarily engages in holographic content sales and SDK software services. Shenzhen Yijia Network Technology Co., Ltd. (“Yijia Network”) - A PRC limited liability company 100% owned by Qianhai Youshi - Formed on September 25, 2008 - Registered capital of RMB 10,000,000 (USD 1,538,461) - Primarily engages in holographic content sales and SDK software services. Name Background Ownership Horgos Youshi Network Technology Co., Ltd. (“Horgos Youshi”) - A PRC limited liability company 100% owned by Qianhai Youshi - Formed on November 2, 2020 - Registered capital of RMB 1,000,000 (USD 153,846) - Primarily engages in holographic content sales and SDK software services. Horgos Weiyi Software Technology Co., Ltd. (“Horgos Weiyi”) - A PRC limited liability company 100% owned by Shenzhen Mengyun - Formed on September 6, 2016 - Registered capital of RMB 10,000,000 (USD 1,538,461) - Primarily engages in holographic integrated solutions. Shenzhen BroadVision Technology Co., Ltd. (“Shenzhen Bowei”) - A PRC limited liability company 100% owned by Shenzhen Mengyun - Formed on April 12, 2016 - Registered capital of RMB 10,000,000 (USD 1,538,461) - Primarily engages in holographic PCBA solutions. Mcloudvr Software Network Technology HK Co., Limited (“Mcloudvr HK”) - A Hong Kong company 100% owned by Shenzhen Mengyun - Formed on February 2, 2016 - Registered capital of HKD 100,000 (USD 12,882) - Primarily engages in holographic integrated solutions. Shenzhen Tianyuemeng Technology Co., Ltd. (“Shenzhen Tianyuemeng”) - A PRC limited liability company 100% owned by Shenzhen Mengyun - Formed on January 6, 2014 - Registered capital of RMB 20,000,000 (USD 3,076,922) - Primarily engages in holographic advertising services. Shenzhen Yunao Hongxiang Technology Co., Ltd. (“Shenzhen Yunao”) - A PRC limited liability company 100% owned by Shenzhen Mengyun - Formed on December 3, 2021 - Registered capital of RMB 5,000,000 (USD 784,671) - Advertising service Broadvision Intelligence (Hong Kong), Ltd. (“Broadvision HK”) - A Hong Kong company 100% owned by Shenzhen Bowei - Formed on November 5, 2020 - Registered capital of HKD 10,000 (USD 1,288) - No operation Horgos BroadVision Technology Co., Ltd. (“Horgos Bowei”) - A PRC limited liability company 100% owned by Shenzhen Bowei - Formed on November 4, 2020 - Registered capital of RMB 1,000,000 (USD 153,846) - Primarily engages in holographic PCBA solutions. Name Background Ownership Horgos Tianyuemeng Technology Co., Ltd. (“Horgos Tianyuemeng”) - A PRC limited liability company 100% owned by Shenzhen Tianyuemeng - Formed on October 23, 2020 - Registered capital of RMB 1,000,000 (USD 153,846) - Primarily engages in SDK software services. Horgos Tianyuemeng Technology Co., Ltd.-Shenzhen Branch (“Horgos Tianyuemeng-SZ”) - A PRC limited liability company 100% owned by Horgos Tianyuemeng - Formed on March 19, 2021 - Registered capital of RMB 1,000,000 (USD 153,846) - No operation - Dissolved on December 10, 2021 Shanghai Mengyun Quanyou Vision Technology Co., Ltd (“Shanghai Quanyou”) - A PRC limited liability company 100% owned by Shanghai Mengyun - Formed on June 24, 2021 - Registered capital of RMB 1,000,000 (USD 153,846) - No operation - Dissolved on September 1, 2021 Ocean Cloud Technology Co., Limited. (“Ocean HK”) - A Hong Kong company 56% owned by Mcloudvr HK - Formed on November 4, 2021 - Registered capital of HKD 10,000 (USD 1,288) - No operation Shenzhen Haiyun Xinsheng Technology Co., Ltd. (“Shenzhen Haiyun”) - A PRC limited liability company 100% owned by Ocean HK - Formed on December 3, 2021 - Registered capital of RMB 50,000,000 (USD 7,846,707) - No operation Shenzhen Tata Mutual Entertainment Information Technology Co., Ltd. (“Shenzhen Tata”) - A PRC limited liability company 100% owned by Shenzhen Haiyun - Formed on January 16, 2020 - Sold on June 30, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Game promotion service Shenzhen Youmi Technology Co., Ltd. (“Shenzhen Youmi”) - A PRC limited liability company 100% owned by Shenzhen Haiyun - Formed on March 17, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Game promotion and advertising service Shenzhen Yushian Technology Co., Ltd. (“Shenzhen Yushi”) - A PRC limited liability company 100% owned by Shenzhen Haiyun - Formed on February 18, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Advertising service Name Background Ownership Horgos Tata Mutual Entertainment Information Technology Co., Ltd. (“Horgos Tata”) - A PRC limited liability company 100% owned by Shenzhen Tata - Formed on March 22, 2022 - Sold on June 30, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Game promotion service Horgos Youmi Technology Co., Ltd. (“Horgos Youmi”) - A PRC limited liability company 100% owned by Shenzhen Youmi - Formed on January 29, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Advertising service Horgos Yushian Technology Co., Ltd. (“Horgos Yushi”) - A PRC limited liability company 100% owned by Shenzhen Yushi - Formed on March 24, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Advertising service Kashgar Youshi Information Technology Co., Ltd. (“Kashgar Youshi”) - A PRC limited liability company 100% owned by Qianhai Youshi - Formed on May 5, 2016 - Registered capital of RMB 5,000,000 (USD 769,230) - Primarily engages in holographic content sales and SDK software services. |
Summary of significant accounti
Summary of significant accounting policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Note 2 — Summary of significant accounting policies Liquidity In assessing the Company’s liquidity, the Company monitors and analyses its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Cash flow from operations, advance from shareholders, and proceeds from third party loan have been utilized to finance the working capital requirements of the Company. As of March 31, 2023, the Company had cash of $ 20.3 million. The Company’s working capital was approximately $ 21.5 Basis of presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission, regarding financial reporting, and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operation results. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of results to be expected for any other three months period or for the full year of 2023. Accordingly, these statements should be read in conjunction with the Company’s audited financial statements and note thereto as of and for the year ended December 31, 2022. Principles of consolidation The unaudited consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. Use of estimates and assumptions The preparation of unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited consolidated financial statements include the useful lives of property and equipment and intangible assets, impairment of long-lived assets and goodwill, allowance for doubtful accounts, revenue recognition, inventory reserve, purchase price allocation for business combination, uncertain tax position, and deferred taxes. Actual results could differ from these estimates. Foreign currency translation and transaction The functional currency of MicroCloud, MC, Mengyun HK, Mcloudvr HK and Broadvision HK is in US dollars and the functional currency of the Company’s other subsidiaries are RMB, as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 “Foreign Currency Matters.” Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange in place at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the unaudited consolidated statement of operations. In the unaudited consolidated financial statements, the financial information of the Company and other entities located outside of the PRC has been translated into USD. Assets and liabilities of the Company translated from their respective functional currencies to the reporting currency at the exchange rates at the balance sheet dates, equity accounts are translated at historical exchange rates and revenues and expenses are translated at the average exchange rates in effect during the reporting period. The resulting foreign currency translation adjustment are recorded in other comprehensive income (loss). The balance sheet amounts, with the exception of shareholders’ equity for MC, Mengyun HK, Mcloudvr HK and Broadvision HK as of March 31, 2023 and December 31, 2022 were translated at RMB 1.00 to USD 0.1456 USD 0.1450 Convenience translation Translations of balances in the unaudited consolidated balance sheets, consolidated statements of income and consolidated statements of cash flows from RMB into USD as of and for the three months ended March 31, 2023 are solely for the convenience of the reader and were calculated at the rate of RMB 1.00 to USD 0.1456 Cash and cash equivalents Cash and cash equivalents primarily consist of bank deposits with original maturities of six months or less, which are unrestricted as to withdrawal and use. Cash and cash equivalents also consist of funds earned from the Company’s operating revenues which were held at third party platform fund accounts which are unrestricted as to immediate use or withdrawal. The Company maintains most of its bank accounts in the PRC. Accounts receivable, net Accounts receivables include trade accounts due from customers. Accounts are considered overdue after 90 days. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and provides an allowance when necessary. The allowance is based on management’s best estimates of specific losses on individual customer exposures, as well as the historical trends of collections. Account balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is not probable. As of March 31, 2023, and December 31, 2022, the Company has $ 2,820,015 705,060 Inventories, net Inventories are comprised of raw material and finish goods are stated at the lower of cost or net realizable value using the weighted average method. Cost of finished goods comprise direct material and outsourced assembling costs. Management reviews inventories for obsolescence and cost in excess of net realizable value periodically when appropriate and records a reserve against the inventory when the carrying value exceeds net realizable value. As of March 31, 2023 and December 31, 2022, the Company has an allowance of $ 25,694 25,584 Prepayments, other current assets and deposits, net Prepayments and other current assets are mainly payments made to vendors or service providers for purchasing goods or services that have not been received or provided, deposits for rent and utilities and employee advances. This amount is refundable and bears no interest. Prepayment and deposit are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. As of March 31, 2023, and December 31, 2022, the Company made $ 478 481 Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment if applicable. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 5% residual value. The estimated useful lives are as follows: Schedule of estimated useful lives Useful Life Office equipment 3 Mechanical equipment 3 5 Electronic equipment 3 5 The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. Intangible assets, net The Company’s intangible assets with definite useful lives primarily consist of customer relationships, software, and non-competing agreements. Identifiable intangible assets resulting from the acquisitions of subsidiaries accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives of three to ten years. Goodwill Goodwill represents the excess of the consideration paid for an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written down to its fair value and the loss is recognized in the consolidated statements of income and comprehensive income. Impairment losses on goodwill are not reversed. The Company has the option to assess qualitative factors to determine whether it is necessary to perform further impairment testing in accordance with ASC 350-20, as amended by ASU 2017-04. If the Company believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the impairment test described below is required. The Company compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, impairment is recognized for the difference, limited to the amount of goodwill recognized for the reporting unit. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being discounted cash flows. Impairment for long-lived assets Long-lived assets, including property and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. For the three months ended March 31, 2023 and 2022, no Investments in unconsolidated entities The Company’s investments in unconsolidated entities consist of equity investments without readily determinable fair value. The Company follows ASC Topic 321, Investments Equity Securities (“ASC 321”) to account for investments that do not have readily determinable fair value and over which the Company does not have significant influence. The Company uses the measurement alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than temporary. Business combination The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expenses in the Company’s consolidated statements of income and comprehensive income. The results of operations of the acquired business are included in the Company’s operating results from the date of acquisition. Fair value measurement U.S. GAAP regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. U.S. GAAP defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follow: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the unaudited consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. Noncontrolling Interests The Company’s noncontrolling interests represent the minority shareholders’ ownership interests related to the Company’s subsidiaries, including 44% for Ocean HK and its subsidiaries. The noncontrolling interests are presented in the consolidated balance sheets separately from equity attributable to the shareholders of the Company. Noncontrolling interests in the results of the Company are presented on the consolidated statement of income as allocations of the total income or loss for the three months ended March 31, 2023 between noncontrolling interest holders and the shareholders of the Company. Ordinary share Warrants The Company accounts for ordinary share warrants as either equity instruments or liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity Revenue recognition Effective January 1, 2019, the Company adopted ASC Topic 606 using the modified retrospective adoption method. Based on the requirements of ASC Topic 606, revenue is recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. The Company primarily sells its products to hospitals and medical equipment companies. Revenue is recognized when the following 5-step revenue recognition criteria are met: 1) Identify the contract with a customer 2) Identify the performance obligations in the contract 3) Determine the transaction price 4) Allocate the transaction price 5) Recognize revenue when or as the entity satisfies a performance obligation The Company’s revenue recognition policies effective upon the adoption of ASC 606 are as follows: (i) Holographic Solutions a. Holographic Technology LiDAR Products The Company generates LiDAR revenue through selling integrated circuit board embedded with holographic software. The Company typically enters into written contracts with its customer where the rights of the parties, including payment terms, are identified and sales prices to the customers are fixed with no separate sales rebate, discount, or other incentive and no right of return exists on sales of inventory. The Company’s performance obligation is to deliver products according to contract specifications. The Company recognizes product revenue at a point in time when the control of products is transferred to customers. b. Holographic Technology Intelligence Vision software and Technology Development Service The Company generates revenue by developing ADAS software and technology, which are generally on a fixed-priced basis. The Company has no alternative use for the customized software and the Company has an enforceable right to payment for performance completed to date. Revenues from ADAS software development contracts are recognized over time during the contract period based on the Company’s measurement of progress towards completion using input method, which is usually measured by comparing labor hours expended to date to total estimated labor hours needed to satisfy the performance obligation. As of March 31, 2023 and December 31, 2022, the Company’s aggregate amount of transaction price allocated to unsatisfied performance obligation is $ 0 384,489 c. Holographic Technology Licensing and Content Products The Company provides holographic content products and holographic software for music videos, shows, and commercials on a fixed-price basis. These contents and software are generally pre-developed and exist when made available to the customer. Content products are delivered through its website or offline using hard drive. Revenues from licensing and content products are recognized at the point in time when the control of products or services is transferred to customers. No upgrades, maintenance, or any other post-contract customer support are provided. d. Holographic Technology Hardware Sales The Company is a distributer of holographic hardware and generates revenue through resale. In accordance with ASC 606, revenue recognition: principal agent consideration, an entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. Otherwise, the entity is an agent in the transaction. The Company evaluates three indicators of control in accordance with ASU 2016-08: 1) For hardware sales, the Company is the most visible entity to customers and assumes fulfilment risk and risks related to the acceptability of products, including addressing customer complaints directly and handling of product returns or refunds directly. 2) The Company assumes inventory risk after taking the title from vendors and is responsible for product damage during shipment period prior to acceptance of its customers and is also responsible for product return if the customer is not satisfied with the products. 3) The Company determines the resale price of hardware products. 4) The Company is the party that directs the use of the inventory and can prevent the vendor from transferring the product to a customer or to redirect the products to a different customer. After evaluating the above scenario, the Company considers itself the principal of these arrangements and records hardware sales revenue on a gross basis. Hardware sales contracts are on a fixed price basis with no separate sales rebate, discount, or other incentive. Revenue is recognized at a point in time when the Company has delivered products and the acceptance by its customer with no future obligation. The Company generally permits returns of products due to deficits; however, returns are historically insignificant. (ii) Holographic Technology Service Holographic advertisements are the use of holographic technology integrated into advertisements on media platforms and offline display. The Company enters advertising contracts with advertisers to promote merchandises and services where the price, which is generally based on cost per action (“CPA”), is fixed and determinable. The Company provides its advertising service to channel providers where the amounts cost per action are also fixed and determinable. Revenue is recognized at a point of time when agreed actions are performed. The Company considers itself as provider of the services under the CPA model as it has the control of the services at any time before it is transferred to the customers which is evidenced by 1) having a right to a service to be performed by the other party, which gives the Company the ability to direct that party to provide the service to the customers on the Company’s behalf. 2) having discretion in setting the price for the service 3) billing monthly advertising fee directly to customers by settling valid CPA data with customers. Therefore, the Company acts as the principal of these arrangements and reports revenue earned and costs incurred related to these transactions on a gross basis. The Company also provides advertisement services through influencers on social networks. The Company charges advertisers a fixed rate, which is generally a fixed percentage of total value of merchandise sold over a specific period (“GMV”). Revenue is recognized at a point of time when merchandise is sold through social network. The Company’s SDK service is a collection of software development tools in one installable package that enables customers (usually software developers) to add holographic functionality and run holographic advertisements in their APPs or software. SDK contracts are primarily on a fixed rate basis, or cost per SDK Connection. The Company recognizes SDK service revenue at a point in time when a user completes an SDK connection via a designated portal. Service fees are generally billed monthly based on per-connection basis. The Company also provides game promotion services for game developers and licensed game operators. The Company acted as a marketing channel that it will promote the games through in-house or third-party platforms, from which users can download the mobile and purchase virtual currency for in game premium features to enhance their game playing experience. The Company contracts with third party payment platforms for collection services offered to game players who have purchased virtual currency. The game developers, licensed operator, payment platforms and the marketing channels are entitled to profit sharing based on a prescribed percentage of the gross amount charged to the game players. The Company’s obligation in the promotion services is completed at a point in time when the game players made a payment to purchase virtual currency. The Company considered itself an agent in these arrangements since it does not control the services at any time. Accordingly, the Company records the game promotion service revenue on a net basis. Contract balances The Company records receivable related to revenue when it has an unconditional right to invoice and receive payment. Payments received from customers before all of the relevant criteria for revenue recognition met are recorded as deferred revenues. Cost of revenues For holographic solutions, the cost of revenue consists primarily of the costs of hardware products sold and outsourced content providers, third party software development costs, and compensation expenses for the Company’s professionals. For holographic technology service, the cost of revenue consists primarily of costs paid to channel distributors for advertising services and compensation expenses for the Company’s professionals. Advertising costs Advertising costs amounted to $ 138,153 85,937 Research and development Research and development expenses include salaries and other compensation-related expenses to the Company’s research and product development personnel, outsourced subcontractors, as well as office rental, depreciation and related expenses for the Company’s research and product development team. Value added taxes (“VAT”) Revenue represents the invoiced value of service, net of VAT. VAT is based on the gross sales price. The VAT rate is 6% on services and 13% on goods in China. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company’s subsidiaries in China, have been and remain subject to examination by the tax authorities for five years from the date of filing. Income taxes The Company are accounted for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the net deferred tax asset will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit has a greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. Other income, net Other income includes government subsidies which are amounts granted by local government authorities as an incentive for companies to promote development of the local technology industry. The Company receives government subsidies and records such government subsidies as a liability when it is received. The Company records government subsidies as other income when there is no further performance obligation. Total government subsidies amounted to $ 12,191 6,665 Other income also includes $ 25,235 8,158 Operating leases Effective January 1, 2022, the Company adopted ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. On January 1, 2022, the Company recognized approximately USD 0.8 million of right of use (“ROU”) assets and approximately USD 0.8 million of operating lease liabilities based on the present value of the future minimum rental payments of leases, using incremental borrowing rate of 7 %. The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. All of the Company’s real estate leases are classified as operating leases. When determining the lease payments for an operating lease transitioning to ASC 842 using the effective date, it’s based on future payments at the transition date, based on the present value of lease payments over the remaining lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company use its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and includes the associated operating lease payments in the undiscounted future pre-tax cash flows. Statutory reserves Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss. Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential common shares (e.g., convertible securities, options and warrants) as if they had |
Accounts receivable, net
Accounts receivable, net | 3 Months Ended |
Mar. 31, 2023 | |
Credit Loss [Abstract] | |
Accounts receivable, net | Note 3 — Accounts receivable, net Accounts receivable, net consisted of the following: Schedule of Accounts receivable, net March 31, 2023 December 31, 2022 Accounts receivable $ 12,401,061 $ 12,355,072 Less: allowance for doubtful accounts (2,820,015 ) (705,060 ) Accounts receivable, net $ 9,581,046 $ 11,650,012 Movement of allowance for doubtful accounts is as follows: Schedule of allowance for doubtful accounts March 31, 2023 December 31, 2022 Beginning balance $ 705,060 $ 296,051 Provision for doubtful accounts 2,119,725 442,335 Exchange difference (4,770 ) (33,326 ) Ending balance $ 2,820,015 $ 705,060 Net provision for doubtful accounts for the three months ended March 31, 2023 and 2022 amounted to $ 2,119,725 442,335 |
Inventories, net
Inventories, net | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories, net | Note 4 — Inventories, net Schedule of inventories, net March 31, 2023 December 31, 2022 Raw materials $ 283,532 $ 263,304 Finished goods 16,990 17,159 Total 300,522 280,463 Less: Inventory allowance (25,694 ) (25,584 ) Inventories, net $ 274,828 $ 254,879 As of March 31, 2023 and December 31, 2022, the management of the Company estimated its inventories at the lower of cost or market, determined on a weighted average method, or net realizable value. The Company recognized nil 0 0 Movement of inventory reserve is as follows: Schedule of inventory reserve March 31, 2023 December 31, 2022 Beginning balance $ 25,584 $ 27,692 Provision for inventory reserve - - Exchange difference 110 (2,108 ) Ending balance $ 25,694 $ 25,584 |
Property and equipment, net
Property and equipment, net | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment, net | Note 5 — Property and equipment, net Property and equipment, net consist of the following: Schedule of Property and equipment, net March 31, 2023 December 31, 2022 Office equipment $ 166,063 $ 165,351 Mechanical equipment 154,228 153,566 Electronic and other equipment 388,465 355,875 Vehicles 6,404 6,377 Less: accumulated depreciation (469,297 ) (442,249 ) Total $ 245,863 $ 238,920 Depreciation expense for the three months ended March 31, 2023 and December 31, 2022 amounted to $ 27,048 69,104 |
Intangible assets, net
Intangible assets, net | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets, net | Note 6 — Intangible assets, net The Company’s intangible assets with definite useful lives primarily consist of accounting software. The following table summarizes acquired intangible asset balances as of: Schedule of Intangible assets, net March 31 2023 December 31 2022 Customer relationship $ 1,936,630 $ 1,928,318 Software 2,147,130 2,137,916 Non-compete agreements 334,906 333,469 Less: accumulated amortization (2,411,863 ) (2,170,317 ) Total $ 2,006,803 $ 2,229,386 The estimated annual amortization expense for each of the five succeeding fiscal years is as follow: Schedule of estimated annual amortization expense Year ending December 31, 2023 $ 686,338 2024 669,919 2025 650,457 2026 89 Total $ 2,006,803 |
Prepayment, other assets, and d
Prepayment, other assets, and deposits | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepayment, other assets, and deposits | Note 7 — Prepayment, other assets, and deposits Schedule of current and non-current assets March 31 2023 December 31 2022 Current: Inventory Purchase $ 298,342 $ 457,875 Rent and rent deposits 780 18,776 VAT 166,598 129,480 Professional service 345,586 231,066 Other services 68,846 57,282 Prepayment and other current assets $ 880,151 $ 894,479 Non-current: Rent deposits $ 74,702 $ 59,144 Other 3,288 1,794 Allowance for doubtful accounts (481 ) (478 ) Prepayment and deposit $ 77,509 $ 60,460 Movement of allowance for doubtful accounts is as follows: Schedule of allowance for doubtful accounts March 31, 2023 December 31, 2022 Beginning balance $ 478 $ 518 Recovery of doubtful accounts - - Exchange difference 3 (40 ) Ending balance $ 481 $ 478 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 8 — Goodwill Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. The following table summarizes the components of acquired goodwill balances as of: Schedule of Goodwill March 31, 2023 December 31, 2022 Goodwill from Shenzhen Bowei acquisition* $ 1,416,665 $ 1,410,585 Goodwill from Shenzhen Tianyuemeng acquisition** 1,663,872 1,656,732 Goodwill $ 3,080,537 $ 3,067,317 * On July 1, 2020, Shenzhen Mengyun entered into acquisition agreement to acquire 100% equity interests of Shenzhen Bowei, a provider of holographic PCBA solutions. The transaction consummated on July 1, 2020. According to the agreement, acquisition consideration is RMB 20,000,000 (approximately USD 3.1 million) to acquire the 100% equity interests of Shenzhen Bowei. Acquired amortizable intangible assets includes customer relationship, software, and non-compete agreements. Approximately RMB 9.7 million (USD 1.5 million) of goodwill arising from the acquisition is mainly attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets under U.S. GAAP, and comprise (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of the synergy resulting from the acquisition. ** On October 1, 2020, Shenzhen Mengyun entered into acquisition agreement to acquire 100% equity interests of Shenzhen Tianyuemeng, an entity focused on holographic advertising services. The transaction consummated on October 1, 2020. According to the agreement, acquisition consideration is RMB 30,000,000 (approximately USD 4.6 million) to acquire the 100% equity interests of Shenzhen Tianyuemeng. Acquired amortizable intangible assets includes customer relationship, software, and non-compete agreements. Approximately RMB 11.4 million (USD 1.8 million) of goodwill arising from the acquisition is mainly attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets under U.S. GAAP, and comprise (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of the synergy resulting from the acquisition. The changes in the carrying amount of goodwill allocated to reportable segments as of December 31, 2022 and March 31, 2023 are as follows: Holographic solutions Holographic technology service Total As of December 31, 2022 $ 1,410,585 $ 1,656,732 $ 3,067,317 As of March 31, 2023 $ 1,416,665 $ 1,663,872 $ 3,080,537 |
Investments in unconsolidated e
Investments in unconsolidated entities | 3 Months Ended |
Mar. 31, 2023 | |
Schedule of Investments [Abstract] | |
Investments in unconsolidated entities | Note 9 — Investments in unconsolidated entities Schedule of investments March 31, 2023 December 31, 2022 Equity investments without readily determinable fair value: 19.9% Investment (1) $ 291,223 $ 289,973 4.4% Investment (2) 72,806 72,493 5% Investment (3) 87,367 86,992 3% Investment (4) 145,611 144,986 2% Investment (5) 87,367 Impairment (597,006 ) (594,444 ) Total $ 87,367 $ - (1) In August 2016, Shenzhen Mengyun invested RMB 2,000,000 in a company in the technology development and animation design areas for 19.9% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 2,000,000 (USD 306,645) impairment loss for the investment in 2018. (2) In November 2015, Shanghai Mengyun invested RMB 500,000 in a company in the database service for 4.44% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 500,000 (USD 76,661) impairment loss for the investment in 2018 (3) In September 2021, Shenzhen Mengyun invested RMB 600,000 in a company specializing in research and development of smart wearable devices for 5% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 600,000 (USD 89,166) impairment loss for the investment in 2022. (4) In October 2021, Shenzhen Mengyun invested RMB 1,000,000 in a company specializing in VR/AR education technology for 3% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 1,000,000 (USD 148,611) impairment loss for the investment in 2022. (5) In March 2023, Shenzhen Mengyun invested RMB 600,000 in a company in the technology development and animation design areas for 2% equity interest. |
Other payables and accrued liab
Other payables and accrued liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Other payables and accrued liabilities | Note 10 — Other payables and accrued liabilities Other payables and accrued liabilities consist of the following: Schedule of Other payables and accrued liabilities March 31, 2023 December 31, 2022 Employee compensation payable $ 1,004,959 $ 996,823 Payable from prior acquisition 565,953 563,524 Other 398,726 404,154 $ 1,969,638 $ 1,964,501 |
Related party balances and tran
Related party balances and transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related party balances and transactions | Note 11 — Related party balances and transactions The amounts due from related parties consist of the following: Schedule of related parties RP Name Relationship Nature March 31, 2023 December 31, 2022 Shenzhen Ultimate Holographic Culture Communication Co., Ltd. Shenzhen Mengyuns 19.9% equity investment Advances for operational purposes, no interest, due on demand $ - $ 8,740 $ - $ 8,740 The amounts due to related parties consists of the following: RP Name Relationship Nature March 31, 2023 December 31, 2022 Yuxiu Han Former shareholder and current legal representative of Shenzhen Bowei Advances for operational purpose, no interest, due on demand - 50,745 $ - $ 50,745 |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Note 12 — Income taxes Cayman Islands MC was incorporated in the Cayman Islands and is not subject to tax on income or capital gains under the laws of Cayman Islands. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. Hong Kong Mengyun HK, Broadvision HK, Ocean HK and Mcloudvr HK are incorporated in Hong Kong and is subject to Hong Kong Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. The applicable tax rate is 16.5 PRC The subsidiaries incorporated in the PRC are governed by the income tax laws of the PRC and the income tax provision for operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemptions may be granted on a case-by-case basis. EIT grants preferential tax treatment to certain High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for HNTE status every three years. Shanghai Mengyun obtained the “high-tech enterprise” tax status in October 2017 and further renewed in December 2020, which reduced its statutory income tax rate to 15% from January 2017 to December 2023. Shenzhen Mengyun obtained the “high-tech enterprise” tax status in November 2018 and further renewed in December 2021, which reduced its statutory income tax rate to 15% from January 2018 to December 2024. Shenzhen Bowei obtained the “high-tech enterprise” tax status in December 2021, which reduced its statutory income tax rate to 15% from December 2021 to December 2024. Horgos Weiyi, Horgos Youshi, Horgos Bowei and Horgos Tianyuemeng were formed and registered in Horgos in Xinjiang Province, China from 2016 to 2020, and Kashgar Youshi was formed and registered in Kashgar in Xinjiang Provence, China in 2016. These companies are not subject to income tax for 5 years and can obtain another two years of tax exempt status and three years at reduced income tax rate of 12.5% after the 5 years due to the local tax policies to attract companies in various industries. The Ministry of Finance (“MOF”) and State Administration of Taxation (“SAT”) on January 17, 2019 jointly issued Cai Shui 2019 No. 13. This clarified that from January 1, 2019 to December 31, 2021, eligible small enterprises whose RMB 1,000,000 of annual taxable income is eligible for a 75% reduction on a rate of 20% (i.e., effective rate is 5%) and the income between RMB 1,000,000 and RMB 3,000,000 is eligible for 50% reduction on a rate of 20% (i.e., effective rate is 10%). On April 2, 2021, MOF and SAT further jointly issued Cai Shui 2021 No. 12, which clarified that from January 1, 2022 to December 31, 2022, eligible small enterprises whose RMB 1,000,000 of annual taxable income is eligible for an extra 50% reduction base on Cai Shui 2019 No. 13 (i.e., effective rate is 2.5%). On March 14, 2022, MOF and SAT further jointly issued Cai Shui 2022 No. 13, which clarified that from January 1, 2022 to December 31, 2024, eligible small enterprises whose income between RMB 1,000,000 and RMB 3,000,000 is eligible for an extra 50% reduction base on Cai Shui 2019 No. 13 (i.e., effective rate is 5%). March 26, 2023, MOF and SAT further jointly issued Cai Shui 2023 No. 6 which clarified that from January 1, 2023 to December 31, 2024, eligible small enterprises whose RMB 1,000,000 of annual taxable income is eligible for a 75% reduction on a rate of 20% (i.e., effective rate is 5%).For the three months ended March 31, 2022 and 2023, Shenzhen Tianyuemeng, Yijia Network, and Qianhai Youshi and Shenzhen Yunao were eligible to employ this policy. Significant components of the income tax expense (benefit) consisted of the following: Schedule of income tax expense (benefit) Three months ended March 31, 2023 2022 Current income tax expense $ - $ 16,599 Deferred income tax benefit (28,450) (73,309 ) Total $ (28,450) $ (56,710 ) Deferred tax assets and liabilities — China Significant components of deferred tax assets and liabilities were as follows: Schedule of deferred tax assets and liabilities March 31 2023 December 31 2022 Deferred tax assets: Allowance for doubtful accounts $ 37,403 $ 37,242 Depreciation and amortization - - Impairment loss for investment 34,947 34,797 Net operating loss carry forward 496,494 494,364 Inventory reserve 3,854 3,838 Right of use 70,711 2,045 Less: valuation allowance (513,397 ) (442,832 ) Deferred tax assets, net 130,012 129,454 Deferred tax liabilities: Recognition of intangible assets arising from business acquisition (262,789 ) (289,884 ) Deferred tax liabilities, net (262,789 ) (289,884 ) Total deferred tax liabilities, net $ (132,777 ) $ (160,430 ) The Company evaluated the recoverable amounts of deferred tax assets, and provided a valuation allowance to the extent that future taxable profits will be available against which the net operating loss and temporary differences can be utilized. Valuation allowance is provided against deferred tax assets when the Company determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Company considered factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. Valuation allowance was provided for net operating loss carry forward because it was more likely than not that such deferred tax assets would not be realized based on the Company’s estimate of its future taxable income. If events occur in the future that allow the Company to realize more of its deferred income tax than the presently recorded amounts, an adjustment to the valuation allowances will result in a decrease in tax expense when those events occur. The valuation allowance was increased by $ 70,565 38,311 The Company recognized deferred tax liabilities related to the excess of the intangible assets reporting basis over its income tax basis as a result of fair value adjustment from acquisitions in 2020. The deferred tax liabilities will reverse as the intangible assets are amortized for financial statement reporting purposes. As of March 31, 2023, the Company had net operating loss carry forwards of approximately $ 5,538,621 Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of December 31, 2022 and March 31, 2023, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses For the three months ended March 31, 2022 and 2023, and also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from March 31, 2023. Value added taxes (“VAT”) Revenue represents the invoiced value of service, net of VAT. The VAT are based on gross sales price. VAT rate is 6 13 Taxes payable consisted of the following: Schedule of Taxes payable March 31, 2023 December 31, 2022 VAT taxes payable $ 15,618 $ 7,199 Income taxes payable 66,112 68,660 Other taxes payable 817 11,459 Totals $ 82,547 $ 87,319 |
Concentration of risk
Concentration of risk | 3 Months Ended |
Mar. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentration of risk | Note 13 — Concentration of risk Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and short-term investments consisting of time deposit. In China, the insurance coverage for cash deposits at each bank is RMB 500,000 $20,328,906 $21,910,338 A majority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the PBOC. Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance. To the extent that the Company needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against the U.S. dollar would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if the Company decides to convert RMB into U.S. dollar for the purpose of making payments for dividends, strategic acquisition or investments or other business purposes, appreciation of the U.S. dollar against the RMB would have a negative effect on the U.S. dollar amount available to the Company. Customer concentration risk For the three months ended March 31, 2023, one customer accounted for 25.7 38.8 As of March 31, 2023, two customers accounted for 31.1 21.1 26.4 15.8 Vendor concentration risk For the three months ended March 31, 2023, two vendors accounted for 59.0 12.7 45.6 23.5 As of March 31, 2023, one vendor accounted for 68.2 63 10.0 |
Shareholders_ equity
Shareholders’ equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Shareholders’ equity | Note 14 — Shareholders’ equity Ordinary shares The Company was established under the laws of Cayman Islands on November 10, 2020 with authorized share of 500,000,000 0.0001 132,000,000 At the closing of the Business Combination, the issued and outstanding shares in MC held by the former MC shareholders were cancelled and ceased to exist, in exchange for the issuance of an aggregate of 44,554,455 The number of shares of ordinary issued immediately following the consummation of the Merger was 50,812,035 0.0001 Restricted assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiary. Relevant PRC statutory laws and regulations permit payments of dividends by Beijing Xihuiyun and Shanghai Mengyun (collectively “Mengyun PRC entities”) only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. The results of operations reflected in the accompanying unaudited consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of Mengyun PRC entities. Mengyun PRC entities are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, Mengyun PRC entities may allocate a portion of its after-tax profits based on PRC accounting standards to an enterprise expansion fund and staff bonus and welfare fund at its discretion. Mengyun PRC entities may allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange. As a result of the foregoing restrictions, Mengyun PRC entities are restricted in their ability to transfer their assets to the Company. Foreign exchange and other regulations in the PRC may further restrict Mengyun PRC entities from transferring funds to the Company in the form of dividends, loans and advances. As of March 31, 2023 and December 31, 2022, amounts restricted are the paid-in-capital and statutory reserve of Mengyun PRC entities, which amounted to $ 6,121,025 6,121,025 Statutory reserve During the three months ended March 31, 2023 and 2022, Mengyun PRC entities collectively attributed $ 0 126,416 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | Note 15 — Leases The Company has several offices lease agreements with lease terms ranging from two to six years. Upon adoption of ASU 2016-02 on January 1, 2022, the Company recognized approximately RMB 5.7 0.9 5.7 0.9 7.0 The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The leases generally do not contain options to extend at the time of expiration. As of March 31, 2023, the Company’s operating leases had a weighted average remaining lease term of approximately 2.75 For the three months ended March 31, 2023, rent expenses for the operating leases and short-term lease (less than one year) were $ 70,168 25,408 For the three months ended March 31, 2022, rent expenses for the operating leases and short term lease (less than one year) were $ 72,563 21,955 The five-year maturity of the Company’s lease obligations is presented below: Schedule of lease liabilities Years ending December 31, 2023(remaining nine months) $ 198,806 2024 182,351 2025 140,147 2026 84,424 Total lease payments 605,728 Less: Interest (55,809 ) Present value of lease liabilities $ 549,921 Future amortization of Company’s ROU assets is presented below: Schedule of Future amortization of Company’s ROU assets Twelve months ending December 31, 2023(remaining nine months) $ 177,353 2024 159,780 2025 120,249 2026 74,383 Total $ 531,765 |
Warrant liabilities
Warrant liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Warrant Liabilities | |
Warrant liabilities | Note 16 — Warrant liabilities As of March 31, 2023, the Company had 5,750,000 270,500 The Company accounts for its outstanding Warrants in accordance with the guidance contained in ASC 815-40-15-7D and 7F. Management has determined that under the Private Warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies the Private Warrants as liabilities at their fair value and adjusts the Private Warrants to fair value at each reporting period. Management has further determined that its Public Warrants qualify for equity treatment. Warrant liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statements of operations. Public Warrants On June 24, 2021, the Company sold 5,750,000 10.00 Each Public Unit consists of one ordinary share of the Company, $0.0001 par value per share, one right and one redeemable warrant (the “Public Warrant”). Each Public Warrant entitles the holder to purchase one-half (1/2) of an ordinary share at an exercise price of $11.50 No public warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares. It is the Company’s current intention to have an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares in effect promptly following consummation of an initial business combination. The Public Warrants became exercisable on September 16, 2022, the later of (a) the consummation of a Business Combination, which was September 16, 2022, or (b) 12 months from the effective date of the registration statement relating to the Initial Offering, which was June 21, 2021. No Public Warrants will be exercisable for cash unless the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the Public Warrants and a current prospectus relating to such ordinary shares. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, the Company will use its best efforts to file, and within 60 business days following a Business Combination to have declared effective, a registration statement covering the ordinary shares issuable upon exercise of the warrants. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon the exercise of the Public Warrants is not effective within 60 days, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation. The Company may call the warrants for redemption (excluding the Private Warrants), in whole and not in part, at a price of $ 0.01 ● at any time while the Public Warrants are exercisable, ● upon not less than 30 days’ prior written notice of redemption to each Public Warrant holder, ● if, and only if, the reported last sale price of the ordinary shares equals or exceeds $16.50 per share, for any 20 trading days within a 30-trading day period ending on the third trading day prior to the notice of redemption to Public Warrant holders, and ● if, and only if, there is a current registration statement in effect with respect to the issuance of the ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless. Private Warrants Simultaneously with the closing of the Initial Public Offering, the Company consummated a private placement of 270,500 10.0 |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 17 — Commitments and contingencies Contingencies From time to time, the Company is party to certain legal proceedings, as well as certain asserted and un-asserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the unaudited consolidated financial statements. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segments | Note 18 — Segments ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments. The Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial information of the separate operating segments when making decisions about allocating resources and assessing the performance of the group. The Company has determined that it has two operating segments: (1) holographic solutions, and (2) holographic technology service. The summary information by segment are as follows: Schedule of segments Holographic solutions Holographic technology service Total March 31 2022 Revenues $ 13,514,868 10,700,343 $ 24,215,211 Cost of revenues (12,129,157 ) (1,299,855 ) (13,429,012 ) Gross profit 1,385,711 9,400,488 10,786,199 Depreciation and amortization (99,202 ) (160,867 ) (260,069 ) Total capital expenditures $ (706 ) - $ (706 ) Holographic solutions Holographic technology service Total March 31 2023 Revenues $ 1,231,097 $ 5,348,634 $ 6,579,731 Cost of revenues (824,440 ) (1,870,269 ) (2,694,709 ) Gross profit 406,657 3,478,365 3,885,022 Depreciation and amortization (258,286 ) - (258,286 ) Total capital expenditures $ (31,170 ) $ - $ (31,170 ) Total assets as of: March 31, December 31, 2023 2022 Holographic solutions $ 26,773,929 $ 29,063,408 Holographic technology service 10,320,846 11,840,424 Total Assets $ 37,094,775 $ 40,903,832 Disaggregated information of holographic solutions revenues by business lines are as follows: Schedule of Disaggregation Three months ended March 31, 2023 2022 Holographic Technology LiDAR Products $ 818,578 $ 1,742,815 Holographic Technology Intelligence Vision software and Technology Development Service 171,530 875,580 Holographic Technology Licensing and Content Product 240,989 1,490,123 Holographic Hardware Sales - 9,406,350 Total Holographic Solutions $ 1,231,097 $ 13,514,868 |
Subsequent events
Subsequent events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent events | Note 19 — Subsequent events The Company, along with its shareholder Joyous JD Limited, has initiated litigation in the New York Supreme Court New York County against Greenland Asset Management Corporation, the sponsor of the pre-business combination company, Golden Path Acquisition Corporation (“Sponsor”). 1. Joyous JD Limited is seeking damages in connection with the Sponsor’s breach of certain investment agreements which was executed by and between the Sponsor and Joyous JD Limited; 2. The Company is seeking damages in connection with the Sponsor’s noncompliant misuse of Form S-4 in registering shares during the course of the business combination, which resulted in a forced withdrawal of the Form S-4. The Company has commenced lawsuit seeking damages. The Court has accepted the complaint filed by the Company and Joyous JD Limited. Due to uncertainty over the process and outcome of the lawsuit, the final ruling of the Court shall prevail. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Liquidity | Liquidity In assessing the Company’s liquidity, the Company monitors and analyses its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Cash flow from operations, advance from shareholders, and proceeds from third party loan have been utilized to finance the working capital requirements of the Company. As of March 31, 2023, the Company had cash of $ 20.3 million. The Company’s working capital was approximately $ 21.5 |
Basis of presentation | Basis of presentation The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission, regarding financial reporting, and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operation results. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of results to be expected for any other three months period or for the full year of 2023. Accordingly, these statements should be read in conjunction with the Company’s audited financial statements and note thereto as of and for the year ended December 31, 2022. |
Principles of consolidation | Principles of consolidation The unaudited consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant intercompany transactions and balances between the Company and its subsidiaries are eliminated upon consolidation. Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. |
Use of estimates and assumptions | Use of estimates and assumptions The preparation of unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited consolidated financial statements include the useful lives of property and equipment and intangible assets, impairment of long-lived assets and goodwill, allowance for doubtful accounts, revenue recognition, inventory reserve, purchase price allocation for business combination, uncertain tax position, and deferred taxes. Actual results could differ from these estimates. |
Foreign currency translation and transaction | Foreign currency translation and transaction The functional currency of MicroCloud, MC, Mengyun HK, Mcloudvr HK and Broadvision HK is in US dollars and the functional currency of the Company’s other subsidiaries are RMB, as determined based on the criteria of Accounting Standards Codification (“ASC”) 830 “Foreign Currency Matters.” Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at the rates of exchange in place at the balance sheet date. Transactions in currencies other than the functional currency during the year are converted into the functional currency at the applicable rates of exchange prevailing when the transactions occurred. Transaction gains and losses are recognized in the unaudited consolidated statement of operations. In the unaudited consolidated financial statements, the financial information of the Company and other entities located outside of the PRC has been translated into USD. Assets and liabilities of the Company translated from their respective functional currencies to the reporting currency at the exchange rates at the balance sheet dates, equity accounts are translated at historical exchange rates and revenues and expenses are translated at the average exchange rates in effect during the reporting period. The resulting foreign currency translation adjustment are recorded in other comprehensive income (loss). The balance sheet amounts, with the exception of shareholders’ equity for MC, Mengyun HK, Mcloudvr HK and Broadvision HK as of March 31, 2023 and December 31, 2022 were translated at RMB 1.00 to USD 0.1456 USD 0.1450 |
Convenience translation | Convenience translation Translations of balances in the unaudited consolidated balance sheets, consolidated statements of income and consolidated statements of cash flows from RMB into USD as of and for the three months ended March 31, 2023 are solely for the convenience of the reader and were calculated at the rate of RMB 1.00 to USD 0.1456 |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents primarily consist of bank deposits with original maturities of six months or less, which are unrestricted as to withdrawal and use. Cash and cash equivalents also consist of funds earned from the Company’s operating revenues which were held at third party platform fund accounts which are unrestricted as to immediate use or withdrawal. The Company maintains most of its bank accounts in the PRC. |
Accounts receivable, net | Accounts receivable, net Accounts receivables include trade accounts due from customers. Accounts are considered overdue after 90 days. Management reviews its receivables on a regular basis to determine if the bad debt allowance is adequate, and provides an allowance when necessary. The allowance is based on management’s best estimates of specific losses on individual customer exposures, as well as the historical trends of collections. Account balances are charged off against the allowance after all means of collection have been exhausted and the likelihood of collection is not probable. As of March 31, 2023, and December 31, 2022, the Company has $ 2,820,015 705,060 |
Inventories, net | Inventories, net Inventories are comprised of raw material and finish goods are stated at the lower of cost or net realizable value using the weighted average method. Cost of finished goods comprise direct material and outsourced assembling costs. Management reviews inventories for obsolescence and cost in excess of net realizable value periodically when appropriate and records a reserve against the inventory when the carrying value exceeds net realizable value. As of March 31, 2023 and December 31, 2022, the Company has an allowance of $ 25,694 25,584 |
Prepayments, other current assets and deposits, net | Prepayments, other current assets and deposits, net Prepayments and other current assets are mainly payments made to vendors or service providers for purchasing goods or services that have not been received or provided, deposits for rent and utilities and employee advances. This amount is refundable and bears no interest. Prepayment and deposit are classified as either current or non-current based on the terms of the respective agreements. These advances are unsecured and are reviewed periodically to determine whether their carrying value has become impaired. As of March 31, 2023, and December 31, 2022, the Company made $ 478 481 |
Property and equipment, net | Property and equipment, net Property and equipment are stated at cost less accumulated depreciation and impairment if applicable. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with a 5% residual value. The estimated useful lives are as follows: Schedule of estimated useful lives Useful Life Office equipment 3 Mechanical equipment 3 5 Electronic equipment 3 5 The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of income and comprehensive income. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. |
Intangible assets, net | Intangible assets, net The Company’s intangible assets with definite useful lives primarily consist of customer relationships, software, and non-competing agreements. Identifiable intangible assets resulting from the acquisitions of subsidiaries accounted for using the purchase method of accounting are estimated by management based on the fair value of assets received. The Company amortizes its intangible assets with definite useful lives over their estimated useful lives and reviews these assets for impairment. The Company typically amortizes its intangible assets with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives of three to ten years. |
Goodwill | Goodwill Goodwill represents the excess of the consideration paid for an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written down to its fair value and the loss is recognized in the consolidated statements of income and comprehensive income. Impairment losses on goodwill are not reversed. The Company has the option to assess qualitative factors to determine whether it is necessary to perform further impairment testing in accordance with ASC 350-20, as amended by ASU 2017-04. If the Company believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, then the impairment test described below is required. The Company compares the fair values of each reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of a reporting unit exceeds its fair value, impairment is recognized for the difference, limited to the amount of goodwill recognized for the reporting unit. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being discounted cash flows. |
Impairment for long-lived assets | Impairment for long-lived assets Long-lived assets, including property and equipment and intangible assets with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. For the three months ended March 31, 2023 and 2022, no |
Investments in unconsolidated entities | Investments in unconsolidated entities The Company’s investments in unconsolidated entities consist of equity investments without readily determinable fair value. The Company follows ASC Topic 321, Investments Equity Securities (“ASC 321”) to account for investments that do not have readily determinable fair value and over which the Company does not have significant influence. The Company uses the measurement alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. An impairment charge is recorded if the carrying amount of the investment exceeds its fair value and this condition is determined to be other-than temporary. |
Business combination | Business combination The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. Transaction costs associated with business combinations are expensed as incurred, and are included in general and administrative expenses in the Company’s consolidated statements of income and comprehensive income. The results of operations of the acquired business are included in the Company’s operating results from the date of acquisition. |
Fair value measurement | Fair value measurement U.S. GAAP regarding fair value of financial instruments and related fair value measurements defines financial instruments and requires disclosure of the fair value of financial instruments held by the Company. U.S. GAAP defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follow: Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. Level 3 inputs to the valuation methodology are unobservable and significant to the fair value. Financial instruments included in current assets and current liabilities are reported in the unaudited consolidated balance sheets at face value or cost, which approximate fair value because of the short period of time between the origination of such instruments and their expected realization and their current market rates of interest. |
Noncontrolling Interests | Noncontrolling Interests The Company’s noncontrolling interests represent the minority shareholders’ ownership interests related to the Company’s subsidiaries, including 44% for Ocean HK and its subsidiaries. The noncontrolling interests are presented in the consolidated balance sheets separately from equity attributable to the shareholders of the Company. Noncontrolling interests in the results of the Company are presented on the consolidated statement of income as allocations of the total income or loss for the three months ended March 31, 2023 between noncontrolling interest holders and the shareholders of the Company. |
Ordinary share Warrants | Ordinary share Warrants The Company accounts for ordinary share warrants as either equity instruments or liabilities in accordance with ASC 480, Distinguishing Liabilities from Equity |
Revenue recognition | Revenue recognition Effective January 1, 2019, the Company adopted ASC Topic 606 using the modified retrospective adoption method. Based on the requirements of ASC Topic 606, revenue is recognized when control of the promised goods or services is transferred to the customers in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services. The Company primarily sells its products to hospitals and medical equipment companies. Revenue is recognized when the following 5-step revenue recognition criteria are met: 1) Identify the contract with a customer 2) Identify the performance obligations in the contract 3) Determine the transaction price 4) Allocate the transaction price 5) Recognize revenue when or as the entity satisfies a performance obligation The Company’s revenue recognition policies effective upon the adoption of ASC 606 are as follows: (i) Holographic Solutions a. Holographic Technology LiDAR Products The Company generates LiDAR revenue through selling integrated circuit board embedded with holographic software. The Company typically enters into written contracts with its customer where the rights of the parties, including payment terms, are identified and sales prices to the customers are fixed with no separate sales rebate, discount, or other incentive and no right of return exists on sales of inventory. The Company’s performance obligation is to deliver products according to contract specifications. The Company recognizes product revenue at a point in time when the control of products is transferred to customers. b. Holographic Technology Intelligence Vision software and Technology Development Service The Company generates revenue by developing ADAS software and technology, which are generally on a fixed-priced basis. The Company has no alternative use for the customized software and the Company has an enforceable right to payment for performance completed to date. Revenues from ADAS software development contracts are recognized over time during the contract period based on the Company’s measurement of progress towards completion using input method, which is usually measured by comparing labor hours expended to date to total estimated labor hours needed to satisfy the performance obligation. As of March 31, 2023 and December 31, 2022, the Company’s aggregate amount of transaction price allocated to unsatisfied performance obligation is $ 0 384,489 c. Holographic Technology Licensing and Content Products The Company provides holographic content products and holographic software for music videos, shows, and commercials on a fixed-price basis. These contents and software are generally pre-developed and exist when made available to the customer. Content products are delivered through its website or offline using hard drive. Revenues from licensing and content products are recognized at the point in time when the control of products or services is transferred to customers. No upgrades, maintenance, or any other post-contract customer support are provided. d. Holographic Technology Hardware Sales The Company is a distributer of holographic hardware and generates revenue through resale. In accordance with ASC 606, revenue recognition: principal agent consideration, an entity is a principal if it controls the specified good or service before that good or service is transferred to a customer. Otherwise, the entity is an agent in the transaction. The Company evaluates three indicators of control in accordance with ASU 2016-08: 1) For hardware sales, the Company is the most visible entity to customers and assumes fulfilment risk and risks related to the acceptability of products, including addressing customer complaints directly and handling of product returns or refunds directly. 2) The Company assumes inventory risk after taking the title from vendors and is responsible for product damage during shipment period prior to acceptance of its customers and is also responsible for product return if the customer is not satisfied with the products. 3) The Company determines the resale price of hardware products. 4) The Company is the party that directs the use of the inventory and can prevent the vendor from transferring the product to a customer or to redirect the products to a different customer. After evaluating the above scenario, the Company considers itself the principal of these arrangements and records hardware sales revenue on a gross basis. Hardware sales contracts are on a fixed price basis with no separate sales rebate, discount, or other incentive. Revenue is recognized at a point in time when the Company has delivered products and the acceptance by its customer with no future obligation. The Company generally permits returns of products due to deficits; however, returns are historically insignificant. (ii) Holographic Technology Service Holographic advertisements are the use of holographic technology integrated into advertisements on media platforms and offline display. The Company enters advertising contracts with advertisers to promote merchandises and services where the price, which is generally based on cost per action (“CPA”), is fixed and determinable. The Company provides its advertising service to channel providers where the amounts cost per action are also fixed and determinable. Revenue is recognized at a point of time when agreed actions are performed. The Company considers itself as provider of the services under the CPA model as it has the control of the services at any time before it is transferred to the customers which is evidenced by 1) having a right to a service to be performed by the other party, which gives the Company the ability to direct that party to provide the service to the customers on the Company’s behalf. 2) having discretion in setting the price for the service 3) billing monthly advertising fee directly to customers by settling valid CPA data with customers. Therefore, the Company acts as the principal of these arrangements and reports revenue earned and costs incurred related to these transactions on a gross basis. The Company also provides advertisement services through influencers on social networks. The Company charges advertisers a fixed rate, which is generally a fixed percentage of total value of merchandise sold over a specific period (“GMV”). Revenue is recognized at a point of time when merchandise is sold through social network. The Company’s SDK service is a collection of software development tools in one installable package that enables customers (usually software developers) to add holographic functionality and run holographic advertisements in their APPs or software. SDK contracts are primarily on a fixed rate basis, or cost per SDK Connection. The Company recognizes SDK service revenue at a point in time when a user completes an SDK connection via a designated portal. Service fees are generally billed monthly based on per-connection basis. The Company also provides game promotion services for game developers and licensed game operators. The Company acted as a marketing channel that it will promote the games through in-house or third-party platforms, from which users can download the mobile and purchase virtual currency for in game premium features to enhance their game playing experience. The Company contracts with third party payment platforms for collection services offered to game players who have purchased virtual currency. The game developers, licensed operator, payment platforms and the marketing channels are entitled to profit sharing based on a prescribed percentage of the gross amount charged to the game players. The Company’s obligation in the promotion services is completed at a point in time when the game players made a payment to purchase virtual currency. The Company considered itself an agent in these arrangements since it does not control the services at any time. Accordingly, the Company records the game promotion service revenue on a net basis. |
Contract balances | Contract balances The Company records receivable related to revenue when it has an unconditional right to invoice and receive payment. Payments received from customers before all of the relevant criteria for revenue recognition met are recorded as deferred revenues. |
Cost of revenues | Cost of revenues For holographic solutions, the cost of revenue consists primarily of the costs of hardware products sold and outsourced content providers, third party software development costs, and compensation expenses for the Company’s professionals. For holographic technology service, the cost of revenue consists primarily of costs paid to channel distributors for advertising services and compensation expenses for the Company’s professionals. |
Advertising costs | Advertising costs Advertising costs amounted to $ 138,153 85,937 |
Research and development | Research and development Research and development expenses include salaries and other compensation-related expenses to the Company’s research and product development personnel, outsourced subcontractors, as well as office rental, depreciation and related expenses for the Company’s research and product development team. |
Value added taxes (“VAT”) | Value added taxes (“VAT”) Revenue represents the invoiced value of service, net of VAT. VAT is based on the gross sales price. The VAT rate is 6% on services and 13% on goods in China. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company’s subsidiaries in China, have been and remain subject to examination by the tax authorities for five years from the date of filing. |
Income taxes | Income taxes The Company are accounted for current income taxes in accordance with the laws of the relevant tax authorities. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the net deferred tax asset will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit has a greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. |
Other income, net | Other income, net Other income includes government subsidies which are amounts granted by local government authorities as an incentive for companies to promote development of the local technology industry. The Company receives government subsidies and records such government subsidies as a liability when it is received. The Company records government subsidies as other income when there is no further performance obligation. Total government subsidies amounted to $ 12,191 6,665 Other income also includes $ 25,235 8,158 |
Operating leases | Operating leases Effective January 1, 2022, the Company adopted ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. On January 1, 2022, the Company recognized approximately USD 0.8 million of right of use (“ROU”) assets and approximately USD 0.8 million of operating lease liabilities based on the present value of the future minimum rental payments of leases, using incremental borrowing rate of 7 %. The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option which result in an economic penalty. All of the Company’s real estate leases are classified as operating leases. When determining the lease payments for an operating lease transitioning to ASC 842 using the effective date, it’s based on future payments at the transition date, based on the present value of lease payments over the remaining lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company use its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and includes the associated operating lease payments in the undiscounted future pre-tax cash flows. |
Statutory reserves | Statutory reserves Pursuant to the laws applicable to the PRC, PRC entities must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss. |
Earnings per share | Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. |
Segment reporting | Segment reporting ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for detailing the Company’s business segments. The Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial information of the separate operating segments when making decisions about allocating resources and assessing the performance of the group. The Company has determined that it has two operating segments: (1) holographic solutions, and (2) holographic technology service. |
Employee benefits | Employee benefits The full-time employees of the Company are entitled to staff welfare benefits including medical care, housing fund, pension benefits, unemployment insurance and other welfare, which are government mandated defined contribution plans. The Company is required to accrue for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant PRC regulations, and make cash contributions to the state-sponsored plans out of the amounts accrued. Total expenses for the plans were $ 60,844 176,196 |
Recently issued accounting pronouncements | Recently issued accounting pronouncements In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments — Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments — Credit Losses — Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-02 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. The Company is still evaluating the impact of the adoption of this ASU on the Company’s unaudited consolidated financial statements. In October 2020, the FASB issued ASU 2020-08, “Codification Improvements to Subtopic 310-20, Receivables — Nonrefundable Fees and Other Costs”. The amendments in this Update represent changes to clarify the Codification. The amendments make the Codification easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. ASU 2020-08 is effective for the Company for annual and interim reporting periods beginning July 1, 2021. Early application is not permitted. All entities should apply the amendments in this Update on a prospective basis as of the beginning of the period of adoption for existing or newly purchased callable debt securities. These amendments do not change the effective dates for Update 2017-08. The adoption of this new standard does not have material impact on Company’s unaudited consolidated financial statements and related disclosures. Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s consolidated balance sheets, statements of income and comprehensive income and statements of cash flows. |
Nature of business and organi_2
Nature of business and organization (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of accompanying consolidated financial statements | Schedule of accompanying consolidated financial statements Name Background Ownership MC Hologram Inc (“MC”) - A Cayman Islands company 100% owned by MicroCloud - Formed on November 10, 2020 - Registered capital of USD 50,000 Quantum Edge HK Limited (“Mengyun HK”) - A Hong Kong company 100% owned by MC - Formed on November 25, 2020 - Registered capital of HK 10,000 (USD 1,290) - A holding company Beijing Xihuiyun Technology Co., Ltd (“Beijing Xihuiyun”) - PRC limited liability company 100% owned by Mengyun HK - Formed on May 11, 2021 - Registered capital of RMB 207,048,000 (USD 30,000,000) - A holding company Shanghai Mengyun Holographic Technology Co., Ltd. (“Shanghai Mengyun”) - A PRC limited liability company 81.63% owned by Beijing Xihuiyun and 18.37% owned by Mengyun HK - Formed on March 24, 2016 - Registered capital of RMB 27,000,000 (USD 4,316,665) - Primarily engages in holographic integrated solutions. Shenzhen Mengyun Holographic Technology Co., Ltd. (“Shenzhen Mengyun”) - A PRC limited liability company 100% owned by Shanghai Mengyun - Formed on March 15, 2016 - Registered capital of RMB 10,000,000 (USD 1,538,461) - Primarily engages in holographic integrated solutions. Shenzhen Qianhai Youshi Technology Co., Ltd. (“Qianhai Youshi”) - A PRC limited liability company 100% owned by Shanghai Mengyun - Formed on August 14, 2014 - Registered capital of RMB 10,000,000 (USD 1,538,461) - Primarily engages in holographic content sales and SDK software services. Shenzhen Yijia Network Technology Co., Ltd. (“Yijia Network”) - A PRC limited liability company 100% owned by Qianhai Youshi - Formed on September 25, 2008 - Registered capital of RMB 10,000,000 (USD 1,538,461) - Primarily engages in holographic content sales and SDK software services. Name Background Ownership Horgos Youshi Network Technology Co., Ltd. (“Horgos Youshi”) - A PRC limited liability company 100% owned by Qianhai Youshi - Formed on November 2, 2020 - Registered capital of RMB 1,000,000 (USD 153,846) - Primarily engages in holographic content sales and SDK software services. Horgos Weiyi Software Technology Co., Ltd. (“Horgos Weiyi”) - A PRC limited liability company 100% owned by Shenzhen Mengyun - Formed on September 6, 2016 - Registered capital of RMB 10,000,000 (USD 1,538,461) - Primarily engages in holographic integrated solutions. Shenzhen BroadVision Technology Co., Ltd. (“Shenzhen Bowei”) - A PRC limited liability company 100% owned by Shenzhen Mengyun - Formed on April 12, 2016 - Registered capital of RMB 10,000,000 (USD 1,538,461) - Primarily engages in holographic PCBA solutions. Mcloudvr Software Network Technology HK Co., Limited (“Mcloudvr HK”) - A Hong Kong company 100% owned by Shenzhen Mengyun - Formed on February 2, 2016 - Registered capital of HKD 100,000 (USD 12,882) - Primarily engages in holographic integrated solutions. Shenzhen Tianyuemeng Technology Co., Ltd. (“Shenzhen Tianyuemeng”) - A PRC limited liability company 100% owned by Shenzhen Mengyun - Formed on January 6, 2014 - Registered capital of RMB 20,000,000 (USD 3,076,922) - Primarily engages in holographic advertising services. Shenzhen Yunao Hongxiang Technology Co., Ltd. (“Shenzhen Yunao”) - A PRC limited liability company 100% owned by Shenzhen Mengyun - Formed on December 3, 2021 - Registered capital of RMB 5,000,000 (USD 784,671) - Advertising service Broadvision Intelligence (Hong Kong), Ltd. (“Broadvision HK”) - A Hong Kong company 100% owned by Shenzhen Bowei - Formed on November 5, 2020 - Registered capital of HKD 10,000 (USD 1,288) - No operation Horgos BroadVision Technology Co., Ltd. (“Horgos Bowei”) - A PRC limited liability company 100% owned by Shenzhen Bowei - Formed on November 4, 2020 - Registered capital of RMB 1,000,000 (USD 153,846) - Primarily engages in holographic PCBA solutions. Name Background Ownership Horgos Tianyuemeng Technology Co., Ltd. (“Horgos Tianyuemeng”) - A PRC limited liability company 100% owned by Shenzhen Tianyuemeng - Formed on October 23, 2020 - Registered capital of RMB 1,000,000 (USD 153,846) - Primarily engages in SDK software services. Horgos Tianyuemeng Technology Co., Ltd.-Shenzhen Branch (“Horgos Tianyuemeng-SZ”) - A PRC limited liability company 100% owned by Horgos Tianyuemeng - Formed on March 19, 2021 - Registered capital of RMB 1,000,000 (USD 153,846) - No operation - Dissolved on December 10, 2021 Shanghai Mengyun Quanyou Vision Technology Co., Ltd (“Shanghai Quanyou”) - A PRC limited liability company 100% owned by Shanghai Mengyun - Formed on June 24, 2021 - Registered capital of RMB 1,000,000 (USD 153,846) - No operation - Dissolved on September 1, 2021 Ocean Cloud Technology Co., Limited. (“Ocean HK”) - A Hong Kong company 56% owned by Mcloudvr HK - Formed on November 4, 2021 - Registered capital of HKD 10,000 (USD 1,288) - No operation Shenzhen Haiyun Xinsheng Technology Co., Ltd. (“Shenzhen Haiyun”) - A PRC limited liability company 100% owned by Ocean HK - Formed on December 3, 2021 - Registered capital of RMB 50,000,000 (USD 7,846,707) - No operation Shenzhen Tata Mutual Entertainment Information Technology Co., Ltd. (“Shenzhen Tata”) - A PRC limited liability company 100% owned by Shenzhen Haiyun - Formed on January 16, 2020 - Sold on June 30, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Game promotion service Shenzhen Youmi Technology Co., Ltd. (“Shenzhen Youmi”) - A PRC limited liability company 100% owned by Shenzhen Haiyun - Formed on March 17, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Game promotion and advertising service Shenzhen Yushian Technology Co., Ltd. (“Shenzhen Yushi”) - A PRC limited liability company 100% owned by Shenzhen Haiyun - Formed on February 18, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Advertising service Name Background Ownership Horgos Tata Mutual Entertainment Information Technology Co., Ltd. (“Horgos Tata”) - A PRC limited liability company 100% owned by Shenzhen Tata - Formed on March 22, 2022 - Sold on June 30, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Game promotion service Horgos Youmi Technology Co., Ltd. (“Horgos Youmi”) - A PRC limited liability company 100% owned by Shenzhen Youmi - Formed on January 29, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Advertising service Horgos Yushian Technology Co., Ltd. (“Horgos Yushi”) - A PRC limited liability company 100% owned by Shenzhen Yushi - Formed on March 24, 2022 - Registered capital of RMB 5,000,000 (USD 784,671) - Advertising service Kashgar Youshi Information Technology Co., Ltd. (“Kashgar Youshi”) - A PRC limited liability company 100% owned by Qianhai Youshi - Formed on May 5, 2016 - Registered capital of RMB 5,000,000 (USD 769,230) - Primarily engages in holographic content sales and SDK software services. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of estimated useful lives | Schedule of estimated useful lives Useful Life Office equipment 3 Mechanical equipment 3 5 Electronic equipment 3 5 |
Accounts receivable, net (Table
Accounts receivable, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Credit Loss [Abstract] | |
Schedule of Accounts receivable, net | Schedule of Accounts receivable, net March 31, 2023 December 31, 2022 Accounts receivable $ 12,401,061 $ 12,355,072 Less: allowance for doubtful accounts (2,820,015 ) (705,060 ) Accounts receivable, net $ 9,581,046 $ 11,650,012 |
Schedule of allowance for doubtful accounts | Schedule of allowance for doubtful accounts March 31, 2023 December 31, 2022 Beginning balance $ 705,060 $ 296,051 Provision for doubtful accounts 2,119,725 442,335 Exchange difference (4,770 ) (33,326 ) Ending balance $ 2,820,015 $ 705,060 |
Inventories, net (Tables)
Inventories, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories, net | Schedule of inventories, net March 31, 2023 December 31, 2022 Raw materials $ 283,532 $ 263,304 Finished goods 16,990 17,159 Total 300,522 280,463 Less: Inventory allowance (25,694 ) (25,584 ) Inventories, net $ 274,828 $ 254,879 |
Schedule of inventory reserve | Schedule of inventory reserve March 31, 2023 December 31, 2022 Beginning balance $ 25,584 $ 27,692 Provision for inventory reserve - - Exchange difference 110 (2,108 ) Ending balance $ 25,694 $ 25,584 |
Property and equipment, net (Ta
Property and equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and equipment, net | Schedule of Property and equipment, net March 31, 2023 December 31, 2022 Office equipment $ 166,063 $ 165,351 Mechanical equipment 154,228 153,566 Electronic and other equipment 388,465 355,875 Vehicles 6,404 6,377 Less: accumulated depreciation (469,297 ) (442,249 ) Total $ 245,863 $ 238,920 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible assets, net | Schedule of Intangible assets, net March 31 2023 December 31 2022 Customer relationship $ 1,936,630 $ 1,928,318 Software 2,147,130 2,137,916 Non-compete agreements 334,906 333,469 Less: accumulated amortization (2,411,863 ) (2,170,317 ) Total $ 2,006,803 $ 2,229,386 |
Schedule of estimated annual amortization expense | Schedule of estimated annual amortization expense Year ending December 31, 2023 $ 686,338 2024 669,919 2025 650,457 2026 89 Total $ 2,006,803 |
Prepayment, other assets, and_2
Prepayment, other assets, and deposits (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of current and non-current assets | Schedule of current and non-current assets March 31 2023 December 31 2022 Current: Inventory Purchase $ 298,342 $ 457,875 Rent and rent deposits 780 18,776 VAT 166,598 129,480 Professional service 345,586 231,066 Other services 68,846 57,282 Prepayment and other current assets $ 880,151 $ 894,479 Non-current: Rent deposits $ 74,702 $ 59,144 Other 3,288 1,794 Allowance for doubtful accounts (481 ) (478 ) Prepayment and deposit $ 77,509 $ 60,460 |
Schedule of allowance for doubtful accounts | Schedule of allowance for doubtful accounts March 31, 2023 December 31, 2022 Beginning balance $ 478 $ 518 Recovery of doubtful accounts - - Exchange difference 3 (40 ) Ending balance $ 481 $ 478 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Schedule of Goodwill March 31, 2023 December 31, 2022 Goodwill from Shenzhen Bowei acquisition* $ 1,416,665 $ 1,410,585 Goodwill from Shenzhen Tianyuemeng acquisition** 1,663,872 1,656,732 Goodwill $ 3,080,537 $ 3,067,317 * On July 1, 2020, Shenzhen Mengyun entered into acquisition agreement to acquire 100% equity interests of Shenzhen Bowei, a provider of holographic PCBA solutions. The transaction consummated on July 1, 2020. According to the agreement, acquisition consideration is RMB 20,000,000 (approximately USD 3.1 million) to acquire the 100% equity interests of Shenzhen Bowei. Acquired amortizable intangible assets includes customer relationship, software, and non-compete agreements. Approximately RMB 9.7 million (USD 1.5 million) of goodwill arising from the acquisition is mainly attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets under U.S. GAAP, and comprise (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of the synergy resulting from the acquisition. ** On October 1, 2020, Shenzhen Mengyun entered into acquisition agreement to acquire 100% equity interests of Shenzhen Tianyuemeng, an entity focused on holographic advertising services. The transaction consummated on October 1, 2020. According to the agreement, acquisition consideration is RMB 30,000,000 (approximately USD 4.6 million) to acquire the 100% equity interests of Shenzhen Tianyuemeng. Acquired amortizable intangible assets includes customer relationship, software, and non-compete agreements. Approximately RMB 11.4 million (USD 1.8 million) of goodwill arising from the acquisition is mainly attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets under U.S. GAAP, and comprise (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of the synergy resulting from the acquisition. |
Investments in unconsolidated_2
Investments in unconsolidated entities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Schedule of Investments [Abstract] | |
Schedule of investments | Schedule of investments March 31, 2023 December 31, 2022 Equity investments without readily determinable fair value: 19.9% Investment (1) $ 291,223 $ 289,973 4.4% Investment (2) 72,806 72,493 5% Investment (3) 87,367 86,992 3% Investment (4) 145,611 144,986 2% Investment (5) 87,367 Impairment (597,006 ) (594,444 ) Total $ 87,367 $ - (1) In August 2016, Shenzhen Mengyun invested RMB 2,000,000 in a company in the technology development and animation design areas for 19.9% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 2,000,000 (USD 306,645) impairment loss for the investment in 2018. (2) In November 2015, Shanghai Mengyun invested RMB 500,000 in a company in the database service for 4.44% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 500,000 (USD 76,661) impairment loss for the investment in 2018 (3) In September 2021, Shenzhen Mengyun invested RMB 600,000 in a company specializing in research and development of smart wearable devices for 5% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 600,000 (USD 89,166) impairment loss for the investment in 2022. (4) In October 2021, Shenzhen Mengyun invested RMB 1,000,000 in a company specializing in VR/AR education technology for 3% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 1,000,000 (USD 148,611) impairment loss for the investment in 2022. (5) In March 2023, Shenzhen Mengyun invested RMB 600,000 in a company in the technology development and animation design areas for 2% equity interest. |
Other payables and accrued li_2
Other payables and accrued liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Other payables and accrued liabilities | Schedule of Other payables and accrued liabilities March 31, 2023 December 31, 2022 Employee compensation payable $ 1,004,959 $ 996,823 Payable from prior acquisition 565,953 563,524 Other 398,726 404,154 $ 1,969,638 $ 1,964,501 |
Related party balances and tr_2
Related party balances and transactions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of related parties | Schedule of related parties RP Name Relationship Nature March 31, 2023 December 31, 2022 Shenzhen Ultimate Holographic Culture Communication Co., Ltd. Shenzhen Mengyuns 19.9% equity investment Advances for operational purposes, no interest, due on demand $ - $ 8,740 $ - $ 8,740 The amounts due to related parties consists of the following: RP Name Relationship Nature March 31, 2023 December 31, 2022 Yuxiu Han Former shareholder and current legal representative of Shenzhen Bowei Advances for operational purpose, no interest, due on demand - 50,745 $ - $ 50,745 |
Income taxes (Tables)
Income taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense (benefit) | Schedule of income tax expense (benefit) Three months ended March 31, 2023 2022 Current income tax expense $ - $ 16,599 Deferred income tax benefit (28,450) (73,309 ) Total $ (28,450) $ (56,710 ) |
Schedule of deferred tax assets and liabilities | Schedule of deferred tax assets and liabilities March 31 2023 December 31 2022 Deferred tax assets: Allowance for doubtful accounts $ 37,403 $ 37,242 Depreciation and amortization - - Impairment loss for investment 34,947 34,797 Net operating loss carry forward 496,494 494,364 Inventory reserve 3,854 3,838 Right of use 70,711 2,045 Less: valuation allowance (513,397 ) (442,832 ) Deferred tax assets, net 130,012 129,454 Deferred tax liabilities: Recognition of intangible assets arising from business acquisition (262,789 ) (289,884 ) Deferred tax liabilities, net (262,789 ) (289,884 ) Total deferred tax liabilities, net $ (132,777 ) $ (160,430 ) |
Schedule of Taxes payable | Schedule of Taxes payable March 31, 2023 December 31, 2022 VAT taxes payable $ 15,618 $ 7,199 Income taxes payable 66,112 68,660 Other taxes payable 817 11,459 Totals $ 82,547 $ 87,319 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Schedule of lease liabilities | Schedule of lease liabilities Years ending December 31, 2023(remaining nine months) $ 198,806 2024 182,351 2025 140,147 2026 84,424 Total lease payments 605,728 Less: Interest (55,809 ) Present value of lease liabilities $ 549,921 |
Schedule of Future amortization of Company’s ROU assets | Schedule of Future amortization of Company’s ROU assets Twelve months ending December 31, 2023(remaining nine months) $ 177,353 2024 159,780 2025 120,249 2026 74,383 Total $ 531,765 |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segments | Schedule of segments Holographic solutions Holographic technology service Total March 31 2022 Revenues $ 13,514,868 10,700,343 $ 24,215,211 Cost of revenues (12,129,157 ) (1,299,855 ) (13,429,012 ) Gross profit 1,385,711 9,400,488 10,786,199 Depreciation and amortization (99,202 ) (160,867 ) (260,069 ) Total capital expenditures $ (706 ) - $ (706 ) Holographic solutions Holographic technology service Total March 31 2023 Revenues $ 1,231,097 $ 5,348,634 $ 6,579,731 Cost of revenues (824,440 ) (1,870,269 ) (2,694,709 ) Gross profit 406,657 3,478,365 3,885,022 Depreciation and amortization (258,286 ) - (258,286 ) Total capital expenditures $ (31,170 ) $ - $ (31,170 ) Total assets as of: March 31, December 31, 2023 2022 Holographic solutions $ 26,773,929 $ 29,063,408 Holographic technology service 10,320,846 11,840,424 Total Assets $ 37,094,775 $ 40,903,832 |
Schedule of Disaggregation | Schedule of Disaggregation Three months ended March 31, 2023 2022 Holographic Technology LiDAR Products $ 818,578 $ 1,742,815 Holographic Technology Intelligence Vision software and Technology Development Service 171,530 875,580 Holographic Technology Licensing and Content Product 240,989 1,490,123 Holographic Hardware Sales - 9,406,350 Total Holographic Solutions $ 1,231,097 $ 13,514,868 |
Nature of business and organi_3
Nature of business and organization (Details) | 3 Months Ended |
Mar. 31, 2023 | |
M C Hologram Inc M C [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | MC Hologram Inc (“MC”) |
Ownership | 100% owned by MicroCloud |
Background | Registered capital of USD 50,000 |
Quantum Edge H K Limited [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Quantum Edge HK Limited (“Mengyun HK”) |
Ownership | 100% owned by MC |
Background | Registered capital of HK 10,000 (USD 1,290) |
Beijing Xihuiyun Technology Co [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Beijing Xihuiyun Technology Co., Ltd (“Beijing Xihuiyun”) |
Ownership | 100% owned by Mengyun HK |
Background | Registered capital of RMB 207,048,000 (USD 30,000,000) |
Shanghai Mengyun Holographic Technology Co [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shanghai Mengyun Holographic Technology Co., Ltd. (“Shanghai Mengyun”) |
Ownership | 81.63% owned by Beijing Xihuiyun and 18.37% owned by Mengyun HK |
Background | Registered capital of RMB 27,000,000 (USD 4,316,665) |
Shenzhen Mengyun Holographic Technology Co [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shenzhen Mengyun Holographic Technology Co., Ltd. (“Shenzhen Mengyun”) |
Ownership | 100% owned by Shanghai Mengyun |
Background | Registered capital of RMB 10,000,000 (USD 1,538,461) |
Shenzhen Qianhai Youshi Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shenzhen Qianhai Youshi Technology Co., Ltd. (“Qianhai Youshi”) |
Ownership | 100% owned by Shanghai Mengyun |
Background | Registered capital of RMB 10,000,000 (USD 1,538,461) |
Shenzhen Yijia Network Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shenzhen Yijia Network Technology Co., Ltd. (“Yijia Network”) |
Ownership | 100% owned by Qianhai Youshi |
Background | Registered capital of RMB 10,000,000 (USD 1,538,461) |
Horgos Youshi Network Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Horgos Youshi Network Technology Co., Ltd. (“Horgos Youshi”) |
Ownership | 100% owned by Qianhai Youshi |
Background | Registered capital of RMB 1,000,000 (USD 153,846) |
Horgos Weiyi Software Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Horgos Weiyi Software Technology Co., Ltd. (“Horgos Weiyi”) |
Ownership | 100% owned by Shenzhen Mengyun |
Background | Registered capital of RMB 10,000,000 (USD 1,538,461) |
Shenzhen Broad Vision Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shenzhen BroadVision Technology Co., Ltd. (“Shenzhen Bowei”) |
Ownership | 100% owned by Shenzhen Mengyun |
Background | Registered capital of RMB 10,000,000 (USD 1,538,461) |
Mcloudvr Software Network Technology H K Co Limited [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Mcloudvr Software Network Technology HK Co., Limited (“Mcloudvr HK”) |
Ownership | 100% owned by Shenzhen Mengyun |
Background | Registered capital of HKD 100,000 (USD 12,882) |
Shenzhen Tianyuemeng Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shenzhen Tianyuemeng Technology Co., Ltd. (“Shenzhen Tianyuemeng”) |
Ownership | 100% owned by Shenzhen Mengyun |
Background | Registered capital of RMB 20,000,000 (USD 3,076,922) |
Shenzhen Yunao Hongxiang Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shenzhen Yunao Hongxiang Technology Co., Ltd. (“Shenzhen Yunao”) |
Ownership | 100% owned by Shenzhen Mengyun |
Background | Registered capital of RMB 5,000,000 (USD 784,671) |
Broadvision Intelligence Hong Kong Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Broadvision Intelligence (Hong Kong), Ltd. (“Broadvision HK”) |
Ownership | 100% owned by Shenzhen Bowei |
Background | Registered capital of HKD 10,000 (USD 1,288) |
Horgos Broad Vision Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Horgos BroadVision Technology Co., Ltd. (“Horgos Bowei”) |
Ownership | 100% owned by Shenzhen Bowei |
Background | Registered capital of RMB 1,000,000 (USD 153,846) |
Horgos Tianyuemeng Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Horgos Tianyuemeng Technology Co., Ltd. (“Horgos Tianyuemeng”) |
Ownership | 100% owned by Shenzhen Tianyuemeng |
Background | Registered capital of RMB 1,000,000 (USD 153,846) |
Horgos Tianyuemeng Technology Co Ltd Shenzhen Branch [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Horgos Tianyuemeng Technology Co., Ltd.-Shenzhen Branch (“Horgos Tianyuemeng-SZ”) |
Ownership | 100% owned by Horgos Tianyuemeng |
Background | Registered capital of RMB 1,000,000 (USD 153,846) |
Shanghai Mengyun Quanyou Vision Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shanghai Mengyun Quanyou Vision Technology Co., Ltd (“Shanghai Quanyou”) |
Ownership | 100% owned by Shanghai Mengyun |
Background | Registered capital of RMB 1,000,000 (USD 153,846) |
Ocean Cloud Technology Co Limited [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Ocean Cloud Technology Co., Limited. (“Ocean HK”) |
Ownership | 56% owned by Mcloudvr HK |
Background | Registered capital of HKD 10,000 (USD 1,288) |
Shenzhen Haiyun Xinsheng Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shenzhen Haiyun Xinsheng Technology Co., Ltd. (“Shenzhen Haiyun”) |
Ownership | 100% owned by Ocean HK |
Background | Registered capital of RMB 50,000,000 (USD 7,846,707) |
Shenzhen Tata Mutual Entertainment Information Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shenzhen Tata Mutual Entertainment Information Technology Co., Ltd. (“Shenzhen Tata”) |
Ownership | 100% owned by Shenzhen Haiyun |
Background | Registered capital of RMB 5,000,000 (USD 784,671) |
Shenzhen Youmi Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shenzhen Youmi Technology Co., Ltd. (“Shenzhen Youmi”) |
Ownership | 100% owned by Shenzhen Haiyun |
Background | Registered capital of RMB 5,000,000 (USD 784,671) |
Shenzhen Yushian Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Shenzhen Yushian Technology Co., Ltd. (“Shenzhen Yushi”) |
Ownership | 100% owned by Shenzhen Haiyun |
Background | Registered capital of RMB 5,000,000 (USD 784,671) |
Horgos Tata Mutual Entertainment Information Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Horgos Tata Mutual Entertainment Information Technology Co., Ltd. (“Horgos Tata”) |
Ownership | 100% owned by Shenzhen Tata |
Background | Registered capital of RMB 5,000,000 (USD 784,671) |
Horgos Youmi Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Horgos Youmi Technology Co., Ltd. (“Horgos Youmi”) |
Ownership | 100% owned by Shenzhen Youmi |
Background | Registered capital of RMB 5,000,000 (USD 784,671) |
Horgos Yushian Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Horgos Yushian Technology Co., Ltd. (“Horgos Yushi”) |
Ownership | 100% owned by Shenzhen Yushi |
Background | Registered capital of RMB 5,000,000 (USD 784,671) |
Kashgar Youshi Information Technology Co Ltd [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Name | Kashgar Youshi Information Technology Co., Ltd. (“Kashgar Youshi”) |
Ownership | 100% owned by Qianhai Youshi |
Background | Registered capital of RMB 5,000,000 (USD 769,230) |
Nature of business and organi_4
Nature of business and organization (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Sep. 16, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Redemption of shares | 2,182,470 | |
Warrants outstanding | 6,020,500 | |
Reverse Recapitalization amount | $ 33,200 | |
Common Stock [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Ordinary shares issued | 50,812,035 | |
M C Shareholders [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Issuance of shares | 44,554,455 |
Summary of significant accoun_4
Summary of significant accounting policies (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Electronic Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Electronic Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Summary of significant accoun_5
Summary of significant accounting policies (Details Narrative) ¥ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jan. 03, 2022 CNY (¥) | Jan. 03, 2022 USD ($) | Jan. 02, 2022 USD ($) | |
Cash | $ 20,300,000 | |||||
Working capital | $ 21,500,000 | |||||
Foreign cuurency transactions | RMB 1.00 to USD 0.1456 | |||||
Allowance for doubtful accounts | $ 705,060,000 | $ 2,820,015,000 | ||||
Inventories, net | 25,694 | 25,584 | ||||
Allowance for noncurrent prepayments and deposits | 478,000 | 481,000 | ||||
Impairment of long lived assets | 0 | $ 0 | ||||
Performance obligation | 0 | 384,489 | ||||
Advertising costs | 138,153 | 85,937 | ||||
Government subsidies | 12,191 | 6,665 | ||||
Other non-operating income | 25,235 | 8,158 | ||||
Operating Lease, Right-of-Use Asset | 531,765 | $ 589,301 | ¥ 5,700 | $ 900,000 | $ 800,000 | |
Operating Lease, Liability | ¥ 5,700 | $ 900,000 | $ 800,000 | |||
Operating Lease Interest Rate | 7% | |||||
Total expenses | $ 60,844 | $ 176,196 | ||||
Convenience Translation [Member] | ||||||
Foreign cuurency transactions | RMB 1.00 to USD 0.1456 | |||||
Mcloudvr H K [Member] | ||||||
Foreign cuurency transactions | USD 0.1450 |
Accounts receivable, net (Detai
Accounts receivable, net (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Credit Loss [Abstract] | ||
Accounts receivable | $ 12,401,061 | $ 12,355,072 |
Less: allowance for doubtful accounts | (2,820,015) | (705,060) |
Accounts receivable, net | $ 9,581,046 | $ 11,650,012 |
Accounts receivable, net (Det_2
Accounts receivable, net (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Credit Loss [Abstract] | |||
Beginning balance | $ 705,060 | $ 296,051 | $ 296,051 |
Provision for doubtful accounts | 2,119,725 | $ 20,534 | 442,335 |
Exchange difference | (4,770) | (33,326) | |
Ending balance | $ 2,820,015 | $ 705,060 |
Accounts receivable, net (Det_3
Accounts receivable, net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Credit Loss [Abstract] | ||
Provision for doubtful accounts | $ 2,119,725 | $ 442,335 |
Inventories, net (Details)
Inventories, net (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 283,532 | $ 263,304 |
Finished goods | 16,990 | 17,159 |
Total | 300,522 | 280,463 |
Less: Inventory allowance | (25,694) | (25,584) |
Inventories, net | $ 274,828 | $ 254,879 |
Inventories, net (Details 1)
Inventories, net (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |||
Beginning balance | $ 25,584 | $ 27,692 | $ 27,692 |
Provision for inventory reserve | $ (22,753) | ||
Exchange difference | 110 | (2,108) | |
Ending balance | $ 25,694 | $ 25,584 |
Inventories, net (Details Narra
Inventories, net (Details Narrative) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Inventory allowance | $ 0 | $ 0 |
Property and equipment, net (De
Property and equipment, net (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Abstract] | ||
Office equipment | $ 166,063 | $ 165,351 |
Mechanical equipment | 154,228 | 153,566 |
Electronic and other equipment | 388,465 | 355,875 |
Vehicles | 6,404 | 6,377 |
Less: accumulated depreciation | (469,297) | (442,249) |
Total | $ 245,863 | $ 238,920 |
Property and equipment, net (_2
Property and equipment, net (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 27,048 | $ 69,104 |
Intangible assets, net (Details
Intangible assets, net (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Customer relationship | $ 1,936,630 | $ 1,928,318 |
Software | 2,147,130 | 2,137,916 |
Non-compete agreements | 334,906 | 333,469 |
Less: accumulated amortization | (2,411,863) | (2,170,317) |
Total | $ 2,006,803 | $ 2,229,386 |
Intangible assets, net (Detai_2
Intangible assets, net (Details 1) | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 686,338 |
2024 | 669,919 |
2025 | 650,457 |
2026 | 89 |
Total | $ 2,006,803 |
Prepayment, other assets, and_3
Prepayment, other assets, and deposits (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Inventory Purchase | $ 298,342 | $ 457,875 |
Rent and rent deposits | 780 | 18,776 |
VAT | 166,598 | 129,480 |
Professional service | 345,586 | 231,066 |
Other services | 68,846 | 57,282 |
Prepayment and other current assets | 880,151 | 894,479 |
Rent deposits | 74,702 | 59,144 |
Other | 3,288 | 1,794 |
Allowance for doubtful accounts | (481) | (478) |
Prepayment and deposit | $ 77,509 | $ 60,460 |
Prepayment, other assets, and_4
Prepayment, other assets, and deposits (Details 1) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Beginning Balance | $ 478 | $ 518 |
Recovery of doubtful accounts | ||
Exchange difference | 3 | (40) |
Ending Balance | $ 481 | $ 478 |
Goodwill (Details)
Goodwill (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | |
Indefinite-Lived Intangible Assets [Line Items] | |||
GoodWill | $ 3,080,537 | $ 3,067,317 | |
Goodwillfrom Shenzhen Bowei Acquisition [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
GoodWill | [1] | 1,416,665 | 1,410,585 |
Goodwillfrom Shenzhen Tianyuemeng Acquisition [Member] | |||
Indefinite-Lived Intangible Assets [Line Items] | |||
GoodWill | [2] | $ 1,663,872 | $ 1,656,732 |
[1]On July 1, 2020, Shenzhen Mengyun entered into acquisition agreement to acquire 100% equity interests of Shenzhen Bowei, a provider of holographic PCBA solutions. The transaction consummated on July 1, 2020. According to the agreement, acquisition consideration is RMB 20,000,000 (approximately USD 3.1 million) to acquire the 100% equity interests of Shenzhen Bowei. Acquired amortizable intangible assets includes customer relationship, software, and non-compete agreements. Approximately RMB 9.7 million (USD 1.5 million) of goodwill arising from the acquisition is mainly attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets under U.S. GAAP, and comprise (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of the synergy resulting from the acquisition.[2]On October 1, 2020, Shenzhen Mengyun entered into acquisition agreement to acquire 100% equity interests of Shenzhen Tianyuemeng, an entity focused on holographic advertising services. The transaction consummated on October 1, 2020. According to the agreement, acquisition consideration is RMB 30,000,000 (approximately USD 4.6 million) to acquire the 100% equity interests of Shenzhen Tianyuemeng. Acquired amortizable intangible assets includes customer relationship, software, and non-compete agreements. Approximately RMB 11.4 million (USD 1.8 million) of goodwill arising from the acquisition is mainly attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets under U.S. GAAP, and comprise (a) the assembled work force and (b) the expected but unidentifiable business growth as a result of the synergy resulting from the acquisition. |
Goodwill (Details Narrative)
Goodwill (Details Narrative) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Indefinite-Lived Intangible Assets [Line Items] | ||
GoodWill | $ 3,080,537 | $ 3,067,317 |
Holographic Solutions [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
GoodWill | 1,416,665 | 1,410,585 |
Holographic Technology Service [Member] | ||
Indefinite-Lived Intangible Assets [Line Items] | ||
GoodWill | $ 1,663,872 | $ 1,656,732 |
Investments in unconsolidated_3
Investments in unconsolidated entities (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | |
Schedule of Investments [Line Items] | |||
Investments | $ 87,367 | ||
Investments 19. 9 [Member] | |||
Schedule of Investments [Line Items] | |||
Investments | [1] | 291,223 | 289,973 |
Investment 4. 4 Percent [Member] | |||
Schedule of Investments [Line Items] | |||
Investments | [2] | 72,806 | 72,493 |
Investments 5percent [Member] | |||
Schedule of Investments [Line Items] | |||
Investments | [3] | 87,367 | 86,992 |
Investments 3percent [Member] | |||
Schedule of Investments [Line Items] | |||
Investments | [4] | 145,611 | 144,986 |
Investments 2percent [Member] | |||
Schedule of Investments [Line Items] | |||
Investments | [5] | 87,367 | |
Impairment [Member] | |||
Schedule of Investments [Line Items] | |||
Impairment of investments | $ (597,006) | $ (594,444) | |
[1]In August 2016, Shenzhen Mengyun invested RMB 2,000,000 in a company in the technology development and animation design areas for 19.9% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 2,000,000 (USD 306,645) impairment loss for the investment in 2018.[2]In November 2015, Shanghai Mengyun invested RMB 500,000 in a company in the database service for 4.44% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 500,000 (USD 76,661) impairment loss for the investment in 2018[3]In September 2021, Shenzhen Mengyun invested RMB 600,000 in a company specializing in research and development of smart wearable devices for 5% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 600,000 (USD 89,166) impairment loss for the investment in 2022.[4]In October 2021, Shenzhen Mengyun invested RMB 1,000,000 in a company specializing in VR/AR education technology for 3% equity interest. Due to the continual losses, the Company believes that the probability of recovering the investment is low. Therefore, the Company accrued RMB 1,000,000 (USD 148,611) impairment loss for the investment in 2022.[5]In March 2023, Shenzhen Mengyun invested RMB 600,000 in a company in the technology development and animation design areas for 2% equity interest. |
Other payables and accrued li_3
Other payables and accrued liabilities (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Other payables and accrued liabilities | $ 1,969,638 | $ 1,964,501 |
Employee Compensation Payable [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other payables and accrued liabilities | 1,004,959 | 996,823 |
Payable From Prior Acquisition [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other payables and accrued liabilities | 565,953 | 563,524 |
Other [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other payables and accrued liabilities | $ 398,726 | $ 404,154 |
Related party balances and tr_3
Related party balances and transactions (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Due from related party | $ 8,740 | |
Due to related parties | 50,745 | |
Shenzhen Mengyun 19. 9 Equity Investment [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related party | 8,740 | |
Yuxiu Han [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 50,745 |
Income taxes (Details)
Income taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Current income tax expense | $ 16,599 | |
Deferred income tax benefit | (28,450) | (73,309) |
Total | $ (28,450) | $ (56,710) |
Income taxes (Details 1)
Income taxes (Details 1) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Allowance for doubtful accounts | $ 37,403 | $ 37,242 |
Depreciation and amortization | ||
Impairment loss for investment | 34,947 | 34,797 |
Net operating loss carry forward | 496,494 | 494,364 |
Inventory reserve | 3,854 | 3,838 |
Right of use | 70,711 | 2,045 |
Less: valuation allowance | (513,397) | (442,832) |
Deferred tax assets, net | 130,012 | 129,454 |
Deferred tax liabilities: | ||
Recognition of intangible assets arising from business acquisition | (262,789) | (289,884) |
Deferred tax liabilities, net | (262,789) | (289,884) |
Total deferred tax liabilities, net | $ (132,777) | $ (160,430) |
Income taxes (Details 2)
Income taxes (Details 2) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
VAT taxes payable | $ 15,618 | $ 7,199 |
Income taxes payable | 66,112 | 68,660 |
Other taxes payable | 817 | 11,459 |
Totals | $ 82,547 | $ 87,319 |
Income taxes (Details Narrative
Income taxes (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income tax, description | The Ministry of Finance (“MOF”) and State Administration of Taxation (“SAT”) on January 17, 2019 jointly issued Cai Shui 2019 No. 13. This clarified that from January 1, 2019 to December 31, 2021, eligible small enterprises whose RMB 1,000,000 of annual taxable income is eligible for a 75% reduction on a rate of 20% (i.e., effective rate is 5%) and the income between RMB 1,000,000 and RMB 3,000,000 is eligible for 50% reduction on a rate of 20% (i.e., effective rate is 10%). On April 2, 2021, MOF and SAT further jointly issued Cai Shui 2021 No. 12, which clarified that from January 1, 2022 to December 31, 2022, eligible small enterprises whose RMB 1,000,000 of annual taxable income is eligible for an extra 50% reduction base on Cai Shui 2019 No. 13 (i.e., effective rate is 2.5%). On March 14, 2022, MOF and SAT further jointly issued Cai Shui 2022 No. 13, which clarified that from January 1, 2022 to December 31, 2024, eligible small enterprises whose income between RMB 1,000,000 and RMB 3,000,000 is eligible for an extra 50% reduction base on Cai Shui 2019 No. 13 (i.e., effective rate is 5%). March 26, 2023, MOF and SAT further jointly issued Cai Shui 2023 No. 6 which clarified that from January 1, 2023 to December 31, 2024, eligible small enterprises whose RMB 1,000,000 of annual taxable income is eligible for a 75% reduction on a rate of 20% (i.e., effective rate is 5%).For the three months ended March 31, 2022 and 2023, Shenzhen Tianyuemeng, Yijia Network, and Qianhai Youshi and Shenzhen Yunao were eligible to employ this policy. | |
Valuation allowance increased | $ 70,565 | $ 38,311 |
Net operating loss carry forwards | $ 5,538,621 | |
VAT rate on services | 0.06 | |
VAT rate on goods | 0.13 | |
HONG KONG | ||
Tax rate | 16.50% |
Concentration of risk (Details
Concentration of risk (Details Narrative) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 CNY (¥) | Mar. 31, 2022 | Dec. 31, 2022 USD ($) | Mar. 31, 2023 USD ($) | |
Concentration Risk [Line Items] | ||||
Cash deposits | ¥ | ¥ 500,000 | |||
Deposited | $ | $ 21,910,338 | $ 20,328,906 | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 25.70% | 38.80% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 31.10% | 26.40% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customer [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 21.10% | 15.80% | ||
Purchases [Member] | Vendor Concentration Risk [Member] | One Vendor [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 59% | 45.60% | ||
Purchases [Member] | Vendor Concentration Risk [Member] | Two Vendor [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 12.70% | 23.50% | ||
Accounts Payable [Member] | Vendor Concentration Risk [Member] | One Vendor [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 68.20% | 63% | ||
Accounts Payable [Member] | Vendor Concentration Risk [Member] | Two Vendor [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk percentage | 10% |
Shareholders_ equity (Details N
Shareholders’ equity (Details Narrative) - USD ($) | Nov. 10, 2020 | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 |
Class of Stock [Line Items] | ||||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | ||
Exchange for issue of an aggregate shares | 44,554,455 | |||
Number of Common Stock shares per value | 0.0001 | |||
Statutory reserve | $ 6,121,025 | $ 6,121,025 | ||
Retained earnings for statutory reserves | $ 0 | $ 126,416 | ||
Ordinary Shares [Member] | ||||
Class of Stock [Line Items] | ||||
Common Stock, Shares Authorized | 500,000,000 | |||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | |||
Common Stock, Shares, Issued | 132,000,000 | |||
Common Stock, Shares, Outstanding | 132,000,000 | |||
Common Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Common Stock, Shares, Issued | 50,812,035 |
Leases (Details)
Leases (Details) | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
2023(remaining nine months) | $ 198,806 |
2024 | 182,351 |
2025 | 140,147 |
2026 | 84,424 |
Total lease payments | 605,728 |
Less: Interest | (55,809) |
Present value of lease liabilities | $ 549,921 |
Leases (Details 1)
Leases (Details 1) | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
2023(remaining nine months) | $ 177,353 |
2024 | 159,780 |
2025 | 120,249 |
2026 | 74,383 |
Total | $ 531,765 |
Leases (Details Narrative)
Leases (Details Narrative) ¥ in Thousands | 3 Months Ended | |||||
Mar. 31, 2023 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jan. 03, 2022 CNY (¥) | Jan. 03, 2022 USD ($) | Jan. 02, 2022 USD ($) | |
Operating Lease, Right-of-Use Asset | $ 531,765 | $ 589,301 | ¥ 5,700 | $ 900,000 | $ 800,000 | |
Operating Lease, Liability | ¥ 5,700 | $ 900,000 | $ 800,000 | |||
Weighted average remaining lease term | 2 years 9 months | |||||
Operating leases expenses | $ 70,168 | $ 72,563 | ||||
Short term lease expenses | $ 25,408 | $ 21,955 | ||||
Maximum [Member] | ||||||
Incremental borrowing rate | 7% |
Warrant liabilities (Details Na
Warrant liabilities (Details Narrative) - $ / shares | 1 Months Ended | |
Jun. 24, 2021 | Mar. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Warrants | 6,020,500 | |
Warrants, description | Each Public Unit consists of one ordinary share of the Company, $0.0001 par value per share, one right and one redeemable warrant (the “Public Warrant”). Each Public Warrant entitles the holder to purchase one-half (1/2) of an ordinary share at an exercise price of $11.50 | |
IPO [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Sale of units | 5,750,000 | |
Price per share | $ 10 | |
Private Placement [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Sale of units | 270,500 | |
Price per share | $ 10 | |
Public Warrants [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Warrants | 5,750,000 | |
Private Warrants [Member] | ||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Warrants | 270,500 | |
Price per share | $ 0.01 |
Segments (Details)
Segments (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 6,579,731 | $ 24,215,211 | |
Cost of revenues | (2,694,709) | (13,429,012) | |
Gross profit | 3,885,022 | 10,786,199 | |
Total Assets | 37,094,775 | $ 40,903,832 | |
Holographic Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 1,231,097 | 13,514,868 | |
Cost of revenues | (824,440) | (12,129,157) | |
Gross profit | 406,657 | 1,385,711 | |
Depreciation and amortization | (258,286) | (99,202) | |
Total capital expenditures | (31,170) | (706) | |
Total Assets | 26,773,929 | 29,063,408 | |
Holographic Technology Service [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 5,348,634 | 10,700,343 | |
Cost of revenues | (1,870,269) | (1,299,855) | |
Gross profit | 3,478,365 | 9,400,488 | |
Depreciation and amortization | (160,867) | ||
Total capital expenditures | |||
Total Assets | 10,320,846 | 11,840,424 | |
Total [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues | 6,579,731 | 24,215,211 | |
Cost of revenues | (2,694,709) | (13,429,012) | |
Gross profit | 3,885,022 | 10,786,199 | |
Depreciation and amortization | (258,286) | (260,069) | |
Total capital expenditures | (31,170) | (706) | |
Total Assets | $ 37,094,775 | $ 40,903,832 |
Segments (Details 1)
Segments (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 6,579,731 | $ 24,215,211 |
Holographic Technology Li D A R Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 818,578 | 1,742,815 |
Holographic Technology Intelligence Vision Software And Technology Development Service [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 171,530 | 875,580 |
Holographic Technology Licensing And Content Product [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 240,989 | 1,490,123 |
Holographic Hardware Sales [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 9,406,350 | |
Total Holographic Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 1,231,097 | $ 13,514,868 |