| Summary of significant accounting policies | Note
3 – Summary of significant accounting policies Basis
of presentation The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations
of the Securities Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements as of March 31,
2023 and for the three months ended March 31, 2023 reflect all adjustments (consisting of only normal recurring adjustments)
considered necessary to present fairly the financial position, results of operations and cash flow for such interim periods. The
results of operations for the three months ended March 31, 2023 are not necessarily indicative of results to be expected for the
full year of 2023. Certain information and footnote disclosures normally included in the consolidated financial statements prepared
in conformity with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited
condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and
the notes thereto, included in the Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on June 28,
2023. Principles
of consolidation The
unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions
and balances among the Company and its subsidiaries have been eliminated upon consolidation. A
subsidiary is an entity 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 The
preparation of the unaudited condensed 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods
presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include
lease classification and liabilities, right-of-use assets, determinations of the useful lives and valuation of long-lived assets, estimates
of allowances for doubtful accounts, estimates of impairment of long-lived assets, valuation of deferred tax assets, other provisions
and contingencies, estimated fair value of earn-out shares, prepaid forward purchase liability and private warrants. Actual results could
differ from these estimates. Non-controlling
interests For
the Company’s non-wholly owned subsidiaries, a non-controlling interest is recognized to reflect portion of equity that is not
attributable, directly or indirectly, to the Company. The cumulative results of operations attributable to non-controlling interests
are also recorded as non-controlling interests in the Company’s unaudited condensed consolidated balance sheets and unaudited condensed
consolidated statements of operations and comprehensive income (loss). Cash flows related to transactions with non-controlling interests
are presented under financing activities in the unaudited condensed consolidated statements of cash flows. Segment
reporting The
Company’s chief operating decision-maker is identified as the chief executive officer who reviews financial information presented
on a consolidated basis, accompanied by disaggregated information about revenues by different revenues streams for purposes of allocating
resources and evaluating financial performance. Based on qualitative and quantitative criteria established by Accounting Standards Codification
(“ASC”) 280, “Segment Reporting”, the Company considers itself to be operating within two operating and reportable
segments as set forth in Note 15. Cash
and restricted cash Cash
represent cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted as to withdrawal
or use and have original maturities less than three months. Restricted cash represents cash held in bank account from 8i which was restricted
due to the incomplete procedures of changing signers as of December 31, 2022. As of March 31, 2023, such restriction has been lifted
and the remaining cash held in bank account has transfer to the Company’s operating bank account. Accounts
receivable, net Accounts
receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which are
due after 30 to 90 days, depending on the credit term with customers. The carrying value of accounts receivable is reduced by an
allowance that reflects the Company’s best estimate of the amounts that will not be collected. An allowance for doubtful
accounts is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is
unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. Starting from January
1, 2023, the Company adopted ASU No.2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit
Losses on Financial Instruments” (“ASC Topic 326”). The Company used a modified retrospective approach, and the
adoption does not have an impact on our unaudited condensed consolidated financial statements. Management also periodically
evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments
in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of
collection have been exhausted and the potential for recovery is considered remote. The Company’s management continues to
evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of March 31, 2023 and December 31,
2022, the Company provided allowance for doubtful accounts of $ 234,827 197,438 Prepaid
expenses and other current assets Prepaid
expenses and other current assets primarily include prepaid expenses paid to services providers, and other deposits. Management regularly
evaluates past events and current conditions and changes in payment and realization trends and records allowances when management believes
collection or realization of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive
efforts at collection are made. As of March 31, 2023 and December 31, 2022, no Property
and equipment, net Property
and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets with no residual value. The estimated useful lives are as follows: Schedule
of property and equipment useful lives
Expected
useful lives
Office
equipment 3
Medical
equipment 3
Leasehold
improvement Shorter
of the lease term or 5 years 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 unaudited condensed consolidated statements of operations and comprehensive income (loss). 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. The
Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future net undiscounted cash flows
that the asset is expected to generate. If such asset is considered to be impaired, the impairment recognized is the amount by which
the carrying amount of the asset, if any, exceeds its fair value determined using a discounted cash flow model. For the three months
ended March 31, 2023 and 2022, there was no Impairment
for long-lived assets In
accordance with ASC 360-10, Long-lived assets, including property and equipment 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, the Company did no Warrants The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing
Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers
whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480,
and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed
to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement”
in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires
the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while
the warrants are outstanding. For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of equity at the time of issuance. The Company determined that upon further review of the warrant agreements, the Company concluded that
its warrants qualify for equity accounting treatment. Upon
completion of the business combination, all of 8i’s public and private warrants remain outstanding were replaced by the Company’s
public and private warrants. The Company treated such warrants replacement as a warrant modification and no incremental fair value was
recognized. Forward
Purchase Receivables and Prepaid Forward Purchase Liabilities The
Company recorded forward purchase receivables amounted to $ 21,892,527 2.50 In
connection with the forward purchase agreement, the Company recognized prepaid forward purchase liabilities in accordance with ASC 480-10-25-8
as the Company has the obligation to pay cash to settle the maturity consideration. As of March 31, 2023 and December 31, 2022, prepaid
forward purchase liabilities were amounted to $ 20,853,545 20,321,053 Revenue
recognition The
Company follows the revenue accounting requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts
with Customers (Topic 606) (“Accounting Standards Codification (“ASC”) 606”). The core principle underlying the
revenue recognition of this ASU allows the Company to recognize - revenue that represents the transfer of goods and services to customers
in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company
to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based
on when control of goods and services transfers to a customer. To
achieve that core principle, the Company applies five-step model to recognize revenue from customer contracts. The five-step model requires
that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine
the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not
occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when
(or as) the Company satisfies the performance obligation. The
Company accounts for a contract with a customer when the contract is committed in writing, the rights of the parties, including payment
terms, are identified, the contract has commercial substance and collectability is probable. Revenue
recognition policies for each type of revenue stream are as follows: (1)
Medical Services -
Performance obligation satisfied at a point in time The
Company operates on a unified technology health care platform which provide a full continuum of healthcare services integrated with healthcare
data analytics to drive improved outcomes for patients. The Company operates the medical services on a business-to-business (B2B) platform,
and serves the corporate customers involved in various industries. The Company is primarily generating revenue on a per healthcare visit
basis for specialty medical visits for specialist treatment such as cardiology, dermatology and etc, at the time which the single performance
obligation was satisfied. Such fees are paid by the corporate customers on behalf of their employees. The Company generally bills their
corporate customers for the healthcare visit services on a weekly basis, or in arrears depending on the service, with payment terms generally
between 30 to 90 days. There are not significant differences between the timing of revenue recognition and billing. Consequently, the
Company has determined that the Company’s contracts do not include a financing component. Revenue is recognized in an amount that
reflects the consideration that is expected in exchange for the service at a point in time at the time of the visit. In addition, the
Company’s contracts do not generally contain refund provisions for fees earned related to services performed. The
Company accounts for medical service revenue on a gross basis as the Company is acting as a principal in these transactions and is responsible
for fulfilling the promise to provide the specified services, which the Company has control of the services and has the ability to direct
the service providers to be performed to obtain substantially all the benefits. In making this determination, the Company also assesses
whether it is primarily obligated in these transactions, is subject to inventory risk, has latitude in establishing prices, or has met
several but not all of these indicators in accordance with ASC 606-10-55-36 through 40. The
Company recognizes the medical services revenue when the control of the specified services is transferred to its customer, which at a
point in time at the time after completion of the visit. The
Company also operates on a general practice clinic and generating such revenue on a per healthcare visit basis. Revenues are recognized
when the visits are completed at a point in time at the time of the visit. (2)
Product Sales -
Performance obligation satisfied at a point in time The
Company purchases, sells, and installs facial recognition and temperature measurement monitor system to corporate customer, where the
product and the installation are interrelated and are not capable of being distinct since the customer cannot benefit from the product
or installation either on its own. The Company recognized the products revenue when control of the product is passed to the customer,
which is the point in time that the customers are able to direct the use of and obtain substantially all of the economic benefit of the
goods after the installation by the Company’s technician. The transfer of control typically occurs at a point in time based on
consideration of when the customer has an obligation to pay for the goods, and physical possession of, legal title to, and the risks
and rewards of ownership of the goods has been transferred, and the customer has accepted the goods. Revenue is recognized net of estimates
of variable consideration, including product returns, customer discounts and allowance. Historically, the Company has not experienced
any significant returns. (3)
Property Management Services -
Performance obligation satisfied over a period of time The
Company provides property management services in shopping malls, business office building, or residential apartments to all tenants and
property owners. Property management services include common area property management services that contain cleaning, landscaping, public
facilities maintenance and other traditional services and also include security property management services provided to all tenants
and property owners. Each of the two services is within separate agreements. The Company identified common area property management services
as a single performance obligation as the kinds of service in the contract are not capable of being distinct and identified the security
management services as another single performance obligation as there is only one service that is to provide security services. The
Company recognizes the common area property management revenue and security property management revenue on a straight-line basis over
the terms of the common area property management agreement and security property management agreement, generally over one year period
because its customer simultaneously receives and consumes the benefits provided by the Company throughout the performance obligations
period. The
Company has elected to apply the practical expedient to expense costs as incurred for incremental costs to obtain a contract when the
amortization period would have been one year or less. As of March 31, 2023 and December 31, 2022, the Company did not have any contract
assets. The
Company recognized advance payments from its customer prior to revenue recognition as contract liability until the revenue recognition
performance obligation are met. As of March 31, 2023 and December 31, 2022, the Company did not have any contract liability. Disaggregated
information of revenues by products/services are as follows: Schedule
of revenue
For the Three Months Ended
March 31, 2023 March 31, 2022
(Unaudited) (Unaudited)
Medical services – specialty cares $ 791,711 $ 1,496,211
Medical services – general practices - 60,888
Medical services – general practices (related parties) - 135
Medical services – subtotal 791,711 1,557,234
Product sales - 7,238
Property management services – common area management 668,827 817,698
Property management services – security 238,196 284,693
Property management services 907,023 1,102,391
Total revenues $ 1,698,734 $ 2,666,863 Cost
of revenues (1)
Medical Services Cost
of revenues mainly consists of medical supplies purchased and medical service was provided by Cadence Health Pte. Ltd., a related party,
prior to March 2022. Medical supplies purchased and medical service provided by the third party service providers were insignificant
prior to March 2022. Beginning in April 2022, cost of revenues mainly consists of medical supplies purchased and medical service provided
by third party service providers. (2)
Product Sales Cost
of revenues mainly consists of medical product or equipment purchased for resale. (3)
Property Management Services Cost
of revenues mainly consists of labor expenses incurred attributable to property management service. Disaggregated
information of cost of revenues by products/services are as follows: Schedule
of cost of revenue
For the Three Months Ended
March 31, 2023 March 31, 2022
(Unaudited) (Unaudited)
Medical services – specialty cares $ 607,386 $ 43,432
Medical services – specialty cares (related party) - 493,843
Medical services – general practices - 15,360
Medical services – subtotal 607,386 552,635
Product sales - 9,255
Property management services – common area management 496,724 601,457
Property management services – security 191,026 232,270
Property management services 687,750 833,727
Total cost of revenues $ 1,295,136 $ 1,395,617 Defined
contribution plan The
full-time employees of the Company are entitled to the government mandated defined contribution plan. The Company is required to accrue
and pay for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in
accordance with the relevant government regulations, and make cash contributions to the government mandated defined contribution plan.
Total expenses for the plans were $ 137,791 136,159 The
related contribution plans include: Singapore
subsidiaries -
Central Provident Fund (“CPF”) – 17.00% based on employee’s monthly salary for employees aged 55 and below, reduces
progressively to 7.5% as age increase -
Skill Development Levy (“SDL”) – up to 0.25% based on employee’s monthly salary capped $ 8.3 11.25 Vietnam
subsidiary -
Social Insurance Fund (“SIF”) – 20% based on employee’s monthly salary -
Trade Union Fee – 2.00 Income
taxes The
Company accounts for income taxes in accordance with U.S. GAAP for income taxes. 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
tax is calculated using the balance sheet liability method in respect of temporary differences arising from differences between the carrying
amount of assets and liabilities in the unaudited condensed consolidated financial statements and the corresponding tax basis. 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 income will be utilized with prior net operating loss carried forwards 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. 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 deferred tax assets will not be utilized. Current
income taxes are provided for in accordance with the laws of the relevant tax 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 that
is greater than 50% likely of being realized on examination The
Company recognize interest and penalties related to unrecognized tax benefits, if any, on the income tax expense line in the accompanying
unaudited condensed consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line
in the unaudited condensed consolidated balance sheet. The
Company conducts much of its business activities in Singapore and is subject to tax in its jurisdiction. As a result of its business
activities, the Company’s subsidiaries file separate tax returns that are subject to examination by the foreign tax authorities. Comprehensive
income (loss) Comprehensive
income (loss) consists of two components, net income and other comprehensive income. Other comprehensive income (loss) refers to revenue,
expenses, gains and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income.
Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S.
dollar as its functional currencies. (Loss)
earnings per share The
Company computes (loss) 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 ordinary share
outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary 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 ordinary 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. The
Company calculates basic and diluted (loss)/earnings per share as follows: Schedule
of basic and diluted earnings per share
2023 2022
For the Three Months Ended March 31,
2023 2022
(Unaudited) (Unaudited)
Numerator
Net (loss) income $ (2,413,238 ) $ 224,994
Less: Net income attributable to noncontrolling interest 1,407 2,409
Net (loss)/income attributable to common shareholders, basic $ (2,414,465 ) $ 222,585
Denominator
Weighted average number of shares outstanding, basic and diluted 20,191,770 9,253,333
(Loss)/Earnings per share, basic and diluted $ (0.12 ) $ 0.02
Earnings per share, basic $ (0.12 ) $ 0.02 As
of March 31, 2023, the Company had dilutive securities from the outstanding convertible notes and warrants are convertible into 1,411,725 4,458,625 Fair
value measurements Fair
value is defined as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between
market participants at the measurement date. Valuation techniques maximize the use of observable inputs and minimize the use of unobservable
inputs. When determining the fair value measurements for assets and liabilities, we consider the principal or most advantageous market
in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The following
summarizes the three levels of inputs required to measure fair value, of which the first two are considered observable and the third
is considered unobservable: Level
1 - Unadjusted quoted prices in active markets for identical assets or liabilities. Level
2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that
are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term
of the assets or liabilities. Level
3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or
liabilities. The
fair value for certain assets and liabilities such as cash and restricted cash, accounts receivable, net, other receivables, prepaid
expenses and other current assets, short-term loans, promissory note, convertible notes, accounts payable, other payables and accrued
liabilities, and tax payables have been determined to approximate carrying amounts due to the short maturities of these instruments.
The Company believes that its long-term loan to third party approximates the fair value based on current yields for debt instruments
with similar terms. The
following table sets forth by level within the fair value hierarchy our financial liability that were accounted for at fair value on
a recurring basis as of March 31, 2023 and December 31, 2022: Schedule
of fair value hierarchy of financial liability
Carrying Value at Fair Value Measurement at March 31, 2023
March 31, 2023 Level 1 Level 2 Level 3
(Unaudited)
Prepaid forward purchase liabilities $ 20,853,545 $ - $ - $ 20,853,545
Carrying Value at Fair Value Measurement at December 31, 2022
December 31, 2022 Level 1 Level 2 Level 3
Prepaid forward purchase liabilities $ 20,321,053 $ - $ - $ 20,321,053 The
following is a reconciliation of the beginning and ending balance of the financial liability measured at fair value on a recurring basis
for the three months ended March 31, 2023 and for the year ended December 31, 2022: Schedule of reconciliation of financial
liability measured at fair value on a recurring basis
Prepaid forward purchase liabilities
Beginning balance as of November 17, 2022 $ 7,409,550
Change in fair value of prepaid forward purchase liabilities 12,911,503
Balance as of December 31, 2022 $ 20,321,053
Change in fair value of prepaid forward purchase liabilities 532,492
Balance as of March 31, 2023 (unaudited) $ 20,853,545 Leases The
Company accounts for leases in accordance with ASC 842. The Company entered into two agreements as a lessee to lease office equipment
for general and administrative operations. If any of the following criteria are met, the Company classifies the lease as a finance lease:
● The
lease transfers ownership of the underlying asset to the lessee by the end of the lease term;
● The
lease grants the lessee an option to purchase the underlying asset that the Company is reasonably certain to exercise;
● The
lease term is for 75% or more of the remaining economic life of the underlying asset, unless the commencement date falls within the
last 25% of the economic life of the underlying asset;
● The
present value of the sum of the lease payments equals or exceeds 90% of the fair value of the underlying asset; or
● The
underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the
lease term. Leases
that do not meet any of the above criteria are accounted for as operating leases. The
Company combines lease and non-lease components in its contracts under Topic 842, when permissible. Finance
and operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date based on the
present value of lease payments over the lease term. Since the implicit rate for the Company’s leases is not readily determinable,
the Company uses 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 finance or 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
finance or operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease
term for operating lease. Meanwhile, the Company recognizes the finance leases ROU assets and interest on an amortized cost basis. The
amortization of finance ROU assets is recognized on an accretion basis as amortization expense, while the lease liability is increased
to reflect interest on the liability and decreased to reflect the lease payments made during the period. Interest expense on the lease
liability is determined each period during the lease term as the amount that results in a constant periodic interest rate of the office
equipment on the remaining balance of the liability. 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 poss |
