Cover
Cover - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Mar. 30, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | MGO GLOBAL INC. | |
Entity Central Index Key | 0001902794 | |
Document Type | 10-K | |
Amendment Flag | false | |
Entity Voluntary Filers | No | |
Current Fiscal Year End Date | --12-31 | |
Entity Well Known Seasoned Issuer | No | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Dec. 31, 2022 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2022 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 14,241,541 | |
Entity Public Float | $ 0 | |
Document Annual Report | true | |
Document Transition Report | false | |
Entity File Number | 001-41592 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 87-3929852 | |
Entity Address Address Line 1 | 1515 SE 17th Street | |
Entity Address Address Line 2 | Suite 121/#460596 | |
Entity Address City Or Town | Ft. Lauderdale | |
Entity Address Postal Zip Code | 33346 | |
City Area Code | 347 | |
Icfr Auditor Attestation Flag | false | |
Auditor Name | BF Borgers CPA PC | |
Auditor Location | Lakewood, CO | |
Auditor Firm Id | 5041 | |
Local Phone Number | 913-3316 | |
Security 12b Title | common stock, par value $0.00001 per share | |
Trading Symbol | MGOL | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 113,952 | $ 87,922 |
Accounts receivable | 101,837 | 3,285 |
Other current assets | 7,864 | 9,339 |
Prepaid royalty expense | 147,769 | 401,330 |
Inventory | 69,546 | 68,406 |
Total current assets | 440,968 | 570,282 |
Total assets | 440,968 | 570,282 |
Current liabilities: | ||
Accounts payable | 648,129 | 272,401 |
Accounts payable - related party | 22,533 | 36,178 |
Accrued liabilities | 52,540 | 225,894 |
Accrued payroll | 746,050 | 298,297 |
Other current liabilities | 13,634 | 13,634 |
Current portion of loan payable | 10,793 | 13,768 |
Loan payable - related parties | 123,850 | 103,270 |
Total current liabilities | 1,617,529 | 963,442 |
Loan payable | 20,847 | |
Total liabilities | 1,617,529 | 984,289 |
Stockholders' equity (deficit): | ||
Common stock, par value $0.00001, authorized 20,000,000 shares; 11,689,230 and 9,593,000 shares issued and outstanding at December 31, 2022 and 2021, respectively | 117 | 96 |
Additional paid in capital | 4,963,340 | 2,866,558 |
Accumulated deficit | (5,796,636) | (3,213,690) |
Total MGO stockholders' equity (deficit) | (833,179) | (347,036) |
Non-controlling interest | (361,382) | (66,971) |
Total stockholder's deficit | (1,194,561) | (414,007) |
Total liabilities and stockholders' equity (deficit) | $ 440,968 | $ 570,282 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Stockholders' Equity | ||
Common Stock, Par Value | $ 0.00001 | $ 0.00001 |
Common Stock, Authorized Shares | 20,000,000 | 20,000,000 |
Common Stock, Issued Shares | 11,689,230 | 9,593,000 |
Common Stock, Outstanding Shares | 11,689,230 | 9,593,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||
Sales, net | $ 1,048,012 | $ 880,340 |
Cost of goods sold | 337,631 | 392,407 |
Gross profit | 710,381 | 487,933 |
Operating expenses: | ||
Royalty expenses | 1,273,105 | 180,246 |
Rent expense - related party | 15,026 | 14,568 |
Professional fees | 509,853 | 5,670 |
Selling, general and administrative expenses | 1,402,106 | 745,554 |
Total operating expenses | 3,349,346 | 1,407,192 |
Operating loss | (2,638,965) | (919,259) |
Other (income) expenses: | ||
Finance charges | 236,231 | 103,987 |
PPP loan forgiveness | 0 | (41,600) |
Other expense, net | 2,161 | 4,249 |
Total other (income) expenses | 238,392 | 66,636 |
Loss before income taxes | (2,877,357) | (985,895) |
Provision for income taxes | 0 | 0 |
Net loss | (2,877,357) | (985,895) |
Less: net loss attributable to non-controlling interest | (294,411) | (79,569) |
Net loss attributable to MGO stockholders | $ (2,582,946) | $ (906,326) |
Basic and diluted weighted average shares outstanding | 10,542,419 | 10,019,110 |
Basic and diluted net loss per share to MGO stockholders | $ (0.25) | $ 0.09 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY (DEFICIT) - USD ($) | Total | Common Stock | Preferred Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Total MGO Stockholder's Equity (deficit) | Noncontrolling Interest |
Balance, share at Dec. 31, 2020 | 8,818,000 | ||||||
Balance, amount at Dec. 31, 2020 | $ (284,762) | $ 88 | $ 0 | $ 2,022,515 | $ (2,307,364) | $ (284,762) | $ 0 |
Share issuance for cash,share | 775,000 | ||||||
Share issuance for cash,amount | 659,100 | $ 8 | 0 | 659,092 | 0 | 659,100 | 0 |
Stock compensation expense | 132,814 | 0 | 0 | 132,814 | 0 | 132,814 | 0 |
Warrants issued for financing expenses | 54,217 | 0 | 0 | 54,217 | 0 | 54,217 | 0 |
Imputed interest | 10,519 | 0 | 0 | 10,519 | 0 | 10,519 | 0 |
Sale of subsidiary as non-controlling interest | 0 | 0 | 0 | (12,598) | 0 | (12,598) | 12,598 |
Net loss | (985,895) | $ 0 | 0 | 0 | (906,326) | (906,326) | (79,569) |
Balance, shares at Dec. 31, 2021 | 9,593,000 | ||||||
Balance, amount at Dec. 31, 2021 | (414,007) | $ 96 | 0 | 2,866,559 | (3,213,690) | (347,036) | (66,971) |
Share issuance for cash,share | 1,925,000 | ||||||
Share issuance for cash,amount | 1,712,564 | $ 19 | 0 | 1,712,545 | 0 | 1,705,928 | 0 |
Warrants issued for financing expenses | 183,686 | 183,686 | 183,686 | ||||
Imputed interest | 13,420 | 13,420 | 13,420 | ||||
Net loss | (2,877,357) | (2,582,946) | (2,564,946) | (294,411) | |||
Stock compensation expense,share | 141,730 | ||||||
Stock compensation expense,amount | 141,731 | $ 1 | $ 0 | 141,230 | 0 | 141,731 | 0 |
Stock issued to settle accounts payable,share | 30,000 | ||||||
Stock issued to settle accounts payable,amount | 30,000 | $ 0 | 30,000 | 0 | 30,000 | 0 | |
Capital contributions by founders | 15,400 | 15,400 | 15,400 | ||||
Balance, shares at Dec. 31, 2022 | 11,689,230 | ||||||
Balance, amount at Dec. 31, 2022 | $ (1,194,561) | $ 117 | $ 4,963,340 | $ (5,796,636) | $ (815,179) | $ (361,382) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (2,877,357) | $ (985,895) |
Adjustments to reconcile net loss to net cash | ||
Imputed interest | 13,420 | 10,519 |
Stock compensation expenses | 141,731 | 132,814 |
Warrants issued for financing expenses | 183,686 | 54,217 |
Stock issued to settle accounts payable | 30,000 | 0 |
PPP loan forgiveness | 0 | (41,600) |
Net changes in operating assets & liabilities: | ||
Accounts receivable | (98,552) | 7,475 |
Inventory | (1,140) | 130,078 |
Prepaid royalty expense | 253,561 | (401,330) |
Other current assets | 1,475 | 0 |
Accounts payable - related party | (31,645) | 26,633 |
Accrued payroll | 447,753 | 213,000 |
Accounts payable and accrued liabilities | 235,774 | 84,267 |
Net cash used in operating activities | (1,683,293) | (769,822) |
Cash flows from financing activities: | ||
Shares issued for cash | 1,712,564 | 659,100 |
Proceeds from loans payable - related party | 45,556 | 72,877 |
Repayments of loans payable related party | (24,976) | (25,500) |
Repayment of loans payable | (48,822) | (15,385) |
Proceeds from loans payable | 25,000 | 50,000 |
Net cash provided by financing activities | 1,709,323 | 39,542 |
Net increase (decrease) in cash | (26,030) | (28,730) |
Cash at beginning of period | 87,922 | 116,652 |
Cash at end of period | 113,952 | 87,922 |
Supplemental disclosure of cash flow information | ||
Interest | 0 | 0 |
Income taxes | $ 0 | $ 0 |
ORGANIZATION AND OPERATIONS
ORGANIZATION AND OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND OPERATIONS | |
ORGANIZATION AND OPERATIONS | NOTE 1 - ORGANIZATION AND OPERATIONS MGO Global, Inc. (“MGO”, “we”, “us”, “our”, or the “Company”) was formed on December 6, 2021, which operates through its subsidiary, MGOTEAM 1 LLC that designs, manufactures, licenses, distributes, advertises and sells a range of products under the soccer legend Lionel (‘Leo”) Messi brand, “The Messi Brand”. The Messi Brand www.themessistore.com On October 29, 2018, the Company entered into a Trademark License Agreement with Leo Messi Management SL (“LMM”). LMM granted the Company a worldwide non-exclusive license in order to use Leo Messi’s Trademarks with the purpose of developing, manufacturing, trading and promoting The Messi Brand On November 20, 2021, the Company entered into a Trademark License Agreement with LMM to have the worldwide license to use Leo Messi’s Trademarks for the purpose of developing, manufacturing, marketing, and promoting The Messi Brand |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. MGOTEAM 1, LLC (“MGO LLC”) was formed on October 11, 2018, and the Company entered into a Rollover Agreement by and among MGO LLC and members of MGO LLC on December 6, 2021. All of the members of MGO LLC, except for one member who owns a 11.82% membership interest in MGO LLC, exchanged all of their membership interests in MGO LLC for 8,818,000 shares of MGO’s common stock. The sole MGO LLC member which did not rollover his 11.82% membership interest in MGO LLC to MGO Global Inc. as of December 6, 2021 was due to the fact that the Company exhausted all reasonable means to locate and/or contact the member and has yet to locate him. Efforts are still ongoing to locate and contact the MGO LLC member. We account for that remaining minority interest in MGO LLC as non-controlling interest. Both the Company and MGO LLC were under common control, the series of contractual arrangements between the Company and MGO LLC on December 6, 2021 constituted a reorganization under common control and are required to be retrospectively applied to the consolidated financial statements at their historical amounts. The consolidated financial statements have been prepared as if the existing corporate structure had been in existence throughout all periods. This includes a retrospective presentation for all equity related disclosures, including issued shares and earnings per share, which have been revised to reflect the effects of the reorganization in accordance with ASC 250 as of December 31, 2021 and 2020. ASC 250 requires that a change in the reporting entity from reorganization entities under common control, be retrospectively applied to the financials statements of all prior periods when the financial statements are issued for a period that includes the date the change in reporting entity of the transaction occurred. Principles of Consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. The equity method of accounting is used for joint ventures and investments in Shanghai Celebrity International Trading Co., Ltd (SCIT) which the Company has significant influence but does not have effective control. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the footnotes thereto. Actual results could differ from those estimates. It is reasonably possible that changes in estimates will occur in the near term. Accounts Receivable Accounts receivables are carried at their estimated collectible amounts, net of any estimated allowances for doubtful accounts. We grant unsecured credit to our customer’s deemed credit worthy. Ongoing credit evaluations are performed and potential credit losses estimated by management are charged to operations on a regular basis. At the time any particular account receivable is deemed uncollectible, the balance is charged to the allowance for doubtful accounts. As of December 31, 2021 and December 31, 2020, the Company had no allowance for accounts receivable. Inventory Inventory consists of raw materials and finished goods ready for sale and is stated at the lower of cost or net realizable value. We value inventories using the weighted average costing method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence. If the estimated realized value of our inventory is less than cost, we make provisions in order to reduce its carrying value to its estimated net realizable value. Prepaid Royalty Expense The Company paid 500,000€ every five months according to the Trademark License Agreement payment schedule with LMM signed on November 20, 2021. The Company records each installment payment as prepaid expense and amortized over the license period granted by LMM. See Note10. Revenue Recognition The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. Revenue transactions associated with the sale of the Leo Messi Brand products, comprise a single performance obligation, which consists of the sale of products to customers either through direct wholesale or online sales through our website www.themessistore.com. We satisfy the performance obligation and record revenues when transfer of control to the customer has occurred, based on the terms of sale. A customer is considered to have control once they are able to direct the use and receive substantially all of the benefits of the product. Control is transferred to wholesale customers upon shipment or upon receipt depending on the country of the sale and the agreement with the customer. Control transfers to online customers at the time upon shipment. The transactions price is determined based upon the invoiced sales price, less anticipated sales returns, discounts and miscellaneous claims from customers. Payment terms for wholesale transactions depend on the country of sale or agreement with the customer and payment is generally required within 30 days or less of shipment to or receipt by the wholesale customer. Payment is due at the time of sale for direct wholesale and online transactions. The Company sold our product directly to consumers via ecommerce site we operate and our mobile app and to wholesale customers. All our products are related to The Messi Brand For the year ended December 31, 2022, the Company sold $941,581 directly to consumers via our website and $106,431 to wholesale customers. For the year ended December 31, 2021, the Company sold $778,571 directly to consumers via our website and $101,769 to wholesale customers. Non-controlling interest One member did not rollover his 11.82% membership interest from MGO LLC to MGO as of December 6, 2021 due to the fact that the Company exhausted all reasonable means to locate and/or contact the member and has yet to locate him. Efforts are still ongoing to locate and contact the member. According to ASC 810-10-45-22 through 810-10-45-24, carrying amount of the NCI will be adjusted to reflect the change in the NCI’s ownership interest in the subsidiary. Any difference between the amount by which the NCI is adjusted and the fair value of the consideration paid or received is recognized in equity/APIC and attributed to the equity holders of the parent in accordance with ASC 810-10-45-23. The Company accounted for this portion of shares as non-controlling interest as of December 6, 2021 for $12,598. See Note 9. The Company recorded non-controlling interest of $(294,411) from the net loss for the year ended December 31, 2022. Foreign currency For all operations, gains or losses from remeasuring foreign currency transactions into the functional currency are included in the statements of operations as finance charges. Segment Reporting The Company has one reportable segment which sells a range of products under the soccer legend Lionel (‘Leo”) Messi brand, “The Messi Brand.” The chief operating decision maker is responsible for allocating resources and assessing performance and obtains financial information, being the consolidated statements of operations, consolidated balance sheets and consolidated statements of cash flow, about the Company as a whole. Income Taxes The Company accounts for income taxes using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax law. For deferred tax assets, management evaluates the probability of realizing the future benefits of such assets. The Company establishes valuation allowances for its deferred tax assets when evidence suggests it is unlikely that the assets will be fully realized. The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and then only in an amount more likely than not to be sustained upon review by the tax authorities. Income tax positions that previously failed to meet the more likely than not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more likely than not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company classifies potential accrued interest and penalties related to unrecognized tax benefits within the accompanying consolidated statements of operations and comprehensive income (loss) as income tax expense. New Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, (Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations. In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company did not expect the adoption will have any significant impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
LIQUIDITY
LIQUIDITY | 12 Months Ended |
Dec. 31, 2022 | |
LIQUIDITY | |
LIQUIDITY | NOTE 3 – LIQUIDITY The accompanying financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. On December 31, 2022, the Company had a cash balance of $113,952 and working capital of $(1,176,561). The Company reported a net increase in cash for the year ended December 31, 2022 of $26,030. On January 18, 2023 the Company received proceeds from the sale of common stock of $7,239,855. The proceeds were used for working capital purposes, inventory, and operating expenses. On January 18, 2023, the Company completed an initial public offering (“IPO”) and sold 1,725,000 shares of its common stock at a price to the public of $5.00 per share for gross proceeds of $8,625,000. The Company received net proceeds of $7,239,855 which is net of offering expenses of $1,385,145. Until such time that the Company implements its growth strategy, it expects to continue to generate operating losses in the foreseeable future, mostly due to corporate overhead and costs of being a public company. The Company believes that its existing working capital and its future cash flows from operating activities will provide sufficient cash to enable the Company to meet its operating needs and debt requirements for the next twelve months from the issuance date of this report. |
INVENTORY
INVENTORY | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORY | |
INVENTORY | NOTE 4 – INVENTORY As of December 31, 2022 and December 31, 2021, inventory amounted to $69,546 and $68,406, respectively. December 31, 2022 December 31, 2021 Finished goods $ 69,546 $ 68,406 Total $ 69,546 $ 68,406 |
JOINT VENTURE
JOINT VENTURE | 12 Months Ended |
Dec. 31, 2022 | |
JOINT VENTURE | |
JOINT VENTURE | NOTE 5 - JOINT VENTURE On August 29, 2019, the Company entered into an Equity Joint Venture Contract with Shanghai Celebrity International Trading Co., Ltd (SCIT) and invested $500,000 as a 40% shareholder of the joint venture. The term of the agreement is for (20) twenty years commencing from the Establishment Date on August 29, 2019. Per the Equity Joint Venture Contract, SCIT is to engage in the sale and distribution of MGO Products and/or other commercial products within the Territory (PRC, Hong Kong S.A.R., Macau S.A.R., Taiwan, and Singapore). The Company will be responsible for formulating business strategy and SCIT will be responsible for assisting the joint venture to apply for and being granted all necessary approvals, permits, certificates, licenses required from the relevant government authorities. Per the preferred membership interest purchase agreement, MGO will receive $2 million from SCIT. As of December 31, 2021 the Company received $1,995,000 from SCIT for 12% of MGO LLC membership units. The Company was obligated and re-invested $500,000 from the proceeds of $2 million to this Joint Venture with SCIT. On August 29, 2019, the Company entered into a License Agreement with Shanghai Celebrity International Trading Co., Ltd. for the use of Leo Messi trademarks and service marks. For the years ended December 31, 2022, 2021 and 2020, the Company did not receive any royalty from SCIT. Also, the Company initially recorded the $500,000 in the joint venture as equity investment since the Company only has 40% ownership, SCIT controlled the majority of the board, and the Company has no obligations to absorb the losses. As of December 31, 2020, the Company impaired the entire $500,000 investment in the joint venture because no business cooperation and communication exists between the Company and SCIT since 2020, despite the Company’s unsuccessful efforts to locate and contact SCIT. We do not expect any resumption of the operations of the joint venture. The Company does not expect to receive any of the royalties from this joint venture. |
ACCOUNTS PAYABLE AND ACCRUED LI
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES | NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES) Accounts payable and accrued liabilities were $592,564 and $498,295 as of December 31, 2022 and December 31, 2021, respectively. Accounts payable are mainly payables to vendors and accrued liabilities consists of mainly credit card payable and sales and VAT tax payable. December 31, December 31, 2021 2022 Accounts payable $ 275,551 $ 142,489 Warehouse rent payable 78,673 74,172 Legal payable 316,438 240,634 Accrued liabilities 52,540 77,178 Total accounts payable and accrued liabilities: $ 723,202 $ 534,473 |
LOAN PAYABLE
LOAN PAYABLE | 12 Months Ended |
Dec. 31, 2022 | |
LOAN PAYABLE | |
LOAN PAYABLE | NOTE 7 – LOAN PAYABLE On May 8, 2020, the Company received $41,600 of proceeds from a note payable issued under either the Small Business Administration "the SBA" Paycheck Protection Program ("PPP") under section 7(a)(36) of the Small Business Act or the SBA's Paycheck Protection Program Second Draw Loans under Section 7(a)(37) of the Small Business Act. The note matures in two years and bears interest at 1% per year. In April 2021 our PPP Loan was forgiven by the SBA in its entirety. The forgiveness was accounted for as other income which resulted in a gain of $41,600 recorded in our statement of operations. On July 30, 2021, the Company entered into a loan with PayPal with an interest rate of 6.79% and principal balance of $25,000 and monthly payment of $560 over the term of the loan. This loan will mature on November 30, 2025. This loan principal and accrued interest have been paid off as of December 30, 2022. On September 10, 2021, the Company entered into a loan with PayPal with an interest rate of 9.16% and principal balance of $25,000 and monthly payment of $588 over the term of the loan. This loan will mature on January 10, 2026. This loan principal and accrued interest have been paid off as of December 30, 2022. On May 25, 2022, the Company entered into a loan with PayPal with an interest rate of 6.51% and principal balance of $25,000 and monthly payment of $539 over the term of the loan. This loan will mature on May 25, 2023. The Company paid principal balance of $14,207 and incurred $2,513 interest during the year ended December 31, 2022. The balance as of December 31, 2022 of this loan was $10,793. December 30, 2022 December 31, 2021 Current portion of loans payable $ 10,793 $ - Non-current portion of loans payable $ - $ - |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 8 – RELATED PARTY TRANSACTIONS The Company borrowed $45,556 and paid $24,976 from our Chairman and CEO, Maximiliano Ojeda, for the year ended December 31, 2022. The Company borrowed from Mr. Ojeda $72,877 and paid $25,500 for the year ended December 31, 2021. This borrowing does not have a fixed maturity date or stated rate of interest. As of December 31, 2022 and December 31, 2021, the balance of loans payable to Mr. Ojeda is $123,850 and $103,270, respectively. During the years ended December 31, 2022 and 2021, related party imputed interest was $13,420 and $10,519, respectively. The imputed interest was recorded as interest expense and an increase in additional paid-in capital based on a rate of 12%. For the years ended December 31, 2022 and 2021, the Company recorded $10,378 and $0 respectively, in e-commerce expenses paid directly by Julian Groves, our Chief Operating Officer and Director. For the years ended December 31, 2022 and 2021, the Company recorded $14,400 and $14,568 respectively, in month-to- month rent expense paid directly by Virginia Hilfiger, our Chief Design Officer and Director. The accounts payable owed to a related party as of December 31, 2022 and December 31, 2021 was $22,533 and $36,178, respectively. |
STOCKHOLDERS DEFICIT
STOCKHOLDERS DEFICIT | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS DEFICIT | |
STOCKHOLDERS' DEFICIT | NOTE 9 – STOCKHOLDERS’ DEFICIT Common Stock MGOTEAM 1, LLC (“MGO LLC”) was formed on October 11, 2018, and the Company entered into a Rollover Agreement by and among MGO Global, Inc. and members of MGO LLC on December 6, 2021. The members of MGO LLC exchanged all of their membership interests with the Company in exchange for 8,818,000 shares of the Company’s common stock. The remaining 11.82% of MGO LLC’S membership unit from SCIT did not rollover to MGO Global Inc. due to the fact that, despite all reasonable means and methods to locate and contact SCIT, SCIT could not be found or contacted. Therefore, we have accounted for this 11.82% as non-controlling interest. Also, one of the original members of MGO LLC is entitled to receive an additional 200,000 shares of common stock if he meets criteria listed in his grant letter. The stockholder’s equity is retroactively restated to reflect the Rollover Agreement on December 6, 2021. For the year ended December 31, 2021, the Company issued 775,000 shares with net proceeds of $659,100 from Pre-IPO funding. For the year ended December 31, 2022, the Company issued 1,925,000 shares with net proceeds of $1,712,564 from Pre-IPO funding. For the year ended December 31, 2022, the Company issued 141,230 shares to consultants for services at fair value of $141,731. For the year ended December 31, 2022, the Company issued 30,000 shares to a consultant for services at fair value of $30,000. Warrants For the year ended December 31, 2021, the Company issued a total of 54,250 five-year warrants to Boustead Securities, LLC, an investment banking firm, with an exercise price of $1.00 per share. Upon the issuance of the warrant as compensation for its services as an investment banker, the warrant was categorized as equity and the fair value of $54,217 was recorded as finance expense. For the year ended December 31, 2022, the Company issued five-year warrants to purchase 883,750 shares of its common stock in a pre-IPO private placement with an exercise price of $1.00 per share. Upon the issuance of the warrants in connection with the private placement, the warrant was categorized as equity and the fair value of $183,686 was recorded as finance expense. The following is a summary of warrant activity. Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding, December 31, 2021 54,250 $ 1.00 3.98 $ — Issued 883,750 1.00 4.74 — Forfeited — — — — Exercised — — — — Outstanding, December 31, 2022 938,000 $ 1.00 4.70 $ — Exercisable, December 31, 2022 938,000 $ 1.00 4.70 $ — The Company utilizes the Black-Scholes model to value its warrants. The Company utilized the following assumptions: For the year ended December 31, 2022 Expected term 5 years Expected average volatility 328% - 339 % Expected dividend yield - Risk-free interest rate 1.76% - 2.89 % For the year ended December 31, 2021 Expected term 5 years Expected average volatility 340 % Expected dividend yield - Risk-free interest rate 1.23 % |
PREPAID ROYALTY EXPENSE
PREPAID ROYALTY EXPENSE | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID ROYALTY EXPENSE | |
PREPAID ROYALTY EXPENSE | NOTE 10 –PREPAID ROYALTY EXPENSE On October 29, 2018, the Company entered into a Trademark License Agreement with Leo Messi Management SL (LMM) to have the right to license the Licensed Mark. Both parties agreed to cancel the original Trademark License Agreement due to COVID-19 in 2021 and both parties were released from the obligations and responsibilities under the original Trademark License Agreement. The Company recorded the actual royalty expense paid on or before the new agreement in November 2021 since both parties agreed to waive the original payment schedule in the 2018 Trademark License agreement. On November 20, 2021, the Company entered into a Trademark License Agreement with Leo Messi Management SL (LMM) to have the worldwide license to use Leo Messi’s Trademarks for the purpose of developing, manufacturing, marketing, and promoting products under the Company’s “The Messi Brand.” The Company is to pay LMM a minimum guaranteed amount of royalties in installments, amounting to Four Million Euros (4,000,000 €), net of taxes, with the final payment due on November 15, 2024. The Company recorded $1,273,105 and $180,246 royalty expense for the year ended December 31, 2022 and 2021, respectively. The prepaid expense as of December 31, 2022 and December 31, 2021 was $147,769 and $401,330, respectively. The following table presents the future royalty payments of the Trademark License Agreement based on exchange rate as of December 31, 2022: F-12 Table of Contents Fiscal year ending December 31, Amount 2023 1,069,000 (1,000,000€) 2024 1,603,500 (1,500,000€) Total 2,672,500 (2,500,000€) |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE 11 – INCOME TAXES At December 31, 2022 and 2021, the Company’s deferred income tax assets and liabilities were as follows: December 31, 2022 December 31, 2021 Deferred tax asset Net operating loss carryforwards $ 632,385 $ 49,365 Total deferred tax asset 632,385 49,365 Less: valuation allowance (632,385 ) (49,365 ) Total deferred tax asset - - Total deferred tax liabilities - - Net deferred tax asset (liabilities) $ - $ - A reconciliation between expected income taxes, computed at the federal income tax rate of 21% applied to the pretax accounting loss, and our blended state income tax rate of 5.5% in 2022 and 3.5% in 2021, and the income tax net expense included in the consolidated statements of operations for the year ended December 31, 2022, and 2021 is as follows: December 31, 2022 December 31, 2021 Loss for the year $ 2,877,356 $ 289,291 Permanent difference and others (101,074 ) (54,217 ) Change in valuation allowance 2,776,282 235,074 Income tax expense per books $ - $ - The valuation allowance increased by $583,019 during the year ended December 31, 2022, as a result of the Company’s net operating losses for the year ended December 31, 2022. The Company has net operating loss carryforwards of approximately $2,776,282 for both U.S. federal and state tax purposes as of December 31, 2022. Utilization of the net operating loss and tax credit carryforwards is subject to a substantial annual limitation due to the “ownership change” limitations provided by Section 382 and 383 of the Internal Revenue Code of 1986, as amended, and other similar state provisions. Any annual limitation may result in the expiration of net operating loss and tax credit carryforwards before utilization. The Company has not recorded any income tax expense or benefit in the consolidated statements of operations for the years ended December 31, 2022 and 2021, due to the benefit of net operating losses in these periods and the Company’s change during 2021 to a C corporation from a limited liability company that was disregarded for federal and state income tax purposes. The reconciliation between the federal statutory income tax rate of 21% to the Company’s effective tax for the periods presented is as follows: Year Ended December 31, 2022 2021 Amount Percent Amount Percent Federal provision at statutory rate $ (604,245 ) 21.0 % $ (60,751 ) 21.0 % State income taxes - 0 % - 0 % Non-deductible expenses 21,226 (0.7%) 11,386 (4%) Change in valuation allowance 583,019 (20.3%) 49,365 (17%) Effective tax rate $ - 0.0 % $ - 0.0 % The Company’s effective tax rates differ from the federal statutory rate primarily due to the establishment of a valuation allowance. The Company periodically evaluates the likelihood of the realization of deferred tax assets and adjusts the carrying amount of the deferred tax assets by the valuation allowance to the extent the future realization of the deferred tax assets is not judged to be more likely than not. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including its recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors. Future changes in the unrecognized tax benefit will have no impact on the effective tax rate due to the existence of the valuation allowance. The Company estimates that the unrecognized tax benefit will not change significantly within the next twelve months. The Company classifies income tax penalties and interest as part of general and administrative expense in its consolidated statements of operations. There were no interest or penalties accrued as of December 31, 2022 and 2021. In the normal course of business, the Company is subject to examination by taxing authorities, for which the Company’s major tax jurisdictions are the United States and various states for their first year tax return filed for the year ended December 31, 2021. |
Risks and Uncertainties
Risks and Uncertainties | 12 Months Ended |
Dec. 31, 2022 | |
Risks and Uncertainties | |
Risks and Uncertainties | Note 12 – Risks and Uncertainties During the year ended December 31, 2021, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a novel coronavirus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, and general market uncertainty. The extent of the future impact of COVID-19 on the Company’s operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, and its impact on the Company’s customers, employees and vendors, which cannot be determined at this time. The Company is subject to credit, liquidity, and market risks, as well as other payment-related risks such as risks associated with the fraudulent use of credit or debit cards and customer banking information, which could have adverse effects on our business and revenues due to chargebacks from customers. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS On January 12, 2023, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Boustead Securities, LLC, as representative of the underwriters, relating to the Company’s initial public offering (the “Offering”) of 1,725,000 shares (the “Shares”) of the Company’s common stock, par value $0.00001 per share (“common stock”), which included the exercise by the underwriters in full of the over-allotment option to purchase an additional 225,000 shares of the Company’s common stock, at an Offering price of $5.00 per share. Pursuant to the Underwriting Agreement, in exchange for the Representative’s firm commitment to purchase the Shares, the Company agreed to sell the Shares to the Representative at a purchase price of $4.65 (93% of the public offering price per Share of $5.00) and issue the underwriters three year warrants to purchase an aggregate of 86,250 shares of the Company’s common stock, which is equal to five percent (5%) of the Shares sold in the Offering. Such warrants have an exercise price of $6.25, which is equal to 125% of the Offering price (the “Warrant"). The Shares were offered and sold pursuant to the Company’s Registration Statement on Form S-1 (File No. 333-268484), as amended (the “Registration Statement”), and filed with the Securities and Exchange Commission (the “Commission”) and the final prospectus filed with the Commission pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement was declared effective by the Commission on January 12, 2023. The closing of the Offering for the Shares took place on January 18, 2023. Aggregate gross proceeds from the closing were $8,625,000, which included 225,000 shares sold by the Company upon the exercise by the underwriters of the over-allotment option in full. After deducting the underwriting commissions, discounts, and offering expenses, the Company received net proceeds of approximately $7,239,855. The Company intends to use the net proceeds from the Offering for team expansion, marketing, general and administrative corporate purposes, including working capital and capital expenditures. On January 13, 2023, in connection with the Offering, the Company commenced trading on The Nasdaq Capital Market under ticker symbol “MGOL.” ‘ In January 2023, the Company issued 700,000 shares to the Pre-IPO funding investors from the exercise of their warrants. In January 2023, the Company issued 127,311 shares to Boustead Securities, LLC from the exercise of their warrants. On February 20, 2023, we signed a renewable one-year lease for a building located at 813 NE 17 th On March 13, 2023, we obtained a royalty free, worldwide and exclusive license (the “License”) to the use of certain assets of Stand Co., LLC (“Stand”) for all purposes in exchange for payment of $1.00 by the Company. The License was entered into in connection with a potential acquisition by the Company of the assets related to the License. The term of the License commenced on March 15, 2023 and shall expire on the earlier of: 1) May 12, 2023, or 2) the date when the Company and Stand sign the definitive agreement for the acquisition of the assets. Licensed assets include all rights to all stock keeping units (“SKU”) of Stand sold under the names: “Roosevelt Premium 25ft Telescoping Flag Pole Kit,” “20FT Telescoping Flag Pole Kit” and “LED Solar Flag Pole Light;” any intellectual property and other intangible property related to SKUs, including but not limited to all rights to a brand name “Stand Flagpoles,” domain and website standflagpoles.com, the Meta pages associated with “Stand Flagpoles” brand name (in Facebook and Instagram); all manufacturer, distributor and customer contracts and relationships for SKUs; marketing materials; any commercialization rights; domain and administrative access to Stand’s Shopify account, Facebook Assets & Accounts; all historical digital and non-digital assets; and customer database since inception. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis Of Presentation | These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. MGOTEAM 1, LLC (“MGO LLC”) was formed on October 11, 2018, and the Company entered into a Rollover Agreement by and among MGO LLC and members of MGO LLC on December 6, 2021. All of the members of MGO LLC, except for one member who owns a 11.82% membership interest in MGO LLC, exchanged all of their membership interests in MGO LLC for 8,818,000 shares of MGO’s common stock. The sole MGO LLC member which did not rollover his 11.82% membership interest in MGO LLC to MGO Global Inc. as of December 6, 2021 was due to the fact that the Company exhausted all reasonable means to locate and/or contact the member and has yet to locate him. Efforts are still ongoing to locate and contact the MGO LLC member. We account for that remaining minority interest in MGO LLC as non-controlling interest. Both the Company and MGO LLC were under common control, the series of contractual arrangements between the Company and MGO LLC on December 6, 2021 constituted a reorganization under common control and are required to be retrospectively applied to the consolidated financial statements at their historical amounts. The consolidated financial statements have been prepared as if the existing corporate structure had been in existence throughout all periods. This includes a retrospective presentation for all equity related disclosures, including issued shares and earnings per share, which have been revised to reflect the effects of the reorganization in accordance with ASC 250 as of December 31, 2021 and 2020. ASC 250 requires that a change in the reporting entity from reorganization entities under common control, be retrospectively applied to the financials statements of all prior periods when the financial statements are issued for a period that includes the date the change in reporting entity of the transaction occurred. |
Principles Of Consolidation | The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated in consolidation. The equity method of accounting is used for joint ventures and investments in Shanghai Celebrity International Trading Co., Ltd (SCIT) which the Company has significant influence but does not have effective control. |
Use Of Estimates | The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the footnotes thereto. Actual results could differ from those estimates. It is reasonably possible that changes in estimates will occur in the near term. |
Accounts Receivable | Accounts receivables are carried at their estimated collectible amounts, net of any estimated allowances for doubtful accounts. We grant unsecured credit to our customer’s deemed credit worthy. Ongoing credit evaluations are performed and potential credit losses estimated by management are charged to operations on a regular basis. At the time any particular account receivable is deemed uncollectible, the balance is charged to the allowance for doubtful accounts. As of December 31, 2021 and December 31, 2020, the Company had no allowance for accounts receivable. |
Inventory | Inventory consists of raw materials and finished goods ready for sale and is stated at the lower of cost or net realizable value. We value inventories using the weighted average costing method. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We regularly review inventory and consider forecasts of future demand, market conditions and product obsolescence. If the estimated realized value of our inventory is less than cost, we make provisions in order to reduce its carrying value to its estimated net realizable value. |
Prepaid Royalty Expense | The Company paid 500,000€ every five months according to the Trademark License Agreement payment schedule with LMM signed on November 20, 2021. The Company records each installment payment as prepaid expense and amortized over the license period granted by LMM. See Note10. |
Revenue Recognition | The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. Revenue transactions associated with the sale of the Leo Messi Brand products, comprise a single performance obligation, which consists of the sale of products to customers either through direct wholesale or online sales through our website www.themessistore.com. We satisfy the performance obligation and record revenues when transfer of control to the customer has occurred, based on the terms of sale. A customer is considered to have control once they are able to direct the use and receive substantially all of the benefits of the product. Control is transferred to wholesale customers upon shipment or upon receipt depending on the country of the sale and the agreement with the customer. Control transfers to online customers at the time upon shipment. The transactions price is determined based upon the invoiced sales price, less anticipated sales returns, discounts and miscellaneous claims from customers. Payment terms for wholesale transactions depend on the country of sale or agreement with the customer and payment is generally required within 30 days or less of shipment to or receipt by the wholesale customer. Payment is due at the time of sale for direct wholesale and online transactions. The Company sold our product directly to consumers via ecommerce site we operate and our mobile app and to wholesale customers. All our products are related to The Messi Brand For the year ended December 31, 2022, the Company sold $941,581 directly to consumers via our website and $106,431 to wholesale customers. For the year ended December 31, 2021, the Company sold $778,571 directly to consumers via our website and $101,769 to wholesale customers. |
Non-controlling interest | One member did not rollover his 11.82% membership interest from MGO LLC to MGO as of December 6, 2021 due to the fact that the Company exhausted all reasonable means to locate and/or contact the member and has yet to locate him. Efforts are still ongoing to locate and contact the member. According to ASC 810-10-45-22 through 810-10-45-24, carrying amount of the NCI will be adjusted to reflect the change in the NCI’s ownership interest in the subsidiary. Any difference between the amount by which the NCI is adjusted and the fair value of the consideration paid or received is recognized in equity/APIC and attributed to the equity holders of the parent in accordance with ASC 810-10-45-23. The Company accounted for this portion of shares as non-controlling interest as of December 6, 2021 for $12,598. See Note 9. The Company recorded non-controlling interest of $(294,411) from the net loss for the year ended December 31, 2022. |
Foreign currency | For all operations, gains or losses from remeasuring foreign currency transactions into the functional currency are included in the statements of operations as finance charges. |
Segment Reporting | The Company has one reportable segment which sells a range of products under the soccer legend Lionel (‘Leo”) Messi brand, “The Messi Brand.” The chief operating decision maker is responsible for allocating resources and assessing performance and obtains financial information, being the consolidated statements of operations, consolidated balance sheets and consolidated statements of cash flow, about the Company as a whole. |
Income Taxes | The Company accounts for income taxes using the asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. In estimating future tax consequences, the Company generally considers all expected future events other than enactments of changes in the tax law. For deferred tax assets, management evaluates the probability of realizing the future benefits of such assets. The Company establishes valuation allowances for its deferred tax assets when evidence suggests it is unlikely that the assets will be fully realized. The Company recognizes the tax effects of an uncertain tax position only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date and then only in an amount more likely than not to be sustained upon review by the tax authorities. Income tax positions that previously failed to meet the more likely than not threshold are recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more likely than not threshold are derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company classifies potential accrued interest and penalties related to unrecognized tax benefits within the accompanying consolidated statements of operations and comprehensive income (loss) as income tax expense. |
Recent Accounting Pronouncements | In June 2016, the FASB issued ASU No. 2016-13, (Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss” model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience, current conditions and reasonable and supportable forecasts. This guidance amends the accounting for credit losses for most financial assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company believes the adoption of ASU No. 2016-13 will not have a material impact on its financial position and results of operations. In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, to improve financial reporting associated with accounting for convertible instruments and contracts in an entity’s own equity. ASU 2020-06 will be effective for the Company in the first quarter of 2022. The Company did not expect the adoption will have any significant impact on the Company’s consolidated financial statements. Management does not believe that any recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, we will adopt those that are applicable under the circumstances. |
INVENTORY (Tables)
INVENTORY (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORY | |
Schedule Of Inventory | December 31, 2022 December 31, 2021 Finished goods $ 69,546 $ 68,406 Total $ 69,546 $ 68,406 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES | |
Schedule Of Accounts payable and accrued liabilities | December 31, December 31, 2021 2022 Accounts payable $ 275,551 $ 142,489 Warehouse rent payable 78,673 74,172 Legal payable 316,438 240,634 Accrued liabilities 52,540 77,178 Total accounts payable and accrued liabilities: $ 723,202 $ 534,473 |
LOAN PAYABLE (Tables)
LOAN PAYABLE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LOAN PAYABLE | |
Schedule Of LOAN PAYABLE | December 30, 2022 December 31, 2021 Current portion of loans payable $ 10,793 $ - Non-current portion of loans payable $ - $ - |
STOCKHOLDERS DEFICIT (Tables)
STOCKHOLDERS DEFICIT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCKHOLDERS DEFICIT | |
Schedule Of summary of warrant activity | Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Outstanding, December 31, 2021 54,250 $ 1.00 3.98 $ — Issued 883,750 1.00 4.74 — Forfeited — — — — Exercised — — — — Outstanding, December 31, 2022 938,000 $ 1.00 4.70 $ — Exercisable, December 31, 2022 938,000 $ 1.00 4.70 $ — |
Schedule Of Company utilizes the Black-Scholes model to value its warrants | For the year ended December 31, 2022 Expected term 5 years Expected average volatility 328% - 339 % Expected dividend yield - Risk-free interest rate 1.76% - 2.89 % For the year ended December 31, 2021 Expected term 5 years Expected average volatility 340 % Expected dividend yield - Risk-free interest rate 1.23 % |
PREPAID ROYALTY EXPENSE (Tables
PREPAID ROYALTY EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PREPAID ROYALTY EXPENSE | |
Schedule of future royalty payments | Fiscal year ending December 31, Amount 2023 1,069,000 (1,000,000€) 2024 1,603,500 (1,500,000€) Total 2,672,500 (2,500,000€) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule Of Deferrred Tax Assets And Liabilities | December 31, 2022 December 31, 2021 Deferred tax asset Net operating loss carryforwards $ 632,385 $ 49,365 Total deferred tax asset 632,385 49,365 Less: valuation allowance (632,385 ) (49,365 ) Total deferred tax asset - - Total deferred tax liabilities - - Net deferred tax asset (liabilities) $ - $ - |
Schedule Of income tax net expense | December 31, 2022 December 31, 2021 Loss for the year $ 2,877,356 $ 289,291 Permanent difference and others (101,074 ) (54,217 ) Change in valuation allowance 2,776,282 235,074 Income tax expense per books $ - $ - |
Schedule Of reconciliation between the federal statutory income tax rate of 21% to the Company's | Year Ended December 31, 2022 2021 Amount Percent Amount Percent Federal provision at statutory rate $ (604,245 ) 21.0 % $ (60,751 ) 21.0 % State income taxes - 0 % - 0 % Non-deductible expenses 21,226 (0.7%) 11,386 (4%) Change in valuation allowance 583,019 (20.3%) 49,365 (17%) Effective tax rate $ - 0.0 % $ - 0.0 % |
ORGANIZATION AND OPERATIONS (De
ORGANIZATION AND OPERATIONS (Details Narrative) | 1 Months Ended |
Nov. 20, 2021 USD ($) | |
ORGANIZATION AND OPERATIONS | |
Amount of minimum guaranteed royalties | $ 4,000,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 06, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Nov. 20, 2021 | |
Prepaid Royalty Expense | $ 500,000 | |||
Rollover Agreement description | All of the members of MGO LLC, except for one member who owns a 11.82% membership interest in MGO LLC, exchanged all of their membership interests in MGO LLC for 8,818,000 shares of MGO’s common stock. The sole MGO LLC member which did not rollover his 11.82% membership interest in MGO LLC to MGO Global Inc. as of December 6, 2021 was due to the fact that the Company exhausted all reasonable means to locate and/or contact the member and has yet to locate him. Efforts are still ongoing to locate and contact the MGO LLC member | |||
Non-controlling interest | $ 12,598 | $ (294,411) | ||
Direct to consumers [Member] | ||||
Revenue | 106,431 | $ 101,769 | ||
Wholesale customers [Member] | ||||
Revenue | $ 941,581 | $ 778,571 |
LIQUIDITY (Details Narrative)
LIQUIDITY (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 18, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Jan. 12, 2023 | |
Cash | $ 113,952 | $ 87,922 | ||
Working capital | (1,176,561) | |||
Net increase (decrease) in cash | $ (26,030) | $ (28,730) | ||
Subsequent Event [Member] | ||||
Net proceeds | $ 7,239,855 | |||
Offering price | $ 5 | |||
Number of Shares sold | 1,725,000 | |||
Aggregate gross proceeds | $ 8,625,000 | |||
Offering expense | $ 1,385,145 |
INVENTORY (Details)
INVENTORY (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
INVENTORY | ||
Finished goods | $ 69,546 | $ 68,406 |
Total | $ 69,546 | $ 68,406 |
INVENTORY (Details Narrative)
INVENTORY (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
INVENTORY | ||
Inventory | $ 69,546 | $ 68,406 |
JOINT VENTURE (Details Narrativ
JOINT VENTURE (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Aug. 29, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
JOINT VENTURE | |||
Proceed from joint venture | $ 2,000,000 | $ 1,995,000,000,000 | |
Imairement of investment | $ 500,000 | ||
Invested on equity joint venture | $ 500,000 | $ 500,000 | |
Ownership percentage of joint venture | 40% | ||
Agreement term | 20 years |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES) (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES | ||
Accounts payable | $ 142,489 | $ 275,551 |
Warehouse rent payable | 74,172 | 78,673 |
Legal payable | 240,634 | 316,438 |
Accrued liabilities | 77,178 | 52,540 |
Total accounts payable and accrued liabilities | $ 534,473 | $ 723,202 |
ACCOUNTS PAYABLE AND ACCRUED _4
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES) (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES (INCLUDING RELATED PARTIES | ||
Accounts payable and accrued liabilities | $ 592,564 | $ 498,295 |
LOAN PAYABLE (Details)
LOAN PAYABLE (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
LOAN PAYABLE | ||
Current portion of loans payable | $ 10,793 | $ 13,768 |
Non-current portion of loans payable | $ 0 |
LOAN PAYABLE (Details Narrative
LOAN PAYABLE (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Sep. 10, 2021 | May 08, 2020 | May 25, 2022 | Jul. 30, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
Proceeds from note payble | $ 41,600 | |||||
Interest rate | 1% | |||||
PPP loan forgiveness | $ 0 | $ 41,600 | ||||
Loan payable | $ 20,847 | |||||
Loan payable one [Member] | ||||||
Principle amount | $ 25,000 | $ 25,000 | ||||
Interest rate | 6.79% | |||||
Maturity date | Nov. 30, 2025 | |||||
Monthly payment | $ 560 | |||||
Loan payable Two [Member] | ||||||
Principle amount | $ 25,000 | |||||
Interest rate | 9.16% | |||||
Maturity date | Jan. 10, 2026 | |||||
Monthly payment | $ 588 | |||||
Loan payable Three [Member] | ||||||
Principle amount | $ 25,000 | |||||
Interest rate | 6.51% | |||||
Maturity date | May 25, 2023 | |||||
Monthly payment | $ 539 | |||||
Payment for loan | $ 14,207 | |||||
Incurred interest | 2,513 | |||||
Loan payable | $ 10,793 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Proceed from related party | $ 45,556 | $ 72,877 |
Paid to related party | 24,976 | 25,500 |
Imputed interest | $ 13,420 | $ 10,519 |
Imputed interest rate | 12% | 12% |
Accounts payable - related party | $ 22,533 | $ 36,178 |
Mr. Ojeda [Member] | ||
Loan payble to related party | 123,850 | 103,270 |
Julian Groves [Member] | ||
Commerce expense paid | 10,378 | 0 |
Virginia Hilfiger [Member] | ||
Rent expense paid | $ 14,400 | $ 14,568 |
STOCKHOLDERS DEFICIT (Details)
STOCKHOLDERS DEFICIT (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS DEFICIT | ||
Number of warrants, issued | 883,750 | |
Number of warrants, Forfeited | 0 | |
Number of warrants, Exercised | 0 | |
Number of warrants, ending balance | 938,000 | |
Number of warrant Exercisable | 938,000 | |
Weighted average exercise price, beginnning balance | $ 1 | |
Weighted average exercise price, issued | 1 | |
Weighted average exercise price, Forfeited | 0 | |
Weighted average exercise price, Exercised | 0 | |
Weighted average exercise price, ending balance | 1 | $ 1 |
Weighted average exercise price, exercisable | $ 1 | |
Weighted average remining contractual life, beginning balance | 4 years 8 months 12 days | 3 years 11 months 23 days |
Weighted average remining contractual life, issued | 4 years 8 months 26 days | |
Weighted average remining contractual life, Exercisable | 4 years 8 months 12 days |
STOCKHOLDERS DEFICIT (Details 1
STOCKHOLDERS DEFICIT (Details 1) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Expected term | 5 years | 5 years |
Expected average volatility | 340% | |
Expected dividend yield | 0% | 0% |
Risk-free interest rate | 1.23% | |
Minimum [Member] | ||
Expected average volatility | 328% | |
Risk-free interest rate | 1.76% | 1.23% |
Maximum [Member] | ||
Expected average volatility | 339% | |
Risk-free interest rate | 2.89% | 1.23% |
STOCKHOLDERS DEFICIT (Details N
STOCKHOLDERS DEFICIT (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 06, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS DEFICIT | |||
Non-controlling interest | 11.82% | ||
Non-controlling description | The members of MGO LLC exchanged all of their membership interests with the Company in exchange for 8,818,000 shares of the Company’s common stock. The remaining 11.82% of MGO LLC’S membership unit from SCIT did not rollover to MGO Global Inc. due to the fact that, despite all reasonable means and methods to locate and contact SCIT, SCIT could not be found or contacted. Therefore, we have accounted for this 11.82% as non-controlling interest | ||
Additonal shares | 200,000 | ||
Stock issued, shares | 1,925,000 | 775,000 | |
Net proceeds | $ 1,712,564 | $ 659,100 | |
Stock issued to consultant, shares | 30,000 | 141,230 | |
Fair value | $ 141,731 | $ 30,000 | |
Warrants issued | 883,750 | 54,250 | |
Exercise price | $ 1 | $ 1 | |
Finance expense | $ 183,686 | $ 54,217 |
PREPAID ROYALTY EXPENSE (Detail
PREPAID ROYALTY EXPENSE (Details ) | Dec. 31, 2022 USD ($) |
Future Royalty Payments | $ 2,672,500 |
Fiscal year ending December 31, 2023 | |
Future Royalty Payments | 1,069,000 |
Fiscal year ending December 31, 2024 | |
Future Royalty Payments | $ 1,603,500 |
PREPAID ROYALTY EXPENSE (Deta_2
PREPAID ROYALTY EXPENSE (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Nov. 20, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | |
PREPAID ROYALTY EXPENSE | |||
Prepaid expenses | $ 147,769 | $ 401,330 | |
Royalty expense | $ 1,273,105 | $ 180,246 | |
Royalty payble | $ 4,000,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
INCOME TAXES | ||
Net operating loss carryforwards | $ 632,385 | $ 49,365 |
Total deferred tax asset | 632,385 | 49,365 |
Less: valuation allowance | (632,385) | (49,365) |
Total deferred tax asset, net | 0 | 0 |
Total deferred tax liabilities | 0 | 0 |
Net deferred tax asset (liabilities) | $ 0 | $ 0 |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
Loss for the year | $ 2,877,356 | $ 289,291 |
Permanent difference and others | (101,074) | (54,217) |
Change in valuation allowance | 2,776,282 | 235,074 |
Income tax expense per books | $ 0 | $ 0 |
INCOME TAXES (Details 2)
INCOME TAXES (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
Federal provision at statutory rate | $ (604,245) | $ (60,751) |
State income taxes | 0 | 0 |
Non-deductible expenses | 21,226 | 11,386 |
Change in valuation allowance | 583,019 | 49,365 |
Effective tax rate | $ 0 | $ 0 |
Federal provision at statutory rate | 21% | 21% |
State income taxes | 5.50% | 0% |
Non-deductible expenses | 0.70% | (4.00%) |
Change in valuation allowance | (20.30%) | (17.00%) |
Effective tax rate | 0% | 0% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
Federal imcome tax rate | 21% | 21% |
State income tax rate | 5.50% | 0% |
Change in valuation allowance | $ 583,019 | $ 49,365 |
Net operating loss carryforwards | $ 2,776,282 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | ||||
Jan. 12, 2023 | Jan. 30, 2023 | Jan. 18, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Common Stock, Par Value | $ 0.00001 | $ 0.00001 | |||
Pre-IPO funding investors | |||||
Shares issued | 700,000 | ||||
Boustead Securities, LLC | |||||
Shares issued | 127,311 | ||||
Subsequent Event [Member] | |||||
Common Stock, Par Value | $ 0.00001 | ||||
Initial pubic offering | 1,725,000 | ||||
Additional shares purchased | $ 225,000 | ||||
Offering price | $ 5 | ||||
Aggregate gross proceeds | $ 8,625,000 | ||||
Shares sold | 225,000 | ||||
Net proceeds | $ 7,239,855 |