Cover
Cover | 12 Months Ended |
Dec. 31, 2022 shares | |
Entity Addresses [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2022 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2022 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 333-268512 |
Entity Registrant Name | Qilun Group Inc. |
Entity Central Index Key | 0001951378 |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | Room 2201, Modern International Building |
Entity Address, Address Line Two | No. 3038, Jintian Road, Gangxia Community |
Entity Address, Address Line Three | Futian Street, Futian District |
Entity Address, City or Town | Shenzhen |
Entity Address, Country | CN |
Title of 12(b) Security | Ordinary Shares, $0.0001 par value |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | No |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 116,550,000 |
ICFR Auditor Attestation Flag | false |
Auditor Name | Assentsure PAC |
Auditor Location | Singapore |
Auditor Firm ID | 6783 |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
Entity Address, Address Line One | Room 2201, Modern International Building |
Entity Address, Address Line Two | No. 3038, Jintian Road, Gangxia Community |
Entity Address, Address Line Three | Futian Street, Futian District |
Entity Address, City or Town | Shenzhen |
Entity Address, Country | CN |
Country Region | 86 |
City Area Code | 755 |
Local Phone Number | 83985414 |
Contact Personnel Name | Ms. Ruowen Li |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash | $ 11,948,756 | $ 1,767,042 |
Prepayments | 296,753 | 169,318 |
Inventories | 583,358 | 185,012 |
Account receivables, net - third parties | 1,170,020 | |
Account receivables, net - related parties | 2,604 | |
Amount due from related parties – non-trade | 763,700 | 7,200 |
Other receivables and deposit | 178,704 | 46,018 |
Total current assets | 14,941,291 | 2,177,194 |
Plant and equipment, net | 321,639 | 176,147 |
Right-of-use assets | 80,449 | 139,441 |
Total assets | 15,343,379 | 2,492,782 |
Current Liabilities: | ||
Accounts payable– third parties | 285,106 | 71,470 |
Accounts payable– related parties | 278,225 | |
Deposits received – third parties | 2,286,017 | 968,812 |
Deposits received – related parties | 438,302 | 12,450 |
Amount due to related parties | 1,153,624 | 572,373 |
Tax payable | 411,418 | 72,392 |
Payroll payable | 77,397 | 154,581 |
Other payable | 435,445 | |
Operating lease liabilities, current | 72,439 | 119,045 |
Total current liabilities | 5,437,973 | 1,971,123 |
Operating lease liabilities, less current portion | 13,809 | 20,396 |
Deposits received – third parties, non current | 3,545,788 | |
Total liabilities | 8,997,570 | 1,991,519 |
Shareholders’ equity | ||
Common stock; $0.0001 par value, 500,000,000 shares authorized; 116,550,000 and 100,000,000 shares issued and outstanding at December 31, 2022 and 2021, respectively | 11,655 | 10,000 |
Additional paid-in capital | 5,177,220 | |
Statutory reserve | 155,296 | 33,259 |
Retained earnings | 1,098,460 | 451,120 |
Other comprehensive (loss)/income | (96,822) | 6,884 |
Total Shareholders’ equity | 6,345,809 | 501,263 |
Total liabilities and Shareholders’ equity | $ 15,343,379 | $ 2,492,782 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 116,550,000 | 100,000,000 |
Common stock, shares outstanding | 116,550,000 | 100,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Revenue – third parties | $ 6,708,321 | $ 1,249,542 | |
Revenue – related parties | 352,175 | 269,724 | |
Cost of revenue - third parties | 493,777 | 251,644 | |
Cost of revenue – related parties | 1,365,231 | 159,646 | |
Gross profit | 5,201,488 | 1,107,976 | |
Salaries and benefits | 1,085,422 | 329,989 | |
Research and development expenses | 122,948 | ||
Office supplies | 388,189 | 164,346 | |
Utilities expenses | 23,936 | 12,661 | |
Rentals and leases | 235,859 | 103,542 | |
Advertising and promotion expenses | 870,270 | 144,384 | |
Depreciation | 135,967 | 20,582 | |
Professional fees | 968,059 | ||
Total operating expenses | 3,830,650 | 775,504 | |
Earnings from operations before other income and income taxes | 1,370,838 | 332,472 | |
Interest income | 47,896 | ||
Other income | 114,026 | 175,427 | |
Other expense | (89,069) | ||
Earnings from operations before income taxes | 1,443,691 | 507,899 | |
Provision for income taxes | 406,791 | 23,520 | |
Net income | 1,036,900 | 484,379 | |
Comprehensive income: | |||
Foreign currency translation adjustment | (103,706) | 6,884 | |
Comprehensive income | $ 933,194 | $ 491,263 | |
Basic and diluted earnings per share | $ 0.009 | $ 0.005 | |
Weighted average number of shares outstanding | 116,550,000 | 100,000,000 | 100,000,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Statutory Reserve [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance at Dec. 31, 2019 | $ 10,000 | $ 10,000 | ||||
Balance shares at Dec. 31, 2019 | 100,000,000 | |||||
Net income | ||||||
Foreign currency translation adjustment | ||||||
Balance at Dec. 31, 2020 | $ 10,000 | 10,000 | ||||
Balance shares at Dec. 31, 2020 | 100,000,000 | |||||
Net income | 33,259 | 451,120 | 484,379 | |||
Foreign currency translation adjustment | 6,884 | 6,884 | ||||
Balance at Dec. 31, 2021 | $ 10,000 | 33,259 | 451,120 | 6,884 | 501,263 | |
Balance shares at Dec. 31, 2021 | 100,000,000 | |||||
Net income | 122,037 | 914,863 | 1,036,900 | |||
Issuance of common stocks | $ 1,655 | 3,308,345 | 3,310,000 | |||
Issuance of common stocks, shares | 16,550,000 | |||||
Shareholder contribution | 1,868,875 | 1,868,875 | ||||
Dividends | (267,523) | (267,523) | ||||
Foreign currency translation adjustment | (103,706) | (103,706) | ||||
Balance at Dec. 31, 2022 | $ 11,655 | $ 5,177,220 | $ 155,296 | $ 1,098,460 | $ (96,822) | $ 6,345,809 |
Balance shares at Dec. 31, 2022 | 116,550,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flows from Operating Activities | |||
Net income | $ 1,036,900 | $ 484,379 | |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Depreciation | 135,967 | 20,582 | |
Amortization on ROU asset | 155,164 | 93,652 | |
Gain on bargain purchase | (156,452) | ||
Changes in operating assets and liabilities: | |||
Account receivables - third parties | (1,199,394) | ||
Account receivables - related parties | 2,604 | (2,604) | |
Prepayments | (134,885) | (159,506) | |
Inventories | (412,991) | (102,593) | |
Other receivables and deposit | (137,102) | (32,165) | |
Accounts payable – third parties | 220,794 | 70,469 | |
Accounts payable – related parties | 285,210 | ||
Deposits received – third parties | 5,009,401 | 955,238 | |
Deposits received – related parties | 436,856 | 12,450 | |
Payroll payable | (75,241) | 152,004 | |
Other payables | 446,377 | (15,500) | |
Tax payable | 349,355 | 71,378 | |
Net cash provided by operating activities | 6,119,015 | 1,391,332 | |
Cash Flows from Investing Activities | |||
Acquisition of subsidiary net of cash acquired | 11,559 | ||
Purchase of plant and equipment | (289,534) | (190,503) | |
Payment of amounts due from related parties | (775,492) | ||
Net cash used in investing activities | (1,065,026) | (178,944) | |
Cash Flows from financing activities | |||
Payments for operating lease | (149,219) | (93,652) | |
Amounts advanced to related parties | 618,649 | 623,548 | |
Payments for dividends | (267,523) | ||
Issuance of common stocks | 3,310,000 | ||
Shareholders contribution | 1,915,793 | ||
Net cash provided by financing activities | 5,427,700 | 529,896 | |
Effect of exchange rate fluctuation on cash and cash equivalents | (299,975) | 24,758 | |
Net increase in cash and cash equivalents | 10,181,714 | 1,767,042 | |
Cash and cash equivalents, beginning of year | 1,767,042 | ||
Cash and cash equivalents, end of year | 11,948,756 | 1,767,042 | |
Supplemental disclosure of cash flow information | |||
Cash paid for income taxes | $ (406,791) | $ (23,520) |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NOTE 1. NATURE OF OPERATIONS Qilun Group Inc. (“Qilun”, together as a group with Qilun’s subsidiaries was referred to the “Company” or “we”) was incorporated in Cayman Islands on May 24, 2022. The Company provides cultural products, including calligraphy, painting, book, magazine, cultural and creative products, and related services provide, such as design, planning, exhibition installation, video recording and production when sells products. Qilun’s subsidiaries include: ● Qilun Group Limited (“Qilun Group (HK)”), which was established on June 14, 2022 under the laws of Hong Kong. Qilun controlled 100 ● Qilun Holding (Shenzhen) Company Limited (“Qilun Holding (Shenzhen)”), a privately held Limited Company registered in Guangdong, China on August 29, 2022. Qilun Group (HK) controlled 100 ● Qilun Culture (Shenzhen) Group Co., Ltd. (“Qilun Culture (Shenzhen)”), a privately held Limited Company registered in Guangdong, China on February 26, 2021. On October 14, 2022, Qilun Holding (Shenzhen) acquired 100 ● Qilun Culture (HK) Co., Ltd. (“Qilun Culture (HK)”), which was established on November 12, 2021 under the laws of Hong Kong. Qilun Culture (Shenzhen) controlled 100 100 ● Oriental Dream and Strategic Research Institute Limited (“OD&SR Institute”), which was established on October 31, 2022 under the laws of Hong Kong. Qilun Culture (HK) controlled 100 ● Qilun Enterprise Management Consultant (Shenzhen) Co., Ltd. (“Qilun Enterprise Management Consultant”), a privately held Limited Company registered in Guangdong, China. On December 7, 2021. Qilun Culture (Shenzhen) controlled 100 ● Shenzhen Houhaitang Culture Communication Co., Ltd. (“Shenzhen Houhaitang”), a privately held Limited Company registered in Guangdong, China on March 31, 2014. On December 31, 2021, Qilun Culture (Shenzhen) acquired 100 Reorganization On October 14, 2022, the Company completed a corporate reorganization to combine several controlled entities (now referred to as the “subsidiaries”) into Qilun. The specific transactions related to this reorganization are as follows: The reorganization involved the incorporation of Qilun, and its wholly-owned subsidiaries, Qilun Group (HK), Qilun Culture (HK) and Qilun Holding (Shenzhen); and the transfer of all equity ownership of Qilun Culture (Shenzhen). On May 24, 2022, Qilun Group Inc. issued 61,000,000 61 On June 14, 2022 and August 29, 2022, Qilun established its wholly-owned subsidiaries, Qilun Group (HK) and Qilun Holding (Shenzhen). On October 14, 2022, the original shareholders of Qilun Culture (Shenzhen) signed Equity Transfer Agreements with Qilun Holding (Shenzhen), whereby shareholders of Qilun Culture (Shenzhen) transferred 100 As a result of the transaction, Guangyi Sui hold 61 On December 31, 2021, Qilun Culture (Shenzhen) acquired 100 15,720 100,000 In accordance with Accounting Standards Codification 805, and particularly sections 805-30-25 and 805-30-30, before recognizing a gain on bargain purchase, the Company reassessed and concluded that it had identified all of the assets acquired and all of the liabilities assumed. In addition, the Company reviewed the procedures used to measure the amounts to be recognized with respect to identifiable assets acquired and liabilities assumed, as well as the aggregate consideration transferred. The objective of the review was to ensure that the measurements appropriately reflected all available information as of the acquisition date. Based on this review, the Company concluded that the fair value of the consideration transferred in the acquisition of Houhaitang was less than the fair value of the net identifiable assets acquired, resulting in the $ 158,675 SCHEDULE OF GAIN RECOGNIZED BUSINESS ACQUISITION Amount Cash and cash equivalents $ 11,724 Prepayments 7,545 Inventory 80,960 Other Receivables and deposits 10,595 Amount due from related parties 205,750 Plant and equipment, net 3,811 Amount due to related parties (145,573 ) Payroll payable (417 ) Total identifiable net assets 174,395 Less: Purchase consideration 15,720 Gain on bargain purchase $ 158,675 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Basis of presentation The accompanying consolidated financial statements are expressed in U.S. Dollars and have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). B. Principles of consolidation The consolidated financial statements include the accounts of Qilun and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. The consolidated financial statements include 100% of assets, liabilities, and net income or loss of these subsidiaries. Qilun’s subsidiaries as of the date filing this report are listed as follows: SCHEDULE OF SUBSIDIARIES Name Place of Incorporation Attributable equity interest % Authorized capital Qilun Group Limited Hong Kong 100 HK$ 1,000,000 Qilun Culture (HK) Co., Ltd. Hong Kong 100 HK$ 5,000,000 Oriental Dream and Strategic Research Institute Limited (Hong Kong) Hong Kong 100 HK$ 999,000 Qilun Holding (Shenzhen) Company Limited China 100 US$ 5,000,000 Qilun Culture (Shenzhen) Group Co., Ltd. China 100 - Qilun Enterprise Management Consultant (Shenzhen) Co., Ltd. China 100 - Shenzhen Houhaitang Culture Communication Co., Ltd.; Co., Ltd. China 100 - C. Use of estimates The preparation of 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, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from these estimates. D. Functional currency and foreign currency translation An entity’s functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. The functional currency of the Company is the Chinese Renminbi (“RMB’), except the functional currency of Qilun is the United States dollar (“US Dollars” or “$”). The reporting currency of these consolidated financial statements is in US Dollars. Qilun’s subsidiaries that are prepared using the RMB, are translated into the Company’s reporting currency, the US Dollar. Assets and liabilities are translated using the exchange rate at each reporting period end date. Revenue and expenses are translated using weighted average rates prevailing during each reporting period, and stockholders’ equity (deficit) is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income or expense. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Foreign currency exchange gains and losses resulting from these transactions are included in operations. The exchange rates used for foreign currency translation are as follows: SCHEDULE OF EXCHANGE RATES USED FOR FOREIGN CURRENCY TRANSLATION For the Year Ended December 31, 2022 2021 (USD to RMB) (USD to RMB) Assets and liabilities period end exchange rate 6.8973 6.3614 Revenue and expenses period average 6.7284 6.4518 E. Concentration of credit risk The Company maintains cash in state-owned banks in China. In China, the insurance coverage of each bank is RMB 500,000 72,492 11,615,311 During the year ended December 31, 2022, the Company had nil major customers generated more than 10% of revenue. During the year ended December 31, 2021, the Company had 3 customers generated more than 10% of revenue. SCHEDULE OF CONCENTRATION OF CREDIT RISK For the Year Ended December 31, 2021 Revenue Percentage of revenue A $ 201,955 13.3 B 198,655 13.1 C 196,430 12.9 During the year ended December 31, 2020, the Company had nil major customers generated more than 10% of revenue. F. Cash Cash consists of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. All highly liquid investments with original stated maturity of three months or less are classified as cash and cash equivalents. Cash equivalents approximate or equal fair value due to their short-term nature. The Company’s cash consist of cash on hand and cash in bank as of December 31, 2022 and 2021. G. Inventories The Company’s inventories primarily consist of goods for sales such as book, magazine, cultural and creative products and materials and expenses in processing, are stated at the lower of cost or net realizable value. Cost is determined using moving weighted average and specific identification method. The Company reviews its inventories regularly for possible obsolete goods and establishes reserves when determined necessary. No H. Plant and equipment, net Plant and equipment are stated at cost net of accumulated depreciation. Expenditures for maintenance and repairs are charged to operations when incurred, while additions and betterments are capitalized. Depreciation is recorded on a straight-line basis over the useful lives of the assets. When assets are retired or disposed, the asset’s original cost and related accumulated depreciation are eliminated from those accounts and any gain or loss is reflected in income. The estimated useful lives for plant and equipment categories are as follows: SCHEDULE OF PROPERTY PLANT AND EQUIPMENT ESTIMATED USEFUL LIFE Office equipment 3 5 Furniture 5 Leasehold improvements shorter of remaining lease period and estimated useful life I. Fair value measurements The Company applies the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Section 820, Fair Value Measurements Fair value is defined as the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value for the assets and liabilities required or permitted to be recorded, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices, other than those in Level 1, in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability, Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). There were no transfers between level 1, level 2 or level 3 measurements for the years ended December 31, 2022 and 2021. Financial assets and liabilities of the Company primarily comprise of cash, prepayments, other receivables, inventories, due from related parties, accounts payable, deposits received, payroll payable, tax payable, amount due to related parties. As of December 31, 2022 and 2021, the carrying values of these financial instruments approximated their fair values due to the short-term maturity of these instruments. J. Segment information and geographic data The Company is operating in one Segment Reporting K. Revenue recognition The Company adopted FASB ASC Section 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the sales of products and services by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that economic benefits will flow to the entity, and specific criteria have been met for each of the Company’s activities as described below. Product and Service Revenue The Company mainly sells cultural products, including calligraphy, painting, book, magazine, cultural and creative products, the Company often provide services such as design, planning, exhibition installation, video recording and production when sells products. The Company sells products and provide service to a customer. The delivery of products to a customer represents a separate performance obligation. The Company’s policy is to recognize the service revenue when service is provided, and recognize the sales revenue when the product is signed for receipt, at that time the sold products and service, ownership and risk of loss have been transferred to the customer. Accordingly, revenue is recognized at the point in time when the products and service is provided. Sales and service revenue is recognized when the products and service has been delivered to the customer as no remaining performance obligation after the delivery of products and service. Management regularly reviews the sales return and allowance based on historical experience. Any subsequent sales return and cancellations are recognized upon notification from the customers. The amount of sales return allowance for the sale of products and service amounted to $nil as of December 31, 2022 and 2021. The Company typically collects fees before delivery of products and service. Amounts received from a customer before the delivery of products and service are recorded as deposits received on the Consolidated Balance Sheets. Cost of Revenues Cost of revenue consists primarily of the cost of products and service purchased from third party providers to fulfill a contract with a customer, and no asset was recognized from the costs incurred to obtain or fulfill a contract with a customer. Cost of products consists primarily of the cost of products purchased from suppliers. Cost of products is recognized when the product has been delivered to the customer. L . Income taxes The Company follows FASB ASC Section 740, Income Taxes ASC 740-10-30 requires income tax positions to meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Under ASC 740-10-30, tax positions that previously failed to meet the more-likely-than-not threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or the deferred tax asset valuation allowance. As a result of the implementation of ASC 740-10, the Company made a comprehensive review of its portfolio of tax positions in accordance with recognition standards established by ASC 740-10. The Company recognized no material adjustments to liabilities or shareholder’s equity as a result of the implementation. M. Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, Earnings Per Share Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of contracts to issue ordinary common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. The computation of diluted EPS includes the estimated impact of the exercise of contracts to purchase common stock using the treasury stock method and the potential shares of converted common stock associated with the convertible debt using the if-converted method. Potential common shares that have an anti-dilutive effect (i.e., those that increase earnings per share or decrease loss per share) are excluded from the calculation of diluted EPS. There is no N. Leases In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842), which increases transparency and comparability among organizations by recognizing right-of-use (“ROU”) lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU maintains a distinction between finance leases and operating leases, which is substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. Retaining this distinction allows the recognition, measurement and presentation of expenses and cash flows arising from a lease to remain similar to the previous accounting treatment. A lessee is permitted to make an accounting policy election by class of underlying asset to exclude from balance sheet recognition any lease assets and lease liabilities with a term of 12 months or less, and instead to recognize lease expense on a straight-line basis over the lease term. For both financing and operating leases, the ROU asset and lease liability is initially measured at the present value of the lease payments in the consolidated balance sheet. In July 2018, the FASB issued ASU 2018-11 which provides entities with the option to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if necessary. As discussed in Note 10, we adopted ASU 2016-02–Leases (Topic 842) effective January 1, 2020 utilizing the transition option provided by ASU 2018-11. O. Impairment of long-lived assets Long-lived assets, including property and equipment 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 will 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 years ended December 31, 2022 and 2021 no P. Related parties Parties, which can be a corporation or individuals, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Q. Recently accounting pronouncements In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“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) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective on August 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on August 1, 2021. We have determined not to early adopt. Management does not believe that this and any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on our financial statements. |
PREPAYMENTS
PREPAYMENTS | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure Prepayments Abstract | |
PREPAYMENTS | NOTE 3. PREPAYMENTS Prepayments primarily include prepaid service and products in advance to suppliers. As of December 31, 2022 and 2021, prepayments were $ 296,753 169,318 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4. INVENTORIES At December 31, 2022 and 2021, inventories consist of the following: SCHEDULE OF INVENTORIES 2022 2021 December 31 2022 2021 Finished Goods $ 583,358 $ 185,012 Inventories $ 583,358 $ 185,012 |
PLANT AND EQUIPMENT, NET
PLANT AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
PLANT AND EQUIPMENT, NET | NOTE 5. PLANT AND EQUIPMENT, NET At December 31, 2022 and 2021, plant and equipment, at cost less accumulated depreciation, consisted of: SCHEDULE OF PLANT AND EQUIPMENT 2022 2021 December 31 2022 2021 Office equipment $ 147,353 $ 132,154 Furniture 231,992 66,273 Leasehold improvements 95,964 - Total 475,309 198,427 Less: Accumulated depreciation (153,670 ) (22,280 ) Total plant and equipment, net $ 321,639 $ 176,147 The Company recorded depreciation expenses of $ 135,967 20,582 nil No |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 6. RELATED PARTY TRANSACTIONS Due from related parties Due from related parties consists of the following: SCHEDULE OF AMOUNT DUE FROM RELATED PARTIES Name of related parties 2022 2021 December 31, Name of related parties 2022 2021 Qilun Classical Art Creation (Shenzhen) Studio 756,500 - UNIMOS Holdings Limited 6,100 6,100 Sancai Holdings Limited 1,100 1,100 Due from related parties $ 763,700 $ 7,200 Amount due from UNIMOS Holdings Limited and Sancai Holdings Limited were mainly for the paid-in capital to be paid. UNIMOS Holdings Limited and Sancai Holdings Limited are shareholders of the Company. Amount due from Qilun Classical Art Creation (Shenzhen) Studio mainly represented amounts borrowed from the Company. The annual interest rate is 10 July 26, 2023 31,579 Amount due to related parties Amount due to related parties consisted of the following as of the periods indicated: SCHEDULE OF AMOUNT DUE TO RELATED PARTIES Name of related parties 2022 2021 December 31, Name of related parties 2022 2021 Guangyi Sui $ 931,028 $ - Ruowen Li 207,333 191,953 Jingxia Yang 15,263 380,420 Due to related parties $ 1,153,624 $ 572,373 On October 14, 2022, the original shareholders of Qilun Culture (Shenzhen) signed Equity Transfer Agreements with Qilun Holding (Shenzhen), whereby shareholders of Qilun Culture (Shenzhen) transferred 100 100 52.34 Ruowen Li is the CEO, director and shareholder of Qilun, and Jingxia Yang is her parent. These debts due to related parties were unsecured, repayable on demand, and interest free. Account receivables from related parties SCHEDULE OF ACCOUNT RECEIVABLES FROM RELATED PARTIES Name of related parties 2022 2021 December 31, Name of related parties 2022 2021 Yuanheng Culture Art Creative Co., Ltd. $ - $ 2,604 Account receivables from related parties $ - $ 2,604 Account receivables from Yuanheng Culture Art Creative Co., Ltd. mainly represented the balance of product sales to Yuanheng at the end of year 2021. Yuanheng Culture Art Creative Co., Ltd. was 50 50 Accounts payable to related parties SCHEDULE OF ACCOUNTS PAYABLE TO RELATED PARTIES Name of related parties 2022 2021 December 31, Name of related parties 2022 2021 Guangyi Sui $ 89,745 $ - Qilun Classical Art Creation (Shenzhen) Studio 188,480 - Total $ 278,225 $ - Accounts payable to related parties $ 278,225 $ - Related parties’ transactions SCHEDULE OF RELATED PARTIES TRANSACTIONS Purchase from related parties consisted of the following for the periods indicated: Name of related parties 2022 2021 For the Year ended December 31, Name of related parties 2022 2021 Qilun Classical Art Creation (Shenzhen) Studio $ 1,237,952 $ - Guangyi Sui 290,560 51,149 Zhaodong Li - 108,497 Total $ 1,528,512 $ 159,646 Purchase from related parties $ 1,528,512 $ 159,646 Sales to related parties consisted of the following for the periods indicated: Name of related parties 2022 2021 For the Year ended December 31, Name of related parties 2022 2021 Yuanheng Culture Art Creative Co., Ltd. $ 109,040 $ 73,294 Jingxia Yang 243,135 196,430 Total $ 352,175 $ 269,724 Sales to related parties $ 352,175 $ 269,724 Interest income from related parties consisted of the following for the periods indicated: Name of related parties 2022 2021 For the Year ended December 31, Name of related parties 2022 2021 Qilun Classical Art Creation (Shenzhen) Studio $ 32,372 $ - Total $ 32,372 $ - Interest income from related parties $ 32,372 $ - |
DEPOSITS RECEIVED
DEPOSITS RECEIVED | 12 Months Ended |
Dec. 31, 2022 | |
Deposits Received | |
DEPOSITS RECEIVED | NOTE 7. DEPOSITS RECEIVED At December 31, 2022 and 2021, deposits received consist of the following: SCHEDULE OF DEPOSITS RECEIVED 2022 2021 December 31 2022 2021 Received from customer in advance for goods sales – third parties $ 5,831,805 $ 968,812 Received from customer in advance for goods sales – related parties 438,302 12,450 Received from customer in advance for goods sales $ 6,270,107 $ 981,262 |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | NOTE 8. REVENUE The Company’s revenue consists of products sales and service revenue. SCHEDULE OF PRODUCTS SALES AND SERVICE REVENUE 2022 2021 2020 For the Year Ended December 31, 2022 2021 2020 Category of Revenue: Products sales – third parties $ 6,532,609 $ 1,007,868 $ - Products sales – related parties 352,175 269,724 - Services revenue 175,712 241,674 - Total revenue $ 7,060,496 $ 1,519,266 $ - Timing of Revenue Recognition: Services transferred overtime $ - $ 61,385 $ - Services transferred at a point in time 175,712 180,289 - Goods transferred at a point in time 6,884,784 1,277,592 - Total revenue $ 7,060,496 $ 1,519,266 $ - |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9. INCOME TAXES Cayman Islands Under the current laws of the Cayman Islands, Qilun and its subsidiaries incorporated in the Cayman Islands are not subject to tax on income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. Hong Kong Qilun Group (HK) and Qilun Culture (HK) were incorporated in Hong Kong and is subject to Hong Kong profits tax. Qilun Group (HK) and Qilun Culture (HK) are subject to Hong Kong taxation on its activities conducted in Hong Kong and income arising in or derived from Hong Kong. The applicable statutory tax rate is 16.5 China Qilun Holding (Shenzhen) and its subsidiaries are subject to a 25 The following table summarizes income before income taxes incurred in the PRC and outside of the PRC: SCHEDULE OF INCOME BEFORE INCOME TAXES 2022 2021 2020 Year Ended December 31 2022 2021 2020 Income before income taxes: PRC $ 1,443,691 $ 507,899 $ - Outside of PRC - - - Total $ 1,443,432 $ 507,899 $ - Expenses for income taxes are comprised of: SCHEDULE OF EXPENSES FOR INCOME TAXES 2022 2021 2020 Year Ended December 31 2022 2021 2020 Current Tax: PRC $ 406,791 $ 23,520 $ - Outside of PRC - - - Income tax expense $ 406,791 $ 23,520 $ - The reconciliations of the statutory income tax rate and the Company’s effective income tax rate as follows: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION 2022 2021 2020 For the years Ended December 31, 2022 2021 2020 Net income before provision for income taxes $ 1,443,691 $ 507,899 $ - PRC statutory tax rate 25 % 25 % Income at statutory tax rate 360,923 126,975 - Effect of non-taxable income—gain on bargain purchase - (39,113 ) - Effect of preferential tax rates granted to the PRC entities (a) (37,233 ) (64,342 ) - Changes in valuation allowance 83,101 - - Income tax expense $ 406,791 $ 23,520 $ - Effective income tax rate 28 % 4.63 % - (a) For the year ended December 31, 2022, the Company’s subsidiaries Shenzhen Houhaitang, Qilun Enterprise Management Consultant and Qilun Holding (Shenzhen) enjoy a preferential income tax rate of 2.5 1 5 1 3 For the year ended December 31, 2021, the Company’s subsidiary Qilun Culture (Shenzhen) enjoys a preferential income tax rate of 2.5 1 10 1 3 For the years ended December 31, 2022, 2021 and 2020, the tax saving as the result of the favorable tax rate amounted to $ 37,233 64,342 nil |
LEASE
LEASE | 12 Months Ended |
Dec. 31, 2022 | |
Lease | |
LEASE | NOTE 10. LEASE Operating Lease Agreements – On March 4, 2021, the Company leased office space (approximately 232.26 115,927 2 In March 2022, Qilun Culture (Shenzhen) leased office space (approximately 250 2 4,756 Leases with an initial term of 12 months or less are not recorded on the balance sheet. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in Rentals and leases. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company did not combine lease and non-lease components. The exercise of lease renewal options has to be agreed by the lessors. The depreciable life of assets and leasehold improvements are limited by the term of leases, unless there is a transfer of title or purchase option reasonably certain of exercise. Lease expense is recognized on a straight-line basis over the term of the lease. Lease expense related to these non-cancelable operating leases was $ 235,859 103,542 nil Balance sheet information related to the Company’s leases is presented below: SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO OPERATING LEASES December 31, 2022 December 31, 2021 Assets Operating lease right of use assets $ 80,449 $ 139,441 Liabilities Operating lease liabilities – current $ 72,439 $ 119,045 Operating lease liabilities – non-current 13,809 20,396 Total Operating lease liabilities $ 86,248 $ 139,441 The following provides details of the Company’s lease expenses: SCHEDULE OF LEASE EXPENSES For the year Ended December 31, 2022 December 31, 2021 Operating lease expenses $ 235,859 $ 103,542 Other information related to leases is presented below: SCHEDULE OF OTHER INFORMATION RELATED TO LEASES For the year Ended December 31, 2022 December 31, 2021 Cash Paid for Amounts Included in Measurement of Liabilities: Financing cash flows from operating leases $ 149,219 $ 93,652 Weighted Average Remaining Lease Term: Operating leases 0.72 1.17 Weighted Average Discount Rate Operating leases 4.75 % 4.75 % As most of the Company’s leases do not provide an implicit rate, the Company uses 1 5 4.75 Maturities of lease liabilities were as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITIES For the year ending December 31: 2022 $ - 2023 74,522 2024 13,918 Total lease payments 88,440 Less: imputed interest 2,192 Total lease liabilities $ 86,248 |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | NOTE 11. CONTINGENCIES Contingencies Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed. The Company was not subject to any material loss contingency as of December 31, 2022 and 2021. |
BASIC AND DILUTED EARNINGS PER
BASIC AND DILUTED EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED EARNINGS PER SHARE | NOTE 12. BASIC AND DILUTED EARNINGS PER SHARE Basic net income per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares comprise shares issuable upon the exercise of share-based awards, using the treasury stock method. The reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for income from continuing operations is shown as follows: SCHEDULE OF BASIC AND DILUTED EARNINGS PER SHARE 2022 2021 2020 For the year Ended December 31, 2022 2021 2020 Numerator: Net profit attributable to common stockholders $ 1,036,900 $ 484,379 $ - Denominator: Basic and diluted weighted-average number of shares outstanding 116,550,000 100,000,000 100,000,000 Net income per share: Basic and diluted $ 0.009 $ 0.005 $ 0.00 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13. SUBSEQUENT EVENTS Management has evaluated subsequent events through the date which the consolidated financial statements were available to be issued. All subsequent events requiring recognition as of December 31, 2022 have been incorporated into these consolidated financial statements and there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.” |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | A. Basis of presentation The accompanying consolidated financial statements are expressed in U.S. Dollars and have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Principles of consolidation | B. Principles of consolidation The consolidated financial statements include the accounts of Qilun and its subsidiaries. All significant inter-company accounts and transactions have been eliminated. The consolidated financial statements include 100% of assets, liabilities, and net income or loss of these subsidiaries. Qilun’s subsidiaries as of the date filing this report are listed as follows: SCHEDULE OF SUBSIDIARIES Name Place of Incorporation Attributable equity interest % Authorized capital Qilun Group Limited Hong Kong 100 HK$ 1,000,000 Qilun Culture (HK) Co., Ltd. Hong Kong 100 HK$ 5,000,000 Oriental Dream and Strategic Research Institute Limited (Hong Kong) Hong Kong 100 HK$ 999,000 Qilun Holding (Shenzhen) Company Limited China 100 US$ 5,000,000 Qilun Culture (Shenzhen) Group Co., Ltd. China 100 - Qilun Enterprise Management Consultant (Shenzhen) Co., Ltd. China 100 - Shenzhen Houhaitang Culture Communication Co., Ltd.; Co., Ltd. China 100 - |
Use of estimates | C. Use of estimates The preparation of 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, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Management makes these estimates using the best information available at the time the estimates are made. Actual results could differ from these estimates. |
Functional currency and foreign currency translation | D. Functional currency and foreign currency translation An entity’s functional currency is the currency of the primary economic environment in which it operates, normally that is the currency of the environment in which the entity primarily generates and expends cash. Management’s judgment is essential to determine the functional currency by assessing various indicators, such as cash flows, sales price and market, expenses, financing and inter-company transactions and arrangements. The functional currency of the Company is the Chinese Renminbi (“RMB’), except the functional currency of Qilun is the United States dollar (“US Dollars” or “$”). The reporting currency of these consolidated financial statements is in US Dollars. Qilun’s subsidiaries that are prepared using the RMB, are translated into the Company’s reporting currency, the US Dollar. Assets and liabilities are translated using the exchange rate at each reporting period end date. Revenue and expenses are translated using weighted average rates prevailing during each reporting period, and stockholders’ equity (deficit) is translated at historical exchange rates. Adjustments resulting from the translation are recorded as a separate component of accumulated other comprehensive income or expense. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Foreign currency exchange gains and losses resulting from these transactions are included in operations. The exchange rates used for foreign currency translation are as follows: SCHEDULE OF EXCHANGE RATES USED FOR FOREIGN CURRENCY TRANSLATION For the Year Ended December 31, 2022 2021 (USD to RMB) (USD to RMB) Assets and liabilities period end exchange rate 6.8973 6.3614 Revenue and expenses period average 6.7284 6.4518 |
Concentration of credit risk | E. Concentration of credit risk The Company maintains cash in state-owned banks in China. In China, the insurance coverage of each bank is RMB 500,000 72,492 11,615,311 During the year ended December 31, 2022, the Company had nil major customers generated more than 10% of revenue. During the year ended December 31, 2021, the Company had 3 customers generated more than 10% of revenue. SCHEDULE OF CONCENTRATION OF CREDIT RISK For the Year Ended December 31, 2021 Revenue Percentage of revenue A $ 201,955 13.3 B 198,655 13.1 C 196,430 12.9 During the year ended December 31, 2020, the Company had nil major customers generated more than 10% of revenue. |
Cash | F. Cash Cash consists of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. All highly liquid investments with original stated maturity of three months or less are classified as cash and cash equivalents. Cash equivalents approximate or equal fair value due to their short-term nature. The Company’s cash consist of cash on hand and cash in bank as of December 31, 2022 and 2021. |
Inventories | G. Inventories The Company’s inventories primarily consist of goods for sales such as book, magazine, cultural and creative products and materials and expenses in processing, are stated at the lower of cost or net realizable value. Cost is determined using moving weighted average and specific identification method. The Company reviews its inventories regularly for possible obsolete goods and establishes reserves when determined necessary. No |
Plant and equipment, net | H. Plant and equipment, net Plant and equipment are stated at cost net of accumulated depreciation. Expenditures for maintenance and repairs are charged to operations when incurred, while additions and betterments are capitalized. Depreciation is recorded on a straight-line basis over the useful lives of the assets. When assets are retired or disposed, the asset’s original cost and related accumulated depreciation are eliminated from those accounts and any gain or loss is reflected in income. The estimated useful lives for plant and equipment categories are as follows: SCHEDULE OF PROPERTY PLANT AND EQUIPMENT ESTIMATED USEFUL LIFE Office equipment 3 5 Furniture 5 Leasehold improvements shorter of remaining lease period and estimated useful life |
Fair value measurements | I. Fair value measurements The Company applies the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Section 820, Fair Value Measurements Fair value is defined as the price that would be received when selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining the fair value for the assets and liabilities required or permitted to be recorded, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices, other than those in Level 1, in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability, Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). There were no transfers between level 1, level 2 or level 3 measurements for the years ended December 31, 2022 and 2021. Financial assets and liabilities of the Company primarily comprise of cash, prepayments, other receivables, inventories, due from related parties, accounts payable, deposits received, payroll payable, tax payable, amount due to related parties. As of December 31, 2022 and 2021, the carrying values of these financial instruments approximated their fair values due to the short-term maturity of these instruments. |
Segment information and geographic data | J. Segment information and geographic data The Company is operating in one Segment Reporting |
Revenue recognition | K. Revenue recognition The Company adopted FASB ASC Section 606 — Revenue from Contracts with Customers. Under ASC 606, the Company recognizes revenue from the sales of products and services by applying the following steps: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that economic benefits will flow to the entity, and specific criteria have been met for each of the Company’s activities as described below. Product and Service Revenue The Company mainly sells cultural products, including calligraphy, painting, book, magazine, cultural and creative products, the Company often provide services such as design, planning, exhibition installation, video recording and production when sells products. The Company sells products and provide service to a customer. The delivery of products to a customer represents a separate performance obligation. The Company’s policy is to recognize the service revenue when service is provided, and recognize the sales revenue when the product is signed for receipt, at that time the sold products and service, ownership and risk of loss have been transferred to the customer. Accordingly, revenue is recognized at the point in time when the products and service is provided. Sales and service revenue is recognized when the products and service has been delivered to the customer as no remaining performance obligation after the delivery of products and service. Management regularly reviews the sales return and allowance based on historical experience. Any subsequent sales return and cancellations are recognized upon notification from the customers. The amount of sales return allowance for the sale of products and service amounted to $nil as of December 31, 2022 and 2021. The Company typically collects fees before delivery of products and service. Amounts received from a customer before the delivery of products and service are recorded as deposits received on the Consolidated Balance Sheets. Cost of Revenues Cost of revenue consists primarily of the cost of products and service purchased from third party providers to fulfill a contract with a customer, and no asset was recognized from the costs incurred to obtain or fulfill a contract with a customer. Cost of products consists primarily of the cost of products purchased from suppliers. Cost of products is recognized when the product has been delivered to the customer. |
Income taxes | L . Income taxes The Company follows FASB ASC Section 740, Income Taxes ASC 740-10-30 requires income tax positions to meet a more-likely-than-not recognition threshold to be recognized in the financial statements. Under ASC 740-10-30, tax positions that previously failed to meet the more-likely-than-not threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. The application of tax laws and regulations is subject to legal and factual interpretation, judgment and uncertainty. Tax laws and regulations themselves are subject to change as a result of changes in fiscal policy, changes in legislation, the evolution of regulations and court rulings. Therefore, the actual liability may be materially different from our estimates, which could result in the need to record additional tax liabilities or potentially reverse previously recorded tax liabilities or the deferred tax asset valuation allowance. As a result of the implementation of ASC 740-10, the Company made a comprehensive review of its portfolio of tax positions in accordance with recognition standards established by ASC 740-10. The Company recognized no material adjustments to liabilities or shareholder’s equity as a result of the implementation. |
Earnings per share | M. Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC 260, Earnings Per Share Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of contracts to issue ordinary common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. The computation of diluted EPS includes the estimated impact of the exercise of contracts to purchase common stock using the treasury stock method and the potential shares of converted common stock associated with the convertible debt using the if-converted method. Potential common shares that have an anti-dilutive effect (i.e., those that increase earnings per share or decrease loss per share) are excluded from the calculation of diluted EPS. There is no |
Leases | N. Leases In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842), which increases transparency and comparability among organizations by recognizing right-of-use (“ROU”) lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The ASU maintains a distinction between finance leases and operating leases, which is substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous lease guidance. Retaining this distinction allows the recognition, measurement and presentation of expenses and cash flows arising from a lease to remain similar to the previous accounting treatment. A lessee is permitted to make an accounting policy election by class of underlying asset to exclude from balance sheet recognition any lease assets and lease liabilities with a term of 12 months or less, and instead to recognize lease expense on a straight-line basis over the lease term. For both financing and operating leases, the ROU asset and lease liability is initially measured at the present value of the lease payments in the consolidated balance sheet. In July 2018, the FASB issued ASU 2018-11 which provides entities with the option to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, if necessary. As discussed in Note 10, we adopted ASU 2016-02–Leases (Topic 842) effective January 1, 2020 utilizing the transition option provided by ASU 2018-11. |
Impairment of long-lived assets | O. Impairment of long-lived assets Long-lived assets, including property and equipment 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 will 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 years ended December 31, 2022 and 2021 no |
Related parties | P. Related parties Parties, which can be a corporation or individuals, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence. |
Recently accounting pronouncements | Q. Recently accounting pronouncements In August 2020, the Financial Accounting Standards Board issued Accounting Standards Update (“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) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective on August 1, 2024 and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on August 1, 2021. We have determined not to early adopt. Management does not believe that this and any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have an effect on our financial statements. |
NATURE OF OPERATIONS (Tables)
NATURE OF OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF GAIN RECOGNIZED BUSINESS ACQUISITION | SCHEDULE OF GAIN RECOGNIZED BUSINESS ACQUISITION Amount Cash and cash equivalents $ 11,724 Prepayments 7,545 Inventory 80,960 Other Receivables and deposits 10,595 Amount due from related parties 205,750 Plant and equipment, net 3,811 Amount due to related parties (145,573 ) Payroll payable (417 ) Total identifiable net assets 174,395 Less: Purchase consideration 15,720 Gain on bargain purchase $ 158,675 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
SCHEDULE OF SUBSIDIARIES | Qilun’s subsidiaries as of the date filing this report are listed as follows: SCHEDULE OF SUBSIDIARIES Name Place of Incorporation Attributable equity interest % Authorized capital Qilun Group Limited Hong Kong 100 HK$ 1,000,000 Qilun Culture (HK) Co., Ltd. Hong Kong 100 HK$ 5,000,000 Oriental Dream and Strategic Research Institute Limited (Hong Kong) Hong Kong 100 HK$ 999,000 Qilun Holding (Shenzhen) Company Limited China 100 US$ 5,000,000 Qilun Culture (Shenzhen) Group Co., Ltd. China 100 - Qilun Enterprise Management Consultant (Shenzhen) Co., Ltd. China 100 - Shenzhen Houhaitang Culture Communication Co., Ltd.; Co., Ltd. China 100 - |
SCHEDULE OF EXCHANGE RATES USED FOR FOREIGN CURRENCY TRANSLATION | The exchange rates used for foreign currency translation are as follows: SCHEDULE OF EXCHANGE RATES USED FOR FOREIGN CURRENCY TRANSLATION For the Year Ended December 31, 2022 2021 (USD to RMB) (USD to RMB) Assets and liabilities period end exchange rate 6.8973 6.3614 Revenue and expenses period average 6.7284 6.4518 |
SCHEDULE OF CONCENTRATION OF CREDIT RISK | During the year ended December 31, 2021, the Company had 3 customers generated more than 10% of revenue. SCHEDULE OF CONCENTRATION OF CREDIT RISK For the Year Ended December 31, 2021 Revenue Percentage of revenue A $ 201,955 13.3 B 198,655 13.1 C 196,430 12.9 |
SCHEDULE OF PROPERTY PLANT AND EQUIPMENT ESTIMATED USEFUL LIFE | The estimated useful lives for plant and equipment categories are as follows: SCHEDULE OF PROPERTY PLANT AND EQUIPMENT ESTIMATED USEFUL LIFE Office equipment 3 5 Furniture 5 Leasehold improvements shorter of remaining lease period and estimated useful life |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | At December 31, 2022 and 2021, inventories consist of the following: SCHEDULE OF INVENTORIES 2022 2021 December 31 2022 2021 Finished Goods $ 583,358 $ 185,012 Inventories $ 583,358 $ 185,012 |
PLANT AND EQUIPMENT, NET (Table
PLANT AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PLANT AND EQUIPMENT | At December 31, 2022 and 2021, plant and equipment, at cost less accumulated depreciation, consisted of: SCHEDULE OF PLANT AND EQUIPMENT 2022 2021 December 31 2022 2021 Office equipment $ 147,353 $ 132,154 Furniture 231,992 66,273 Leasehold improvements 95,964 - Total 475,309 198,427 Less: Accumulated depreciation (153,670 ) (22,280 ) Total plant and equipment, net $ 321,639 $ 176,147 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Related Party Transactions [Abstract] | |
SCHEDULE OF AMOUNT DUE FROM RELATED PARTIES | Due from related parties consists of the following: SCHEDULE OF AMOUNT DUE FROM RELATED PARTIES Name of related parties 2022 2021 December 31, Name of related parties 2022 2021 Qilun Classical Art Creation (Shenzhen) Studio 756,500 - UNIMOS Holdings Limited 6,100 6,100 Sancai Holdings Limited 1,100 1,100 Due from related parties $ 763,700 $ 7,200 |
SCHEDULE OF AMOUNT DUE TO RELATED PARTIES | Amount due to related parties consisted of the following as of the periods indicated: SCHEDULE OF AMOUNT DUE TO RELATED PARTIES Name of related parties 2022 2021 December 31, Name of related parties 2022 2021 Guangyi Sui $ 931,028 $ - Ruowen Li 207,333 191,953 Jingxia Yang 15,263 380,420 Due to related parties $ 1,153,624 $ 572,373 |
SCHEDULE OF ACCOUNT RECEIVABLES FROM RELATED PARTIES | Account receivables from related parties SCHEDULE OF ACCOUNT RECEIVABLES FROM RELATED PARTIES Name of related parties 2022 2021 December 31, Name of related parties 2022 2021 Yuanheng Culture Art Creative Co., Ltd. $ - $ 2,604 Account receivables from related parties $ - $ 2,604 |
SCHEDULE OF ACCOUNTS PAYABLE TO RELATED PARTIES | Accounts payable to related parties SCHEDULE OF ACCOUNTS PAYABLE TO RELATED PARTIES Name of related parties 2022 2021 December 31, Name of related parties 2022 2021 Guangyi Sui $ 89,745 $ - Qilun Classical Art Creation (Shenzhen) Studio 188,480 - Total $ 278,225 $ - Accounts payable to related parties $ 278,225 $ - |
SCHEDULE OF RELATED PARTIES TRANSACTIONS | Related parties’ transactions SCHEDULE OF RELATED PARTIES TRANSACTIONS Purchase from related parties consisted of the following for the periods indicated: Name of related parties 2022 2021 For the Year ended December 31, Name of related parties 2022 2021 Qilun Classical Art Creation (Shenzhen) Studio $ 1,237,952 $ - Guangyi Sui 290,560 51,149 Zhaodong Li - 108,497 Total $ 1,528,512 $ 159,646 Purchase from related parties $ 1,528,512 $ 159,646 Sales to related parties consisted of the following for the periods indicated: Name of related parties 2022 2021 For the Year ended December 31, Name of related parties 2022 2021 Yuanheng Culture Art Creative Co., Ltd. $ 109,040 $ 73,294 Jingxia Yang 243,135 196,430 Total $ 352,175 $ 269,724 Sales to related parties $ 352,175 $ 269,724 Interest income from related parties consisted of the following for the periods indicated: Name of related parties 2022 2021 For the Year ended December 31, Name of related parties 2022 2021 Qilun Classical Art Creation (Shenzhen) Studio $ 32,372 $ - Total $ 32,372 $ - Interest income from related parties $ 32,372 $ - |
DEPOSITS RECEIVED (Tables)
DEPOSITS RECEIVED (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deposits Received | |
SCHEDULE OF DEPOSITS RECEIVED | At December 31, 2022 and 2021, deposits received consist of the following: SCHEDULE OF DEPOSITS RECEIVED 2022 2021 December 31 2022 2021 Received from customer in advance for goods sales – third parties $ 5,831,805 $ 968,812 Received from customer in advance for goods sales – related parties 438,302 12,450 Received from customer in advance for goods sales $ 6,270,107 $ 981,262 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
SCHEDULE OF PRODUCTS SALES AND SERVICE REVENUE | The Company’s revenue consists of products sales and service revenue. SCHEDULE OF PRODUCTS SALES AND SERVICE REVENUE 2022 2021 2020 For the Year Ended December 31, 2022 2021 2020 Category of Revenue: Products sales – third parties $ 6,532,609 $ 1,007,868 $ - Products sales – related parties 352,175 269,724 - Services revenue 175,712 241,674 - Total revenue $ 7,060,496 $ 1,519,266 $ - Timing of Revenue Recognition: Services transferred overtime $ - $ 61,385 $ - Services transferred at a point in time 175,712 180,289 - Goods transferred at a point in time 6,884,784 1,277,592 - Total revenue $ 7,060,496 $ 1,519,266 $ - |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF INCOME BEFORE INCOME TAXES | The following table summarizes income before income taxes incurred in the PRC and outside of the PRC: SCHEDULE OF INCOME BEFORE INCOME TAXES 2022 2021 2020 Year Ended December 31 2022 2021 2020 Income before income taxes: PRC $ 1,443,691 $ 507,899 $ - Outside of PRC - - - Total $ 1,443,432 $ 507,899 $ - |
SCHEDULE OF EXPENSES FOR INCOME TAXES | Expenses for income taxes are comprised of: SCHEDULE OF EXPENSES FOR INCOME TAXES 2022 2021 2020 Year Ended December 31 2022 2021 2020 Current Tax: PRC $ 406,791 $ 23,520 $ - Outside of PRC - - - Income tax expense $ 406,791 $ 23,520 $ - |
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION | The reconciliations of the statutory income tax rate and the Company’s effective income tax rate as follows: SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION 2022 2021 2020 For the years Ended December 31, 2022 2021 2020 Net income before provision for income taxes $ 1,443,691 $ 507,899 $ - PRC statutory tax rate 25 % 25 % Income at statutory tax rate 360,923 126,975 - Effect of non-taxable income—gain on bargain purchase - (39,113 ) - Effect of preferential tax rates granted to the PRC entities (a) (37,233 ) (64,342 ) - Changes in valuation allowance 83,101 - - Income tax expense $ 406,791 $ 23,520 $ - Effective income tax rate 28 % 4.63 % - (a) For the year ended December 31, 2022, the Company’s subsidiaries Shenzhen Houhaitang, Qilun Enterprise Management Consultant and Qilun Holding (Shenzhen) enjoy a preferential income tax rate of 2.5 1 5 1 3 For the year ended December 31, 2021, the Company’s subsidiary Qilun Culture (Shenzhen) enjoys a preferential income tax rate of 2.5 1 10 1 3 For the years ended December 31, 2022, 2021 and 2020, the tax saving as the result of the favorable tax rate amounted to $ 37,233 64,342 nil |
LEASE (Tables)
LEASE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Lease | |
SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO OPERATING LEASES | Balance sheet information related to the Company’s leases is presented below: SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO OPERATING LEASES December 31, 2022 December 31, 2021 Assets Operating lease right of use assets $ 80,449 $ 139,441 Liabilities Operating lease liabilities – current $ 72,439 $ 119,045 Operating lease liabilities – non-current 13,809 20,396 Total Operating lease liabilities $ 86,248 $ 139,441 |
SCHEDULE OF LEASE EXPENSES | The following provides details of the Company’s lease expenses: SCHEDULE OF LEASE EXPENSES For the year Ended December 31, 2022 December 31, 2021 Operating lease expenses $ 235,859 $ 103,542 |
SCHEDULE OF OTHER INFORMATION RELATED TO LEASES | Other information related to leases is presented below: SCHEDULE OF OTHER INFORMATION RELATED TO LEASES For the year Ended December 31, 2022 December 31, 2021 Cash Paid for Amounts Included in Measurement of Liabilities: Financing cash flows from operating leases $ 149,219 $ 93,652 Weighted Average Remaining Lease Term: Operating leases 0.72 1.17 Weighted Average Discount Rate Operating leases 4.75 % 4.75 % |
SCHEDULE OF MATURITIES OF LEASE LIABILITIES | Maturities of lease liabilities were as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITIES For the year ending December 31: 2022 $ - 2023 74,522 2024 13,918 Total lease payments 88,440 Less: imputed interest 2,192 Total lease liabilities $ 86,248 |
BASIC AND DILUTED EARNINGS PE_2
BASIC AND DILUTED EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF BASIC AND DILUTED EARNINGS PER SHARE | SCHEDULE OF BASIC AND DILUTED EARNINGS PER SHARE 2022 2021 2020 For the year Ended December 31, 2022 2021 2020 Numerator: Net profit attributable to common stockholders $ 1,036,900 $ 484,379 $ - Denominator: Basic and diluted weighted-average number of shares outstanding 116,550,000 100,000,000 100,000,000 Net income per share: Basic and diluted $ 0.009 $ 0.005 $ 0.00 |
SCHEDULE OF GAIN RECOGNIZED BUS
SCHEDULE OF GAIN RECOGNIZED BUSINESS ACQUISITION (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||||
Gain on bargain purchase | $ (156,452) | |||
Shenzhen Houhaitang Culture Communication Co., Ltd. [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cash and cash equivalents | 11,724 | |||
Prepayments | 7,545 | |||
Inventory | 80,960 | |||
Other Receivables and deposits | 10,595 | |||
Amount due from related parties | 205,750 | |||
Plant and equipment, net | 3,811 | |||
Amount due to related parties | (145,573) | |||
Payroll payable | (417) | |||
Total identifiable net assets | 174,395 | |||
Less: Purchase consideration | 15,720 | ¥ 100,000 | ||
Gain on bargain purchase | 158,675 | |||
Shenzhen Houhaitang [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Less: Purchase consideration | 15,720 | |||
Gain on bargain purchase | $ 158,675 |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) | 12 Months Ended | |||||||||||
Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2021 CNY (¥) shares | Dec. 31, 2020 USD ($) | Oct. 31, 2022 | Oct. 14, 2022 | Aug. 29, 2022 | Aug. 24, 2022 | Jun. 14, 2022 | May 24, 2022 shares | Dec. 07, 2021 | Nov. 12, 2021 | |
Common stock shares issued | shares | 116,550,000 | 100,000,000 | 100,000,000 | 61,000,000 | ||||||||
Percentage of ordinary shares | 61% | 61% | ||||||||||
Gain on bargain purchase | $ (156,452) | |||||||||||
Shenzhen Houhaitang Culture Communication Co., Ltd. [Member] | ||||||||||||
Consideration of acquisition | 15,720 | ¥ 100,000 | ||||||||||
Gain on bargain purchase | $ 158,675 | |||||||||||
Qilun Group (HK) [Member] | ||||||||||||
Ownership percentage | 100% | |||||||||||
Qilun Holding (Shenzhen) Company Limited [Member] | ||||||||||||
Ownership percentage | 100% | 100% | ||||||||||
Qilun Culture (Shenzhen) Group Co., Ltd. [Member] | ||||||||||||
Ownership percentage | 100% | 100% | 100% | 100% | ||||||||
Qilun Culture (HK) Co., Ltd. [Member] | ||||||||||||
Ownership percentage | 100% | 100% | 100% | |||||||||
Oriental Dream and Strategic Research Institute Limited [Member] | ||||||||||||
Ownership percentage | 100% | |||||||||||
Qilun Enterprise Management Consultant (Shenzhen) Co., Ltd. [Member] | ||||||||||||
Ownership percentage | 100% | 100% | ||||||||||
Shenzhen Houhaitang Culture Communication Co., Ltd. [Member] | ||||||||||||
Ownership percentage | 100% | 100% | ||||||||||
Qilun Culture (Shenzhen) [Member] | ||||||||||||
Ownership percentage | 100% |
SCHEDULE OF SUBSIDIARIES (Detai
SCHEDULE OF SUBSIDIARIES (Details) - USD ($) | 12 Months Ended | ||||||
Dec. 31, 2022 | Oct. 14, 2022 | Aug. 29, 2022 | Aug. 24, 2022 | Dec. 31, 2021 | Dec. 07, 2021 | Nov. 12, 2021 | |
Qilun Group Limited [Member] | |||||||
Place of incorporation | Hong Kong | ||||||
Attributable equity interest percentage | 100% | ||||||
Authorized capital | $ 1,000,000 | ||||||
Qilun Culture (HK) Co., Ltd. [Member] | |||||||
Place of incorporation | Hong Kong | ||||||
Attributable equity interest percentage | 100% | 100% | 100% | ||||
Authorized capital | $ 5,000,000 | ||||||
Oriental Dream and Strategic Research Institute Limited (Hong Kong) [Member] | |||||||
Place of incorporation | Hong Kong | ||||||
Attributable equity interest percentage | 100% | ||||||
Authorized capital | $ 999,000 | ||||||
Qilun Holding (Shenzhen) Company Limited [Member] | |||||||
Place of incorporation | China | ||||||
Attributable equity interest percentage | 100% | 100% | |||||
Authorized capital | $ 5,000,000 | ||||||
Qilun Culture (Shenzhen) Group Co., Ltd. [Member] | |||||||
Place of incorporation | China | ||||||
Attributable equity interest percentage | 100% | 100% | 100% | ||||
Authorized capital | |||||||
Qilun Enterprise Management Consultant (Shenzhen) Co., Ltd. [Member] | |||||||
Place of incorporation | China | ||||||
Attributable equity interest percentage | 100% | 100% | |||||
Authorized capital | |||||||
Shenzhen Houhaitang Culture Communication Co., Ltd.; Co., Ltd. [Member] | |||||||
Place of incorporation | China | ||||||
Attributable equity interest percentage | 100% | ||||||
Authorized capital |
SCHEDULE OF EXCHANGE RATES USED
SCHEDULE OF EXCHANGE RATES USED FOR FOREIGN CURRENCY TRANSLATION (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Period Average [Member] | Revenue and Expenses [Member] | ||
Foreign currency translation exchange rate | 6.7284 | 6.4518 |
Assets and Liabilities [Member] | Period End Exchange Rate [Member] | ||
Foreign currency translation exchange rate | 6.8973 | 6.3614 |
SCHEDULE OF CONCENTRATION OF CR
SCHEDULE OF CONCENTRATION OF CREDIT RISK (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Product Information [Line Items] | |||
Revenue | $ 6,708,321 | $ 1,249,542 | |
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer A [Member] | |||
Product Information [Line Items] | |||
Revenue | $ 201,955 | ||
Percentage of revenue | 13.30% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer B [Member] | |||
Product Information [Line Items] | |||
Revenue | $ 198,655 | ||
Percentage of revenue | 13.10% | ||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Customer C [Member] | |||
Product Information [Line Items] | |||
Revenue | $ 196,430 | ||
Percentage of revenue | 12.90% |
SCHEDULE OF PROPERTY PLANT AND
SCHEDULE OF PROPERTY PLANT AND EQUIPMENT ESTIMATED USEFUL LIFE (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | shorter of remaining lease period and estimated useful life |
Minimum [Member] | Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 3 years |
Maximum [Member] | Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) Segment shares | Dec. 31, 2021 USD ($) shares | Dec. 31, 2020 USD ($) shares | Dec. 31, 2022 CNY (¥) | |
Inventory reserve | $ 0 | $ 0 | ||
Number of operating segments | Segment | 1 | |||
Anti-dilutive dilutive shares | shares | 0 | 0 | 0 | |
Impairment of long lived assets | $ 0 | $ 0 | $ 0 | |
CHINA | ||||
Insurance coverage | 72,492 | ¥ 500,000 | ||
Cash in excess of insured amount | $ 11,615,311 |
PREPAYMENTS (Details Narrative)
PREPAYMENTS (Details Narrative) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Disclosure Prepayments Abstract | ||
Prepaid expense | $ 296,753 | $ 169,318 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished Goods | $ 583,358 | $ 185,012 |
Inventories | $ 583,358 | $ 185,012 |
SCHEDULE OF PLANT AND EQUIPMENT
SCHEDULE OF PLANT AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Total | $ 475,309 | $ 198,427 |
Less: Accumulated depreciation | (153,670) | (22,280) |
Total plant and equipment, net | 321,639 | 176,147 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 147,353 | 132,154 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | 231,992 | 66,273 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 95,964 |
PLANT AND EQUIPMENT, NET (Detai
PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 135,967 | $ 20,582 | |
Impairment of plant and equipment | $ 0 | $ 0 | $ 0 |
SCHEDULE OF AMOUNT DUE FROM REL
SCHEDULE OF AMOUNT DUE FROM RELATED PARTIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Due from related parties | $ 763,700 | $ 7,200 |
Qilun Classical Art Creation (Shenzhen) Studio [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 756,500 | |
UNIMOS Holdings Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 6,100 | 6,100 |
Sancai Holdings Limited [Member] | ||
Related Party Transaction [Line Items] | ||
Due from related parties | $ 1,100 | $ 1,100 |
SCHEDULE OF AMOUNT DUE TO RELAT
SCHEDULE OF AMOUNT DUE TO RELATED PARTIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Due to related parties | $ 1,153,624 | $ 572,373 |
Guangyi Sui [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 931,028 | |
Ruowen Li [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 207,333 | 191,953 |
Jingxia Yang [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 15,263 | $ 380,420 |
SCHEDULE OF ACCOUNT RECEIVABLES
SCHEDULE OF ACCOUNT RECEIVABLES FROM RELATED PARTIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Account receivables from related parties | $ 2,604 | |
Yuanheng Culture Art Creative Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
Account receivables from related parties | $ 2,604 |
SCHEDULE OF ACCOUNTS PAYABLE TO
SCHEDULE OF ACCOUNTS PAYABLE TO RELATED PARTIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Accounts payable to related parties | $ 278,225 | |
Guangyi Sui [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable to related parties | 89,745 | |
Qilun Classical Art Creation (Shenzhen) Studio [Member] | ||
Related Party Transaction [Line Items] | ||
Accounts payable to related parties | $ 188,480 |
SCHEDULE OF RELATED PARTIES TRA
SCHEDULE OF RELATED PARTIES TRANSACTIONS (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Purchase from related parties | $ 1,528,512 | $ 159,646 |
Sales to related parties | 352,175 | 269,724 |
Interest income from related parties | 32,372 | |
Qilun Classical Art Creation (Shenzhen) Studio [Member] | ||
Related Party Transaction [Line Items] | ||
Purchase from related parties | 1,237,952 | |
Interest income from related parties | 32,372 | |
Guangyi Sui [Member] | ||
Related Party Transaction [Line Items] | ||
Purchase from related parties | 290,560 | 51,149 |
Zhaodong Li [Member] | ||
Related Party Transaction [Line Items] | ||
Purchase from related parties | 108,497 | |
Yuanheng Culture Art Creative Co., Ltd. [Member] | ||
Related Party Transaction [Line Items] | ||
Sales to related parties | 109,040 | 73,294 |
Jingxia Yang [Member] | ||
Related Party Transaction [Line Items] | ||
Sales to related parties | $ 243,135 | $ 196,430 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Oct. 14, 2022 | |
Related Party Transaction [Line Items] | ||
Annual interest rate | 4.75% | |
Qilun Culture (Shenzhen) [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 100% | |
Qilun Culture (Shenzhen) [Member] | Qilun Holding (Shenzhen) [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 100% | |
UNIMOS Holdings Limited [Member] | Guangyi Sui [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 100% | |
Voting rights percentage | 52.34% | |
Yuanheng Culture Art Creative Co., Ltd. [Member] | Ruowen Li [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 50% | |
Yuanheng Culture Art Creative Co., Ltd. [Member] | Ruowen Li's Mother [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 50% | |
Qilun Classical Art Creation (Shenzhen) Studio [Member] | ||
Related Party Transaction [Line Items] | ||
Annual interest rate | 10% | |
Maturity date | Jul. 26, 2023 | |
Interest receivable | $ 31,579 |
SCHEDULE OF DEPOSITS RECEIVED (
SCHEDULE OF DEPOSITS RECEIVED (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Defined Benefit Plan Disclosure [Line Items] | ||
Received from customer in advance for goods sales | $ 6,270,107 | $ 981,262 |
Third Parties [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Received from customer in advance for goods sales | 5,831,805 | 968,812 |
Related Parties [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Received from customer in advance for goods sales | $ 438,302 | $ 12,450 |
SCHEDULE OF PRODUCTS SALES AND
SCHEDULE OF PRODUCTS SALES AND SERVICE REVENUE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 7,060,496 | $ 1,519,266 | |
Product [Member] | Third Parties [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 6,532,609 | 1,007,868 | |
Product [Member] | Related Parties [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 352,175 | 269,724 | |
Service [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 175,712 | 241,674 | |
Service [Member] | Transferred over Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 61,385 | ||
Service [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 175,712 | 180,289 | |
Goods [Member] | Transferred at Point in Time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 6,884,784 | $ 1,277,592 |
SCHEDULE OF INCOME BEFORE INCOM
SCHEDULE OF INCOME BEFORE INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income before income taxes: | |||
PRC | $ 1,443,691 | $ 507,899 | |
Outside of PRC | |||
Total | $ 1,443,432 | $ 507,899 |
SCHEDULE OF EXPENSES FOR INCOME
SCHEDULE OF EXPENSES FOR INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current Tax: | |||
PRC | $ 406,791 | $ 23,520 | |
Outside of PRC | |||
Income tax expense | $ 406,791 | $ 23,520 |
SCHEDULE OF EFFECTIVE INCOME TA
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Income Tax Disclosure [Abstract] | ||||
Net income before provision for income taxes | $ 1,443,691 | $ 507,899 | ||
PRC statutory tax rate | 25% | 25% | ||
Income at statutory tax rate | $ 360,923 | $ 126,975 | ||
Effect of non-taxable income—gain on bargain purchase | (39,113) | |||
Effect of preferential tax rates granted to the PRC entities | [1] | (37,233) | (64,342) | |
Changes in valuation allowance | 83,101 | |||
Income tax expense | $ 406,791 | $ 23,520 | ||
Effective income tax rate | 28% | 4.63% | ||
[1]For the year ended December 31, 2022, the Company’s subsidiaries Shenzhen Houhaitang, Qilun Enterprise Management Consultant and Qilun Holding (Shenzhen) enjoy a preferential income tax rate of 2.5 1 5 1 3 |
SCHEDULE OF EFFECTIVE INCOME _2
SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION (Details) (Parenthetical) ¥ in Millions | 12 Months Ended | |||||
Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 CNY (¥) | Dec. 31, 2020 USD ($) | ||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Preferential tax rates | $ | [1] | $ 37,233 | $ 64,342 | |||
Shenzhen Houhaitang [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Preferential income tax rate | 2.50% | 2.50% | ||||
Shenzhen Houhaitang [Member] | Maximum [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Net income before provision | ¥ 1 | |||||
Qilun Enterprise Management Consultant [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Preferential income tax rate | 2.50% | 2.50% | ||||
Qilun Enterprise Management Consultant [Member] | Maximum [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Net income before provision | ¥ 1 | |||||
Qilun Holding (Shenzhen) [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Preferential income tax rate | 5% | 5% | ||||
Qilun Holding (Shenzhen) [Member] | Maximum [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Net income before provision | ¥ 3 | |||||
Qilun Holding (Shenzhen) [Member] | Minimum [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Net income before provision | ¥ 1 | |||||
Qilun Culture (Shenzhen) [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Preferential income tax rate | 2.50% | 2.50% | ||||
Qilun Culture (Shenzhen) [Member] | Maximum [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Net income before provision | ¥ 1 | |||||
Qilun Culture (Shenzhen) One [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Preferential income tax rate | 10% | 10% | ||||
Qilun Culture (Shenzhen) One [Member] | Maximum [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Net income before provision | ¥ 3 | |||||
Qilun Culture (Shenzhen) One [Member] | Minimum [Member] | ||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible [Line Items] | ||||||
Net income before provision | ¥ 1 | |||||
[1]For the year ended December 31, 2022, the Company’s subsidiaries Shenzhen Houhaitang, Qilun Enterprise Management Consultant and Qilun Holding (Shenzhen) enjoy a preferential income tax rate of 2.5 1 5 1 3 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) | 12 Months Ended |
Dec. 31, 2022 | |
Statutory tax rate | 25% |
HONG KONG | |
Statutory tax rate | 16.50% |
SCHEDULE OF BALANCE SHEET INFOR
SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO OPERATING LEASES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Operating lease right of use assets | $ 80,449 | $ 139,441 |
Liabilities | ||
Operating lease liabilities – current | 72,439 | 119,045 |
Operating lease liabilities – non-current | 13,809 | 20,396 |
Total Operating lease liabilities | $ 86,248 | $ 139,441 |
SCHEDULE OF LEASE EXPENSES (Det
SCHEDULE OF LEASE EXPENSES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease | |||
Operating lease expenses | $ 235,859 | $ 103,542 |
SCHEDULE OF OTHER INFORMATION R
SCHEDULE OF OTHER INFORMATION RELATED TO LEASES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lease | ||
Financing cash flows from operating leases | $ 149,219 | $ 93,652 |
Operating leases, weighted average remaining lease term | 8 months 19 days | 1 year 2 months 1 day |
Operating leases, weighted average discount rate | 4.75% | 4.75% |
SCHEDULE OF MATURITIES OF LEASE
SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details) - USD ($) | Dec. 31, 2022 | Dec. 31, 2021 |
Lease | ||
2022 | ||
2023 | 74,522 | |
2024 | 13,918 | |
Total lease payments | 88,440 | |
Less: imputed interest | 2,192 | |
Total Operating lease liabilities | $ 86,248 | $ 139,441 |
LEASE (Details Narrative)
LEASE (Details Narrative) | 1 Months Ended | 12 Months Ended | |||
Mar. 04, 2021 USD ($) m² | Mar. 31, 2022 USD ($) m² | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Lease expense related to non-cancelable operating leases | $ 235,859 | $ 103,542 | |||
Borrowing rate | 4.75% | ||||
Minimum [Member] | |||||
Operating lease term | 1 year | ||||
Maximum [Member] | |||||
Operating lease term | 5 years | ||||
Qilun Culture (Shenzhen) [Member] | |||||
Leased office space | m² | 232.26 | 250 | |||
Operating lease payments | $ 115,927 | $ 4,756 | |||
Operating lease term | 2 years | ||||
Operating lease term | 2 years |
SCHEDULE OF BASIC AND DILUTED E
SCHEDULE OF BASIC AND DILUTED EARNINGS PER SHARE (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Net profit attributable to common stockholders | $ 1,036,900 | $ 484,379 | |
Basic and diluted weighted-average number of shares outstanding | 116,550,000 | 100,000,000 | 100,000,000 |
Basic and diluted | $ 0.009 | $ 0.005 |