UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2024

 

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number: 000-56305

 

ENTREPRENEUR UNIVERSE BRIGHT GROUP.

(Exact name of registrant as specified in its charter)

 

Nevada   90-1734867
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification Number)
     
Suite 907, Saigao City Plaza Building 2,
No. 170, Weiyang RoadXi’anChina
   
(Address of principal executive offices)   (Zip Code)

 

+86-029 - 86100263

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of Each Class   Trading Symbol(s)   Name of each exchange on which
registered
None        

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
  Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No 

 

The number of shares of registrant’s common stock outstanding as of August 8, 2024 was 1,701,181,423.

 

 

 

 

 

ENTREPRENEUR UNIVERSE BRIGHT GROUP

 

FORM 10-Q

For the Quarterly Period Ended June 30, 2024

Table of Contents

 

  Page No.
NOTE ii
SPECIAL NOTE REGARDING FORWARD- LOOKING STATEMENTS vi
   
PART I - Financial Information 1
     
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 7
ITEM 4. CONTROLS AND PROCEDURES 7
     
PART II - Other Information 9
     
ITEM 1. LEGAL PROCEEDINGS 9
ITEM 1A. RISK FACTORS 9
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 9
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 9
ITEM 4. MINE SAFETY DISCLOSURES 9
ITEM 5. OTHER INFORMATION 9
ITEM 6. EXHIBITS 9
     
SIGNATURES 10

 

i

 

 

NOTE

 

Entrepreneur Universe Bright Group, a Nevada corporation (“EUBG” or the “Company”), is not a Chinese operating company but a Nevada holding company. As a holding company with no material operations of our own, EUBG conducts all of its operations through its subsidiaries in Hong Kong and in the People’s Republic of China (“PRC” or “China”). Therefore our shareholders will not directly hold any equity interests in our Chinese operating subsidiaries. Unless otherwise mentioned or unless the context requires otherwise, when used in this Quarterly Report on Form 10-Q (the “Form 10-Q”), the terms “we,” “us,” and “our” refer to EUBG and its consolidated subsidiaries, or any one or more of them as the context may require, “HK subsidiary” refers to Entrepreneurship World Technology Holding Group Company Limited, our wholly-owned subsidiary and a Hong Kong limited company, and “PRC subsidiary” refers to Xi’an Yunchuang Space Information Technology Co., Ltd., f/k/a Entrepreneurship World Consultants Limited, a wholly-foreign owned Chinese subsidiary of HK subsidiary.  EUBG is a holding company for its operating subsidiaries.

 

We currently do not, and we do not plan to use variable interest entities (“VIE”) to execute our business plan or to conduct our China-based operations. We do not have any contractual arrangements between the holding company, the HK subsidiary, and the PRC subsidiary. EUBG is a Nevada holding company and does not have any substantive operations other than directly or indirectly holding the equity interest in our operating subsidiaries in Hong Kong and China. Therefore our shareholders will not directly hold any equity interests in our Chinese operating subsidiaries. Our holding company structure involves unique risks to investors. Chinese regulatory authorities could disallow our corporate structure, which would likely result in a material change in our operations and/or the value of the Company’s common stock, including that it could cause the value of such securities to significantly decline or become worthless.

 

To the extent you make any investment in our Company, it will be in EUBG, our holding company in Nevada, and not in our operating subsidiaries in Hong Kong or in China. Because substantially all of our operations are conducted in China through our PRC subsidiary, the PRC government may exercise significant oversight and discretion over the conduct of our business and may exert more supervision over our operations, which could have a material adverse effect on our operations and/or the value of the Company’s common stock. The PRC government could also significantly limit or completely hinder our ability to list and/or remain listed on a U.S. or other foreign exchange, and to offer future securities to investors and cause the value of such securities to significantly decline or be worthless.

  

There are significant legal and operational risks associated with being in and conducting a substantial portion of our operations in mainland China. PRC laws and regulations governing our current business operations and corporate structure are sometimes vague and uncertain, and we face the risk that changes in the PRC laws, regulations and policies, including how those laws, regulations and policies will be interpreted or implemented could have a significant impact upon the business we may be able to conduct in the PRC which would likely result in a material change in our operations and/or the value of the Company’s common stock, including that it could cause the value of such securities to significantly decline or become worthless. Furthermore, these risks may significantly limit or completely hinder our ability to offer or continue to offer our securities to investors in the future.  

 

Recently, the PRC government has sought to exert more oversight and supervision over offerings that are conducted overseas and/or foreign investments in China based issuers. For example, the PRC government initiated a series of regulatory actions and made a number of public statements on the regulation of business operations in China, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a VIE structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding efforts in anti-monopoly enforcement. We may be subject to regulations relating to overseas securities offering and listing of China-based companies, including pursuant to the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law issued by the PRC government authorities, which called for enhanced oversight of overseas listed companies as well as overseas equity fundraising and listing by Chinese companies, and proposed measures such as the construction of regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies; the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and the supporting guidelines issued by China Securities Regulatory Commission (the “CSRC”), which regulate overseas securities offering and listing activities by China-based companies; the draft Regulations on Network Data Security Management (the “Draft Regulation”) issued by the Cyberspace Administration of China(“CAC”), which requires, among other things, that a prior cybersecurity review be conducted by the Cybersecurity Review Office before listing overseas for data processors which process over one million users’ personal information, and for the listing in Hong Kong of data processors which affect or may affect national security; the Revised Cybersecurity Review Measures, jointly issued by the National Development and Reform Commission, the Ministry of Industry and Information Technology of the PRC, and several other administrations, which require, among other things, that a network platform operator holding over one million users’ personal information must apply with the Cybersecurity Review Office for a cybersecurity review before any public offering or listing outside of Chinese mainland and Hong Kong. Any future action by the PRC government expanding the categories of industries and companies whose foreign securities offerings are subject to government review could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless.

 

ii

 

 

As of the date of this filing, our operating subsidiaries have not been involved in any investigations on cybersecurity review initiated by the CAC based on the Measures for Cybersecurity Review (2021) and the Draft Regulation, and we have not received any inquiry, notice, warning, sanctions in such respect or any regulatory objections to this registration of our shares of common stock with the Securities and Exchange Commission (“SEC”). However, it is still uncertain what existing or new laws or regulations will be modified or promulgated, or the potential impact such modified or new laws and regulations will have on our daily business operations or our ability to accept foreign investments and list on a U.S. exchange. If we are subject to such a probe or if we are required to comply with stepped-up supervisory requirements, valuable time from our management and money may be expended in complying and/or responding to the probe and requirements, thus diverting valuable resources and attention away from our operations. This may, in turn, negatively impact our operations. 

 

As advised by our PRC legal counsel, we need to file with the CSRC within three business days after our application for overseas listing in a new capital market is submitted. As of the date of this filing, nor have we, or our subsidiaries, applied for or received any denial for the registration of our shares of common stock with the SEC. However, The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Severely Cracking Down on Illegal Securities Activities According to Law,” or the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters. The Opinions and any related implementing rules to be enacted may subject us to compliance requirement in the future. On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and five supporting guidelines which became effective on June 30, 2023. Thus, we are required to file with the CSRC within three business days after our application for overseas listing in a new capital market is submitted. Failure to perform our filing obligations may result in penalties imposed on the Company and responsible officers. In addition, we shall report to the CSRC upon occurrence of certain material events after our listing on the stock exchange outside of Chinese Mainland, including change of control, investigations or sanctions imposed by overseas securities regulatory authorities, change of listing status or transfer of listing segment, and voluntary or mandatory delisting. Given the current regulatory environment in the PRC, we are still subject to the uncertainty of interpretation and enforcement of the rules and regulations in the PRC, which can change quickly with little advance notice, and any future actions of the PRC authorities. We cannot assure you that relevant PRC government agencies would reach the same conclusion as we do or as advised by our PRC legal counsel. However, (i) if we inadvertently concluded that no other permissions, approvals or filings are required, or (ii) if the CSRC, the CAC or other regulatory PRC agencies later promulgate new rules requiring that we obtain their approvals or finish other procedures to issue the Company’s common stock to foreign investors, and we are unable to obtain a waiver of such requirements, if and when procedures are established to obtain such a waiver, then we may not be able to issue our shares. In addition, any uncertainties and/or negative publicity regarding such requirements could have a material adverse effect on the trading price of our securities.

  

The PRC laws and regulations and government policy changes rapidly on digital training. For our digital training related services, we worked with Beida Jade Bird Vocational Education (“Jade Bird”) which was an authorized licensee of China National Personal Talent Training Network (“CNPTTN”), a PRC regulatory agency for the talent training. Jade Bird was in charge of its training courses, and the Company was authorized by Jade Bird as its sole training related administrator of the key opinion leader (KOL) training courses and to coordinate the digital training related services to individual clients who were interested in becoming KOL conducting live-broadcasting business through social media. The Company provided training related services, to these individual clients who subscribed courses, in arranging the examination, following up certificate issuance processes, addressing clients’ concerns, etc. On March 22, 2022, the PRC subsidiary learned that Jade Bird suspended its service after receiving a notice from CNPTTN and that until further notice CNPTTN has suspended all recruitment services using its CNPTTN’s name. As a result of CNPTTN’s suspension, on March 22, 2022, our PRC subsidiary has also suspended its digital training related services with Jade Bird. As it is highly unlikely that such digital training services by the Company will resume in the foreseeable future, the Company has refunded all advance payments made by clients who were unable to receive such training-related services. If we were to resume KOL related training services in the future, laws and regulations and the CNPTTN may require our PRC subsidiary to meet additional requirements or obtain additional approvals, licenses or permits to conduct KOL training related business. If our PRC subsidiary is unable to meet the relevant requirements or obtain the relevant approvals, licenses or permits, our PRC subsidiary may not be able to continue to conduct the KOL training related business. As of the date of this report, there is no further notice from CNPTTN and the service is still being suspended. Other than the above, we and our subsidiaries are currently not required to obtain permission from any of the PRC authorities to operate its principal business. We cannot assure you that relevant PRC government agencies would reach the same conclusion as we do. If (i) we and our PRC legal counsel inadvertently concluded that such permissions or approvals are not required, or (ii) the relevant regulatory PRC agencies later promulgate new rules requiring that we obtain their approvals to operate our business, and we are unable to obtain approval or a waiver of such approval requirements, any uncertainties and/or negative publicity regarding such an approval requirement could have a material adverse effect on our business operation and the trading price of our securities.

  

iii

 

 

Although we concluded that we and our subsidiaries are currently not required to obtain permission from any of the PRC central or local government and that we have not received any denial to registration on the OTC market or to conduct our business operations, if (x) we inadvertently conclude that such approvals are not required when they are, (y) we do not receive or maintain such permissions or approvals if and when required, or (z) changes in applicable laws, regulations, or interpretations relating to our business or industry which would require us to obtain approvals in the future, our operations, financial conditions, and results of operations could be adversely affected, directly or indirectly, and the value of the Company’s common stock could significantly decline or become worthless.

 

On July 7, 2022, the CAC promulgated the Measures for the Security Assessment for Cross-border Transfer of Data (the “Security Assessment measures”), which came into effect on September 1, 2022. The Security Assessment measures stipulates that data processors which provide data cross-border and have one of the following circumstances, should apply the security assessment to the national network information department through the provincial branches of network information department: (A) data processors to provide important data cross-border; (B) operators of critical information infrastructure and data processors handling personal information of more than 1 million people to provide personal information cross-border;(C) data processors which provide cross-border a cumulative total of 100,000 people’s personal information or 10,000 people’s sensitive personal information since January 1 of the previous year; (D) other situations requiring application for the security assessment regarding providing data cross-border as stipulated by the state Internet information department. As of the date of this filing, the PRC subsidiary has not provided any important data or personal data to any offshore institutions or individuals, so the PRC subsidiary does not need to apply for a security assessment at this stage. However, if we need to provide data to offshore institutions or individuals in the future and fall into the situations which should apply for the security assessment, we might not pass the security assessment.

   

In December 2020, the Holding Foreign Companies Accountable Act (“HFCAA”), was signed into law as part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law. The HFCAA states if the Securities and Exchange Commission (“SEC”) determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the Public Company Accounting Oversight Board (“PCAOB”) for three consecutive years beginning in 2021, the SEC shall prohibit securities from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. Following the filing of our Form 10 for fiscal year ended December 31, 2021, which was audited by Centurion ZD CPA & Co. (“CZD CPA”), an audit firm headquartered in Hong Kong, a jurisdiction that the PCAOB has determined that the PCAOB is unable to conduct inspections or investigate auditors, the SEC added us to its list of Commission-Identified Issuers identified under HFCAA. In December 2022, the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”) was signed into law, which amended the HFCAA to shorten the three-year period to two years.

 

On September 7, 2022, the Company dismissed CZD CPA and appointed Prager Metis CPAs, LLC (“PragerMetis”) as the Company’s independent auditor for the fiscal year end December 31, 2022. Our current auditors, PragerMetis, is located at Hackensack, New Jersey, and has been inspected by the PCAOB. We expect that this will satisfy the PCAOB inspection requirements for the audit of our consolidated financial statements, subject to compliance with SEC and other requirements prior to the two-year deadline of the AHFCAA.

 

Further, on August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory Commission, or the CSRC, and the Ministry of Finance of the PRC, taking the first step toward opening access for the PCAOB to inspect and investigate registered public accounting firms headquartered in Chinese mainland and Hong Kong. On December 15, 2022, the PCAOB announced that it “was able to secure complete access to inspect and investigate audit firms in the People’s Republic of China (PRC) for the first time in history, in 2022. Therefore, on December 15, 2022, the PCAOB Board voted to vacate previous determinations to the contrary.”

  

iv

 

 

EUBG is permitted to transfer cash as a loan and/or capital contribution to the HK subsidiary for its operations and the HK subsidiary is permitted to transfer cash as a loan and/or capital contribution to the PRC subsidiary for capital investment and company operations. For instance, the PRC subsidiary will use the cash for their daily business operations. However, under existing PRC regulations, any loans made to our PRC subsidiaries shall not exceed a statutory limit, and shall be filed with PRC State Administration of Foreign Exchange (“SAFE”) or its local bureau. Additionally, any capital contributions the HK subsidiary make to the PRC subsidiary shall be filed with the local commerce department. The PRC subsidiary is the main operating company to earn revenue. The HK subsidiary is also permitted under the laws of Hong Kong SAR to provide funding to EUBG through dividend distribution without restrictions on the amount of the funds. Current PRC laws require that dividends be paid only out of the profit for the year calculated according to PRC accounting principles, which differ from the generally accepted accounting principles in other jurisdictions. In addition, PRC laws also require a foreign-invested enterprise to set aside at least 10% of its after-tax profits, if any, to fund its statutory reserves, until the aggregate amount reaches 50% of its registered capital. In addition, a wholly foreign-owned enterprise may, at its discretion, allocate a portion of its after-tax profits based on PRC accounting principles to enterprise expansion funds, staff welfare, and bonus funds. Those reserve funds are not available for distribution as cash dividends. The PRC government’s control of foreign currency conversion may limit our foreign exchange transactions. Under existing PRC foreign exchange regulations, payments of current account items can be made in foreign currencies without prior approval from SAFE. However, approval from SAFE, or registration with SAFE or other appropriate departments is required where RMB shall be converted into foreign currency and be remitted out of the PRC. Failure to comply with the above regulations may result in liability under PRC laws for evasion of foreign exchange controls.

   

As of the date of this filing, our PRC subsidiary has distributed $10 million (net of withholding tax at $1.1 million charged at a rate of 10% of the declared dividend) to its holding parent, which is our HK subsidiary. However, we cannot ensure that we will be able to comply with the above regulations in all respects in the future. If we fail to comply with the above regulations, our ability to transfer cash and distribute earnings may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business. Since EUBG, the Nevada holding company, is not the direct parent company of the PRC subsidiary, EUBG and the PRC subsidiary cannot make transfers to each other. As of the date of this filing, other than the above stated $10 million cash dividends transferred from our PRC subsidiary to our HK subsidiary for operational costs, no cash transfer or transfer of other assets (including dividends and distribution) have occurred among EUBG, our Nevada holding company, and either of its subsidiaries, our HK subsidiary or our PRC subsidiary.

 

The PRC government has significant oversight and discretion over the conduct of our business as the government deems appropriate to further regulatory, political and societal goals. To the extent that the cash and assets of our business are in our PRC subsidiary and/or Hong Kong subsidiary, such cash or assets may not be available to fund our operations or for other use outside of the PRC and/or Hong Kong due to the potential intervention by the PRC government to impose restrictions and limitations over our ability or our subsidiaries’ ability to transfer cash or assets. Any such influence on our business operations or action to exert more oversight and supervision over the cash or assets of our subsidiaries could adversely affect our business, financial condition and results of operations and the value of our common stock, or significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or in extreme cases, become worthless. 

 

On September 1, 2021, our PRC subsidiary adopted a written Monetary and Cash Fund Management System (“Cash Management Policy”) for its operations in China and Hong Kong. The Cash Management Policy covers cash, bank deposits and other monetary funds owned by the PRC subsidiary and Hong Kong subsidiary and includes procedures on receiving funds, depositing funds, transferring funds and proper documentation and recording of cash. We adopted the Cash Management Policy in order to provide a process and guidance on collecting, accounting for, and safeguarding all cash and cash equivalents of our PRC subsidiary and Hong Kong subsidiary, including 1) checking the latest regulation requirements between China and Hong Kong; and 2) seeking approval from EUBG’s chief executive officer in order to transfer funds from our PRC subsidiary to our HK subsidiary. EUBG does not have a cash management policy.

 

For detailed discussions on such risks, please see the section captioned “Risk Factors” in our Annual Report on Form 10-K (the “Annual Report” or “Form 10-K”), filed with the SEC on March 28, 2024.

 

v

 

 

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q (the “Quarterly Report” or “Form 10-Q”) includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements in this report other than statements of historical fact are forward-looking statements for purposes of these provisions, including any statements of the Company’s plans and objectives for future operations, the Company’s future financial or economic performance (including known or anticipated trends), and the assumptions underlying or related to the foregoing. Statements that include the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “potential,” or “continue,” or the negative thereof, or other comparable terminology, are forward-looking statements. These risks and uncertainties include, but are not limited to, the factors described in the section captioned “Risk Factors” in our Annual Report filed with the Securities and Exchange Commission (SEC) on March 28, 2024. Forward-looking statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties. You should read these factors and the other cautionary statements made in this report and in the documents we incorporate by reference into this report as being applicable to all related forward-looking statements wherever they appear in this report or the documents we incorporate by reference into this report. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements.

 

Any forward-looking statements contained in this Quarterly Report are only estimates or predictions of future events based on information currently available to our management and management’s current beliefs about the potential outcome of future events. Whether these future events will occur as management anticipates, whether we will achieve our business objectives, and whether our revenues, operating results or financial condition will improve in future periods are subject to numerous risks. There are a number of important factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements. These important factors include those that we discuss under the heading “Risk Factors” in this Quarterly Report and in other reports filed from time to time with the SEC that are incorporated by reference into this Quarterly Report. You should read these factors and the other cautionary statements made in this Quarterly Report and in the documents which we incorporate by reference into this Quarterly Report as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report or the documents we incorporate by reference into this Quarterly Report. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

  

vi

 

 

PART I - Financial Information

 

Item 1. Financial Statements

 

INDEX TO FINANCIAL STATEMENTS 

 

UNAUDITED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

 

  Page
Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 (unaudited) F-1
   
Condensed Consolidated Statements of Operations and Comprehensive Income for the three and six months ended June 30, 2024 and 2023 (unaudited) F-2
   
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2024 and 2023 (unaudited) F-3
   
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (unaudited) F-4
   
Notes to Condensed Consolidated Financial Statements (unaudited) F-5

 

1

 

 

ENTREPRENEUR UNIVERSE BRIGHT GROUP 

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(UNAUDITED)

(In U.S. dollars except for number of shares)

 

   June 30,
2024
   December 31,
2023
 
         
ASSETS        
CURRENT ASSETS        
Cash and cash equivalents  $10,029,766   $9,324,115 
Accounts receivable   404,523    632,541 
Other receivables and prepayments   56,582    71,247 
Total current assets   10,490,871    10,027,903 
           
NON-CURRENT ASSETS          
Plant and equipment, net   72,324    107,014 
Operating lease right-of-use assets, net   143,488    27,648 
Total non-current assets   215,812    134,662 
           
TOTAL ASSETS  $10,706,683   $10,162,565 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
CURRENT LIABILITIES          
Other payables and accrued liabilities  $238,031   $478,326 
Operating lease liabilities, current   58,723    27,648 
Tax payables   215,423    337,734 
Amount due to a director   3,508    3,508 
Total current liabilities   515,685    847,216 
           
NON-CURRENT LIABILITY          
Deferred tax liabilities   323,007    184,146 
Operating lease liabilities, non-current   84,765    
-
 
Total non-current liabilities   407,772    184,146 
           
TOTAL LIABILITIES   923,457    1,031,362 
           
COMMITMENTS AND CONTINGENCIES   
 
    
 
 
           
STOCKHOLDERS’ EQUITY          
Preferred stock, par value $0.0001 per share, 1,100,000 shares authorized, Nil (December 31, 2023: Nil) shares issued and outstanding as of June 30, 2024   
-
    
-
 
Common stock, par value $0.0001 per share; 1,800,000,000 shares authorized, 1,701,181,423 (December 31, 2023: 1,701,181,423) shares issued and outstanding as of June 30, 2024   170,118    170,118 
Additional paid-in capital   6,453,048    6,453,048 
Statutory reserves   65,911    65,911 
Retained earnings   3,051,537    2,329,574 
Accumulated other comprehensive income   42,612    112,552 
Total stockholders’ equity   9,783,226    9,131,203 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $10,706,683   $10,162,565 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

F-1

 

 

ENTREPRENEUR UNIVERSE BRIGHT GROUP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(UNAUDITED)

(In U.S. dollars except for number of shares)

 

   For the three months ended
June 30,
   For the six months ended
June 30,
 
   2024   2023   2024   2023 
Revenue  $1,264,221   $1,705,942   $2,524,274   $2,882,878 
Cost of revenue   (169,757)   (108,581)   (331,138)   (223,135)
Gross profit   1,094,464    1,597,361    2,193,136    2,659,743 
Selling expenses   (27,762)   (5,279)   (30,068)   (6,718)
General and administrative expenses   (427,775)   (390,294)   (847,958)   (813,796)
Profit from operations   638,927    1,201,788    1,315,110    1,839,229 
Other income (expenses):                    
Interest income   6,325    10,764    9,130    18,500 
Exchange gain (loss)   (24,132)   (74,178)   (42,260)   (53,630)
Sundry income   13,702    7,938    23,392    65,943 
Total other income(expenses), net   (4,105)   (55,476)   (9,738)   30,813 
Income before income tax   634,822    1,146,312    1,305,372    1,870,042 
Income tax expense   (286,355)   (455,865)   (583,409)   (748,138)
Net income   348,467    690,447    721,963    1,121,904 
Other comprehensive loss   
-
                
Foreign currency translation adjustment   (5,333)   (77,327)   (69,940)   (92,821)
Total comprehensive income  $343,134    613,120   $652,023   $1,029,083 
                     
Net income per share - Basic and diluted
  $0.00*   0.00*  $0.00*  $0.00*
Weighted average number of common shares outstanding                    
- Basic and Diluted
   1,701,181,423    1,701,181,423    1,701,181,423    1,701,181,423 

 

*Less than $0.01 per share

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

F-2

 

 

ENTREPRENEUR UNIVERSE BRIGHT GROUP

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(UNAUDITED)

(In U.S. dollars except for number of shares) 

 

Three and six months ended June 30, 2023

 

   Common Stock   Additional   Preferred stock           Accumulated
Other
   Total 
   Number of
Shares
   Amount   Paid-In
Capital
   Number of
Shares
   Amount   Statutory
Reserves
   Retained
earnings
   Comprehensive
Income
   Stockholders’
Equity
 
                                     
Balance as of January 1, 2023  1,701,181,423   $170,118   $6,453,048         -   $            -   $65,911   $47,215   $147,908   $6,884,200 
                                              
Net income   -    -    -    -    -    -    431,457    -    431,457 
Foreign currency translation adjustment   -    -    -    -    -    -    -    (15,494)   (15,494)
                                              
Balance as of March 31, 2023   1,701,181,423   $170,118   $6,453,048    -   $-   $65,911   $478,672   $132,414   $7,300,163 
                                              
Net income   -    -    -    -    -    -    690,447    -    690,447 
Foreign currency translation adjustment   -    -    -    -    -    -    -    (77,327)   (77,327)
                                              
Balance as of June 30, 2023   1,701,181,423   $170,118   $6,453,048    -   $-   $65,911   $1,169,119   $55,087   $7,913,283 

 

Three and six months ended June 30, 2024

 

   Common Stock   Additional   Preferred stock           Accumulated
Other
   Total 
   Number of       Paid-In   Number of       Statutory   Retained   Comprehensive   Stockholders’ 
   Shares   Amount   Capital   Shares   Amount   Reserve   Earnings   Income   Equity 
Balance as of January 1, 2024   1,701,181,423   $170,118   $6,453,048    
       -
   $
       -
   $65,911   $2,329,574   $112,552   $9,131,203 
                                              
Net income   -    
-
    
-
    -    
-
    
-
    373,496    
-
    373,496 
Foreign currency translation adjustment   -    
-
    
-
    -    
-
    
-
    
-
    (64,607)   (64,607)
                                              
Balance as of March 31, 2024   1,701,181,423   $170,118   $6,453,048    
-
   $
-
   $65,911   $2,703,070   $47,945   $9,440,092 
                                              
Net income   -    
-
    
-
    -    
-
    
-
    348,467    
-
    348,467 
Foreign currency translation adjustment   -    
-
    
-
    -    
-
    
-
    
-
    (5,333)   (5,333)
                                              
Balance as of June 30, 2024   1,701,181,423   $170,118   $6,453,048    
-
   $
-
   $65,911   $3,051,537   $42,612   $9,783,226 

 

The accompanying notes are an integral part of these condensed consolidated financial statements. 

 

F-3

 

 

ENTREPRENEUR UNIVERSE BRIGHT GROUP

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(UNAUDITED)

(In U.S. dollars)

 

   For the six months ended
June 30,
 
   2024   2023 
Cash flows from operating activities        
Net income  $721,963   $1,121,904 
Adjustments to reconcile net income to cash used in operating activities:          
Depreciation   29,690    40,298 
Amortization of operating lease right-of-use assets   27,179    26,907 
Deferred tax   138,365    28,230 
Changes in operating assets and liabilities:          
Other receivables and prepayments   13,028    12,259 
Accounts receivable   213,551    (207,645)
Other payables and accrued liabilities   (235,604)   (160,301)
Tax payables   (114,592)   286,498 
Receipt in advance   
-
    (1,703)
Operating lease liabilities   (25,852)   (26,908)
Net cash generated from operating activities   767,728    1,119,539 
           
Cash flows used in investing activities          
Purchase of property, plant and equipment   
-
    (1,877)
           
Cash flows used in financing activities          
Repayment to a director   
-
    (164,441)
           
Effect of exchange rates on cash   (62,077)   (87,081)
           
Net increase in cash and cash equivalents   705,651    866,140 
Cash and cash equivalents at beginning of period   9,324,115    7,193,591 
Cash and cash equivalents at end of period  $10,029,766   $8,059,731 
           
Supplemental cash flow information          
Cash paid during the period for:          
Income taxes  $554,417   $286,922 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

F-4

 

 

ENTREPRENEUR UNIVERSE BRIGHT GROUP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(UNAUDITED)

(In U.S. dollars except for number of shares)

 

NOTE 1 – ORGANIZATION AND BUSINESS

 

Entrepreneur Universe Bright Group (“EUBG” or the “Company”) was incorporated in the State of Nevada on April 21, 1999 under the name LE GOURMET CO, INC. and the Company’s name to Entrepreneur Universe Bright Group, with an effective date of April 3, 2020.

 

The Company, through its wholly owned subsidiaries, mainly engages in provision of digital marketing consultation services in Hong Kong and China.

 

Company name   Place/date of incorporation   Principal activities
1. Entrepreneurship World Technology Holding Group Company Limited   Hong Kong/May 15, 2019   Plan to provide consulting and promotional services
         
2. Xian Yunchuang Space Information Technology Co., Ltd.   The People’s Republic of China (“PRC”)/October 18, 2019   Provision of digital marketing consultation services

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States of America generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting.

 

The interim condensed consolidated financial information as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 have been prepared without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The interim condensed consolidated financial information should be read in conjunction with the Financial Statements and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, previously filed with the SEC on March 28, 2024.

 

In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s interim condensed consolidated financial position as of June 30, 2024, its interim condensed consolidated results of operations and cash flows for the three and six months ended June 30, 2024 and 2023, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

 

Use of Estimates

 

The preparation of these financial statements in conformity with U.S. GAAP requires management of the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an ongoing basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Recently Issued and Adopted Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.

 

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to improve income tax disclosures primarily through enhanced disclosure of income tax rate reconciliation items, and disaggregation of income (loss) from continuing operations, income tax expense (benefit) and income taxes paid, net disclosures by federal, state and foreign jurisdictions, among others. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and early adoption is permitted. The Company is evaluating the impact that ASC 2023-09 will have on the consolidated financial statements and its plan for adoption, including the adoption date and transition method.

 

F-5

 

 

Basis of Consolidation

 

The condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders.

 

Leases

 

The Company determines if an arrangement is a lease or contains a lease at inception of the arrangement. Operating lease liabilities are recognized based on the present value of the remaining lease payments, discounted using the discount rate for the lease at the commencement date. As the rate implicit in the lease is not readily determinable for the operating lease, the Company generally uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future lease payments. Operating lease right-of-use (“ROU assets”) assets represent the Company’s right to control the use of an identified asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are generally recognized based on the amount of the initial measurement of the lease liability. Lease expense is recognized on a straight-line basis over the lease term. The Company elected the package of practical expedients permitted under the transition guidance to combine the lease and non-lease components as a single lease component for operating leases associated with the Company’s office space lease, and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the condensed consolidated statements of income on a straight-line basis over the lease term.

 

ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets.

 

ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

 

The Company recognized no impairment of ROU assets as of June 30, 2024 and December 31, 2023.

 

The operating lease is included in operating lease right-of-use assets, operating lease liabilities-current and operating lease liabilities-non-current on the Company’s condensed consolidated balance sheets.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Company considers cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and all highly liquid investments placed with banks or other financial institutions with an original maturity of three and six months or less to be cash equivalents. 

 

As of June 30, 2024, cash held in accounts managed by online payment platforms such as Alipay and WeChat Pay amounted to $2,764 (as at December 31, 2023: $2,837), which have been classified as cash and cash equivalents in the condensed consolidated balance sheets.

 

F-6

 

 

Accounts receivable

 

Accounts receivables are recorded at the invoiced amount, net of allowances for doubtful accounts and sales returns. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivables. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions.

 

Outstanding accounts receivable balances are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

 

Plant and equipment

 

Plant and equipment are recorded at cost less accumulated depreciation and accumulated impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets.

 

   Estimated
useful lives
(years)
Motor vehicle  45
Office equipment  3

 

The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the lower of the carrying value or fair value less cost to sell the relevant assets and is recognized in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

 

Impairment of Long-lived Assets

 

In accordance with ASC 360-10-35, we review the carrying values of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Company assesses the recover-ability of the assets based on the non-discounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. No impairment has been recorded by the Company for the three and six months ended June 30, 2024 and 2023.

 

Revenue Recognition

 

The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. 

 

The Company evaluates if it is a principal or an agent in a transaction to determine whether revenue should be recorded on a gross or net basis. The Company is acting as the principal if it obtains control over the goods and services before they are transferred to customers. When the Company is primarily obligated in a transaction, is generally subject to inventory risk, has latitude in establishing prices, or has several but not all of these indicators, the Company acts as the principal and revenue is recorded on a gross basis. When the Company is not primarily obligated in a transaction, does not generally bear the inventory risk and does not have the ability to establish the price, the Company acts as the agent and revenue is recorded on a net basis

 

The Company derives its revenue primarily from consultancy services, sourcing and marketing services related services.

 

F-7

 

 

Consultancy services

 

The Company generates the majority of its revenues by providing consulting services to its clients.

 

Performance-based arrangements represent forms of variable consideration determined by pre-established fixed rates. In these arrangements, the Company’s fees are based on the attainment of contractually defined objectives with our client, such as assisting the client in achieving a specific business objective (e.g. facilitating product sales, course enrollments, private car sales and delivery, and enhancing livestream performers’ performance and profitability). The Company is entitled a fixed rate on revenue generated by the client that are related to the scope of respective consultancy services upon client acceptance on the services provided.

 

Sourcing and marketing services

 

The Company provides agency-based sourcing and marketing services to connect marketplace operators and merchants.

 

Agency-based sourcing and marketing services represents product procurement on behalf of marketplace operators. The Company recognized revenues from agency-based sourcing and marketing services at a fixed rate on the value of goods that are sourced and delivered to the ultimate customers by the merchants. The Company reports revenues from these transactions on a net basis because the performance obligation is to facilitate a transaction between marketplace operators and merchants, for which the Company did not obtain the control over the products before passing on to the end customers. The Company is not primarily responsible for fulfilling the promise and not exposed to inventory risk.

 

The post-sale services, goods return and other kinds of product issue are responsibilities of the merchants. Upon successful delivery to ultimate customers by the merchants, there is no unfulfilled obligation that could affect the marketplace operators’ and merchants’ acceptance of the services provided. The acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

 

The Company derived services revenues of $1,255,022 and $440,732 for the three months ended June 30, 2024 and 2023, respectively; and $2,501,586 and $792,401 for the six months ended June 30, 2024 and 2023, respectively, from provision of certain consultancy services and sourcing and marketing services through the program application (“App”) platform managed by a related company, Xi’an Chuangyetianxia Network Technology Co., Ltd. (“Xi’an CNT”). Xi’an CNT is substantially controlled by Zhongchuang Boli (as described in Note 4 to the consolidated financial statements).

 

Practical expedients and exemption

 

The Company has not incurred any costs to obtain contracts, and does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

 

F-8

 

 

Revenue by major service line

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Consultancy services  $1,264,221   $1,705,206   $2,524,274   $2,876,812 
Sourcing and marketing services   
-
    736    
-
    6,066 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 

 

Revenue by recognition over time vs point in time

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Revenue recognized at a point in time  $1,264,221   $1,705,942   $2,524,274   $2,882,878 
Revenue recognized over time   
-
    
-
    
-
    
-
 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 

 

Revenue recorded on a gross vs net basis

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Revenue recorded on a gross basis  $1,264,221   $1,705,206   $2,524,274   $2,876,812 
Revenue recorded on a net basis   
-
    736    
-
    6,066 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 

 

Cost of revenue

 

Cost of revenues consists primarily of employee compensation which are directly attributable to the revenues

 

Employee benefits

 

Full time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiary of the Company make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Company has no legal obligation for the benefits beyond the contributions made. Total amounts of such employee benefit expenses, which were expensed as incurred, were approximately $18,918 and $29,904 for the three months ended June 30, 2024 and 2023, respectively; and $40,090 and $46,148 for the six months ended June 30, 2024 and 2023, respectively.

 

F-9

 

 

Foreign Currency Transaction and Translation 

 

The reporting currency of the Company is the United States dollar (“US dollar”). The financial records of the Company’s PRC operating subsidiaries are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency. The financial records of the Company’s Hong Kong operating subsidiary are maintained in its local currency, the Hong Kong Dollar (“HKD”), which is the functional currency. Assets and liabilities of the subsidiaries are translated into the reporting currency at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates, and income and expense items are translated using the average rate for the period. The translation adjustments are recorded in accumulated other comprehensive loss under shareholders’ equity.

 

Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during the period are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the condensed consolidated statements of operations.

 

RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation of amounts from RMB into US dollars has been made at the following exchange rates for the respective periods:

 

Six months ended June 30, 2024      
Balance sheet, except for equity accounts   RMB 7.2673 to US$1.00  
Income statement and cash flows   RMB 7.2007 to US$1.00  
       
Six months ended June 30, 2023      
Balance sheet, except for equity accounts   RMB 7.2335 to US$1.00  
Income statement and cash flows   RMB 6.9263 to US$1.00  

 

During the periods presented, HKD is pegged to the U.S. dollar within a narrow range which is around HKD 7.8 to USD 1.00 for both periods.

 

Income Taxes

 

Income taxes are accounted for using an asset and liability approach which requires the recognition of income taxes payable or refundable for the current period and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred income taxes are determined based on the differences between the accounting basis and the tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws. Deferred tax assets are reduced by a valuation allowance, if based on available evidence, it is considered that it is more likely than not that some portion of or all of the deferred tax assets will not be realized. In making such determination, the Company considers factors including future reversals of existing taxable temporary differences, future profitability, and tax planning strategies. If events were to occur in the future that would allow the Company to realize more of its deferred tax assets than the presently recorded net amount, an adjustment would be made to the deferred tax assets that would increase income for the period when those events occurred. If events were to occur in the future that would require the Company to realize less of its deferred tax assets than the presently recorded net amount, an adjustment would be made to the valuation allowance against deferred tax assets that would decrease income for the period when those events occurred. Significant management judgment is required in determining income tax expense and deferred tax assets and liabilities.

 

The Company conducts business in the US, the PRC and Hong Kong and is subject to tax in these jurisdictions. As a result of its business activities, the Company will file tax returns that are subject to examination by the respective tax authorities.

 

F-10

 

 

Uncertain Tax Positions

 

Management reviews regularly the adequacy of the provisions for taxes as they relate to the Company’s income and transactions. In order to assess uncertain tax positions, the Company applies a more likely than not threshold and a two-step approach for tax position measurement and financial statement recognition. For the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. In subsequent periods, any interest and penalties related to uncertain tax positions will be recognized as a component of income tax expense. As of June 30, 2024 and December 31, 2023, the Company had not recorded any liability for uncertain tax positions.

 

Net income per Share of Common Stock

 

The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period.

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Net income  $348,467   $690,447   $721,963   $1,121,904 
                     
Weighted average number of common stock outstanding                    
- basic and diluted
   1,701,181,423    1,701,181,423    1,701,181,423    1,701,181,423 
                     
Net income per share                    
- basic and diluted
  $0.00*  $0.00*  $0.00*  $0.00*

 

* Less than $0.01 per share

 

The calculation of basic net income per share of common stock is based on the net income for the three and six months ended June 30, 2024 and 2023 and the weighted average number of ordinary shares outstanding.

 

For the three and six months ended June 30, 2024 and 2023, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 

Segments

 

The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operating results solely by monthly revenue of marketing consultation services and operating results of the Company and, as such, the Company has determined that the Company has one operating segment (provision of consulting, sourcing and marketing services, and digital training related services in China) as defined by ASC Topic 280 “Segment Reporting”.

 

F-11

 

 

Fair Value of Financial Instruments

 

ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value. Certain current assets and current liabilities are financial instruments. Management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and, if applicable, their current interest rates are equivalent to interest rates currently available. The three levels of valuation hierarchy are defined as follows:

 

  Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

  Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

 

  Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

Valuation of debt products depends upon a number of factors, including prevailing interest rates for like securities, expected volatility in future interest rates, and other relevant terms of the debt. Other factors that may be considered include the borrower’s ability to adequately service its debt, the fair market value of the borrower in relation to the face amount of its outstanding debt and the quality of collateral securing the Company’s debt investments. The fair value of these debt products classified as Level 2 are established by reference to the prices quoted by respective fund administrators.

 

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, other receivables, accounts payable and other payables, amounts due to a director and a shareholder and borrowings approximate their fair values because of the short maturity of these instruments or the rate of interest of these instruments approximate the market rate of interest.

 

Comprehensive Income

 

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income includes cumulative foreign currency translation adjustment.

 

NOTE 3 – PLANT AND EQUIPMENT

 

Plant and equipment as of June 30, 2024 and December 31, 2023 are summarized below:

 

   June 30,
2024
   December 31,
2023
 
Motor vehicle  $350,475   $359,818 
Office equipment   7,471    11,061 
    357,946    370,879 
Less: Accumulated depreciation   (285,622)   (263,865)
Plant and equipment, net  $72,324   $107,014 

 

Depreciation expenses, classified as operating expenses, were $7,758 and $19,978 for the three months ended June 30, 2024 and 2023, respectively; and $29,690 and $40,298 for the six months ended June 30, 2024 and 2023, respectively.

 

F-12

 

 

NOTE 4 – RELATED PARTY TRANSACTIONS

 

The following is the list of the related parties with which the Company had transactions for the three and six months ended June 30, 2024 and 2023: 

 

  (a) Zhongchuang Boli Technology Co., Ltd. (“Zhongchuang Boli”) – a company incorporated in the Gansu, PRC. Zhongchuang Boli is wholly owned by a relative of the Company’s CEO, Mr. Guolin Tao.

  

Related party transaction

 

   Three months ended
June 30,
   Six months ended
June 30,
 
    2024   2023    2024   2023 
Sundry income                
Zhongchuang Boli  $1,954   $2,043   $3,930   $4,086 

 

Sundry income was charged at fees agreed by both parties in accordance with a trademark licensing agreement.

 

Related party balances

 

   June 30,
2024
   December 31,
2023
 
Amount due to a director        
- Mr. Guolin Tao  $3,508   $3,508 

 

The amount due to director as of June 30, 2024 and December 31, 2023 are unsecured, non-interest bearing and repayable on demand.

 

NOTE 5 – ACCOUNTS RECEIVABLE, NET

 

Accounts receivable as of June 30, 2024 and December 31, 2023:

 

   June 30,
2024
   December 31,
2023
 
Account receivables  $404,523   $632,541 
Less: Allowance for doubtful accounts   
-
    
-
 
   $404,523   $632,541 

 

NOTE 6 – OTHER RECEIVABLES AND PREPAYMENTS

 

Other receivables and prepayments consisted of the following as of June 30, 2024 and December 31, 2023:

 

   June 30,
2024
   December 31,
2023
 
Deposits and other receivables  $26,516   $16,186 
Prepayments   30,066    55,061 
   $56,582   $71,247 

 

F-13

 

 

NOTE 7 – OTHER PAYABLES AND ACCRUED LIABILITIES

 

Other payables and accrued liabilities and consisted of the following as of June 30, 2024 and December 31, 2023:

 

   June 30,
2024
   December 31,
2023
 
Other payables  $48,013   $61,503 
Salary payable   95,520    107,755 
Accrued audit fees   50,000    195,000 
Value-added tax and other taxes payables   38,198    62,068 
Other accrued expenses   6,300    52,000 
   $238,031   $478,326 

 

NOTE 8 – STATUTORY RESERVES

 

As stipulated by the relevant laws and regulations in the PRC, company established in the PRC (the “PRC subsidiary”) is required to maintain a statutory reserve made out of profit for the year based on the PRC subsidiary’ statutory financial statements which are prepared in accordance with the accounting principles generally accepted in the PRC. The amount and allocation basis are decided by the director of the PRC subsidiary annually and is not to be less than 10% of the profit for the year of the PRC subsidiary. The aggregate amount allocated to the reserves will be limited to 50% of registered capital for certain subsidiaries. Statutory reserve can be used for expanding the capital base of the PRC subsidiary by means of capitalization issue.

 

In addition, as a result of the relevant PRC laws and regulations which impose restriction on distribution or transfer of assets out of the PRC statutory reserve, $65,911 representing the PRC statutory reserve of the subsidiary as of June 30, 2024 and December 31, 2023, are also considered under restriction for distribution.

 

No additional statutory reserves is recorded in June 30, 2024 because the aggregate amount of profits allocated to the reserves has reached 50% of registered capital of the PRC subsidiary.

 

NOTE 9 – INCOME TAXES

 

Income is subject to tax in the various countries in which the Company operates.

  

The Company mainly conducts its operating business through its subsidiaries in China, including Hong Kong.

 

The subsidiary incorporated in Hong Kong is subject to Hong Kong taxation on income derived from their activities conducted in Hong Kong. Hong Kong Profits Tax has been calculated at 16.5% of the estimated assessable profit for the three and six months ended June 30, 2024 and 2023.

 

The subsidiary incorporated in mainland China is governed by the Income Tax Law of the PRC concerning foreign invested enterprises and foreign enterprises and various local income tax laws (the Income Tax Laws), and are subject to 25% tax rate throughout the periods presented.

 

Under the PRC EIT law, withholding income tax, normally at a rate of 10%, is imposed on dividend paid by PRC entities out of its profits earned since January 1, 2008 to its overseas investors (including Hong Kong investors). Deferred taxation on the undistributed profits of the PRC subsidiaries has been provided in the condensed consolidated financial statements to the extent that in the opinion of the directors such profits will be distributed in the foreseeable future. Total undistributed profits of the Company’s PRC subsidiary at June 30, 2024 and December 31, 2023 were $3,266,719 and $2,002,008, respectively. At June 30, 2024 and December 31, 2023, the Company recognized deferred tax liabilities of $326,672 and $200,201, respectively, in respect of the undistributed profits.

 

F-14

 

 

Income tax expense consists of the following:

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Current tax:                
China  $223,674   $358,019   $439,825   $573,420 
                     
Deferred tax                    
Hong Kong   62,986    98,081    131,500    173,751 
China   (305)   (235)   12,084    967 
Total  $286,355   $455,865   $583,409   $748,138 

 

The provision for income taxes consisted of the following:

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
Income before income tax  $634,822   $1,146,312   $1,305,372   $1,870,042 
Statutory income tax rate   21%   21%   21%   21%
Income tax credit computed at statutory income rate   133,313    240,727    274,128    392,709 
Reconciling items:                    
Non-deductible expenses and change of valuation allowance   43,207    53,659    89,423    90,827 
Tax paid (Over-provision) for prior year   7,488    
-
    7,488    (9,452)
Rate differential in different tax jurisdictions   39,361    63,398    80,870    100,303 
Deferred tax provided on dividends withholding tax of PRC subsidiaries   62,986    98,081    131,500    173,751 
Income tax expense  $286,355   $455,865   $583,409   $748,138 

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of June 30, 2024 and December 31, 2023 are presented below: 

 

   June 30,
2024
   December 31,
2023
 
Deferred tax assets:        
Accelerated depreciation  $3,009   $3,840 
Deductible temporarily difference arising from other payable   11,898    12,215 
Less: Net off with deferred tax liabilities for financial reporting purposes   (14,907)   (16,055)
Net total deferred tax assets  $
-
   $
-
 
           
Deferred tax liabilities:          
Undistributed profits of a PRC subsidiary  $326,672   $200,201 
Taxable temporarily difference arising from account receivables   11,242    
-
 
Less: Net off with deferred tax assets for financial reporting purposes   (14,907)   (16,055)
Net total deferred tax liabilities  $323,007   $184,146 

  

F-15

 

 

NOTE 10 – LEASE

 

On June 10, 2021, the Company entered into a lease agreement for office space in Xian, the PRC with a non-cancellable lease term, commencing on July 16, 2021 and expiring on July 15, 2024. The monthly rental payment is approximately $4,534   (RMB32,951) per month. On June 12, 2024, the Company renewed this lease agreement with a non-cancellable lease term, commencing on July 16, 2024 and expiring on July 15, 2027. The monthly rental payment is approximately $4,177 (RMB30,358) per month.

 

Operating lease expense for the three and six months ended June 30, 2024 and 2023 were as follows:

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Operating lease cost – straight line   13,650    14,098    27,457    28,545 
Total lease expense  $13,650   $14,098   $27,457   $28,545 

 

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2024:

 

   Operating
leases
 
     
Remainder of 2024  $25,064 
2025   50,127 
2026   50,127 
2027   25,064 
Thereafter   
-
 
Total undiscounted cash flows   150,382 
Less: imputed interest   (6,894)
Present value of lease liabilities  $143,488 

 

Lease term and discount rate

 

   June 30,
2024
 
Weighted-average remaining lease term - year   3.0 
Weighted-average discount rate (%)   3.45%

 

Supplemental cash flow information related to lease where the Company was the lessee for the three and six months ended June 30, 2024 and 2023 was as follows:

 

   Six months ended
June 30,
 
   2024   2023 
Operating cash outflows from operating lease  $27,457   $28,545 

 

F-16

 

 

NOTE 11 – CONTINGENCIES AND COMMITMENTS 

 

Contingencies

 

Certain conditions may exist as of the date the condensed 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. There was no contingency of this type as of June 30, 2024 and December 31, 2023.

 

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. There was no contingency of this type as of June 30, 2024 and December 31, 2023.

 

Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

 

NOTE 12 – CERTAIN RISKS AND CONCENTRATIONS 

 

(a) Concentrations

 

The Company had net revenue from the following customers that individually comprised 10% or more of net revenue for the three and six months ended June 30, 2024 and 2023:

 

   Three months ended June 30, 
   2024   2023 
Customer A  $773,017    61%  $1,250,773    73%

 

    Six months ended June 30,  
    2024     2023  
Customer A   $ 1,681,055       67 %   $ 2,063,279       72 %

 

The Company had accounts receivable from the following customers that individually comprised 10% or more of net accounts receivable as of June 30, 2024 and December 31, 2023:

 

   June 30,
2024
   December 31,
2023
 
Customer A (note i)  $257,533    64%  $513,083    76%

 

For the three and six months ended June 30, 2024 and 2023, the Company derived services revenues of $1,255,022   and $440,732 for the three months ended June 30, 2024 and 2023, respectively; and $2,501,586   and $792,401 for the six months ended June 30, 2024 and 2023, respectively, through the APP platform managed by Xian CNT, represented 99%, 26%, 99% and 27% of our total revenue. Xi’an CNT is substantially controlled by Zhongchuang Boli (as described in Note 4 to the condensed consolidated financial statements).

 

F-17

 

 

The Company had cost of revenue from the following service vendor that individually comprised 10% or more of cost of revenue for the three and six months ended June 30, 2024 and 2023:

 

 

   Three months ended June 30, 
   2024   2023 
Service vendor A  $40,449    24%  $
-
 

 

   Six months ended June 30, 
   2024   2023 
Service vendor A  $40,449    12%  $
-
 

 

There was no service vendor that individually comprised 10% or more of accounts payable as of June 30, 2024 and December 31, 2023.

 

(b) Credit risk

 

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents.

 

As of June 30, 2024 and December 31, 2023, $10,029,766 and $9,324,115 of the Company’s cash and cash equivalents, respectively were held at financial institutions and online payment platforms located in the PRC and Hong Kong that management believes to be of high credit quality. The Company has not experienced any losses on cash and cash equivalents to date.

 

As at June 30, 2024, the Company held cash of $3,284,710 deposited in financial institutions located in Mainland China, and each bank account is insured by the government authority with the maximum limit of RMB500,000 (equivalent to $68,801). The Company also held cash of $6,742,292 deposited in financial institutions located in Hong Kong, and each bank account is insured by the government authority with the maximum limit of HKD500,000 (equivalent to $64,028). In addition, the Company held cash of $2,764 in accounts managed by online payment platforms such as Alipay which is not insured by Federal Deposit Insurance Corporation or other insurance. To limit exposure to credit risk relating to deposits held in bank accounts in Mainland China and Hong Kong excess the government insured limits, the Company primarily place cash and cash equivalent deposits with large financial institutions, which management believes are of high credit quality and the Company also continually monitors their credit worthiness.

 

The Company operates principally in the PRC and grants credit to its customers in this geographic region. Although the PRC is economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Company’s operations.

 

NOTE 13 – SUBSEQUENT EVENTS

 

The Company has evaluated the existence of events and transactions subsequent to the balance sheet date through the date the unaudited condensed consolidated financial statements were issued and has determined that there were no significant subsequent events or transactions which would require recognition or disclosure in the financial statements.

 

F-18

 

 

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

Overview

 

EUBG is a holding company for its operating subsidiaries that provide marketing consultancy services and e-commerce business in China. While substantially all of our operations are located in China, we currently do not, and we do not plan to use variable interest entities to execute our business plan or to conduct our China-based operations. However, because our operations are in China and our major shareholders are located in China, there is always a risk that the Chinese government may exert certain supervision over the operations of any company with any level of operations in China, including its ability to offer securities to investors, list its securities on a U.S. or other foreign exchange, conduct its business or accept foreign investment. If any or all of the foregoing were to occur, it could, in turn, result in a material change in the Company’s operations and/or the value of its common stock and/or significantly limit or completely hinder its ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

 

Segment and Related Information

 

We operate as a single reportable segment “provision of consulting, sourcing and marketing services in China”.

 

Results of Operations and Financial Condition

 

Results of Operations for the three months ended June 30, 2024 as compared to the three months ended June 30, 2023

 

The following table represents our unaudited condensed consolidated statement of operations for the three months ended June 30, 2024 and 2023.

 

   Three Months Ended June 30, 
   2024   2023 
   $   % of
Revenues
   $   % of
Revenues
 
                 
Revenues  $1,264,221    100%  $1,705,942    100%
Cost of revenue   (169,757)   (13)%   (108,581)   (6)%
Gross profit   1,094,464    87%   1,597,361    94%
Selling Expenses:   (27,762)   (2)%   (5,279)   0%
General and administrative expenses   (427,775)   (34)%   (390,294)   (23)%
Total other (expense) income, net   (4,105)   0%   (55,476)   (3)%
Income before income tax   634,822    50%   1,146,312    67%
Income tax expense   (286,355)   (23)%   (455,865)   (27)%
Net income  $348,467    28%  $690,447    40%

 

Revenue and cost of revenue

 

During the three months ended June 30, 2024, we generated revenue of $1,264,221, which represents a decrease of $441,721 or 25.9% as compared to the same period in the prior year. The decrease was mainly attributed to our consultation services in connection with a client engaged in live streaming business which dropped by $440,985 in the current period.

 

Cost of revenue for the three months ended June 30, 2024 was $169,757, which represented an increase of $61,176 or 56.3% as compared to the same period in the prior year. The increase in cost of revenue is mainly due to the introduction of a new service provider.

 

Profit margin for the three months ended June 30, 2024 was 86.6%, which represents a decrease of 7.1% as compared to the same period in the prior year. It indicates that the additional consultancy costs and labor costs involved in the cost of revenue outweighed the slight increase in revenue, resulting in a lower profit margin.

 

As a result of the above, the gross profit was $1,094,464 for the three months ended June 30, 2024, which represented a decrease of $502,897 or 31.5% as compared to the same period in the prior year.

 

2

 

 

Selling expenses

 

During the three months ended June 30, 2024, we incurred $27,762 selling expenses, which represented an increase of $22,483 or 425.9% as compared to the same period in the prior year. The increase in selling expenses was mainly due to additional marketing costs incurred in selling activities during the current period.

 

General and administrative expenses

 

During the three months ended June 30, 2024, we incurred $427,775 general and administrative expenses, which represented an increase of $37,481 or 9.6% as compared to the same period in the prior year. Our general and administrative expenses consisted mainly of audit fees, professional fees, payroll expenses and consultancy fees.

 

Total other (expenses) income, net

 

During the three months ended June 30, 2024, we recorded net other expenses of $4,105, which represented a difference of $51,371 or 92.6% as compared to the same period in the prior year. Our net other income mainly consisted of bank interest income, exchange rate differences and sundry income. The difference is primarily attributed to the unrealized exchange loss recorded as a result of the depreciation of the RMB against the HKD.

 

Income tax expense

 

During the three months ended June 30, 2024, we incurred income tax expense of $286,355, which represented a decrease of $169,510 or 37.2% as compared to the same period in the prior year. The income tax expenses consisted of the Enterprise Income Tax charged in China and the withholding tax incurred in Hong Kong.

 

For the three months ended June 30, 2024, our income tax expenses comprised of current tax expenses and deferred tax expenses of $223,674 and $62,681, respectively, compared to current tax expenses and deferred tax expenses of $358,019 and $97,846 for the same period in the prior year.

 

Net income

 

As a result of the above, we generated a net income of $348,467 and $690,447 for the three months ended June 30, 2024 and 2023, respectively.

 

Results of Operations for the six months ended June 30, 2024 as compared to the six months ended June 30, 2023

 

The following table represents our unaudited condensed consolidated statement of operations for the six months ended June 30, 2024 and 2023.

 

   Six Months Ended June 30, 
   2024   2023 
   $   % of
Revenues
   $   % of
Revenues
 
                 
Revenues  $2,524,274    100%  $2,882,878    100%
Cost of revenue   (331,138)   (13)%   (223,135)   (8)%
Gross profit   2,193,136    87%   2,659,743    92%
Selling Expenses:   (30,068)   (1)%   (6,718)   0%
General and administrative expenses   (847,958)   (34)%   (813,796)   (28)%
Total other (expense) income, net   (9,738)   0%   30,813    1%
Income before income tax   1,305,372    52%   1,870,042    65%
Income tax expense   (583,409)   (23)%   (748,138)   (26)%
Net income  $721,963    29%  $1,121,904    39%

 

3

 

 

Revenue and cost of revenue

 

During the six months ended June 30, 2024, we generated revenue of $2,524,274, which represents a decrease of $358,604 or 12.4% as compared to the same period in the prior year. The decrease was mainly attributed to our consultation services in connection with a client engaged in live streaming business which dropped by $352,538 in the current period.

 

Cost of revenue for the six months ended June 30, 2024 was $331,138, which represented an increase of $108,003 or 48.4% as compared to the same period in the prior year. The increase in cost of revenue is mainly due to the introduction of a new service provider and the salary adjustments for certain employees.

 

Profit margin for the six months ended June 30, 2024 was 86.9%, which represents a decrease of 5.4% as compared to the same period in the prior year. It indicates that the additional consultancy costs and labor costs involved in the cost of revenue outweighed the slight increase in revenue, resulting in a lower profit margin.

 

As a result of the above, the gross profit was $2,193,136 for the six months ended June 30, 2024, which represented a decrease of $466,607 or 17.5% as compared to the same period in the prior year.

 

Selling expenses

 

During the six months ended June 30, 2024, we incurred $30,068 selling expenses, which represented an increase of $23,350 or 347.6% as compared to the same period in the prior year. The increase in selling expenses was mainly due to additional marketing costs incurred in selling activities during the current period.

 

General and administrative expenses

 

During the six months ended June 30, 2024, we incurred $847,958 general and administrative expenses, which represented a slight increase of $34,162 or 4.2% as compared to the same period in the prior year. Our general and administrative expenses consisted mainly of audit fees, professional fees, payroll expenses and consultancy fees.

 

Total other (expenses) income, net

 

During the six months ended June 30, 2024, we recorded net other expenses of $9,738, which represented a difference of $40,551 or 131.6% as compared to the same period in the prior year. Our net other income mainly consisted of bank interest income, exchange rate differences and sundry income. The significant difference is primarily attributed to certain sundry income recorded in the last year that did not recur in the current period and the unrealized exchange loss recorded as a result of the depreciation of the RMB against the HKD.

 

Income tax expense

 

During the six months ended June 30, 2024, we incurred income tax expense of $583,409, which represented a decrease of $164,729 or 22.0% as compared to the same period in the prior year. The income tax expenses consisted of the Enterprise Income Tax charged in China and the withholding tax incurred in Hong Kong.

 

For the six months ended June 30, 2024, our income tax expenses comprised of current tax expenses and deferred tax expenses of $439,825 and $143,584, respectively, compared to current tax expenses and deferred tax expenses of $573,420 and $174,718 for the same period in the prior year.

 

Net income

 

As a result of the above, we generated a net income of $721,963 and $1,121,904 for the six months ended June 30, 2024 and 2023, respectively.

  

4

 

 

Liquidity and Capital Resources

 

Working Capital

 

   June 30,
2024
   December 31,
2023
 
Cash and cash equivalents  $10,029,766   $9,324,115 
Total current assets   10,490,871    10,027,903 
Total assets   10,706,683    10,162,565 
Total liabilities   923,457    1,031,362 
Retained earnings   3,051,537    2,329,574 
Total equity  $9,783,226   $9,131,203 

 

Cash flow

 

The following table sets forth a summary of our cash flows for the periods indicated:

 

   Six months ended
June 30,
 
   2024   2023 
Net cash generated from operating activities  $767,728   $1,119,539 
Cash flows used in investing activities   -    (1,877)
Cash flows used in financing activities   -    (164,441)
Effect of exchange rate changes on cash and cash equivalents   (62,077)   (87,081)
Cash and cash equivalents, beginning of period   9,324,115    7,193,591 
Cash and cash equivalents, end of period  $10,029,766   $8,059,731 

 

Cash generated from operating activities

 

Net cash generated from operating activities for the six months ended June 30, 2024 was $767,728, which represented a decrease of $351,811 or 31.4% as compared to the same period in the prior year. The decrease of operating cash flows was mainly resulted from a combination of below operating activities changes:

 

Net income was $721,963 for the six months ended June 30, 2024, as compared to $1,121,904 for the six months ended June 30, 2023. The decrease of net income of $399,941 or 35.6% was primarily due to the decrease in revenue attributed to our consultation services in connection with a client engaged in live streaming business which dropped by $352,538 in the current period.

 

Cash inflow of trade receivables was $213,551 for the six months ended June 30, 2024, as compared to cash outflow of $207,645 for the six months ended June 30, 2023. The changes in cash flow from trade receivables were primarily attributed to the changes in the consultation business. For the six months ended June 30, 2024, the decrease in the consultation business compared to the previous period end resulted in a lower trade receivables balance and a cash inflow of $213,551. On the other hand, for the six months ended June 30, 2023, the consultation business experienced significant growth compared to the previous period end, leading to a higher trade receivables balance and a cash outflow of $207,645.

 

Cash outflow of tax payables was $114,592 for the six months ended June 30, 2024, as compared to cash inflow of $286,498 for the six months ended June 30, 2023. Our tax payables consist of the Enterprise Income Tax charged in China, which is accrued on a quarterly basis and settled in the subsequent quarter. The changes in cash flow from tax payables were primarily influenced by the income tax provision and income tax paid during the period. For the six months ended June 30, 2024, the income tax provision was $439,825 less than the income tax paid of $554,417, leading to the cash outflow of $114,592. Conversely, for the six months ended June 30, 2023, the income tax provision was $573,420 exceeded the income tax paid of $286,922, resulting the cash inflow of $286,498.

 

5

 

 

Cash flows used in investing activities

 

No cash movement of investing activities was resulted for the six months ended June 30, 2024. The cash used in investing activities for the six months ended June 30, 2023 was due to purchase of property, plant and equipment.

  

Cash flows used in financing activities

 

No cash movement of financing activities was resulted for the six months ended June 30, 2024. The cash used in financing activities for the six months ended June 30, 2023 was due to repayment to a director for the amount advanced by a director.

 

Future Capital Requirements

 

We believe that our ability to generate cash from operations are adequate to fund working capital, capital spending and other cash needs for at least the next 12 months. Our ability to generate adequate cash from operations in the future, however, will depend on, among other things, our ability to successfully implement our business strategies while continuing to tightly control our expenses, and to manage the impact of changes to the PRC regulatory environment. We can give no assurance that we will be able to successfully implement those strategies and cost control initiatives, or successfully adjust to any changes to PRC laws and regulations impacting our business. In addition, changes in our operating plans, lower than anticipated sales, increased expenses, interest rate increases, acquisitions or other events may cause us to seek additional debt or equity financing in future periods. We can give no assurance that financing will be available on acceptable terms or at all. Additional equity financing could be dilutive to holders of the Company’s common stock; debt financing, if available, could impose additional cash payment obligations and additional covenants and operating restrictions.

 

Contractual Obligations

 

We had the following contractual obligations and commercial commitments as of June 30, 2024: 

 

Contractual Obligations  Total   Less than
1 year
   1-3
years
   3-5
years
   More than
5 years
 
Lease   150,382    50,127    100,255        -         - 
TOTAL  $150,382   $50,127   $100,255   $-   $- 

  

Off-Balance Sheet Arrangements

 

As of June 30, 2024 and December 31, 2023, we did not have any off-balance sheet arrangements as defined in Item 303(a) (4) (ii) of Regulation S-K promulgated under the Securities Act of 1934.

 

6

 

 

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

 

ITEM 4 - CONTROLS AND PROCEDURES

  

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this Report, we conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the 1934 Act). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2024, our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in reports that we file or submit under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

 

The Company determined that there were control deficiencies that constituted material weaknesses, as described below as of June 30, 2024.

 

  1. We did not maintain appropriate cash controls – We had not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on our bank accounts. However, the effects of poor cash controls were mitigated in part by the fact that we had introduced certain cash management policies.

 

  2. We did not implement appropriate information technology controls – We were retaining copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of our data or off-site storage of the data in the event of theft, misplacement, or loss due to unmitigated factors.

 

  3. We currently lack sufficient accounting personnel with the appropriate level of knowledge, experience and training in U.S. GAAP and SEC reporting requirements.

 

  4. We do not have adequate written policies and procedures – Due to lack of adequate written policies and procedures for accounting and financial reporting, we did not establish a formal process to close our books monthly and account for all transactions in a timely manner.

  

7

 

 

Accordingly, we concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by our internal controls.

 

Due to our small size and the early stage of our business, segregation of duties may not always be possible and may not be economically feasible. We have limited capital resources and have given priority in the use of those resources to our business development efforts. As a result, we have not been able to take steps to improve our internal controls over financial reporting during the quarter ended June 30, 2024. However, we continue to evaluate the effectiveness of internal controls and procedures on an ongoing basis. Once our operations grow and become more complex, our Board of Directors will take steps to remediate these material weaknesses as soon as practicable:

 

  1. We plan to formalize and provide training, on certain policies, including cash control.

 

  2. We plan, as funding permits, to engage a third party consultant to help evaluate and improve the design of appropriate information technology controls.

 

  3. We plan, as funding permits, to appoint additional personnel with U.S. GAAP and SEC reporting experience to assist with the preparation of our financial reporting.

 

  4. Prepare written policies and procedures for accounting and financial reporting to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity and debt transactions, in a timely manner.

 

Despite the material weaknesses and deficiencies reported above, our management believes that our financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented and that this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

 

Changes in Internal Control over Financial Reporting

 

Other than as described above, there have been no changes in the internal controls over financial reporting during the most recently completed quarter ended June 30, 2024, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

8

 

 

PART II - OTHER INFORMATION

 

ITEM 1 - LEGAL PROCEEDINGS

 

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. To the best knowledge of management, there are no material legal proceedings pending against the Company.

 

ITEM 1A - RISK FACTORS

 

An investment in our common stock involves a high degree of risk. You should carefully consider the risks set forth in the section captioned “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 28, 2024, before making an investment decision. If any of the risks actually occur, our business, financial condition or results of operations could suffer. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. You should read the section captioned “Special Note Regarding Forward Looking Statements” above for a discussion of what types of statements are forward-looking statements, as well as the significance of such statements in the context of this report.

 

ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

None

 

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4 - MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5 - OTHER INFORMATION

 

None.

 

ITEM 6 - EXHIBITS

 

The following exhibits are filed as part of this Report.

 

Exhibit No.   Description
31.1*   Certifications of the Principal Executive Officer and Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act
32.1*   Certifications of the Principal Executive Officer and Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act
101.INS*   Inline XBRL Instance Document.
101.SCH*   Inline XBRL Taxonomy Extension Schema Document.
101.CAL*   Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*   Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*   Inline XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*   Inline XBRL Taxonomy Extension Definition Linkbase Document.
104   Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).*

 

*These certifications are not deemed filed by the SEC and are not to be incorporated by reference in any filing we make under the Securities Act of 1933 or the Securities Exchange Act of 1934, irrespective of any general incorporation language in any filings.

 

9

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  Entrepreneur Universe Bright Group
     
Date: August 12, 2024 By: /s/ Guolin Tao
    Guolin Tao
    Chief Executive Officer and Chief Financial Officer
    (Principal Executive Officer and
Principal Financial Officer)

 

 

10

 
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Exhibit 31.1

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE
SARBANES-OXLEY ACT OF 2002

 

I, Guolin Tao, certify that:

 

1.I have reviewed this Quarterly Report on Form 10-Q of Entrepreneur Universe Bright Group (the “Company”);

 

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

 

4.The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

 

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c)Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

(d)Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

 

5.The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

 

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

 

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

 

Date: August 12, 2024

 

  By: /s/ Guolin Tao
  Name:  Guolin Tao
  Title:   Chief Executive Officer
(Principal Executive Officer and Principal Financial Officer)

 

 

Exhibit 32.1

 

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Entrepreneur Universe Bright Group (the “Company”) on Form 10-Q for the quarter ended June 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, in the capacities and on the date indicated below, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

 

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 12, 2024

 

  By: /s/ Guolin Tao
  Name:   Guolin Tao
  Title:  

Chief Executive Officer

(Principal Executive Officer and Principal Financial Officer)

 

 

 

v3.24.2.u1
Cover - shares
6 Months Ended
Jun. 30, 2024
Aug. 08, 2024
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Transition Report false  
Entity Interactive Data Current Yes  
Amendment Flag false  
Document Period End Date Jun. 30, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Entity Information [Line Items]    
Entity Registrant Name ENTREPRENEUR UNIVERSE BRIGHT GROUP.  
Entity Central Index Key 0001171326  
Entity File Number 000-56305  
Entity Tax Identification Number 90-1734867  
Entity Incorporation, State or Country Code NV  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
Entity Contact Personnel [Line Items]    
Entity Address, Address Line One Suite 907, Saigao City  
Entity Address, Address Line Two Plaza Building 2  
Entity Address, Address Line Three No. 170, Weiyang Road  
Entity Address, City or Town Xi’an  
Entity Address, Country CN  
Entity Address, Postal Zip Code 00000  
Entity Phone Fax Numbers [Line Items]    
City Area Code +86-029  
Local Phone Number 86100263  
Entity Listings [Line Items]    
Entity Common Stock, Shares Outstanding   1,701,181,423
v3.24.2.u1
Condensed Consolidated Balance Sheets (Unaudited) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
CURRENT ASSETS    
Cash and cash equivalents $ 10,029,766 $ 9,324,115
Accounts receivable 404,523 632,541
Other receivables and prepayments 56,582 71,247
Total current assets 10,490,871 10,027,903
NON-CURRENT ASSETS    
Plant and equipment, net 72,324 107,014
Operating lease right-of-use assets, net 143,488 27,648
Total non-current assets 215,812 134,662
TOTAL ASSETS 10,706,683 10,162,565
CURRENT LIABILITIES    
Other payables and accrued liabilities 238,031 478,326
Operating lease liabilities, current 58,723 27,648
Tax payables 215,423 337,734
Amount due to a director 3,508 3,508
Total current liabilities 515,685 847,216
NON-CURRENT LIABILITY    
Deferred tax liabilities 323,007 184,146
Operating lease liabilities, non-current 84,765
Total non-current liabilities 407,772 184,146
TOTAL LIABILITIES 923,457 1,031,362
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY    
Preferred stock, par value $0.0001 per share, 1,100,000 shares authorized, Nil (December 31, 2023: Nil) shares issued and outstanding as of June 30, 2024
Common stock, par value $0.0001 per share; 1,800,000,000 shares authorized, 1,701,181,423 (December 31, 2023: 1,701,181,423) shares issued and outstanding as of June 30, 2024 170,118 170,118
Additional paid-in capital 6,453,048 6,453,048
Statutory reserves 65,911 65,911
Retained earnings 3,051,537 2,329,574
Accumulated other comprehensive income 42,612 112,552
Total stockholders’ equity 9,783,226 9,131,203
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 10,706,683 $ 10,162,565
v3.24.2.u1
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares
Jun. 30, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Preferred stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Preferred stock, shares authorized 1,100,000 1,100,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in Dollars per share) $ 0.0001 $ 0.0001
Common stock, shares authorized 1,800,000,000 1,800,000,000
Common stock, shares issued 1,701,181,423 1,701,181,423
Common stock, shares outstanding 1,701,181,423 1,701,181,423
v3.24.2.u1
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
Revenue $ 1,264,221 $ 1,705,942 $ 2,524,274 $ 2,882,878
Cost of revenue (169,757) (108,581) (331,138) (223,135)
Gross profit 1,094,464 1,597,361 2,193,136 2,659,743
Selling expenses (27,762) (5,279) (30,068) (6,718)
General and administrative expenses (427,775) (390,294) (847,958) (813,796)
Profit from operations 638,927 1,201,788 1,315,110 1,839,229
Other income (expenses):        
Interest income 6,325 10,764 9,130 18,500
Exchange gain (loss) (24,132) (74,178) (42,260) (53,630)
Sundry income 13,702 7,938 23,392 65,943
Total other income(expenses), net (4,105) (55,476) (9,738) 30,813
Income before income tax 634,822 1,146,312 1,305,372 1,870,042
Income tax expense (286,355) (455,865) (583,409) (748,138)
Net income 348,467 690,447 721,963 1,121,904
Other comprehensive loss      
Foreign currency translation adjustment (5,333) (77,327) (69,940) (92,821)
Total comprehensive income $ 343,134 $ 613,120 $ 652,023 $ 1,029,083
Net income per share - Basic (in Dollars per share) [1] $ 0 $ 0 $ 0 $ 0
Weighted average number of common shares outstanding        
Weighted average number of common shares outstanding, Basic (in Shares) 1,701,181,423 1,701,181,423 1,701,181,423 1,701,181,423
[1] Less than $0.01 per share
v3.24.2.u1
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) (Parentheticals) - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
Net income per share - Diluted [1] $ 0.00 $ 0.00 $ 0.00 $ 0.00
Weighted average number of common shares outstanding, Diluted 1,701,181,423 1,701,181,423 1,701,181,423 1,701,181,423
[1] Less than $0.01 per share
v3.24.2.u1
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($)
Common Stock
Additional Paid-In Capital
Preferred stock
Statutory Reserves
Retained earnings
Accumulated Other Comprehensive Income
Total
Balance at Dec. 31, 2022 $ 170,118 $ 6,453,048 $ 65,911 $ 47,215 $ 147,908 $ 6,884,200
Balance (in Shares) at Dec. 31, 2022 1,701,181,423          
Net income 431,457 431,457
Foreign currency translation adjustment (15,494) (15,494)
Balance at Mar. 31, 2023 $ 170,118 6,453,048 65,911 478,672 132,414 7,300,163
Balance (in Shares) at Mar. 31, 2023 1,701,181,423          
Balance at Dec. 31, 2022 $ 170,118 6,453,048 65,911 47,215 147,908 6,884,200
Balance (in Shares) at Dec. 31, 2022 1,701,181,423          
Net income             1,121,904
Balance at Jun. 30, 2023 $ 170,118 6,453,048 65,911 1,169,119 55,087 7,913,283
Balance (in Shares) at Jun. 30, 2023 1,701,181,423          
Balance at Mar. 31, 2023 $ 170,118 6,453,048 65,911 478,672 132,414 7,300,163
Balance (in Shares) at Mar. 31, 2023 1,701,181,423          
Net income 690,447 690,447
Foreign currency translation adjustment (77,327) (77,327)
Balance at Jun. 30, 2023 $ 170,118 6,453,048 65,911 1,169,119 55,087 7,913,283
Balance (in Shares) at Jun. 30, 2023 1,701,181,423          
Balance at Dec. 31, 2023 $ 170,118 6,453,048 65,911 2,329,574 112,552 9,131,203
Balance (in Shares) at Dec. 31, 2023 1,701,181,423          
Net income 373,496 373,496
Foreign currency translation adjustment (64,607) (64,607)
Balance at Mar. 31, 2024 $ 170,118 6,453,048 65,911 2,703,070 47,945 9,440,092
Balance (in Shares) at Mar. 31, 2024 1,701,181,423          
Balance at Dec. 31, 2023 $ 170,118 6,453,048 65,911 2,329,574 112,552 9,131,203
Balance (in Shares) at Dec. 31, 2023 1,701,181,423          
Net income             721,963
Balance at Jun. 30, 2024 $ 170,118 6,453,048 65,911 3,051,537 42,612 9,783,226
Balance (in Shares) at Jun. 30, 2024 1,701,181,423          
Balance at Mar. 31, 2024 $ 170,118 6,453,048 65,911 2,703,070 47,945 9,440,092
Balance (in Shares) at Mar. 31, 2024 1,701,181,423          
Net income 348,467 348,467
Foreign currency translation adjustment (5,333) (5,333)
Balance at Jun. 30, 2024 $ 170,118 $ 6,453,048 $ 65,911 $ 3,051,537 $ 42,612 $ 9,783,226
Balance (in Shares) at Jun. 30, 2024 1,701,181,423          
v3.24.2.u1
Condensed Consolidated Statement of Cash Flows (Unaudited) - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities    
Net income $ 721,963 $ 1,121,904
Adjustments to reconcile net income to cash used in operating activities:    
Depreciation 29,690 40,298
Amortization of operating lease right-of-use assets 27,179 26,907
Deferred tax 138,365 28,230
Changes in operating assets and liabilities:    
Other receivables and prepayments 13,028 12,259
Accounts receivable 213,551 (207,645)
Other payables and accrued liabilities (235,604) (160,301)
Tax payables (114,592) 286,498
Receipt in advance (1,703)
Operating lease liabilities (25,852) (26,908)
Net cash generated from operating activities 767,728 1,119,539
Cash flows used in investing activities    
Purchase of property, plant and equipment (1,877)
Cash flows used in financing activities    
Repayment to a director (164,441)
Effect of exchange rates on cash (62,077) (87,081)
Net increase in cash and cash equivalents 705,651 866,140
Cash and cash equivalents at beginning of period 9,324,115 7,193,591
Cash and cash equivalents at end of period 10,029,766 8,059,731
Cash paid during the period for:    
Income taxes $ 554,417 $ 286,922
v3.24.2.u1
Organization and Business
6 Months Ended
Jun. 30, 2024
Organization and Business [Abstract]  
ORGANIZATION AND BUSINESS

NOTE 1 – ORGANIZATION AND BUSINESS

 

Entrepreneur Universe Bright Group (“EUBG” or the “Company”) was incorporated in the State of Nevada on April 21, 1999 under the name LE GOURMET CO, INC. and the Company’s name to Entrepreneur Universe Bright Group, with an effective date of April 3, 2020.

 

The Company, through its wholly owned subsidiaries, mainly engages in provision of digital marketing consultation services in Hong Kong and China.

 

Company name   Place/date of incorporation   Principal activities
1. Entrepreneurship World Technology Holding Group Company Limited   Hong Kong/May 15, 2019   Plan to provide consulting and promotional services
         
2. Xian Yunchuang Space Information Technology Co., Ltd.   The People’s Republic of China (“PRC”)/October 18, 2019   Provision of digital marketing consultation services
v3.24.2.u1
Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2024
Summary of Significant Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States of America generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting.

 

The interim condensed consolidated financial information as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 have been prepared without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The interim condensed consolidated financial information should be read in conjunction with the Financial Statements and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, previously filed with the SEC on March 28, 2024.

 

In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s interim condensed consolidated financial position as of June 30, 2024, its interim condensed consolidated results of operations and cash flows for the three and six months ended June 30, 2024 and 2023, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

 

Use of Estimates

 

The preparation of these financial statements in conformity with U.S. GAAP requires management of the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an ongoing basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

Recently Issued and Adopted Accounting Pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.

 

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to improve income tax disclosures primarily through enhanced disclosure of income tax rate reconciliation items, and disaggregation of income (loss) from continuing operations, income tax expense (benefit) and income taxes paid, net disclosures by federal, state and foreign jurisdictions, among others. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and early adoption is permitted. The Company is evaluating the impact that ASC 2023-09 will have on the consolidated financial statements and its plan for adoption, including the adoption date and transition method.

 

Basis of Consolidation

 

The condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders.

 

Leases

 

The Company determines if an arrangement is a lease or contains a lease at inception of the arrangement. Operating lease liabilities are recognized based on the present value of the remaining lease payments, discounted using the discount rate for the lease at the commencement date. As the rate implicit in the lease is not readily determinable for the operating lease, the Company generally uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future lease payments. Operating lease right-of-use (“ROU assets”) assets represent the Company’s right to control the use of an identified asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are generally recognized based on the amount of the initial measurement of the lease liability. Lease expense is recognized on a straight-line basis over the lease term. The Company elected the package of practical expedients permitted under the transition guidance to combine the lease and non-lease components as a single lease component for operating leases associated with the Company’s office space lease, and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the condensed consolidated statements of income on a straight-line basis over the lease term.

 

ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets.

 

ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

 

The Company recognized no impairment of ROU assets as of June 30, 2024 and December 31, 2023.

 

The operating lease is included in operating lease right-of-use assets, operating lease liabilities-current and operating lease liabilities-non-current on the Company’s condensed consolidated balance sheets.

 

Cash and Cash Equivalents

 

For purposes of the statement of cash flows, the Company considers cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and all highly liquid investments placed with banks or other financial institutions with an original maturity of three and six months or less to be cash equivalents. 

 

As of June 30, 2024, cash held in accounts managed by online payment platforms such as Alipay and WeChat Pay amounted to $2,764 (as at December 31, 2023: $2,837), which have been classified as cash and cash equivalents in the condensed consolidated balance sheets.

 

Accounts receivable

 

Accounts receivables are recorded at the invoiced amount, net of allowances for doubtful accounts and sales returns. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivables. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions.

 

Outstanding accounts receivable balances are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

 

Plant and equipment

 

Plant and equipment are recorded at cost less accumulated depreciation and accumulated impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets.

 

   Estimated
useful lives
(years)
Motor vehicle  4 – 5
Office equipment  3

 

The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the lower of the carrying value or fair value less cost to sell the relevant assets and is recognized in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

 

Impairment of Long-lived Assets

 

In accordance with ASC 360-10-35, we review the carrying values of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Company assesses the recover-ability of the assets based on the non-discounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. No impairment has been recorded by the Company for the three and six months ended June 30, 2024 and 2023.

 

Revenue Recognition

 

The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. 

 

The Company evaluates if it is a principal or an agent in a transaction to determine whether revenue should be recorded on a gross or net basis. The Company is acting as the principal if it obtains control over the goods and services before they are transferred to customers. When the Company is primarily obligated in a transaction, is generally subject to inventory risk, has latitude in establishing prices, or has several but not all of these indicators, the Company acts as the principal and revenue is recorded on a gross basis. When the Company is not primarily obligated in a transaction, does not generally bear the inventory risk and does not have the ability to establish the price, the Company acts as the agent and revenue is recorded on a net basis

 

The Company derives its revenue primarily from consultancy services, sourcing and marketing services related services.

 

Consultancy services

 

The Company generates the majority of its revenues by providing consulting services to its clients.

 

Performance-based arrangements represent forms of variable consideration determined by pre-established fixed rates. In these arrangements, the Company’s fees are based on the attainment of contractually defined objectives with our client, such as assisting the client in achieving a specific business objective (e.g. facilitating product sales, course enrollments, private car sales and delivery, and enhancing livestream performers’ performance and profitability). The Company is entitled a fixed rate on revenue generated by the client that are related to the scope of respective consultancy services upon client acceptance on the services provided.

 

Sourcing and marketing services

 

The Company provides agency-based sourcing and marketing services to connect marketplace operators and merchants.

 

Agency-based sourcing and marketing services represents product procurement on behalf of marketplace operators. The Company recognized revenues from agency-based sourcing and marketing services at a fixed rate on the value of goods that are sourced and delivered to the ultimate customers by the merchants. The Company reports revenues from these transactions on a net basis because the performance obligation is to facilitate a transaction between marketplace operators and merchants, for which the Company did not obtain the control over the products before passing on to the end customers. The Company is not primarily responsible for fulfilling the promise and not exposed to inventory risk.

 

The post-sale services, goods return and other kinds of product issue are responsibilities of the merchants. Upon successful delivery to ultimate customers by the merchants, there is no unfulfilled obligation that could affect the marketplace operators’ and merchants’ acceptance of the services provided. The acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

 

The Company derived services revenues of $1,255,022 and $440,732 for the three months ended June 30, 2024 and 2023, respectively; and $2,501,586 and $792,401 for the six months ended June 30, 2024 and 2023, respectively, from provision of certain consultancy services and sourcing and marketing services through the program application (“App”) platform managed by a related company, Xi’an Chuangyetianxia Network Technology Co., Ltd. (“Xi’an CNT”). Xi’an CNT is substantially controlled by Zhongchuang Boli (as described in Note 4 to the consolidated financial statements).

 

Practical expedients and exemption

 

The Company has not incurred any costs to obtain contracts, and does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

 

Revenue by major service line

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Consultancy services  $1,264,221   $1,705,206   $2,524,274   $2,876,812 
Sourcing and marketing services   
-
    736    
-
    6,066 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 

 

Revenue by recognition over time vs point in time

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Revenue recognized at a point in time  $1,264,221   $1,705,942   $2,524,274   $2,882,878 
Revenue recognized over time   
-
    
-
    
-
    
-
 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 

 

Revenue recorded on a gross vs net basis

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Revenue recorded on a gross basis  $1,264,221   $1,705,206   $2,524,274   $2,876,812 
Revenue recorded on a net basis   
-
    736    
-
    6,066 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 

 

Cost of revenue

 

Cost of revenues consists primarily of employee compensation which are directly attributable to the revenues. 

 

Employee benefits

 

Full time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiary of the Company make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Company has no legal obligation for the benefits beyond the contributions made. Total amounts of such employee benefit expenses, which were expensed as incurred, were approximately $18,918 and $29,904 for the three months ended June 30, 2024 and 2023, respectively; and $40,090 and $46,148 for the six months ended June 30, 2024 and 2023, respectively.

 

Foreign Currency Transaction and Translation 

 

The reporting currency of the Company is the United States dollar (“US dollar”). The financial records of the Company’s PRC operating subsidiaries are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency. The financial records of the Company’s Hong Kong operating subsidiary are maintained in its local currency, the Hong Kong Dollar (“HKD”), which is the functional currency. Assets and liabilities of the subsidiaries are translated into the reporting currency at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates, and income and expense items are translated using the average rate for the period. The translation adjustments are recorded in accumulated other comprehensive loss under shareholders’ equity.

 

Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during the period are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the condensed consolidated statements of operations.

 

RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation of amounts from RMB into US dollars has been made at the following exchange rates for the respective periods:

 

Six months ended June 30, 2024      
Balance sheet, except for equity accounts   RMB 7.2673 to US$1.00  
Income statement and cash flows   RMB 7.2007 to US$1.00  
       
Six months ended June 30, 2023      
Balance sheet, except for equity accounts   RMB 7.2335 to US$1.00  
Income statement and cash flows   RMB 6.9263 to US$1.00  

 

During the periods presented, HKD is pegged to the U.S. dollar within a narrow range which is around HKD 7.8 to USD 1.00 for both periods.

 

Income Taxes

 

Income taxes are accounted for using an asset and liability approach which requires the recognition of income taxes payable or refundable for the current period and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred income taxes are determined based on the differences between the accounting basis and the tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws. Deferred tax assets are reduced by a valuation allowance, if based on available evidence, it is considered that it is more likely than not that some portion of or all of the deferred tax assets will not be realized. In making such determination, the Company considers factors including future reversals of existing taxable temporary differences, future profitability, and tax planning strategies. If events were to occur in the future that would allow the Company to realize more of its deferred tax assets than the presently recorded net amount, an adjustment would be made to the deferred tax assets that would increase income for the period when those events occurred. If events were to occur in the future that would require the Company to realize less of its deferred tax assets than the presently recorded net amount, an adjustment would be made to the valuation allowance against deferred tax assets that would decrease income for the period when those events occurred. Significant management judgment is required in determining income tax expense and deferred tax assets and liabilities.

 

The Company conducts business in the US, the PRC and Hong Kong and is subject to tax in these jurisdictions. As a result of its business activities, the Company will file tax returns that are subject to examination by the respective tax authorities.

 

Uncertain Tax Positions

 

Management reviews regularly the adequacy of the provisions for taxes as they relate to the Company’s income and transactions. In order to assess uncertain tax positions, the Company applies a more likely than not threshold and a two-step approach for tax position measurement and financial statement recognition. For the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. In subsequent periods, any interest and penalties related to uncertain tax positions will be recognized as a component of income tax expense. As of June 30, 2024 and December 31, 2023, the Company had not recorded any liability for uncertain tax positions.

 

Net income per Share of Common Stock

 

The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period.

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Net income  $348,467   $690,447   $721,963   $1,121,904 
                     
Weighted average number of common stock outstanding                    
- basic and diluted
   1,701,181,423    1,701,181,423    1,701,181,423    1,701,181,423 
                     
Net income per share                    
- basic and diluted
  $0.00*  $0.00*  $0.00*  $0.00*

 

* Less than $0.01 per share

 

The calculation of basic net income per share of common stock is based on the net income for the three and six months ended June 30, 2024 and 2023 and the weighted average number of ordinary shares outstanding.

 

For the three and six months ended June 30, 2024 and 2023, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 

Segments

 

The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operating results solely by monthly revenue of marketing consultation services and operating results of the Company and, as such, the Company has determined that the Company has one operating segment (provision of consulting, sourcing and marketing services, and digital training related services in China) as defined by ASC Topic 280 “Segment Reporting”.

 

Fair Value of Financial Instruments

 

ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value. Certain current assets and current liabilities are financial instruments. Management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and, if applicable, their current interest rates are equivalent to interest rates currently available. The three levels of valuation hierarchy are defined as follows:

 

  Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

 

  Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

 

  Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

Valuation of debt products depends upon a number of factors, including prevailing interest rates for like securities, expected volatility in future interest rates, and other relevant terms of the debt. Other factors that may be considered include the borrower’s ability to adequately service its debt, the fair market value of the borrower in relation to the face amount of its outstanding debt and the quality of collateral securing the Company’s debt investments. The fair value of these debt products classified as Level 2 are established by reference to the prices quoted by respective fund administrators.

 

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, other receivables, accounts payable and other payables, amounts due to a director and a shareholder and borrowings approximate their fair values because of the short maturity of these instruments or the rate of interest of these instruments approximate the market rate of interest.

 

Comprehensive Income

 

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income includes cumulative foreign currency translation adjustment.

v3.24.2.u1
Plant and Equipment
6 Months Ended
Jun. 30, 2024
Plant and Equipment [Abstract]  
PLANT AND EQUIPMENT

NOTE 3 – PLANT AND EQUIPMENT

 

Plant and equipment as of June 30, 2024 and December 31, 2023 are summarized below:

 

   June 30,
2024
   December 31,
2023
 
Motor vehicle  $350,475   $359,818 
Office equipment   7,471    11,061 
    357,946    370,879 
Less: Accumulated depreciation   (285,622)   (263,865)
Plant and equipment, net  $72,324   $107,014 

 

Depreciation expenses, classified as operating expenses, were $7,758 and $19,978 for the three months ended June 30, 2024 and 2023, respectively; and $29,690 and $40,298 for the six months ended June 30, 2024 and 2023, respectively.

v3.24.2.u1
Related Party Transactions
6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 4 – RELATED PARTY TRANSACTIONS

 

The following is the list of the related parties with which the Company had transactions for the three and six months ended June 30, 2024 and 2023: 

 

  (a) Zhongchuang Boli Technology Co., Ltd. (“Zhongchuang Boli”) – a company incorporated in the Gansu, PRC. Zhongchuang Boli is wholly owned by a relative of the Company’s CEO, Mr. Guolin Tao.

  

Related party transaction

 

   Three months ended
June 30,
   Six months ended
June 30,
 
    2024   2023    2024   2023 
Sundry income                
Zhongchuang Boli  $1,954   $2,043   $3,930   $4,086 

 

Sundry income was charged at fees agreed by both parties in accordance with a trademark licensing agreement.

 

Related party balances

 

   June 30,
2024
   December 31,
2023
 
Amount due to a director        
- Mr. Guolin Tao  $3,508   $3,508 

 

The amount due to director as of June 30, 2024 and December 31, 2023 are unsecured, non-interest bearing and repayable on demand.

v3.24.2.u1
Accounts Receivable, Net
6 Months Ended
Jun. 30, 2024
Accounts Receivable, Net [Abstract]  
ACCOUNTS RECEIVABLE, NET

NOTE 5 – ACCOUNTS RECEIVABLE, NET

 

Accounts receivable as of June 30, 2024 and December 31, 2023:

 

   June 30,
2024
   December 31,
2023
 
Account receivables  $404,523   $632,541 
Less: Allowance for doubtful accounts   
-
    
-
 
   $404,523   $632,541 
v3.24.2.u1
Other Receivables and Prepayments
6 Months Ended
Jun. 30, 2024
Other Receivables and Prepayments [Abstract]  
OTHER RECEIVABLES AND PREPAYMENTS

NOTE 6 – OTHER RECEIVABLES AND PREPAYMENTS

 

Other receivables and prepayments consisted of the following as of June 30, 2024 and December 31, 2023:

 

   June 30,
2024
   December 31,
2023
 
Deposits and other receivables  $26,516   $16,186 
Prepayments   30,066    55,061 
   $56,582   $71,247 
v3.24.2.u1
Other Payables and Accrued Liabilities
6 Months Ended
Jun. 30, 2024
Other Payables and Accrued Liabilities [Abstract]  
OTHER PAYABLES AND ACCRUED LIABILITIES

NOTE 7 – OTHER PAYABLES AND ACCRUED LIABILITIES

 

Other payables and accrued liabilities and consisted of the following as of June 30, 2024 and December 31, 2023:

 

   June 30,
2024
   December 31,
2023
 
Other payables  $48,013   $61,503 
Salary payable   95,520    107,755 
Accrued audit fees   50,000    195,000 
Value-added tax and other taxes payables   38,198    62,068 
Other accrued expenses   6,300    52,000 
   $238,031   $478,326 
v3.24.2.u1
Statutory Reserves
6 Months Ended
Jun. 30, 2024
Statutory Reserves [Abstract]  
STATUTORY RESERVES

NOTE 8 – STATUTORY RESERVES

 

As stipulated by the relevant laws and regulations in the PRC, company established in the PRC (the “PRC subsidiary”) is required to maintain a statutory reserve made out of profit for the year based on the PRC subsidiary’ statutory financial statements which are prepared in accordance with the accounting principles generally accepted in the PRC. The amount and allocation basis are decided by the director of the PRC subsidiary annually and is not to be less than 10% of the profit for the year of the PRC subsidiary. The aggregate amount allocated to the reserves will be limited to 50% of registered capital for certain subsidiaries. Statutory reserve can be used for expanding the capital base of the PRC subsidiary by means of capitalization issue.

 

In addition, as a result of the relevant PRC laws and regulations which impose restriction on distribution or transfer of assets out of the PRC statutory reserve, $65,911 representing the PRC statutory reserve of the subsidiary as of June 30, 2024 and December 31, 2023, are also considered under restriction for distribution.

 

No additional statutory reserves is recorded in June 30, 2024 because the aggregate amount of profits allocated to the reserves has reached 50% of registered capital of the PRC subsidiary.

v3.24.2.u1
Income Taxes
6 Months Ended
Jun. 30, 2024
Income Taxes [Abstract]  
INCOME TAXES

NOTE 9 – INCOME TAXES

 

Income is subject to tax in the various countries in which the Company operates.

  

The Company mainly conducts its operating business through its subsidiaries in China, including Hong Kong.

 

The subsidiary incorporated in Hong Kong is subject to Hong Kong taxation on income derived from their activities conducted in Hong Kong. Hong Kong Profits Tax has been calculated at 16.5% of the estimated assessable profit for the three and six months ended June 30, 2024 and 2023.

 

The subsidiary incorporated in mainland China is governed by the Income Tax Law of the PRC concerning foreign invested enterprises and foreign enterprises and various local income tax laws (the Income Tax Laws), and are subject to 25% tax rate throughout the periods presented.

 

Under the PRC EIT law, withholding income tax, normally at a rate of 10%, is imposed on dividend paid by PRC entities out of its profits earned since January 1, 2008 to its overseas investors (including Hong Kong investors). Deferred taxation on the undistributed profits of the PRC subsidiaries has been provided in the condensed consolidated financial statements to the extent that in the opinion of the directors such profits will be distributed in the foreseeable future. Total undistributed profits of the Company’s PRC subsidiary at June 30, 2024 and December 31, 2023 were $3,266,719 and $2,002,008, respectively. At June 30, 2024 and December 31, 2023, the Company recognized deferred tax liabilities of $326,672 and $200,201, respectively, in respect of the undistributed profits.

 

Income tax expense consists of the following:

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Current tax:                
China  $223,674   $358,019   $439,825   $573,420 
                     
Deferred tax                    
Hong Kong   62,986    98,081    131,500    173,751 
China   (305)   (235)   12,084    967 
Total  $286,355   $455,865   $583,409   $748,138 

 

The provision for income taxes consisted of the following:

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
Income before income tax  $634,822   $1,146,312   $1,305,372   $1,870,042 
Statutory income tax rate   21%   21%   21%   21%
Income tax credit computed at statutory income rate   133,313    240,727    274,128    392,709 
Reconciling items:                    
Non-deductible expenses and change of valuation allowance   43,207    53,659    89,423    90,827 
Tax paid (Over-provision) for prior year   7,488    
-
    7,488    (9,452)
Rate differential in different tax jurisdictions   39,361    63,398    80,870    100,303 
Deferred tax provided on dividends withholding tax of PRC subsidiaries   62,986    98,081    131,500    173,751 
Income tax expense  $286,355   $455,865   $583,409   $748,138 

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of June 30, 2024 and December 31, 2023 are presented below: 

 

   June 30,
2024
   December 31,
2023
 
Deferred tax assets:        
Accelerated depreciation  $3,009   $3,840 
Deductible temporarily difference arising from other payable   11,898    12,215 
Less: Net off with deferred tax liabilities for financial reporting purposes   (14,907)   (16,055)
Net total deferred tax assets  $
-
   $
-
 
           
Deferred tax liabilities:          
Undistributed profits of a PRC subsidiary  $326,672   $200,201 
Taxable temporarily difference arising from account receivables   11,242    
-
 
Less: Net off with deferred tax assets for financial reporting purposes   (14,907)   (16,055)
Net total deferred tax liabilities  $323,007   $184,146 
v3.24.2.u1
Lease
6 Months Ended
Jun. 30, 2024
Lease [Abstract]  
LEASE

NOTE 10 – LEASE

 

On June 10, 2021, the Company entered into a lease agreement for office space in Xian, the PRC with a non-cancellable lease term, commencing on July 16, 2021 and expiring on July 15, 2024. The monthly rental payment is approximately $4,534   (RMB32,951) per month. On June 12, 2024, the Company renewed this lease agreement with a non-cancellable lease term, commencing on July 16, 2024 and expiring on July 15, 2027. The monthly rental payment is approximately $4,177 (RMB30,358) per month.

 

Operating lease expense for the three and six months ended June 30, 2024 and 2023 were as follows:

 

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Operating lease cost – straight line   13,650    14,098    27,457    28,545 
Total lease expense  $13,650   $14,098   $27,457   $28,545 

 

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2024:

 

   Operating
leases
 
     
Remainder of 2024  $25,064 
2025   50,127 
2026   50,127 
2027   25,064 
Thereafter   
-
 
Total undiscounted cash flows   150,382 
Less: imputed interest   (6,894)
Present value of lease liabilities  $143,488 

 

Lease term and discount rate

 

   June 30,
2024
 
Weighted-average remaining lease term - year   3.0 
Weighted-average discount rate (%)   3.45%

 

Supplemental cash flow information related to lease where the Company was the lessee for the three and six months ended June 30, 2024 and 2023 was as follows:

 

   Six months ended
June 30,
 
   2024   2023 
Operating cash outflows from operating lease  $27,457   $28,545 
v3.24.2.u1
Contingencies and Commitments
6 Months Ended
Jun. 30, 2024
Contingencies and Commitments [Abstract]  
CONTINGENCIES AND COMMITMENTS

NOTE 11 – CONTINGENCIES AND COMMITMENTS 

 

Contingencies

 

Certain conditions may exist as of the date the condensed 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. There was no contingency of this type as of June 30, 2024 and December 31, 2023.

 

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. There was no contingency of this type as of June 30, 2024 and December 31, 2023.

 

Loss contingencies considered to be remote by management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed.

v3.24.2.u1
Certain Risks and Concentrations
6 Months Ended
Jun. 30, 2024
Certain Risks and Concentrations [Abstract]  
CERTAIN RISKS AND CONCENTRATIONS

NOTE 12 – CERTAIN RISKS AND CONCENTRATIONS 

 

(a) Concentrations

 

The Company had net revenue from the following customers that individually comprised 10% or more of net revenue for the three and six months ended June 30, 2024 and 2023:

 

   Three months ended June 30, 
   2024   2023 
Customer A  $773,017    61%  $1,250,773    73%

 

    Six months ended June 30,  
    2024     2023  
Customer A   $ 1,681,055       67 %   $ 2,063,279       72 %

 

The Company had accounts receivable from the following customers that individually comprised 10% or more of net accounts receivable as of June 30, 2024 and December 31, 2023:

 

   June 30,
2024
   December 31,
2023
 
Customer A (note i)  $257,533    64%  $513,083    76%

 

For the three and six months ended June 30, 2024 and 2023, the Company derived services revenues of $1,255,022   and $440,732 for the three months ended June 30, 2024 and 2023, respectively; and $2,501,586   and $792,401 for the six months ended June 30, 2024 and 2023, respectively, through the APP platform managed by Xian CNT, represented 99%, 26%, 99% and 27% of our total revenue. Xi’an CNT is substantially controlled by Zhongchuang Boli (as described in Note 4 to the condensed consolidated financial statements).

 

The Company had cost of revenue from the following service vendor that individually comprised 10% or more of cost of revenue for the three and six months ended June 30, 2024 and 2023:

 

 

   Three months ended June 30, 
   2024   2023 
Service vendor A  $40,449    24%  $
-
 

 

   Six months ended June 30, 
   2024   2023 
Service vendor A  $40,449    12%  $
-
 

 

There was no service vendor that individually comprised 10% or more of accounts payable as of June 30, 2024 and December 31, 2023.

 

(b) Credit risk

 

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents.

 

As of June 30, 2024 and December 31, 2023, $10,029,766 and $9,324,115 of the Company’s cash and cash equivalents, respectively were held at financial institutions and online payment platforms located in the PRC and Hong Kong that management believes to be of high credit quality. The Company has not experienced any losses on cash and cash equivalents to date.

 

As at June 30, 2024, the Company held cash of $3,284,710 deposited in financial institutions located in Mainland China, and each bank account is insured by the government authority with the maximum limit of RMB500,000 (equivalent to $68,801). The Company also held cash of $6,742,292 deposited in financial institutions located in Hong Kong, and each bank account is insured by the government authority with the maximum limit of HKD500,000 (equivalent to $64,028). In addition, the Company held cash of $2,764 in accounts managed by online payment platforms such as Alipay which is not insured by Federal Deposit Insurance Corporation or other insurance. To limit exposure to credit risk relating to deposits held in bank accounts in Mainland China and Hong Kong excess the government insured limits, the Company primarily place cash and cash equivalent deposits with large financial institutions, which management believes are of high credit quality and the Company also continually monitors their credit worthiness.

 

The Company operates principally in the PRC and grants credit to its customers in this geographic region. Although the PRC is economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Company’s operations.

v3.24.2.u1
Subsequent Events
6 Months Ended
Jun. 30, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 13 – SUBSEQUENT EVENTS

 

The Company has evaluated the existence of events and transactions subsequent to the balance sheet date through the date the unaudited condensed consolidated financial statements were issued and has determined that there were no significant subsequent events or transactions which would require recognition or disclosure in the financial statements.

v3.24.2.u1
Pay vs Performance Disclosure - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Pay vs Performance Disclosure            
Net Income (Loss) $ 348,467 $ 373,496 $ 690,447 $ 431,457 $ 721,963 $ 1,121,904
v3.24.2.u1
Insider Trading Arrangements
3 Months Ended
Jun. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.2.u1
Accounting Policies, by Policy (Policies)
6 Months Ended
Jun. 30, 2024
Summary of Significant Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States of America generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting.

The interim condensed consolidated financial information as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023 have been prepared without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The interim condensed consolidated financial information should be read in conjunction with the Financial Statements and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, previously filed with the SEC on March 28, 2024.

In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s interim condensed consolidated financial position as of June 30, 2024, its interim condensed consolidated results of operations and cash flows for the three and six months ended June 30, 2024 and 2023, as applicable, have been made. The interim results of operations are not necessarily indicative of the operating results for the full fiscal year or any future periods.

Use of Estimates

Use of Estimates

The preparation of these financial statements in conformity with U.S. GAAP requires management of the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an ongoing basis, the Company evaluates its estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Recently Adopted Accounting Standards

Recently Issued and Adopted Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 is intended to improve income tax disclosures primarily through enhanced disclosure of income tax rate reconciliation items, and disaggregation of income (loss) from continuing operations, income tax expense (benefit) and income taxes paid, net disclosures by federal, state and foreign jurisdictions, among others. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, and early adoption is permitted. The Company is evaluating the impact that ASC 2023-09 will have on the consolidated financial statements and its plan for adoption, including the adoption date and transition method.

 

Basis of Consolidation

Basis of Consolidation

The condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power; or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors or to cast a majority of votes at the meeting of the board of directors or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders.

Leases

Leases

The Company determines if an arrangement is a lease or contains a lease at inception of the arrangement. Operating lease liabilities are recognized based on the present value of the remaining lease payments, discounted using the discount rate for the lease at the commencement date. As the rate implicit in the lease is not readily determinable for the operating lease, the Company generally uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future lease payments. Operating lease right-of-use (“ROU assets”) assets represent the Company’s right to control the use of an identified asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are generally recognized based on the amount of the initial measurement of the lease liability. Lease expense is recognized on a straight-line basis over the lease term. The Company elected the package of practical expedients permitted under the transition guidance to combine the lease and non-lease components as a single lease component for operating leases associated with the Company’s office space lease, and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the condensed consolidated statements of income on a straight-line basis over the lease term.

ROU assets are reviewed for impairment when indicators of impairment are present. ROU assets from operating and finance leases are subject to the impairment guidance in ASC 360, Property, Plant, and Equipment, as ROU assets are long-lived nonfinancial assets.

ROU assets are tested for impairment individually or as part of an asset group if the cash flows related to the ROU asset are not independent from the cash flows of other assets and liabilities. An asset group is the unit of accounting for long-lived assets to be held and used, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

The Company recognized no impairment of ROU assets as of June 30, 2024 and December 31, 2023.

The operating lease is included in operating lease right-of-use assets, operating lease liabilities-current and operating lease liabilities-non-current on the Company’s condensed consolidated balance sheets.

Cash and Cash Equivalents

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers cash, money market funds, investments in interest bearing demand deposit accounts, time deposits and all highly liquid investments placed with banks or other financial institutions with an original maturity of three and six months or less to be cash equivalents. 

As of June 30, 2024, cash held in accounts managed by online payment platforms such as Alipay and WeChat Pay amounted to $2,764 (as at December 31, 2023: $2,837), which have been classified as cash and cash equivalents in the condensed consolidated balance sheets.

 

Accounts receivable

Accounts receivable

Accounts receivables are recorded at the invoiced amount, net of allowances for doubtful accounts and sales returns. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivables. The Company determines the allowance based on historical write-off experience, customer specific facts and economic conditions.

Outstanding accounts receivable balances are reviewed individually for collectability. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Plant and equipment

Plant and equipment

Plant and equipment are recorded at cost less accumulated depreciation and accumulated impairment. Depreciation is computed using the straight-line method over the estimated useful lives of the assets.

   Estimated
useful lives
(years)
Motor vehicle  4 – 5
Office equipment  3

The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the lower of the carrying value or fair value less cost to sell the relevant assets and is recognized in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

Impairment of Long-lived Assets

Impairment of Long-lived Assets

In accordance with ASC 360-10-35, we review the carrying values of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The Company assesses the recover-ability of the assets based on the non-discounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated discounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. No impairment has been recorded by the Company for the three and six months ended June 30, 2024 and 2023.

Revenue Recognition

Revenue Recognition

The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation. 

The Company evaluates if it is a principal or an agent in a transaction to determine whether revenue should be recorded on a gross or net basis. The Company is acting as the principal if it obtains control over the goods and services before they are transferred to customers. When the Company is primarily obligated in a transaction, is generally subject to inventory risk, has latitude in establishing prices, or has several but not all of these indicators, the Company acts as the principal and revenue is recorded on a gross basis. When the Company is not primarily obligated in a transaction, does not generally bear the inventory risk and does not have the ability to establish the price, the Company acts as the agent and revenue is recorded on a net basis

The Company derives its revenue primarily from consultancy services, sourcing and marketing services related services.

 

Consultancy services

The Company generates the majority of its revenues by providing consulting services to its clients.

Performance-based arrangements represent forms of variable consideration determined by pre-established fixed rates. In these arrangements, the Company’s fees are based on the attainment of contractually defined objectives with our client, such as assisting the client in achieving a specific business objective (e.g. facilitating product sales, course enrollments, private car sales and delivery, and enhancing livestream performers’ performance and profitability). The Company is entitled a fixed rate on revenue generated by the client that are related to the scope of respective consultancy services upon client acceptance on the services provided.

Sourcing and marketing services

The Company provides agency-based sourcing and marketing services to connect marketplace operators and merchants.

Agency-based sourcing and marketing services represents product procurement on behalf of marketplace operators. The Company recognized revenues from agency-based sourcing and marketing services at a fixed rate on the value of goods that are sourced and delivered to the ultimate customers by the merchants. The Company reports revenues from these transactions on a net basis because the performance obligation is to facilitate a transaction between marketplace operators and merchants, for which the Company did not obtain the control over the products before passing on to the end customers. The Company is not primarily responsible for fulfilling the promise and not exposed to inventory risk.

The post-sale services, goods return and other kinds of product issue are responsibilities of the merchants. Upon successful delivery to ultimate customers by the merchants, there is no unfulfilled obligation that could affect the marketplace operators’ and merchants’ acceptance of the services provided. The acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

The Company derived services revenues of $1,255,022 and $440,732 for the three months ended June 30, 2024 and 2023, respectively; and $2,501,586 and $792,401 for the six months ended June 30, 2024 and 2023, respectively, from provision of certain consultancy services and sourcing and marketing services through the program application (“App”) platform managed by a related company, Xi’an Chuangyetianxia Network Technology Co., Ltd. (“Xi’an CNT”). Xi’an CNT is substantially controlled by Zhongchuang Boli (as described in Note 4 to the consolidated financial statements).

Practical expedients and exemption

The Company has not incurred any costs to obtain contracts, and does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

 

Revenue by major service line

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Consultancy services  $1,264,221   $1,705,206   $2,524,274   $2,876,812 
Sourcing and marketing services   
-
    736    
-
    6,066 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 

Revenue by recognition over time vs point in time

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Revenue recognized at a point in time  $1,264,221   $1,705,942   $2,524,274   $2,882,878 
Revenue recognized over time   
-
    
-
    
-
    
-
 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 

Revenue recorded on a gross vs net basis

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Revenue recorded on a gross basis  $1,264,221   $1,705,206   $2,524,274   $2,876,812 
Revenue recorded on a net basis   
-
    736    
-
    6,066 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 
Cost of revenue

Cost of revenue

Cost of revenues consists primarily of employee compensation which are directly attributable to the revenues
Employee benefits

Employee benefits

Full time employees of the Company in the PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits, medical care, employee housing fund and other welfare benefits are provided to the employees. Chinese labor regulations require that the PRC subsidiary of the Company make contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Company has no legal obligation for the benefits beyond the contributions made. Total amounts of such employee benefit expenses, which were expensed as incurred, were approximately $18,918 and $29,904 for the three months ended June 30, 2024 and 2023, respectively; and $40,090 and $46,148 for the six months ended June 30, 2024 and 2023, respectively.

 

Foreign Currency Transaction and Translation

Foreign Currency Transaction and Translation 

The reporting currency of the Company is the United States dollar (“US dollar”). The financial records of the Company’s PRC operating subsidiaries are maintained in their local currency, the Renminbi (“RMB”), which is the functional currency. The financial records of the Company’s Hong Kong operating subsidiary are maintained in its local currency, the Hong Kong Dollar (“HKD”), which is the functional currency. Assets and liabilities of the subsidiaries are translated into the reporting currency at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates, and income and expense items are translated using the average rate for the period. The translation adjustments are recorded in accumulated other comprehensive loss under shareholders’ equity.

Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during the period are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the condensed consolidated statements of operations.

RMB is not a fully convertible currency. All foreign exchange transactions involving RMB must take place either through the People’s Bank of China (the “PBOC”) or other institutions authorized to buy and sell foreign exchange. The exchange rates adopted for the foreign exchange transactions are the rates of exchange quoted by the PBOC, which are determined largely by supply and demand. Translation of amounts from RMB into US dollars has been made at the following exchange rates for the respective periods:

Six months ended June 30, 2024      
Balance sheet, except for equity accounts   RMB 7.2673 to US$1.00  
Income statement and cash flows   RMB 7.2007 to US$1.00  
       
Six months ended June 30, 2023      
Balance sheet, except for equity accounts   RMB 7.2335 to US$1.00  
Income statement and cash flows   RMB 6.9263 to US$1.00  

During the periods presented, HKD is pegged to the U.S. dollar within a narrow range which is around HKD 7.8 to USD 1.00 for both periods.

Income Taxes

Income Taxes

Income taxes are accounted for using an asset and liability approach which requires the recognition of income taxes payable or refundable for the current period and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the Company’s financial statements or tax returns. Deferred income taxes are determined based on the differences between the accounting basis and the tax basis of assets and liabilities and are measured using the currently enacted tax rates and laws. Deferred tax assets are reduced by a valuation allowance, if based on available evidence, it is considered that it is more likely than not that some portion of or all of the deferred tax assets will not be realized. In making such determination, the Company considers factors including future reversals of existing taxable temporary differences, future profitability, and tax planning strategies. If events were to occur in the future that would allow the Company to realize more of its deferred tax assets than the presently recorded net amount, an adjustment would be made to the deferred tax assets that would increase income for the period when those events occurred. If events were to occur in the future that would require the Company to realize less of its deferred tax assets than the presently recorded net amount, an adjustment would be made to the valuation allowance against deferred tax assets that would decrease income for the period when those events occurred. Significant management judgment is required in determining income tax expense and deferred tax assets and liabilities.

The Company conducts business in the US, the PRC and Hong Kong and is subject to tax in these jurisdictions. As a result of its business activities, the Company will file tax returns that are subject to examination by the respective tax authorities.

 

Uncertain Tax Positions

Uncertain Tax Positions

Management reviews regularly the adequacy of the provisions for taxes as they relate to the Company’s income and transactions. In order to assess uncertain tax positions, the Company applies a more likely than not threshold and a two-step approach for tax position measurement and financial statement recognition. For the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon settlement. In subsequent periods, any interest and penalties related to uncertain tax positions will be recognized as a component of income tax expense. As of June 30, 2024 and December 31, 2023, the Company had not recorded any liability for uncertain tax positions.

Net income per Share of Common Stock

Net income per Share of Common Stock

The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period.

   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Net income  $348,467   $690,447   $721,963   $1,121,904 
                     
Weighted average number of common stock outstanding                    
- basic and diluted
   1,701,181,423    1,701,181,423    1,701,181,423    1,701,181,423 
                     
Net income per share                    
- basic and diluted
  $0.00*  $0.00*  $0.00*  $0.00*
* Less than $0.01 per share

The calculation of basic net income per share of common stock is based on the net income for the three and six months ended June 30, 2024 and 2023 and the weighted average number of ordinary shares outstanding.

For the three and six months ended June 30, 2024 and 2023, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

Segments

Segments

The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. Management, including the chief operating decision maker, reviews operating results solely by monthly revenue of marketing consultation services and operating results of the Company and, as such, the Company has determined that the Company has one operating segment (provision of consulting, sourcing and marketing services, and digital training related services in China) as defined by ASC Topic 280 “Segment Reporting”.

 

Fair Value of Financial Instruments

Fair Value of Financial Instruments

ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value. Certain current assets and current liabilities are financial instruments. Management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and, if applicable, their current interest rates are equivalent to interest rates currently available. The three levels of valuation hierarchy are defined as follows:

  Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
  Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
  Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Valuation of debt products depends upon a number of factors, including prevailing interest rates for like securities, expected volatility in future interest rates, and other relevant terms of the debt. Other factors that may be considered include the borrower’s ability to adequately service its debt, the fair market value of the borrower in relation to the face amount of its outstanding debt and the quality of collateral securing the Company’s debt investments. The fair value of these debt products classified as Level 2 are established by reference to the prices quoted by respective fund administrators.

The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, other receivables, accounts payable and other payables, amounts due to a director and a shareholder and borrowings approximate their fair values because of the short maturity of these instruments or the rate of interest of these instruments approximate the market rate of interest.

Comprehensive Income

Comprehensive Income

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Accumulated other comprehensive income includes cumulative foreign currency translation adjustment.

v3.24.2.u1
Organization and Business (Tables)
6 Months Ended
Jun. 30, 2024
Organization and Business [Abstract]  
Schedule of Provision of Digital Marketing Consultation Services The Company, through its wholly owned subsidiaries, mainly engages in provision of digital marketing consultation services in Hong Kong and China.
Company name   Place/date of incorporation   Principal activities
1. Entrepreneurship World Technology Holding Group Company Limited   Hong Kong/May 15, 2019   Plan to provide consulting and promotional services
         
2. Xian Yunchuang Space Information Technology Co., Ltd.   The People’s Republic of China (“PRC”)/October 18, 2019   Provision of digital marketing consultation services
v3.24.2.u1
Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2024
Summary of Significant Accounting Policies [Abstract]  
Schedule of Straight-Line Method Over the Estimated Useful Lives Depreciation is computed using the straight-line method over the estimated useful lives of the assets.
   Estimated
useful lives
(years)
Motor vehicle  4 – 5
Office equipment  3
Schedule of Revenue by Major Service Line Revenue by major service line
   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Consultancy services  $1,264,221   $1,705,206   $2,524,274   $2,876,812 
Sourcing and marketing services   
-
    736    
-
    6,066 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 
Schedule of Revenue by Recognition Over Time Vs Point in Time Revenue by recognition over time vs point in time
   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Revenue recognized at a point in time  $1,264,221   $1,705,942   $2,524,274   $2,882,878 
Revenue recognized over time   
-
    
-
    
-
    
-
 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 
Revenue recorded on a gross vs net basis
   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Revenue recorded on a gross basis  $1,264,221   $1,705,206   $2,524,274   $2,876,812 
Revenue recorded on a net basis   
-
    736    
-
    6,066 
   $1,264,221   $1,705,942   $2,524,274   $2,882,878 
Schedule of Exchange Rates for the Respective Periods Translation of amounts from RMB into US dollars has been made at the following exchange rates for the respective periods:
Six months ended June 30, 2024      
Balance sheet, except for equity accounts   RMB 7.2673 to US$1.00  
Income statement and cash flows   RMB 7.2007 to US$1.00  
       
Six months ended June 30, 2023      
Balance sheet, except for equity accounts   RMB 7.2335 to US$1.00  
Income statement and cash flows   RMB 6.9263 to US$1.00  
Schedule of Basic Earnings per Share In the accompanying financial statements, basic earnings per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period.
   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Net income  $348,467   $690,447   $721,963   $1,121,904 
                     
Weighted average number of common stock outstanding                    
- basic and diluted
   1,701,181,423    1,701,181,423    1,701,181,423    1,701,181,423 
                     
Net income per share                    
- basic and diluted
  $0.00*  $0.00*  $0.00*  $0.00*
* Less than $0.01 per share
v3.24.2.u1
Plant and Equipment (Tables)
6 Months Ended
Jun. 30, 2024
Plant and Equipment [Abstract]  
Schedule of Plant and Equipment Plant and equipment as of June 30, 2024 and December 31, 2023 are summarized below:
   June 30,
2024
   December 31,
2023
 
Motor vehicle  $350,475   $359,818 
Office equipment   7,471    11,061 
    357,946    370,879 
Less: Accumulated depreciation   (285,622)   (263,865)
Plant and equipment, net  $72,324   $107,014 
v3.24.2.u1
Related Party Transactions (Tables)
6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
Schedule of Related Party Transaction Related party transaction
   Three months ended
June 30,
   Six months ended
June 30,
 
    2024   2023    2024   2023 
Sundry income                
Zhongchuang Boli  $1,954   $2,043   $3,930   $4,086 
Related party balances
   June 30,
2024
   December 31,
2023
 
Amount due to a director        
- Mr. Guolin Tao  $3,508   $3,508 
v3.24.2.u1
Accounts Receivable, Net (Tables)
6 Months Ended
Jun. 30, 2024
Accounts Receivable, Net [Abstract]  
Schedule of Accounts Receivable Accounts receivable as of June 30, 2024 and December 31, 2023:
   June 30,
2024
   December 31,
2023
 
Account receivables  $404,523   $632,541 
Less: Allowance for doubtful accounts   
-
    
-
 
   $404,523   $632,541 
v3.24.2.u1
Other Receivables and Prepayments (Tables)
6 Months Ended
Jun. 30, 2024
Other Receivables and Prepayments [Abstract]  
Schedule of Other Receivables and Prepayments Other receivables and prepayments consisted of the following as of June 30, 2024 and December 31, 2023:
   June 30,
2024
   December 31,
2023
 
Deposits and other receivables  $26,516   $16,186 
Prepayments   30,066    55,061 
   $56,582   $71,247 
v3.24.2.u1
Other Payables and Accrued Liabilities (Tables)
6 Months Ended
Jun. 30, 2024
Other Payables and Accrued Liabilities [Abstract]  
Schedule of Other Payables and Accrued Liabilities Other payables and accrued liabilities and consisted of the following as of June 30, 2024 and December 31, 2023:
   June 30,
2024
   December 31,
2023
 
Other payables  $48,013   $61,503 
Salary payable   95,520    107,755 
Accrued audit fees   50,000    195,000 
Value-added tax and other taxes payables   38,198    62,068 
Other accrued expenses   6,300    52,000 
   $238,031   $478,326 
v3.24.2.u1
Income Taxes (Tables)
6 Months Ended
Jun. 30, 2024
Income Taxes [Abstract]  
Schedule of Income Tax Expense Income tax expense consists of the following:
   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Current tax:                
China  $223,674   $358,019   $439,825   $573,420 
                     
Deferred tax                    
Hong Kong   62,986    98,081    131,500    173,751 
China   (305)   (235)   12,084    967 
Total  $286,355   $455,865   $583,409   $748,138 
Schedule of Provision for Income Taxes The provision for income taxes consisted of the following:
   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
Income before income tax  $634,822   $1,146,312   $1,305,372   $1,870,042 
Statutory income tax rate   21%   21%   21%   21%
Income tax credit computed at statutory income rate   133,313    240,727    274,128    392,709 
Reconciling items:                    
Non-deductible expenses and change of valuation allowance   43,207    53,659    89,423    90,827 
Tax paid (Over-provision) for prior year   7,488    
-
    7,488    (9,452)
Rate differential in different tax jurisdictions   39,361    63,398    80,870    100,303 
Deferred tax provided on dividends withholding tax of PRC subsidiaries   62,986    98,081    131,500    173,751 
Income tax expense  $286,355   $455,865   $583,409   $748,138 
Schedule of Deferred Tax Assets and Liabilities The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of June 30, 2024 and December 31, 2023 are presented below:
   June 30,
2024
   December 31,
2023
 
Deferred tax assets:        
Accelerated depreciation  $3,009   $3,840 
Deductible temporarily difference arising from other payable   11,898    12,215 
Less: Net off with deferred tax liabilities for financial reporting purposes   (14,907)   (16,055)
Net total deferred tax assets  $
-
   $
-
 
           
Deferred tax liabilities:          
Undistributed profits of a PRC subsidiary  $326,672   $200,201 
Taxable temporarily difference arising from account receivables   11,242    
-
 
Less: Net off with deferred tax assets for financial reporting purposes   (14,907)   (16,055)
Net total deferred tax liabilities  $323,007   $184,146 
v3.24.2.u1
Lease (Tables)
6 Months Ended
Jun. 30, 2024
Lease [Abstract]  
Schedule of Operating Lease Expense Operating lease expense for the three and six months ended June 30, 2024 and 2023 were as follows:
   Three months ended
June 30,
   Six months ended
June 30,
 
   2024   2023   2024   2023 
                 
Operating lease cost – straight line   13,650    14,098    27,457    28,545 
Total lease expense  $13,650   $14,098   $27,457   $28,545 
Lease term and discount rate
   June 30,
2024
 
Weighted-average remaining lease term - year   3.0 
Weighted-average discount rate (%)   3.45%
Schedule of Maturities of Lease Liabilities The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2024:
   Operating
leases
 
     
Remainder of 2024  $25,064 
2025   50,127 
2026   50,127 
2027   25,064 
Thereafter   
-
 
Total undiscounted cash flows   150,382 
Less: imputed interest   (6,894)
Present value of lease liabilities  $143,488 
Schedule of Supplemental Cash Flow Information Related to Lease Supplemental cash flow information related to lease where the Company was the lessee for the three and six months ended June 30, 2024 and 2023 was as follows:
   Six months ended
June 30,
 
   2024   2023 
Operating cash outflows from operating lease  $27,457   $28,545 
v3.24.2.u1
Certain Risks and Concentrations (Tables)
6 Months Ended
Jun. 30, 2024
Certain Risks and Concentrations [Abstract]  
Schedule of Concentrations Net Revenue The Company had net revenue from the following customers that individually comprised 10% or more of net revenue for the three and six months ended June 30, 2024 and 2023:
   Three months ended June 30, 
   2024   2023 
Customer A  $773,017    61%  $1,250,773    73%
    Six months ended June 30,  
    2024     2023  
Customer A   $ 1,681,055       67 %   $ 2,063,279       72 %
The Company had accounts receivable from the following customers that individually comprised 10% or more of net accounts receivable as of June 30, 2024 and December 31, 2023:
   June 30,
2024
   December 31,
2023
 
Customer A (note i)  $257,533    64%  $513,083    76%
The Company had cost of revenue from the following service vendor that individually comprised 10% or more of cost of revenue for the three and six months ended June 30, 2024 and 2023:
   Three months ended June 30, 
   2024   2023 
Service vendor A  $40,449    24%  $
-
 
   Six months ended June 30, 
   2024   2023 
Service vendor A  $40,449    12%  $
-
 
v3.24.2.u1
Organization and Business (Details) - Schedule of Provision of Digital Marketing Consultation Services
6 Months Ended
Jun. 30, 2024
Entrepreneurship World Technology Holding Group Company Limited [Member]  
Schedule of Provision of Digital Marketing Consultation Services [Line Items]  
Place/date of incorporation Hong Kong/May 15, 2019
Principal activities Plan to provide consulting and promotional services
Xian Yunchuang Space Information Technology Co., Ltd. [Member]  
Schedule of Provision of Digital Marketing Consultation Services [Line Items]  
Place/date of incorporation The People’s Republic of China (“PRC”)/October 18, 2019
Principal activities Provision of digital marketing consultation services
v3.24.2.u1
Summary of Significant Accounting Policies (Details)
3 Months Ended 6 Months Ended
Jun. 30, 2024
USD ($)
$ / shares
Jun. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
$ / shares
Jun. 30, 2024
HKD ($)
Jun. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Summary of Significant Accounting Policies [Abstract]            
Voting power percentage     50.00% 50.00%    
Cash held in accounts $ 2,764   $ 2,764     $ 2,837
Derived services revenues 1,255,022 $ 440,732 792,401   $ 2,501,586  
Employee benefit expense $ 18,918 $ 29,904 40,090   $ 46,148  
Range price     $ 1 $ 7.8    
Settlement percentage     50.00% 50.00%    
Per share price (in Dollars per share) | $ / shares $ 0.01   $ 0.01      
v3.24.2.u1
Summary of Significant Accounting Policies (Details) - Schedule of Straight-Line Method Over the Estimated Useful Lives
Jun. 30, 2024
Office equipment [Member]  
Schedule of Straight-Line Method Over the Estimated Useful Lives [Line Items]  
Estimated useful lives (years) 3 years
Minimum [Member] | Motor vehicle [Member]  
Schedule of Straight-Line Method Over the Estimated Useful Lives [Line Items]  
Estimated useful lives (years) 4 years
Maximum [Member] | Motor vehicle [Member]  
Schedule of Straight-Line Method Over the Estimated Useful Lives [Line Items]  
Estimated useful lives (years) 5 years
v3.24.2.u1
Summary of Significant Accounting Policies (Details) - Schedule of Revenue by Major Service Line - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Schedule of Revenue by Major Service Line [Line Items]        
Revenue by major service line $ 1,264,221 $ 1,705,942 $ 2,524,274 $ 2,882,878
Consultancy Services [Member]        
Schedule of Revenue by Major Service Line [Line Items]        
Revenue by major service line 1,264,221 1,705,206 2,524,274 2,876,812
Sourcing and Marketing Services [Member]        
Schedule of Revenue by Major Service Line [Line Items]        
Revenue by major service line $ 736 $ 6,066
v3.24.2.u1
Summary of Significant Accounting Policies (Details) - Schedule of Revenue by Recognition - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Schedule of Revenue by Recognition [Line Items]        
Revenue $ 1,264,221 $ 1,705,942 $ 2,524,274 $ 2,882,878
Revenue recorded on a gross basis [Member]        
Schedule of Revenue by Recognition [Line Items]        
Revenue 1,264,221 1,705,206 2,524,274 2,876,812
Revenue recorded on a net basis [Member]        
Schedule of Revenue by Recognition [Line Items]        
Revenue 736 6,066
Revenue recognized at a point in time [Member]        
Schedule of Revenue by Recognition [Line Items]        
Revenue 1,264,221 1,705,942 2,524,274 2,882,878
Revenue recognized over time [Member]        
Schedule of Revenue by Recognition [Line Items]        
Revenue
v3.24.2.u1
Summary of Significant Accounting Policies (Details) - Schedule of Exchange Rates for the Respective Periods
Jun. 30, 2024
Jun. 30, 2023
Balance sheet, except for equity accounts [Member] | RMB [Member]    
Summary of Significant Accounting Policies (Details) - Schedule of Exchange Rates for the Respective Periods [Line Items]    
Foreign exchange rates 7.2673 7.2335
Balance sheet, except for equity accounts [Member] | United States [Member]    
Summary of Significant Accounting Policies (Details) - Schedule of Exchange Rates for the Respective Periods [Line Items]    
Foreign exchange rates 1 1
Income statement and cash flows [Member] | RMB [Member]    
Summary of Significant Accounting Policies (Details) - Schedule of Exchange Rates for the Respective Periods [Line Items]    
Foreign exchange rates 7.2007 6.9263
Income statement and cash flows [Member] | United States [Member]    
Summary of Significant Accounting Policies (Details) - Schedule of Exchange Rates for the Respective Periods [Line Items]    
Foreign exchange rates 1 1
v3.24.2.u1
Summary of Significant Accounting Policies (Details) - Schedule of Basic Earnings Per Share - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Schedule of Basic Earnings Per Share [Abstract]            
Net income (in Dollars) $ 348,467 $ 373,496 $ 690,447 $ 431,457 $ 721,963 $ 1,121,904
Weighted average number of common stock outstanding            
Weighted average number of common stock outstanding -Basic (in Shares) 1,701,181,423   1,701,181,423   1,701,181,423 1,701,181,423
Net income per share            
Net income per share -Basic [1] $ 0   $ 0   $ 0 $ 0
[1] Less than $0.01 per share
v3.24.2.u1
Summary of Significant Accounting Policies (Details) - Schedule of Basic Earnings Per Share (Parentheticals) - $ / shares
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Schedule of Basic Earnings Per Share [Abstract]        
Weighted average number of common stock outstanding -Diluted 1,701,181,423 1,701,181,423 1,701,181,423 1,701,181,423
Net income per share -Diluted [1] $ 0.00 $ 0.00 $ 0.00 $ 0.00
[1] Less than $0.01 per share
v3.24.2.u1
Plant and Equipment (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Plant and Equipment [Abstract]        
Depreciation expenses $ 7,758 $ 19,978 $ 29,690 $ 40,298
v3.24.2.u1
Plant and Equipment (Details) - Schedule of Plant and Equipment - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Schedule of Plant and Equipment [Line Items]    
Plant and equipment, gross $ 357,946 $ 370,879
Less: Accumulated depreciation (285,622) (263,865)
Plant and equipment, net 72,324 107,014
Motor vehicle [Member]    
Schedule of Plant and Equipment [Line Items]    
Plant and equipment, gross 350,475 359,818
Office equipment [Member]    
Schedule of Plant and Equipment [Line Items]    
Plant and equipment, gross $ 7,471 $ 11,061
v3.24.2.u1
Related Party Transactions (Details) - Schedule of Related Party Transaction - USD ($)
3 Months Ended 6 Months Ended 15 Months Ended
Jun. 30, 2024
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Dec. 31, 2023
Zhongchuang Boli [Member]          
Schedule of Related Party Transactions [Line Items]          
Sundry income $ 1,954 $ 3,930 $ 4,086 $ 2,043  
Mr Guolin Tao [Member]          
Schedule of Related Party Transactions [Line Items]          
Amount due to a director $ 3,508 $ 3,508   $ 3,508 $ 3,508
v3.24.2.u1
Accounts Receivable, Net (Details) - Schedule of Accounts Receivable - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Schedule of Accounts Receivable [Abstract]    
Account receivables $ 404,523 $ 632,541
Less: Allowance for doubtful accounts
Total $ 404,523 $ 632,541
v3.24.2.u1
Other Receivables and Prepayments (Details) - Schedule of Other Receivables and Prepayments - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Schedule of Other Receivables and Prepayments [Abstract]    
Deposits and other receivables $ 26,516 $ 16,186
Prepayments 30,066 55,061
Total other receivables and prepayments $ 56,582 $ 71,247
v3.24.2.u1
Other Payables and Accrued Liabilities (Details) - Schedule of Other Payables and Accrued Liabilities - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Schedule of Other Payables and Accrued Liabilities [Abstract]    
Other payables $ 48,013 $ 61,503
Salary payable 95,520 107,755
Accrued audit fees 50,000 195,000
Value-added tax and other taxes payables 38,198 62,068
Other accrued expenses 6,300 52,000
Accrued liabilities and other payables $ 238,031 $ 478,326
v3.24.2.u1
Statutory Reserves (Details) - USD ($)
6 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Statutory Reserves [Abstract]    
Profit percentage 10.00%  
Registered capital percentage 50.00%  
Statutory reserve (in Dollars) $ 65,911 $ 65,911
Reserves percentage 50.00%  
v3.24.2.u1
Income Taxes (Details) - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Income Taxes [Line Items]          
Estimated assessable profit, percentage 16.50% 16.50% 16.50% 16.50%  
Income tax, percentage     25.00%    
Total undistributed profits (in Dollars) $ 326,672   $ 326,672   $ 200,201
Hong Kong [Member]          
Income Taxes [Line Items]          
Income tax, percentage     10.00%    
Total undistributed profits (in Dollars) $ 3,266,719   $ 3,266,719   $ 2,002,008
v3.24.2.u1
Income Taxes (Details) - Schedule of Income Tax Expense - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Deferred tax        
Deferred tax     $ 138,365 $ 28,230
Income tax expense $ 286,355 $ 455,865 583,409 748,138
China [Member]        
Current tax:        
Current tax 223,674 358,019 439,825 573,420
Deferred tax        
Deferred tax (305) (235) 12,084 967
Hong Kong [Member]        
Deferred tax        
Deferred tax $ 62,986 $ 98,081 $ 131,500 $ 173,751
v3.24.2.u1
Income Taxes (Details) - Schedule of Provision for Income Taxes - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Schedule of Provision for Income Taxes [Abstract]        
Income before income tax $ 634,822 $ 1,146,312 $ 1,305,372 $ 1,870,042
Statutory income tax rate 21.00% 21.00% 21.00% 21.00%
Income tax credit computed at statutory income rate $ 133,313 $ 240,727 $ 274,128 $ 392,709
Reconciling items:        
Non-deductible expenses and change of valuation allowance 43,207 53,659 89,423 90,827
Tax paid (Over-provision) for prior year 7,488 7,488 (9,452)
Rate differential in different tax jurisdictions 39,361 63,398 80,870 100,303
Deferred tax provided on dividends withholding tax of PRC subsidiaries 62,986 98,081 131,500 173,751
Income tax expense $ 286,355 $ 455,865 $ 583,409 $ 748,138
v3.24.2.u1
Income Taxes (Details) - Schedule of Deferred Tax Assets and Liabilities - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Deferred tax assets:    
Accelerated depreciation $ 3,009 $ 3,840
Deductible temporarily difference arising from other payable 11,898 12,215
Less: Net off with deferred tax liabilities for financial reporting purposes (14,907) (16,055)
Net total deferred tax assets
Deferred tax liabilities:    
Undistributed profits of a PRC subsidiary 326,672 200,201
Taxable temporarily difference arising from account receivables 11,242
Less: Net off with deferred tax assets for financial reporting purposes (14,907) (16,055)
Net total deferred tax liabilities $ 323,007 $ 184,146
v3.24.2.u1
Lease (Details) - 6 months ended Jun. 30, 2024
USD ($)
CNY (¥)
Lease (Details) [Line Items]    
Rental payment $ 4,177 ¥ 30,358
Office Space [Member]    
Lease (Details) [Line Items]    
Rental payment $ 4,534 ¥ 32,951
v3.24.2.u1
Lease (Details) - Schedule of Operating Lease Expense - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Schedule of Operating Lease Expense [Abstract]        
Operating lease cost – straight line $ 13,650 $ 14,098 $ 27,457 $ 28,545
Total lease expense $ 13,650 $ 14,098 $ 27,457 $ 28,545
Weighted-average remaining lease term - year   3 years   3 years
Weighted-average discount rate (%)   3.45%   3.45%
v3.24.2.u1
Lease (Details) - Schedule of Maturities of Lease Liabilities
Jun. 30, 2024
USD ($)
Schedule of Maturities of Lease Liabilities [Abstract]  
Remainder of 2024 $ 25,064
2025 50,127
2026 50,127
2027 25,064
Thereafter
Total undiscounted cash flows 150,382
Less: imputed interest (6,894)
Present value of lease liabilities $ 143,488
v3.24.2.u1
Lease (Details) - Schedule of Supplemental Cash Flow Information Related to Lease - USD ($)
6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Schedule of Supplemental Cash Flow Information Related to Lease [Abstract]    
Operating cash outflows from operating lease $ 27,457 $ 28,545
v3.24.2.u1
Certain Risks and Concentrations (Details)
3 Months Ended 6 Months Ended
Jun. 30, 2024
USD ($)
Jun. 30, 2023
USD ($)
Jun. 30, 2024
USD ($)
Jun. 30, 2023
USD ($)
Jun. 30, 2024
HKD ($)
Jun. 30, 2024
CNY (¥)
Dec. 31, 2023
USD ($)
Certain Risks and Concentrations [Line Items]              
Derived services revenues $ 1,255,022 $ 440,732 $ 2,501,586 $ 792,401      
Cash and cash equivalents 10,029,766   10,029,766       $ 9,324,115
Cash held account 3,284,710   3,284,710        
Insured cash 68,801   68,801     ¥ 500,000  
Cash insured 64,028   64,028   $ 500,000    
Alipay and WeChat Pay [Member]              
Certain Risks and Concentrations [Line Items]              
Cash held account 2,764   2,764        
Hong Kong [Member]              
Certain Risks and Concentrations [Line Items]              
Cash held account $ 6,742,292   $ 6,742,292        
Customer Concentration Risk [Member] | Xian CNT [Member] | Revenue Benchmark [Member]              
Certain Risks and Concentrations [Line Items]              
Concentration risk percentage     99.00%        
Customer Concentration Risk [Member] | Xian CNT [Member] | Revenue Benchmark [Member]              
Certain Risks and Concentrations [Line Items]              
Concentration risk percentage     26.00%        
Customer Concentration Risk [Member] | Xian CNT [Member] | Revenue Benchmark [Member]              
Certain Risks and Concentrations [Line Items]              
Concentration risk percentage     99.00%        
Customer Concentration Risk [Member] | Xian CNT [Member] | Revenue Benchmark [Member]              
Certain Risks and Concentrations [Line Items]              
Concentration risk percentage     27.00%        
v3.24.2.u1
Certain Risks and Concentrations (Details) - Schedule of Concentration Risks - USD ($)
3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Dec. 31, 2023
Jun. 30, 2023
Customer Concentration Risk [Member] | Customer A [Member] | Revenue Benchmark [Member]          
Schedule of Concentration Risks [Line Items]          
Revenue $ 773,017 $ 1,250,773 $ 1,681,055   $ 2,063,279
Concentration risk percentage 61.00% 73.00% 67.00%   72.00%
Customer Concentration Risk [Member] | Customer A [Member] | Accounts Receivable [Member]          
Schedule of Concentration Risks [Line Items]          
Revenue     $ 257,533 $ 513,083  
Concentration risk percentage     64.00% 76.00%  
Customer Concentration Risk [Member] | Service Vendor A [Member] | Cost of Revenue [Member]          
Schedule of Concentration Risks [Line Items]          
Revenue     $ 40,449  
Concentration risk percentage     12.00%    
Supplier Concentration Risk [Member] | Service Vendor A [Member] | Cost of Revenue [Member]          
Schedule of Concentration Risks [Line Items]          
Revenue $ 40,449      
Concentration risk percentage 24.00%        

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