UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 SEPTEMBER 30, 2023

 

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

 

Commission File Number 000-55793

 

 

 

COSMOS GROUP HOLDINGS INC.
(Exact Name of Registrant as Specified in Its Charter)

 

Nevada   90-1177460
(State or Other Jurisdiction of
Incorporation or Organization)		  

(I.R.S. Employer

Identification No.)

 

37th Floor, Singapore Land Tower

50 Raffles Place, Singapore 048623

+65 6829 7017

(Address of Principal Executive Offices and Issuer’s

Telephone Number, including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each Class   Trading Symbol   Name of each exchange on which registered
None.   N/A   N/A

 

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 registrant 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 ☒

 

As of September 30, 2023, the Company had outstanding 1,870,992,244 shares of common stock.

 

 

 

 

 

 

INTRODUCTORY COMMENTS 

 

References in this report to the “Company,” “COSG,” “we,” “us” and “our” refer to Cosmos Group Holdings Inc., a Nevada company (also known as Coinllectibles, Inc.), and all of its subsidiaries on a consolidated basis. Where reference to a specific entity is required, the name of such specific entity will be referenced.

 

We are a Nevada holding company with operations conducted through our wholly owned subsidiaries based in Hong Kong and Singapore. Our investors hold shares of common stock in Cosmos Group Holdings Inc., the Nevada holding company. This structure presents unique risks as our investors may never directly hold equity interests in our Hong Kong subsidiary and will be dependent upon contributions from our subsidiaries to finance our cash flow needs. Our ability to obtain contributions from our subsidiaries are significantly affected by regulations promulgated by Hong Kong and Singaporean authorities. Any change in the interpretation of existing rules and regulations or the promulgation of new rules and regulations may materially affect our operations and or the value of our securities, including causing the value of our securities to significantly decline or become worthless. For a detailed description of the risks facing the Company associated with our structure, please refer to “Risk Factors – Risks Relating to Doing Business in Hong Kong.” set forth in the Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 15, 2022 (the “Form 10-K”).

 

Cosmos Group Holdings Inc. and our Hong Kong subsidiaries are not required to obtain permission or approval from the Chinese authorities including the China Securities Regulatory Commission, or CSRC, the Cybersecurity Administration Committee, or CAC, to operate our business or to issue securities to foreign investors. However, in light of the recent statements and regulatory actions by the People’s Republic of China (“the PRC”) government, such as those related to Hong Kong’s national security, the promulgation of regulations prohibiting foreign ownership of Chinese companies operating in certain industries, which are constantly evolving, and anti-monopoly concerns, we may be subject to the risks of uncertainty of any future actions of the PRC government in this regard including the risk that we inadvertently conclude that such approvals are not required, that applicable laws, regulations or interpretations change such that we are required to obtain approvals in the future, or that the PRC government could disallow our holding company structure, which would likely result in a material change in our operations, including our ability to continue our existing holding company structure, carry on our current business, accept foreign investments, and offer or continue to offer securities to our investors. These adverse actions could cause the value of our common stock to significantly decline or become worthless. We may also be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the CSRC, if we fail to comply with such rules and regulations, which would likely adversely affect the ability of the Company’s securities to continue to trade on the Over-the-Counter Bulletin Board, which would likely cause the value of our securities to significantly decline or become worthless.

 

There are prominent legal and operational risks associated with our operations being in Hong Kong. For example, as a U.S.-listed Hong Kong public company, we may face heightened scrutiny, criticism and negative publicity, which could result in a material change in our operations and the value of our common stock. It could also 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 be worthless. We are subject to risks arising from the legal system in China where there are risks and uncertainties regarding the enforcement of laws including where the Chinese government can change the rules and regulations in China and Hong Kong, including the enforcement and interpretation thereof, at any time with little to no advance notice and can intervene at any time with little to no advance notice. Changes in Chinese internal regulatory mandates, such as the M&A rules, Anti-Monopoly Law, and Data Security Law, may target the Company’s corporate structure and impact our ability to conduct business in Hong Kong, accept foreign investments, or list on an U.S. or other foreign exchange. By way of example, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. In April 2020, the Cyberspace Administration of China and certain other PRC regulatory authorities promulgated the Cybersecurity Review Measures, which became effective in June 2020. Pursuant to the Cybersecurity Review Measures, operators of critical information infrastructure must pass a cybersecurity review when purchasing network products and services which do or may affect national security. On July 10, 2021, the Cyberspace Administration of China issued a revised draft of the Measures for Cybersecurity Review for public comments (“Draft Measures”), which required that, in addition to “operator of critical information infrastructure,” any “data processor” carrying out data processing activities that affect or may affect national security should also be subject to cybersecurity review, and further elaborated the factors to be considered when assessing the national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. The Cyberspace Administration of China has said that under the proposed rules companies holding data on more than 1,000,000 users must now apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be “affected, controlled, and maliciously exploited by foreign governments,” The cybersecurity review will also investigate the potential national security risks from overseas IPOs. On January 4, 2022, the CAC, in conjunction with 12 other government departments, issued the New Measures for Cybersecurity Review (the “New Measures”) on January 4, 2022. The New Measures amends the Draft Measures released on July 10, 2021 and became effective on February 15, 2022.

 

i

 

 

The business of our subsidiaries are not subject to cybersecurity review with the Cyberspace Administration of China, given that: (i) we do not have one million individual online users of our products and services in Hong Kong; (ii) we do not possess a large amount of personal information in our business operations. In addition, we are not subject to merger control review by China’s anti-monopoly enforcement agency due to the level of our revenues which provided from us and audited by our auditor and the fact that we currently do not expect to propose or implement any acquisition of control of, or decisive influence over, any company with revenues within China of more than Renminbi (“RMB”) 400 million. Currently, these statements and regulatory actions have had no impact on our daily business operations, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange. However, since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange. For a detailed description of the risks the Company is facing and the offering associated with our operations in Hong Kong, please refer to “Risk Factors – Risks Relating to Doing Business in Hong Kong.” set forth in the Form 10-K.

  

The recent joint statement by the SEC and Public Company Accounting Oversight Board (“PCAOB”), and the Holding Foreign Companies Accountable Act (“HFCAA”) all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. Trading in our securities may be prohibited under the HFCAA if the PCAOB determines that it cannot inspect or investigate completely our auditor, and that as a result, an exchange may determine to delist our securities. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act which would reduce the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two thus reducing the time before our securities may be prohibited from trading or being delisted. On December 2, 2021, the SEC adopted rules to implement the HFCAA. Pursuant to the HFCAA, the PCAOB issued its report notifying the Commission that it is unable to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong due to positions taken by authorities in mainland China and Hong Kong. Our auditor is based in Kuala Lumpur, Malaysia and is subject to PCAOB’s inspection. It is not subject to the determinations announced by the PCAOB on December 16, 2021. However, in the event the Malaysian authorities subsequently take a position disallowing the PCAOB to inspect our auditor, then we would need to change our auditor to avoid having our securities delisted. Furthermore, due to the recent developments in connection with the implementation of the HFCAA, we cannot assure you whether the SEC or other regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. On December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB will consider the need to issue a new determination. Notwithstanding the foregoing, in the event it is later determined that the PCAOB is unable to inspect or investigate completely our auditor, then such lack of inspection could cause our securities to be delisted from the stock exchange. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and amended the Holding Foreign Companies Accountable Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before our Ordinary Shares may be prohibited from trading or delisted. Please see “Risk Factors- The Holding Foreign Companies Accountable Act requires the Public Company Accounting Oversight Board (PCAOB) to be permitted to inspect the issuer’s public accounting firm within three years. This three-year period will be shortened to two years if the Accelerating Holding Foreign Companies Accountable Act is enacted. There are uncertainties under the PRC Securities Law relating to the procedures and requisite timing for the U.S. securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. If the U.S. securities regulatory agencies are unable to conduct such investigations, they may suspend or de-register our registration with the SEC and delist our securities from applicable trading market within the U.S.” set forth in the Form 10-K.

 

ii

 

 

In addition to the foregoing risks, we face various legal and operational risks and uncertainties arising from doing business in Hong Kong as summarized below and in “Risk Factors — Risks Relating to Doing Business in Hong Kong.” set forth in the Form 10-K.

   

Adverse changes in economic and political policies of the PRC government could have a material and adverse effect on overall economic growth in China and Hong Kong, which could materially and adversely affect our business. Please see “Risk Factors-We face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in Hong Kong and the profitability of such business.” and “Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.” set forth in the Form 10-K.

 

We are a holding company with operations conducted through our wholly owned subsidiaries based in Hong Kong and Singapore. This structure presents unique risks as our investors may never directly hold equity interests in our Hong Kong and Singapore subsidiaries and will be dependent upon contributions from our subsidiaries to finance our cash flow needs. Any limitation on the ability of our subsidiaries to make payments to us could have a material adverse effect on our ability to conduct business. We do not anticipate paying dividends in the foreseeable future; you should not buy our stock if you expect dividends. Please see “Risk Factors- Because our holding company structure creates restrictions on the payment of dividends, our ability to pay dividends is limited.” set forth in the Form 10-K.  

  

There is a possibility that the PRC could prevent our cash maintained in Hong Kong from leaving or the PRC could restrict the deployment of the cash into our business or for the payment of dividends. We rely on dividends from our Hong Kong subsidiaries for our cash and financing requirements, such as the funds necessary to service any debt we may incur. Any such controls or restrictions may adversely affect our ability to finance our cash requirements, service debt or make dividend or other distributions to our shareholders. Please see “Risk Factors - PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds we receive from offshore financing activities to make loans to or make additional capital contributions to our Hong Kong subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand business.”; “Risk Factors - Because our holding company structure creates restrictions on the payment of dividends or other cash payments, our ability to pay dividends or make other payments is limited.” and “Transfers of Cash to and from our Subsidiaries.” set forth in the Form 10-K.

 

PRC regulation of loans to and direct investments in PRC entities by offshore holding companies may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our operating subsidiaries in Hong Kong. Substantial uncertainties exist with respect to the interpretation of the PRC Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations. Please see “Risk Factors- PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds we receive from offshore financing activities to make loans to or make additional capital contributions to our Hong Kong subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand business.” set forth in the Form 10-K.

 

In light of China’s extension of its authority into Hong Kong, the Chinese government can change Hong Kong’s rules and regulations at any time with little or no advance notice, and can intervene and influence our operations and business activities in Hong Kong. We are currently not required to obtain approval from Chinese authorities to list on U.S. exchanges. However, if our subsidiaries or the holding company were required to obtain approval in the future, or we erroneously conclude that approvals were not required, or we were denied permission from Chinese authorities to operate or to list on U.S. exchanges, we will not be able to continue listing on a U.S. exchange and the value of our common stock would likely significantly decline or become worthless, which would materially affect the interest of the investors. There is a risk that the Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in Hong Kong-based issuers, which could result in a material change in our operations and/or the value of our securities. Further, any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers would likely 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 be worthless. Please see “Risk Factors-We face the risk that changes in the policies of the PRC government could have a significant impact upon the business we may be able to conduct in the Hong Kong and the profitability of such business.” and “Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.” and “The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S. exchanges. However, to the extent that the Chinese government exerts more control over offerings conducted overseas and/or foreign investment in China-based issuers over time and if our PRC subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange and the value of our common stock may significantly decline or become worthless, which would materially affect the interest of the investors.” set forth in the Form 10-K.

  

iii

 

 

Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.

 

We may become subject to a variety of laws and regulations in the PRC regarding privacy, data security, cybersecurity, and data protection. We may be liable for improper use or appropriation of personal information provided by our customers. Please see “Risk Factors- The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges. However, to the extent that the Chinese government exerts more control over offerings conducted overseas and/or foreign investment in China-based issuers over time and if our PRC subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange and the value of our common stock may significantly decline or become worthless, which would materially affect the interest of the investors.” set forth in the Form 10-K.

 

Under the Enterprise Income Tax Law of the PRC (“EIT Law”), we may be classified as a “Resident Enterprise” of China. Such classification will likely result in unfavorable tax consequences to us and our non-PRC shareholders. Please see “Risk Factors- Our global income may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which could have a material adverse effect on our results of operations.” set forth in the Form 10-K.

 

Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident Shareholders to personal liability, may limit our ability to acquire Hong Kong and PRC companies or to inject capital into our Hong Kong subsidiary, may limit the ability of our Hong Kong subsidiaries to distribute profits to us or may otherwise materially and adversely affect us.

 

You may be subject to PRC income tax on dividends from us or on any gain realized on the transfer of shares of our common stock. Please see “Risk Factors- Dividends payable to our foreign investors and gains on the sale of our shares of common stock by our foreign investors may become subject to tax by the PRC.” set forth in the Form 10-K.  

 

We face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies. Please see “Risk Factors- We and our shareholders face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.” set forth in the Form 10-K.

 

We are organized under the laws of the State of Nevada as a holding company that conducts its business through a number of subsidiaries organized under the laws of foreign jurisdictions such as Hong Kong, Singapore and the British Virgin Islands. This may have an adverse impact on the ability of U.S. investors to enforce a judgment obtained in U.S. Courts against these entities, bring actions in Hong Kong against us or our management or to effect service of process on the officers and directors managing the foreign subsidiaries. Please see “Risk Factors- It may be difficult for stockholders to enforce any judgment obtained in the United States against us, which may limit the remedies otherwise available to our stockholders.” set forth in the Form 10-K.

   

iv

 

 

U.S. regulatory bodies may be limited in their ability to conduct investigations or inspections of our operations in China.

 

There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC subsidiary, and dividends payable by our PRC subsidiary to our offshore subsidiaries may not qualify to enjoy certain treaty benefits. Please see “Risk Factors- Our global income may be subject to PRC taxes under the PRC Enterprise Income Tax Law, which could have a material adverse effect on our results of operations.” set forth in the Form 10-K.

 

References in this registration statement to the “Company,” “COSG,” “we,” “us” and “our” refer to Cosmos Group Holdings Inc., a Nevada company and all of its subsidiaries on a consolidated basis. Where reference to a specific entity is required, the name of such specific entity will be referenced.

 

Transfers of Cash to and from Our Subsidiaries

 

Cosmos Group Holdings Inc. is a Nevada holding company with no operations of its own. We conduct our operations in Hong Kong primarily through our subsidiaries in Hong Kong and Singapore. We may rely on dividends or other transfers of cash or assets to be made by our Hong Kong and Singapore subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. If our Hong Kong and Singapore subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us. To date, our subsidiaries have not made any transfers, dividends or distributions to Cosmos Group Holdings Inc. and Cosmos Group Holdings Inc. has not made any transfers, dividends or distributions of cash flows or other assets to our subsidiaries.

 

We do not intend to make dividends or distributions to investors of Cosmos Group Holdings Inc. in the foreseeable future.

 

We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing instruments.

 

Cosmos Group Holdings Inc. (Nevada corporation)

 

Subject to the Nevada Revised Statutes and our bylaws, our board of directors may authorize and declare a dividend to shareholders at such time and of such an amount as they think fit if they are satisfied, on reasonable grounds, that immediately following the dividend the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due. There is no further Nevada statutory restriction on the amount of funds which may be distributed by us by dividend.  Accordingly, Cosmos Group Holdings Inc. is permitted under the Nevada laws to provide funding to our subsidiaries in Singapore and Hong Kong through loans or capital contributions without restrictions on the amount of the funds, subject to satisfaction of applicable government registration, approval and filing requirements.

 

Singapore and Hong Kong Subsidiaries

 

Our Hong Kong subsidiaries and our Singapore subsidiary are also permitted under the laws of Hong Kong and Singapore to provide funding to Cosmos Group Holdings Inc. through dividend distribution without restrictions on the amount of the funds. If our Hong Kong and Singapore subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to us. To date, our subsidiaries have not made any transfers, dividends or distributions to Cosmos Group Holdings Inc. and Cosmos Group Holdings Inc. has not made any transfers, dividends or distributions to our subsidiaries.

 

v

 

 

Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. The laws and regulations of the PRC do not currently have any material impact on transfer of cash from Cosmos Group Holdings Inc. to our Hong Kong subsidiaries or from our Hong Kong subsidiaries to Cosmos Group Holdings Inc. There are no restrictions or limitation under the laws of Hong Kong imposed on the conversion of Hong Kong dollar (“HKD”) into foreign currencies and the remittance of currencies out of Hong Kong or across borders and to U.S. investors.

 

There is a possibility that the PRC could prevent our cash maintained in Hong Kong from leaving or the PRC could restrict the deployment of the cash into our business or for the payment of dividends. Any such controls or restrictions may adversely affect our ability to finance our cash requirements, service debt or make dividend or other distributions to our shareholders. Please see “Risk Factors - “Risk Factors - PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds we receive from offshore financing activities to make loans to or make additional capital contributions to our Hong Kong subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand business.”; “Risk Factors - Because our holding company structure creates restrictions on the payment of dividends or other cash payments, our ability to pay dividends or make other payments is limited.” set forth in the Form 10-K.

 

Current PRC regulations permit PRC subsidiaries to pay dividends to Hong Kong subsidiaries only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation. As of the date of this report, we do not have any PRC subsidiaries.

 

The PRC government imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency to finance our cash requirements, service debt or make dividend or other distributions to our shareholders. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations, we may be unable to pay dividends on our common stock.

  

Cash dividends, if any, on our common stock will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10%.

 

If in the future we have PRC subsidiaries, certain payments from such PRC subsidiaries to Hong Kong subsidiaries will be subject to PRC taxes, including business taxes and VAT. As of the date of this report, we do not have any PRC subsidiaries and our Hong Kong subsidiaries have not made any transfers, dividends or distributions nor do we expect to make such transfers, dividends or distributions in the foreseeable future.

 

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by a PRC subsidiary to its immediate holding company. As of the date of this report, we do not have a PRC subsidiary. In the event that we acquire or form a PRC subsidiary in the future and such PRC subsidiary desires to declare and pay dividends to our Hong Kong subsidiary, our Hong Kong subsidiary will be required to apply for the tax resident certificate from the relevant Hong Kong tax authority. In such event, we plan to inform the investors through SEC filings, such as a current report on Form 8-K, prior to such actions. See “Risk Factors – Risks Relating to Doing Business in Hong Kong.” set forth in the Form 10-K.

 

vi

 

 

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

  

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical facts, included in this Form 10-Q including, without limitation, statements in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, events or developments which the Company expects or anticipates will or may occur in the future, including such things as future capital expenditures (including the amount and nature thereof); expansion and growth of the Company’s business and operations; and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate under the circumstances. However, whether actual results or developments will conform with the Company’s expectations and predictions is subject to a number of risks and uncertainties, including general economic, market and business conditions; the business opportunities (or lack thereof) that may be presented to and pursued by the Company; changes in laws or regulation and other factors, most of which are beyond the control of the Company.

  

These forward-looking statements can be identified by the use of predictive, future-tense or forward-looking terminology, such as “believes,” “anticipates,” “expects,” “estimates,” “plans,” “may,” “will,” or similar terms. These statements appear in a number of places in this filing and include statements regarding the intent, belief or current expectations of the Company, and its directors or its officers with respect to, among other things: (i) trends affecting the Company’s financial condition or results of operations for its limited history; (ii) the Company’s business and growth strategies; and, (iii) the Company’s financing plans. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Such factors that could adversely affect actual results and performance include, but are not limited to, the Company’s limited operating history, potential fluctuations in quarterly operating results and expenses, government regulation, technological change and competition. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to our filings with the SEC under the Exchange Act and the Securities Act of 1933, as amended, including our Current Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2022.

 

Consequently, all of the forward-looking statements made in this Form 10-Q are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The Company assumes no obligations to update any such forward-looking statements.

 

vii

 

 

TABLE OF CONTENTS.

 

        Page
         
PART I FINANCIAL INFORMATION    
         
ITEM 1   Financial Statements   1
         
    Unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022 (Audited)   1
         
    Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2023 and 2022   2
         
    Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022   3
         
    Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three And Nine Months Ended September 30, 2023 and 2022   4
         
    Notes to Unaudited Condensed Consolidated Financial Statements   5-26
         
ITEM 2   Management’s Discussion and Analysis of Financial Condition and Results of Operations   27
         
ITEM 3   Quantitative and Qualitative Disclosures about Market Risk   36
         
ITEM 4   Controls and Procedures   36
         
PART II OTHER INFORMATION    
         
ITEM 1   Legal Proceedings   37
         
ITEM 1A   Risk Factors   37
         
ITEM 2   Unregistered Sales of Equity Securities and Use of Proceeds   37
         
ITEM 3   Defaults upon Senior Securities   37
         
ITEM 4   Mine Safety Disclosures   37
         
ITEM 5   Other Information   37
         
ITEM 6   Exhibits   38
         
SIGNATURES   39

 

viii

 

 

PART I FINANCIAL INFORMATION

 

ITEM 1 Financial Statements

 

COSMOS GROUP HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

   September 30,   December 31, 
   2023   2022 
ASSETS      (Audited) 
Current asset:        
Cash and cash equivalents  $57,888   $2,468,828 
Accounts receivable   7,491,754    
-
 
Loan receivables, net   
-
    17,757,942 
Loan interest and fee receivables, net   
-
    358,872 
Inventories   1,147,109    1,164,887 
Prepayments and other receivables   10,959    701,877 
Income tax receivable   440    
-
 
Right-of-use assets, net   
-
    160,945 
           
Total current assets   8,708,150    22,613,351 
           
Non-current assets:          
Property and equipment, net   1,493    57,087 
Intangible assets, net   10,735,203    13,339,427 
Loan receivables, net   
-
    3,100,057 
           
TOTAL ASSETS  $19,444,846   $39,109,922 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable  $2,794,264   $2,381,429 
Accrued liabilities and other payables   136,084    465,890 
Accrued consulting and service fee   5,077,589    2,851,719 
Loan payables   
-
    1,823,536 
Amounts due to related parties   6,350,245    23,931,078 
Income tax payable   
-
    719,081 
Convertible note payables   215,750    383,058 
Promissory note payables   39,053,735    
-
 
Operating lease liabilities   
-
    136,800 
           
Total current liabilities   53,627,667    32,692,591 
           
Non-current liabilities          
Operating lease liabilities:   
-
    29,725 
           
TOTAL LIABILITIES   53,627,667    32,722,316 
           
Commitments and contingencies   
-
    
-
 
           
STOCKHOLDERS’ EQUITY          
Common stock, $0.001 par value; 5,000,000,000 shares authorized; 1,870,992,244 and 454,398,143 issued and outstanding as of September 30, 2023 and December 31, 2022   1,870,992    454,398 
Common stock to be issued   
-
    400,000 
Additional paid-in capital   156,694,284    133,631,985 
Accumulated other comprehensive income (loss)   (90,971)   18,554 
Accumulated deficit   (192,659,942)   (128,107,220)
    (34,192,777)   6,397,717 
Noncontrolling interest   9,956    (10,111)
           
Stockholders’ equity   (34,182,821)   6,387,606 
           
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $19,444,846   $39,109,922 

 

See accompanying notes to unaudited condensed consolidated financial statements.

1

 

 

COSMOS GROUP HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

   Three months ended
September 30,		   Nine months ended
September 30,		 
   2023   2022   2023   2022 
                 
Revenue, net  $
-
   $2,493,100   $597,351   $8,051,436 
                     
Cost of revenue   53,372    (311,620)   (313,601)   (1,118,755)
                     
Gross profit   53,372    2,181,480    283,750    6,932,681 
Operating expenses:                    
Sales and marketing expenses   9    (491,783)   (5,641)   (26,495,720)
Corporate development expense   (13,905)   (510,786)   (71,113)   (26,242,917)
Technology and development expense   (18,489)   (273,839)   (35,369)   (32,832,406)
Metaverse and AI development expense   
-
    (5,000,000)   
-
    (5,000,000)
General and administrative expenses   (1,068,316)   (3,607,243)   (15,425,508)   (7,192,879)
Total operating expenses   (1,100,701)   (9,883,651)   (15,537,631)   (97,763,922)
                     
LOSS FROM CONTINUING OPERATION   (1,047,329)   (7,702,171)   (15,253,881)   (90,831,241)
                     
Other income (expense):                    
Interest income   99    84    191    90 
Convertible notes interest expense   (4,516)   (979)   (14,947)   (979)
Gain (loss) on disposal of digital assets   
-
    206    
-
    206 
Impairment loss on digital assets   
-
    (2,477)   
-
    (12,633)
Impairment loss on goodwill   (51,231)   
-
    (51,231)   
-
 
Loan interest expense   (46,006)   (1,360)   (123,244)   (1,360)
Loss on disposal of subsidiaries   (48,610,283)   
-
    (48,610,283)   
-
 
Sundry income   
-
    
-
    
-
    506 
Total other expense, net   (48,711,937)   (4,526)   (48,799,514)   (14,170)
                     
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES   (47,043,982)   (7,706,697)   (64,053,395)   (90,845,411)
Income tax expense   
-
    (188,878)   -    (546,146)
LOSS FROM CONTINUING OPERATIONS   (47,043,982)   (7,895,575)   (64,053,395)   (91,391,557)
DISCONTINUED OPERATIONS:                    
Loss from discontinued operations, net of income taxes   (2,729,883)   546,942    (489,506)   1,033,902 
NET LOSS        (7,348,633)        (90,357,655)
Net income (loss) attributable to noncontrolling interest   9,821    (156,049)   9,821    (113,468)
Net loss attributable to common shareholders   (49,783,686)   (7,192,584)   (64,552,722)   (90,244,187)
Other comprehensive (loss) income:                    
Foreign currency adjustment loss   (115,862)   (11,403)   (109,525)   (15,923)
COMPREHENSIVE LOSS  $(49,899,548)  $(7,203,987)  $(64,662,247)  $(90,260,110)
Net loss per share:                    
– Basic  $(0.03)  $(0.02)  $(0.06)  $(0.24)
– Diluted  $(0.03)  $(0.02)  $(0.06)  $(0.24)
Weighted average common shares outstanding                    
– Basic   1,846,177,793    385,604,067    1,160,062,852    374,086,727 
– Diluted   1,846,177,793    385,604,067    1,160,062,852    374,086,727 
                 
Share-based compensation expense included in operating expenses:                    
Sales and marketing expenses  $
-
   $150,225   $
-
   $25,913,695 
Corporate development expense   
-
    333,225    
-
    25,646,926 
Technology and development expense   
-
    45,000    
-
    32,105,000 
General and administrative expenses   22,500    2,172,839    12,316,110    2,811,839 
   $22,500   $2,701,289   $12,316,110   $86,477,460 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

2

 

 

COSMOS GROUP HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Currency expressed in United States Dollars (“US$”))

 

   Nine months ended
September 30,		 
   2023   2022 
Cash flows from operating activities:        
Net loss  $(64,053,395)  $(90,357,655)
Less: net loss from discontinued operations   (489,506)   1,033,902 
Net loss from continuing operations   (64,053,395)   (91,391,557)
           
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:          
Depreciation of property and equipment   663    6,341 
Amortization of intangible assets   2,524,214    2,979,763 
Imputed interest expense   
-
    714,696 
Digital assets received as revenue   
-
    (8,025,885)
Digital assets paid for expense   
-
    8,029,743 
Loss on disposal of digital assets   
-
    (206)
Impairment loss on digital assets   
-
    12,633 
Impairment loss on goodwill   (51,231)   
-
 
Shares issued for services rendered   10,322,092    83,856,800 
Loss on disposal of subsidiaries   48,610,283    
-
 
           
Change in operating assets and liabilities:          
Accounts receivable   (583,113)   
-
 
Loan receivables   
-
    (1,429,750)
Loan interest and fee receivables   
-
    184,327 
Inventories   17,778    (975,512)
Prepayment and other receivables   6,497    51,114 
Accrued liabilities and other payables   (174,252)   54,977 
Accrued consulting and service fee   2,225,870    2,642,821 
Accounts payables   
-
    1,977,320 
Right-of-use assets and operating lease liabilities   
-
    (60,662)
Produced content cost   
-
    (67,272)
Income tax payable   
-
    546,146 
Net cash (used in) provided by operating activities – Continuing operations   (1,644,100)   139,739 
Net cash provided by operating activities – Discontinued operations   910,644    
-
 
Net cash (used in) provided by operating activities   (816,278)   139,739 
           
Cash flows from investing activities:          
Payment to acquire property and equipment   
-
    (2,858)
Payment to acquire intangible assets   (145)   (1,874)
Cash from acquisition of subsidiary   10,246    33,322 
Net cash provided by investing activities – Continuing operations   10,101    28,590 
Net cash provided by investing activities – Discontinued operations   
-
    
-
 
Net cash provided by investing activities   10,101    28,590 
           
Cash flows from financing activities:          
Proceeds from loan payables   
-
    327,110 
(Repayment to) advance from related parties   (429,660)   59,684 
(Repayment to) proceeds from convertible note payables   (197,033)   312,952 
Net cash (used in) provided by financing activities – Continuing operations   (626,693)   699,746 
Net cash (used in) provided by financing activities – Discontinued operations   (739,800)   
-
 
Net cash (used in) provided by financing activities   (1,366,493)   699,746 
           
Foreign currency translation adjustment   (321,092)   (24,156)
           
Net change in cash and cash equivalents   (2,410,940)   843,919 
           
BEGINNING OF PERIOD   2,468,828    1,131,128 
           
END OF PERIOD  $57,888   $1,975,047 
           
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:          
Cash paid for income taxes  $
-
   $
-
 
Cash paid for interest  $94,782   $367,337 

 

 See accompanying notes to unaudited condensed consolidated financial statements.

3

 

 

COSMOS GROUP HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

 

    Common stock     Common
stock		     Additional     Accumulated
other		           Non-     Total
stockholders’		  
    No. of
shares		     Amount     to be
issued		     paid- in capital     comprehensive
(loss) income		     (Accumulated
losses)		     controlling
interest		     equity
(deficit)		  
Balance as of January 1, 2023     454,398,143     $ 454,398     $ 400,000       133,631,985     $ 18,554     $ (128,107,220 )   $ (10,111 )   $ 6,387,606  
Foreign currency translation adjustment     -       -       -       -       36,829       -       -       36,829  
Imputed interest on related party loans     -       -       -       237,118       -       -       -       237,118  
Share issued for services rendered     2,602,772       2,603       -       166,249       -       -       -       168,852  
Net loss for the period     -       -       -       -       -       (2,616,322 )     -       (2,616,322 )
Balance as of March 31, 2023     457,000,915     $ 457,001     $ 400,000       134,035,352     $ 55,383     $ (130,723,452 )   $ (10,111 )   $ 4,214,083  
Foreign currency translation adjustment     -       -       -       -       (30,492 )     -       -       (30,492 )
Imputed interest on related party loans     -       -       -       223,775       -       -       -       223,775  
Share issued for services rendered     1,013,074,000       1,013,074       -       9,117,666       -       -       -       10,130,740  
Net loss for the period     -       -       -       -       -       (12,152,714 )             (12,152,714 )
Balance as of June 30, 2023     1,470,074,915     $ 1,470,075     $ 400,000     $ 143,376,793     $ 24,891     $ (142,876,256 )   $ (10,111 )   $ 2,385,392  
Foreign currency translation adjustment     -       -       -       -       (115,862 )     -       -       (115,862 )
Shares cancelled     (352,941 )     (353 )     -       353       -       -       -       -  
Shares cancelled for disposal of subsidiaries     (8,119,657 )     (8,120 )     -       13,296,888       -       -       -       13,288,768  
Share issued for services rendered     2,250,000       2,250       -       20,250       -       -       -       22,500  
Share issued for acquisition of subsidiaries     400,000,000       400,000       (400,000 )     -       -       -       10,246       10,246  
Net loss for the period     -       -       -       -       -       (49,783,686 )     9,821       (49,773,865 )
Balance as of September 30, 2023     1,863,852,317     $ 1,863,852     $ -     $ 156,694,284     $ (90,971 )   $ (192,659,942 )   $ 9,956     $ (34,182,821 )

 

    Common stock     Common
stock		     Additional     Accumulated other     (Accumulated
losses)		     Non-     Total
 stockholders’		  
    No. of
shares		     Amount     to be
issued		     paid- in capital     comprehensive
loss		     retained earnings     controlling
interest		     (deficit)
equity		  
Balance as of January 1, 2022     358,067,481     $ 358,067     $ 806,321     $ 44,930,337     $ (7,588 )   $ (26,436,477 )   $ 118,409     $ 19,769,069  
Foreign currency translation adjustment     -       -       -       -       (10,442 )     -       -       (10,442 )
Imputed interest on related party loans     -       -       -       236,336       -       -       -       236,336  
Commitment Share issued for private placement     100,000       100       -       (100 )     -       -       -       -  
Share issued for acquired subsidiary     153,060       154       -       612,086       -       -       12,966       625,206  
Net loss for the period     -       -       -       -       -       (62,391,753 )     (3,391 )     (62,395,144 )
Balance as of March 31, 2022     358,320,541     $ 358,321     $ 806,321     $ 45,778,659     $ (18,030 )   $ (88,828,230 )   $ 127,984     $ (41,774,975 )
Foreign currency translation adjustment     -       -       -       -       5,922       -       -       5,922  
Imputed interest on related party loans     -       -       -       241,872       -       -       -       241,872  
Share issued for service rendered     26,985,556       26,985       (6,321 )     82,636,136                               82,656,800  
Net loss for the period     -       -       -       -       -       (20,659,850 )     45,972       (20,613,878 )
Balance as of June 30, 2022     385,306,097     $ 385,306     $ 800,000     $ 128,656,667     $ (12,108 )   $ (109,488,080 )   $ 173,956     $ 20,515,741  
Foreign currency translation adjustment     -       -       -       -       (11,403 )     -       -       (11,403 )
Imputed interest on related party loans     -       -       -       234,959       -       -       -       234,959  
Share issued for service rendered     1,452,785       1,452       -       1,198,548       -       -               1,200,000  
Share issued for the acquisition of a subsidiary     164,516       165       -       246,609       -               (16,117 )     230,657  
Net loss for the period     -       -       -       -       -       (7,192,584 )     (156,049 )     (7,348,633 )
Balance as of September 30, 2022     386,923,398     $ 386,923     $ 800,000     $ 130,336,783     $ (23,511 )   $ (116,680,664 )   $ 1,790     $ 14,821,321  

 

 See accompanying notes to unaudited condensed consolidated financial statements.

 

4

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

NOTE 1 – BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the consolidated balance sheet as of December 31, 2022 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2023 or for any future period.

 

NOTE 2 – ORGANIZATION AND BUSINESS BACKGROUND

 

Cosmos Group Holdings Inc. (the “Company” or “COSG”) was incorporated in the state of Nevada on August 14, 1987.

 

The Company currently offers financial and money lending services in Hong Kong and operates an online platform for the sale and distribution of arts and collectibles around the world, through the use of blockchain technologies and minting token.

 

On September 30, 2023, the Company discontinued and disposed the money lending business.

 

5

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

Description of subsidiaries 

 

Company name  Place of incorporation
and kind of legal entity		  Principal activities
and place of
operation		  Particulars of
registered/ paid up
share capital		  Effective
interest
held		 
Massive Treasure Limited  BVI, limited liability company  Investment holding  50,000 ordinary shares with a par value of US$1 each   100%
               
Coinllectibles DeFi Limited  Hong Kong, limited liability company  Financing service management in Hong Kong  10,000 ordinary shares for HK$10,000   100%
               
Coinllectibles Private Limited  Singapore, limited liability company  Corporate management and IT development in Singapore  1,000 ordinary shares for S$1,000   100%
               
Healthy Finance Limited#  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
8M Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  10 ordinary shares for HK$10   100%
               
Dragon Group Mortgage Limited#  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
E-on Finance Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  2 ordinary shares for HK$2   100%
               
Lee Kee Finance Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  920,000 ordinary shares for HK$920,000   51%
               
Rich Finance (Hong Kong) Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
Long Journey Finance Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  100 ordinary shares for HK$100   51%
               
Vaav Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
Star Credit Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  1,000,000 ordinary shares for HK$1,000,000   51%
               
NFT Limited  BVI, limited liability company  Procurement of intangible assets in Hong Kong  10,000 ordinary shares with a par value of US$1 each   51%
               
Grandway Worldwide Holding Limited  BVI, limited liability company  Development of mobile application  50,000 ordinary shares for USD$50,000   51%
               
Grand Town Development Limited  Hong Kong, limited liability company  Provision treasury management  2 ordinary shares for HK$2   100%
               
Grand Gallery Limited  Hong Kong, limited liability company  Procurement of art and collectibles in Hong Kong  400,000 ordinary shares for HK$400,000   80%
               
Phoenix Waters Group Limited  BVI, limited liability company  Investment holding  50,000 ordinary shares with a par value of US$1 each   100%

 

#These subsidiaries were disposed on June 30, 2023
^These subsidiaries were disposed on September 30, 2023

 

The Company and its subsidiaries are hereinafter referred to as (the “Company”).

 

6

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying unaudited condensed consolidated financial statements and notes.

 

● Basis of presentation

 

These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

 

● Use of estimates and assumptions 

 

In preparing these unaudited condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates. If actual results significantly differ from the Company’s estimates, the Company’s financial condition and results of operations could be materially impacted. Significant estimates in the period include impairment loss on loan receivables, useful lives of intangible assets and property and equipment and deferred tax valuation allowance.

 

● Discontinued operations

 

On September 30, 2023, the Company disposed the lending segment and related assets and liabilities have been accounted for as discontinued operations in the Company’s condensed consolidated balance sheets for all periods presented. The operating results related to these lines of business have been included in discontinued operations in the Company’s unaudited condensed consolidated statement of operations for all periods presented.

 

● Basis of consolidation

 

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

 

● Segment reporting

 

Accounting Standard Codification (“ASC”) Topic 280, Segment Reporting establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in condensed consolidated financial statements. The Company operates in two reportable operating segments in Hong Kong and Singapore. Lending segment was discontinued and disposed on September 30, 2023.

 

● Cash and cash equivalents

 

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

 

● Inventories

 

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The cost includes the purchase cost of arts and collectibles from related party and independent artists and the costs associated with token minting for collectible pieces. The Company will reduce inventory on hand to its net realizable value on an item-by-item basis when it is apparent that the expected realizable value of an inventory item falls below its original cost. A charge to cost of sales results when the estimated net realizable value of specific inventory items declines below cost. Management regularly reviews the Company’s inventories for such declines in value. Although inventories are classified as current assets in the accompanying balance sheets, the Company anticipates that certain inventories will be sold beyond twelve months from September 30, 2023.

 

7

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

● Loan receivables, net (discontinued operations)

 

Loans receivables are carried at unpaid principal balances, less the allowance for loan losses and charge-offs. The loans receivables portfolio consists of real estate mortgage loans, commercial and personal loans.

 

Loans are placed on nonaccrual status when they are past due 180 days or more as to contractual obligations or when other circumstances indicate that collection is not probable. When a loan is placed on nonaccrual status, any interest accrued but not received is reversed against interest income. Payments received on a nonaccrual loan are either applied to protective advances, the outstanding principal balance or recorded as interest income, depending on an assessment of the ability to collect the loan. A nonaccrual loan may be restored to accrual status when principal and interest payments have been brought current and the loan has performed in accordance with its contractual terms for a reasonable period (generally six months).

 

If the Company determines that a loan is impaired, the Company next determines the amount of the impairment. The amount of impairment on collateral dependent loans is charged off within the given fiscal quarter. Generally, the amount of the loan and negative escrow in excess of the appraised value less estimated selling costs, for the fair value of collateral valuation method, is charged off. For all other loans, impairment is measured as described below in Allowance for Loan Losses.

 

● Allowance for loan losses (“ALL”)

 

The adequacy of the Company’s ALL is determined, in accordance with ASC Topic 450-20 Loss Contingencies includes management’s review of the Company’s loan portfolio, including the identification and review of individual problem situations that may affect a borrower’s ability to repay. In addition, management reviews the overall portfolio quality through an analysis of delinquency and non-performing loan data, estimates of the value of underlying collateral, current charge-offs and other factors that may affect the portfolio, including a review of regulatory examinations, an assessment of current and expected economic conditions and changes in the size and composition of the loan portfolio. 

 

The ALL reflects management’s evaluation of the loans presenting identified loss potential, as well as the risk inherent in various components of the portfolio. There is significant judgment applied in estimating the ALL. These assumptions and estimates are susceptible to significant changes based on the current environment. Further, any change in the size of the loan portfolio or any of its components could necessitate an increase in the ALL even though there may not be a decline in credit quality or an increase in potential problem loans.

 

● Property and equipment

 

Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

 

   Expected useful life
Computer and office equipment  5 years

 

Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

 

Depreciation expense for the nine months ended September 30, 2023 and 2022 totaled $3,579 and $6,341, respectively.

 

Depreciation expense for the three months ended September 30, 2023 and 2022 totaled $1,984 and $2,016, respectively.

 

8

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

● Intangible assets

 

The Company accounts for its intangible assets in accordance with ASC 350. Intangible assets represented the acquired technology software, licensed technology know-how, trademark and trade names for its internal use to facilitate and support its platform operation. They are stated at the purchase cost and are amortized based on their economic benefit expected to be realized.

 

● Impairment of long-lived assets

 

In accordance with the provisions of ASC Topic 360, Impairment or Disposal of Long-Lived Assets, all long-lived assets such as property and equipment and intangible assets owned and held by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.

 

● Revenue recognition

 

ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

 

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

  ● identify the contract with a customer;
     
  ● identify the performance obligations in the contract;
     
  ● determine the transaction price;
     
  ● allocate the transaction price to performance obligations in the contract; and
     
  ● recognize revenue as the performance obligation is satisfied.

 

9

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product and collection is reasonably assured. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct.

 

Arts and Collectibles Technology Business (Continuing operations)

 

The Company currently operates its online platform in the sale and distribution of arts and collectibles, with the use of blockchain technologies and minting tokens. The item of arts and collectibles is individually monetized as non-interchangeable unit of data stored on a blockchain, which is a form of digital ledger that can be sold, in the form of a minting token on the online platform. The Company involves with the following activities to earn its revenue in this segment:

 

Sale of arts and collectibles products: The Company recognizes revenue derived from the sales of the arts and collectibles when the Company has transferred the risks and rewards to the customers.

 

The minted item of the individual art or collectible which is sold in crypto asset transaction is the only performance obligation under the fixed-fee arrangements. The corresponding fees received upon each sale transaction is recognized as revenue, is recognized when the designated token, minted with the corresponding art and collectibles is delivered to the end user, together with the transfer of both digital and official title.

 

Transaction fee income:

 

The Company also generates revenue through transaction fees transacted on its platform or other marketplaces. The Company charges a fee to individual customer at the secondary transaction level, which is allocated to the single performance obligation. The transaction fee is collected from the customer in digital assets, with revenue measured based on a certain percentage of the value of digital assets at the time the transaction is executed.

 

The Company’s service comprises of a single performance obligation to provide a platform facilitating the transfer of its DOTs. The Company considers its performance obligation satisfied, and recognizes revenue, at the point in time the transaction is processed.

 

In this segment, the transaction consideration that the Company receives is a non-cash consideration in the form of digital assets, which are cryptocurrencies. The Company measures the related cryptocurrencies at fair value on the date received, at the same time, the revenue is recognized. Fair value of the digital asset award received is determined using the average U.S. dollar spot rate of the related digital currency at the time of receipt.

 

Expenses associated with operating the Arts and Collectibles Technology Business, such as minting cost and purchase cost of collectibles and artworks are also recorded as cost of revenues.

 

Lending Business (discontinued operations)

 

The Company is licensed to originate personal loan, company loan and mortgage loan in Hong Kong. During the nine months ended September 30, 2023 and 2022, the Company originated loans generally ranging from $644 to $579,000, with terms ranging from 1 week to 120 months. The Company mainly derives a portion of its revenue from loan which is specifically excluded from the scope of this standard, that is, interest on loan receivable is accrued monthly and credited to income as earned.

 

10

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

● Leases

 

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use assets may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

 

In accordance with the guidance in ASC Topic 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.

 

The Company made the policy election to not separate lease and non-lease components. Each lease component and the related non-lease components are accounted for together as a single component.

 

● Income taxes

 

The Company adopted the ASC Topic 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

 

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

 

● Uncertain tax positions

 

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC Topic 740 provisions of Section 740-10-25 for the nine months ended September 30, 2023 and 2022.

 

11

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

● Foreign currencies translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.

 

The reporting currency of the Company is United States Dollar (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company has operations in Hong Kong and Singapore and maintains the books and record in the local currency, Hong Kong Dollars (“HKD”) and Singapore Dollars (“SGD”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, Translation of Financial Statement, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholder’s equity.

 

Translation of amounts from HKD and SGD into US$ has been made at the following exchange rates for the following periods:

 

   September 30,
2023		   September 30,
2022		 
Period-end HKD:US$ exchange rate   0.1277    0.1274 
Period average HKD:US$ exchange rate   0.1277    0.1277 

 

   September 30,
2023		   September 30,
2022		 
Period-end SGD:US$ exchange rate   0.7316    0.6973 
Period average SGD:US$ exchange rate   0.7458    0.7271 

 

● Comprehensive income

 

ASC Topic 220, Comprehensive Income, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying consolidated statements of changes in stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

 

● Net loss per share

 

The Company calculates net loss per share in accordance with ASC Topic 260, Earnings per Share. Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 

12

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

● Stock based compensation

 

Pursuant to ASU 2018-07, the Company follows ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all share-based payment awards (employee or non-employee), are measured at grant-date fair value of the equity instruments that an entity is obligated to issue. Restricted stock units are valued using the market price of the Company’s common shares on the date of grant. The Company uses a Black-Scholes option model to estimate the fair value of employee stock options at the date of grant. As of September 30, 2023, those shares issued and stock options granted for service compensations were immediately vested, and therefore these amounts are thus recognized as expense in the operation.

 

● Related parties

 

The Company follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.

 

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

The condensed consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

● Commitments and contingencies

 

The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the 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 assesses 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 un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

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 consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

13

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

● Fair value of financial instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

 

  Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
     
  Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
     
  Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

14

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, loan and fee receivable, prepayments and other receivables, amounts due from related parties, accrued liabilities and other payables, loans payable, amounts due to related parties approximate their fair values because of the short maturity of these instruments.

 

●Recent accounting pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

NOTE 4 – GOING CONCERN UNCERTAINTIES

 

The accompanying unaudited condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

The Company has suffered from an accumulated deficit of $192,659,942 and working capital of $44,919,517 at September 30, 2023. The continuation of the Company as a going concern in the next twelve months is dependent upon the continued financial support from its stockholders. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

 

These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

 

NOTE 5 – DISPOSAL OF SUBSIDIARIES 

 

During the nine months ended September 30, 2023, the Company disposed the lending segment and sold all equity interest. A loss of $48,610,283 was recognized from the disposal of subsidiaries.

 

NOTE 6 – REVENUE FROM CONTRACTS WITH CUSTOMERS

 

The following is a disaggregation of the Company’s revenue by major source for the respective periods:

 

   Three months ended
September 30,		   Nine months ended
September 30,		 
   2023   2022   2023   2022 
                 
Interest income (from discontinued operation)  $1,911   $1,517,764   $3,100,102   $4,833,433 
ACT income                    
- Sale of arts and collectibles products   
-
    418,998    595,590    1,825,448 
- Transaction fee income and others   
-
    2,074,102    
-
    6,225,988 
    
-
    2,493,100    595,590    8,051,436 
                     
   $1,911   $4,010,864   $3,695,692   $12,884,869 

 

15

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

NOTE 7 – BUSINESS SEGMENT INFORMATION

 

Currently, the Company has two reportable business segments:

 

  (i) Lending Segment, mainly provides financing and lending services (discontinued on September 30, 2023); and
     
  (ii) Arts and Collectibles Technology (“ACT”) Segment, mainly operates an online platform to sell and distribute the arts and collectibles to end-users, with the use of blockchain technologies.

 

In the following table, revenue is disaggregated by primary major product line, and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments.

 

   Three months ended
September 30, 2023		 
   Lending
Segment (discontinued operation)		   ACT
Segment		   Total 
Revenue from external customers:            
Interest income  $1,911    
-
    1,911 
Arts and collectibles technology income   
-
    
-
    
-
 
Total revenue, net   1,911    
-
    1,911 
                
Cost of revenue:               
Interest expense   (58)   
-
    (58)
Arts and collectibles technology expense   
-
    53,327    53,327 
Total cost of revenue   (58)   53,327    53,314 
                
Gross profit   1,853         55,225 
                
Operating expenses               
Sales and marketing   (74)   9    (65)
Corporate development   
-
    (13,905)   (13,905)
Technology and development   
-
    (18,489)   (18,489)
General and administrative   (15,908)   (1,068,316)   (1,084,224)
Total operating expenses   (15,982)   (1,100,701)   (1,116,683)
                
Loss from operations   (14,129)   (1,047,329)   (1,061,458)
                
Other income (expense):               
Interest income   1    99    100 
Convertible notes interest expense   
-
    (4,516)   (4,516)
Impairment loss on goodwill   
-
    (51,231)   (51,231)
Imputed interest expense   (284)   
-
    (284)
Loan interest expense   
-
    (46,006)   (46,006)
Loss on disposal of subsidiaries   (48,609,336)   (947)   (48,610,283)
Sundry income   32    
-
    32 
Total other expenses, net   (48,609,587)   (102,601)   (48,712,188)
                
Segment loss  $(48,623,716)   (1,149,930)   (49,773,646)

 

16

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

   Three months ended September 30, 2022 
  

Lending
Segment

(discontinued operation)

   ACT
Segment		   Total 
Revenue from external customers:            
Interest income  $1,517,764   $
-
   $1,517,764 
Arts and collectibles technology income   
-
    2,493,100    2,493,100 
Total revenue, net   1,517,764    2,493,100    4,010,864 
                
Cost of revenue:               
Interest expense   (27,046)   
-
    (27,046)
Arts and collectibles technology expense   
-
    (311,620)   (311,620)
Total cost of revenue   (27,046)   (311,620)   (338,666)
                
Gross profit   1,490,718    2,181,480    3,672,198 
                
Operating expenses               
Sales and marketing   (7,681)   (491,783)   (499,464)
Corporate development   
-
    (510,786)   (510,786)
Technology and development   
-
    (273,839)   (273,839)
Metaverse and AI development   
-
    (5,000,000)   (5,000,000)
General and administrative   (737,558)   (3,607,243)   (4,344,801)
Total operating expenses   (745,239)   (9,883,651)   (10,628,890)
                
Income (loss) from operations   745,479    (7,702,171)   (6,956,692)
                
Other income (expense):               
Interest income   104    84    188 
Gain (loss) on disposal of digital assets   
-
    206    206 
Impairment loss on digital assets   
-
    (2,477)   (2,477)
Convertible notes interest expense   
-
    (979)   (979)
Loan interest expense   
-
    (1,360)   (1,360)
Imputed interest expense   (235,205)   
-
    (235,205)
Sundry income   36,564    
-
    36,564 
Total other expense, net   (198,537)   (4,526)   (203,063)
                
Segment income (loss)  $546,942   $(7,706,697)  $(7,159,755)

 

17

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

   Nine months ended September 30, 2023 
  

Lending

Segment (discontinued operation)

  

ACT

Segment

   Total 
Revenue from external customers:            
Interest income  $3,100,102    -    3,100,102 
Arts and collectibles technology income   
-
    597,351    597,351 
Total revenue, net   3,100,102    597,351    3,697,453 
                
Cost of revenue:               
Interest expense   (94,782)   -    (94,782)
Arts and collectibles technology expense   
-
    (313,601)   (313,601)
Total cost of revenue   (94,782)   (313,601)   (408,383)
                
Gross profit   3,005,320    283,750    3,289,070 
                
Operating Expenses               
Sales and marketing   (119,300)   (5,641)   (124,941)
Corporate development   
-
    (71,113)   (71,113)
Technology and development   
-
    (35,369)   (35,369)
General and administrative   (4,792,862)   (13,244,612)   (18,037,474)
Total operating expenses   (4,912,162)   (13,356,735)   (18,268,897)
                
Loss from operations   (1,906,842)   (13,074,746)   (14,979,827)
                
Other income (expense):               
Interest income   1,976    191    2,167 
Convertible notes interest expense   
-
    (14,947)   (14,947)
Impairment loss on goodwill   
-
    (51,231)   (51,231)
Imputed interest expense   (461,179)   
-
    (461,179)
Loan interest expense   
-
    (123,244)   (123,244)
Loss on disposal of subsidiaries   (48,609,336)   (947)   (48,610,283)
Sundry income   51,324    
-
    51,324 
Total other expenses, net   (49,017,215)   (190,178)   (49,207,393)
                
Segment loss  $(50,924,057)   (13,263,163)   (64,187,220)

 

18

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

   Nine months ended September 30, 2022 
  

Lending
Segment

(discontinued operation)

  

ACT

Segment

   Total 
Revenue from external customers:            
Interest income  $4,833,433   $
-
   $4,833,433 
Arts and collectibles technology income   
-
    8,051,436    8,051,436 
Total revenue, net   4,833,433    8,051,436    12,884,869 
                
Cost of revenue:               
Interest expense   (367,337)   
-
    (367,337)
Arts and collectibles technology expense   
-
    (1,118,755)   (1,118,755)
Total cost of revenue   (367,337)   (1,118,755)   (1,486,092)
                
Gross profit   4,466,096    6,932,681    11,398,777 
                
Operating expenses               
Sales and marketing   (260,599)   (26,495,720)   (26,756,319)
Corporate development   
-
    (26,242,917)   (26,242,917)
Technology and development   
-
    (32,832,406)   (32,832,406)
Metaverse and AI development   
-
    (5,000,000)   (5,000,000)
General and administrative   (2,550,218)   (7,192,879)   (9,743,097)
Total operating expenses   (2,810,817)   (97,763,922)   (100,574,739)
                
Income (loss) from operations   1,655,279    (90,831,241)   (89,175,962)
                
Other income (expense):               
Interest income   211    90    301 
Gain on disposal of digital assets   
-
    206    206 
Impairment loss on digital assets   
-
    (12,633)   (12,633)
Convertible notes interest expense   
-
    (979)   (979)
Loan interest expense   
-
    (1,360)   (1,360)
Imputed interest expense   (714,696)   
-
    (714,696)
Sundry income   93,108    506    93,614 
Total other expense, net   (621,377)   (14,170)   (635,547)
                
Segment income (loss)  $1,033,902   $(90,845,411)  $(89,811,509)

 

The below revenues are based on the countries in which the customer is located. Summarized financial information concerning the geographic segments is shown in the following tables:

 

   Three months ended
September 30,		   Nine months ended
September 30,		 
   2023   2022   2023   2022 
                 
Hong Kong  $1,911    1,517,764   $3,100,102    4,833,433 
Around the world   
-
    2,493,100    597,351    8,051,436 
                     
    1,911    4,010,864    3,697,453    12,884,869 

 

19

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

NOTE 8 – INTANGIBLE ASSETS, NET

 

A summary of intangible assets as of September 30, 2023 and December 31, 2022 is as follows:

 

  

Estimated

useful life

 

September  30,
2023

  

December 31,
2022

 
At cost:           
Acquired technology software  5 years  $17,344,690   $17,344,690 
Trademarks and trade name  10 years   39,415    39,270 
Less: accumulated amortization      (6,657,665)   (4,052,889)
Foreign translation adjustment      8,763    8,356 
      $10,735,203   $13,339,427 

 

As of September 30, 2023, the estimated annual amortization expense for intangible assets for each of the succeeding five years and thereafter is as follows

 

Period ending September 30:    
2024  $3,473,760 
2025   3,473,760 
2026   3,473,760 
2027   293,890 
2028   4,812 
Thereafter   15,221 
   $10,735,203 

 

Amortization of intangible assets for the three months ended September 30, 2023 and 2022 totaled $868,260 and $993,257, respectively.

 

Amortization of intangible assets for the nine months ended September 30, 2023 and 2022 totaled $2,604,776 and $2,979,763, respectively.

 

NOTE 9 – ACCRUED CONSULTING AND SERVICE FEE

 

For the nine months ended September 30, 2023, the Company agreed to compensate certain business or professional service providers, in which rendered IT development service, sale and marketing service, corporate development service and administrative service. These accrued consulting and service fees totaled $5,077,589 and agreed to be settled in lieu of the common stock of the Company. 

 

NOTE 10 – LOAN PAYABLES

 

The amounts represented temporary advances received from the third parties for the lending business, which carried annual interest at the rate of 18% to 21%. These amounts were unsecured and will become repayable within one year. The loan payable balance was $0 and $1,823,536 as of September 30, 2023 and December 31, 2022, respectively.

 

Interest related to the loan payables was $46,006 and $27,046 for the three months ended September 30, 2023 and 2022, respectively.

 

Interest related to the loan payables was $123,244 and $367,337 for the nine months ended September 30, 2023 and 2022, respectively.

 

20

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

NOTE 11 – AMOUNTS DUE TO RELATED PARTIES

 

The amounts represented temporary advances to the Company for the lending business, which were unsecured, interest-free and had no fixed terms of repayments. The related party balances were $6,350,245 and $23,931,078 as of September 30, 2023 and December 31, 2022, respectively.

 

During the three and nine months ended September 30, 2023, the Company recorded and imputed additional non-cash interest of $0 and $0 at the market rate of 5% per annum on these interest-free related party loans, under ASC 835-30 “Imputation of Interest”.

 

NOTE 12 – CONVERTIBLES NOTE PAYABLES

 

Securities purchase agreement and related convertible note

 

Chan Hin Yip Note

 

On August 2, 2022, the Company entered into a Sale and Purchase Agreement (“SPA”) with CHAN Hin Yip, pursuant to which the Company agreed to purchase approximately 58 collectible items from Mr. Chan for a purchase price of HKD1,305,000 (approximately USD $167,308) (the “Purchase Price”), through its subsidiaries holds approximately 80% of the issued and outstanding securities of Grand Gallery Limited (“GGL”), and Mr. Chan is a director and 5% equity owner of GGL.

 

On August 2, 2022, the Company and Mr. Chan entered into a Note Purchase Agreement (“Chan Hin Yip Note”) pursuant to which the Company agreed to pay the Purchase Price via a promissory note that will be converted into shares of the Company’s common stock at a conversion price equal to 90% of the volume weighted average closing price of the Company’s common stock for the ten days immediately prior to February 2, 2023. The Chan Hin Yip Note bears interest at 1% per annum and is due on February 2, 2023. At the date of this report, Chan Hin Yip Note is currently in default.

 

Root Ventures Note

 

On November 11, 2022, the Company and Root Ventures, LLC (“Root Ventures”) entered into a Securities Purchase Agreement, whereby the Company issued a promissory note to Root Ventures (“Root Ventures Note”) in the original principal amount of $33,000. The Root Ventures Note is convertible into shares of the common stock of the Company one hundred eighty (180) days following the date of funding at a price equal to 60% of the average of two (2) lowest trading price of the Company’s common stock for the fifteen (15) trading days prior to conversion. The Root Ventures Note bears interest at 10% per annum and is due on November 10, 2023.

 

1800 Diagonal Note

 

On August 26, 2022, the Company and 1800 Diagonal Lending LLC (“1800 Diagonal”) entered into a Securities Purchase Agreement, whereby the Company issued a promissory note to 1800 Diagonal (“1800 Diagonal Note”) in the original principal amount of $89,250. The 1800 Diagonal Note is convertible into shares of the common stock of the Company one hundred eighty (180) days following the date of funding at a price equal to 65% of the average of two (2) lowest trading price of the Company’s common stock for the twenty (20) trading days prior to conversion. The Company has the option to prepay the 1800 Diagonal Note by paying an amount equal to the then outstanding amount multiplied by premium percentage during the first one hundred eighty (180) days. The 1800 Diagonal Note bears interest at 8% per annum and is due on August 26, 2023.

 

As of September 30, 2023 and December 31, 2022, the Company did not prepay the convertible note payables and accrued convertible notes interest expense of $123,244 and $979, respectively.

 

21

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

NOTE 13 – STOCK-BASED COMPANESATION

 

On May 19, 2022, the Company filed a Registration Statement on Form S-8 and includes a Reoffer Prospectus that the Reoffer Prospectus may be used for reoffers and resales of shares of the Company. The Reoffer Prospectus covers the Shares issuable to the Selling Securityholders pursuant to awards granted to the Selling Securityholders under the Coinllectibles Inc. 2022 Stock Incentive Plan. The Company will not receive any proceeds from the sale of the shares offered by the Reoffer Prospectus.

 

As of September 30, 2023, there were 1,017,926,772 shares of the Company have been issued to consultants who have provided services to the Company.

 

The following table presents the stock-based compensation expenses for shares granted consultants during the three and nine months ended September 30, 2023 and 2022:

 

   Three months ended
September 30,		   Nine months ended
September 30,		 
   2023   2022   2023   2022 
                 
Corporate development expenses  $
-
   $333,225   $
-
   $25,646,926 
Technology and development expenses   
-
    45,000    
-
    32,105,000 
Sales and marketing expenses   
-
    150,225    
-
    25,913,695 
General and administrative expenses   22,500    2,172,839    12,316,110    2,811,839 
   $22,500   $2,701,289   $12,316,110   $86,477,460 

 

The stock-based compensation expense was $22,500 during the three months ended September 30, 2023.

 

The stock-based compensation expense was $12,316,110 during the nine months ended September 30, 2023.

 

NOTE 14 – STOCKHOLDERS’ EQUITY

 

Authorized stock

 

The Company’s authorized share is 5,000,000,000 common shares with a par value of $0.001 per share.

 

Common stock outstanding

 

During the nine months ended September 30, 2023, the Company issued 1,017,926,772 shares of its common stock to consultants who have provided services to the Company under the Coinllectibles Inc. 2022 Stock Incentive Plan. The stock-based compensation expenses for shares granted consultants during the nine months ended September 30, 2023 and 2022 were $12,316,110 and $86,477,460, respectively.

 

As of September 30, 2023 and December 31, 2022, the Company had a total of 1,863,852,317 shares and 454,398,143 shares of its common stock issued and outstanding, respectively.

 

NOTE 15 – INCOME TAX

 

The provision for income taxes consisted of the following:

 

  

Nine months ended

September 30,

 
   2023   2022 
Current tax:        
- Local  $
-
   $
-
 
- Foreign   355,681    546,146 
           
Deferred tax          
- Local   
-
    
-
 
- Foreign   
-
    
-
 
           
Income tax expense  $355,681   $546,146 

 

22

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company mainly operates in Singapore and Hong Kong that is subject to taxes in the jurisdictions in which they operate, as follows:

 

United States of America

 

COSG is registered in the State of Nevada and is subject to the tax laws of United States of America. The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were not material to its results of operations for the periods presented. Deferred tax asset is not provided for as the tax losses may not be able to carry forward after a change in substantial ownership of the Company.

 

For the nine months ended September 30, 2023 and 2022, there were no operating income in US tax regime.

 

BVI

 

Under the current BVI law, the Company is not subject to tax on income.

 

Republic of Singapore

 

The Company’s subsidiaries are registered in Republic of Singapore and are subject to the Singapore corporate income tax at a standard income tax rate of 17% on the assessable income arising in Singapore during its tax year. The operation in Singapore incurred an operating loss due to certain charges within the group and there is no provision for income tax for the nine months ended September 30, 2023 and 2022.

 

   Nine months ended
September 30,		 
   2023   2022 
Income (loss) before income taxes  $15,504   $(87,384,457)
Statutory income tax rate   17%   17%
Income tax expense at statutory rate   2,636    (14,855,358)
Net operating loss   (2,636)   14,855,358 
Income tax expense  $
-
   $
-
 

 

Hong Kong

 

The Company and subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the nine months ended September 30, 2022 and 2021 is as follows:

 

   Nine months ended
September 30,		 
   2023   2022 
(Loss) income before income taxes  $(51,274,393)  $1,191,436 
Statutory income tax rate   16.5%   16.5%
Income tax expense at statutory rate   (8,460,275)   196,587 
Tax effect of non-deductible items   378,150    342,096 
Tax effect of non-taxable items   
-
    (8,499)
Net operating income   8,437,805    15,962 
           
Income tax expense  $355,681   $546,146 

 

23

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

The following table sets forth the significant components of the deferred tax assets and liabilities of the Company as of September 30, 2023 and December 31, 2022:

 

   September 30,
2023		   December 31,
2022		 
Deferred tax assets:        
Net operating loss carryforward, from        
US tax regime  $76,498   $102,932 
Singapore tax regime   
-
    
15,324,07
 
Hong Kong tax regime   8,460,275    13,019 
Less: valuation allowance   (8,536,773)   (15,440,658)
Deferred tax assets, net  $
-
   $
-
 

 

As of September 30, 2023, the operations in the United States of America incurred $747,940 of cumulative net operating losses which can be carried forward indefinitely to offset future taxable income. The Company has provided for a full valuation allowance against the deferred tax assets of $157,067 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

As of September 30, 2023, the operations in Singapore incurred $9,914,376 of cumulative net operating losses which can be carried forward to offset future taxable income. There is no expiry in net operating loss carryforwards under Singapore tax regime. the Company has provided for a full valuation allowance against the deferred tax assets of $1,685,444 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

As of September 30, 2023, the operations in Hong Kong incurred $52,790,112 of cumulative net operating losses which can be carried forward indefinitely to offset future taxable income. The Company has provided for a full valuation allowance against the deferred tax assets of $8,710,368 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

The Company filed income tax returns in the United States federal tax jurisdiction and several state tax jurisdictions. Since the Company is in a loss carryforward position, it is generally subject to examination by federal and state tax authorities for all tax years in which a loss carryforward is available.

 

NOTE 16 - RELATED PARTY TRANSACTIONS

 

From time to time, the directors of the Company advanced funds to the Company for working capital purpose. Those advances were unsecured, non-interest bearing and had no fixed terms of repayment.

 

During the three months ended September 30, 2023 and 2022, the Company paid the management service fee of $0 and $931,059, to a company controlled by its director, Dr. Lee.

 

During the three months ended September 30, 2023 and 2022, the Company paid the director fee of $38 and $30,000 to Mr. Tan, a director of the Company, for his service to the Company’s subsidiary.

 

During the nine months ended September 30, 2023 and 2022, the Company paid the management service fee of $0 and $2,746,911, to a company controlled by its director, Dr. Lee.

 

During the nine months ended September 30, 2023 and 2022, the Company paid the director fee of $124,276 and $90,000 to Mr. Tan, a director of the Company, for his service to the Company’s subsidiary.

 

Apart from the transactions and balances detailed elsewhere in these accompanying unaudited condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented.

 

24

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

NOTE 17 - CONCENTRATIONS OF RISK

 

The Company is exposed to the following concentrations of risk:

 

(a) Major customers

 

For the three and nine months ended September 30, 2023 and 2022, there was no single customer whose revenue exceeded 10% of the revenue.

 

(b) Economic and political risk

 

The Company’s major operations are conducted in Singapore and Hong Kong. Accordingly, the political, economic, and legal environments in Singapore and Hong Kong, as well as the general state of Singapore and Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.

 

(c) Exchange rate risk

 

The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

 

(d) Liquidity risk

 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s policy is to ensure that it has sufficient cash to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases.

 

NOTE 18 - COMMITMENTS AND CONTINGENCIES

 

As of September 30, 2023, the Company is committed to the below contractual arrangements.

 

25

 

 

COSMOS GROUP HOLDINGS INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

On December 31, 2021, the Company entered into an Equity Purchase Agreement with Williamsburg Venture Holdings, LLC, a Nevada limited liability company (“Investor”), pursuant to which the Investor agreed to invest up to Thirty Million Dollars ($30,000,000) over a 36-month period in accordance with the terms and conditions of that certain Equity Purchase Agreement, dated as of December 31, 2021, by and between the Company and the Investor (the “Equity Purchase Agreement”). During the term, the Company shall be entitled to put to the Investor, and the Investor shall be obligated to purchase, such number of shares of the Company’s common stock and at such price as are determined in accordance with the Equity Purchase Agreement. The per share purchase price for the Williamsburg Put Shares will be equal to 88% the lowest traded price of the Common Stock on the principal market during the five (5) consecutive trading days immediately preceding the date which Williamsburg received the Williamsburg Put Shares as DWAC Shares in its brokerage account (as reported by Bloomberg Finance L.P., Quotestream, or other reputable source). In connection with the Equity Purchase Agreement, both parties also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company agreed to register with the SEC the common stock issuable under the Equity Purchase Agreement, among other securities. As of September 30, 2023, the remaining balance for Equity Purchase from the Investor was $30,000,000.

 

NOTE 19 - SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2023, up through the date the Company issued the unaudited condensed consolidated financial statements.

 

26

 

 

ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion and analysis of our Company’s financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in the report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors. See “Cautionary Note Concerning Forward-Looking Statements” on page vii.

 

Unless otherwise noted, all currency figures quoted as “U.S. dollars”, “dollars” or “$” refer to the legal currency of the United States. Throughout this report, assets and liabilities of the Company’s subsidiaries are translated into U.S. dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

 

Overview

 

We are a Nevada holding company with operations conducted through our subsidiaries based in Singapore and Hong Kong. The Company, through its subsidiaries, is engaged in two business segments: (i) the physical arts and collectibles business, and (ii) the financing/money lending business.

 

Through our physical arts and collectibles business, we provide authentication, valuation and certification (“AVC”) service, sale and purchase, hire purchase, financing, custody, security and exhibition (“CSE”) services to art and collectibles buyers through traditional methods as well as through leveraging blockchain technology through the creation of Digital Ownership Tokens (“DOTs”).

 

DOT is an integrated, best in class, smart contract for art and collectible pieces. We use blockchain technology to help resolve the issues of provenance, authenticity and ownership in the arts and collectibles market. For each art or collectible piece, we create an individual DOT that includes an independent appraisal, a 3D rendering of the piece, high-definition photo of the piece, AI recognition file of the piece and a set of legal documents to provide proof of ownership and provenance of the piece to the blockchain. Our DOTs are intended to provide assurance on the authenticity of art or collectible pieces as well as act as a record of ownership transfers using blockchain technology to establish provenance of the piece. As the owner of a DOT, the buyer will be able to take the necessary legal action against those who breach the digital ownership rights. We initially intend to focus on customers located in Hong Kong and expand throughout Asia and the rest of the world.

 

We conduct our DOT operations from Singapore. In Singapore, cryptocurrencies and the custodianship of such cryptocurrencies are not specifically regulated. Cryptocurrency exchanges and trading of cryptocurrencies are legal, but not considered legal tender. To the extent that cryptocurrencies or tokens are considered “capital market products” such as securities, spot foreign exchange contracts, derivatives and the like, they will be subject to the jurisdiction of the Monetary Authority of Singapore (“MAS”), Securities and Futures Act, anti-money laundering and combating the financing of terrorism laws and requirements. To the extent that tokens are deemed “digital payment tokens,” they will be subject to the Payment Services Act of 2019 which, among other things, require compliance with anti-money laundering and combating the financing of terrorism laws and requirements. According to the Payment Services Act of 2019, “digital payment token” means any digital representation of value (other than an excluded digital representation of value) that (a) is expressed as a unit; (b) is not denominated in any currency, and is not pegged by its issuer to any currency; (c) is, or is intended to be, a medium of exchange accepted by the public, or a section of the public, as payment for goods or services or for the discharge of a debt; (d) can be transferred, stored or traded electronically; and (e) satisfies such other characteristics as the Authority may prescribe. Our DOTs, therefore, are not securities or digital payment tokens subject to these acts.

 

We receive fiat and cryptocurrency from the sale of art and collectibles and collection of transaction fees derived from the secondary and subsequent sales of the collectibles. In order to minimize the risk of price fluctuation in cryptocurrency, after we receive the cryptocurrencies, we will recognize the value by immediately exchange them into US dollar or stable currencies that are pegged with US dollar.

 

We conduct our financing/money lending business through our Hong Kong subsidiaries which are licensed under Hong Kong’s Money Lenders Ordinance. We primarily provide unsecured personal loan financings to private individuals. We also have a small portfolio of mortgage loans. Revenue is generated from interest received from the provision of loans to private individual customers.

 

27

 

 

There may be prominent risks associated with our operations being in Hong Kong. We may be subject to the risks of uncertainty of any future actions of the PRC government including the risk that the PRC government could disallow our holding company structure, which may result in a material change in our operations, including our ability to continue our existing holding company structure, carry on our current business, accept foreign investments, and offer or continue to offer securities to our investors. These adverse actions could change the value of our common stock to significantly decline or become worthless. We may also be subject to penalties and sanctions imposed by the PRC regulatory agencies, including the Chinese Securities Regulatory Commission, if we fail to comply with such rules and regulations, which could adversely affect the ability of the Company’s securities to continue to trade on the Over-the-Counter Bulletin Board, which may cause the value of our securities to significantly decline or become worthless.

 

As a U.S.-listed company with operations in Hong Kong, we may face heightened scrutiny, criticism and negative publicity, which could result in a material change in our operations and the value of our common stock. It could also 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 be worthless. Additionally, changes in Chinese internal regulatory mandates, such as the M&A rules, Anti-Monopoly Law, and the soon to be effective Data Security Law, may target the Company’s corporate structure and impact our ability to conduct business in Hong Kong, accept foreign investments, or list on an U.S. or other foreign exchange. For a detailed description of the risks facing the Company and the offering associated with our operations in Hong Kong, please refer to “Risk Factors – Risk Factors Relating to Our Operations in Hong Kong” as disclosed in our set forth in the Company’s Registration Statement on Form 10 filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 15, 2022 (the “Form 10-K”).

 

Our corporate chart is below:

 

 

 

Note 1: In May 2021, Massive Treasure entered into a Share Swap Letter Agreement (the “100% Share Swap Letter”) with the shareholders of each of E-on Finance Limited (“E-on”) and 8M Limited (“8M”) to acquire 100% of each of E-on and 8M for 20,110,604 and 10,055,302 shares of common stock of COSG respectively based upon the closing price of the common stock of COSG as of the date of signing of the 100% Share Swap Letter and determined in accordance with the terms of the 100% Share Swap Letter on the date. The acquisition of E-on and 8M consummated in May 2021. Thereon, COSG issued 10,256,409 shares and 5,128,204 shares to the shareholders of E-on and 8M respectively.

 

COSG is obligated to issue 9,854,195 and 4,927,098 shares on the first anniversary of the closing of the acquisition to the former shareholders of E-on and 8M respectively, subject to certain clawback provisions. E-on and 8M are obligated to meet certain financial milestones in each of the two-year anniversaries following the closing. Failure to meet such milestones will result in a clawback of the shares issued to the former shareholders. On the second anniversary of the closing, if E-on or 8M exceeds the aggregate financial milestone set for the two years, the former shareholders thereof shall be entitled to additional shares of COSG as determined in accordance with the 100% Share Swap Letter.

 

Note 2: In May and June 2021, Massive Treasure entered into a Share Swap Letter Agreement (the “51% Share Swap Letter”) with the shareholders of each of the entities to acquire 51% of the issued and outstanding securities of the entities for an aggregate amount of 23,589,736 shares of COSG’s common stock as set forth below (the “First Tranche Shares”), based upon the closing price of the common stock of COSG as of the date of signing the 51% Share Swap Letter and determined in accordance with the terms of the 51% Share Swap Letter. The acquisition of the entities consummated in May and June 2021. Thereon, COSG issued the First Tranche Shares.

 

28

 

 

 

On the first anniversary of the closing, COSG is obligated to issue a second tranche of shares of its common stock, based upon the closing price of its shares as of the fifth business day prior to such first anniversary as determined in accordance with the terms of the 51% Share Swap Letter (the “Second Tranche Shares”).  Upon the issuance of the Second Tranche Shares, each of the entities will deliver the remaining 49% of the issued and outstanding securities to COSG to become wholly owned subsidiaries of COSG. Each of the entities are obligated to meet certain financial milestones in each of the two-year anniversaries following the closing. Failure to meet such milestones will result in a clawback of the shares issued to the former shareholders. On the second anniversary of the closing, if any entity exceeds the aggregate financial milestone set for the two years, the former shareholders thereof shall be entitled to additional shares of COSG as determined in accordance with the 51% Share Swap Letter.

   

Note 3: On February 10, 2022, the Company consummated the acquisition of 80% of the issued and outstanding securities of Grand Gallery Limited, a Hong Kong limited liability company engaged in the business of selling traditional art and collectible pieces, through the issuance of 153,060 shares of our common stock, at a valuation of $4.00 per share. The Company believes that this acquisition will strengthen our DOT business by expanding our access to buyers of arts and collectibles.

 

Commentary on our Revenue – an overview

 

In this quarter, we have seen strong and continued revenue growth. The total revenue for 2022 Q2 was approximately US$4.7 million consisting of approximately $3.05 million from the DOT business segment and $1.65 million from the lending segment. Our DOT revenue are primarily attributable to: (i) our MetaMall/Resale transactions of approximately US$3.04 million; (ii) primary DOT sales (revenue from sales of new collectible DOTs) of approximately US$198,000; and (iii) Coinllectibles Sports of approximately US$35,000.

 

Commentary on DOT Revenue – our key growth driver

 

As a whole, the 2022 Q2 revenue growth is in line with Management’s expectations. Our business model focuses on the rights of ownership through a digital ownership token attached to physical art or some other collectible with real world tangible value. The business is fundamentally different from the model NFT marketplaces like OpenSea or Rarible that list third party NFTs for sale. Given the business model targets the physical art and collectibles market, the relative growth in the overall art markets sales at major auction houses and art fairs, we were less affected by the recent negative sentiment in the crypto and NFT markets.

 

We currently generate revenue from primary sales, or sales of new collectibles DOTs and resale transaction fees between 8% and 10% each time the DOT is sold in the secondary market. Because each collectible has the potential of generating revenue beyond the initial sale, we intend to focus on bringing quality primary sales DOT for long term ownership as well as resale potential to market. A key focus of the company is to work with appropriate partners to mint and sell DOTs attached to high quality collectibles in an increasing range of art such as photographs and sculptures and a range of other market segments including sports. We feel that DOTs are an attractive way for artists, galleries, auction houses to engage with existing and new buyer bases in addition to their current sales strategies. We see further opportunity to engage with partners to support strategies using applications of DOTs such as in the luxury goods segment.

 

The sports collectibles market is another area of potential application for DOTs. According to Market Decipher, the market value of sports collectibles – which is currently at US$26.1billion, is expected to reach US$227 billion by 2032. Sports related NFTs, with a current estimated market value of US$1.4 billion, is also expected to reach an estimated market value of US$92 billion by 2032.

 

29

 

 

Commentary on finance revenue – providing stability to the business

 

The lending segment is providing a stable revenue to the Group, and we generated approximately US$1.65 million and US$1.65 million for the nine months ended September 30, 2023 and 2022, respectively. Our finance companies are licensed to originate personal loans, company loans and mortgage loans in Hong Kong, and generate interest income from these loans. In contrast to the significant growth in DOT revenue, our finance companies have long been established in Hong Kong and thus, the growth of the business is relatively steady. Despite the global economic situation and consequences caused by the pandemic, we believe that there is always a need for borrowing, and anticipate our lending segment to continue to provide stable revenue in the near future.

 

Other Activities

  

On December 31, 2021, the Company entered into an Equity Purchase Agreement with Williamsburg Venture Holdings, LLC, a Nevada limited liability company (“Investor”), pursuant to which the Investor agreed to invest up to Thirty Million Dollars ($30,000,000) over a 36-months period in accordance with the terms and conditions of that certain Equity Purchase Agreement, dated as of December 31, 2021, by and between the Company and the Investor (the “Equity Purchase Agreement”). During the term, the Company shall be entitled to put to the Investor, and the Investor shall be obligated to purchase, such number of shares of the Company’s common stock and at such price as are determined in accordance with the Equity Purchase Agreement. The per share purchase price for the Williamsburg Put Shares will be equal to 88% the lowest traded price of the Common Stock on the principal market during the five (5) consecutive trading days immediately preceding the date which Williamsburg received the Williamsburg Put Shares as DWAC Shares in its brokerage account (as reported by Bloomberg Finance L.P., Quotestream, or other reputable source). In connection with the Equity Purchase Agreement, both parties also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company agreed to register with the SEC the common stock issuable under the Equity Purchase Agreement, among other securities. As of September 30, 2023, the remaining balance for Equity Purchase from the Investor was $30,000,000.

  

In connection with the Equity Purchase Agreement, the parties also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company agreed to register with the SEC the common stock issuable under the Equity Purchase Agreement, among other securities.

 

The foregoing descriptions of the Equity Purchase Agreement and the Registration Rights Agreement are qualified in their entirety by reference to the Equity Purchase Agreement and the Registration Rights Agreement, which are filed as Exhibits 10.3 and 10.4 to this Quarterly Report and incorporated herein by reference.

 

In March 2022, we launched a new sports division in our MetaMall and partnering with a former NBA basketball player as president of Coinllectible Sports. We hope to exploit our DOT technology and the metaverse to bring innovation to the sports space, bridge the intersection of our DOT technology and Sports memorabilia to improve experiences for fans, athletes, teams, events and partners.

 

Results of Operations.

 

The recent outbreak of COVID-19, which has been declared by the World Health Organization to be a pandemic, has spread across the globe and is impacting worldwide economic activity. The COVID-19 pandemic has significantly impacted health and economic conditions throughout Asian region. National, regional and local governments took a variety of actions to contain the spread of COVID-19, including office and store closures, quarantining suspected COVID-19 patients, and capacity limitations. These developments have significantly impacted the results of operations, financial condition and cash flows of the Company included in this reporting. The impact included the difficulties of working remotely from home including slow Internet connection, the inability of our accounting and financial officers to collaborate as effectively as they would otherwise have in an office environment and issues arising from mandatory state quarantines.

 

While it is not possible at this time to estimate with sufficient certainty the impact that COVID-19 could have on the Company’s business, the continued spread of COVID-19 and the measures taken by federal, state, local and foreign governments could disrupt the operation of the Company’s business. The COVID-19 outbreak and mitigation measures have also had and may continue to have an adverse impact on global and domestic economic conditions, which could have an adverse effect on the Company’s business and financial condition, including on its potential to conduct financings on terms acceptable to the Company, if at all. In addition, the Company has taken temporary precautionary measures intended to help minimize the risk of the virus to its employees, including temporarily requiring employees to work remotely, and discouraging employee attendance at in-person work-related meetings, which could negatively affect the Company’s business. These measures are continuing. The extent to which the COVID-19 outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.

 

30

 

 

As of September 30, 2023, we had a working capital of $44,919,517 and accumulated deficit of $192,659,942. As a result, our continuation as a going concern is dependent upon improving our profitability and continued financial support from our stockholders or other capital sources. Management believes that continued financial support from existing shareholders and external financing will provide the additional cash necessary to meet our obligations as they become due. Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

 

On September 30, 2023, the Company disposed the lending segment and related assets and liabilities have been accounted for as discontinued operations in the Company’s consolidated balance sheets for all years presented. The operating results related to these lines of business have been included in discontinued operations in the Company’s combined and consolidated statement of operations for all years presented.

 

Comparison of the three months ended September 30, 2023 and 2022

 

The following table sets forth certain operational data for the three months ended September 30, 2023, compared to the three months ended September 30, 2022:

 

  

Three months ended
September 30,

 
   2023   2022 
Revenue:        
Lending segment (discontinued operations)  $1,911   $1,517,764 
Arts and collectibles technology (“ACT”) segment   -    2,493,100 
Total revenue   1,911    4,010,864 
Cost of revenue:          
Lending segment   (58)   (27,046)
ACT segment   53,372    (311,620)
Gross profit   55,225    3,672,198 
Operating expenses:          
Sales and marketing   (65)   (499,464)
Corporate development   (13,905)   (510,786)
Technology and development   (18,489)   (273,839)
Metaverse and AI development   -    (5,000,000)
General and administrative   (1,084,224)   (4,344,801)
Loss from operations   (1,116,683)   (6,956,692)
Total other expense, net   (48,712,188)   (203,063)
Loss before income taxes   (48,712,188)   (7,159,755)
Income tax expense   -    (188,878)
           
NET LOSS  $(48,712,188)  $(7,348,633)
Non-cash consultancy expenses   22,500    2,701,289 
           
ADJUSTED LOS  $(48,689,688)  $(4,647,344)

 

Revenue. Revenue for the three months ended September 30, 2023 and 2022 was $1,911 and $4,010,864. The decrease in revenue of approximately $4,008,953 is primarily due to the decrease from the sales of collectibles. During the three months ended September 30, 2023 and 2022, revenues were mainly attributable to the lending segment representing 100% and 37.8%, and ACT segment representing 0 and 62.2%, respectively.

 

Cost of Revenue. Cost of revenue of approximately ($53,314) for the three months ended September 30, 2023 consisted primarily of interest expense and cost of collectibles. The decrease in cost of revenues of approximately $391,980 from the comparable period in 2022 was mainly due to the decrease in sales in ACT segment which led to the decrease in cost of collectibles.

 

Gross Profit. We achieved a gross profit of $55,225 and $3,672,198 for the three months ended September 30, 2023, and 2022, respectively. The decrease in gross profit for the three months ended September 30, 2023 was approximately $3,616,973, which was mainly due to the decrease in gross profit is primarily attributable to decrease in our ACT segment volume.

 

Sales and marketing. We incurred sales and marketing expenses of $65 and $499,464 for the three months ended September 30, 2023, and 2022, respectively. Sales and marketing expenses consist primarily of costs related to public relations, consultancy fee, advertising and marketing programs, and personnel-related expenses. Sales and marketing expense decreased by approximately $499,399 in the three months ended September 30, 2023 from $499,464 in the same period of 2022. The decrease was primarily due to the decrease in non-cash consultancy expenses charged by consultants for marketing events for ACT segment.

 

31

 

 

Corporate development. We incurred corporate development expenses of $13,905 and $510,786 for the three months ended September 30, 2023, and 2022, respectively. Corporate development expenses consist primarily of personnel-related expenses incurred to support our corporate development. Corporate development expenses decreased by approximately $496,881 in the three months ended September 30, 2023 from $510,786 in the same period of 2022. The increase was primarily due to the decrease in non-cash consultancy expense charged by consultants for corporate and community development for ACT segment.

 

Technology and development. We incurred technology and development expenses of $18,489 and $273,839 for the three months ended September 30, 2023, and 2022, respectively. Technology and support expenses consist primarily of (i) development of the DOT (digital ownership token), an effective application of NFT technologies to real world assets, both tangible and intangible, (ii) research and development of blockchain smart contracts and other coding to apply the most suitable blockchains for DOTs and maintaining a distributed ledger to record all transactions and (iii) Development of a client management system to facilitate the sale and purchase of DOTs by both crypto and non-crypto natives. Technology and development expenses decreased by approximately $255,350 in the three months ended September 30, 2023 from $273,839 in the same period of 2022. The increase was primarily due to the decrease in non-cash consultancy fee charged by 3D technology consultants for ACT segment.

 

Metaverse and AI development. We incurred Metaverse and AI development expenses of $0 and $5,000,000 for the three months ended September 30, 2023, and 2022, respectively.

 

General and administrative. We incurred general and administrative expenses of $1,084,224 and $44,344,801 for the three months ended September 30, 2023, and 2022, respectively. General and administrative expenses consist primarily of professional fees, audit fees, other miscellaneous expenses incurred in connection with general operations and personnel-related expenses incurred to support our business, including legal, finance, executive, and other support operations. General and administrative expenses increased by approximately $43,260,577 in the three months ended September 30, 2023 from $44,344,801 in the same period of 2022. The increase was primarily due to the increase directors’ remuneration, and management fee charged by a related company owned by the director of the Company.

 

Other expense, net. We incurred net other expense of $48,712,188 and $203,063 for the three months ended September 30, 2023 and 2022, respectively.

 

Income Tax Expense. Our income tax expense for the three months ended September 30, 2023 and 2022 was $219 and $188,878, respectively.

 

Net Loss. During the three months ended September 30, 2023 and 2022, we incurred a net loss of $49,773,865 and $7,348,633, respectively. The increase in net loss for the three months ended September 30, 2023 of $42,426,993 was mainly attributed from the increase in loss on disposal of subsidiaries.

 

Comparison of the nine months ended September 30, 2023 and September 30, 2022

 

The following table sets forth certain operational data for the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022:

 

  

Nine months ended
September 30,

 
   2023   2022 
Revenue:        
Lending segment (discontinued operations)  $3,100,102   $4,833,433 
Arts and collectibles technology (“ACT”) segment   597,351    8,051,436 
Total revenue   3,697,453    12,884,869 
Cost of revenue:          
Lending segment   (94,782)   (367,337)
ACT segment   (313,601)   (1,118,755)
Gross profit   3,289,070    11,398,777 
Operating expenses:          
Sales and marketing   (124,941)   (26,756,319)
Corporate development   (71,113)   (26,242,917)
Technology and support   (35,369)   (32,832,406)
Metaverse and AI development   -    (5,000,000)
General and administrative   (18,037,474)   (9,743,097)
Loss from operations   (18,268,897)   (89,175,962)
Total other expense, net   (49,207,393)   (635,547)
Loss before income taxes   (64,187,220)   (89,811,509)
Income tax expense   (355,681)   (546,146)
           
NET LOSS  $(64,542,901)  $(90,357,655)
Non-cash consultancy expenses   12,316,110    86,477,460 
           
ADJUSTED LOS  $(52,226,791)  $(3,880,195)

 

32

 

 

Revenue. Revenue for the nine months ended September 30, 2023 and 2022 was $3,697,453 and $12,884,869. The decrease in revenue of approximately $9,187,416 is primarily due to the decrease from the sales of collectibles. During the three months ended September, 2023 and 2022, revenues were mainly attributable to the lending segment representing 84% and 37.5%, and ACT segment representing 16% and 62.5%, respectively.

 

Cost of Revenue. Cost of revenue of approximately $408,383 for the nine months ended September 30, 2023 consisted primarily of interest expense and cost of collectibles. The decrease in cost of revenues of approximately $1,077,709 from the comparable period in 2022 was mainly due to the decrease in sales in ACT segment which led to the decrease in cost of collectibles.

 

Gross Profit. We achieved a gross profit of $3,289,070 and $11,398,777 for the nine months ended September 30, 2023, and 2022, respectively. The decrease in gross profit for the three months ended September 30, 2023 was approximately $8,109,707, which was mainly due to the decrease in gross profit is primarily attributable to decrease in our ACT segment volume.

 

Sales and marketing. We incurred sales and marketing expenses of $124,941 and $26,756,319 for the nine months ended September 30, 2023 and 2022, respectively. Sales and marketing expenses consist primarily of costs related to public relations, consultancy fee, advertising and marketing programs, and personnel-related expenses. Sales and marketing expense decreased by approximately $26,631,378 in the nine months ended September 30, 2023 from $26,756,319 in the same period of 2022. The decrease was primarily due to the decrease in non-cash consultancy expenses charged by consultants for marketing events for ACT segment.

 

Corporate development. We incurred corporate development expenses of $71,113 and $26,242,917 for the nine months ended September 30, 2023 and 2022, respectively. Corporate development expenses consist primarily of personnel-related expenses incurred to support our corporate development. Corporate development expenses decreased by approximately $26,171,804 in the nine months ended September 30, 2023 from $26,242,917 in the same period of 2022. The increase was primarily due to the decrease in non-cash consultancy expense charged by consultants for corporate and community development for ACT segment.

 

Technology and development. We incurred technology and development expenses of $35,369 and $32,832,406 for the nine months ended September 30, 2023 and 2022, respectively. Technology and support expenses consist primarily of (i) development of the DOT (digital ownership token), an effective application of NFT technologies to real world assets, both tangible and intangible, (ii) research and development of blockchain smart contracts and other coding to apply the most suitable blockchains for DOTs and maintaining a distributed ledger to record all transactions and (iii) Development of a client management system to facilitate the sale and purchase of DOTs by both crypto and non-crypto natives. Technology and development expenses decreased by approximately $32,797,037 in the nine months ended September 30, 2023 from $32,832,406 in the same period of 2022. The increase was primarily due to the decrease in non-cash consultancy fee charged by 3D technology consultants for ACT segment.

 

Metaverse and AI development. We incurred Metaverse and AI development expenses of $0 and $5,000,000 for the nine months ended September 30, 2023, and 2022, respectively.

 

General and administrative. We incurred general and administrative expenses of $18,037,474 and $9,743,097 for the nine months ended September 30, 2023, and 2022, respectively. General and administrative expenses consist primarily of professional fees, audit fees, other miscellaneous expenses incurred in connection with general operations and personnel-related expenses incurred to support our business, including legal, finance, executive, and other support operations. General and administrative expenses increased by approximately $8,294,377 in the nine months ended September 30, 2023 from $9,743,097 in the same period of 2022. The increase was primarily due to the increase in loss on disposal of subsidiaries.

 

Other expense, net. We incurred net other income of $49,207,393 and $635,547 for the nine months ended September 30, 2023 and 2022, respectively.

 

Income Tax expense. Our income tax expense for the nine months ended September 30, 2023 and 2022 was $355,681 and $546,146, respectively.

 

Net Loss. During the nine months ended September 30, 2023 and 2022, we incurred a net loss of $64,542,901 and $90,357,655, respectively. The decrease in net loss for the nine months ended September 30, 2023 of $25,812,993 was mainly attributed from the decrease in operating expenses.

 

33

 

 

Liquidity and Capital Resources

 

As of September 30, 2023 and December 31, 2022, we had cash and cash equivalents of $57,888 and $2,468,828.

 

We expect to incur significantly greater expenses in the near future as we develop our arts and collectibles technology business or enter into strategic partnerships. We also expect our general and administrative expenses to increase as we expand our finance and administrative staff, add infrastructure, and incur additional costs related to being reporting act company, including directors’ and officers’ insurance and increased professional fees.

  

We have never paid dividends on our Common Stock. Our present policy is to apply cash to investments in product development, acquisitions or expansion; consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.

 

Going Concern Uncertainties

 

Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders. Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and public offerings, lease liability and short-term and long-term debts. In addition, with respect to the ongoing and evolving coronavirus (COVID-19) outbreak, which was designated as a pandemic by the World Health Organization on March 11, 2020, the outbreak has caused substantial disruption in international economies and global trades and if repercussions of the outbreak are prolonged, could have a significant adverse impact on our business. Given the addition political and public health challenges, our ability to obtain external financing or financing from existing shareholders to fund our working capital needs has been materially and adversely impacted, and there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms. We believe that our current cash and other sources of liquidity discussed below are adequate to support general operations for at least the next 12 months.

 

   Nine Months Ended
September 30,		 
   2023   2022 
Net cash (used in) provided by operating activities  $(733,456)  $139,739 
Net cash provided by investing activities   10,101    28,590 
Net cash (used in) provided by financing activities  $(1,366,493)  $699,746 

 

Net Cash (Used In) Provided by Operating Activities.

 

For the nine months ended September 30, 2023, net cash used in operating activities was $733,456 which consisted primarily of a net loss of $64,542,901, imputed interest expense of $460,893, amortization of $2,604,776, shares issued for services rendered of $10,322,092, a decrease in inventory of $17,778, a decrease in loan interest and fee receivables of $162,611 and an increase in income tax payable of $355,241; offset by an increase in loan receivables of $199,147.

 

For the nine months ended September 30, 2022, net cash provided by operating activities was $139,739 which consisted primarily of a net loss of $90,357,655, imputed interest expense of $714,696, amortization of $2,979,763, digital assets paid for expense of $8,029,743, shares issued for services rendered of $83,856,800, a decrease in loan interest and fee receivables of $184,327, an increase in accrued consulting and service fee of $2,642,821, an increase in accounts payables of $1,977,320 and an increase in income tax payable of $546,146; offset by digital assets received of $8,025,885, an increase in loan receivables of $1,429,750 and an increase in inventory of $975,512. 

 

We expect to continue to rely on cash generated through financing from our existing shareholders and private placements of our securities, however, to finance our operations and future acquisitions.

 

Net Cash Provided by Investing Activities.

 

For the nine months ended September 30, 2023, net cash provided by investment activities was $10,101. The net cash used in investing activities for the nine months ended September 30, 2022 mainly consisted of cash from acquisition of a subsidiary of $10,246, offset by purchase of intangible assets of $145.

 

For the nine months ended September 30, 2022, net cash provided by investment activities was $28,59. The net cash used in investing activities for the nine months ended September 30, 2022 mainly consisted of cash from acquisition of a subsidiary of $33,322; offset by acquisition of property and equipment of $2,858 and purchase of intangible assets of $1,874.

 

34

 

 

Net Cash (Used In) Provided by Financing Activities.

 

For the nine months ended September 30, 2023, net cash used in financing activities was $1,366,493 consisting of repayment to related parties of $429,660, repayment of loan payables of $739,800 and repayment to convertible note payables of $197,033.

 

For the nine months ended September 30, 2022, net cash provided by financing activities was $699,746 consisting of advance from related parties of $ 59,684, proceeds from loan payables of $327,110 and proceeds of convertible note payables of $312,952.

 

Material Cash Requirements

 

We have not achieved profitability since our inception, and we expect to continue to incur net losses for the foreseeable future. We expect net cash expended in 2023 to be significantly higher than 2022. As of September 30, 2023, we had an accumulated deficit of $192,661,710. Our material cash requirements are highly dependent upon the additional financial support from our major shareholders in the next 12 - 18 months.

 

We had the following contractual obligations and commercial commitments as of September 30, 2023:

  

Contractual Obligations  Total   Less than
1 year		   1-3 Years   3-5 Years   More than
5 Years		 
   $   $   $   $   $ 
Amounts due to related parties   6,350,245    6,350,245     –     –     – 
Operating lease liabilities   –    –    –    –    – 
Other contractual liabilities (1)   –    –    –    –    – 
Commercial commitments   –    –    –    –    – 
Bank loan repayment   –    –    –    –    – 
Total obligations  $6,350,245    6,350,245   $–    –    – 

 

(1)Includes all obligations included in “Accrued liabilities and other payables” and “Accrued consulting and service fee” in current liabilities in the “Unaudited Condensed Consolidated Balance Sheets” that are contractually fixed as to timing and amount.

 

Off-Balance Sheet Arrangements

 

We have no outstanding off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

 

Contractual Obligations and Commercial Commitments

 

We have no contractual obligations and commercial commitments as of September 30, 2023.

 

35

 

 

Critical Accounting Policies and Estimates

 

For a detailed description of the Critical Accounting Policies and Estimates of the Company, please refer to Part II, ITEM 7 “MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” in our Annual Report Form 10-K for the year ended December 31, 2022 filed with the SEC on April 17, 2023.

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

ITEM 3 Quantitative and Qualitative Disclosures about Market Risk

 

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

 

ITEM 4 Controls and Procedure

 

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

 

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures, subject to limitations as noted below, as of September 30, 2023, and during the period prior to and including the date of this report, were effective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

Inherent Limitations

 

Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

 

Changes in Internal Control over Financial Reporting

 

Subject to the foregoing disclosure, there were no changes in our internal control over financial reporting that occurred during our fiscal quarter ended September 30, 2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

36

 

 

PART II OTHER INFORMATION

 

ITEM 1 Legal Proceedings

 

We are not a party to any legal or administrative proceedings that we believe, individually or in the aggregate, would be likely to have a material adverse effect on our financial condition or results of operations.

 

ITEM 1A Risk Factors

 

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

 

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.

 

37

 

 

ITEM 6 Exhibits

 

Exhibit No.   Description
3.1   Articles of Incorporation and Certificate of Amendment to Articles of Incorporation (1)
3.2   Amended and Restated Bylaws (2)
4.1   Specimen certificate evidencing shares of Common Stock (6)
4.2   Description of Securities (3)
10.1   Technical Knowhow License & Servicing Agreement, dated July 1, 2021, by and between Coinllectibles Limited and Marvel Digital Group Limited (4)
10.2   Services Agreement, dated July 1, 2021, by and between Coinllectibles Limited and Marvel Digital Group Limited (4)
10.3   Equity Purchase Agreement, dated December 31, 2021, by and between Cosmos Group Holdings Inc. and Williamsburg Venture Holdings, LLC, a Nevada limited liability company (5)
10.4   Registration Rights Agreement, dated December 31, 2021, by and between Cosmos Group Holdings Inc., and Williamsburg Venture Holdings, LLC (5)
10.5   Consultancy Agreement, dated February 2, 2022, by and between First Technology Development Limited, a Hong Kong limited liability company, and Coinllectibles Limited, a British Virgin Islands limited liability company (6)
10.6   Consultancy Agreement, dated February 2, 2022, by and between Silver Bloom Properties Limited, a Hong Kong and Coinllectibles Limited, a British Virgin Islands limited liability company (6)
10.7   Consultancy Agreement, dated February 2, 2022, by and between Grace Time International Holdings Limited, a Hong Kong limited liability company,  and Coinllectibles Limited, a British Virgin Islands limited liability company (6)
21   Subsidiaries (4)
31.1   Certification of Chief Executive Officer and Chief Financial Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act.*
32.1   Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS   Inline XBRL Instance Document.*
101.SCH   Inline XBRL Taxonomy Extension Schema Document.*
101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB   Inline XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document.*
104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

 

* Filed herewith
   
(1) Incorporated by reference from our Form 10 filed with the Securities and Exchange Commission on May 23, 2017.
(2) Incorporated by reference from our Form 10-SB filed with the Securities and Exchange Commission on January 19, 2000, under the name Interactive Marketing Technology, Inc.
(3) Incorporated by reference to Exhibit 4.2 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 25, 2021.
(4) Incorporated by reference to the Exhibits to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 15, 2022.
(5) Incorporated by reference to the Exhibits to the Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2022.
(6) Incorporated by reference to the Exhibits to the Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 16, 2022.

 

38

 

 

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.

 

  COSMOS GROUP HOLDINGS INC.
   
  By: /s/ Man Chung Chan
    Man Chung Chan
   

Chief Executive Officer,

Chief Financial Officer, Secretary

     
Date: November 22, 2023  

 

 

39

 

NONE 1532407 false --12-31 Q3 0001706509 0001706509 2023-01-01 2023-09-30 0001706509 2023-09-30 0001706509 2022-12-31 0001706509 us-gaap:RelatedPartyMember 2023-09-30 0001706509 us-gaap:RelatedPartyMember 2022-12-31 0001706509 2023-07-01 2023-09-30 0001706509 2022-07-01 2022-09-30 0001706509 2022-01-01 2022-09-30 0001706509 2021-12-31 0001706509 2022-09-30 0001706509 us-gaap:CommonStockMember 2022-12-31 0001706509 cosg:CommonStockToBeIssuedMember 2022-12-31 0001706509 us-gaap:AdditionalPaidInCapitalMember 2022-12-31 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-12-31 0001706509 us-gaap:RetainedEarningsMember 2022-12-31 0001706509 us-gaap:NoncontrollingInterestMember 2022-12-31 0001706509 us-gaap:CommonStockMember 2023-01-01 2023-03-31 0001706509 cosg:CommonStockToBeIssuedMember 2023-01-01 2023-03-31 0001706509 us-gaap:AdditionalPaidInCapitalMember 2023-01-01 2023-03-31 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-01-01 2023-03-31 0001706509 us-gaap:RetainedEarningsMember 2023-01-01 2023-03-31 0001706509 us-gaap:NoncontrollingInterestMember 2023-01-01 2023-03-31 0001706509 2023-01-01 2023-03-31 0001706509 us-gaap:CommonStockMember 2023-03-31 0001706509 cosg:CommonStockToBeIssuedMember 2023-03-31 0001706509 us-gaap:AdditionalPaidInCapitalMember 2023-03-31 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-03-31 0001706509 us-gaap:RetainedEarningsMember 2023-03-31 0001706509 us-gaap:NoncontrollingInterestMember 2023-03-31 0001706509 2023-03-31 0001706509 us-gaap:CommonStockMember 2023-04-01 2023-06-30 0001706509 us-gaap:AdditionalPaidInCapitalMember 2023-04-01 2023-06-30 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-04-01 2023-06-30 0001706509 us-gaap:RetainedEarningsMember 2023-04-01 2023-06-30 0001706509 us-gaap:NoncontrollingInterestMember 2023-04-01 2023-06-30 0001706509 2023-04-01 2023-06-30 0001706509 cosg:CommonStockToBeIssuedMember 2023-04-01 2023-06-30 0001706509 us-gaap:CommonStockMember 2023-06-30 0001706509 cosg:CommonStockToBeIssuedMember 2023-06-30 0001706509 us-gaap:AdditionalPaidInCapitalMember 2023-06-30 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-06-30 0001706509 us-gaap:RetainedEarningsMember 2023-06-30 0001706509 us-gaap:NoncontrollingInterestMember 2023-06-30 0001706509 2023-06-30 0001706509 us-gaap:CommonStockMember 2023-07-01 2023-09-30 0001706509 us-gaap:AdditionalPaidInCapitalMember 2023-07-01 2023-09-30 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-07-01 2023-09-30 0001706509 us-gaap:RetainedEarningsMember 2023-07-01 2023-09-30 0001706509 us-gaap:NoncontrollingInterestMember 2023-07-01 2023-09-30 0001706509 cosg:CommonStockToBeIssuedMember 2023-07-01 2023-09-30 0001706509 us-gaap:CommonStockMember 2023-09-30 0001706509 us-gaap:AdditionalPaidInCapitalMember 2023-09-30 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-09-30 0001706509 us-gaap:RetainedEarningsMember 2023-09-30 0001706509 us-gaap:NoncontrollingInterestMember 2023-09-30 0001706509 us-gaap:CommonStockMember 2021-12-31 0001706509 cosg:CommonStockToBeIssuedMember 2021-12-31 0001706509 us-gaap:AdditionalPaidInCapitalMember 2021-12-31 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-12-31 0001706509 us-gaap:RetainedEarningsMember 2021-12-31 0001706509 us-gaap:NoncontrollingInterestMember 2021-12-31 0001706509 us-gaap:CommonStockMember 2022-01-01 2022-03-31 0001706509 cosg:CommonStockToBeIssuedMember 2022-01-01 2022-03-31 0001706509 us-gaap:AdditionalPaidInCapitalMember 2022-01-01 2022-03-31 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-01-01 2022-03-31 0001706509 us-gaap:RetainedEarningsMember 2022-01-01 2022-03-31 0001706509 us-gaap:NoncontrollingInterestMember 2022-01-01 2022-03-31 0001706509 2022-01-01 2022-03-31 0001706509 us-gaap:CommonStockMember 2022-03-31 0001706509 cosg:CommonStockToBeIssuedMember 2022-03-31 0001706509 us-gaap:AdditionalPaidInCapitalMember 2022-03-31 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-03-31 0001706509 us-gaap:RetainedEarningsMember 2022-03-31 0001706509 us-gaap:NoncontrollingInterestMember 2022-03-31 0001706509 2022-03-31 0001706509 us-gaap:CommonStockMember 2022-04-01 2022-06-30 0001706509 cosg:CommonStockToBeIssuedMember 2022-04-01 2022-06-30 0001706509 us-gaap:AdditionalPaidInCapitalMember 2022-04-01 2022-06-30 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-04-01 2022-06-30 0001706509 us-gaap:RetainedEarningsMember 2022-04-01 2022-06-30 0001706509 us-gaap:NoncontrollingInterestMember 2022-04-01 2022-06-30 0001706509 2022-04-01 2022-06-30 0001706509 us-gaap:CommonStockMember 2022-06-30 0001706509 cosg:CommonStockToBeIssuedMember 2022-06-30 0001706509 us-gaap:AdditionalPaidInCapitalMember 2022-06-30 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-06-30 0001706509 us-gaap:RetainedEarningsMember 2022-06-30 0001706509 us-gaap:NoncontrollingInterestMember 2022-06-30 0001706509 2022-06-30 0001706509 us-gaap:CommonStockMember 2022-07-01 2022-09-30 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-07-01 2022-09-30 0001706509 us-gaap:AdditionalPaidInCapitalMember 2022-07-01 2022-09-30 0001706509 us-gaap:NoncontrollingInterestMember 2022-07-01 2022-09-30 0001706509 us-gaap:RetainedEarningsMember 2022-07-01 2022-09-30 0001706509 us-gaap:CommonStockMember 2022-09-30 0001706509 cosg:CommonStockToBeIssuedMember 2022-09-30 0001706509 us-gaap:AdditionalPaidInCapitalMember 2022-09-30 0001706509 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2022-09-30 0001706509 us-gaap:RetainedEarningsMember 2022-09-30 0001706509 us-gaap:NoncontrollingInterestMember 2022-09-30 0001706509 cosg:MassiveTreasureLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:CoinllectiblesDeFiLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:CoinllectiblesPrivateLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:HealthyFinanceLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:EightMLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:DragonGroupMortgageLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:EOnFinanceLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:LeeKeeFinanceLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:RichFinanceHongKongLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:LongJourneyFinanceLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:VaavLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:StarCreditLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:NFTLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:GrandwayWorldwideHoldingLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:GrandTownDevelopmentLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:GrandGalleryLimitedMember 2023-01-01 2023-09-30 0001706509 cosg:PhoenixWatersGroupLimitedMember 2023-01-01 2023-09-30 0001706509 us-gaap:ComputerEquipmentMember 2023-09-30 0001706509 cosg:PeriodEndHKDUSExchangeRateMember 2023-09-30 0001706509 cosg:PeriodEndHKDUSExchangeRateMember 2022-09-30 0001706509 cosg:PeriodAverageHKDUSExchangeRateMember 2023-09-30 0001706509 cosg:PeriodAverageHKDUSExchangeRateMember 2022-09-30 0001706509 cosg:PeriodEndSGDUSExchangeRateMember 2023-09-30 0001706509 cosg:PeriodEndSGDUSExchangeRateMember 2022-09-30 0001706509 cosg:PeriodAverageSGDUSExchangeRateMember 2023-09-30 0001706509 cosg:PeriodAverageSGDUSExchangeRateMember 2022-09-30 0001706509 cosg:LendingSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:LendingSegmentMember 2022-07-01 2022-09-30 0001706509 cosg:LendingSegmentMember 2023-01-01 2023-09-30 0001706509 cosg:LendingSegmentMember 2022-01-01 2022-09-30 0001706509 cosg:SaleOfArtsAndCollectiblesProductsMember us-gaap:TechnologyServiceMember 2023-07-01 2023-09-30 0001706509 cosg:SaleOfArtsAndCollectiblesProductsMember us-gaap:TechnologyServiceMember 2022-07-01 2022-09-30 0001706509 cosg:SaleOfArtsAndCollectiblesProductsMember us-gaap:TechnologyServiceMember 2023-01-01 2023-09-30 0001706509 cosg:SaleOfArtsAndCollectiblesProductsMember us-gaap:TechnologyServiceMember 2022-01-01 2022-09-30 0001706509 cosg:TransactionFeeIncomeAndOthersMember us-gaap:TechnologyServiceMember 2023-07-01 2023-09-30 0001706509 cosg:TransactionFeeIncomeAndOthersMember us-gaap:TechnologyServiceMember 2022-07-01 2022-09-30 0001706509 cosg:TransactionFeeIncomeAndOthersMember us-gaap:TechnologyServiceMember 2023-01-01 2023-09-30 0001706509 cosg:TransactionFeeIncomeAndOthersMember us-gaap:TechnologyServiceMember 2022-01-01 2022-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologySegmentMember 2023-07-01 2023-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologySegmentMember 2022-07-01 2022-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologySegmentMember 2023-01-01 2023-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologySegmentMember 2022-01-01 2022-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember cosg:LendingSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember cosg:ACTSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember cosg:LendingSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember cosg:ACTSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:BusinessSegmentMember cosg:LendingSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:BusinessSegmentMember cosg:ACTSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:BusinessSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:ArtsAndCollectibleTechnologyExpenseMember cosg:BusinessSegmentMember cosg:LendingSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:ArtsAndCollectibleTechnologyExpenseMember cosg:BusinessSegmentMember cosg:ACTSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:ArtsAndCollectibleTechnologyExpenseMember cosg:BusinessSegmentMember 2023-07-01 2023-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember cosg:LendingSegmentMember 2022-07-01 2022-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember cosg:ACTSegmentMember 2022-07-01 2022-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember 2022-07-01 2022-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember cosg:LendingSegmentMember 2022-07-01 2022-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember cosg:ACTSegmentMember 2022-07-01 2022-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember 2022-07-01 2022-09-30 0001706509 cosg:BusinessSegmentMember cosg:LendingSegmentMember 2022-07-01 2022-09-30 0001706509 cosg:BusinessSegmentMember cosg:ACTSegmentMember 2022-07-01 2022-09-30 0001706509 cosg:BusinessSegmentMember 2022-07-01 2022-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember cosg:LendingSegmentMember 2023-01-01 2023-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember 2023-01-01 2023-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember cosg:LendingSegmentMember 2023-01-01 2023-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember cosg:ACTSegmentMember 2023-01-01 2023-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember 2023-01-01 2023-09-30 0001706509 cosg:BusinessSegmentMember cosg:LendingSegmentMember 2023-01-01 2023-09-30 0001706509 cosg:BusinessSegmentMember cosg:ACTSegmentMember 2023-01-01 2023-09-30 0001706509 cosg:BusinessSegmentMember 2023-01-01 2023-09-30 0001706509 cosg:BusinessSegmentMember cosg:LendingSegmentMember 2022-01-01 2022-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember cosg:LendingSegmentMember 2022-01-01 2022-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember cosg:ACTSegmentMember 2022-01-01 2022-09-30 0001706509 cosg:LendingSegmentdiscontinuedOperationMember cosg:BusinessSegmentMember 2022-01-01 2022-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember cosg:LendingSegmentMember 2022-01-01 2022-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember cosg:ACTSegmentMember 2022-01-01 2022-09-30 0001706509 cosg:ArtsAndCollectiblesTechnologyIncomeMember cosg:BusinessSegmentMember 2022-01-01 2022-09-30 0001706509 cosg:BusinessSegmentMember cosg:ACTSegmentMember 2022-01-01 2022-09-30 0001706509 cosg:BusinessSegmentMember 2022-01-01 2022-09-30 0001706509 country:HK 2023-07-01 2023-09-30 0001706509 country:HK 2022-07-01 2022-09-30 0001706509 country:HK 2023-01-01 2023-09-30 0001706509 country:HK 2022-01-01 2022-09-30 0001706509 cosg:AroundTheWorldMember 2023-07-01 2023-09-30 0001706509 cosg:AroundTheWorldMember 2022-07-01 2022-09-30 0001706509 cosg:AroundTheWorldMember 2023-01-01 2023-09-30 0001706509 cosg:AroundTheWorldMember 2022-01-01 2022-09-30 0001706509 cosg:AcquiredTechnologySoftwareMember 2023-09-30 0001706509 cosg:AcquiredTechnologySoftwareMember 2022-12-31 0001706509 us-gaap:TrademarksAndTradeNamesMember 2023-09-30 0001706509 us-gaap:TrademarksAndTradeNamesMember 2022-12-31 0001706509 srt:MinimumMember 2023-09-30 0001706509 srt:MaximumMember 2023-09-30 0001706509 us-gaap:LoansPayableMember 2023-07-01 2023-09-30 0001706509 us-gaap:LoansPayableMember 2022-07-01 2022-09-30 0001706509 us-gaap:LoansPayableMember 2023-01-01 2023-09-30 0001706509 us-gaap:LoansPayableMember 2022-01-01 2022-09-30 0001706509 cosg:CHANHinYipMember 2022-08-02 2022-08-02 0001706509 cosg:GrandGalleryLimitedMember 2022-08-02 2022-08-02 0001706509 cosg:CHANHinYipMember 2022-08-02 0001706509 cosg:CHANHinYipMember 2023-09-30 0001706509 cosg:RootVenturesLLCMember 2022-11-11 2022-11-11 0001706509 cosg:RootVenturesLLCMember 2022-11-11 0001706509 cosg:RootVenturesLLCMember 2023-09-30 0001706509 cosg:ThousandEightHundredDiagonalLendingLLCMember 2022-08-26 2022-08-26 0001706509 cosg:ThousandEightHundredDiagonalLendingLLCMember 2022-08-26 0001706509 cosg:ThousandEightHundredDiagonalLendingLLCMember 2023-09-30 0001706509 cosg:ThousandEightHundredDiagonalLendingLLCMember 2023-01-01 2023-09-30 0001706509 cosg:ThousandEightHundredDiagonalLendingLLCMember 2022-01-01 2022-12-31 0001706509 cosg:TwoThousandAndTwentyTwoStockIncentivePlanMember 2023-01-01 2023-09-30 0001706509 us-gaap:CommonStockMember 2023-09-30 0001706509 us-gaap:CommonStockMember 2022-12-31 0001706509 srt:MaximumMember 2018-01-01 2018-01-01 0001706509 srt:MinimumMember 2018-01-01 2018-01-01 0001706509 country:SG 2023-01-01 2023-09-30 0001706509 srt:MinimumMember country:HK 2023-01-01 2023-09-30 0001706509 srt:MaximumMember country:HK 2023-01-01 2023-09-30 0001706509 country:US 2023-09-30 0001706509 country:SG 2023-09-30 0001706509 country:HK 2023-09-30 0001706509 cosg:LocalMember 2023-01-01 2023-09-30 0001706509 cosg:LocalMember 2022-01-01 2022-09-30 0001706509 us-gaap:ForeignExchangeMember 2023-01-01 2023-09-30 0001706509 us-gaap:ForeignExchangeMember 2022-01-01 2022-09-30 0001706509 country:US 2022-12-31 0001706509 country:SG 2022-12-31 0001706509 country:HK 2022-12-31 0001706509 cosg:DirectorsMember 2023-07-01 2023-09-30 0001706509 cosg:DirectorsMember 2022-07-01 2022-09-30 0001706509 srt:DirectorMember 2023-07-01 2023-09-30 0001706509 srt:DirectorMember 2022-07-01 2022-09-30 0001706509 cosg:DirectorsMember 2023-01-01 2023-09-30 0001706509 cosg:DirectorsMember 2022-01-01 2022-09-30 0001706509 srt:DirectorMember 2023-01-01 2023-09-30 0001706509 srt:DirectorMember 2022-01-01 2022-09-30 0001706509 cosg:MajorCustomersMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-07-01 2023-09-30 0001706509 cosg:MajorCustomersMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2023-01-01 2023-09-30 0001706509 cosg:MajorCustomersMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2022-07-01 2022-09-30 0001706509 cosg:MajorCustomersMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2022-01-01 2022-09-30 0001706509 cosg:WilliamsburgVentureHoldingsLLCMember 2021-12-31 xbrli:shares iso4217:USD iso4217:USD xbrli:shares xbrli:pure cosg:Collectibles iso4217:HKD

Exhibit 31.1

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Man Chung Chan, certify that:

 

1.I have reviewed this quarterly report on Form 10-Q of Cosmos Group Holdings Inc.;

 

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 quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4.The registrant’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 controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly 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 registrant’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;

 

d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

 

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

 

a)all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’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 registrant’s internal controls over financial reporting.

 

Dated: November 22, 2023 By: /s/ Man Chung Chan
    Man Chung Chan
   

Chief Executive Officer,

Chief Financial Officer, Secretary

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of Cosmos Group Holdings Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Man Chung Chan, Chief Executive Officer, Chief Financial Officer and Secretary of the Company, certify, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

 

(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: November 22, 2023 By: /s/ Man Chung Chan
    Man Chung Chan
   

Chief Executive Officer,

Chief Financial Officer and Secretary

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

v3.23.3
Document And Entity Information
 9 Months Ended
Sep. 30, 2023
shares
Document Information Line Items  
Entity Registrant Name COSMOS GROUP HOLDINGS INC.
Trading Symbol N/A
Document Type 10-Q
Current Fiscal Year End Date --12-31
Entity Common Stock, Shares Outstanding 1,870,992,244
Amendment Flag false
Entity Central Index Key 0001706509
Entity Current Reporting Status Yes
Entity Filer Category Non-accelerated Filer
Document Period End Date Sep. 30, 2023
Document Fiscal Year Focus 2023
Document Fiscal Period Focus Q3
Entity Small Business true
Entity Emerging Growth Company false
Entity Shell Company false
Document Quarterly Report true
Document Transition Report false
Entity File Number 000-55793
Entity Incorporation, State or Country Code NV
Entity Tax Identification Number 90-1177460
Entity Address, Address Line One 37th Floor
Entity Address, Address Line Two Singapore Land Tower
Entity Address, City or Town 50 Raffles Place
Entity Address, Country SG
Entity Address, Postal Zip Code 048623
City Area Code +65
Local Phone Number 6829 7017
Title of 12(b) Security None
Security Exchange Name NONE
Entity Interactive Data Current Yes
v3.23.3
Unaudited Condensed Consolidated Balance Sheets - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Current asset:    
Cash and cash equivalents $ 57,888 $ 2,468,828
Accounts receivable 7,491,754
Loan receivables, net 17,757,942
Loan interest and fee receivables, net 358,872
Inventories 1,147,109 1,164,887
Prepayments and other receivables 10,959 701,877
Income tax receivable 440
Right-of-use assets, net 160,945
Total current assets 8,708,150 22,613,351
Non-current assets:    
Property and equipment, net 1,493 57,087
Intangible assets, net 10,735,203 13,339,427
Loan receivables, net 3,100,057
TOTAL ASSETS 19,444,846 39,109,922
Current liabilities:    
Accounts payable 2,794,264 2,381,429
Accrued liabilities and other payables 136,084 465,890
Accrued consulting and service fee 5,077,589 2,851,719
Loan payables 1,823,536
Income tax payable 719,081
Convertible note payables 215,750 383,058
Promissory note payables 39,053,735
Operating lease liabilities 136,800
Total current liabilities 53,627,667 32,692,591
Non-current liabilities    
Operating lease liabilities: 29,725
TOTAL LIABILITIES 53,627,667 32,722,316
Commitments and contingencies
STOCKHOLDERS’ EQUITY    
Common stock, $0.001 par value; 5,000,000,000 shares authorized; 1,870,992,244 and 454,398,143 issued and outstanding as of September 30, 2023 and December 31, 2022 1,870,992 454,398
Common stock to be issued 400,000
Additional paid-in capital 156,694,284 133,631,985
Accumulated other comprehensive income (loss) (90,971) 18,554
Accumulated deficit (192,659,942) (128,107,220)
Stockholders’ equity attributable to COSG Group Holdings Inc. (34,192,777) 6,397,717
Noncontrolling interest 9,956 (10,111)
Stockholders’ equity (34,182,821) 6,387,606
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 19,444,846 39,109,922
Related Party    
Current liabilities:    
Amounts due to related parties $ 6,350,245 $ 23,931,078
v3.23.3
Unaudited Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares
Sep. 30, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 5,000,000,000 5,000,000,000
Common stock, shares issued 1,870,992,244 454,398,143
Common stock, shares outstanding 1,870,992,244 454,398,143
v3.23.3
Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Income Statement [Abstract]        
Revenue, net $ 2,493,100 $ 597,351 $ 8,051,436
Cost of revenue 53,372 (311,620) (313,601) (1,118,755)
Gross profit 53,372 2,181,480 283,750 6,932,681
Operating expenses:        
Sales and marketing expenses 9 (491,783) (5,641) (26,495,720)
Corporate development expense (13,905) (510,786) (71,113) (26,242,917)
Technology and development expense (18,489) (273,839) (35,369) (32,832,406)
Metaverse and AI development expense (5,000,000) (5,000,000)
General and administrative expenses (1,068,316) (3,607,243) (15,425,508) (7,192,879)
Total operating expenses (1,100,701) (9,883,651) (15,537,631) (97,763,922)
LOSS FROM CONTINUING OPERATION (1,047,329) (7,702,171) (15,253,881) (90,831,241)
Other income (expense):        
Interest income 99 84 191 90
Convertible notes interest expense (4,516) (979) (14,947) (979)
Gain (loss) on disposal of digital assets 206 206
Impairment loss on digital assets (2,477) (12,633)
Impairment loss on goodwill (51,231) (51,231)
Loan interest expense (46,006) (1,360) (123,244) (1,360)
Loss on disposal of subsidiaries (48,610,283) (48,610,283)
Sundry income 506
Total other expense, net (48,711,937) (4,526) (48,799,514) (14,170)
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (47,043,982) (7,706,697) (64,053,395) (90,845,411)
Income tax expense (188,878) (355,681) (546,146)
LOSS FROM CONTINUING OPERATIONS (47,043,982) (7,895,575) (64,053,395) (91,391,557)
DISCONTINUED OPERATIONS:        
Loss from discontinued operations, net of income taxes (2,729,883) 546,942 (489,506) 1,033,902
NET LOSS (49,773,865) (7,348,633) (64,053,395) (90,357,655)
Net income (loss) attributable to noncontrolling interest 9,821 (156,049) 9,821 (113,468)
Net loss attributable to common shareholders (49,783,686) (7,192,584) (64,552,722) (90,244,187)
Foreign currency adjustment loss (115,862) (11,403) (109,525) (15,923)
COMPREHENSIVE LOSS $ (49,899,548) $ (7,203,987) $ (64,662,247) $ (90,260,110)
Net loss per share:        
– Basic (in Shares) (0.03) (0.02) (0.06) (0.24)
– Diluted (in Shares) (0.03) (0.02) (0.06) (0.24)
Weighted average common shares outstanding        
– Basic (in Dollars per share) $ 1,846,177,793 $ 385,604,067 $ 1,160,062,852 $ 374,086,727
– Diluted (in Dollars per share) $ 1,846,177,793 $ 385,604,067 $ 1,160,062,852 $ 374,086,727
Share-based compensation expense included in operating expenses:        
Sales and marketing expenses $ 150,225 $ 25,913,695
Corporate development expense 333,225 25,646,926
Technology and development expense 45,000 32,105,000
General and administrative expenses 22,500 2,172,839 12,316,110 2,811,839
Share-based compensation expense $ 22,500 $ 2,701,289 $ 12,316,110 $ 86,477,460
v3.23.3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Cash flows from operating activities:    
Net loss $ (64,053,395) $ (90,357,655)
Less: net loss from discontinued operations (489,506) 1,033,902
Net loss from continuing operations (64,053,395) (91,391,557)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:    
Depreciation of property and equipment 663 6,341
Amortization of intangible assets 2,524,214 2,979,763
Imputed interest expense 714,696
Digital assets received as revenue (8,025,885)
Digital assets paid for expense 8,029,743
Loss on disposal of digital assets (206)
Impairment loss on digital assets 12,633
Impairment loss on goodwill (51,231)
Shares issued for services rendered 10,322,092 83,856,800
Loss on disposal of subsidiaries 48,610,283
Change in operating assets and liabilities:    
Accounts receivable (583,113)
Loan receivables (1,429,750)
Loan interest and fee receivables 184,327
Inventories 17,778 (975,512)
Prepayment and other receivables 6,497 51,114
Accrued liabilities and other payables (174,252) 54,977
Accrued consulting and service fee 2,225,870 2,642,821
Accounts payables 1,977,320
Right-of-use assets and operating lease liabilities (60,662)
Produced content cost (67,272)
Income tax payable 546,146
Net cash (used in) provided by operating activities – Continuing operations (1,644,100) 139,739
Net cash provided by operating activities – Discontinued operations 910,644
Net cash (used in) provided by operating activities (816,278) 139,739
Cash flows from investing activities:    
Payment to acquire property and equipment (2,858)
Payment to acquire intangible assets (145) (1,874)
Cash from acquisition of subsidiary 10,246 33,322
Net cash provided by investing activities – Continuing operations 10,101 28,590
Net cash provided by investing activities – Discontinued operations
Net cash provided by investing activities 10,101 28,590
Cash flows from financing activities:    
Proceeds from loan payables 327,110
(Repayment to) advance from related parties (429,660) 59,684
(Repayment to) proceeds from convertible note payables (197,033) 312,952
Net cash (used in) provided by financing activities – Continuing operations (626,693) 699,746
Net cash (used in) provided by financing activities – Discontinued operations (739,800)
Net cash (used in) provided by financing activities (1,366,493) 699,746
Foreign currency translation adjustment (321,092) (24,156)
Net change in cash and cash equivalents (2,410,940) 843,919
BEGINNING OF PERIOD 2,468,828 1,131,128
END OF PERIOD 57,888 1,975,047
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Cash paid for income taxes
Cash paid for interest $ 94,782 $ 367,337
v3.23.3
Unaudited Condensed Consolidated Statements of Changes In Stockholders’ Equity (Deficit) - USD ($)
Common stock
Common stock to be issued
Additional paid-in capital
Accumulated other comprehensive (loss) income
(Accumulated losses) retained earnings
Non- controlling interest
Total
Balance at Dec. 31, 2021 $ 358,067 $ 806,321 $ 44,930,337 $ (7,588) $ (26,436,477) $ 118,409 $ 19,769,069
Balance (in Shares) at Dec. 31, 2021 358,067,481            
Foreign currency translation adjustment (10,442) (10,442)
Imputed interest on related party loans 236,336 236,336
Commitment Share issued for private placement $ 100 (100)
Commitment Share issued for private placement (in Shares) 100,000            
Share issued for acquisition of subsidiaries $ 154 612,086 12,966 625,206
Share issued for acquisition of subsidiaries (in Shares) 153,060            
Net loss for the period (62,391,753) (3,391) (62,395,144)
Balance at Mar. 31, 2022 $ 358,321 806,321 45,778,659 (18,030) (88,828,230) 127,984 (41,774,975)
Balance (in Shares) at Mar. 31, 2022 358,320,541            
Balance at Dec. 31, 2021 $ 358,067 806,321 44,930,337 (7,588) (26,436,477) 118,409 19,769,069
Balance (in Shares) at Dec. 31, 2021 358,067,481            
Net loss for the period             (90,357,655)
Balance at Sep. 30, 2022 $ 386,923 800,000 130,336,783 (23,511) (116,680,664) 1,790 14,821,321
Balance (in Shares) at Sep. 30, 2022 386,923,398            
Balance at Mar. 31, 2022 $ 358,321 806,321 45,778,659 (18,030) (88,828,230) 127,984 (41,774,975)
Balance (in Shares) at Mar. 31, 2022 358,320,541            
Foreign currency translation adjustment 5,922 5,922
Imputed interest on related party loans 241,872 241,872
Share issued for services rendered $ 26,985 (6,321) 82,636,136       82,656,800
Share issued for services rendered (in Shares) 26,985,556            
Net loss for the period (20,659,850) 45,972 (20,613,878)
Balance at Jun. 30, 2022 $ 385,306 800,000 128,656,667 (12,108) (109,488,080) 173,956 20,515,741
Balance (in Shares) at Jun. 30, 2022 385,306,097            
Foreign currency translation adjustment     (11,403)     (11,403)
Imputed interest on related party loans     234,959       234,959
Share issued for services rendered $ 1,452   1,198,548       1,200,000
Share issued for services rendered (in Shares) 1,452,785            
Share issued for acquisition of subsidiaries $ 165   246,609     (16,117) 230,657
Share issued for acquisition of subsidiaries (in Shares) 164,516            
Net loss for the period         (7,192,584) (156,049) (7,348,633)
Balance at Sep. 30, 2022 $ 386,923 800,000 130,336,783 (23,511) (116,680,664) 1,790 14,821,321
Balance (in Shares) at Sep. 30, 2022 386,923,398            
Balance at Dec. 31, 2022 $ 454,398 400,000 133,631,985 18,554 (128,107,220) (10,111) 6,387,606
Balance (in Shares) at Dec. 31, 2022 454,398,143            
Foreign currency translation adjustment 36,829 36,829
Imputed interest on related party loans 237,118 237,118
Share issued for services rendered $ 2,603 166,249 168,852
Share issued for services rendered (in Shares) 2,602,772            
Net loss for the period (2,616,322) (2,616,322)
Balance at Mar. 31, 2023 $ 457,001 400,000 134,035,352 55,383 (130,723,452) (10,111) 4,214,083
Balance (in Shares) at Mar. 31, 2023 457,000,915            
Balance at Dec. 31, 2022 $ 454,398 400,000 133,631,985 18,554 (128,107,220) (10,111) 6,387,606
Balance (in Shares) at Dec. 31, 2022 454,398,143            
Net loss for the period             (64,053,395)
Balance at Sep. 30, 2023 $ 1,863,852   156,694,284 (90,971) (192,659,942) 9,956 (34,182,821)
Balance (in Shares) at Sep. 30, 2023 1,863,852,317            
Balance at Mar. 31, 2023 $ 457,001 400,000 134,035,352 55,383 (130,723,452) (10,111) 4,214,083
Balance (in Shares) at Mar. 31, 2023 457,000,915            
Foreign currency translation adjustment   (30,492) (30,492)
Imputed interest on related party loans 223,775 223,775
Share issued for services rendered $ 1,013,074 9,117,666 10,130,740
Share issued for services rendered (in Shares) 1,013,074,000            
Net loss for the period (12,152,714)   (12,152,714)
Balance at Jun. 30, 2023 $ 1,470,075 400,000 143,376,793 24,891 (142,876,256) (10,111) 2,385,392
Balance (in Shares) at Jun. 30, 2023 1,470,074,915            
Foreign currency translation adjustment   (115,862) (115,862)
Shares cancelled $ (353)   353        
Shares cancelled (in Shares) (352,941)            
Shares cancelled for disposal of subsidiaries $ (8,120)   13,296,888       13,288,768
Shares cancelled for disposal of subsidiaries (in Shares) (8,119,657)            
Share issued for services rendered $ 2,250   20,250       22,500
Share issued for services rendered (in Shares) 2,250,000            
Share issued for acquisition of subsidiaries $ 400,000 $ (400,000)       10,246 10,246
Share issued for acquisition of subsidiaries (in Shares) 400,000,000            
Net loss for the period         (49,783,686) 9,821 (49,773,865)
Balance at Sep. 30, 2023 $ 1,863,852   $ 156,694,284 $ (90,971) $ (192,659,942) $ 9,956 $ (34,182,821)
Balance (in Shares) at Sep. 30, 2023 1,863,852,317            
v3.23.3
Basis of Presentation
 9 Months Ended
Sep. 30, 2023
Basis of Presentation [Abstract]  
BASIS OF PRESENTATION

NOTE 1 – BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the consolidated balance sheet as of December 31, 2022 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2023 or for any future period.
v3.23.3
Organization and Business Background
 9 Months Ended
Sep. 30, 2023
Organization and Business Background [Abstract]  
ORGANIZATION AND BUSINESS BACKGROUND

NOTE 2 – ORGANIZATION AND BUSINESS BACKGROUND

 

Cosmos Group Holdings Inc. (the “Company” or “COSG”) was incorporated in the state of Nevada on August 14, 1987.

 

The Company currently offers financial and money lending services in Hong Kong and operates an online platform for the sale and distribution of arts and collectibles around the world, through the use of blockchain technologies and minting token.

 

On September 30, 2023, the Company discontinued and disposed the money lending business.

 

Description of subsidiaries 

 

Company name  Place of incorporation
and kind of legal entity		  Principal activities
and place of
operation		  Particulars of
registered/ paid up
share capital		  Effective
interest
held		 
Massive Treasure Limited  BVI, limited liability company  Investment holding  50,000 ordinary shares with a par value of US$1 each   100%
               
Coinllectibles DeFi Limited  Hong Kong, limited liability company  Financing service management in Hong Kong  10,000 ordinary shares for HK$10,000   100%
               
Coinllectibles Private Limited  Singapore, limited liability company  Corporate management and IT development in Singapore  1,000 ordinary shares for S$1,000   100%
               
Healthy Finance Limited#  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
8M Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  10 ordinary shares for HK$10   100%
               
Dragon Group Mortgage Limited#  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
E-on Finance Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  2 ordinary shares for HK$2   100%
               
Lee Kee Finance Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  920,000 ordinary shares for HK$920,000   51%
               
Rich Finance (Hong Kong) Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
Long Journey Finance Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  100 ordinary shares for HK$100   51%
               
Vaav Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
Star Credit Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  1,000,000 ordinary shares for HK$1,000,000   51%
               
NFT Limited  BVI, limited liability company  Procurement of intangible assets in Hong Kong  10,000 ordinary shares with a par value of US$1 each   51%
               
Grandway Worldwide Holding Limited  BVI, limited liability company  Development of mobile application  50,000 ordinary shares for USD$50,000   51%
               
Grand Town Development Limited  Hong Kong, limited liability company  Provision treasury management  2 ordinary shares for HK$2   100%
               
Grand Gallery Limited  Hong Kong, limited liability company  Procurement of art and collectibles in Hong Kong  400,000 ordinary shares for HK$400,000   80%
               
Phoenix Waters Group Limited  BVI, limited liability company  Investment holding  50,000 ordinary shares with a par value of US$1 each   100%

 

#These subsidiaries were disposed on June 30, 2023
^These subsidiaries were disposed on September 30, 2023

 

The Company and its subsidiaries are hereinafter referred to as (the “Company”).

 
v3.23.3
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2023
Summary of Significant Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying unaudited condensed consolidated financial statements and notes.

 

● Basis of presentation

 

These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

 

● Use of estimates and assumptions 

 

In preparing these unaudited condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates. If actual results significantly differ from the Company’s estimates, the Company’s financial condition and results of operations could be materially impacted. Significant estimates in the period include impairment loss on loan receivables, useful lives of intangible assets and property and equipment and deferred tax valuation allowance.

 

● Discontinued operations

 

On September 30, 2023, the Company disposed the lending segment and related assets and liabilities have been accounted for as discontinued operations in the Company’s condensed consolidated balance sheets for all periods presented. The operating results related to these lines of business have been included in discontinued operations in the Company’s unaudited condensed consolidated statement of operations for all periods presented.

 

● Basis of consolidation

 

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

 

● Segment reporting

 

Accounting Standard Codification (“ASC”) Topic 280, Segment Reporting establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in condensed consolidated financial statements. The Company operates in two reportable operating segments in Hong Kong and Singapore. Lending segment was discontinued and disposed on September 30, 2023.

 

● Cash and cash equivalents

 

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

 

● Inventories

 

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The cost includes the purchase cost of arts and collectibles from related party and independent artists and the costs associated with token minting for collectible pieces. The Company will reduce inventory on hand to its net realizable value on an item-by-item basis when it is apparent that the expected realizable value of an inventory item falls below its original cost. A charge to cost of sales results when the estimated net realizable value of specific inventory items declines below cost. Management regularly reviews the Company’s inventories for such declines in value. Although inventories are classified as current assets in the accompanying balance sheets, the Company anticipates that certain inventories will be sold beyond twelve months from September 30, 2023.

 

● Loan receivables, net (discontinued operations)

 

Loans receivables are carried at unpaid principal balances, less the allowance for loan losses and charge-offs. The loans receivables portfolio consists of real estate mortgage loans, commercial and personal loans.

 

Loans are placed on nonaccrual status when they are past due 180 days or more as to contractual obligations or when other circumstances indicate that collection is not probable. When a loan is placed on nonaccrual status, any interest accrued but not received is reversed against interest income. Payments received on a nonaccrual loan are either applied to protective advances, the outstanding principal balance or recorded as interest income, depending on an assessment of the ability to collect the loan. A nonaccrual loan may be restored to accrual status when principal and interest payments have been brought current and the loan has performed in accordance with its contractual terms for a reasonable period (generally six months).

 

If the Company determines that a loan is impaired, the Company next determines the amount of the impairment. The amount of impairment on collateral dependent loans is charged off within the given fiscal quarter. Generally, the amount of the loan and negative escrow in excess of the appraised value less estimated selling costs, for the fair value of collateral valuation method, is charged off. For all other loans, impairment is measured as described below in Allowance for Loan Losses.

 

● Allowance for loan losses (“ALL”)

 

The adequacy of the Company’s ALL is determined, in accordance with ASC Topic 450-20 Loss Contingencies includes management’s review of the Company’s loan portfolio, including the identification and review of individual problem situations that may affect a borrower’s ability to repay. In addition, management reviews the overall portfolio quality through an analysis of delinquency and non-performing loan data, estimates of the value of underlying collateral, current charge-offs and other factors that may affect the portfolio, including a review of regulatory examinations, an assessment of current and expected economic conditions and changes in the size and composition of the loan portfolio. 

 

The ALL reflects management’s evaluation of the loans presenting identified loss potential, as well as the risk inherent in various components of the portfolio. There is significant judgment applied in estimating the ALL. These assumptions and estimates are susceptible to significant changes based on the current environment. Further, any change in the size of the loan portfolio or any of its components could necessitate an increase in the ALL even though there may not be a decline in credit quality or an increase in potential problem loans.

 

● Property and equipment

 

Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

 

   Expected useful life
Computer and office equipment  5 years

 

Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

 

Depreciation expense for the nine months ended September 30, 2023 and 2022 totaled $3,579 and $6,341, respectively.

 

Depreciation expense for the three months ended September 30, 2023 and 2022 totaled $1,984 and $2,016, respectively.

 

● Intangible assets

 

The Company accounts for its intangible assets in accordance with ASC 350. Intangible assets represented the acquired technology software, licensed technology know-how, trademark and trade names for its internal use to facilitate and support its platform operation. They are stated at the purchase cost and are amortized based on their economic benefit expected to be realized.

 

● Impairment of long-lived assets

 

In accordance with the provisions of ASC Topic 360, Impairment or Disposal of Long-Lived Assets, all long-lived assets such as property and equipment and intangible assets owned and held by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.

 

● Revenue recognition

 

ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

 

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

 

  ● identify the contract with a customer;
     
  ● identify the performance obligations in the contract;
     
  ● determine the transaction price;
     
  ● allocate the transaction price to performance obligations in the contract; and
     
  ● recognize revenue as the performance obligation is satisfied.

 

Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product and collection is reasonably assured. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct.

 

Arts and Collectibles Technology Business (Continuing operations)

 

The Company currently operates its online platform in the sale and distribution of arts and collectibles, with the use of blockchain technologies and minting tokens. The item of arts and collectibles is individually monetized as non-interchangeable unit of data stored on a blockchain, which is a form of digital ledger that can be sold, in the form of a minting token on the online platform. The Company involves with the following activities to earn its revenue in this segment:

 

Sale of arts and collectibles products: The Company recognizes revenue derived from the sales of the arts and collectibles when the Company has transferred the risks and rewards to the customers.

 

The minted item of the individual art or collectible which is sold in crypto asset transaction is the only performance obligation under the fixed-fee arrangements. The corresponding fees received upon each sale transaction is recognized as revenue, is recognized when the designated token, minted with the corresponding art and collectibles is delivered to the end user, together with the transfer of both digital and official title.

 

Transaction fee income:

 

The Company also generates revenue through transaction fees transacted on its platform or other marketplaces. The Company charges a fee to individual customer at the secondary transaction level, which is allocated to the single performance obligation. The transaction fee is collected from the customer in digital assets, with revenue measured based on a certain percentage of the value of digital assets at the time the transaction is executed.

 

The Company’s service comprises of a single performance obligation to provide a platform facilitating the transfer of its DOTs. The Company considers its performance obligation satisfied, and recognizes revenue, at the point in time the transaction is processed.

 

In this segment, the transaction consideration that the Company receives is a non-cash consideration in the form of digital assets, which are cryptocurrencies. The Company measures the related cryptocurrencies at fair value on the date received, at the same time, the revenue is recognized. Fair value of the digital asset award received is determined using the average U.S. dollar spot rate of the related digital currency at the time of receipt.

 

Expenses associated with operating the Arts and Collectibles Technology Business, such as minting cost and purchase cost of collectibles and artworks are also recorded as cost of revenues.

 

Lending Business (discontinued operations)

 

The Company is licensed to originate personal loan, company loan and mortgage loan in Hong Kong. During the nine months ended September 30, 2023 and 2022, the Company originated loans generally ranging from $644 to $579,000, with terms ranging from 1 week to 120 months. The Company mainly derives a portion of its revenue from loan which is specifically excluded from the scope of this standard, that is, interest on loan receivable is accrued monthly and credited to income as earned.

 

● Leases

 

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use assets may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

 

In accordance with the guidance in ASC Topic 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.

 

The Company made the policy election to not separate lease and non-lease components. Each lease component and the related non-lease components are accounted for together as a single component.

 

● Income taxes

 

The Company adopted the ASC Topic 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

 

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

 

● Uncertain tax positions

 

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC Topic 740 provisions of Section 740-10-25 for the nine months ended September 30, 2023 and 2022.

 

● Foreign currencies translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.

 

The reporting currency of the Company is United States Dollar (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company has operations in Hong Kong and Singapore and maintains the books and record in the local currency, Hong Kong Dollars (“HKD”) and Singapore Dollars (“SGD”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, Translation of Financial Statement, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholder’s equity.

 

Translation of amounts from HKD and SGD into US$ has been made at the following exchange rates for the following periods:

 

   September 30,
2023		   September 30,
2022		 
Period-end HKD:US$ exchange rate   0.1277    0.1274 
Period average HKD:US$ exchange rate   0.1277    0.1277 

 

   September 30,
2023		   September 30,
2022		 
Period-end SGD:US$ exchange rate   0.7316    0.6973 
Period average SGD:US$ exchange rate   0.7458    0.7271 

 

● Comprehensive income

 

ASC Topic 220, Comprehensive Income, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying consolidated statements of changes in stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

 

● Net loss per share

 

The Company calculates net loss per share in accordance with ASC Topic 260, Earnings per Share. Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 

● Stock based compensation

 

Pursuant to ASU 2018-07, the Company follows ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all share-based payment awards (employee or non-employee), are measured at grant-date fair value of the equity instruments that an entity is obligated to issue. Restricted stock units are valued using the market price of the Company’s common shares on the date of grant. The Company uses a Black-Scholes option model to estimate the fair value of employee stock options at the date of grant. As of September 30, 2023, those shares issued and stock options granted for service compensations were immediately vested, and therefore these amounts are thus recognized as expense in the operation.

 

● Related parties

 

The Company follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.

 

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

The condensed consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

● Commitments and contingencies

 

The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the 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 assesses 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 un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

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 consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

● Fair value of financial instruments

 

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

 

  Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
     
  Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
     
  Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.

 

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

 

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, loan and fee receivable, prepayments and other receivables, amounts due from related parties, accrued liabilities and other payables, loans payable, amounts due to related parties approximate their fair values because of the short maturity of these instruments.

 

●Recent accounting pronouncements

 

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
v3.23.3
Going Concern Uncertainties
 9 Months Ended
Sep. 30, 2023
Going Concern Uncertainties [Abstract]  
GOING CONCERN UNCERTAINTIES

NOTE 4 – GOING CONCERN UNCERTAINTIES

 

The accompanying unaudited condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

The Company has suffered from an accumulated deficit of $192,659,942 and working capital of $44,919,517 at September 30, 2023. The continuation of the Company as a going concern in the next twelve months is dependent upon the continued financial support from its stockholders. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

 

These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.
v3.23.3
Disposal of Subsidiaries
 9 Months Ended
Sep. 30, 2023
Disposal of Subsidiaries [Abstract]  
DISPOSAL OF SUBSIDIARIES

NOTE 5 – DISPOSAL OF SUBSIDIARIES 

 

During the nine months ended September 30, 2023, the Company disposed the lending segment and sold all equity interest. A loss of $48,610,283 was recognized from the disposal of subsidiaries.
v3.23.3
Revenue from Contracts with Customers
 9 Months Ended
Sep. 30, 2023
Revenue From Contract With Customers [Abstract]  
REVENUE FROM CONTRACTS WITH CUSTOMERS

NOTE 6 – REVENUE FROM CONTRACTS WITH CUSTOMERS

 

The following is a disaggregation of the Company’s revenue by major source for the respective periods:

 

   Three months ended
September 30,		   Nine months ended
September 30,		 
   2023   2022   2023   2022 
                 
Interest income (from discontinued operation)  $1,911   $1,517,764   $3,100,102   $4,833,433 
ACT income                    
- Sale of arts and collectibles products   
-
    418,998    595,590    1,825,448 
- Transaction fee income and others   
-
    2,074,102    
-
    6,225,988 
    
-
    2,493,100    595,590    8,051,436 
                     
   $1,911   $4,010,864   $3,695,692   $12,884,869 
v3.23.3
Business Segment Information
 9 Months Ended
Sep. 30, 2023
Business Segment Information [Abstract]  
BUSINESS SEGMENT INFORMATION

NOTE 7 – BUSINESS SEGMENT INFORMATION

 

Currently, the Company has two reportable business segments:

 

  (i) Lending Segment, mainly provides financing and lending services (discontinued on September 30, 2023); and
     
  (ii) Arts and Collectibles Technology (“ACT”) Segment, mainly operates an online platform to sell and distribute the arts and collectibles to end-users, with the use of blockchain technologies.

 

In the following table, revenue is disaggregated by primary major product line, and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments.

 

   Three months ended
September 30, 2023		 
   Lending
Segment (discontinued operation)		   ACT
Segment		   Total 
Revenue from external customers:            
Interest income  $1,911    
-
    1,911 
Arts and collectibles technology income   
-
    
-
    
-
 
Total revenue, net   1,911    
-
    1,911 
                
Cost of revenue:               
Interest expense   (58)   
-
    (58)
Arts and collectibles technology expense   
-
    53,327    53,327 
Total cost of revenue   (58)   53,327    53,314 
                
Gross profit   1,853         55,225 
                
Operating expenses               
Sales and marketing   (74)   9    (65)
Corporate development   
-
    (13,905)   (13,905)
Technology and development   
-
    (18,489)   (18,489)
General and administrative   (15,908)   (1,068,316)   (1,084,224)
Total operating expenses   (15,982)   (1,100,701)   (1,116,683)
                
Loss from operations   (14,129)   (1,047,329)   (1,061,458)
                
Other income (expense):               
Interest income   1    99    100 
Convertible notes interest expense   
-
    (4,516)   (4,516)
Impairment loss on goodwill   
-
    (51,231)   (51,231)
Imputed interest expense   (284)   
-
    (284)
Loan interest expense   
-
    (46,006)   (46,006)
Loss on disposal of subsidiaries   (48,609,336)   (947)   (48,610,283)
Sundry income   32    
-
    32 
Total other expenses, net   (48,609,587)   (102,601)   (48,712,188)
                
Segment loss  $(48,623,716)   (1,149,930)   (49,773,646)

 

   Three months ended September 30, 2022 
  

Lending
Segment

(discontinued operation)

   ACT
Segment		   Total 
Revenue from external customers:            
Interest income  $1,517,764   $
-
   $1,517,764 
Arts and collectibles technology income   
-
    2,493,100    2,493,100 
Total revenue, net   1,517,764    2,493,100    4,010,864 
                
Cost of revenue:               
Interest expense   (27,046)   
-
    (27,046)
Arts and collectibles technology expense   
-
    (311,620)   (311,620)
Total cost of revenue   (27,046)   (311,620)   (338,666)
                
Gross profit   1,490,718    2,181,480    3,672,198 
                
Operating expenses               
Sales and marketing   (7,681)   (491,783)   (499,464)
Corporate development   
-
    (510,786)   (510,786)
Technology and development   
-
    (273,839)   (273,839)
Metaverse and AI development   
-
    (5,000,000)   (5,000,000)
General and administrative   (737,558)   (3,607,243)   (4,344,801)
Total operating expenses   (745,239)   (9,883,651)   (10,628,890)
                
Income (loss) from operations   745,479    (7,702,171)   (6,956,692)
                
Other income (expense):               
Interest income   104    84    188 
Gain (loss) on disposal of digital assets   
-
    206    206 
Impairment loss on digital assets   
-
    (2,477)   (2,477)
Convertible notes interest expense   
-
    (979)   (979)
Loan interest expense   
-
    (1,360)   (1,360)
Imputed interest expense   (235,205)   
-
    (235,205)
Sundry income   36,564    
-
    36,564 
Total other expense, net   (198,537)   (4,526)   (203,063)
                
Segment income (loss)  $546,942   $(7,706,697)  $(7,159,755)

 

   Nine months ended September 30, 2023 
  

Lending

Segment (discontinued operation)

  

ACT

Segment

   Total 
Revenue from external customers:            
Interest income  $3,100,102    -    3,100,102 
Arts and collectibles technology income   
-
    597,351    597,351 
Total revenue, net   3,100,102    597,351    3,697,453 
                
Cost of revenue:               
Interest expense   (94,782)   -    (94,782)
Arts and collectibles technology expense   
-
    (313,601)   (313,601)
Total cost of revenue   (94,782)   (313,601)   (408,383)
                
Gross profit   3,005,320    283,750    3,289,070 
                
Operating Expenses               
Sales and marketing   (119,300)   (5,641)   (124,941)
Corporate development   
-
    (71,113)   (71,113)
Technology and development   
-
    (35,369)   (35,369)
General and administrative   (4,792,862)   (13,244,612)   (18,037,474)
Total operating expenses   (4,912,162)   (13,356,735)   (18,268,897)
                
Loss from operations   (1,906,842)   (13,074,746)   (14,979,827)
                
Other income (expense):               
Interest income   1,976    191    2,167 
Convertible notes interest expense   
-
    (14,947)   (14,947)
Impairment loss on goodwill   
-
    (51,231)   (51,231)
Imputed interest expense   (461,179)   
-
    (461,179)
Loan interest expense   
-
    (123,244)   (123,244)
Loss on disposal of subsidiaries   (48,609,336)   (947)   (48,610,283)
Sundry income   51,324    
-
    51,324 
Total other expenses, net   (49,017,215)   (190,178)   (49,207,393)
                
Segment loss  $(50,924,057)   (13,263,163)   (64,187,220)

 

   Nine months ended September 30, 2022 
  

Lending
Segment

(discontinued operation)

  

ACT

Segment

   Total 
Revenue from external customers:            
Interest income  $4,833,433   $
-
   $4,833,433 
Arts and collectibles technology income   
-
    8,051,436    8,051,436 
Total revenue, net   4,833,433    8,051,436    12,884,869 
                
Cost of revenue:               
Interest expense   (367,337)   
-
    (367,337)
Arts and collectibles technology expense   
-
    (1,118,755)   (1,118,755)
Total cost of revenue   (367,337)   (1,118,755)   (1,486,092)
                
Gross profit   4,466,096    6,932,681    11,398,777 
                
Operating expenses               
Sales and marketing   (260,599)   (26,495,720)   (26,756,319)
Corporate development   
-
    (26,242,917)   (26,242,917)
Technology and development   
-
    (32,832,406)   (32,832,406)
Metaverse and AI development   
-
    (5,000,000)   (5,000,000)
General and administrative   (2,550,218)   (7,192,879)   (9,743,097)
Total operating expenses   (2,810,817)   (97,763,922)   (100,574,739)
                
Income (loss) from operations   1,655,279    (90,831,241)   (89,175,962)
                
Other income (expense):               
Interest income   211    90    301 
Gain on disposal of digital assets   
-
    206    206 
Impairment loss on digital assets   
-
    (12,633)   (12,633)
Convertible notes interest expense   
-
    (979)   (979)
Loan interest expense   
-
    (1,360)   (1,360)
Imputed interest expense   (714,696)   
-
    (714,696)
Sundry income   93,108    506    93,614 
Total other expense, net   (621,377)   (14,170)   (635,547)
                
Segment income (loss)  $1,033,902   $(90,845,411)  $(89,811,509)

 

The below revenues are based on the countries in which the customer is located. Summarized financial information concerning the geographic segments is shown in the following tables:

 

   Three months ended
September 30,		   Nine months ended
September 30,		 
   2023   2022   2023   2022 
                 
Hong Kong  $1,911    1,517,764   $3,100,102    4,833,433 
Around the world   
-
    2,493,100    597,351    8,051,436 
                     
    1,911    4,010,864    3,697,453    12,884,869 
v3.23.3
Intangible Assets, Net
 9 Months Ended
Sep. 30, 2023
Intangible Assets, Net [Abstract]  
INTANGIBLE ASSETS, NET

NOTE 8 – INTANGIBLE ASSETS, NET

 

A summary of intangible assets as of September 30, 2023 and December 31, 2022 is as follows:

 

  

Estimated

useful life

 

September  30,
2023

  

December 31,
2022

 
At cost:           
Acquired technology software  5 years  $17,344,690   $17,344,690 
Trademarks and trade name  10 years   39,415    39,270 
Less: accumulated amortization      (6,657,665)   (4,052,889)
Foreign translation adjustment      8,763    8,356 
      $10,735,203   $13,339,427 

 

As of September 30, 2023, the estimated annual amortization expense for intangible assets for each of the succeeding five years and thereafter is as follows

 

Period ending September 30:    
2024  $3,473,760 
2025   3,473,760 
2026   3,473,760 
2027   293,890 
2028   4,812 
Thereafter   15,221 
   $10,735,203 

 

Amortization of intangible assets for the three months ended September 30, 2023 and 2022 totaled $868,260 and $993,257, respectively.

 

Amortization of intangible assets for the nine months ended September 30, 2023 and 2022 totaled $2,604,776 and $2,979,763, respectively.
v3.23.3
Accrued Consulting and Service Fee
 9 Months Ended
Sep. 30, 2023
Accrued Consulting and Service Fee [Abstract]  
ACCRUED CONSULTING AND SERVICE FEE

NOTE 9 – ACCRUED CONSULTING AND SERVICE FEE

 

For the nine months ended September 30, 2023, the Company agreed to compensate certain business or professional service providers, in which rendered IT development service, sale and marketing service, corporate development service and administrative service. These accrued consulting and service fees totaled $5,077,589 and agreed to be settled in lieu of the common stock of the Company. 
v3.23.3
Loan Payables
 9 Months Ended
Sep. 30, 2023
Loan Payables [Abstract]  
LOAN PAYABLES

NOTE 10 – LOAN PAYABLES

 

The amounts represented temporary advances received from the third parties for the lending business, which carried annual interest at the rate of 18% to 21%. These amounts were unsecured and will become repayable within one year. The loan payable balance was $0 and $1,823,536 as of September 30, 2023 and December 31, 2022, respectively.

 

Interest related to the loan payables was $46,006 and $27,046 for the three months ended September 30, 2023 and 2022, respectively.

 

Interest related to the loan payables was $123,244 and $367,337 for the nine months ended September 30, 2023 and 2022, respectively.
v3.23.3
Amounts Due to Related Parties
 9 Months Ended
Sep. 30, 2023
Amounts Due to Related Parties [Abstract]  
AMOUNTS DUE TO RELATED PARTIES

NOTE 11 – AMOUNTS DUE TO RELATED PARTIES

 

The amounts represented temporary advances to the Company for the lending business, which were unsecured, interest-free and had no fixed terms of repayments. The related party balances were $6,350,245 and $23,931,078 as of September 30, 2023 and December 31, 2022, respectively.

 

During the three and nine months ended September 30, 2023, the Company recorded and imputed additional non-cash interest of $0 and $0 at the market rate of 5% per annum on these interest-free related party loans, under ASC 835-30 “Imputation of Interest”.
v3.23.3
Convertibles Note Payables
 9 Months Ended
Sep. 30, 2023
Convertibles Note Payables [Abstract]  
CONVERTIBLES NOTE PAYABLES

NOTE 12 – CONVERTIBLES NOTE PAYABLES

 

Securities purchase agreement and related convertible note

 

Chan Hin Yip Note

 

On August 2, 2022, the Company entered into a Sale and Purchase Agreement (“SPA”) with CHAN Hin Yip, pursuant to which the Company agreed to purchase approximately 58 collectible items from Mr. Chan for a purchase price of HKD1,305,000 (approximately USD $167,308) (the “Purchase Price”), through its subsidiaries holds approximately 80% of the issued and outstanding securities of Grand Gallery Limited (“GGL”), and Mr. Chan is a director and 5% equity owner of GGL.

 

On August 2, 2022, the Company and Mr. Chan entered into a Note Purchase Agreement (“Chan Hin Yip Note”) pursuant to which the Company agreed to pay the Purchase Price via a promissory note that will be converted into shares of the Company’s common stock at a conversion price equal to 90% of the volume weighted average closing price of the Company’s common stock for the ten days immediately prior to February 2, 2023. The Chan Hin Yip Note bears interest at 1% per annum and is due on February 2, 2023. At the date of this report, Chan Hin Yip Note is currently in default.

 

Root Ventures Note

 

On November 11, 2022, the Company and Root Ventures, LLC (“Root Ventures”) entered into a Securities Purchase Agreement, whereby the Company issued a promissory note to Root Ventures (“Root Ventures Note”) in the original principal amount of $33,000. The Root Ventures Note is convertible into shares of the common stock of the Company one hundred eighty (180) days following the date of funding at a price equal to 60% of the average of two (2) lowest trading price of the Company’s common stock for the fifteen (15) trading days prior to conversion. The Root Ventures Note bears interest at 10% per annum and is due on November 10, 2023.

 

1800 Diagonal Note

 

On August 26, 2022, the Company and 1800 Diagonal Lending LLC (“1800 Diagonal”) entered into a Securities Purchase Agreement, whereby the Company issued a promissory note to 1800 Diagonal (“1800 Diagonal Note”) in the original principal amount of $89,250. The 1800 Diagonal Note is convertible into shares of the common stock of the Company one hundred eighty (180) days following the date of funding at a price equal to 65% of the average of two (2) lowest trading price of the Company’s common stock for the twenty (20) trading days prior to conversion. The Company has the option to prepay the 1800 Diagonal Note by paying an amount equal to the then outstanding amount multiplied by premium percentage during the first one hundred eighty (180) days. The 1800 Diagonal Note bears interest at 8% per annum and is due on August 26, 2023.

 

As of September 30, 2023 and December 31, 2022, the Company did not prepay the convertible note payables and accrued convertible notes interest expense of $123,244 and $979, respectively.
v3.23.3
Stock-Based Companesation
 9 Months Ended
Sep. 30, 2023
Stock Based Companesation [Abstract]  
STOCK-BASED COMPANESATION

NOTE 13 – STOCK-BASED COMPANESATION

 

On May 19, 2022, the Company filed a Registration Statement on Form S-8 and includes a Reoffer Prospectus that the Reoffer Prospectus may be used for reoffers and resales of shares of the Company. The Reoffer Prospectus covers the Shares issuable to the Selling Securityholders pursuant to awards granted to the Selling Securityholders under the Coinllectibles Inc. 2022 Stock Incentive Plan. The Company will not receive any proceeds from the sale of the shares offered by the Reoffer Prospectus.

 

As of September 30, 2023, there were 1,017,926,772 shares of the Company have been issued to consultants who have provided services to the Company.

 

The following table presents the stock-based compensation expenses for shares granted consultants during the three and nine months ended September 30, 2023 and 2022:

 

   Three months ended
September 30,		   Nine months ended
September 30,		 
   2023   2022   2023   2022 
                 
Corporate development expenses  $
-
   $333,225   $
-
   $25,646,926 
Technology and development expenses   
-
    45,000    
-
    32,105,000 
Sales and marketing expenses   
-
    150,225    
-
    25,913,695 
General and administrative expenses   22,500    2,172,839    12,316,110    2,811,839 
   $22,500   $2,701,289   $12,316,110   $86,477,460 

 

The stock-based compensation expense was $22,500 during the three months ended September 30, 2023.

 

The stock-based compensation expense was $12,316,110 during the nine months ended September 30, 2023.
v3.23.3
Stockholders' Equity
 9 Months Ended
Sep. 30, 2023
Stockholders Equity [Abstract]  
STOCKHOLDERS’ EQUITY

NOTE 14 – STOCKHOLDERS’ EQUITY

 

Authorized stock

 

The Company’s authorized share is 5,000,000,000 common shares with a par value of $0.001 per share.

 

Common stock outstanding

 

During the nine months ended September 30, 2023, the Company issued 1,017,926,772 shares of its common stock to consultants who have provided services to the Company under the Coinllectibles Inc. 2022 Stock Incentive Plan. The stock-based compensation expenses for shares granted consultants during the nine months ended September 30, 2023 and 2022 were $12,316,110 and $86,477,460, respectively.

 

As of September 30, 2023 and December 31, 2022, the Company had a total of 1,863,852,317 shares and 454,398,143 shares of its common stock issued and outstanding, respectively.
v3.23.3
Income Tax
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
INCOME TAX

NOTE 15 – INCOME TAX

 

The provision for income taxes consisted of the following:

 

  

Nine months ended

September 30,

 
   2023   2022 
Current tax:        
- Local  $
-
   $
-
 
- Foreign   355,681    546,146 
           
Deferred tax          
- Local   
-
    
-
 
- Foreign   
-
    
-
 
           
Income tax expense  $355,681   $546,146 

 

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company mainly operates in Singapore and Hong Kong that is subject to taxes in the jurisdictions in which they operate, as follows:

 

United States of America

 

COSG is registered in the State of Nevada and is subject to the tax laws of United States of America. The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were not material to its results of operations for the periods presented. Deferred tax asset is not provided for as the tax losses may not be able to carry forward after a change in substantial ownership of the Company.

 

For the nine months ended September 30, 2023 and 2022, there were no operating income in US tax regime.

 

BVI

 

Under the current BVI law, the Company is not subject to tax on income.

 

Republic of Singapore

 

The Company’s subsidiaries are registered in Republic of Singapore and are subject to the Singapore corporate income tax at a standard income tax rate of 17% on the assessable income arising in Singapore during its tax year. The operation in Singapore incurred an operating loss due to certain charges within the group and there is no provision for income tax for the nine months ended September 30, 2023 and 2022.

 

   Nine months ended
September 30,		 
   2023   2022 
Income (loss) before income taxes  $15,504   $(87,384,457)
Statutory income tax rate   17%   17%
Income tax expense at statutory rate   2,636    (14,855,358)
Net operating loss   (2,636)   14,855,358 
Income tax expense  $
-
   $
-
 

 

Hong Kong

 

The Company and subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the nine months ended September 30, 2022 and 2021 is as follows:

 

   Nine months ended
September 30,		 
   2023   2022 
(Loss) income before income taxes  $(51,274,393)  $1,191,436 
Statutory income tax rate   16.5%   16.5%
Income tax expense at statutory rate   (8,460,275)   196,587 
Tax effect of non-deductible items   378,150    342,096 
Tax effect of non-taxable items   
-
    (8,499)
Net operating income   8,437,805    15,962 
           
Income tax expense  $355,681   $546,146 

 

The following table sets forth the significant components of the deferred tax assets and liabilities of the Company as of September 30, 2023 and December 31, 2022:

 

   September 30,
2023		   December 31,
2022		 
Deferred tax assets:        
Net operating loss carryforward, from        
US tax regime  $76,498   $102,932 
Singapore tax regime   
-
    
15,324,07
 
Hong Kong tax regime   8,460,275    13,019 
Less: valuation allowance   (8,536,773)   (15,440,658)
Deferred tax assets, net  $
-
   $
-
 

 

As of September 30, 2023, the operations in the United States of America incurred $747,940 of cumulative net operating losses which can be carried forward indefinitely to offset future taxable income. The Company has provided for a full valuation allowance against the deferred tax assets of $157,067 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

As of September 30, 2023, the operations in Singapore incurred $9,914,376 of cumulative net operating losses which can be carried forward to offset future taxable income. There is no expiry in net operating loss carryforwards under Singapore tax regime. the Company has provided for a full valuation allowance against the deferred tax assets of $1,685,444 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

As of September 30, 2023, the operations in Hong Kong incurred $52,790,112 of cumulative net operating losses which can be carried forward indefinitely to offset future taxable income. The Company has provided for a full valuation allowance against the deferred tax assets of $8,710,368 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

The Company filed income tax returns in the United States federal tax jurisdiction and several state tax jurisdictions. Since the Company is in a loss carryforward position, it is generally subject to examination by federal and state tax authorities for all tax years in which a loss carryforward is available.
v3.23.3
Related Party Transactions
 9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 16 - RELATED PARTY TRANSACTIONS

 

From time to time, the directors of the Company advanced funds to the Company for working capital purpose. Those advances were unsecured, non-interest bearing and had no fixed terms of repayment.

 

During the three months ended September 30, 2023 and 2022, the Company paid the management service fee of $0 and $931,059, to a company controlled by its director, Dr. Lee.

 

During the three months ended September 30, 2023 and 2022, the Company paid the director fee of $38 and $30,000 to Mr. Tan, a director of the Company, for his service to the Company’s subsidiary.

 

During the nine months ended September 30, 2023 and 2022, the Company paid the management service fee of $0 and $2,746,911, to a company controlled by its director, Dr. Lee.

 

During the nine months ended September 30, 2023 and 2022, the Company paid the director fee of $124,276 and $90,000 to Mr. Tan, a director of the Company, for his service to the Company’s subsidiary.

 

Apart from the transactions and balances detailed elsewhere in these accompanying unaudited condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented.
v3.23.3
Concentrations of Risk
 9 Months Ended
Sep. 30, 2023
Concentrations of Risk [Abstract]  
CONCENTRATIONS OF RISK

NOTE 17 - CONCENTRATIONS OF RISK

 

The Company is exposed to the following concentrations of risk:

 

(a) Major customers

 

For the three and nine months ended September 30, 2023 and 2022, there was no single customer whose revenue exceeded 10% of the revenue.

 

(b) Economic and political risk

 

The Company’s major operations are conducted in Singapore and Hong Kong. Accordingly, the political, economic, and legal environments in Singapore and Hong Kong, as well as the general state of Singapore and Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.

 

(c) Exchange rate risk

 

The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

 

(d) Liquidity risk

 

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s policy is to ensure that it has sufficient cash to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases.
v3.23.3
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2023
Commitments and Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 18 - COMMITMENTS AND CONTINGENCIES

 

As of September 30, 2023, the Company is committed to the below contractual arrangements.

 

On December 31, 2021, the Company entered into an Equity Purchase Agreement with Williamsburg Venture Holdings, LLC, a Nevada limited liability company (“Investor”), pursuant to which the Investor agreed to invest up to Thirty Million Dollars ($30,000,000) over a 36-month period in accordance with the terms and conditions of that certain Equity Purchase Agreement, dated as of December 31, 2021, by and between the Company and the Investor (the “Equity Purchase Agreement”). During the term, the Company shall be entitled to put to the Investor, and the Investor shall be obligated to purchase, such number of shares of the Company’s common stock and at such price as are determined in accordance with the Equity Purchase Agreement. The per share purchase price for the Williamsburg Put Shares will be equal to 88% the lowest traded price of the Common Stock on the principal market during the five (5) consecutive trading days immediately preceding the date which Williamsburg received the Williamsburg Put Shares as DWAC Shares in its brokerage account (as reported by Bloomberg Finance L.P., Quotestream, or other reputable source). In connection with the Equity Purchase Agreement, both parties also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company agreed to register with the SEC the common stock issuable under the Equity Purchase Agreement, among other securities. As of September 30, 2023, the remaining balance for Equity Purchase from the Investor was $30,000,000.
v3.23.3
Subsequent Events
 9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 19 - SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2023, up through the date the Company issued the unaudited condensed consolidated financial statements.
v3.23.3
Accounting Policies, by Policy (Policies)
 9 Months Ended
Sep. 30, 2023
Summary of Significant Accounting Policies [Abstract]  
Basis of presentation
● Basis of presentation

These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
Use of estimates and assumptions
● Use of estimates and assumptions 

In preparing these unaudited condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates. If actual results significantly differ from the Company’s estimates, the Company’s financial condition and results of operations could be materially impacted. Significant estimates in the period include impairment loss on loan receivables, useful lives of intangible assets and property and equipment and deferred tax valuation allowance.
Discontinued operations
● Discontinued operations

On September 30, 2023, the Company disposed the lending segment and related assets and liabilities have been accounted for as discontinued operations in the Company’s condensed consolidated balance sheets for all periods presented. The operating results related to these lines of business have been included in discontinued operations in the Company’s unaudited condensed consolidated statement of operations for all periods presented.
Noncontrolling interest On September 30, 2023, the Company disposed the lending segment and related assets and liabilities have been accounted for as discontinued operations in the Company’s condensed consolidated balance sheets for all periods presented.
Basis of consolidation
● Basis of consolidation

The condensed consolidated financial statements include the accounts of COSG and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.
Segment reporting
● Segment reporting
Accounting Standard Codification (“ASC”) Topic 280, Segment Reporting establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in condensed consolidated financial statements. The Company operates in two reportable operating segments in Hong Kong and Singapore.
Cash and cash equivalents
● Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
Inventories
● Inventories

Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The cost includes the purchase cost of arts and collectibles from related party and independent artists and the costs associated with token minting for collectible pieces. The Company will reduce inventory on hand to its net realizable value on an item-by-item basis when it is apparent that the expected realizable value of an inventory item falls below its original cost. A charge to cost of sales results when the estimated net realizable value of specific inventory items declines below cost. Management regularly reviews the Company’s inventories for such declines in value. Although inventories are classified as current assets in the accompanying balance sheets, the Company anticipates that certain inventories will be sold beyond twelve months from September 30, 2023.

 
Loan receivables, net (discontinued operations)
● Loan receivables, net (discontinued operations)

Loans receivables are carried at unpaid principal balances, less the allowance for loan losses and charge-offs. The loans receivables portfolio consists of real estate mortgage loans, commercial and personal loans.

Loans are placed on nonaccrual status when they are past due 180 days or more as to contractual obligations or when other circumstances indicate that collection is not probable. When a loan is placed on nonaccrual status, any interest accrued but not received is reversed against interest income. Payments received on a nonaccrual loan are either applied to protective advances, the outstanding principal balance or recorded as interest income, depending on an assessment of the ability to collect the loan. A nonaccrual loan may be restored to accrual status when principal and interest payments have been brought current and the loan has performed in accordance with its contractual terms for a reasonable period (generally six months).

If the Company determines that a loan is impaired, the Company next determines the amount of the impairment. The amount of impairment on collateral dependent loans is charged off within the given fiscal quarter. Generally, the amount of the loan and negative escrow in excess of the appraised value less estimated selling costs, for the fair value of collateral valuation method, is charged off. For all other loans, impairment is measured as described below in Allowance for Loan Losses.
Allowance for loan losses (“ALL”)
● Allowance for loan losses (“ALL”)

The adequacy of the Company’s ALL is determined, in accordance with ASC Topic 450-20 Loss Contingencies includes management’s review of the Company’s loan portfolio, including the identification and review of individual problem situations that may affect a borrower’s ability to repay. In addition, management reviews the overall portfolio quality through an analysis of delinquency and non-performing loan data, estimates of the value of underlying collateral, current charge-offs and other factors that may affect the portfolio, including a review of regulatory examinations, an assessment of current and expected economic conditions and changes in the size and composition of the loan portfolio. 

The ALL reflects management’s evaluation of the loans presenting identified loss potential, as well as the risk inherent in various components of the portfolio. There is significant judgment applied in estimating the ALL. These assumptions and estimates are susceptible to significant changes based on the current environment. Further, any change in the size of the loan portfolio or any of its components could necessitate an increase in the ALL even though there may not be a decline in credit quality or an increase in potential problem loans.
Property and equipment
● Property and equipment

Property and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

   Expected useful life
Computer and office equipment  5 years

Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

Depreciation expense for the nine months ended September 30, 2023 and 2022 totaled $3,579 and $6,341, respectively.

Depreciation expense for the three months ended September 30, 2023 and 2022 totaled $1,984 and $2,016, respectively.

 
Intangible assets
● Intangible assets

The Company accounts for its intangible assets in accordance with ASC 350. Intangible assets represented the acquired technology software, licensed technology know-how, trademark and trade names for its internal use to facilitate and support its platform operation. They are stated at the purchase cost and are amortized based on their economic benefit expected to be realized.
Impairment of long-lived assets
● Impairment of long-lived assets

In accordance with the provisions of ASC Topic 360, Impairment or Disposal of Long-Lived Assets, all long-lived assets such as property and equipment and intangible assets owned and held by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.
Revenue recognition
● Revenue recognition

ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:

  ● identify the contract with a customer;
     
  ● identify the performance obligations in the contract;
     
  ● determine the transaction price;
     
  ● allocate the transaction price to performance obligations in the contract; and
     
  ● recognize revenue as the performance obligation is satisfied.

 

Revenue is recognized when the Company satisfies its performance obligation under the contract by transferring the promised product to its customer that obtains control of the product and collection is reasonably assured. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer. Most of the Company’s contracts have a single performance obligation, as the promise to transfer products or services is not separately identifiable from other promises in the contract and, therefore, not distinct.

Arts and Collectibles Technology Business (Continuing operations)

The Company currently operates its online platform in the sale and distribution of arts and collectibles, with the use of blockchain technologies and minting tokens. The item of arts and collectibles is individually monetized as non-interchangeable unit of data stored on a blockchain, which is a form of digital ledger that can be sold, in the form of a minting token on the online platform. The Company involves with the following activities to earn its revenue in this segment:

Sale of arts and collectibles products: The Company recognizes revenue derived from the sales of the arts and collectibles when the Company has transferred the risks and rewards to the customers.

The minted item of the individual art or collectible which is sold in crypto asset transaction is the only performance obligation under the fixed-fee arrangements. The corresponding fees received upon each sale transaction is recognized as revenue, is recognized when the designated token, minted with the corresponding art and collectibles is delivered to the end user, together with the transfer of both digital and official title.

Transaction fee income:

The Company also generates revenue through transaction fees transacted on its platform or other marketplaces. The Company charges a fee to individual customer at the secondary transaction level, which is allocated to the single performance obligation. The transaction fee is collected from the customer in digital assets, with revenue measured based on a certain percentage of the value of digital assets at the time the transaction is executed.

The Company’s service comprises of a single performance obligation to provide a platform facilitating the transfer of its DOTs. The Company considers its performance obligation satisfied, and recognizes revenue, at the point in time the transaction is processed.

In this segment, the transaction consideration that the Company receives is a non-cash consideration in the form of digital assets, which are cryptocurrencies. The Company measures the related cryptocurrencies at fair value on the date received, at the same time, the revenue is recognized. Fair value of the digital asset award received is determined using the average U.S. dollar spot rate of the related digital currency at the time of receipt.

Expenses associated with operating the Arts and Collectibles Technology Business, such as minting cost and purchase cost of collectibles and artworks are also recorded as cost of revenues.

Lending Business (discontinued operations)

The Company is licensed to originate personal loan, company loan and mortgage loan in Hong Kong. During the nine months ended September 30, 2023 and 2022, the Company originated loans generally ranging from $644 to $579,000, with terms ranging from 1 week to 120 months. The Company mainly derives a portion of its revenue from loan which is specifically excluded from the scope of this standard, that is, interest on loan receivable is accrued monthly and credited to income as earned.

 
Leases
● Leases

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use assets may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

In accordance with the guidance in ASC Topic 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components.

The Company made the policy election to not separate lease and non-lease components. Each lease component and the related non-lease components are accounted for together as a single component.
Income taxes
● Income taxes

The Company adopted the ASC Topic 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.
Uncertain tax positions
● Uncertain tax positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC Topic 740 provisions of Section 740-10-25 for the nine months ended September 30, 2023 and 2022.

 
Foreign currencies translation
● Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the consolidated statement of operations.

The reporting currency of the Company is United States Dollar (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company has operations in Hong Kong and Singapore and maintains the books and record in the local currency, Hong Kong Dollars (“HKD”) and Singapore Dollars (“SGD”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, Translation of Financial Statement, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholder’s equity.

Translation of amounts from HKD and SGD into US$ has been made at the following exchange rates for the following periods:

   September 30,
2023		   September 30,
2022		 
Period-end HKD:US$ exchange rate   0.1277    0.1274 
Period average HKD:US$ exchange rate   0.1277    0.1277 
   September 30,
2023		   September 30,
2022		 
Period-end SGD:US$ exchange rate   0.7316    0.6973 
Period average SGD:US$ exchange rate   0.7458    0.7271 
Comprehensive income
● Comprehensive income

ASC Topic 220, Comprehensive Income, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying consolidated statements of changes in stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.
Net loss per share
● Net loss per share

The Company calculates net loss per share in accordance with ASC Topic 260, Earnings per Share. Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 
Stock based compensation
● Stock based compensation

Pursuant to ASU 2018-07, the Company follows ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all share-based payment awards (employee or non-employee), are measured at grant-date fair value of the equity instruments that an entity is obligated to issue. Restricted stock units are valued using the market price of the Company’s common shares on the date of grant. The Company uses a Black-Scholes option model to estimate the fair value of employee stock options at the date of grant. As of September 30, 2023, those shares issued and stock options granted for service compensations were immediately vested, and therefore these amounts are thus recognized as expense in the operation.
Related parties
● Related parties

The Company follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The condensed consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Commitments and contingencies
● Commitments and contingencies

The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the 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 assesses 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 un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

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 consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 
Fair value of financial instruments
● Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

  Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
     
  Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
     
  Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

 

The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, loan and fee receivable, prepayments and other receivables, amounts due from related parties, accrued liabilities and other payables, loans payable, amounts due to related parties approximate their fair values because of the short maturity of these instruments.
Recent accounting pronouncements
●Recent accounting pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.
v3.23.3
Organization and Business Background (Tables)
 9 Months Ended
Sep. 30, 2023
Organization and Business Background [Abstract]  
Schedule of Description of Subsidiaries Description of subsidiaries
Company name  Place of incorporation
and kind of legal entity		  Principal activities
and place of
operation		  Particulars of
registered/ paid up
share capital		  Effective
interest
held		 
Massive Treasure Limited  BVI, limited liability company  Investment holding  50,000 ordinary shares with a par value of US$1 each   100%
               
Coinllectibles DeFi Limited  Hong Kong, limited liability company  Financing service management in Hong Kong  10,000 ordinary shares for HK$10,000   100%
               
Coinllectibles Private Limited  Singapore, limited liability company  Corporate management and IT development in Singapore  1,000 ordinary shares for S$1,000   100%
               
Healthy Finance Limited#  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
8M Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  10 ordinary shares for HK$10   100%
               
Dragon Group Mortgage Limited#  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
E-on Finance Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  2 ordinary shares for HK$2   100%
               
Lee Kee Finance Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  920,000 ordinary shares for HK$920,000   51%
               
Rich Finance (Hong Kong) Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
Long Journey Finance Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  100 ordinary shares for HK$100   51%
               
Vaav Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  10,000 ordinary shares for HK$10,000   51%
               
Star Credit Limited^  Hong Kong, limited liability company  Money lending service in Hong Kong  1,000,000 ordinary shares for HK$1,000,000   51%
               
NFT Limited  BVI, limited liability company  Procurement of intangible assets in Hong Kong  10,000 ordinary shares with a par value of US$1 each   51%
               
Grandway Worldwide Holding Limited  BVI, limited liability company  Development of mobile application  50,000 ordinary shares for USD$50,000   51%
               
Grand Town Development Limited  Hong Kong, limited liability company  Provision treasury management  2 ordinary shares for HK$2   100%
               
Grand Gallery Limited  Hong Kong, limited liability company  Procurement of art and collectibles in Hong Kong  400,000 ordinary shares for HK$400,000   80%
               
Phoenix Waters Group Limited  BVI, limited liability company  Investment holding  50,000 ordinary shares with a par value of US$1 each   100%
#These subsidiaries were disposed on June 30, 2023
^These subsidiaries were disposed on September 30, 2023
v3.23.3
Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2023
Summary of Significant Accounting Policies [Abstract]  
Schedule of Property and Equipment Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:
   Expected useful life
Computer and office equipment  5 years
Schedule of Translation of Amounts Translation of amounts from HKD and SGD into US$ has been made at the following exchange rates for the following periods:
   September 30,
2023		   September 30,
2022		 
Period-end HKD:US$ exchange rate   0.1277    0.1274 
Period average HKD:US$ exchange rate   0.1277    0.1277 
   September 30,
2023		   September 30,
2022		 
Period-end SGD:US$ exchange rate   0.7316    0.6973 
Period average SGD:US$ exchange rate   0.7458    0.7271 
v3.23.3
Revenue from Contracts with Customers (Tables)
 9 Months Ended
Sep. 30, 2023
Revenue From Contract With Customers [Abstract]  
Schedule of Disaggregation of the Company’s Revenue by Major Source The following is a disaggregation of the Company’s revenue by major source for the respective periods:
   Three months ended
September 30,		   Nine months ended
September 30,		 
   2023   2022   2023   2022 
                 
Interest income (from discontinued operation)  $1,911   $1,517,764   $3,100,102   $4,833,433 
ACT income                    
- Sale of arts and collectibles products   
-
    418,998    595,590    1,825,448 
- Transaction fee income and others   
-
    2,074,102    
-
    6,225,988 
    
-
    2,493,100    595,590    8,051,436 
                     
   $1,911   $4,010,864   $3,695,692   $12,884,869 
v3.23.3
Business Segment Information (Tables)
 9 Months Ended
Sep. 30, 2023
Business Segment Information [Abstract]  
Schedule of Reconciliation of the Disaggregated Revenue In the following table, revenue is disaggregated by primary major product line, and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments.
   Three months ended
September 30, 2023		 
   Lending
Segment (discontinued operation)		   ACT
Segment		   Total 
Revenue from external customers:            
Interest income  $1,911    
-
    1,911 
Arts and collectibles technology income   
-
    
-
    
-
 
Total revenue, net   1,911    
-
    1,911 
                
Cost of revenue:               
Interest expense   (58)   
-
    (58)
Arts and collectibles technology expense   
-
    53,327    53,327 
Total cost of revenue   (58)   53,327    53,314 
                
Gross profit   1,853         55,225 
                
Operating expenses               
Sales and marketing   (74)   9    (65)
Corporate development   
-
    (13,905)   (13,905)
Technology and development   
-
    (18,489)   (18,489)
General and administrative   (15,908)   (1,068,316)   (1,084,224)
Total operating expenses   (15,982)   (1,100,701)   (1,116,683)
                
Loss from operations   (14,129)   (1,047,329)   (1,061,458)
                
Other income (expense):               
Interest income   1    99    100 
Convertible notes interest expense   
-
    (4,516)   (4,516)
Impairment loss on goodwill   
-
    (51,231)   (51,231)
Imputed interest expense   (284)   
-
    (284)
Loan interest expense   
-
    (46,006)   (46,006)
Loss on disposal of subsidiaries   (48,609,336)   (947)   (48,610,283)
Sundry income   32    
-
    32 
Total other expenses, net   (48,609,587)   (102,601)   (48,712,188)
                
Segment loss  $(48,623,716)   (1,149,930)   (49,773,646)

 

   Three months ended September 30, 2022 
  

Lending
Segment

(discontinued operation)

   ACT
Segment		   Total 
Revenue from external customers:            
Interest income  $1,517,764   $
-
   $1,517,764 
Arts and collectibles technology income   
-
    2,493,100    2,493,100 
Total revenue, net   1,517,764    2,493,100    4,010,864 
                
Cost of revenue:               
Interest expense   (27,046)   
-
    (27,046)
Arts and collectibles technology expense   
-
    (311,620)   (311,620)
Total cost of revenue   (27,046)   (311,620)   (338,666)
                
Gross profit   1,490,718    2,181,480    3,672,198 
                
Operating expenses               
Sales and marketing   (7,681)   (491,783)   (499,464)
Corporate development   
-
    (510,786)   (510,786)
Technology and development   
-
    (273,839)   (273,839)
Metaverse and AI development   
-
    (5,000,000)   (5,000,000)
General and administrative   (737,558)   (3,607,243)   (4,344,801)
Total operating expenses   (745,239)   (9,883,651)   (10,628,890)
                
Income (loss) from operations   745,479    (7,702,171)   (6,956,692)
                
Other income (expense):               
Interest income   104    84    188 
Gain (loss) on disposal of digital assets   
-
    206    206 
Impairment loss on digital assets   
-
    (2,477)   (2,477)
Convertible notes interest expense   
-
    (979)   (979)
Loan interest expense   
-
    (1,360)   (1,360)
Imputed interest expense   (235,205)   
-
    (235,205)
Sundry income   36,564    
-
    36,564 
Total other expense, net   (198,537)   (4,526)   (203,063)
                
Segment income (loss)  $546,942   $(7,706,697)  $(7,159,755)

 

   Nine months ended September 30, 2023 
  

Lending

Segment (discontinued operation)

  

ACT

Segment

   Total 
Revenue from external customers:            
Interest income  $3,100,102    -    3,100,102 
Arts and collectibles technology income   
-
    597,351    597,351 
Total revenue, net   3,100,102    597,351    3,697,453 
                
Cost of revenue:               
Interest expense   (94,782)   -    (94,782)
Arts and collectibles technology expense   
-
    (313,601)   (313,601)
Total cost of revenue   (94,782)   (313,601)   (408,383)
                
Gross profit   3,005,320    283,750    3,289,070 
                
Operating Expenses               
Sales and marketing   (119,300)   (5,641)   (124,941)
Corporate development   
-
    (71,113)   (71,113)
Technology and development   
-
    (35,369)   (35,369)
General and administrative   (4,792,862)   (13,244,612)   (18,037,474)
Total operating expenses   (4,912,162)   (13,356,735)   (18,268,897)
                
Loss from operations   (1,906,842)   (13,074,746)   (14,979,827)
                
Other income (expense):               
Interest income   1,976    191    2,167 
Convertible notes interest expense   
-
    (14,947)   (14,947)
Impairment loss on goodwill   
-
    (51,231)   (51,231)
Imputed interest expense   (461,179)   
-
    (461,179)
Loan interest expense   
-
    (123,244)   (123,244)
Loss on disposal of subsidiaries   (48,609,336)   (947)   (48,610,283)
Sundry income   51,324    
-
    51,324 
Total other expenses, net   (49,017,215)   (190,178)   (49,207,393)
                
Segment loss  $(50,924,057)   (13,263,163)   (64,187,220)

 

   Nine months ended September 30, 2022 
  

Lending
Segment

(discontinued operation)

  

ACT

Segment

   Total 
Revenue from external customers:            
Interest income  $4,833,433   $
-
   $4,833,433 
Arts and collectibles technology income   
-
    8,051,436    8,051,436 
Total revenue, net   4,833,433    8,051,436    12,884,869 
                
Cost of revenue:               
Interest expense   (367,337)   
-
    (367,337)
Arts and collectibles technology expense   
-
    (1,118,755)   (1,118,755)
Total cost of revenue   (367,337)   (1,118,755)   (1,486,092)
                
Gross profit   4,466,096    6,932,681    11,398,777 
                
Operating expenses               
Sales and marketing   (260,599)   (26,495,720)   (26,756,319)
Corporate development   
-
    (26,242,917)   (26,242,917)
Technology and development   
-
    (32,832,406)   (32,832,406)
Metaverse and AI development   
-
    (5,000,000)   (5,000,000)
General and administrative   (2,550,218)   (7,192,879)   (9,743,097)
Total operating expenses   (2,810,817)   (97,763,922)   (100,574,739)
                
Income (loss) from operations   1,655,279    (90,831,241)   (89,175,962)
                
Other income (expense):               
Interest income   211    90    301 
Gain on disposal of digital assets   
-
    206    206 
Impairment loss on digital assets   
-
    (12,633)   (12,633)
Convertible notes interest expense   
-
    (979)   (979)
Loan interest expense   
-
    (1,360)   (1,360)
Imputed interest expense   (714,696)   
-
    (714,696)
Sundry income   93,108    506    93,614 
Total other expense, net   (621,377)   (14,170)   (635,547)
                
Segment income (loss)  $1,033,902   $(90,845,411)  $(89,811,509)
Schedule of Financial Information Concerning the Geographic Segments The below revenues are based on the countries in which the customer is located. Summarized financial information concerning the geographic segments is shown in the following tables:
   Three months ended
September 30,		   Nine months ended
September 30,		 
   2023   2022   2023   2022 
                 
Hong Kong  $1,911    1,517,764   $3,100,102    4,833,433 
Around the world   
-
    2,493,100    597,351    8,051,436 
                     
    1,911    4,010,864    3,697,453    12,884,869 
v3.23.3
Intangible Assets, Net (Tables)
 9 Months Ended
Sep. 30, 2023
Intangible Assets, Net [Abstract]  
Schedule of Intangible Assets A summary of intangible assets as of September 30, 2023 and December 31, 2022 is as follows:
  

Estimated

useful life

 

September  30,
2023

  

December 31,
2022

 
At cost:           
Acquired technology software  5 years  $17,344,690   $17,344,690 
Trademarks and trade name  10 years   39,415    39,270 
Less: accumulated amortization      (6,657,665)   (4,052,889)
Foreign translation adjustment      8,763    8,356 
      $10,735,203   $13,339,427 
Schedule of Estimated Amortization Expense for Intangible Assets As of September 30, 2023, the estimated annual amortization expense for intangible assets for each of the succeeding five years and thereafter is as follows
Period ending September 30:    
2024  $3,473,760 
2025   3,473,760 
2026   3,473,760 
2027   293,890 
2028   4,812 
Thereafter   15,221 
   $10,735,203 
v3.23.3
Stock-Based Companesation (Tables)
 9 Months Ended
Sep. 30, 2023
Stock Based Companesation [Abstract]  
Schedule of Stock-Based Compensation Expenses for Shares Granted The following table presents the stock-based compensation expenses for shares granted consultants during the three and nine months ended September 30, 2023 and 2022:
   Three months ended
September 30,		   Nine months ended
September 30,		 
   2023   2022   2023   2022 
                 
Corporate development expenses  $
-
   $333,225   $
-
   $25,646,926 
Technology and development expenses   
-
    45,000    
-
    32,105,000 
Sales and marketing expenses   
-
    150,225    
-
    25,913,695 
General and administrative expenses   22,500    2,172,839    12,316,110    2,811,839 
   $22,500   $2,701,289   $12,316,110   $86,477,460 
v3.23.3
Income Tax (Tables)
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Schedule of Provision for Income Taxes The provision for income taxes consisted of the following:
  

Nine months ended

September 30,

 
   2023   2022 
Current tax:        
- Local  $
-
   $
-
 
- Foreign   355,681    546,146 
           
Deferred tax          
- Local   
-
    
-
 
- Foreign   
-
    
-
 
           
Income tax expense  $355,681   $546,146 

 
Schedule of Reconciliation of Income Tax Rate to the Effective Income Tax Rate The Company’s subsidiaries are registered in Republic of Singapore and are subject to the Singapore corporate income tax at a standard income tax rate of 17% on the assessable income arising in Singapore during its tax year. The operation in Singapore incurred an operating loss due to certain charges within the group and there is no provision for income tax for the nine months ended September 30, 2023 and 2022.
   Nine months ended
September 30,		 
   2023   2022 
Income (loss) before income taxes  $15,504   $(87,384,457)
Statutory income tax rate   17%   17%
Income tax expense at statutory rate   2,636    (14,855,358)
Net operating loss   (2,636)   14,855,358 
Income tax expense  $
-
   $
-
 
   Nine months ended
September 30,		 
   2023   2022 
(Loss) income before income taxes  $(51,274,393)  $1,191,436 
Statutory income tax rate   16.5%   16.5%
Income tax expense at statutory rate   (8,460,275)   196,587 
Tax effect of non-deductible items   378,150    342,096 
Tax effect of non-taxable items   
-
    (8,499)
Net operating income   8,437,805    15,962 
           
Income tax expense  $355,681   $546,146 

 
Schedule of the Deferred Tax Assets and Liabilities The following table sets forth the significant components of the deferred tax assets and liabilities of the Company as of September 30, 2023 and December 31, 2022:
   September 30,
2023		   December 31,
2022		 
Deferred tax assets:        
Net operating loss carryforward, from        
US tax regime  $76,498   $102,932 
Singapore tax regime   
-
    
15,324,07
 
Hong Kong tax regime   8,460,275    13,019 
Less: valuation allowance   (8,536,773)   (15,440,658)
Deferred tax assets, net  $
-
   $
-
 
v3.23.3
Organization and Business Background (Details) - Schedule of Description of Subsidiaries
 9 Months Ended
Sep. 30, 2023
Massive Treasure Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity BVI, limited liability company
Principal activities and place of operation Investment holding
Particulars of registered/ paid up share capital 50,000 ordinary shares with a par value of US$1 each
Effective interest held 100.00%
Coinllectibles DeFi Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company
Principal activities and place of operation Financing service management in Hong Kong
Particulars of registered/ paid up share capital 10,000 ordinary shares for HK$10,000
Effective interest held 100.00%
Coinllectibles Private Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Singapore, limited liability company
Principal activities and place of operation Corporate management and IT development in Singapore
Particulars of registered/ paid up share capital 1,000 ordinary shares for S$1,000
Effective interest held 100.00%
Healthy Finance Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company [1]
Principal activities and place of operation Money lending service in Hong Kong [1]
Particulars of registered/ paid up share capital 10,000 ordinary shares for HK$10,000 [1]
Effective interest held 51.00% [1]
8M Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company [2]
Principal activities and place of operation Money lending service in Hong Kong [2]
Particulars of registered/ paid up share capital 10 ordinary shares for HK$10 [2]
Effective interest held 100.00% [2]
Dragon Group Mortgage Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company [1]
Principal activities and place of operation Money lending service in Hong Kong [1]
Particulars of registered/ paid up share capital 10,000 ordinary shares for HK$10,000 [1]
Effective interest held 51.00% [1]
E-on Finance Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company [2]
Principal activities and place of operation Money lending service in Hong Kong [2]
Particulars of registered/ paid up share capital 2 ordinary shares for HK$2 [2]
Effective interest held 100.00% [2]
Lee Kee Finance Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company [2]
Principal activities and place of operation Money lending service in Hong Kong [2]
Particulars of registered/ paid up share capital 920,000 ordinary shares for HK$920,000 [2]
Effective interest held 51.00% [2]
Rich Finance (Hong Kong) Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company [2]
Principal activities and place of operation Money lending service in Hong Kong [2]
Particulars of registered/ paid up share capital 10,000 ordinary shares for HK$10,000 [2]
Effective interest held 51.00% [2]
Long Journey Finance Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company [2]
Principal activities and place of operation Money lending service in Hong Kong [2]
Particulars of registered/ paid up share capital 100 ordinary shares for HK$100 [2]
Effective interest held 51.00% [2]
Vaav Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company [2]
Principal activities and place of operation Money lending service in Hong Kong [2]
Particulars of registered/ paid up share capital 10,000 ordinary shares for HK$10,000 [2]
Effective interest held 51.00% [2]
Star Credit Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company [2]
Principal activities and place of operation Money lending service in Hong Kong [2]
Particulars of registered/ paid up share capital 1,000,000 ordinary shares for HK$1,000,000 [2]
Effective interest held 51.00% [2]
NFT Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity BVI, limited liability company
Principal activities and place of operation Procurement of intangible assets in Hong Kong
Particulars of registered/ paid up share capital 10,000 ordinary shares with a par value of US$1 each
Effective interest held 51.00%
Grandway Worldwide Holding Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity BVI, limited liability company
Principal activities and place of operation Development of mobile application
Particulars of registered/ paid up share capital 50,000 ordinary shares for USD$50,000
Effective interest held 51.00%
Grand Town Development Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company
Principal activities and place of operation Provision treasury management
Particulars of registered/ paid up share capital 2 ordinary shares for HK$2
Effective interest held 100.00%
Grand Gallery Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity Hong Kong, limited liability company
Principal activities and place of operation Procurement of art and collectibles in Hong Kong
Particulars of registered/ paid up share capital 400,000 ordinary shares for HK$400,000
Effective interest held 80.00%
Phoenix Waters Group Limited [Member]  
Subsidiary of Limited Liability Company or Limited Partnership [Line Items]  
Place of incorporation and kind of legal entity BVI, limited liability company
Principal activities and place of operation Investment holding
Particulars of registered/ paid up share capital 50,000 ordinary shares with a par value of US$1 each
Effective interest held 100.00%
[1] These subsidiaries were disposed on June 30, 2023
[2] These subsidiaries were disposed on September 30, 2023
v3.23.3
Summary of Significant Accounting Policies (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Summary of Significant Accounting Policies [Abstract]        
Depreciation $ 1,984 $ 2,016 $ 3,579 $ 6,341
Originated loans     $ 644 $ 579,000
v3.23.3
Summary of Significant Accounting Policies (Details) - Schedule of Property and Equipment
Sep. 30, 2023
Computer and office equipment [Member]  
Property, Plant and Equipment [Line Items]  
Expected useful life 5 years
v3.23.3
Summary of Significant Accounting Policies (Details) - Schedule of Translation of Amounts
Sep. 30, 2023
Sep. 30, 2022
Period-end HKD:US$ exchange rate    
Foreign Currency Balance [Line Items]    
Exchange rate 0.001277 0.001274
Period average HKD:US$ exchange rate    
Foreign Currency Balance [Line Items]    
Exchange rate 0.001277 0.001277
Period-end SGD:US$ exchange rate    
Foreign Currency Balance [Line Items]    
Exchange rate 0.007316 0.006973
Period average SGD:US$ exchange rate    
Foreign Currency Balance [Line Items]    
Exchange rate 0.007458 0.007271
v3.23.3
Going Concern Uncertainties (Details) - USD ($)
 9 Months Ended
Sep. 30, 2023
Dec. 31, 2022
Going Concern Uncertainties [Abstract]    
Accumulated deficit $ (192,659,942) $ (128,107,220)
Working capital $ 44,919,517  
v3.23.3
Disposal of Subsidiaries (Details) - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Disposal of Subsidiaries [Abstract]    
Loss on disposal of subsidiaries $ (48,610,283)
v3.23.3
Revenue from Contracts with Customers (Details) - Schedule of Disaggregation of the Company’s Revenue by Major Source - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Disaggregation of Revenue [Line Items]        
Revenue $ 1,911 $ 4,010,864 $ 3,695,692 $ 12,884,869
Interest income [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 1,911 1,517,764 3,100,102 4,833,433
ACT income [Member] | Sale of arts and collectibles products [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 418,998 595,590 1,825,448
ACT income [Member] | Sale of arts and collectibles products [Member]        
Disaggregation of Revenue [Line Items]        
Revenue 2,074,102 6,225,988
ACT income [Member]        
Disaggregation of Revenue [Line Items]        
Revenue $ 2,493,100 $ 595,590 $ 8,051,436
v3.23.3
Business Segment Information (Details) - Schedule of Reconciliation of the Disaggregated Revenue - Business Segment [Member] - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Revenue from external customers:        
Revenue $ 1,911 $ 4,010,864 $ 3,697,453 $ 12,884,869
Cost of revenue:        
Cost of revenue 53,314 (338,666) (408,383) (1,486,092)
Gross profit 55,225 3,672,198 3,289,070 11,398,777
Operating expenses        
Sales and marketing (65) (499,464) (124,941) (26,756,319)
Corporate development (13,905) (510,786) (71,113) (26,242,917)
Technology and development (18,489) (273,839) (35,369) (32,832,406)
Metaverse and AI development   (5,000,000)   (5,000,000)
General and administrative (1,084,224) (4,344,801) (18,037,474) (9,743,097)
Total operating expenses (1,116,683) (10,628,890) (18,268,897) (100,574,739)
Income (loss) from operations (1,061,458) (6,956,692) (14,979,827) (89,175,962)
Other income (expense):        
Interest income 100 188 2,167 301
Gain (loss) on disposal of digital assets   206   206
Impairment loss on digital assets   (2,477)   (12,633)
Convertible notes interest expense (4,516) (979) (14,947) (979)
Impairment loss on goodwill (51,231)   (51,231)  
Imputed interest expense (284) (235,205) (461,179) (714,696)
Loan interest expense (46,006) (1,360) (123,244) (1,360)
Loss on disposal of subsidiaries (48,610,283)   (48,610,283)  
Sundry income 32 36,564 51,324 93,614
Total other expenses, net (48,712,188) (203,063) (49,207,393) (635,547)
Segment income (loss) (49,773,646) (7,159,755) (64,187,220) (89,811,509)
ACT Segment [Member]        
Revenue from external customers:        
Revenue     597,351  
Cost of revenue:        
Cost of revenue     (313,601)  
Gross profit     283,750  
Operating expenses        
Sales and marketing     (5,641)  
Corporate development     (71,113)  
Technology and development     (35,369)  
General and administrative     (13,244,612)  
Total operating expenses     (13,356,735)  
Income (loss) from operations     (13,074,746)  
Other income (expense):        
Interest income     191  
Convertible notes interest expense     (14,947)  
Impairment loss on goodwill     (51,231)  
Imputed interest expense      
Loan interest expense     (123,244)  
Loss on disposal of subsidiaries     (947)  
Sundry income      
Total other expenses, net     (190,178)  
Segment income (loss)     (13,263,163)  
Lending Segment (discontinued operation) [Member]        
Revenue from external customers:        
Revenue 1,911 1,517,764 3,100,102 4,833,433
Cost of revenue:        
Cost of revenue (58) (27,046) (94,782) (367,337)
Arts and Collectibles Technology Income [Member]        
Revenue from external customers:        
Revenue 2,493,100 597,351 8,051,436
Cost of revenue:        
Cost of revenue   (311,620) (313,601) (1,118,755)
Arts and Collectibles Technology Income [Member] | ACT Segment [Member]        
Revenue from external customers:        
Revenue     597,351  
Cost of revenue:        
Cost of revenue     (313,601)  
Arts and Collectible Technology Expense [Member]        
Cost of revenue:        
Cost of revenue 53,327      
Lending Segment [Member]        
Revenue from external customers:        
Revenue 1,911 1,517,764 3,100,102 4,833,433
Cost of revenue:        
Cost of revenue (58) (27,046) (94,782) (367,337)
Gross profit 1,853 1,490,718 3,005,320 4,466,096
Operating expenses        
Sales and marketing (74) (7,681) (119,300) (260,599)
Corporate development
Technology and development
Metaverse and AI development    
General and administrative (15,908) (737,558) (4,792,862) (2,550,218)
Total operating expenses (15,982) (745,239) (4,912,162) (2,810,817)
Income (loss) from operations (14,129) 745,479 (1,906,842) 1,655,279
Other income (expense):        
Interest income 1 104 1,976 211
Gain (loss) on disposal of digital assets    
Impairment loss on digital assets    
Convertible notes interest expense
Impairment loss on goodwill    
Imputed interest expense (284) (235,205) (461,179) (714,696)
Loan interest expense
Loss on disposal of subsidiaries (48,609,336)   (48,609,336)  
Sundry income 32 36,564 51,324 93,108
Total other expenses, net (48,609,587) (198,537) (49,017,215) (621,377)
Segment income (loss) (48,623,716) 546,942 (50,924,057) 1,033,902
Lending Segment [Member] | Lending Segment (discontinued operation) [Member]        
Revenue from external customers:        
Revenue 1,911 1,517,764 3,100,102 4,833,433
Cost of revenue:        
Cost of revenue (58) (27,046) (94,782) (367,337)
Lending Segment [Member] | Arts and Collectibles Technology Income [Member]        
Revenue from external customers:        
Revenue
Cost of revenue:        
Cost of revenue  
Lending Segment [Member] | Arts and Collectible Technology Expense [Member]        
Cost of revenue:        
Cost of revenue      
ACT Segment [Member]        
Revenue from external customers:        
Revenue 2,493,100   8,051,436
Cost of revenue:        
Cost of revenue 53,327 (311,620)   (1,118,755)
Gross profit   2,181,480   6,932,681
Operating expenses        
Sales and marketing 9 (491,783)   (26,495,720)
Corporate development (13,905) (510,786)   (26,242,917)
Technology and development (18,489) (273,839)   (32,832,406)
Metaverse and AI development   (5,000,000)   (5,000,000)
General and administrative (1,068,316) (3,607,243)   (7,192,879)
Total operating expenses (1,100,701) (9,883,651)   (97,763,922)
Income (loss) from operations (1,047,329) (7,702,171)   (90,831,241)
Other income (expense):        
Interest income 99 84   90
Gain (loss) on disposal of digital assets   206   206
Impairment loss on digital assets   (2,477)   (12,633)
Convertible notes interest expense (4,516) (979)   (979)
Impairment loss on goodwill (51,231)      
Imputed interest expense  
Loan interest expense (46,006) (1,360)   (1,360)
Loss on disposal of subsidiaries (947)      
Sundry income   506
Total other expenses, net (102,601) (4,526)   (14,170)
Segment income (loss) (1,149,930) (7,706,697)   (90,845,411)
ACT Segment [Member] | Lending Segment (discontinued operation) [Member]        
Revenue from external customers:        
Revenue  
Cost of revenue:        
Cost of revenue  
ACT Segment [Member] | Arts and Collectibles Technology Income [Member]        
Revenue from external customers:        
Revenue 2,493,100   8,051,436
Cost of revenue:        
Cost of revenue   $ (311,620)   $ (1,118,755)
ACT Segment [Member] | Arts and Collectible Technology Expense [Member]        
Cost of revenue:        
Cost of revenue $ 53,327      
v3.23.3
Business Segment Information (Details) - Schedule of Financial Information Concerning the Geographic Segments - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Disaggregation of Revenue [Line Items]        
Revenues $ 1,911 $ 4,010,864 $ 3,697,453 $ 12,884,869
Hong Kong [Member]        
Disaggregation of Revenue [Line Items]        
Revenues 1,911 1,517,764 3,100,102 4,833,433
Around the world [Member]        
Disaggregation of Revenue [Line Items]        
Revenues $ 2,493,100 $ 597,351 $ 8,051,436
v3.23.3
Intangible Assets, Net (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Intangible Assets, Net [Abstract]        
Amortization of intangible assets $ 868,260 $ 993,257 $ 2,604,776 $ 2,979,763
v3.23.3
Intangible Assets, Net (Details) - Schedule of Intangible Assets - USD ($)
Sep. 30, 2023
Dec. 31, 2022
At cost:    
Less: accumulated amortization $ (6,657,665) $ (4,052,889)
Foreign translation adjustment 8,763 8,356
Intangible assets $ 10,735,203 13,339,427
Acquired technology software [Member]    
At cost:    
Estimated useful life 5 years  
Intangible assets $ 17,344,690 17,344,690
Trademarks and trade name [Member]    
At cost:    
Estimated useful life 10 years  
Intangible assets $ 39,415 $ 39,270
v3.23.3
Intangible Assets, Net (Details) - Schedule of Estimated Amortization Expense for Intangible Assets - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Schedule of Estimated Amortization Expense for Intangible Assets [Abstract]    
2024 $ 3,473,760  
2025 3,473,760  
2026 3,473,760  
2027 293,890  
2028 4,812  
Thereafter 15,221  
Total $ 10,735,203 $ 13,339,427
v3.23.3
Accrued Consulting and Service Fee (Details)
 9 Months Ended
Sep. 30, 2023
USD ($)
Accrued Consulting and Service Fee [Abstract]  
Consulting fee $ 5,077,589
v3.23.3
Loan Payables (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Loan Payables [Line Items]          
Repayable term 1 year   1 year    
Interest related loan payable $ 0   $ 0   $ 1,823,536
Minimum [Member]          
Loan Payables [Line Items]          
Annual interest rate 18.00%   18.00%    
Maximum [Member]          
Loan Payables [Line Items]          
Annual interest rate 21.00%   21.00%    
Loans Payable [Member]          
Loan Payables [Line Items]          
Interest on loans payable $ 46,006 $ 27,046 $ 123,244 $ 367,337  
v3.23.3
Amounts Due to Related Parties (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2023
Dec. 31, 2022
Amounts Due to Related Parties [Abstract]      
Imputed additional non-cash interest $ 0 $ 0  
Market rate   5.00%  
Related Party [Member]      
Amounts Due to Related Parties [Abstract]      
Related party $ 6,350,245 $ 6,350,245 $ 23,931,078
v3.23.3
Convertibles Note Payables (Details)
 9 Months Ended 12 Months Ended
Nov. 11, 2022
USD ($)
Aug. 26, 2022
USD ($)
Aug. 02, 2022
USD ($)
Collectibles
Aug. 02, 2022
HKD ($)
Collectibles
Sep. 30, 2023
USD ($)
Dec. 31, 2022
USD ($)
CHAN Hin Yip [Member]            
Convertibles Note Payables [Line Items]            
Purchase of collectible items (in Collectibles) | Collectibles     58 58    
Purchase price     $ 167,308 $ 1,305,000    
Equity owner percentage     5.00% 5.00%    
weighted average closing price, percentage     90.00% 90.00%    
Bear interest, percentage     1.00% 1.00%    
Due date         Feb. 02, 2023  
Grand Gallery Limited [Member]            
Convertibles Note Payables [Line Items]            
Percentage of issued and outstanding securities     80.00% 80.00%    
Root Ventures LLC [Member]            
Convertibles Note Payables [Line Items]            
Bear interest, percentage 10.00%          
Due date         Nov. 10, 2023  
Original principal amount (in Dollars) $ 33,000          
Common stock convertible days 180 days          
Average percentage of price equal 60.00%          
Lowest trading days 2 days          
Trading days prior to conversion 15 days          
1800 Diagonal Lending LLC [Member]            
Convertibles Note Payables [Line Items]            
Bear interest, percentage   8.00%        
Due date         Aug. 26, 2023  
Original principal amount (in Dollars)   $ 89,250        
Common stock convertible days   180 days        
Average percentage of price equal   65.00%        
Lowest trading days   2 days        
Trading days prior to conversion   20 days        
Accrued convertible notes interest expense (in Dollars)         $ 123,244 $ 979
v3.23.3
Stock-Based Companesation (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Stock Based Companesation [Abstract]        
Share price     $ 1,017,926,772  
Stock-based compensation expense $ 22,500 $ 2,701,289 $ 12,316,110 $ 86,477,460
v3.23.3
Stock-Based Companesation (Details) - Schedule of Stock-Based Compensation Expenses for Shares Granted - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Schedule Of Stock Based Compensation Expenses For Shares Granted Abstract        
Corporate development expenses $ 333,225 $ 25,646,926
Technology and development expenses 45,000 32,105,000
Sales and marketing expenses 150,225 25,913,695
General and administrative expenses 22,500 2,172,839 12,316,110 2,811,839
Total stock-based compensation expenses $ 22,500 $ 2,701,289 $ 12,316,110 $ 86,477,460
v3.23.3
Stockholders' Equity (Details) - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Class of Stock [Line Items]      
Common stock, shares authorized 5,000,000,000   5,000,000,000
Common shares, par value (in Dollars per share) $ 0.001   $ 0.001
Stock-based compensation expenses (in Dollars) $ 12,316,110 $ 86,477,460  
Common stock, shares issued 1,870,992,244   454,398,143
Common stock shares outstanding 1,870,992,244   454,398,143
2022 Stock Incentive Plan [Member]      
Class of Stock [Line Items]      
Share issued for services 1,017,926,772    
Common Stock [Member]      
Class of Stock [Line Items]      
Common stock, shares issued 1,863,852,317   454,398,143
Common stock shares outstanding 1,863,852,317   454,398,143
v3.23.3
Income Tax (Details) - USD ($)
 9 Months Ended
Jan. 01, 2018
Sep. 30, 2023
Sep. 30, 2022
Dec. 31, 2022
Income Tax [Line Items]        
Corporate tax rate   17.00% 17.00%  
Deferred tax assets   $ 8,536,773   $ 15,440,658
Singapore [Member]        
Income Tax [Line Items]        
Income tax rate, percentage   17.00%    
Deferred tax assets   $ 1,685,444    
Net operating losses   $ 9,914,376    
HONG KONG        
Income Tax [Line Items]        
Corporate tax rate   16.50% 16.50%  
Net operating losses   $ 52,790,112    
Deferred tax assets   8,710,368    
United States [Member]        
Income Tax [Line Items]        
Net operating losses   747,940    
Deferred tax assets   $ 157,067    
Maximum [Member]        
Income Tax [Line Items]        
Corporate tax rate 35.00%      
Maximum [Member] | HONG KONG        
Income Tax [Line Items]        
Income tax rate, percentage   16.50%    
Minimum [Member]        
Income Tax [Line Items]        
Corporate tax rate 21.00%      
Minimum [Member] | HONG KONG        
Income Tax [Line Items]        
Income tax rate, percentage   8.25%    
v3.23.3
Income Tax (Details) - Schedule of Provision for Income Taxes - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Current tax:        
Current tax    
Deferred tax        
Income tax expense $ 188,878 355,681 546,146
Local [Member]        
Current tax:        
Current tax    
Deferred tax        
Deferred tax    
Foreign [Member]        
Current tax:        
Current tax     355,681 546,146
Deferred tax        
Deferred tax    
v3.23.3
Income Tax (Details) - Schedule of Reconciliation of Income Tax Rate to the Effective Income Tax Rate - USD ($)
 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Income Tax (Details) - Schedule of Reconciliation of Income Tax Rate to the Effective Income Tax Rate [Line Items]    
Income (loss) before income taxes $ 15,504 $ (87,384,457)
Statutory income tax rate 17.00% 17.00%
Income tax expense at statutory rate $ 2,636 $ (14,855,358)
Net operating income (loss) (2,636) 14,855,358
Income tax expense
HONG KONG [Member]    
Income Tax (Details) - Schedule of Reconciliation of Income Tax Rate to the Effective Income Tax Rate [Line Items]    
Income (loss) before income taxes $ (51,274,393) $ 1,191,436
Statutory income tax rate 16.50% 16.50%
Income tax expense at statutory rate $ (8,460,275) $ 196,587
Tax effect of non-deductible items 378,150 342,096
Tax effect of non-taxable items (8,499)
Net operating income (loss) 8,437,805 15,962
Income tax expense $ 355,681 $ 546,146
v3.23.3
Income Tax (Details) - Schedule of the Deferred Tax Assets and Liabilities - USD ($)
Sep. 30, 2023
Dec. 31, 2022
Deferred tax assets:    
Less: valuation allowance $ (8,536,773) $ (15,440,658)
Deferred tax assets, net
US tax regime [Member]    
Deferred tax assets:    
Deferred tax assets 76,498 102,932
Less: valuation allowance (157,067)  
Singapore tax regime [Member]    
Deferred tax assets:    
Deferred tax assets 1,532,407
Less: valuation allowance (1,685,444)  
Hong Kong tax regime [Member]    
Deferred tax assets:    
Deferred tax assets 8,460,275 $ 13,019
Less: valuation allowance $ (8,710,368)  
v3.23.3
Related Party Transactions (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Director [Member]        
Related Party Transaction [Line Items]        
Director fee $ 38 $ 30,000 $ 124,276 $ 90,000
Dr. Lee [Member]        
Related Party Transaction [Line Items]        
Management service fee $ 0 $ 931,059 $ 0 $ 2,746,911
v3.23.3
Concentrations of Risk (Details)
 3 Months Ended 9 Months Ended
Sep. 30, 2023
Sep. 30, 2022
Sep. 30, 2023
Sep. 30, 2022
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Major Customers [Member]        
Concentration Risk [Line Items]        
Concentrations of Risk 10.00% 10.00% 10.00% 10.00%
v3.23.3
Commitments and Contingencies (Details) - USD ($)
Sep. 30, 2023
Dec. 31, 2021
Commitments and Contingencies [Line Items]    
Investment receivable $ 30,000,000  
Williamsburg Venture Holdings, LLC [Member]    
Commitments and Contingencies [Line Items]    
Investment receivable   $ 30,000,000
Purchase price percentage   88.00%
Cosmos (PK) (USOTC:COSG)
Historical Stock Chart
From Oct 2024 to Nov 2024 Click Here for more Cosmos (PK) Charts.
Cosmos (PK) (USOTC:COSG)
Historical Stock Chart
From Nov 2023 to Nov 2024 Click Here for more Cosmos (PK) Charts.