0001683168-17-002081.txt : 20170814 0001683168-17-002081.hdr.sgml : 20170814 20170814132726 ACCESSION NUMBER: 0001683168-17-002081 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 54 CONFORMED PERIOD OF REPORT: 20170630 FILED AS OF DATE: 20170814 DATE AS OF CHANGE: 20170814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Cosmos Group Holdings Inc. CENTRAL INDEX KEY: 0001706509 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING & COURIER SERVICES (NO AIR) [4210] IRS NUMBER: 223617931 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-55793 FILM NUMBER: 171028953 BUSINESS ADDRESS: STREET 1: ROOMS 1309-11, 13TH FLOOR STREET 2: TAI YAU BLDG., NO 181 JOHNSTON ROAD CITY: WANCHAI STATE: K3 ZIP: 00000 BUSINESS PHONE: 852-3188-9363 MAIL ADDRESS: STREET 1: ROOMS 1309-11, 13TH FLOOR STREET 2: TAI YAU BLDG., NO 181 JOHNSTON ROAD CITY: WANCHAI STATE: K3 ZIP: 00000 10-Q 1 cosmos_10q-063017.htm FORM 10-Q

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 JUNE 30, 2017

☐ 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		22-3617931
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification No.)

Rooms 1309-11, 13^th Floor, Tai Yau Building,

No. 181 Johnston Road

Wanchai, Hong Kong

+852 3188 9363
(Address of Principal Executive Offices and Issuer’s
Telephone Number, including Area Code)

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. (Check one)

Large accelerated filer ☐		Accelerated filer ☐

Non-accelerated filer ☐		Smaller reporting company ☒
(Do not check if 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. o

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 August 11, 2017, the issuer had outstanding 429,848,898 shares of common stock.

TABLE OF CONTENTS

		Page

PART I	FINANCIAL INFORMATION

ITEM 1	Financial Statements

	Condensed Consolidated Balance Sheets as of June 30, 2017 (Unaudited) and December 31, 2016 (Audited)		1

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2017 and 2016 (Unaudited)		2

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016 (Unaudited)		3

	Condensed Consolidated Statement of Stockholders’ Equity (Deficit) for the Six Months ended June 30, 2017 and 2016 (Unaudited)		4

	Notes to Condensed Consolidated Financial Statements (Unaudited)		5

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		16

ITEM 3	Quantitative and Qualitative Disclosures about Market Risk		24

ITEM 4	Controls and Procedures		24

PART II	OTHER INFORMATION

ITEM 1	Legal Proceedings		25

ITEM 1A	Risk Factors		25

ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds		25

ITEM 3	Defaults upon Senior Securities		25

ITEM 4	Mine Safety Disclosures		25

ITEM 5	Other Information		25

ITEM 6	Exhibits		26

SIGNATURES			27

PART I FINANCIAL INFORMATION

ITEM 1 Financial Statements

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2017 AND DECEMBER 31, 2016

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

	June 30, 2017			December 31, 2016
		(Unaudited)			(Restated)
ASSETS
Current assets:
Cash and cash equivalents	$	12,369		$	1,581
Accounts receivable		6,501			46,282

Total current assets		18,870			47,863

Non-current assets:
Property, plant and equipment, net		113,480			124,161

TOTAL ASSETS	$	132,350		$	172,024

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	40,402		$	13,700
Amounts due to related parties		49,749			41,306
Current portion of obligation under finance leases		20,000			20,124

Total current liabilities		110,151			75,130

Non-current liabilities:
Deferred tax liabilities		13,132			12,870
Obligation under finance leases		38,333			48,633

Total non-current liabilities		51,465			61,503

TOTAL LIABILITIES		161,616			136,633

Commitments and contingencies

Stockholders’ equity:
Common stock, $0.001 par value; 500,000,000 shares authorized; 429,848,898 and 219,222,938 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively		429,849			219,223
Accumulated losses		(459,115	)		(183,832	)

Total stockholders’ (deficit) equity		(29,266	)		35,391

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	$	132,350		$	172,024

See accompanying notes to condensed consolidated financial statements.

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF

OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND 2016

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

(Unaudited)

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
				(Restated)						(Restated)
Revenues, net	$	187,664		$	90,822		$	279,382		$	185,781

Cost of revenue		(125,393	)		(75,839	)		(200,980	)		(168,045	)

Gross profit		62,271			14,983			78,402			17,736

Operating expenses
General and administrative		80,623			43,436			126,837			79,757

Total operating expenses		80,623			43,436			126,837			79,757

LOSS FROM OPERATIONS		(18,352	)		(28,453	)		(48,435	)		(62,021	)

Other (expense) income:
Interest expense		(560	)		(566	)		(1,125	)		(1,132	)
Other income		–			2			142			6
Total other expense		(560	)		(564	)		(983	)		(1,126	)

LOSS BEFORE INCOME TAXES		(18,912	)		(29,017	)		(49,418	)		(63,147	)

Income tax expense		(53	)		(528	)		(262	)		(1,131	)

NET LOSS	$	(18,965	)	$	(29,545	)	$	(49,680	)	$	(64,278	)

Other comprehensive income (loss):
– Foreign currency translation gain (loss)		–			–			–			–

COMPREHENSIVE LOSS	$	(18,965	)	$	(29,545	)	$	(49,680	)	$	(64,278	)

Net loss per share
– Basic	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
– Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)

Weighted average common shares outstanding
– Basic		259,676,495			219,222,938			254,640,966			219,222,938
– Diluted		259,676,495			219,222,938			254,640,966			219,222,938

See accompanying notes to condensed consolidated financial statements.

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016

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

(Unaudited)

	Six months ended June 30,
	2017			2016
					(Restated)
Cash flows from operating activities:
Net loss	$	(49,418	)	$	(63,147	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation of property, plant and equipment		9,917			9,979
Change in operating assets and liabilities:
Accounts receivable		39,495			35,851
Accounts payable and accrued liabilities		(34,186)			(3,864	)
Net cash used in operating activities		(34,192)			(21,181	)

Cash flows from financing activities:
Advance from related parties		(145,020)			29,828
Proceeds from issuance of common stock		200,000			-
Repayment of finance lease		(10,000	)		(10,062	)
Net cash provided by financing activities		44,980			19,766

NET CHANGE IN CASH AND CASH EQUIVALENTS		10,788			(1,415	)

BEGINNING OF PERIOD		1,581			4,148

END OF PERIOD	$	12,369		$	2,733

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for tax	$	–		$	–
Cash paid for interest	$	1,125		$	1,132

See accompanying notes to condensed consolidated financial statements.

COSMOS GROUP HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

	Common stock				Accumulated			Total stockholders’
	No. of shares		Amount		losses			equity (deficit)

Balance as of January 1, 2017 (restated)		219,222,938	$	219,223	$	(183,832	)	$	35,391

Share issues for cash proceeds on January 13, 2017		200,000,000		200,000		–			200,000

Share issued for acquisition of a legal acquirer on May 12, 2017		10,625,960		10,626		(225,603	)		(214,977	)

Net loss for the period		–		–		(49,680	)		(49,680	)
Balance as of June 30, 2017		429,848,898		429,849		(459,115	)		(29,266	)

See accompanying notes to condensed consolidated financial statements.

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

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, 2016 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 June 30, 2017 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2017 or for any future period.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements for the year ended December 31, 2016 on Form 10.

NOTE–2

ORGANIZATION AND BUSINESS BACKGROUND

Cosmos Group Holdings Inc. (the “Company” or “COSG”) incorporated in the state of Nevada on August 14, 1987, under the name Shur De Cor, Inc. and engaged in developing certain mining claims. In April 1999, Shur De Cor merged with Interactive Marketing Technology, a New Jersey corporation that was engaged in the business of developing and direct marketing of consumer products. As the surviving company, Shur De Cor changed its name to Interactive Marketing Techology, Inc. Shur De Cor's then management resigned and the management of Interactive New Jersey became the Company’s management. The prior management of Shur De Cor retained Shur De Cor’s business and assets. The Company filed a registration statement on Form 10-SB on January 19, 2000.

The Company, through a wholly owned subsidiary, IMT's Plumber, Inc., produced, marketed, and sold a licensed product called the Plumber's Secret, which was discontinued in fiscal 2001. In May 2002, the Company ceased to actively pursue its product development and marketing business and actively sought to either acquire a third party, merge with a third party or pursue a joint venture with a third party in order to re-enter its former business of development and direct marketing of proprietary consumer products in the United States and worldwide.

On November 17, 2004, the Company acquired MPL, a company organized under the laws of the British Virgin Islands, and its subsidiaries in accordance with the terms of a Share Exchange Agreement executed by the parties (the “2004 Agreement”). In connection with the acquisition, the Company issued an aggregate of 109,623,006 shares of its common stock to Imperial International Limited, a company incorporated under the laws of the British Virgin Islands (“Imperial”), the sole shareholder of MPL, in exchange for 100% of the issued and outstanding shares of MPL capital stock (the "2004 Share Exchange"). Upon completion of the share exchange, MPL became the Company's wholly owned subsidiary and the Company’s former owner transferred control of the Company to Imperial. The Company relied on Rule 506 of Regulation D of the Securities Act of 1933, as amended (the "Act"), in regard to the shares that we issued pursuant to the 2004 Share Exchange. The Company treated this transaction as a qualified "business combination" as defined by Rule 501(d). The Company relied on the exemption from registration pursuant to Section 4(2) of, and or Regulation D promulgated under, the Act in issuing the Company’s securities.

In connection with the 2004 Share Exchange, the Company: (i) changed its name from Interactive Marketing Technology, Inc. to China Artists Agency, Inc. ("China Artists"); (ii) obtained a new stock symbol, "CAAY", and CUSIP Number, effective on December 21, 2004; (iii) increased its authorized common stock to 200,000,000 shares; (iv) effectuated a 1 for 1.69 reverse stock split; and (v) spun off the Company’s existing business into a separate public company, All Star Marketing, Inc., a Nevada corporation ("All Star"). All Star was formed as a wholly owned subsidiary of the Company. The Spin-off was satisfied by means of a pro-rata share dividend to the Company's shareholders of record as of December 10, 2004. The purpose of the Spin-Off was to allow the subsidiary to operate as a separate public company and raise working capital through the sale of its own equity. This allowed the Company’s management to focus on its business, while at the same time, allowing the spun-off company to have greater exposure by trading as an independent public company. Additionally, the shareholders and the market would then more easily identify the results and performance of the Company as a separate entity from that of All Star. In August 2005, the Company changed its name to China Entertainment Group, Inc. and, effective August 9, 2005, obtained a new stock symbol "CGRP", and CUSIP Number.

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

Because the Company failed to generate revenues in its new business, prior management commenced litigation in the Superior Court for Los Angeles County California which action was removed to the United States District Court for the Central District of California Case No. CV07-1068 GHK. On January 30, 2008, the parties entered into a Settlement Agreement and Conditional Release (the “Settlement Agreement”), pursuant to which, among other things, the Company’s former management reacquired control of the Company and all assets related to the Chinese entertainment business were transferred out of the Company. The Company, under its former management, once again entered the business of locating products to develop and mass market. These efforts did not prove fruitful and the Company, while continuing its product development business, also began to seek another business to acquire.

On January 22, 2010, the Company filed a Form 15-12G to withdraw from its reporting obligations.

Effective July 22, 2010, the Company merged with Safe and Secure TV Channel, LLC, a Delaware limited liability company (the “Merger”). In connection with the Merger, the management of the Company resigned and was replaced by the management and principals of Safe and Secure TV Channel, LLC. The holders of interests in Safe and Secure TV Channel, LLC exchanged their interests for approximately 50.2% of the issued and outstanding stock of the Company. In September 2010, the Company effectuated a 9.85 for one stock split to shareholders of record as of August 23, 2010. After the Merger, the Company became a television network and multimedia information and distribution company focused on serving the homeland security and emergency preparedness industry.

On February 15, 2016, the Company sold to Asia Cosmos Group Limited, a private limited liability company incorporated under the laws of British Virgin Islands (“ACOSG”), 10,000,000 shares of its common stock at a per share price of $0.027. ACOSG’s sole shareholder is Miky Wan. The Company relied on the exemption from registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act in selling the Company’s securities to ACOSG.

In connection with the private placement to ACOSG, a change of control occurred and Bryan Glass resigned from his position as President, Secretary, Treasurer and Chairman of the Company. Miky Wan was appointed to serve as Chief Executive Officer, Chief Operating Officer, President and Director, effective February 19, 2016. Peter Tong, our Chief Financial Officer, Secretary and director continued in his positions with the Company. Calvin K.W. Lai, Anthony H.H. Chan, Jenher Jeng, Alice K.M. Tang, Connie Y.M. Kwok were appointed to serve on our Board of Directors effective February 19, 2016. Effective February 26, 2016, the Company changed its name to Cosmos Group Holdings Inc. and filed a Certificate of Amendment to such effect with the Nevada Secretary of State. The name change and the related stock symbol change to “COSG” were approved by the Financial Industry Regulatory Authority on March 31, 2016. The Company also increased the number of its authorized common stock, par value $0.001, from 90,000,0000 shares to 500,000,000 and its preferred stock, par value $0.001, from 10,000,000 to 30,000,000 shares. After the private placement, the Company shifted its business plan to focus on acquiring undervalued companies including those in the Greater China region.

On May 12, 2017, the Company acquired all of the issued and outstanding shares of Lee Tat from Mr. Koon Wing CHEUNG, Lee Tat’s sole shareholder, in exchange for 219,222,938 shares of our issued and outstanding common stock. In connection with the Lee Tat acquisition, Miky Wan resigned from her positions as Chief Executive Officer and Chief Operating Officer and Koon Wing CHEUNG and Yongwei HU were appointed to serve as our Chief Executive Officer and Chief Operating Officer, respectively, and also as our directors. In addition, Anthony H.H. CHAN and Alice K. M. TANG resigned from their positions as directors, and Zhigang LIAO and Weiming CHEN were appointed to fill the vacancies created by their resignations. The Company relied on the exemption from registration pursuant to Section 4(2) of, and Regulation D and/or Regulation S promulgated under the Act in selling the Company’s securities to the shareholders of Lee Tat.

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

Prior to the acquisition, the Company was considered as a shell company due to its nominal assets and limited operation. Upon the acquisition, Lee Tat will comprise the ongoing operations of the combined entity and its senior management will serve as the senior management of the combined entity, Lee Tat is deemed to be the accounting acquirer for accounting purposes. The transaction will be treated as a recapitalization of the Company. Accordingly, the consolidated assets, liabilities and results of operations of the Company will become the historical financial statements of Lee Tat, and the Company’s assets, liabilities and results of operations will be consolidated with Lee Tat beginning on the acquisition date. Lee Tat was the legal acquiree but deemed to be the accounting acquirer. The Company was the legal acquirer but deemed to be the accounting acquiree in the reverse merger. The historical financial statements prior to the acquisition are those of the accounting acquirer (Lee Tat). Historical stockholders’ equity of the accounting acquirer prior to the merger are retroactively restated (a recapitalization) for the equivalent number of shares received in the merger. Operations prior to the merger are those of the acquirer. After completion of the share exchange transaction, the Company’s consolidated financial statements include the assets and liabilities, the operations and cash flow of the accounting acquirer.

The Company, through its subsidiaries, mainly engages in the provision of truckload transportation service in Hong Kong, in which the Company utilizes its owned trucks or independent contractor owned trucks for the pickup and delivery of freight from port to the designated destination, upon the customers’ request.

Description of subsidiaries

Name	Place of incorporation and kind of legal entity	Principal activities and place of operation	Particulars of issued/ registered share capital	Effective interest held

Cosmo Group International Holdings Limited	British Virgin Islands	Investment holding	50,000 shares at US$1 each		100%

Asia Cosmos Group (Hong Kong) Limited	Hong Kong	Corporate	10,000 ordinary shares at HK$1 each		100%

Lee Tat Transportation International Limited	Hong Kong	Logistic and delivery	10,000 ordinary shares at HK$1 each		100%

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

NOTE–3

GOING CONCERN UNCERTAINTIES

These condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

As shown in the accompanying financial statements, the Company suffered from a negative working capital of $91,281 and capital deficit of $29,266 as at June 30, 2017.

The continuation of the Company is dependent upon the continuing financial support of its stockholders. Management believes this funding will continue, and is also actively seeking new investors to obtain the additional fund to finance its operating activities. Management believes the existing stockholder or external borrowings will provide the additional cash to meet the Company’s obligations as it become due. 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 for a reasonable period of time. These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

NOTE–4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Use of estimates

In preparing these 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.

Basis of consolidation

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

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.

Accounts receivable

Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer's financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of June 30, 2017, there was no allowance for doubtful accounts.

Property, plant and equipment

Property, plant 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
Service vehicle		8 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 three months ended June 30, 2017 and 2016 was $4,958 and $4,990, respectively.

Depreciation expense for the six months ended June 30, 2017 and 2016 was $9,917 and $9,979, respectively.

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, plant and equipment held and used 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. There has been no impairment charge for the three and six months ended June 30, 2017 and 2016.

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

Revenue recognition

In accordance with the ASC Topic 605, “Revenue Recognition”, the Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable and collectibility is reasonably assured.

Revenue is recognized in full upon completion of delivery to the receiver’s location.

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 condensed consolidated statement of 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.

Income taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

For the three and six months ended June 30, 2017 and 2016, the Company did not have any interest and penalties associated with tax positions. As of June 30, 2017, the Company did not have any significant unrecognized uncertain tax positions.

The Company conducts major businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the foreign tax authority.

Finance leases

Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30, “Imputation of Interest”.

Net income per share

The Company calculates net income 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.

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

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 statement of operations.

The reporting currency of the Company is the United States Dollar ("US$"). The Company's subsidiaries in Hong Kong maintain their books and records in their local currency, Hong Kong Dollars ("HK$"), which is the functional currency as being the primary currency of the economic environment in which these entities operate.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the 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 subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

Related parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

Segment reporting

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 financial statements. The Company operates in one reportable operating segment in Hong Kong.

Fair value of financial instruments

The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

·	Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

Level 2 : Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Recent accounting pronouncements

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–5

AMOUNTS DUE TO RELATED PARTIES

	June 30, 2017		December 31, 2016
		(Unaudited)		(Audited)
Balances due to related parties:
Koon Wing CHEUNG, Chief Executive Officer and Director	$	5,117	$	41,306
Cosmos Links International Holding Limited		34,631		–
Asia Cosmos Group Limited		10,000		–
Asia Cosmos Wealth Management Limited		1		–

	$	49,749	$	43,106

The balances were unsecured, interest-free and repayable upon demand. Imputed interest from related party loan is not significant.

NOTE–6

OBLIGATION UNDER FINANCE LEASE

The Company purchased a service vehicle under a finance lease agreement with the effective interest rate of 2.25% per annum, due through May 29, 2020, with principal and interest payable monthly. The obligation under the finance lease is as follows:

	June 30, 2017			December 31, 2016
		(Unaudited)			(Audited)

Finance lease	$	59,458		$	71,022
Less: interest expense		(1,125	)		(2,265	)

Net present value of finance lease	$	58,333		$	68,757

Current portion	$	20,000		$	20,124
Non-current portion		38,333			48,633

Total	$	58,333		$	68,757

As of June 30, 2017, the maturities of the finance lease for each of the three years are as follows:

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

NOTE–7

INCOME TAXES

COSG is registered in the State of Nevada and is subject to the tax laws of United States of America.

As of June 30, 2017, the operation in the United States of America incurred $1,842,542 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2037, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $626,464 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.

BVI

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

Hong Kong

The Company’s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at a standard income tax rate of 16.5% on the assessable income arising in Hong Kong during its tax year. The reconciliation of income tax rate to the effective income tax rate for the six months ended June 30, 2017 and 2016 is as follows:

	Six months ended June 30,
	2017			2016

Income (loss) before income taxes from HK operation	$	3,443		$	(63,147	)
Statutory income tax rate		16.5%			16.5%
Income tax expense at statutory rate		568			(10,419	)
Tax effect from non-deductible items		1,636			1,646
Tax effect from deductible items		(1,977	)		(2,777	)
Tax losses		(227	)		11,550
Income tax expense	$	–		$	–

The following table sets forth the significant components of the deferred tax assets and liabilities of the Company as of June 30, 2017 and December 31, 2016:

	June 30, 2017			December 31, 2016
		(Unaudited)			(Audited)
Deferred tax liabilities:
Accelerated depreciation	$	13,132		$	12,871

Deferred tax assets:
Net operating loss carryforwards		4,768			5,026
Less: valuation allowance		(4,768	)		(5,026	)
Deferred tax assets, net	$	–		$	–

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

As of June 30, 2017, the Company incurred $29,075 of cumulative net operating losses which can be carried forward to offset future taxable income at no expiration. The Company has provided for a full valuation allowance against the deferred tax assets of $4,768 at June 30, 2017, 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.

NOTE–8

STOCKHOLDERS’ EQUITY

The Company has 500,000,000 common shares authorized with a par value of $0.001 per share.

On January 13, 2017, prior to the reverse merger with Lee Tat, COSG issued 200,000,000 shares of its common stock for cash proceed of $200,000 for working capital purpose.

On May 12, 2017, the Company completed the acquisition of 100% equity interest in Lee Tat Transportation International Limited in exchange of 219,222,938 shares of its common stock. These common stocks were subsequently issued to the shareholders of Lee Tat Transportation International Limited.

As of June 30, 2017, the Company had a total of 429,848,898 shares of its common stock issued and outstanding.

NOTE–9

RELATED PARTY TRANSACTIONS

Advances from Stockholder

From time to time, the stockholder and director of the Company advanced funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and due on demand. The imputed interest on the loan from a related party was not significant.

Free Office Space from its Stockholder

The Company has been provided office space by its stockholder at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.

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

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

NOTE–10

CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

(a) Major customers

For the three and six months ended June 30, 2017 and 2016, the customers who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at period-end dates, are presented as follows:

		Three months ended June 30, 2017						June 30, 2017
Customers		Sales		Percentage of sales				Accounts receivable

Customer B		$	73,022		40%		$	–
Customer C			57,302		32%			–

	Total:	$	130,324		72%	Total:	$	–

		Six months ended June 30, 2017						June 30, 2017
Customers		Sales		Percentage of sales				Accounts receivable

Customer B		$	139,472		50%		$	–
Customer C			57,302		21%			–

	Total:	$	196,774		71%	Total:	$	–

	Three months ended June 30, 2016				June 30, 2016
	Sales		Percentage of sales		Accounts receivable

Customer A	$	19,002		21%	$	–
Customer B		21,816		24%		–
Customer C		33,729		37%		–

	$	74,547		82%	$	–

	Six months ended June 30, 2016				June 30, 2016
	Sales		Percentage of sales		Accounts receivable

Customer A	$	19,002		10%	$	–
Customer B		21,816		12%		–
Customer C		33,729		18%		–

	$	74,547		40%	$	–

All customers are located in Hong Kong.

COSMOS GROUP HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2017

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

(Unaudited)

(b) Major vendors

For the three and six months ended June 30, 2017, one vender represented more than 10% of the Company’s operating cost. This vendor accounted for 10% of the Company’s operating cost amounting to $11,346 and $20,775, respectively with $0 of accounts payable at June 30, 2017.

For the three and six months ended June 30, 2016, one vender represented more than 10% of the Company’s operating cost. This vendor accounted for 18% of the Company’s operating cost amounting to $19,627 and $30,272, respectively with $0 of accounts payable at June 30, 2016.

All vendors are located in Hong Kong.

Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

(d) Interest rate risk

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

The Company’s interest-rate risk arises from borrowing under notes and bank borrowings. The Company manages interest rate risk by varying the issuance and maturity dates variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. As of June 30, 2017, borrowing under finance lease was at fixed rate.

NOTE–11

COMMITMENTS AND CONTINGENCIES

(a)

Operating lease commitments

As of June 30, 2017, the Company has no material commitments under operating leases.

(b)

Capital commitment

As of June 30, 2017, the Company has no material capital commitments in the next twelve months.

NOTE–12

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 financial statements are issued, the Company has evaluated all events or transactions that occurred after June 30, 2017, up through the date the Company issued the unaudited condensed financial statements. During the period, the Company did not have any material recognizable subsequent events.

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

Forward-looking statements

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report on Form 10-Q. This quarterly report on Form 10-Q contains certain forward-looking statements and our future operating results could differ materially from those discussed herein. Certain statements contained in this discussion, including, without limitation, statements containing the words "believes," "anticipates," "expects" and the like, constitute "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 (the “Exchange Act”). However, as we issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are ineligible to rely on these safe harbor provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained herein to reflect future events or developments.

Currency and exchange rate

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 specialty commercial logistic company that provides timely and reliable logistics and delivery services to commercial clients located in Hong Kong. We offer service to the cable supply industry in Hong Kong, and expect to provide small parcel delivery service in cities near Shanghai in the near future. We conduct our business operations through Lee Tat Transportation Int’l Limited, our wholly owned Hong Kong subsidiary (“Lee Tat”). Lee was organized as a private limited liability company on August 11, 2014, in Hong Kong. We acquired Lee Tat on May 12, 2017.

We are at a development stage company and reported a net income of $19,166 and $37,366 for the years ended December 31, 2016 and 2015, respectively. We had current assets of $47,863 and current liabilities of $75,130 as of December 31, 2016. As of December 31^,2015, our current assets and current liabilities were $46,541 and $94,771, respectively. Our auditors have prepared our financial statements for the years ended December 31, 2016 and 2015 assuming that we will continue as a going concern. 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, capital leases and short-term and long-term debts.

Results of Operations

Comparison of the three months ended June 30, 2017 and June 30, 2016

As of June 30, 2017, we suffered from a working capital deficit of $91,281. As a result, our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders or other capital sources. Management believes that the continuing financial support from the existing shareholders and external financing will provide the additional cash 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.

The following table sets forth certain operational data for the three months ended June 30, 2017, compared to the three months ended June 30, 2016:

	Three months ended June 30,
	2017			2016

Revenue	$	187,664		$	90,822
Cost of revenue		(125,393	)		(75,839	)
Gross profit		62,271			14,983
General and administrative expenses		80,623			43,436
Income (loss) from operation		(18,352	)		(28,453	)
Total other expense		(560	)		(564	)
Income tax expense		(53	)		(528	)
NET LOSS	$	(18,965	)	$	(29,545	)

Revenue. We generated revenues of $187,664 and $90,822 for the three months ended June 30, 2017 and 2016. The increase in revenue is attributable to the expansion of our business into Shanghai and our contract with Shanghai Yunda Cargo Limited. We anticipate that our revenues will continue increase in the near future as we further develop our business in the China market.

During the three months ended June 30, 2017, and 2016, the following customers accounted for 10% or more of our total net revenues:

	Three months ended June 30, 2017					June 30, 2017
Customer	Revenues		Percentage of revenues			Accounts receivable
Peaceman Cable Engineering Limited	$	73,022		40%		$	–
Hip Tung Cables Company Limited		57,302		32%			–
Total:	$	130,324		72%	Total:	$	–

	Three months ended June 30, 2016					June 30, 2016
Customer	Revenues		Percentage of revenues			Accounts receivable
BBC Cable Engineering Co Limited	$	19,002		21%		$	–
Peaceman Cables Eng limited		21,816		24%			–
Hip Tung Cables Company Limited		33,729		37%			–
Total:	$	74,547		82%	Total:	$	–

All customers are located in Hong Kong.

Cost of Revenue. Cost of revenue for the three months ended June 30, 2017, was $125,393, and as a percentage of net revenue, approximately 66.8%. Cost of revenue for the same period ended June 30, 2016, was $75,839. Cost of revenue as a percentage of net revenue for the quarter ended June 30, 2016 was approximately 83.5%. Cost of revenue increased primarily as a result of the increase in our business volume.

Gross Profit. We achieved a gross profit of $62,271 and $14,983 for the quarters ended June 30, 2017, and 2016, respectively. The increase in gross profit is primarily attributable to our increased operational efficiencies.

General and Administrative Expenses (“G&A”). We incurred G&A expenses of $80,623 and $43,436 for the quarters ended June 30, 2017, and 2016, respectively. The increase in G&A is primarily attributable to professional, administrative and other fees associated with being a reporting act company.

G&A as a percentage of net revenue was approximately 42.9% and 47.9% for the quarters ended June 30, 2017 and 2016, respectively. As a general matter, we expect our G&A to increase in the foreseeable future as we expand our business operations, including an anticipated increase in employees.

Other Income, net. We incurred net other expenses of $560 for the quarter ended June 30, 2017, as compared to $564 for the quarter ended June 30, 2016. Our net other expenses for the quarters ended June 30, 2017 and 2016 consisted primarily of interest expenses.

Income Tax Expense. Our income tax expenses for the quarters ended June 30, 2017 and 2016 was $53 and $528, respectively. The decrease in income tax expenses was primarily attributable to the larger net loss that we incurred as a result of greater operating expenses.

Net Loss. During the quarter ended June 30, 2017, we incurred a net loss of $18,965, as compared to $29,545 for the same period ended June 30, 2016. The increase in net loss is primarily attributable to increased general and administrative expenses resulting from being a reporting act company.

Comparison of the six months ended June 30, 2017 and June 30, 2016

The following table sets forth certain operational data for the six months ended June 30, 2017, compared to the six months ended June 30, 2016:

	Six months ended June 30,
	2017			2016

Revenue	$	279,382		$	185,781
Cost of revenue		(200,980	)		(168,045	)
Gross profit		78,402			17,736
General and administrative expenses		126,837			79,757
Income (loss) from operation		(48,435	)		(62,021	)
Total other expense		(983	)		(1,126	)
Income tax expense		(262	)		(1,131	)
NET LOSS	$	(49,680	)	$	(64,278	)

Revenue. We generated revenues of $279,382 and $185,781 for the six months ended June 30, 2017 and 2016. The increase in revenue is attributable to the expansion of our business into Shanghai and our contract with Shanghai Yunda Cargo Limited. We anticipate that our revenues will continue increase in the near future as we further develop our business in the China market.

During the six months ended June 30, 2017, and 2016, the following customers accounted for 10% or more of our total net revenues:

	Six months ended June 30, 2017					June 30, 2017
Customer	Revenues		Percentage of revenues			Accounts receivable
Peaceman Cable Engineering Limited	$	139,472		50%		$	–
Hip Tung Cables Company Limited		57,302		21%			–
Total:	$	196,774		71%	Total:	$	–

	Three months ended June 30, 2016					June 30, 2016
Customer	Revenues		Percentage of revenues			Accounts receivable
BBC Cable Engineering Co Limited	$	19,002		10%		$	–
Peaceman Cable Engineering Limited		21,816		12%			–
Hip Tung Cables Company Limited		33,729		18%			–
Total:	$	74,547		40%	Total:	$	–

All customers are located in Hong Kong.

Cost of Revenue. Cost of revenue for the six months ended June 30, 2017, was $200,980, and as a percentage of net revenue, approximately 71.9%. Cost of revenue for the same period ended June 30, 2016, was $168,045. Cost of revenue as a percentage of net revenue for the quarter ended June 30, 2016 was approximately 90.5%. Cost of revenue increased primarily as a result of the increase in our business volume.

Gross Profit. We achieved a gross profit of $78,402 and $17,736 for the six months ended June 30, 2017, and 2016, respectively. The increase in gross profit is primarily attributable to our increased operational efficiencies.

General and Administrative Expenses (“G&A”). We incurred G&A expenses of $126,837 and $79,757 for the six months ended June 30, 2017, and 2016, respectively. The increase in G&A is primarily attributable to professional, administrative and other fees associated with being a reporting act company.

G&A as a percentage of net revenue was approximately 45.4% and 42.9% for the six months ended June 30, 2017 and 2016, respectively. As a general matter, we expect our G&A to increase in the foreseeable future as we expand our business operations, including an anticipated increase in employees.

Other Income, net. We incurred net other expenses of $983 for the six months ended June 30, 2017, as compared to $1,126 for the same period ended June 30, 2016. Our net other expenses for the six months ended June 30, 2017 and 2016 consisted primarily of interest expenses.

Income Tax Expense. Our income tax expenses for the six months ended June 30, 2017 and 2016 was $262 and $1,131, respectively. The decrease in income tax expenses was primarily attributable to the larger net loss that we incurred as a result of greater operating expenses.

Net Loss. During the six months ended June 30, 2017, we incurred a net loss of $49,680, as compared to $64,278 for the same period ended June 30, 2016.

Liquidity and Capital Resources

As of June 30, 2017, we had cash and cash equivalents of $12,369, accounts receivable of $6,501 and incurred a net loss of $49,680 for the six months ended June 30, 2017. As of December 31, 2016, we had cash and cash equivalents of $1,581, accounts receivable of $46,282 and incurred a net loss of $183,832.

We expect to incur significantly greater expenses in the near future as we expand our 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 may include the sale of equity securities, which include common stock sold in private transactions, capital leases and short-term and long-term debts. While we believe that we will obtain external financing and the existing shareholders will continue to provide the additional cash to meet our obligations as they become due, 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 operations for at least the next 12 months.

	Six Months Ended June 30,
	2017			2016
Net cash used in operating activities	$	(34,192	)	$	(21,181	)
Net cash (used in) provided by investing activities		–			–
Net cash generated from financing activities		44,980			19,766

Net Cash Generated From (Used In) Operating Activities.

For the six months ended June 30, 2017, net cash used in operating activities was $34,192, which consisted primarily of a net loss of $49,418 and an decrease in accrued liabilities and other payables of $34,186, offset by decrease in accounts receivable of $39,495, and depreciation of property, plant and equipment of $9,917.

For the six months ended June 30, 2016, net cash used in operating activities was $21,181, which consisted primarily of a net loss of $63,147, an increase in accounts receivable of $35,851 and depreciation of property, plant and equipment of $9,979, offset by a decrease in accrued liabilities and other payables of $3,864.

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 (Used In) Generated From Financing Activities.

For the six months ended June 30, 2017, net cash generated from financing activities was $44,980 consisting primarily of proceeds from issue of common stock of $200,000, offset by repayments on a finance lease of $10,000, repayment to related party of $108,831 and repayment to Koon Wing, CHEUNG, our Chief Executive Officer of $36,189

For the six months ended June 30, 2016, net cash generated from financing activities was $19,766, consisting primarily of advances from Koon Wing, CHEUNG, our Chief Executive Officer, of $29,828, offset by repayment on a finance lease of $10,062.

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 had the following contractual obligations and commercial commitments as of June 30, 2017:

Contractual Obligations	Total		Less than 1 Year		1-3 Years		3-5 Years	More than 5 Years
		$		$		$	$	$
Amounts due to related parties		49,749		49,749		–	–	–
Commercial commitments
Bank loan repayment		58,333		20,000		38,333	–	–
Total obligations		108,082		69,749		38,333	–	–

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.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management's subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments. We believe the following accounting policies are critical in the preparation of our financial statements.

Basis of consolidation

Accounts receivable

Property, plant and equipment

		Expected useful life
Service vehicle		8 years

Depreciation expense for the three months ended June 30, 2017 and 2016 was $4,958 and $4,990, respectively.

Depreciation expense for the six months ended June 30, 2017 and 2016 was $9,917 and $9,979, respectively.

Impairment of long-lived assets

Revenue recognition

Revenue is recognized in full upon completion of delivery to the receiver’s location.

Income taxes

Finance leases

Foreign currencies translation

Related parties

Segment reporting

Fair value of financial instruments

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.

·	Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

Recent accounting pronouncements

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 Procedures

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 June 30, 2017, 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 last fiscal quarter ended June 30, 2017, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

None.

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds

None.

ITEM 3 Defaults upon Senior Securities

None.

ITEM 4 Mine Safety Disclosures

Not applicable.

ITEM 5 Other Information

None.

ITEM 6 Exhibits

Exhibit No.		Description

3.1		Articles of Incorporation and Certificate of Amendment to Articles of Incorporation (2)
3.2		Amended and Restated Bylaws (1)
4.1		Specimen certificate evidencing shares of Common Stock (2)
10.1		Lee Tat Transportation Service Contract, effective May 1, 2017, by and between Lee Tat Transportation International Limited and Shanghai Yunda Cargo Co., Ltd. (2)
10.2		Lee Tat Transportation Service Contract, effective May 1, 2017, by and between Lee Tat Transportation International Limited and Suzhou Yuantong Logistic Company, Ltd. (3)
10.3		Employment Agreement, effective January 1, 2015, by and between Lee Tat Transportation International Limited and Koon Wing Cheung. (2)
21		Subsidiaries*
31.1		Certification of Chief Executive Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act.*
31.2		Certification of Chief Financial Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act.*
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2		Certification of 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		XBRL Instance Document*
101.SCH		XBRL Schema Document*
101.CAL		XBRL Calculation Linkbase Document*
101.DEF		XBRL Definition Linkbase Document*
101.LAB		XBRL Label Linkbase Document*
101.PRE		XBRL Presentation Linkbase Document*

* Filed herewith

(1) 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.

(2) Incorporated by reference from our Registration Statement on Form 10 filed with the Securities and Exchange Commission on May 23, 2017.

(3) Incorporated by reference from the Amendment No. 2 to our Registration Statement on Form 10 filed with the Securities and Exchange Commission on July 7, 31, 2017.

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/Koon Wing Cheung
		Koon Wing Cheung
		Chief Executive Officer




Date: August 14, 2017

EX-21 2 cosmos_ex2100.htm LIST OF SUBSIDIARIES

Exhibit 21

LIST OF SUBSIDIARIES

Company Name	Place/Date of Incorporation	Issued Capital	Principal Activities
Cosmos Group International Holdings Limited	British Virgin Islands	50,000 shares	Holding company
Lee Tat Transportation International Limited	Hong Kong	10,000 shares	Logistic and delivery company
Asia Cosmos Group (Hong Kong) Limited	Hong Kong	10,000 shares	Corporate

EX-31.1 3 cosmos_ex3101.htm CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

Exhibit 31.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

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

I, Koon Wing Cheung, certify that:

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

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;

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

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 control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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 report is being prepared;

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;

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; and

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; and

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 functions):

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

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

Date: August 14, 2017

By:

/s/ Koon Wing Cheung

Name:

Koon Wing Cheung

Title:

Chief Executive Officer

(Principal Executive Officer)

EX-31.2 4 cosmos_ex3102.htm CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

Exhibit 31.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

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

I, Miky Y.C. Wan, certify that:

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

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

Date: August 14, 2017

By:

/s/ Miky Y.C. Wan

Name:

Miky Y.C. Wan

Title:

Interim Chief Financial Officer and President

(Principal Financial Officer)

EX-32.1 5 cosmos_ex3201.htm CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

Exhibit 32.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

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

In connection with the Quarterly Report of Cosmos Group Holdings, Inc., a Nevada corporation (the “Company”), on Form 10-Q for the quarter ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Koon Wing Cheung, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

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

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

Date: August 14, 2017

By:

/s/ Koon Wing Cheung

Name:

Koon Wing Cheun

Title:

Chief Executive Officer

(Principal Executive Officer)

EX-32.2 6 cosmos_ex3202.htm CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

Exhibit 32.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

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

In connection with the Quarterly Report of Cosmos Group Holdings, Inc., a Nevada corporation (the “Company”), on Form 10-Q for the quarter ended June 30, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Miky Y.C. Wan, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

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

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

Date: August 14, 2017

By:

/s/ Miky Y.C. Wan

Name:

Miky Y.C. Wan

Title:

Interim Chief Financial Officer and President

(Principal Financial Officer)

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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, 2016 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 June 30, 2017 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2017 or for any future period.   These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements for the year ended December 31, 2016 on Form 10.

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: center; border-bottom: Black 1pt solid">Name</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; border-bottom: Black 1pt solid">Place of incorporation and kind of legal entity</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; border-bottom: Black 1pt solid">Principal activities and place of operation</td><td style="padding-bottom: 1pt"> </td> <td style="text-align: center; border-bottom: Black 1pt solid">Particulars of issued/ registered share capital</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Effective interest held</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center"> </td><td> </td> <td style="text-align: justify"> </td><td> </td> <td style="text-align: justify"> </td><td> </td> <td style="text-align: justify"> </td><td> </td> <td colspan="2" style="text-align: center"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 18%; text-align: center; vertical-align: top">Cosmo Group International Holdings Limited</td><td style="width: 2%; text-align: center; vertical-align: top"> </td> <td style="width: 18%; text-align: center; vertical-align: top">British Virgin Islands</td><td style="width: 2%; text-align: center; vertical-align: top"> </td> <td style="width: 18%; text-align: center; vertical-align: top">Investment holding</td><td style="width: 2%; text-align: center; vertical-align: top"> </td> <td style="width: 18%; text-align: center; vertical-align: top">50,000 shares at US$1 each</td><td style="width: 2%; text-align: center; vertical-align: top"> </td> <td style="width: 1%; text-align: center; vertical-align: top"> </td><td style="width: 18%; text-align: center; vertical-align: top">100%</td><td style="width: 1%; text-align: center; vertical-align: top"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center; padding-left: 7.6pt; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: center; padding-left: 7.6pt; vertical-align: top">Asia Cosmos Group (Hong Kong) Limited</td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top">Hong Kong</td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top">Corporate</td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top">10,000 ordinary shares at HK$1 each</td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top">100%</td><td style="text-align: center; vertical-align: top"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: center; padding-left: 7.6pt; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: center; padding-left: 7.6pt; vertical-align: top">Lee Tat Transportation International Limited</td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top">Hong Kong</td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top">Logistic and delivery</td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top">10,000 ordinary shares at HK$1 each</td><td style="text-align: center; vertical-align: top"> </td> <td style="text-align: center; vertical-align: top"> </td><td style="text-align: center; vertical-align: top">100%</td><td style="text-align: left"> </td></tr> </table>

The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Use of estimates</td></tr></table>   In preparing these 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.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Basis of consolidation</td></tr></table>   The condensed consolidated financial statements include the financial statements of COSG and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Cash and cash equivalents</td></tr></table>   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.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Accounts receivable</td></tr></table>   Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer's financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of June 30, 2017, there was no allowance for doubtful accounts.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Property, plant and equipment</td></tr></table>   Property, plant 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:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 50%; text-align: justify"> </td> <td style="width: 3%; text-align: justify"> </td> <td style="width: 28%; border-bottom: Black 1pt solid; text-align: center">Expected useful life</td> <td style="width: 1%; text-align: justify"> </td> <td style="width: 18%; text-align: center"> </td></tr> <tr style="vertical-align: top"> <td style="text-align: justify">Service vehicle</td> <td style="text-align: justify"> </td> <td style="text-align: center">8 years</td> <td style="text-align: justify"> </td> <td style="text-align: center"> </td></tr> </table>   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 three months ended June 30, 2017 and 2016 was $4,958 and $4,990, respectively.   Depreciation expense for the six months ended June 30, 2017 and 2016 was $9,917 and $9,979, respectively.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Impairment of long-lived assets</td></tr></table>   In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as property, plant and equipment held and used 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. There has been no impairment charge for the three and six months ended June 30, 2017 and 2016.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Revenue recognition</td></tr></table>   In accordance with the ASC Topic 605, “Revenue Recognition”, the Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable and collectibility is reasonably assured.   Revenue is recognized in full upon completion of delivery to the receiver’s location.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Comprehensive income</td></tr></table>   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 condensed consolidated statement of 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.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Income taxes</td></tr></table>   Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.   ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.   For the three and six months ended June 30, 2017 and 2016, the Company did not have any interest and penalties associated with tax positions. As of June 30, 2017, the Company did not have any significant unrecognized uncertain tax positions.   The Company conducts major businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the foreign tax authority.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> <tr style="vertical-align: top"> <td style="width: 0"></td> <td style="width: 27pt">·</td> <td style="text-align: justify">Finance leases</td></tr> </table>   Leases that transfer substantially all the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding 90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method in accordance with the provisions of ASC Topic 835-30, “Imputation of Interest”.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Net income per share</td></tr></table>   The Company calculates net income 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.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Foreign currencies translation</td></tr></table>   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 statement of operations.   The reporting currency of the Company is the United States Dollar ("US$"). The Company's subsidiaries in Hong Kong maintain their books and records in their local currency, Hong Kong Dollars ("HK$"), which is the functional currency as being the primary currency of the economic environment in which these entities operate.   In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the US$ 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 subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Related parties</td></tr></table>   Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 27pt">·</td><td style="text-align: justify">Segment reporting</td></tr></table>   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 financial statements. The Company operates in one reportable operating segment in Hong Kong.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 24.1pt">·</td><td style="text-align: justify">Fair value of financial instruments</td></tr></table>   The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.   Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.   The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 4%; text-align: justify">·</td> <td style="width: 96%; text-align: justify">Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 4%; text-align: justify">·</td> <td style="width: 96%; text-align: justify">Level 2 : Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 4%; text-align: justify">·</td> <td style="width: 96%; text-align: justify">Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.</td></tr> </table>   Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 24.1pt">·</td><td style="text-align: justify">Recent accounting pronouncements</td></tr></table>   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.

<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top"> <td style="width: 0"></td><td style="width: 24.1pt">·</td><td style="text-align: justify">Fair value of financial instruments</td></tr></table>   The carrying value of the Company’s financial instruments (excluding short-term bank borrowing and note payable): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.   Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.   The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 4%; text-align: justify">·</td> <td style="width: 96%; text-align: justify">Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 4%; text-align: justify">·</td> <td style="width: 96%; text-align: justify">Level 2 : Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: top"> <td style="width: 4%; text-align: justify">·</td> <td style="width: 96%; text-align: justify">Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.</td></tr> </table>   Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The Company purchased a service vehicle under a finance lease agreement with the effective interest rate of 2.25% per annum, due through May 29, 2020, with principal and interest payable monthly. The obligation under the finance lease is as follows:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Audited)</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; text-align: left; text-indent: -5.65pt; padding-left: 5.65pt">Finance lease</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">59,458</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">71,022</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -5.65pt; padding-left: 5.65pt">Less: interest expense</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,125</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(2,265</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -5.65pt; padding-left: 5.65pt">Net present value of finance lease</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">58,333</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">68,757</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: -5.65pt; padding-left: 5.65pt">Current portion</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">20,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">20,124</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -5.65pt; padding-left: 5.65pt">Non-current portion</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">38,333</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">48,633</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-indent: -5.65pt; padding-left: 5.65pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">58,333</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">68,757</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>   As of June 30, 2017, the maturities of the finance lease for each of the three years are as follows:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td colspan="2" style="text-align: left">Years ending June 30:</td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 1%; text-align: left"> </td><td style="width: 81%; text-align: left">2018</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">20,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"> </td><td style="text-align: left">2019</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">20,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: left">2020</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">18,333</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"> </td><td style="text-align: left"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: left">Total</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">58,333</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Audited)</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; text-align: left; text-indent: -5.65pt; padding-left: 5.65pt">Finance lease</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">59,458</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">71,022</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -5.65pt; padding-left: 5.65pt">Less: interest expense</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(1,125</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(2,265</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt; text-indent: -5.65pt; padding-left: 5.65pt">Net present value of finance lease</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">58,333</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">68,757</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: -5.65pt; padding-left: 5.65pt">Current portion</td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">20,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left">$</td><td style="text-align: right">20,124</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt; text-indent: -5.65pt; padding-left: 5.65pt">Non-current portion</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">38,333</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">48,633</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-indent: -5.65pt; padding-left: 5.65pt">Total</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">58,333</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">68,757</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td colspan="2" style="text-align: left">Years ending June 30:</td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 1%; text-align: left"> </td><td style="width: 81%; text-align: left">2018</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">20,000</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"> </td><td style="text-align: left">2019</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">20,000</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: left">2020</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">18,333</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"> </td><td style="text-align: left"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: left">Total</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">58,333</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

COSG is registered in the State of Nevada and is subject to the tax laws of United States of America.   As of June 30, 2017, the operation in the United States of America incurred $1,842,542 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2037, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $626,464 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.   BVI   Under the current BVI law, the Company is not subject to tax on income.   Hong Kong   The Company’s subsidiaries operating in Hong Kong are subject to the Hong Kong Profits Tax at a standard income tax rate of 16.5% on the assessable income arising in Hong Kong during its tax year. The reconciliation of income tax rate to the effective income tax rate for the six months ended June 30, 2017 and 2016 is as follows:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; text-align: justify">Income (loss) before income taxes from HK operation</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">3,443</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">(63,147</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Statutory income tax rate</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">16.5%</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">16.5%</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Income tax expense at statutory rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">568</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(10,419</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Tax effect from non-deductible items</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,636</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,646</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Tax effect from deductible items</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,977</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,777</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Tax losses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(227</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">11,550</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Income tax expense</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>   The following table sets forth the significant components of the deferred tax assets and liabilities of the Company as of June 30, 2017 and December 31, 2016:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Audited)</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Deferred tax liabilities:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; text-align: left">Accelerated depreciation</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">13,132</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">12,871</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Deferred tax assets:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: -5.65pt; padding-left: 5.65pt">Net operating loss carryforwards</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,768</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">5,026</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Less: valuation allowance</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(4,768</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(5,026</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Deferred tax assets, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>   As of June 30, 2017, the Company incurred $29,075 of cumulative net operating losses which can be carried forward to offset future taxable income at no expiration. The Company has provided for a full valuation allowance against the deferred tax assets of $4,768 at June 30, 2017, 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.

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Audited)</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Deferred tax liabilities:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; text-align: left">Accelerated depreciation</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">13,132</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">12,871</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Deferred tax assets:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; text-indent: -5.65pt; padding-left: 5.65pt">Net operating loss carryforwards</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">4,768</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">5,026</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Less: valuation allowance</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(4,768</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(5,026</td><td style="padding-bottom: 1pt; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 2.5pt">Deferred tax assets, net</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Six months ended June 30,</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; text-align: justify">Income (loss) before income taxes from HK operation</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">3,443</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">(63,147</td><td style="width: 1%; text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Statutory income tax rate</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">16.5%</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">16.5%</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Income tax expense at statutory rate</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">568</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(10,419</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Tax effect from non-deductible items</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,636</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">1,646</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Tax effect from deductible items</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(1,977</td><td style="text-align: left">)</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">(2,777</td><td style="text-align: left">)</td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Tax losses</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">(227</td><td style="padding-bottom: 1pt; text-align: left">)</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">11,550</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 2.5pt">Income tax expense</td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">December 31, 2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-indent: -5.65pt; padding-left: 5.65pt"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Unaudited)</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: center">(Audited)</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Balances due to related parties:</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 66%; text-align: left; text-indent: -7.6pt; padding-left: 7.6pt">Koon Wing CHEUNG, Chief Executive Officer and Director</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">5,117</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">41,306</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Cosmos Links International Holding Limited</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">34,631</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left">Asia Cosmos Group Limited</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">10,000</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Asia Cosmos Wealth Management Limited</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">1</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">49,749</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">43,106</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>   The balances were unsecured, interest-free and repayable upon demand. Imputed interest from related party loan is not significant.

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 financial statements are issued, the Company has evaluated all events or transactions that occurred after June 30, 2017, up through the date the Company issued the unaudited condensed financial statements. During the period, the Company did not have any material recognizable subsequent events.

1.0

British Virgin Islands Hong Kong Hong Kong Investment holding Corporate Logistic and delivery 50,000 shares at US$1 each 10,000 ordinary shares at HK$1 each 10,000 ordinary shares at HK$1 each

P8Y

20000

20124

38333

48633

58333

68757

1125

2265

59458

71022

58333

2020-05-29

.0225

3443

-63147

0.165

568

-10419

1636

1646

1977

2777

-227

11550

13132

12871

4768

5026

4768

5026

1842542

29075

2037-12-31

626464

4768

200000000

200000

219222938

.21

.10

.40

.24

.12

.21

.32

.37

.18

0.00

.72

0.00

.71

0.00

.82

0.00

.40

0.00

.10

0.00

19002

139472

73022

21816

57302

33729

130324

196774

74547

19627

30272

13132

12870

.001

500000000

429848898

219222938

429848898

219222938

254640966

259676495

219222938

200000

10625960

-214977

10626

-225603

200000

-91281

The Company is exposed to the following concentrations of risk:   (a)       Major customers   For the three and six months ended June 30, 2017 and 2016, the customers who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at period-end dates, are presented as follows:   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Three months ended June 30, 2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; border-bottom: Black 1pt solid">Customers</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Percentage of sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="text-align: center; border-bottom: Black 1pt solid">Accounts receivable</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 30%; text-align: left">Customer B</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">73,022</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">40%</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="text-align: right; width: 13%">–</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Customer C</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">57,302</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">32%</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="border-bottom: Black 1pt solid; text-align: right">–</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right">Total:</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">130,324</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">72%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right">Total:</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td>$</td> <td style="border-bottom: Black 2.5pt double; text-align: right">–</td> <td> </td></tr> </table>   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Six months ended June 30, 2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; border-bottom: Black 1pt solid">Customers</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Percentage of sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="text-align: center; border-bottom: Black 1pt solid">Accounts receivable</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td> </td><td> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 30%; text-align: left">Customer B</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">139,472</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">50%</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="text-align: right; width: 13%">–</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Customer C</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">57,302</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">21%</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="border-bottom: Black 1pt solid; text-align: right">–</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right">Total:</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">196,774</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">71%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right">Total:</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td>$</td> <td style="border-bottom: Black 2.5pt double; text-align: right">–</td> <td> </td></tr> </table>   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Three months ended June 30, 2016</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Percentage of sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Accounts receivable</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 49%; text-align: left">Customer A</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">19,002</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">21%</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Customer B</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">21,816</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">24%</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Customer C</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">33,729</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">37%</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">74,547</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">82%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Six months ended June 30, 2016</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Percentage of sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Accounts receivable</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 49%; text-align: left">Customer A</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">19,002</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">10%</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Customer B</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">21,816</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">12%</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Customer C</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">33,729</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">18%</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">74,547</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">40%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>   All customers are located in Hong Kong.   (b)       Major vendors   For the three and six months ended June 30, 2017, one vender represented more than 10% of the Company’s operating cost. This vendor accounted for 10% of the Company’s operating cost amounting to $11,346 and $20,775, respectively with $0 of accounts payable at June 30, 2017.   For the three and six months ended June 30, 2016, one vender represented more than 10% of the Company’s operating cost. This vendor accounted for 18% of the Company’s operating cost amounting to $19,627 and $30,272, respectively with $0 of accounts payable at June 30, 2016.   All vendors are located in Hong Kong.   (c)       Credit risk   Financial instruments that are potentially subject to credit risk consist principally of trade receivables. The Company believes the concentration of credit risk in its trade receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.   (d)       Interest rate risk   As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.   The Company’s interest-rate risk arises from borrowing under notes and bank borrowings. The Company manages interest rate risk by varying the issuance and maturity dates variable rate debt, limiting the amount of variable rate debt, and continually monitoring the effects of market changes in interest rates. As of June 30, 2017, borrowing under finance lease was at fixed rate.

<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Three months ended June 30, 2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; border-bottom: Black 1pt solid">Customers</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Percentage of sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="text-align: center; border-bottom: Black 1pt solid">Accounts receivable</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td><td> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 30%; text-align: left">Customer B</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">73,022</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">40%</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="text-align: right; width: 13%">–</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Customer C</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">57,302</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">32%</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: center"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="border-bottom: Black 1pt solid; text-align: right">–</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right">Total:</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">130,324</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">72%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right">Total:</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td>$</td> <td style="border-bottom: Black 2.5pt double; text-align: right">–</td> <td> </td></tr> </table>   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Six months ended June 30, 2017</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="text-align: center; border-bottom: Black 1pt solid">June 30, 2017</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; border-bottom: Black 1pt solid">Customers</td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: right"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Percentage of sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center"> </td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="text-align: center; border-bottom: Black 1pt solid">Accounts receivable</td> <td> </td></tr> <tr style="vertical-align: bottom"> <td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2"> </td> <td> </td> <td> </td> <td> </td><td> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 30%; text-align: left">Customer B</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">139,472</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">50%</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 8%; text-align: right"> </td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%">$</td> <td style="text-align: right; width: 13%">–</td> <td style="width: 1%"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left; padding-bottom: 1pt">Customer C</td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">57,302</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">21%</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt; text-align: right"> </td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td> </td> <td style="border-bottom: Black 1pt solid; text-align: right">–</td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="padding-bottom: 2.5pt"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right">Total:</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">196,774</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">71%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt; text-align: right">Total:</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td>$</td> <td style="border-bottom: Black 2.5pt double; text-align: right">–</td> <td> </td></tr> </table>   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Three months ended June 30, 2016</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Percentage of sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Accounts receivable</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 49%; text-align: left">Customer A</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">19,002</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">21%</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Customer B</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">21,816</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">24%</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Customer C</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">33,729</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">37%</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">74,547</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">82%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>   <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="6" style="text-align: center; border-bottom: Black 1pt solid">Six months ended June 30, 2016</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">June 30, 2016</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Percentage of sales</td><td style="padding-bottom: 1pt"> </td><td style="padding-bottom: 1pt"> </td> <td colspan="2" style="text-align: center; border-bottom: Black 1pt solid">Accounts receivable</td><td style="padding-bottom: 1pt"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: left"> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td><td> </td> <td colspan="2" style="text-align: right"> </td><td> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="width: 49%; text-align: left">Customer A</td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">19,002</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left"> </td><td style="width: 13%; text-align: right">10%</td><td style="width: 1%; text-align: left"> </td><td style="width: 2%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 13%; text-align: right">–</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left">Customer B</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">21,816</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">12%</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">–</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="text-align: left; padding-bottom: 1pt">Customer C</td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">33,729</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">18%</td><td style="padding-bottom: 1pt; text-align: left"> </td><td style="padding-bottom: 1pt"> </td> <td style="border-bottom: Black 1pt solid; text-align: left"> </td><td style="border-bottom: Black 1pt solid; text-align: right">–</td><td style="padding-bottom: 1pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"> </td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(238,238,238)"> <td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">74,547</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; text-align: right">40%</td><td style="padding-bottom: 2.5pt; text-align: left"> </td><td style="padding-bottom: 2.5pt"> </td> <td style="border-bottom: Black 2.5pt double; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; text-align: right">–</td><td style="padding-bottom: 2.5pt; text-align: left"> </td></tr> </table>

These condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.   As shown in the accompanying financial statements, the Company suffered from a negative working capital of $91,281 and capital deficit of $29,266 as at June 30, 2017.   The continuation of the Company is dependent upon the continuing financial support of its stockholders. Management believes this funding will continue, and is also actively seeking new investors to obtain the additional fund to finance its operating activities. Management believes the existing stockholder or external borrowings will provide the additional cash to meet the Company’s obligations as it become due. 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 for a reasonable period of time. These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.

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Obligation under Finance Lease (Details - Finance lease) link:presentationLink link:calculationLink link:definitionLink 00000030 - Disclosure - 6. Obligation under Finance Lease (Details - Maturities of finance lease) link:presentationLink link:calculationLink link:definitionLink 00000031 - Disclosure - 6. Obligation under Finance Lease (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000032 - Disclosure - 7. Income Taxes (Details - Income tax reconcilation) link:presentationLink link:calculationLink link:definitionLink 00000033 - Disclosure - 7. Income Taxes (Details - Deferred taxes) link:presentationLink link:calculationLink link:definitionLink 00000034 - Disclosure - 7. Income Taxes (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000035 - Disclosure - 8. Stockholders' Equity (Details Narrative) link:presentationLink link:calculationLink link:definitionLink 00000036 - Disclosure - 10. Concentrations of Risk (Details - Concentration risk) link:presentationLink link:calculationLink link:definitionLink 00000037 - Disclosure - 10. Concentrations of Risk (Details Narrative) link:presentationLink link:calculationLink link:definitionLink EX-101.CAL 9 cosg-20170630_cal.xml XBRL CALCULATION FILE EX-101.DEF 10 cosg-20170630_def.xml XBRL DEFINITION FILE EX-101.LAB 11 cosg-20170630_lab.xml XBRL LABEL FILE Equity Components [Axis] Common Stock Retained Earnings / Accumulated Deficit Legal Entity [Axis] Cosmo Group International Holdings Limited [Member] Asia Cosmos Group (HK) Limited [Member] Lee Tat Transporation International Limited [Member] Property, Plant and Equipment, Type [Axis] Service vehicle [Member] Related Party [Axis] Koon Wing CHEUNG [Member] Cosmos Links International [Member] Asia Cosmos Wealth Management Limited [Member] Income Tax Authority, Name [Axis] Hong Kong Profits Tax [Member] Transaction Type [Axis] Working capital [Member] Business Acquisition [Axis] Concentration Risk Benchmark [Axis] Sales Revenue, Net [Member] Customer [Axis] Customer A [Member] Customer B [Member] Customer C [Member] Accounts Receivable [Member] Cost of Sales [Member] Concentration Risk Type [Axis] One Vendor [Member] Accounts Payable [Member] Document And Entity Information Entity Registrant Name Entity Central Index Key Document Type Document Period End Date Amendment Flag Current Fiscal Year End Date Is Entity a Well-known Seasoned Issuer? Is Entity a Voluntary Filer? Is Entity's Reporting Status Current? Entity Filer Category Entity Public Float Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Statement of Financial Position [Abstract] ASSETS Current assets: Cash and cash equivalents Accounts receivable Total current assets Non-current assets: Property, plant and equipment, net TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY Current liabilities: Accounts payable and accrued liabilities Amounts due to related parties Current portion of obligation under finance leases Total current liabilities Non-current liabilities: Deferred tax liabilities Obligation under finance leases Total non-current liabilities TOTAL LIABILITIES Commitments and contingencies Stockholders' equity: Common stock, $0.001 par value; 500,000,000 shares authorized; 429,848,898 and 219,222,938 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively Accumulated losses Total stockholders' (deficit) equity TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Income Statement [Abstract] Revenues, net Cost of revenue Gross profit Operating expenses General and administrative Total operating expenses LOSS FROM OPERATIONS Other (expense) income: Interest expense Other income Total other expense LOSS BEFORE INCOME TAXES Income tax expense NET LOSS Other comprehensive income (loss): - Foreign currency translation gain (loss) COMPREHENSIVE LOSS Net loss per share - Basic Net loss per share - Diluted Weighted average common shares outstanding - Basic Weighted average common shares outstanding - Diluted Statement of Cash Flows [Abstract] Cash flows from operating activities: Net loss Adjustments to reconcile net loss to net cash provided by (used in) by operating activities Depreciation of property, plant and equipment Change in operating assets and liabilities: Accounts receivable Accounts payable and accrued liabilities Net cash used in operating activities Cash flows from financing activities: Advance from related parties Proceeds from issuance of common stock Repayment of finance lease Net cash provided by financing activities NET CHANGE IN CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD END OF PERIOD SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for tax Cash paid for interest Statement [Table] Statement [Line Items] Beginning balance, shares Beginning balance, value Shares issued for cash proceeds, shares Shares issued for cash proceeds, value Shares issued for acquisition of a legal acquirer, shares Shares issued for acquisition of a legal acquirer, value Net loss Ending balance, shares Ending balance, value Accounting Policies [Abstract] Basis of Presentation Organization, Consolidation and Presentation of Financial Statements [Abstract] Organization and Business Background Going Concern Uncertainties Summary of Significant Accounting Policies Related Party Transactions [Abstract] Amounts due to Related Parties Notes to Financial Statements Obligation under Finance Lease Income Tax Disclosure [Abstract] Income Taxes Equity [Abstract] Stockholders' Equity Related Party Transactions Risks and Uncertainties [Abstract] Concentrations of Risk Commitments and Contingencies Disclosure [Abstract] Commitments and Contingencies Subsequent Events [Abstract] Subsequent Events Use of estimates Basis of consolidation Cash and cash equivalents Accounts receivable Property, plant and equipment Impairment of long-lived assets Revenue recognition Comprehensive income Income taxes Finance leases Net income per share Foreign currencies translation Related parties Segment reporting Fair value of financial instruments Recent accounting pronouncements Schedule of subsidiaries Amounts due to related parties Schedule of financed lease Maturities of finance lease Income tax reconciliation Schedule of deferred tax assets and liabilities Schedule of customer concentrations Ownership percentage Place of incorporation Principal activities Registered share capital Working capital Capital deficit Allowance for doubtful accounts Expected useful life of property Depreciation expense Asset impairment charge Uncertain tax positions Due to related parties Finance lease Less: interest expense Net present value of finance lease Current portion Non-current portion Total Finance lease maturity within one year Finance lease maturity within two years Finance lease maturity within three years Finance lease obligation Finance lease effective interest rate Finance lease maturity date Income (loss) before income taxes from HK operation Statutory income tax rate EX-101.PRE 12 cosg-20170630_pre.xml XBRL PRESENTATION FILE XML 13 R1.htm IDEA: XBRL DOCUMENT

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2017	Aug. 11, 2017
Document And Entity Information
Entity Registrant Name	Cosmos Group Holdings Inc.
Entity Central Index Key	0001706509
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		429,848,898
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2017

XML 14 R2.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 12,369	$ 1,581
Accounts receivable	6,501	46,282
Total current assets	18,870	47,863
Non-current assets:
Property, plant and equipment, net	113,480	124,161
TOTAL ASSETS	132,350	172,024
Current liabilities:
Accounts payable and accrued liabilities	40,402	13,700
Amounts due to related parties	49,749	41,306
Current portion of obligation under finance leases	20,000	20,124
Total current liabilities	110,151	75,130
Non-current liabilities:
Deferred tax liabilities	13,132	12,870
Obligation under finance leases	38,333	48,633
Total non-current liabilities	51,465	61,503
TOTAL LIABILITIES	161,616	136,633
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value; 500,000,000 shares authorized; 429,848,898 and 219,222,938 shares issued and outstanding as of June 30, 2017 and December 31, 2016, respectively	429,849	219,223
Accumulated losses	(459,115)	(183,832)
Total stockholders' (deficit) equity	(29,266)	35,391
TOTAL LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY	$ 132,350	$ 172,024

XML 15 R3.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Common stock, par value	$ .001	$ .001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	429,848,898	219,222,938
Common stock, shares outstanding	429,848,898	219,222,938

XML 16 R4.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income Statement [Abstract]
Revenues, net	$ 187,664	$ 90,822	$ 279,382	$ 185,781
Cost of revenue	(125,393)	(75,839)	(200,980)	(168,045)
Gross profit	62,271	14,983	78,402	17,736
Operating expenses
General and administrative	80,623	43,436	126,837	79,757
Total operating expenses	80,623	43,436	126,837	79,757
LOSS FROM OPERATIONS	(18,352)	(28,453)	(48,435)	(62,021)
Other (expense) income:
Interest expense	(560)	(566)	(1,125)	(1,132)
Other income	0	2	142	6
Total other expense	(560)	(564)	(983)	(1,126)
LOSS BEFORE INCOME TAXES	(18,912)	(29,017)	(49,418)	(63,147)
Income tax expense	(53)	(528)	(262)	(1,131)
NET LOSS	(18,965)	(29,545)	(49,680)	(64,278)
Other comprehensive income (loss):
- Foreign currency translation gain (loss)	0	0	0	0
COMPREHENSIVE LOSS	$ (18,965)	$ (29,545)	$ (49,680)	$ (64,278)
Net loss per share - Basic	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
Net loss per share - Diluted	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
Weighted average common shares outstanding - Basic	259,676,495	219,222,938	254,640,966	219,222,938
Weighted average common shares outstanding - Diluted	259,676,495	219,222,938	254,640,966	219,222,938

XML 17 R5.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities:
Net loss	$ (49,418)	$ (63,147)
Adjustments to reconcile net loss to net cash provided by (used in) by operating activities
Depreciation of property, plant and equipment	9,917	9,979
Change in operating assets and liabilities:
Accounts receivable	39,495	35,851
Accounts payable and accrued liabilities	(34,186)	(3,864)
Net cash used in operating activities	(34,192)	(21,181)
Cash flows from financing activities:
Advance from related parties	(145,020)	29,828
Proceeds from issuance of common stock	200,000	0
Repayment of finance lease	(10,000)	(10,062)
Net cash provided by financing activities	44,980	19,766
NET CHANGE IN CASH AND CASH EQUIVALENTS	10,788	(1,415)
BEGINNING OF PERIOD	1,581	4,148
END OF PERIOD	12,369	2,733
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for tax	0	0
Cash paid for interest	$ 1,125	$ 1,132

XML 18 R6.htm IDEA: XBRL DOCUMENT

Condensed Consolidated Statement of Stockholders' Equity (Deficit) (Unaudited) - 6 months ended Jun. 30, 2017 - USD ($)	Common Stock	Retained Earnings / Accumulated Deficit	Total
Beginning balance, shares at Dec. 31, 2016	219,222,938
Beginning balance, value at Dec. 31, 2016	$ 219,223	$ (183,832)	$ 35,391
Shares issued for cash proceeds, shares	200,000,000
Shares issued for cash proceeds, value	$ 200,000		200,000
Shares issued for acquisition of a legal acquirer, shares	10,625,960
Shares issued for acquisition of a legal acquirer, value	$ 10,626	(225,603)	(214,977)
Net loss		(49,680)	(49,680)
Ending balance, shares at Jun. 30, 2017	429,848,898
Ending balance, value at Jun. 30, 2017	$ 429,849	$ (459,115)	$ (29,266)

XML 19 R7.htm IDEA: XBRL DOCUMENT

1. Basis of Presentation

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Basis of Presentation

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited financial statements for the year ended December 31, 2016 on Form 10.

XML 20 R8.htm IDEA: XBRL DOCUMENT

2. Organization and Business Background

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Business Background

On January 22, 2010, the Company filed a Form 15-12G to withdraw from its reporting obligations.

Description of subsidiaries

Name	Place of incorporation and kind of legal entity	Principal activities and place of operation	Particulars of issued/ registered share capital	Effective interest held

Cosmo Group International Holdings Limited	British Virgin Islands	Investment holding	50,000 shares at US$1 each		100%

Asia Cosmos Group (Hong Kong) Limited	Hong Kong	Corporate	10,000 ordinary shares at HK$1 each		100%

Lee Tat Transportation International Limited	Hong Kong	Logistic and delivery	10,000 ordinary shares at HK$1 each		100%

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

XML 21 R9.htm IDEA: XBRL DOCUMENT

3. Going Concern Uncertainties

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern Uncertainties

As shown in the accompanying financial statements, the Company suffered from a negative working capital of $91,281 and capital deficit of $29,266 as at June 30, 2017.

XML 22 R10.htm IDEA: XBRL DOCUMENT

4. Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Use of estimates

Basis of consolidation

Cash and cash equivalents

Accounts receivable

Property, plant and equipment

		Expected useful life
Service vehicle		8 years

Depreciation expense for the three months ended June 30, 2017 and 2016 was $4,958 and $4,990, respectively.

Depreciation expense for the six months ended June 30, 2017 and 2016 was $9,917 and $9,979, respectively.

Impairment of long-lived assets

Revenue recognition

Revenue is recognized in full upon completion of delivery to the receiver’s location.

Comprehensive income

Income taxes

Finance leases

Net income per share

Foreign currencies translation

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the 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 subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

Related parties

Segment reporting

Fair value of financial instruments

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.

·	Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

Recent accounting pronouncements

XML 23 R11.htm IDEA: XBRL DOCUMENT

5. Amounts due to Related Parties

6 Months Ended

Jun. 30, 2017

Amounts due to Related Parties

	June 30, 2017		December 31, 2016
		(Unaudited)		(Audited)
Balances due to related parties:
Koon Wing CHEUNG, Chief Executive Officer and Director	$	5,117	$	41,306
Cosmos Links International Holding Limited		34,631		–
Asia Cosmos Group Limited		10,000		–
Asia Cosmos Wealth Management Limited		1		–
	$	49,749	$	43,106

The balances were unsecured, interest-free and repayable upon demand. Imputed interest from related party loan is not significant.

XML 24 R12.htm IDEA: XBRL DOCUMENT

6. Obligation under Finance Lease

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Obligation under Finance Lease

	June 30, 2017			December 31, 2016
		(Unaudited)			(Audited)

Finance lease	$	59,458		$	71,022
Less: interest expense		(1,125	)		(2,265	)

Net present value of finance lease	$	58,333		$	68,757

Current portion	$	20,000		$	20,124
Non-current portion		38,333			48,633

Total	$	58,333		$	68,757

As of June 30, 2017, the maturities of the finance lease for each of the three years are as follows:

XML 25 R13.htm IDEA: XBRL DOCUMENT

7. Income Taxes

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

COSG is registered in the State of Nevada and is subject to the tax laws of United States of America.

BVI

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

Hong Kong

	Six months ended June 30,
	2017			2016

Income (loss) before income taxes from HK operation	$	3,443		$	(63,147	)
Statutory income tax rate		16.5%			16.5%
Income tax expense at statutory rate		568			(10,419	)
Tax effect from non-deductible items		1,636			1,646
Tax effect from deductible items		(1,977	)		(2,777	)
Tax losses		(227	)		11,550
Income tax expense	$	–		$	–

The following table sets forth the significant components of the deferred tax assets and liabilities of the Company as of June 30, 2017 and December 31, 2016:

	June 30, 2017			December 31, 2016
		(Unaudited)			(Audited)
Deferred tax liabilities:
Accelerated depreciation	$	13,132		$	12,871

Deferred tax assets:
Net operating loss carryforwards		4,768			5,026
Less: valuation allowance		(4,768	)		(5,026	)
Deferred tax assets, net	$	–		$	–

XML 26 R14.htm IDEA: XBRL DOCUMENT

8. Stockholders' Equity

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Stockholders' Equity

The Company has 500,000,000 common shares authorized with a par value of $0.001 per share.

On January 13, 2017, the Company issued 200,000,000 shares of its common stock for cash proceed of $200,000 for working capital purpose.

As of June 30, 2017, the Company had a total of 429,848,898 shares of its common stock issued and outstanding.

XML 27 R15.htm IDEA: XBRL DOCUMENT

9. Related Party Transactions

6 Months Ended

Jun. 30, 2017

Related Party Transactions

Advances from Stockholder

Free Office Space from its Stockholder

The Company has been provided office space by its stockholder at no cost. The management determined that such cost is nominal and did not recognize the rent expense in its financial statements.

XML 28 R16.htm IDEA: XBRL DOCUMENT

10. Concentrations of Risk

6 Months Ended

Jun. 30, 2017

Risks and Uncertainties [Abstract]

Concentrations of Risk

The Company is exposed to the following concentrations of risk:

(a) Major customers

		Three months ended June 30, 2017						June 30, 2017
Customers		Sales		Percentage of sales				Accounts receivable

Customer B		$	73,022		40%		$	–
Customer C			57,302		32%			–

	Total:	$	130,324		72%	Total:	$	–

		Six months ended June 30, 2017						June 30, 2017
Customers		Sales		Percentage of sales				Accounts receivable

Customer B		$	139,472		50%		$	–
Customer C			57,302		21%			–

	Total:	$	196,774		71%	Total:	$	–

	Three months ended June 30, 2016				June 30, 2016
	Sales		Percentage of sales		Accounts receivable

Customer A	$	19,002		21%	$	–
Customer B		21,816		24%		–
Customer C		33,729		37%		–

	$	74,547		82%	$	–

	Six months ended June 30, 2016				June 30, 2016
	Sales		Percentage of sales		Accounts receivable

Customer A	$	19,002		10%	$	–
Customer B		21,816		12%		–
Customer C		33,729		18%		–

	$	74,547		40%	$	–

All customers are located in Hong Kong.

(b) Major vendors

All vendors are located in Hong Kong.

(d) Interest rate risk

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

XML 29 R17.htm IDEA: XBRL DOCUMENT

11. Commitments and Contingencies

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

(a)

Operating lease commitments

As of June 30, 2017, the Company has no material commitments under operating leases.

(b)

Capital commitment

As of June 30, 2017, the Company has no material capital commitments in the next twelve months.

XML 30 R18.htm IDEA: XBRL DOCUMENT

12. Subsequent Events

6 Months Ended

Jun. 30, 2017

Subsequent Events [Abstract]

Subsequent Events

XML 31 R19.htm IDEA: XBRL DOCUMENT

4. Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2017

Accounting Policies [Abstract]

Use of estimates

Basis of consolidation

Cash and cash equivalents

Accounts receivable

Property, plant and equipment

		Expected useful life
Service vehicle		8 years

Depreciation expense for the three months ended June 30, 2017 and 2016 was $4,958 and $4,990, respectively.

Depreciation expense for the six months ended June 30, 2017 and 2016 was $9,917 and $9,979, respectively.

Impairment of long-lived assets

Revenue recognition

Revenue is recognized in full upon completion of delivery to the receiver’s location.

Foreign currencies translation

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not the 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 subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

Related parties

Segment reporting

Fair value of financial instruments

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of short-term bank borrowings and note payable approximate the carrying amount.

·	Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

Recent accounting pronouncements

XML 32 R20.htm IDEA: XBRL DOCUMENT

2. Organization and Business Background (Tables)

6 Months Ended

Jun. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of subsidiaries

Name	Place of incorporation and kind of legal entity	Principal activities and place of operation	Particulars of issued/ registered share capital	Effective interest held

Cosmo Group International Holdings Limited	British Virgin Islands	Investment holding	50,000 shares at US$1 each		100%

Asia Cosmos Group (Hong Kong) Limited	Hong Kong	Corporate	10,000 ordinary shares at HK$1 each		100%

Lee Tat Transportation International Limited	Hong Kong	Logistic and delivery	10,000 ordinary shares at HK$1 each		100%

XML 33 R21.htm IDEA: XBRL DOCUMENT

5. Amounts due to Related Parties (Tables)

6 Months Ended

Jun. 30, 2017

Amounts due to related parties

	June 30, 2017		December 31, 2016
		(Unaudited)		(Audited)
Balances due to related parties:
Koon Wing CHEUNG, Chief Executive Officer and Director	$	5,117	$	41,306
Cosmos Links International Holding Limited		34,631		–
Asia Cosmos Group Limited		10,000		–
Asia Cosmos Wealth Management Limited		1		–
	$	49,749	$	43,106

XML 34 R22.htm IDEA: XBRL DOCUMENT

6. Obligation under Finance Lease (Tables)

6 Months Ended

Jun. 30, 2017

Notes to Financial Statements

Schedule of financed lease

	June 30, 2017			December 31, 2016
		(Unaudited)			(Audited)

Finance lease	$	59,458		$	71,022
Less: interest expense		(1,125	)		(2,265	)

Net present value of finance lease	$	58,333		$	68,757

Current portion	$	20,000		$	20,124
Non-current portion		38,333			48,633

Total	$	58,333		$	68,757

Maturities of finance lease

XML 35 R23.htm IDEA: XBRL DOCUMENT

7. Income Taxes (Tables)

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Income tax reconciliation

	Six months ended June 30,
	2017			2016

Income (loss) before income taxes from HK operation	$	3,443		$	(63,147	)
Statutory income tax rate		16.5%			16.5%
Income tax expense at statutory rate		568			(10,419	)
Tax effect from non-deductible items		1,636			1,646
Tax effect from deductible items		(1,977	)		(2,777	)
Tax losses		(227	)		11,550
Income tax expense	$	–		$	–

Schedule of deferred tax assets and liabilities

	June 30, 2017			December 31, 2016
		(Unaudited)			(Audited)
Deferred tax liabilities:
Accelerated depreciation	$	13,132		$	12,871

Deferred tax assets:
Net operating loss carryforwards		4,768			5,026
Less: valuation allowance		(4,768	)		(5,026	)
Deferred tax assets, net	$	–		$	–

XML 36 R24.htm IDEA: XBRL DOCUMENT

10. Concentrations of Risk (Tables)

6 Months Ended

Jun. 30, 2017

Risks and Uncertainties [Abstract]

Schedule of customer concentrations

		Three months ended June 30, 2017						June 30, 2017
Customers		Sales		Percentage of sales				Accounts receivable

Customer B		$	73,022		40%		$	–
Customer C			57,302		32%			–

	Total:	$	130,324		72%	Total:	$	–

		Six months ended June 30, 2017						June 30, 2017
Customers		Sales		Percentage of sales				Accounts receivable

Customer B		$	139,472		50%		$	–
Customer C			57,302		21%			–

	Total:	$	196,774		71%	Total:	$	–

	Three months ended June 30, 2016				June 30, 2016
	Sales		Percentage of sales		Accounts receivable

Customer A	$	19,002		21%	$	–
Customer B		21,816		24%		–
Customer C		33,729		37%		–

	$	74,547		82%	$	–

	Six months ended June 30, 2016				June 30, 2016
	Sales		Percentage of sales		Accounts receivable

Customer A	$	19,002		10%	$	–
Customer B		21,816		12%		–
Customer C		33,729		18%		–

	$	74,547		40%	$	–

XML 37 R25.htm IDEA: XBRL DOCUMENT

2. Organization and Business Background (Details)	6 Months Ended
2. Organization and Business Background (Details)	Jun. 30, 2017
Cosmo Group International Holdings Limited [Member]
Ownership percentage	100.00%
Place of incorporation	British Virgin Islands
Principal activities	Investment holding
Registered share capital	50,000 shares at US$1 each
Asia Cosmos Group (HK) Limited [Member]
Ownership percentage	100.00%
Place of incorporation	Hong Kong
Principal activities	Corporate
Registered share capital	10,000 ordinary shares at HK$1 each
Lee Tat Transporation International Limited [Member]
Ownership percentage	100.00%
Place of incorporation	Hong Kong
Principal activities	Logistic and delivery
Registered share capital	10,000 ordinary shares at HK$1 each

XML 38 R26.htm IDEA: XBRL DOCUMENT

3. Going Concern Uncertainties (Details Narrative) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Working capital	$ (91,281)
Capital deficit	$ (29,266)	$ 35,391

XML 39 R27.htm IDEA: XBRL DOCUMENT

4. Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Allowance for doubtful accounts	$ 0		$ 0		$ 0
Depreciation expense	4,958	$ 4,990	9,917	$ 9,979
Asset impairment charge	0	$ 0	0	$ 0
Uncertain tax positions	$ 0		$ 0		$ 0
Service vehicle [Member]
Expected useful life of property			8 years

XML 40 R28.htm IDEA: XBRL DOCUMENT

5. Amounts due to Related Parties (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Due to related parties	$ 49,749	$ 41,306
Koon Wing CHEUNG [Member]
Due to related parties	5,117	41,306
Cosmos Links International [Member]
Due to related parties	34,631	0
Asia Cosmos Group (HK) Limited [Member]
Due to related parties	10,000	0
Asia Cosmos Wealth Management Limited [Member]
Due to related parties	$ 1	$ 0

XML 41 R29.htm IDEA: XBRL DOCUMENT

6. Obligation under Finance Lease (Details - Finance lease) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Notes to Financial Statements
Finance lease	$ 59,458	$ 71,022
Less: interest expense	(1,125)	(2,265)
Net present value of finance lease	58,333	68,757
Current portion	20,000	20,124
Non-current portion	38,333	48,633
Total	$ 58,333	$ 68,757

XML 42 R30.htm IDEA: XBRL DOCUMENT

6. Obligation under Finance Lease (Details - Maturities of finance lease)	Jun. 30, 2017 USD ($)
Notes to Financial Statements
Finance lease obligation	$ 58,333

XML 43 R31.htm IDEA: XBRL DOCUMENT

6. Obligation under Finance Lease (Details Narrative)	6 Months Ended
6. Obligation under Finance Lease (Details Narrative)	Jun. 30, 2017
Notes to Financial Statements
Finance lease effective interest rate	2.25%
Finance lease maturity date	May 29, 2020

XML 44 R32.htm IDEA: XBRL DOCUMENT

7. Income Taxes (Details - Income tax reconcilation) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Income tax expense	$ 53	$ 528	$ 262	$ 1,131
Hong Kong Profits Tax [Member]
Income (loss) before income taxes from HK operation			$ 3,443	$ (63,147)
Statutory income tax rate			16.50%	16.50%
Income tax expense at statutory rate			$ 568	$ (10,419)
Tax effect from non-deductible items			1,636	1,646
Tax effect from deductible items			(1,977)	(2,777)
Tax losses			(227)	11,550
Income tax expense			$ 0	$ 0

XML 45 R33.htm IDEA: XBRL DOCUMENT

7. Income Taxes (Details - Deferred taxes) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Deferred tax liabilities:
Accelerated depreciation	$ 13,132	$ 12,871
Deferred tax assets:
Net operating loss carryforwards	4,768	5,026
Less: valuation allowance	(4,768)	(5,026)
Deferred tax assets, net	$ 0	$ 0

XML 46 R34.htm IDEA: XBRL DOCUMENT

7. Income Taxes (Details Narrative)	6 Months Ended
7. Income Taxes (Details Narrative)	Jun. 30, 2017 USD ($)
Net operating loss carryforward	$ 1,842,542
Operating loss carryforward beginning expiration date	Dec. 31, 2037
Valuation allowance	$ 626,464
Hong Kong Profits Tax [Member]
Net operating loss carryforward	29,075
Valuation allowance	$ 4,768

XML 47 R35.htm IDEA: XBRL DOCUMENT

8. Stockholders' Equity (Details Narrative)	6 Months Ended
8. Stockholders' Equity (Details Narrative)	Jun. 30, 2017 USD ($) shares
Lee Tat Transporation International Limited [Member]
Stock issued for acquisition, shares	219,222,938
Working capital [Member]
Stock issued new, shares	200,000,000
Proceeds from sale of stock \| $	$ 200,000

XML 48 R36.htm IDEA: XBRL DOCUMENT

10. Concentrations of Risk (Details - Concentration risk) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Sales Revenue, Net [Member]
Concentration risk percentage	72.00%	82.00%	71.00%	40.00%
Revenues	$ 130,324	$ 74,547	$ 196,774	$ 74,547
Sales Revenue, Net [Member] \| Customer B [Member]
Concentration risk percentage	40.00%	24.00%	50.00%	12.00%
Revenues	$ 73,022	$ 21,816	$ 139,472	$ 21,816
Sales Revenue, Net [Member] \| Customer A [Member]
Concentration risk percentage		21.00%		10.00%
Revenues		$ 19,002		$ 19,002
Sales Revenue, Net [Member] \| Customer C [Member]
Concentration risk percentage	32.00%	37.00%	21.00%	18.00%
Revenues	$ 57,302	$ 33,729	$ 57,302	$ 33,729
Accounts Receivable [Member]
Concentration risk percentage	0.00%	0.00%	0.00%	0.00%
Accounts Receivable [Member] \| Customer B [Member]
Concentration risk percentage	0.00%	0.00%	0.00%	0.00%
Accounts Receivable [Member] \| Customer A [Member]
Concentration risk percentage		0.00%		0.00%
Accounts Receivable [Member] \| Customer C [Member]
Concentration risk percentage	0.00%	0.00%	0.00%	0.00%

XML 49 R37.htm IDEA: XBRL DOCUMENT

10. Concentrations of Risk (Details Narrative) - One Vendor [Member] - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016
Cost of Sales [Member]
Concentration risk percentage	10.00%	10.00%
Cost of sales	$ 19,627	$ 30,272
Accounts Payable [Member]
Concentration risk percentage	0.00%	0.00%

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Years ending June 30: