UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
OF THE SECURITIES EXCHANGE ACT OF 1934
For
The Quarterly Period Ended
or
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission
File Number
(Exact name of registrant issuer as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, including zip code)
Registrant’s
phone 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.
☒ 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 (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).
YES ☐ ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large
Accelerated Filer ☐ Accelerated Filer ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The OTC Market – Pink Sheets |
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has fled all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes
☐
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at October 31, 2022 | |
| Common Stock, $.0001 par value |
TABLE OF CONTENTS
| 2 |
PART I FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF OCTOBER 31, 2022 AND JULY 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| As of | As of | |||||||
| October 31, 2022 | July 31, 2022 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Property, plant and equipment | $ | $ | ||||||
| Lease asset – Right of use | ||||||||
| INTANGIBLE ASSET | ||||||||
| Patent and trademark | $ | $ | ||||||
| CURRENT ASSETS | ||||||||
| Trade receivable | $ | $ | ||||||
| Prepayments and deposits | ||||||||
| Amount due from related party | ||||||||
| Inventories | ||||||||
| Cash and cash equivalents | ||||||||
| Total current assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| NON-CURRENT LIABILITIES | ||||||||
| Lease liabilities | $ | $ | ||||||
| Loan from director | ||||||||
| Loan from third party | ||||||||
| $ | $ | |||||||
| CURRENT LIABILITIES | ||||||||
| Trade payable | ||||||||
| Other payables and accrued liabilities | ||||||||
| Amount due to related parties | ||||||||
| Deposit from franchisees | ||||||||
| Deposit from customers | ||||||||
| Loan from director | ||||||||
| Loan from related party | ||||||||
| Lease liabilities | ||||||||
| Total current liabilities | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $ par value, shares authorized, issued and outstanding | $ | $ | ||||||
| Common stock, $ par value, shares authorized, shares issued and outstanding as of October 31, 2022 and July 31, 2022 respectively | ||||||||
| Additional paid-in capital | ||||||||
| Foreign currency adjustment | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements.
| F-2 |
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSES
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 and 2021
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
| Three months ended October 31, | ||||||||
| 2022 | 2021 | |||||||
| REVENUE | $ | $ | ||||||
| COST OF REVENUE | ( | ) | ( | ) | ||||
| GROSS PROFIT | ||||||||
| OTHER INCOME | ||||||||
| SELLING AND MARKETING EXPENSES | ( | ) | ( | ) | ||||
| GENERAL AND ADMINISTRATIVE EXPENSES | ( | ) | ( | ) | ||||
| LOSS BEFORE INCOME TAX | ( | ) | ( | ) | ||||
| TAX PROVISION | ||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive loss: | ||||||||
| - Foreign currency translation gain | ( | ) | ||||||
| TOTAL COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | ||
| Net loss per share- Basic and diluted | ( | ) | ( | ) | ||||
| Weighted average number of common shares outstanding – Basic and diluted | ||||||||
See accompanying notes to condensed consolidated financial statements.
| F-3 |
MU GLOBAL HOLDING LIMITED.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THREE MONTHS ENDED OCTOBER 31, 2022 AND 2021
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
| Three months ended October 31, 2022 | ||||||||||||||||||||||||
| Common Stock | Additional | Accumulated Other | ||||||||||||||||||||||
| Number of Shares | Amount | Paid-In Capital | Comprehensive Income | Accumulated Deficit | Total Equity | |||||||||||||||||||
| Balance as of August 1, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||
| Balance as of October 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Three months ended October 31, 2021 | ||||||||||||||||||||||||
| Common Stock | Additional | Accumulated Other | Total | |||||||||||||||||||||
| Number of shares | Amount | Paid-in Capital | Comprehensive Income | Accumulated Deficit | Stockholders’ Equity | |||||||||||||||||||
| Balance as of August 1, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of October 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
See accompanying notes to condensed consolidated financial statements.
| F-4 |
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 AND 2021
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
| Three months ended October 31 | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization | ||||||||
| Impairment | ||||||||
| Reversal of asset written off | ( | ) | ||||||
| Interest expense | ||||||||
| Gain on disposal | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivable | ( | ) | ||||||
| Prepayments and deposits | ||||||||
| Trade payable | ||||||||
| Other payables and accrued liabilities | ( | ) | ||||||
| Amount due to related party | ||||||||
| Inventories | ||||||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Amount due from related party | ( | ) | ||||||
| Deposit from franchisee | ( | ) | ||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of patent and trademark | ( | ) | ( | ) | ||||
| Proceed on disposal | ||||||||
| Net cash (used in)/ generated from investing activities | $ | ( | ) | $ | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Loan from director | $ | $ | ||||||
| Loan from related party | ( | ) | ||||||
| Loan from third party | ( | ) | ||||||
| Net cash provided by financing activities | $ | $ | ||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ) | ||||||
| Net change in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents, beginning of period | ||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements.
| F-5 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
1. DESCRIPTION OF BUSINESS AND ORGANIZATION
MU Global Holding Limited is organized as a Nevada limited liability company, incorporated on June 4, 2018. For purposes of consolidated financial statement presentation, MU Global Holding Limited and its subsidiary are herein referred to as “the Company” or “we”. The Company business of which planned principal operations are to provide wellness and beauty services to customers via Company owned outlets, franchised outlets or distribution of our product to third party wellness and beauty salon.
On
June 29, 2018, the Company acquired
Details of the Company’s subsidiary:
| Company name | Place
and date of incorporation |
Particulars of issued capital | Principal activities | ||||
| 1. | MU Worldwide Group Limited | ||||||
| 2. | MU Global Holding Limited | ||||||
| 3. | MU Global Health Management |
| F-6 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited condensed consolidated financial statements as of and for the three months ended October 31, 2022, and 2021, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended October 31, 2022, are not necessarily indicative of the results that may be expected for the year ending July 31, 2023. The Condensed Consolidated Balance Sheets information as of October 31, 2022, was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended July 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on October 31, 2022. These financial statements should be read in conjunction with that report.
Basis of consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated upon consolidation.
Use of estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Revenue recognition
The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue. The Company derives its revenue from provision of wellness and beauty services to customers via Company owned outlets, franchised outlets or distribution of our product to third party wellness and beauty salon.
Cost of revenue
Cost of revenue includes the cost of services and product incurred to provide wellness and beauty services and purchase of products.
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.
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:
| Classification | Estimated useful life | |
| Leasable equipment | ||
| Computer hardware and software | ||
| Office equipment | ||
| Outlet design fee and equipment | ||
| Application development fee |
Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of operations and comprehensive losses.
| F-7 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Impairment of long-live assets
Long-lived assets primarily include trademark of the Company. In accordance with the provision of ASC Topic 360, Impairment or Disposal of Long-Lived Assets, the Company generally conducts its annual impairment evaluation to its long-lived assets, usually in the fourth quarter of each fiscal year, or more frequently if indicators of impairment exist, such as significant sustained change in the business climate. The recoverability of long-lived assets is measured at the lowest level group. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset.
Leases
The Company recognizes lease payments for its short-term lease on a straight-line basis over the lease term in accordance with ASC 842.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.
In determining the present value of the unpaid lease payments, ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate for the lease. The Company incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments
Inventories
Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Consolidated Statements of Operations and Comprehensive Loss.
Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 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 periods 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
The Company conducts major businesses in China and is subject to tax in this jurisdiction. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.
Going concern
The accompanying financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
For
the period ended October 31, 2022, the Company has generated revenue of $
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These 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.
| F-8 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
The Company calculates net loss per share in accordance with ASC Topic 260 “Earnings Per Share”. Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the Consolidated Statements of Operations and Comprehensive loss.
The functional currency of the parent Company is United States dollar and the functional currency of the subsidiaries MU Worldwide Group Limited (Seychelles) and MU Global Holding Limited (Hong Kong) is United States dollar. MU Global Health Management (Shanghai) Limited is in Renminbi.
The reporting currency of the Company and its subsidiary is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$.
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within the statements of stockholders’ equity.
Translation of amounts from RMB and HK$ into US$1 has been made at the following exchange rates for the respective periods:
| As of and for the three months ended October 31 | ||||||||
| 2022 | 2021 | |||||||
| Period-end RMB : US$1 exchange rate | ||||||||
| Period-average RMB : US$1 exchange rate | ||||||||
| Period-end HK$ : US$1 exchange rate | ||||||||
| Period-average HK$ : US$1 exchange rate | ||||||||
| Period-end TWD : US$1 exchange rate | ||||||||
| Period-average TWD : US$1 exchange rate | ||||||||
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
| F-9 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Fair value of financial instruments:
The carrying value of the Company’s financial instruments: cash and cash equivalents, account receivables, amount due to a director, and accounts payable and approximate at their fair values because of the short-term nature of these financial instruments.
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: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
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.
In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1, 2023 as the Company is qualified as a smaller reporting company. The Company is currently evaluating the impact ASU 2019-05 may have on its consolidated financial statements.
| F-10 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of October 31, 2022 are summarized below:
As of October 31, 2022 | As of July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Computer hardware and software | $ | $ | ||||||
| Outlet equipment | ||||||||
| Leasable equipment | ||||||||
| Outlet design fee and equipment | ||||||||
| App development fee | ||||||||
| Total | ||||||||
| Accumulated depreciation1 | $ | ( | ) | $ | ( | ) | ||
| Impairment | ( | ) | ( | ) | ||||
| Foreign currency translation adjustment | ||||||||
| Property, plant and equipment, net | $ | $ | ||||||
| 1 |
WRITE OFF OF PROPERTY, PLANT AND EQUIPMENT
| As of October 31, 2022 | As of July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Write off of property, plant and equipment | $ | $ | ||||||
| Accumulated depreciation | ( | ) | ||||||
| Foreign currency translation adjustment | ||||||||
| Total write off of property, plant and equipment | $ | $ | ||||||
DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT
As of October 31, 2022 | As of July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Proceed from disposal of property, plant and equipment | $ | $ | ||||||
| Disposal of equipment at cost | ( | ) | ||||||
| Disposal of equipment written off at net book value | ( | ) | ||||||
| Accumulated depreciation | ||||||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Total gain on disposal | $ | $ | ||||||
4. LEASE
As
of November 1, 2020, the Company recognized approximately US$
A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows.
The initial recognition of operating lease right and lease liability as follow:
| Gross lease payable | $ | |||
| Less: imputed interest | ( | ) | ||
| Initial recognition | $ | |||
| Less: Remeasurement of existing lease | ( | ) | ||
| Balance | $ |
As of October 31, 2022 and July 31, 2022, the operating lease right of use asset as follow:
As of October 31, 2022 | As of July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Balance | ||||||||
| Less: Termination of lease | ( | ) | ||||||
| Add: New operating lease liability | ||||||||
| Foreign exchange translation loss | ( | ) | ( | ) | ||||
| Amortization | ( | ) | ( | ) | ||||
| Balance end of the period/year | $ | $ | ||||||
| F-11 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
As of October 31, 2022 and July 31, 2022, the operating lease liability as follow:
As of October 31, 2022 (Unaudited) | As of July 31, 2022 (Audited) | |||||||
| As of August 1 | $ | $ | ||||||
| Less: Termination of lease | ( | ) | ||||||
| Add: New operating lease liability | ||||||||
| Less: Remeasurement of existing lease | ( | ) | ||||||
| Less: Gross repayment | ( | ) | ( | ) | ||||
| Add: Imputed interest | ||||||||
| Foreign exchange translation loss | ( | ) | ( | ) | ||||
| Balance end of the period/year | $ | $ | ||||||
For
the period ended October 31, 2022, the amortization of the operating lease right of use asset was $
Maturities of operating lease obligation as follow:
| Year ending | ||||
| July 31, 2023 (9 months) | $ | |||
| Oct 31, 2023 (3 months) | ||||
| Total | $ | |||
Other information:
Three months ended | Three months ended | |||||||
| October 31, 2022 | October 31, 2021 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash flow from operating lease | $ | $ | ||||||
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | $ | ||||||
| Remaining lease term for operating lease (years) | ||||||||
| Weighted average discount rate for operating lease | % | % | ||||||
Lease
expenses were $
5. PATENT AND TRADEMARK
| As of | As of | |||||||
| October 31, 2022 | July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Patent and trademark1 | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Impairment | ( | ) | ( | ) | ||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||
| Patent and trademark, net | $ | $ | ||||||
| 1 |
Amortization
were $
| F-12 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
6. PREPAYMENTS AND DEPOSITS
As of October 31, 2022 | As of July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Prepayments | $ | $ | ||||||
| Deposits | ||||||||
| Total prepayments and deposits | $ | $ | ||||||
7. AMOUNT DUE FROM RELATED PARTY
As of October 31, 2022 | As of July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Tien Mu International Co., Ltd1 | $ | $ | ||||||
| Total amount due from related party | $ | $ | ||||||
| 1 |
8. INVENTORIES
| As of | As of | |||||||
| October 31, 2022 | July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Finished goods, at cost | $ | $ | ||||||
| Total inventories | $ | $ | ||||||
9. OTHER PAYABLES AND ACCRUED LIABILITIES
As of October 31, 2022 | As of July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Other payables | $ | $ | ||||||
| Accrued audit fees | ||||||||
| Accrued professional fees | ||||||||
| Total payables and accrued liabilities | $ | $ | ||||||
| F-13 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
10. AMOUNT DUE TO RELATED PARTY
As of October 31, 2022 |
As of July 31, 2022 |
|||||||
| (Unaudited) | (Audited) | |||||||
| Hsieh, Chang-Chung1 | $ | $ | ||||||
| $ | $ | |||||||
| 1 |
The amount due to related party is unsecured, interest-free with no fixed repayment term, for working capital purpose.
11. LOAN FROM RELATED PARTY
As of October 31, 2022 | As of July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Hong Ting Network Technology (Xiamen) Limited1 | $ | $ | ||||||
| Total loan from related party | $ | $ | ||||||
| 1 |
12. LOAN FROM THIRD PARTY
As of October 31, 2022 | As of July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Shang Hai Shi Ba Enterprise Management Centre | $ | $ | ||||||
| Total loan from third party | $ | $ | ||||||
The loan is unsecured, interest-free and repayable in year 2024 and year 2025.
13. LOAN FROM DIRECTOR
As of October 31, 2022 | As of July 31, 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| Current | $ | $ | ||||||
| Non-current | ||||||||
| Total loan from Director | $ | $ | ||||||
Current portion of the loan provided by director Ms. Niu Yen-Yen, is repayable upon demand. Non-current portion of the loan provided by director is unsecured, interest-free and repayable in year 2024, for working capital purpose.
| F-14 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
14. INCOME TAXES
For the three months ended October 31, 2022 and October 31, 2021, the local (United States) and foreign components of income/(loss) before income taxes were comprised of the following:
| Three months ended October 31 | ||||||||
| 2022 | 2021 | |||||||
| Tax jurisdictions from: | ||||||||
| Local | $ | ( | ) | $ | ( | ) | ||
| Foreign, representing | ||||||||
| - Seychelles | ||||||||
| - Hong Kong | ( | ) | ||||||
| - Shanghai | ( | ) | ( | ) | ||||
| Loss before income tax | $ | ( | ) | $ | ( | ) | ||
The provision for income taxes consisted of the following:
| For the period ended October 31, 2022 | For the period ended October 31, 2021 | |||||||
| Current: | ||||||||
| - Local | $ | $ | ||||||
| - Foreign | ||||||||
| Deferred: | ||||||||
| - Local | ||||||||
| - Foreign | ||||||||
| Income tax expense | $ | $ |
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States Seychelles, Hong Kong and Shanghai, PRC that are subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
The
Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of October 31, 2022,
the operations in the United States of America incurred $
Seychelles
Under the current laws of the Seychelles, MU Worldwide Group Limited is registered as an international business company which governs by the International Business Companies Act of Seychelles and there is no income tax charged in Seychelles.
Hong Kong
MU
Global Holding Limited is subject to Hong Kong Profits Tax, which is charged at the statutory income tax rate of
Shanghai
MU
Global Health Management (Shanghai) Limited are operating in the People’s Republic of China (PRC) subject to the Corporate Income
Tax governed by the Income Tax Law of the PRC with a unified statutory income tax rate of
| F-15 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
15. COMMON STOCK
On
June 4, 2018, our Chief Executive Officer, Ms. Niu Yen-Yen subscribed shares of restricted common stock of the Company at par
value of $ per share. The monies from this transaction, which totalled $
On
July 6, 2018, Ms. Niu Yen-Yen and Server Int’l Co., Ltd. subscribed and restricted shares of common stock,
respectively, of the Company, at par value of $ per share. The monies from these transactions, which totalled $
On
July 7, 2018, Chang Chun-Ying and Chang Su-Fen subscribed and restricted shares of common stock, respectively, of
the Company, at par value of $ per share. The monies from these transactions, which totalled $
On
July 9, 2018, GreenPro Asia Strategic SPC and GreenPro Venture Capital Limited, subscribed and restricted shares
of common stock of the Company, respectively, at par value of $ per share. The monies from these transactions, which totalled $
From
July 9, 2018 to July 10, 2018 the Company issued a total of shares of restricted common stock to three non-US residents. Shares
were sold at par value, $ per share. Total proceeds from these shares totalled $
On
July 11, 2018 the Company issued a total of shares of restricted common stock to two non-US residents at a price of $ per
share. Total proceeds from these sales of shares totalled $
On
July 25, 2018 the Company issued a total of shares of restricted common stock to ten non-US residents at a price of $ per
share. Total proceeds from these sales of shares totalled $
On
July 26, 2018 the Company issued shares of restricted common stock to one non-US resident at a price of $ per share. Total
proceeds from these sales of shares totalled $
| F-16 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
On
July 31, 2018 Dezign Format Pte Ltd and Cheng Young-Chien each subscribed restricted shares of common stock of the Company,
at $ per share, for total consideration of $
On July 10, 2018, Server Int’l Co., Ltd, a Company solely controlled and owned by the CEO has transferred shares of common stock to 8 non-US residents.
From August 1, 2018 to December 13, 2018, Ms. Niu Yen-Yen, the CEO of the Company has transferred shares of common stock to 16 non-US residents.
On
May 7, 2019, the convertible promissory note issued by the Company amounted $
From May 14, 2019 to July 31, 2019, the company issued shares of common stock at a price of $ per share through the Initial Public Offering (IPO) to 36 non-US residents.
As of October 31, 2022, MU Global Holding Limited has an issued and outstanding common share of .
16. CONCENTRATIONS OF RISK
(a) Major customers
For the three months period ended October 31, 2022 and 2021, the customers who accounted for 10% or more of the Company’s revenues and its trade receivable balance at period-end are presented as follows:
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Revenue | Percentage of revenue | Trade receivable | ||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| Customer A | $ | $ | -% | % | $ | $ | ||||||||||||||||||
| Customer B | % | -% | ||||||||||||||||||||||
| $ | $ | % | % | $ | $ | |||||||||||||||||||
(b) Major vendors
For the three months period ended October 31, 2022 and 2021, the vendors who accounted for 10% or more of the Company’s purchases and its trade payable balance at period-end are presented as follows:
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Purchases | Percentage of purchases | Trade payable | ||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| Vendor A | $ | $ | % | -% | $ | $ | ||||||||||||||||||
| $ | $ | % | -% | $ | $ | |||||||||||||||||||
| F-17 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
(c) Exchange rate risk
The operation of the Company’s subsidiaries in international markets results in exposure to movements in currency exchange rates. We have experienced foreign currency gains and losses due to the strengthening and weakening of the U.S. dollar. The potential of volatile foreign exchange rate fluctuations in the future could have a significant effect on our results of operations. The Company has not historically used financial instruments to hedge its foreign currency exchange rate risks.
The currencies that create a majority of the Company’s exchange rate exposure are RMB, HK$, and TWD. The Company translates all assets and liabilities at the rate of exchange in effect at the balance sheet date and income and expense activity at the approximate rate of exchange at the transaction date.
17. COMMITMENTS AND CONTINGENCIES
As of October 31, 2022, the Company has the aggregate minimal rent payments due in the next two years as follows:
| Year ending July 31 | ||||
| 2023 | $ | |||
| 2024 | ||||
| Total | $ | |||
On November 11, 2022, a litigation was concluded in the Shanghai Changning People’s Court on the Company and both parties are eligible to appeal within 15 days from the date of judgement. The judgement made by the court order was for the Company to pay a compensation and legal cost to a third party by December 6, 2022.
18. RELATED PARTY TRANSACTIONS
For the period ended October 31, 2022 the Company has following transactions with related parties:
For the period ended October 31, 2022 (Unaudited) | For the year ended July 31, 2022 (Audited) | |||||||
| Professional fee: | ||||||||
| - Related party A | $ | $ | ||||||
| Consultation fee: | ||||||||
| - Related party B | $ | $ | ||||||
| Cost of revenue: | ||||||||
| - Related party C | $ | $ | ||||||
| Total | $ | $ | ||||||
Related party A is the fellow subsidiaries of a corporate shareholder of the Company. Related party B is the employee and shareholder of the Company. Related party C represents a Company which has common director and shareholder with the Company.
For
the period ended October 31, 2022, the Company incurred professional fees of $
| F-18 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED OCTOBER 31, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
19. SEGMENT INFORMATION
ASC 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 services categories, business segments and major customers in financial statements. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes.
The Company had no inter-segment sales for the years presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
By Geography:
| For the period ended October 31, 2022 | ||||||||||||||||||||
| Nevada | Seychelles | Hong Kong | China | Total | ||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||||||||
| Other income | ||||||||||||||||||||
| Selling and marketing expenses | ( | ) | ( | ) | ( | ) | ||||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Net loss before taxation | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Total assets | $ | $ | $ | $ | $ | |||||||||||||||
| For the period ended October 31, 2021 | ||||||||||||||||||||
| Nevada | Seychelles | Hong Kong | China | Total | ||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||||||||
| Other income | ||||||||||||||||||||
| Selling and marketing expenses | ( | ) | ( | ) | ||||||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Net loss before taxation | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Total assets | $ | $ | $ | $ | $ | |||||||||||||||
20. SIGNIFICANT EVENTS
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.
The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on our financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on our financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, we are not able to estimate the effects of the COVID-19 outbreak on our results of operations, financial condition, or liquidity for the period ended October 31, 2022.
The Management had considered the impact of COVID-19 outbreak in China, which would have affected the financial position, performance and cash flow of the Company for the period ended October 31, 2022. It was concluded that the impact of non-adjusting events arising from COVID-19 outbreak has not significantly affected the fair value of the financial assets or liabilities and non-financial assets of the Company, including the classification of non-current and current items that were presented on the reporting date.
21. 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 subsequent events through the filing date of this Form 10-K with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of October 31, 2022, and events which occurred subsequently but were not recognized in the financial statements. During the period, there was no subsequent event that required recognition or disclosure, except for those disclosed in Note 17 Commitments and Contingencies.
| F-19 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended July 31, 2022 filed with the Securities and Exchange Commission on October 31, 2022 (the “Form 10-K”) and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K/A. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.
Certain statements in this Report constitute forward-looking statements. These forward-looking statements include statements, which involve risks and uncertainties, regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategy, (c) anticipated trends in our industry, (d) our future financing plans, and (e) our anticipated needs for, and use of, working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plan,” “potential,” “project,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend,” or the negative of these words or other variations on these words or comparable terminology. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.
The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.
Company Overview
MU Global Holding Limited, the US Company, operates through its wholly owned subsidiary, MU Worldwide Group Limited, a Seychelles Company; which operates through its wholly owned subsidiary, MU Global Holding Limited, a Hong Kong Company; which operates through its wholly owned subsidiary, MU Global Health Management (Shanghai) Limited, a Shanghai Company. The US, Seychelles and Hong Kong Companies act solely for holding purposes whereas all current and future operations in China are planned to be carried out via MU Global Health Management (Shanghai) Limited, the Shanghai Company. The purpose of the Hong Kong Company is to function as the current regional hub of the Company.
At present, we have a physical office in Shanghai with address of Room 1510, Building 5, Ark Times Square, 3148 Chengliu Middle Road, Jiading District, Shanghai. In the future, we do not have definitive plans for which markets intend to expand to, but we base our operations in Shanghai, as we prepare for future unidentified expansion efforts.
All of the previous entities share the same exact business plan with the goal of developing and providing wellness and beauty services to our future clients. We aim to promote improved overall health and beauty in our clients through a holistic detoxification method. We will, at least initially, primarily focus our efforts on attracting customers in China. We have intentions, but no definitive plans or timelines, to expand to Singapore, Malaysia, Hong Kong, and Middle Eastern countries in the coming years, and subsequently we intend to make efforts to expand throughout Asia. We anticipate spending a substantial amount in marketing and advertising in the coming year.
| 3 |
Results of Operation
For the three months ended October 31, 2022 and 2021
Revenues
For the three months ended October 31, 2022 and 2021, the Company has generated revenue of $120,994 and $593 respectively. The revenue represented income from wellness and beauty services provided to customers, sales of products and sharing of revenue from leasable equipment with business alliance and franchisee.
Cost of Revenue and Gross Margin
For the three months ended October 31, 2022 and 2021, cost incurred arise in providing wellness and beauty services and selling of essential oil is $108,844 and $187 respectively, and generate a gross profit the for the three months ended October 31, 2022 and 2021 of $12,150 and $406.
Selling and marketing expenses
For the three months ended October 31, 2022 and 2021, we had incurred marketing expenses in the amount of $275 and $144 respectively. The expense comprised of travelling expenses.
General and administrative expenses
For the three months ended October 31, 2022 and 2021, we had incurred general and administrative expenses in the amount of $46,428 and $71,098 respectively. These expenses are comprised of salary, allowance, professional fees, consultancy fee for IT and system management, office and outlet operation expenses and depreciation.
Other Income
The Company recorded an amount of $1,741 and $21,546 as other income for the three months ended October 31, 2022 and 2021. This income is derived from the interest income, foreign exchange gain, gain on disposal and gain on measurement of long-term liabilities.
Net Loss
Our net loss for three months ended October 31, 2022 and 2021 were $32,812 and $49,290. The net loss mainly derived from the general and administrative expenses incurred. The decrease in net loss of $16,478 as a result of higher revenue generated during the period ended October 31, 2022.
| 4 |
Liquidity and Capital Resources
As of October 31, 2022 and 2021, we had cash and cash equivalents of $2,080 and $5,478 respectively. We expect increased levels of operations going forward will result in more significant cash flow and in turn working.
We depend substantially on financing activities to provide us with the liquidity and capital resources we need to meet our working capital requirements and to make capital investments in connection with ongoing operations. During the period ended October 31, 2022, the Company had met these requirements primarily from the financial support from director and related company.
Cash Used in Operating Activities
For the three months ended October 31, 2022, net cash used in operating activities was $14,029 as compared to net cash used in operating activities of $44,599 for the three months ended October 31, 2021. The decrease in cash used in operating activities was mainly due to lower spend in general and administrative expenses.
Cash Provided in Financing Activities
For the three months ended October 31, 2022 and 2021, net cash provided by financing activities was $15,179 and $3,000 respectively. The financing cash flow performance primarily reflects the provision of long-term loan by director and third party.
Cash Provided in Investing Activities
For the three months ended October 31, 2022 and 2021, the net cash used in investing activities was $3,470 and net cash generated from investing activities was $27,159. The investing cash flow performance primarily reflects the purchase of property, plant and equipment and trademark and disposal of property, plant and equipment.
Credit Facilities
We do not have any credit facilities or other access to bank credit.
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of October 31, 2022.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
| 5 |
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
ITEM 4 CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures:
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of October 31, 2022. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of October 31, 2022, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of October 31, 2022, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the quarter ended October 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 6 |
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.
Item 1A. Risk Factors.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
None
| 7 |
ITEM 6. Exhibits
| Exhibit No. | Description | |
| 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer* | |
| 32.1 | Section 1350 Certification of principal executive officer * | |
| 101.INS | Inline XBRL Instance Document* | |
| 101.SCH | Inline XBRL Schema Document* | |
| 101.CAL | Inline XBRL Calculation Linkbase Document* | |
| 101.DEF | Inline XBRL Definition Linkbase Document* | |
| 101.LAB | Inline XBRL Label Linkbase Document* | |
| 101.PRE | Inline XBRL Presentation Linkbase Document* | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Filed herewith.
| 8 |
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.
| MU Global Holding Limited | ||
| (Name of Registrant) | ||
| Date: December 07, 2022 | By: | /s/ NIU YEN YEN |
| Title: | Chief Executive Officer, Chief Financial Officer, President, Director, Secretary and Treasurer | |
| (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer) | ||
| 9 |
EXHIBIT 31.1
CERTIFICATION
I, NIU YEN YEN, certify that:
1. I have reviewed this quarterly report on Form 10-Q of MU Global Holding Limited (the “Company”) for the quarter ended October 31, 2022;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: December 07, 2022 | By: | /s/ NIU YEN YEN |
| NIU YEN YEN | ||
Chief Executive Officer, Chief Financial Officer, President, Director, Secretary and Treasurer | ||
| (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer) |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of MU Global Holding Limited (the “Company”) on Form 10-Q for the quarter ended October 31, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), The undersigned hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
| Date: December 07, 2022 | By: | /s/ NIU YEN YEN |
| NIU YEN YEN | ||
Chief Executive Officer, Chief Financial Officer, President, Director, Secretary and Treasurer | ||
| (Principal Executive Officer, Principal Financial Officer, Principal Accounting Officer) |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Oct. 31, 2022 |
Jul. 31, 2022 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 |
| Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Preferred stock, shares outstanding | 0 | 0 |
| Common stock, par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 600,000,000 | 600,000,000 |
| Common stock, shares issued | 59,434,838 | 59,434,838 |
| Common stock, shares outstanding | 59,434,838 | 59,434,838 |
Condensed Consolidated Statements of Operations and Comprehensive Losses (Unaudited) - USD ($) |
3 Months Ended | |
|---|---|---|
Oct. 31, 2022 |
Oct. 31, 2021 |
|
| Income Statement [Abstract] | ||
| REVENUE | $ 120,994 | $ 593 |
| COST OF REVENUE | (108,844) | (187) |
| GROSS PROFIT | 12,150 | 406 |
| OTHER INCOME | 1,741 | 21,546 |
| SELLING AND MARKETING EXPENSES | (275) | (144) |
| GENERAL AND ADMINISTRATIVE EXPENSES | (46,428) | (71,098) |
| LOSS BEFORE INCOME TAX | (32,812) | (49,290) |
| TAX PROVISION | ||
| NET LOSS | (32,812) | (49,290) |
| Other comprehensive loss: | ||
| - Foreign currency translation gain | 24,413 | (1,881) |
| TOTAL COMPREHENSIVE LOSS | $ (8,399) | $ (51,171) |
| Net loss per share- Basic and diluted | $ (0.0001) | $ (0.0009) |
| Weighted average number of common shares outstanding – Basic and diluted | 59,434,838 | 59,434,838 |
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
AOCI Attributable to Parent [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|---|
| Beginning balance, value at Jul. 31, 2021 | $ 5,943 | $ 1,830,300 | $ 4,698 | $ (2,031,848) | $ (190,907) |
| Balance, shares at Jul. 31, 2021 | 59,434,838 | ||||
| Net loss for the period | (49,290) | (49,290) | |||
| Foreign currency translation adjustment | (1,881) | (1,881) | |||
| Ending balance, value at Oct. 31, 2021 | $ 5,943 | 1,830,300 | 2,817 | (2,081,138) | (242,078) |
| Balance, shares at Oct. 31, 2021 | 59,434,838 | ||||
| Beginning balance, value at Jul. 31, 2022 | $ 5,943 | 1,830,300 | 19,574 | (2,389,181) | (533,364) |
| Balance, shares at Jul. 31, 2022 | 59,434,838 | ||||
| Net loss for the period | (32,812) | (32,812) | |||
| Foreign currency translation adjustment | 24,413 | 24,413 | |||
| Ending balance, value at Oct. 31, 2022 | $ 5,943 | $ 1,830,300 | $ 43,987 | $ (2,421,993) | $ (541,763) |
| Balance, shares at Oct. 31, 2022 | 59,434,838 |
DESCRIPTION OF BUSINESS AND ORGANIZATION |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DESCRIPTION OF BUSINESS AND ORGANIZATION | 1. DESCRIPTION OF BUSINESS AND ORGANIZATION
MU Global Holding Limited is organized as a Nevada limited liability company, incorporated on June 4, 2018. For purposes of consolidated financial statement presentation, MU Global Holding Limited and its subsidiary are herein referred to as “the Company” or “we”. The Company business of which planned principal operations are to provide wellness and beauty services to customers via Company owned outlets, franchised outlets or distribution of our product to third party wellness and beauty salon.
On June 29, 2018, the Company acquired 100% interest in MU Worldwide Group Limited, a private limited liability company incorporated in Seychelles and its subsidiary MU Global Holding Limited, a private limited liability company incorporated in Hong Kong. On August 16, 2018, MU Global Holding Limited incorporated a wholly owned subsidiary in Shanghai, People Republic of China under the name of MU Global Health Management (Shanghai) Limited.
Details of the Company’s subsidiary:
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying unaudited condensed consolidated financial statements as of and for the three months ended October 31, 2022, and 2021, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended October 31, 2022, are not necessarily indicative of the results that may be expected for the year ending July 31, 2023. The Condensed Consolidated Balance Sheets information as of October 31, 2022, was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended July 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on October 31, 2022. These financial statements should be read in conjunction with that report.
Basis of consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated upon consolidation.
Use of estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Revenue recognition
The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue. The Company derives its revenue from provision of wellness and beauty services to customers via Company owned outlets, franchised outlets or distribution of our product to third party wellness and beauty salon.
Cost of revenue
Cost of revenue includes the cost of services and product incurred to provide wellness and beauty services and purchase of products.
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.
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:
Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of operations and comprehensive losses.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
Impairment of long-live assets
Long-lived assets primarily include trademark of the Company. In accordance with the provision of ASC Topic 360, Impairment or Disposal of Long-Lived Assets, the Company generally conducts its annual impairment evaluation to its long-lived assets, usually in the fourth quarter of each fiscal year, or more frequently if indicators of impairment exist, such as significant sustained change in the business climate. The recoverability of long-lived assets is measured at the lowest level group. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset.
Leases
The Company recognizes lease payments for its short-term lease on a straight-line basis over the lease term in accordance with ASC 842.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.
In determining the present value of the unpaid lease payments, ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate for the lease. The Company incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments
Inventories
Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Consolidated Statements of Operations and Comprehensive Loss.
Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 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 periods 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.
The Company conducts major businesses in China and is subject to tax in this jurisdiction. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.
Going concern
The accompanying financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
For the period ended October 31, 2022, the Company has generated revenue of $120,994 and continuously incurred a net loss of $32,812. As of October 31, 2022, the Company suffered an accumulated deficit of $2,421,993, capital deficiency of $541,763 and negative operating cash flows of $14,029. The Company’s ability to continue as a going concern is dependent upon improving the profitability and the continuing financial support from its shareholders and director. Management believes the existing shareholders, director or external financing will provide the additional cash to meet the Company’s obligations as they become due.
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
The Company calculates net loss per share in accordance with ASC Topic 260 “Earnings Per Share”. Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss 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.
Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the Consolidated Statements of Operations and Comprehensive loss.
The functional currency of the parent Company is United States dollar and the functional currency of the subsidiaries MU Worldwide Group Limited (Seychelles) and MU Global Holding Limited (Hong Kong) is United States dollar. MU Global Health Management (Shanghai) Limited is in Renminbi.
The reporting currency of the Company and its subsidiary is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$.
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within the statements of stockholders’ equity.
Translation of amounts from RMB and HK$ into US$1 has been made at the following exchange rates for the respective periods:
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
Fair value of financial instruments:
The carrying value of the Company’s financial instruments: cash and cash equivalents, account receivables, amount due to a director, and accounts payable and approximate at their fair values because of the short-term nature of these financial instruments.
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: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
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.
In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1, 2023 as the Company is qualified as a smaller reporting company. The Company is currently evaluating the impact ASU 2019-05 may have on its consolidated financial statements.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
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PROPERTY, PLANT AND EQUIPMENT |
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| PROPERTY, PLANT AND EQUIPMENT | 3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment as of October 31, 2022 are summarized below:
WRITE OFF OF PROPERTY, PLANT AND EQUIPMENT
DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT
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| LEASE | 4. LEASE
As of November 1, 2020, the Company recognized approximately US$19,724 lease liability as well as right-of-use asset for all leases (with the exception of short-term leases) at the commencement date. Lease liabilities are measured at present value of the sum of remaining rental payments as of November 1, 2020, with discounted rate of 4.15% adopted from People’s Bank of China as a reference for discount rate. As of November 5, 2021, the Company had terminated the leased asset which has been recognized on November 1, 2020. Thereafter as of November 6, 2021, the Company recognized approximately US$11,581 lease liability as well as right-of-use asset for all leases at the commencement date. Lease liabilities are measured at present value of the sum of remaining rental payments as of November 6, 2021, with discounted rate of 4.35% adopted from “Zhao Shang bank” of China as a reference for discount rate.
A single lease cost is recognized over the lease term on a generally straight-line basis. All cash payments of operating lease cost are classified within operating activities in the statement of cash flows.
The initial recognition of operating lease right and lease liability as follow:
As of October 31, 2022 and July 31, 2022, the operating lease right of use asset as follow:
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
As of October 31, 2022 and July 31, 2022, the operating lease liability as follow:
For the period ended October 31, 2022, the amortization of the operating lease right of use asset was $1,208 while for the period ended October 31, 2021, the amortization of the operating lease right of use asset was $2,543.
Maturities of operating lease obligation as follow:
Other information:
Lease expenses were $64 and $2,660 during the period ended October 31, 2022 and October 31, 2021 respectively.
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PATENT AND TRADEMARK |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PATENT AND TRADEMARK | 5. PATENT AND TRADEMARK
Amortization were $0 and $785 for the period ended October 31, 2022 and October 31, 2021 respectively.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
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PREPAYMENTS AND DEPOSITS |
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| PREPAYMENTS AND DEPOSITS | 6. PREPAYMENTS AND DEPOSITS
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| Amount Due From Related Party | |||||||||||||||||||||||||||||||||||||||
| AMOUNT DUE FROM RELATED PARTY | 7. AMOUNT DUE FROM RELATED PARTY
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INVENTORIES |
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| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| INVENTORIES | 8. INVENTORIES
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OTHER PAYABLES AND ACCRUED LIABILITIES |
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| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER PAYABLES AND ACCRUED LIABILITIES | 9. OTHER PAYABLES AND ACCRUED LIABILITIES
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
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AMOUNT DUE TO RELATED PARTY |
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| AMOUNT DUE TO RELATED PARTY | 10. AMOUNT DUE TO RELATED PARTY
The amount due to related party is unsecured, interest-free with no fixed repayment term, for working capital purpose.
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LOAN FROM RELATED PARTY |
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| LOAN FROM RELATED PARTY | 11. LOAN FROM RELATED PARTY
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LOAN FROM THIRD PARTY |
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| Loan From Third Party | |||||||||||||||||||||||||||||||||||||
| LOAN FROM THIRD PARTY | 12. LOAN FROM THIRD PARTY
The loan is unsecured, interest-free and repayable in year 2024 and year 2025.
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LOAN FROM DIRECTOR |
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| LOAN FROM DIRECTOR | 13. LOAN FROM DIRECTOR
Current portion of the loan provided by director Ms. Niu Yen-Yen, is repayable upon demand. Non-current portion of the loan provided by director is unsecured, interest-free and repayable in year 2024, for working capital purpose.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
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INCOME TAXES |
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| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES | 14. INCOME TAXES
For the three months ended October 31, 2022 and October 31, 2021, the local (United States) and foreign components of income/(loss) before income taxes were comprised of the following:
The provision for income taxes consisted of the following:
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States Seychelles, Hong Kong and Shanghai, PRC that are subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of October 31, 2022, the operations in the United States of America incurred $452,609 of cumulative net operating losses which can be carried forward indefinitely to offset a maximum of 80% future taxable income. The Company has provided for a full valuation allowance of $362,088 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.
Seychelles
Under the current laws of the Seychelles, MU Worldwide Group Limited is registered as an international business company which governs by the International Business Companies Act of Seychelles and there is no income tax charged in Seychelles.
Hong Kong
MU Global Holding Limited is subject to Hong Kong Profits Tax, which is charged at the statutory income tax rate of 16.5% on its assessable income.
Shanghai
MU Global Health Management (Shanghai) Limited are operating in the People’s Republic of China (PRC) subject to the Corporate Income Tax governed by the Income Tax Law of the PRC with a unified statutory income tax rate of 25%.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
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COMMON STOCK |
3 Months Ended |
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Oct. 31, 2022 | |
| Equity [Abstract] | |
| COMMON STOCK | 15. COMMON STOCK
On June 4, 2018, our Chief Executive Officer, Ms. Niu Yen-Yen subscribed shares of restricted common stock of the Company at par value of $ per share. The monies from this transaction, which totalled $10, went to the Company to be used as initial working capital.
On July 6, 2018, Ms. Niu Yen-Yen and Server Int’l Co., Ltd. subscribed and restricted shares of common stock, respectively, of the Company, at par value of $ per share. The monies from these transactions, which totalled $3,600, went to the Company to be used as initial working capital. Server Int’l Co., Ltd. is controlled entirely by Ms. Niu Yen-Yen.
On July 7, 2018, Chang Chun-Ying and Chang Su-Fen subscribed and restricted shares of common stock, respectively, of the Company, at par value of $ per share. The monies from these transactions, which totalled $930, went to the Company to be used as initial working capital.
On July 9, 2018, GreenPro Asia Strategic SPC and GreenPro Venture Capital Limited, subscribed and restricted shares of common stock of the Company, respectively, at par value of $ per share. The monies from these transactions, which totalled $500, went to the Company to be used as initial working capital.
From July 9, 2018 to July 10, 2018 the Company issued a total of shares of restricted common stock to three non-US residents. Shares were sold at par value, $ per share. Total proceeds from these shares totalled $215 and went to the Company to be used as initial working capital.
On July 11, 2018 the Company issued a total of shares of restricted common stock to two non-US residents at a price of $ per share. Total proceeds from these sales of shares totalled $21,300 and went to the Company to be used as initial working capital.
On July 25, 2018 the Company issued a total of shares of restricted common stock to ten non-US residents at a price of $ per share. Total proceeds from these sales of shares totalled $29,850 and went to the Company to be used as initial working capital.
On July 26, 2018 the Company issued shares of restricted common stock to one non-US resident at a price of $ per share. Total proceeds from these sales of shares totalled $50,000 and went to the Company to be used as initial working capital.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
On July 31, 2018 Dezign Format Pte Ltd and Cheng Young-Chien each subscribed restricted shares of common stock of the Company, at $ per share, for total consideration of $800,000. Proceeds went to the Company to be used as initial working capital.
On July 10, 2018, Server Int’l Co., Ltd, a Company solely controlled and owned by the CEO has transferred shares of common stock to 8 non-US residents.
From August 1, 2018 to December 13, 2018, Ms. Niu Yen-Yen, the CEO of the Company has transferred shares of common stock to 16 non-US residents.
On May 7, 2019, the convertible promissory note issued by the Company amounted $779,125 to 45 accredited investors who reside in Taiwan with the conversion price of $1 per share have been converted to common stock of the company after the S-1 registration statement was declared effective on May 6, 2019.
From May 14, 2019 to July 31, 2019, the company issued shares of common stock at a price of $ per share through the Initial Public Offering (IPO) to 36 non-US residents.
As of October 31, 2022, MU Global Holding Limited has an issued and outstanding common share of .
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CONCENTRATIONS OF RISK |
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| Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CONCENTRATIONS OF RISK | 16. CONCENTRATIONS OF RISK
(a) Major customers
For the three months period ended October 31, 2022 and 2021, the customers who accounted for 10% or more of the Company’s revenues and its trade receivable balance at period-end are presented as follows:
(b) Major vendors
For the three months period ended October 31, 2022 and 2021, the vendors who accounted for 10% or more of the Company’s purchases and its trade payable balance at period-end are presented as follows:
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
(c) Exchange rate risk
The operation of the Company’s subsidiaries in international markets results in exposure to movements in currency exchange rates. We have experienced foreign currency gains and losses due to the strengthening and weakening of the U.S. dollar. The potential of volatile foreign exchange rate fluctuations in the future could have a significant effect on our results of operations. The Company has not historically used financial instruments to hedge its foreign currency exchange rate risks.
The currencies that create a majority of the Company’s exchange rate exposure are RMB, HK$, and TWD. The Company translates all assets and liabilities at the rate of exchange in effect at the balance sheet date and income and expense activity at the approximate rate of exchange at the transaction date.
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COMMITMENTS AND CONTINGENCIES |
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| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | 17. COMMITMENTS AND CONTINGENCIES
On November 6, 2021, the Company entered into a contract rental agreement to rent the office in Shanghai for a period of one year commencing on November 6, 2021 with tri-monthly payments in the amount of RMB 3,500 per month over the course of the lease and an entitlement of 1 month rent free period as relief upon rented the premise for full 11 months. The Company has an option to renew after the end of the agreement. On October 18, 2022, the Company has renewed the tenancy agreement for 12 months with tri-monthly payments in the amount of RMB 3,500 per month over the course of the lease from November 6, 2022 to November 5, 2023 and is entitled for 1 month rent free period as relief upon rented the premise for full 11 months.
As of October 31, 2022, the Company has the aggregate minimal rent payments due in the next two years as follows:
On November 11, 2022, a litigation was concluded in the Shanghai Changning People’s Court on the Company and both parties are eligible to appeal within 15 days from the date of judgement. The judgement made by the court order was for the Company to pay a compensation and legal cost to a third party by December 6, 2022.
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RELATED PARTY TRANSACTIONS |
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| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RELATED PARTY TRANSACTIONS | 18. RELATED PARTY TRANSACTIONS
For the period ended October 31, 2022 the Company has following transactions with related parties:
Related party A is the fellow subsidiaries of a corporate shareholder of the Company. Related party B is the employee and shareholder of the Company. Related party C represents a Company which has common director and shareholder with the Company.
For the period ended October 31, 2022, the Company incurred professional fees of $3,500 due to related party A, consultation fees of $8,100 due to related party B and cost of revenue of $108,844 due to related party C.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
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SEGMENT INFORMATION |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SEGMENT INFORMATION | 19. SEGMENT INFORMATION
ASC 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 services categories, business segments and major customers in financial statements. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes.
The Company had no inter-segment sales for the years presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
By Geography:
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SIGNIFICANT EVENTS |
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Oct. 31, 2022 | |
| Significant Events | |
| SIGNIFICANT EVENTS | 20. SIGNIFICANT EVENTS
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally.
The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on our financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on our financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, we are not able to estimate the effects of the COVID-19 outbreak on our results of operations, financial condition, or liquidity for the period ended October 31, 2022.
The Management had considered the impact of COVID-19 outbreak in China, which would have affected the financial position, performance and cash flow of the Company for the period ended October 31, 2022. It was concluded that the impact of non-adjusting events arising from COVID-19 outbreak has not significantly affected the fair value of the financial assets or liabilities and non-financial assets of the Company, including the classification of non-current and current items that were presented on the reporting date.
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SUBSEQUENT EVENTS |
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Oct. 31, 2022 | |
| Subsequent Events [Abstract] | |
| SUBSEQUENT EVENTS | 21. 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 subsequent events through the filing date of this Form 10-K with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the financial statements as of October 31, 2022, and events which occurred subsequently but were not recognized in the financial statements. During the period, there was no subsequent event that required recognition or disclosure, except for those disclosed in Note 17 Commitments and Contingencies. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of presentation | Basis of presentation
The accompanying unaudited condensed consolidated financial statements as of and for the three months ended October 31, 2022, and 2021, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended October 31, 2022, are not necessarily indicative of the results that may be expected for the year ending July 31, 2023. The Condensed Consolidated Balance Sheets information as of October 31, 2022, was derived from the Company’s audited Consolidated Financial Statements as of and for the year ended July 31, 2022, included in the Company’s Annual Report on Form 10-K filed with the SEC on October 31, 2022. These financial statements should be read in conjunction with that report.
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| Basis of consolidation | Basis of consolidation
The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All inter-company accounts and transactions have been eliminated upon consolidation.
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| Use of estimates | Use of estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
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| Revenue recognition | Revenue recognition
The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients.
Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue. The Company derives its revenue from provision of wellness and beauty services to customers via Company owned outlets, franchised outlets or distribution of our product to third party wellness and beauty salon.
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| Cost of revenue | Cost of revenue
Cost of revenue includes the cost of services and product incurred to provide wellness and beauty services and purchase of products.
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| Cash and cash equivalents | Cash and cash equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
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| Property, plant and equipment | 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:
Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the consolidated statements of operations and comprehensive losses.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
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| Impairment of long-live assets | Impairment of long-live assets
Long-lived assets primarily include trademark of the Company. In accordance with the provision of ASC Topic 360, Impairment or Disposal of Long-Lived Assets, the Company generally conducts its annual impairment evaluation to its long-lived assets, usually in the fourth quarter of each fiscal year, or more frequently if indicators of impairment exist, such as significant sustained change in the business climate. The recoverability of long-lived assets is measured at the lowest level group. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset.
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| Leases | Leases
The Company recognizes lease payments for its short-term lease on a straight-line basis over the lease term in accordance with ASC 842.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.
In determining the present value of the unpaid lease payments, ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As most of the Company leases do not provide an implicit rate, the Company uses its incremental borrowing rate as the discount rate for the lease. The Company incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments
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| Inventories | Inventories
Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Consolidated Statements of Operations and Comprehensive Loss.
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| Income taxes | Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 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 periods 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.
The Company conducts major businesses in China and is subject to tax in this jurisdiction. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.
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| Going concern | Going concern
The accompanying financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
For the period ended October 31, 2022, the Company has generated revenue of $120,994 and continuously incurred a net loss of $32,812. As of October 31, 2022, the Company suffered an accumulated deficit of $2,421,993, capital deficiency of $541,763 and negative operating cash flows of $14,029. The Company’s ability to continue as a going concern is dependent upon improving the profitability and the continuing financial support from its shareholders and director. Management believes the existing shareholders, director or external financing will provide the additional cash to meet the Company’s obligations as they become due.
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
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| Net loss per share |
The Company calculates net loss per share in accordance with ASC Topic 260 “Earnings Per Share”. Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss 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.
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| Foreign currencies translation | Foreign currencies translation
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the Consolidated Statements of Operations and Comprehensive loss.
The functional currency of the parent Company is United States dollar and the functional currency of the subsidiaries MU Worldwide Group Limited (Seychelles) and MU Global Holding Limited (Hong Kong) is United States dollar. MU Global Health Management (Shanghai) Limited is in Renminbi.
The reporting currency of the Company and its subsidiary is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$.
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within the statements of stockholders’ equity.
Translation of amounts from RMB and HK$ into US$1 has been made at the following exchange rates for the respective periods:
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| Related parties | Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
MU GLOBAL HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED OCTOBER 31, 2022 (Currency expressed in United States Dollars (“US$”), except for number of shares) (UNAUDITED)
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| Fair value of financial instruments | Fair value of financial instruments:
The carrying value of the Company’s financial instruments: cash and cash equivalents, account receivables, amount due to a director, and accounts payable and approximate at their fair values because of the short-term nature of these financial instruments.
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: Observable inputs such as quoted prices in active markets;
Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
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| Recent accounting pronouncements | 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.
In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1, 2023 as the Company is qualified as a smaller reporting company. The Company is currently evaluating the impact ASU 2019-05 may have on its consolidated financial statements. |
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DESCRIPTION OF BUSINESS AND ORGANIZATION (Tables) |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF COMPANY’S SUBSIDIARY | Details of the Company’s subsidiary:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT ESTIMATED LIFE |
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| SCHEDULE OF FOREIGN EXCHANGE RATES TRANSLATION | Translation of amounts from RMB and HK$ into US$1 has been made at the following exchange rates for the respective periods:
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PROPERTY, PLANT AND EQUIPMENT (Tables) |
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| SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment as of October 31, 2022 are summarized below:
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| SCHEDULE OF WRITE OFF OF PROPERTY, PLANT AND EQUIPMENT |
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| SCHEDULE OF DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT | DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT
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LEASE (Tables) |
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| SCHEDULE OF RECOGNITION OF OPERATING LEASE RIGHT AND LEASE LIABILITY | The initial recognition of operating lease right and lease liability as follow:
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| SCHEDULE OF OPERATING LEASE RIGHT OF USE ASSET |
As of October 31, 2022 and July 31, 2022, the operating lease right of use asset as follow:
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| SCHEDULE OF OPERATING LEASE LIABILITY | As of October 31, 2022 and July 31, 2022, the operating lease liability as follow:
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| SCHEDULE OF MATURITIES OF OPERATING LEASE OBLIGATION | Maturities of operating lease obligation as follow:
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| SCHEDULE OF OTHER INFORMATION | Other information:
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PATENT AND TRADEMARK (Tables) |
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| SCHEDULE OF TRADEMARK |
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PREPAYMENTS AND DEPOSITS (Tables) |
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AMOUNT DUE FROM RELATED PARTY (Tables) |
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INVENTORIES (Tables) |
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| SCHEDULE OF INVENTORIES |
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OTHER PAYABLES AND ACCRUED LIABILITIES (Tables) |
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| SCHEDULE OF OTHER PAYABLES AND ACCRUED LIABILITIES |
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AMOUNT DUE TO RELATED PARTY (Tables) |
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LOAN FROM RELATED PARTY (Tables) |
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LOAN FROM THIRD PARTY (Tables) |
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LOAN FROM DIRECTOR (Tables) |
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| SCHEDULE OF LOAN FROM DIRECTOR |
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INCOME TAXES (Tables) |
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Oct. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF LOSS BEFORE INCOME TAX | For the three months ended October 31, 2022 and October 31, 2021, the local (United States) and foreign components of income/(loss) before income taxes were comprised of the following:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF PROVISION FOR INCOME TAXES | The provision for income taxes consisted of the following:
|
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CONCENTRATIONS OF RISK (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Risks and Uncertainties [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULES OF CONCENTRATION OF RISK | For the three months period ended October 31, 2022 and 2021, the customers who accounted for 10% or more of the Company’s revenues and its trade receivable balance at period-end are presented as follows:
(b) Major vendors
For the three months period ended October 31, 2022 and 2021, the vendors who accounted for 10% or more of the Company’s purchases and its trade payable balance at period-end are presented as follows:
|
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COMMITMENTS AND CONTINGENCIES (Tables) |
3 Months Ended | |||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2022 | ||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||
| SCHEDULE OF AGGREGATE MINIMAL RENT PAYMENTS | As of October 31, 2022, the Company has the aggregate minimal rent payments due in the next two years as follows:
|
|||||||||||||||||||||||||
RELATED PARTY TRANSACTIONS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF OUTSTANDING PAYABLE TO RELATED PARTY | For the period ended October 31, 2022 the Company has following transactions with related parties:
|
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SEGMENT INFORMATION (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SCHEDULE OF SEGMENT REPORTING INFORMATION | The Company had no inter-segment sales for the years presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
By Geography:
|
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SCHEDULE OF COMPANY’S SUBSIDIARY (Details) |
3 Months Ended |
|---|---|
Oct. 31, 2022 | |
| MU Worldwide Group Limited [Member] | |
| Place and date of incorporation | Seychelles, June 7, 2018 |
| Particulars of issued capital | 100 shares of ordinary share of US$1 each |
| Principal activities | Investment holding |
| MU Global Holding Limited [Member] | |
| Place and date of incorporation | Hong Kong, January 30, 2018 |
| Particulars of issued capital | 1 ordinary share of HK$1 |
| Principal activities | Providing SPA and Wellness service in Hong Kong |
| MU Global Health Management [Member] | |
| Place and date of incorporation | Shanghai, August 16, 2018 |
| Particulars of issued capital | RMB 7,400,300 |
| Principal activities | Providing SPA and Wellness service in China |
DESCRIPTION OF BUSINESS AND ORGANIZATION (Details Narrative) |
Jun. 29, 2018 |
|---|---|
| MU Worldwide Group Limited [Member] | |
| Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |
| Acquired interest for private limited liability | 100.00% |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT ESTIMATED LIFE (Details) |
3 Months Ended |
|---|---|
Oct. 31, 2022 | |
| Leasable Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Estimated useful life | 5 years |
| Computer Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Estimated useful life | 3 years |
| Office Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Estimated useful life | 3 years |
| Outlet Design Fee and Equipment [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Estimated useful life | 3 years |
| Application Development Fee [Member] | |
| Property, Plant and Equipment [Line Items] | |
| Estimated useful life | 3 years |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
3 Months Ended | ||
|---|---|---|---|
Oct. 31, 2022 |
Oct. 31, 2021 |
Jul. 31, 2022 |
|
| Accounting Policies [Abstract] | |||
| Income tax description for likelihood | 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. | ||
| Revenue | $ 120,994 | $ 593 | |
| Net income loss | 32,812 | 49,290 | |
| Accumulated deficit | 2,421,993 | $ 2,389,181 | |
| Capital deficiency | 541,763 | ||
| Net cash provided by used in operating activities | $ 14,029 | $ 44,599 | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
||
|---|---|---|---|---|
| Property, Plant and Equipment [Line Items] | ||||
| Total | $ 533,451 | $ 533,451 | ||
| Accumulated depreciation | [1] | (401,797) | (401,797) | |
| Impairment | (149,552) | (149,552) | ||
| Foreign currency translation adjustment | 17,898 | 17,898 | ||
| Property, plant and equipment, net | ||||
| Computer Equipment [Member] | ||||
| Property, Plant and Equipment [Line Items] | ||||
| Total | 129,301 | 129,301 | ||
| Outlet Equipment [Member] | ||||
| Property, Plant and Equipment [Line Items] | ||||
| Total | 120,569 | 120,569 | ||
| Leasable Equipment [Member] | ||||
| Property, Plant and Equipment [Line Items] | ||||
| Total | 229,405 | 229,405 | ||
| Outlet Design Fee and Equipment [Member] | ||||
| Property, Plant and Equipment [Line Items] | ||||
| Total | 16,763 | 16,763 | ||
| Application Development Fee [Member] | ||||
| Property, Plant and Equipment [Line Items] | ||||
| Total | $ 37,413 | $ 37,413 | ||
| ||||
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) (Parenthetical) - USD ($) |
3 Months Ended | |
|---|---|---|
Oct. 31, 2022 |
Oct. 31, 2021 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation | $ 0 | $ 37,431 |
SCHEDULE OF WRITE OFF OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
|---|---|---|
| Property, Plant and Equipment [Abstract] | ||
| Write off of property, plant and equipment | $ 1,686 | |
| Accumulated depreciation | (1,624) | |
| Foreign currency translation adjustment | 38 | |
| Total write off of property, plant and equipment | $ 100 |
SCHEDULE OF DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Oct. 31, 2022 |
Oct. 31, 2021 |
Jul. 31, 2022 |
|
| Property, Plant and Equipment [Abstract] | |||
| Proceed from disposal of property, plant and equipment | $ 114 | $ 44,340 | |
| Disposal of equipment at cost | (27,726) | ||
| Disposal of equipment written off at net book value | (6) | ||
| Accumulated depreciation | 10,965 | ||
| Foreign currency translation adjustment | (40) | ||
| Total gain on disposal | $ 108 | $ 19,714 | $ 27,539 |
SCHEDULE OF RECOGNITION OF OPERATING LEASE RIGHT AND LEASE LIABILITY (Details) |
Oct. 31, 2022
USD ($)
|
|---|---|
| Lease | |
| Gross lease payable | $ 12,048 |
| Less: imputed interest | (467) |
| Initial recognition | 11,581 |
| Less: Remeasurement of existing lease | (843) |
| Balance | $ 10,738 |
SCHEDULE OF OPERATING LEASE RIGHT OF USE ASSET (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Oct. 31, 2022 |
Jul. 31, 2022 |
|
| Lease | ||
| Balance | $ 6,267 | $ 12,966 |
| Less: Termination of lease | (10,285) | |
| Add: New operating lease liability | 10,738 | |
| Foreign exchange translation loss | (428) | (407) |
| Amortization | (1,208) | (6,745) |
| Balance end of the period/year | $ 4,631 | $ 6,267 |
SCHEDULE OF OPERATING LEASE LIABILITY (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Oct. 31, 2022 |
Jul. 31, 2022 |
|
| Lease | ||
| As of August 1 | $ 6,559 | $ 2,647 |
| Less: Termination of lease | (2,647) | |
| Add: New operating lease liability | 11,581 | |
| Less: Remeasurement of existing lease | (843) | |
| Less: Gross repayment | (1,001) | (3,892) |
| Add: Imputed interest | 64 | 278 |
| Foreign exchange translation loss | (461) | (565) |
| Balance end of the period/year | $ 5,161 | $ 6,559 |
SCHEDULE OF MATURITIES OF OPERATING LEASE OBLIGATION (Details) |
Oct. 31, 2022
USD ($)
|
|---|---|
| Lease | |
| July 31, 2023 (9 months) | $ 4,683 |
| Oct 31, 2023 (3 months) | 478 |
| Total | $ 5,161 |
SCHEDULE OF OTHER INFORMATION (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Oct. 31, 2022 |
Oct. 31, 2021 |
|
| Lease | ||
| Operating cash flow from operating lease | $ 898 | $ 2,566 |
| Right-of-use assets obtained in exchange for operating lease liabilities | $ 4,631 | $ 10,532 |
| Remaining lease term for operating lease (years) | 1 year | 1 year |
| Weighted average discount rate for operating lease | 4.35% | 4.15% |
LEASE (Details Narrative) - USD ($) |
3 Months Ended | ||||
|---|---|---|---|---|---|
Oct. 31, 2022 |
Oct. 31, 2021 |
Jul. 31, 2022 |
Nov. 06, 2021 |
Nov. 01, 2020 |
|
| Lease liability | $ 5,161 | $ 6,559 | |||
| Right-of-use asset | $ 4,631 | $ 6,267 | |||
| Lease discounted rate | 4.35% | 4.15% | |||
| Amortization of operating lease right of use asset | $ 1,208 | $ 2,543 | |||
| Lease expenses | $ 64 | $ 2,660 | |||
| Accounting Standards Update 2016-02 [Member] | |||||
| Lease liability | $ 11,581 | $ 19,724 | |||
| Right-of-use asset | $ 11,581 | $ 19,724 | |||
| Lease discounted rate | 4.35% | 4.15% | |||
SCHEDULE OF TRADEMARK (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
||
|---|---|---|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||
| Patent and trademark | [1] | $ 35,988 | $ 32,404 | |
| Accumulated amortization | (6,986) | (6,986) | ||
| Impairment | (28,976) | (25,392) | ||
| Foreign currency translation adjustment | (26) | (26) | ||
| Patent and trademark, net | ||||
| ||||
PATENT AND TRADEMARK (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Oct. 31, 2022 |
Oct. 31, 2021 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Amortization of intangible assets | $ 0 | $ 785 |
SCHEDULE OF PREPAYMENTS AND DEPOSITS (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
|---|---|---|
| Prepayments And Deposits | ||
| Prepayments | $ 36,131 | $ 40,382 |
| Deposits | 2,459 | 4,712 |
| Total prepayments and deposits | $ 38,590 | $ 45,094 |
SCHEDULE OF DUE FROM RELATED PARTY (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
||
|---|---|---|---|---|
| Defined Benefit Plan Disclosure [Line Items] | ||||
| Total amount due from related party | $ 1,707 | $ 11,295 | ||
| Tien Mu International Co Ltd [Member] | ||||
| Defined Benefit Plan Disclosure [Line Items] | ||||
| Total amount due from related party | [1] | $ 1,707 | $ 11,295 | |
| ||||
SCHEDULE OF INVENTORIES (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Finished goods, at cost | $ 15,226 | $ 16,483 |
| Total inventories | $ 15,226 | $ 16,483 |
SCHEDULE OF OTHER PAYABLES AND ACCRUED LIABILITIES (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Other payables | $ 41,447 | $ 45,865 |
| Accrued audit fees | 7,500 | 15,000 |
| Accrued professional fees | 16,864 | 5,000 |
| Total payables and accrued liabilities | $ 65,811 | $ 65,865 |
SCHEDULE OF DUE TO RELATED PARTIES (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
||
|---|---|---|---|---|
| Defined Benefit Plan Disclosure [Line Items] | ||||
| Total amounts due to related parties | $ 93,176 | $ 85,076 | ||
| Hsieh Chang Chung [Member] | ||||
| Defined Benefit Plan Disclosure [Line Items] | ||||
| Total amounts due to related parties | [1] | $ 93,176 | $ 85,076 | |
| ||||
SCHEDULE OF LOAN FROM RELATED PARTY (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
||
|---|---|---|---|---|
| Defined Benefit Plan Disclosure [Line Items] | ||||
| Current | $ 1,707 | $ 11,295 | ||
| Total loan from related party | 1,707 | 11,295 | ||
| Hong Ting Network Technology (Xiamen) Limited [Member] | ||||
| Defined Benefit Plan Disclosure [Line Items] | ||||
| Current | [1] | 38,318 | 43,175 | |
| Total loan from related party | $ 38,318 | $ 43,175 | ||
| ||||
SCHEDULE OF LOAN FROM THIRD PARTY (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
|---|---|---|
| Defined Benefit Plan Disclosure [Line Items] | ||
| Total loan from third party | $ 83,457 | $ 77,064 |
| Shang Hai Shi Ba Enterprise Management Centre [Member] | ||
| Defined Benefit Plan Disclosure [Line Items] | ||
| Total loan from third party | $ 83,457 | $ 77,064 |
SCHEDULE OF LOAN FROM DIRECTOR (Details) - USD ($) |
Oct. 31, 2022 |
Jul. 31, 2022 |
|---|---|---|
| Loan From Director | ||
| Current | $ 152,139 | $ 146,439 |
| Non-current | 114,539 | 122,652 |
| Total loan from Director | $ 266,678 | $ 269,091 |
SCHEDULE OF LOSS BEFORE INCOME TAX (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Oct. 31, 2022 |
Oct. 31, 2021 |
|
| Local | $ (13,025) | $ (10,075) |
| Loss before income tax | (32,812) | (49,290) |
| SEYCHELLES | ||
| Foreign | ||
| HONG KONG | ||
| Foreign | (4,977) | 8,323 |
| CHINA | ||
| Foreign | $ (14,810) | $ (47,538) |
SCHEDULE OF PROVISION FOR INCOME TAXES (Details) - USD ($) |
3 Months Ended | |
|---|---|---|
Oct. 31, 2022 |
Oct. 31, 2021 |
|
| Current: | ||
| - Local | ||
| - Foreign | ||
| Deferred: | ||
| - Local | ||
| - Foreign | ||
| Income tax expense | ||
INCOME TAXES (Details Narrative) |
3 Months Ended |
|---|---|
|
Oct. 31, 2022
USD ($)
| |
| Operating Loss Carryforwards [Line Items] | |
| Operating loss carryforwards | $ 452,609 |
| Future taxable income | 80.00% |
| Assets valuation | $ 362,088 |
| HONG KONG | |
| Operating Loss Carryforwards [Line Items] | |
| Statutory income tax rate | 16.50% |
| CHINA | |
| Operating Loss Carryforwards [Line Items] | |
| Statutory income tax rate | 25.00% |
SCHEDULE OF AGGREGATE MINIMAL RENT PAYMENTS (Details) |
Oct. 31, 2022
USD ($)
|
|---|---|
| Commitments and Contingencies Disclosure [Abstract] | |
| 2023 | $ 4,315 |
| 2024 | 959 |
| Total | $ 5,274 |
COMMITMENTS AND CONTINGENCIES (Details Narrative) - JPY (¥) |
Oct. 18, 2022 |
Nov. 06, 2021 |
|---|---|---|
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Rent payment | ¥ 3,500 | ¥ 3,500 |
| Rental Agreement [Member] | ||
| Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||
| Lessee, Operating Lease, Description | On November 6, 2021, the Company entered into a contract rental agreement to rent the office in Shanghai for a period of one year commencing on November 6, 2021 | |
| Lessee, Operating Lease, Term of Contract | 1 year |
SCHEDULE OF OUTSTANDING PAYABLE TO RELATED PARTY (Details) - USD ($) |
3 Months Ended | 12 Months Ended |
|---|---|---|
Oct. 31, 2022 |
Jul. 31, 2022 |
|
| Related Party Transaction [Line Items] | ||
| Total | $ 120,444 | $ 48,980 |
| Related Party A [Member] | ||
| Related Party Transaction [Line Items] | ||
| Professional fee | 3,500 | 16,580 |
| Related Party B [Member] | ||
| Related Party Transaction [Line Items] | ||
| Consultation fee | 8,100 | 32,400 |
| Related Party C [Member] | ||
| Related Party Transaction [Line Items] | ||
| Consultation fee | $ 108,844 |
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Oct. 31, 2022 |
Oct. 31, 2021 |
Jul. 31, 2022 |
|
| Related Party Transaction [Line Items] | |||
| Cost of revenue | $ 108,844 | $ 187 | |
| Related Party A [Member] | |||
| Related Party Transaction [Line Items] | |||
| Professional Fees | 3,500 | $ 16,580 | |
| Related Party B [Member] | |||
| Related Party Transaction [Line Items] | |||
| Consultation Fees | 8,100 | ||
| Related Party C [Member] | |||
| Related Party Transaction [Line Items] | |||
| Cost of revenue | $ 108,844 | ||