BUSINESS COMBINATION

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

BUSINESS COMBINATION

NOTE－6 BUSINESS COMBINATION

On February 14, 2022 and February 25, 2022, the Company completed the acquisition of 100% equity interest of New Retail Experience Incorporated and Dream Space Trading Company Limited (the “Acquisition”), respectively.

(c) Acquisition of New Retail:

The total consideration of the acquisition is 226,629 shares of common stock, with a fair value of approximately $800,000 and cash consideration of $200,000 The Company accounted for the transaction as an acquisition of a business pursuant to ASC 805, “Business Combinations” (“ASC 805”).

Purchase price consisted of the following:
Fair value of stock at closing	$	800,000
Cash paid		200,000
Less cash received		(5,445	)
Purchase price	$	994,555

The transaction was accounted for using the acquisition method. Accordingly, goodwill has been measured as the excess of the total consideration over the amounts assigned to the identifiable assets acquired and liabilities assumed based on their preliminary estimated fair values.

The Company expects to retain the services of an independent valuation firm to determine the fair value of these identifiable intangible assets. Once determined, the Company will reallocate the purchase price of the acquisition based on the results of the independent evaluation if they are materially different from the allocations as recorded on February 14, 2022. The preliminary estimated fair value of assets acquired, and liabilities assumed in were as follows: The purchase price allocation resulted in $983,103 of goodwill. The purchase price allocation resulted in $983,103 of goodwill, 

Acquired assets:
Trade receivables	$	4,728
Other receivables		9,603
Property and equipment		204
Total acquired assets		14,535
Less: Assumed liabilities
Trade payables		2,804
Accrued liabilities and other payable		279
Total Assumed liabilities		3,083
Fair value of net assets assumed		11,452
Goodwill recorded		983,103
Cash consideration allocated	$	994,555

Under the acquisition method of accounting, the total acquisition consideration price was allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values. The fair value measurements utilize estimates based on key assumptions of the Acquisition, and historical and current market data. The preliminary allocation of the purchase price is based on the best information available and is pending, amongst other things: (i) the finalization of the valuation of the fair values and useful lives of tangible assets acquired; (ii) the finalization of the valuations and useful lives for the intangible assets acquired; (iii) finalization of the valuation of accounts payable and accrued expenses; and (iv) finalization of the fair value of non-cash consideration.

The Acquisition was accounted for as a business combination in accordance with ASC 805 “Business Combinations”. The Company has allocated the purchase price consideration based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from management estimation. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense.

The goodwill is not expected to be deductible for tax purposes. The Company recognized a goodwill impairment of $528,583 during the six months ended June 30, 2022, because there were continuous operating losses and negative cash flows incurred subsequent to the acquisition date. Under ASC 350-20-50, the Company recognized the goodwill impairment loss by comparing the actual operating results of New Retail to the profit forecast which indicated that the goodwill was impaired. Goodwill impairments may not be subsequently reversed.

During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date.

The following unaudited pro forma information presents the combined results of operations as if the acquisitions had been completed on January 1, 2022 and 2021.

	Six months ended June 30, 2022			Six months ended June 30, 2021
Revenue	$	1,181,847		$	185,266
Net loss	$	(14,202,024	)	$	(2,763,079	)
Net loss per share	$	(0.57	)	$	(0.15	)

(ii) Acquisition of Dream Space:

The total acquisition consideration of the acquisition is cash consideration of VND 2,300,000, (approximately US$104). The Company accounted for the transaction as an acquisition of a business pursuant to ASC 805, “Business Combinations” (“ASC 805”).

Purchase price consisted of the following:
Cash paid	$	104
Less cash received		-
Purchase price	$	104

The transaction was accounted for using the acquisition method. Accordingly, goodwill has been measured as the excess of the total consideration over the amounts assigned to the identifiable assets acquired and liabilities assumed based on their preliminary estimated fair values.

The purchase price allocation resulted in $-0- of goodwill, as below:

Acquired assets:
Trade receivables	$	1,168
Other receivables		5
Cash		1,429
Property and equipment
Total acquired assets		2,602
Less: Assumed liabilities
Trade payables		1,228
Accrued liabilities and other payable		2,557
Total Assumed liabilities		3,805
Fair value of net liabilities assumed		(1,203	)
Exchange difference		1,307
Goodwill recorded		—
Cash consideration allocated	$	104

Under the acquisition method of accounting, the total acquisition consideration price was allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values. The fair value measurements utilize estimates based on key assumptions of the Acquisition, and historical and current market data. The preliminary allocation of the purchase price is based on the best information available and is pending, among other things: (i) the finalization of the valuation of the fair values and useful lives of tangible assets acquired; (ii) the finalization of the valuations and useful lives for the intangible assets acquired; (iii) finalization of the valuation of accounts payable and accrued expenses; and (iv) finalization of the fair value of non-cash consideration.

The Acquisition was accounted for as a business combination in accordance with ASC 805 “Business Combinations”. The Company has allocated the purchase price consideration based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from management estimation. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense.

During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. No additional assets or liabilities were recognized during the measurement period, or the changes to the amounts of assets or liabilities previously recognized.

The following unaudited pro forma information presents the combined results of operations as if the acquisitions had been completed on January 1, 2022 and 2021. 

	Six months ended June 30, 2022			Six months ended June 30, 2021
Revenue	$	947,354		$	25,728
Net loss	$	(14,200,611	)	$	(7,099,708	)
Net loss per share	$	(0.57	)	$	(0.38	)

(iii) Acquisition of Gorilla: 

On May 31, 2022, the Company (“Buyer”) entered into Stock Purchase Agreement with Gorilla Networks Pte Ltd. (“Gorilla”) for the acquisition of 100% of the equity interests in Gorilla for an aggregate purchase price equal to (i) the number of the Buyer’s shares of restricted common stock equal to the quotient of $150,000 divided by the closing price of the Buyer’s common stock on the Nasdaq Capital Market on the day immediately before the Closing Date (“Closing Price”) issued on the Closing Date (“First Tranche”) and (ii) the number of the Buyer’s shares of restricted common stock equal to the quotient of $1,000,000 (less the amount of the First Tranche and the amount of the Assumed Liabilities) divided by the Closing Price issued on the six month anniversary of the Closing Date (“Second Tranche”). The approximately $338,785 ($1,000,000 less assumed liabilities of $661,215).The Company accounted for the transaction as an acquisition of a business, on May 31, 2022, pursuant to ASC 805, “Business Combinations” (“ASC 805”).

Purchase price consisted of the following:
Fair value of stock at closing	$	338,785
Less: cash received		(25,583	)
Purchase price	$	313,202

The Company accounts for business combinations using the acquisition method and that the Company has early adopted the amendments of Regulation S-X dated May 21, 2020 and has concluded that this acquisition was not significant. Accordingly, the presentation of the assets acquired, historical financial statements under Rule 3-05 and related pro forma information under Article 8 of Regulation S-X, respectively, are not required to be presented. 

The transaction was accounted for using the acquisition method. Accordingly, goodwill has been measured as the excess of the total consideration over the amounts assigned to the identifiable assets acquired and liabilities assumed based on their preliminary estimated fair values.

The Company expects to retain the services of an independent valuation firm to determine the fair value of these identifiable intangible assets. Once determined, the Company will reallocate the purchase price of the acquisition based on the results of the independent evaluation if they are materially different from the allocations as recorded on May 31, 2022. The preliminary estimated fair value of assets acquired, and liabilities assumed in were as follows: The purchase price allocation resulted in $-0- of goodwill, as below:

Acquired assets:
Inventories	$	4,348
Trade receivables		3,273
Other receivables		58,029
Property and equipment		8,876
Intangible assets (Apps development cost)		899,891
Total acquired assets		974,417
Less: Assumed liabilities		—
Trade payables		534,907
Accrued liabilities and other payable		51,538
Amount due to related parties		73
Amount due to shareholder		74,697
Total acquired Liabilities		661,215
Fair value of net assets assumed		313,202
Goodwill recorded		—
Net consideration allocated, net	$	313,202

Under the acquisition method of accounting, the total acquisition consideration price was allocated to the assets acquired and liabilities assumed based on their preliminary estimated fair values. The fair value measurements utilize estimates based on key assumptions of the Acquisition, and historical and current market data. The preliminary allocation of the purchase price is based on the best information available and is pending, amongst other things: (i) the finalization of the valuation of the fair values and useful lives of tangible assets acquired; (ii) the finalization of the valuations and useful lives for the intangible assets acquired; (iii) finalization of the valuation of accounts payable and accrued expenses; and (iv) finalization of the fair value of non-cash consideration.

The Acquisition was accounted for as a business combination in accordance with ASC 805 “Business Combinations”. The Company has allocated the purchase price consideration based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed and intangible assets identified as of the acquisition date and considered a number of factors including valuations from management estimation. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expense.

During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date.

The following unaudited pro forma information presents the combined results of operations as if the acquisitions had been completed on January 1, 2022 and 2021.

	Six months ended June 30, 2022			Six months ended June 30, 2021
Revenue	$	1,076,601		$	17,289
Net loss	$	(17,143,580	)	$	(7,129,282	)
Net loss per share	$	(0.69	)	$	(0.38	)