See accompanying notes to condensed consolidated
financial statements.
See accompanying notes to condensed consolidated
financial statements.
See accompanying notes to condensed consolidated
financial statements.
See accompanying notes to condensed consolidated
financial statements.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
1. DESCRIPTION
OF BUSINESS AND ORGANIZATION
Bonanza Goldfields Corp. (the “Company”)
was incorporated in the State of Nevada on March 6, 2008. Currently, the Company through its subsidiaries, are principally engaged in
the provision of financing, business development solutions & related professional services in Hong Kong.
On August 27, 2021, Mr. LEE Ying Chiu Herbert
purchased a controlling interest in the Company, resulting in a change of control. On August 26, 2021, Mr. LEE Ying Chiu Herbert was
appointed to serve as director of the Company.
On October 18, 2021, the Company consummated
the Share Exchange Transaction among Marvion Holdings Limited (“MHL”) and its shareholders. The Company acquired all of the
issued and outstanding shares of MHL from its shareholders, in exchange for 139,686,481,453 shares of the issued and outstanding common
stock. Upon completion of the Share Exchange Transaction, MHL became a 100% owned subsidiary of the Company.
Prior to the Share Exchange, the Company was
considered as a shell company due to its nominal assets and limited operation. The transaction will be treated as a recapitalization
of the Company.
The Share Exchange between the Company and MHL
on October 18, 2021, is a merger of entities under common control that Mr. LEE Ying Chiu Herbert is the common director and shareholder
of both the Company and MHL. Under the guidance in ASC 805 for transactions between entities under common control, the assets, liabilities
and results of operations, are recognized at their carrying amounts on the date of the Share Exchange, which required retrospective combination
of the Company and MHL for all periods presented.
Description of subsidiaries
Description of Subsidiaries |
|
|
|
|
|
|
|
|
Name |
|
Place of incorporation
and kind of
legal entity |
|
Principal activities
and place of operation |
|
Particulars of registered/paid
up share capital |
|
Effective interest
held |
|
|
|
|
|
|
|
|
|
Marvion Holdings Limited |
|
British Virgin Islands |
|
Investment holding |
|
50,000 ordinary shares at par value of US$1 |
|
100% |
|
|
|
|
|
|
|
|
|
Marvion Private Limited |
|
Singapore |
|
Corporate management and IT development in Singapore |
|
1,000 ordinary shares at par value of S$1 |
|
100% |
|
|
|
|
|
|
|
|
|
Marvion Group Limited |
|
British Virgin Islands |
|
Procurement of media and entertainment in Singapore |
|
50,000 ordinary shares at par value of US$1 |
|
100% |
|
|
|
|
|
|
|
|
|
Marvion (Hong Kong) Limited |
|
Hong Kong |
|
Corporate management in Hong Kong |
|
1,000 ordinary shares for HK$1,000 |
|
100% |
|
|
|
|
|
|
|
|
|
Typerwise Limited |
|
Hong Kong |
|
Provision of financing, business development solutions
& related professional services |
|
10,000 ordinary shares for HK$10,000 |
|
100% |
The Company and its subsidiaries are hereinafter
referred to as (the “Company”).
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying condensed consolidated financial statements reflect
the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated
financial statements and notes.
These accompanying condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US
GAAP”).
|
· |
Use of estimates and assumptions |
In preparing these condensed consolidated financial
statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet
and revenues and expenses during the years reported. Actual results may differ from these estimates.
The condensed consolidated financial statements
include the accounts of BONZ and its subsidiaries. All significant inter-company balances and transactions within the Company have been
eliminated upon consolidation.
|
· |
Cash and cash equivalents |
Cash and cash equivalents are carried at cost
and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with
an original maturity of three months or less as of the purchase date of such investments.
Intangible asset represents the trademark, which
is stated at cost less accumulated amortization, if any. Amortization is calculated on the straight-line basis over the expected useful
lives of 10 years, from the date on which they become fully operational and after taking into account their estimated residual values:
|
· |
Impairment of long-lived
assets |
In accordance with the provisions of ASC Topic
360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment and intangible
assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying
amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered
to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair
value of the assets. There has been no impairment charge for the periods presented.
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
The Company adopted Accounting Standards Update
("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”) using the full retrospective
transition method. The Company's adoption of ASU 2014-09 did not have a material impact on the amount and timing of revenue recognized
in its condensed consolidated financial statements.
Under ASU 2014-09, the Company recognizes revenue
when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Company
expects to be entitled to in exchange for those goods or services.
The Company applies the following five steps
in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
· |
identify the
contract with a customer; |
· |
identify the performance
obligations in the contract; |
· |
determine the transaction
price; |
· |
allocate the transaction
price to performance obligations in the contract; and |
· |
recognize revenue as the
performance obligation is satisfied. |
Revenue is generated from the rendering of marketing
and strategic advisory services. The Company recognizes services revenue over the period in which such services are performed under fixed
price contracts. Service fee becomes billable to the customer when services are rendered.
The Company adopted the ASC 740 “Income
tax” provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to
be claimed on a tax return should be recorded in the condensed consolidated financial statements. Under paragraph 740-10-25-13, the Company
may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained
on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the condensed
consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty
percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition,
classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company
had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.
The estimated future tax effects of temporary
differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs
and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides
valuation allowances as management deems necessary.
|
· |
Uncertain tax positions |
The Company did not take any uncertain tax positions
and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the nine
months ended September 30, 2021 and 2020.
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
|
· |
Foreign currencies translation |
Transactions denominated in currencies other
than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction.
Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency
using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the condensed consolidated
statement of operations.
The reporting currency of the Company is United
States Dollar ("US$") and the accompanying condensed consolidated financial statements have been expressed in US$. In addition,
the Company is operating in Hong Kong and maintains its books and record in its local currency, Hong Kong Dollars (“HKD”),
which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In
general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into
US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance
sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation
of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the
statements of changes in stockholder’s equity.
Translation of amounts from HKD into US$ has been made at the following
exchange rates for the periods ended September 30, 2021 and 2020:
Schedule of translation rates | |
| | | |
| | |
| |
September 30, 2021 | |
September 30, 2020 |
Period-end HKD:US$ exchange rate | |
| 0.1284 | | |
| 0.1290 | |
Average HKD:US$ exchange rate | |
| 0.1288 | | |
| 0.1289 | |
Period-end SGD:US$ exchange rate | |
| 0.7355 | | |
| 0.7312 | |
Average SGD:US$ exchange rate | |
| 0.7469 | | |
| 0.7192 | |
ASC Topic 220, “Comprehensive Income”,
establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income
as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented
in the accompanying condensed consolidated statements of changes in stockholders’ equity, consists of changes in unrealized gains
and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.
ASC Topic 280, “Segment Reporting”
establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization
structure as well as information about geographical areas, business segments and major customers in condensed consolidated financial
statements. For the three and nine months ended September 30, 2021 and 2020, the Company operates in one reportable operating segment
in Hong Kong. 1
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
Contributions to retirement plans (which are
defined contribution plans) are charged to general and administrative expenses in the accompanying statements of operation as the related
employee service are provided.
The Company follows the ASC 850-10, “Related
Party Disclosures” for the identification of related parties and disclosure of related party transactions.
Pursuant to section 850-10-20 the related parties
include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election
of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method
by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under
the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company
may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one
of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly
influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting
parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully
pursuing its own separate interests.
The condensed consolidated financial statements
shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other
similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated
or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s)
involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each
of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects
of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income
statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period;
and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the
terms and manner of settlement.
|
· |
Commitments and contingencies |
The Company follows the ASC 450-20, “Contingencies”
to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may
result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses
such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related
to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates
the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or
expected to be sought therein.
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
If the assessment of a contingency indicates
that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability
would be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potentially material
loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally
not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon
information available at this time that these matters will have a material adverse effect on the Company’s financial position,
results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s
business, financial position, and results of operations or cash flows.
|
· |
Fair value of financial
instruments |
The Company follows paragraph 825-10-50-10 of
the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37
of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.
Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted
accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair
value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value
hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value
hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest
priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting
Standards Codification are described below:
Level 1 |
|
Quoted market prices available in
active markets for identical assets or liabilities as of the reporting date. |
|
|
|
Level 2 |
|
Pricing inputs other than quoted prices in active markets
included in Level 1, which are either directly or indirectly observable as of the reporting date. |
|
|
|
Level 3 |
|
Pricing inputs that are generally observable inputs
and not corroborated by market data. |
Financial assets are considered Level 3 when
their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant
model assumption or input is unobservable.
The fair value hierarchy gives the highest priority
to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If
the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is
based on the lowest level input that is significant to the fair value measurement of the instrument.
The carrying amounts of the Company’s financial
assets and liabilities, such as cash and cash equivalents, approximate their fair values because of the short maturity of these instruments.
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
|
· |
Recent accounting pronouncements |
In September 2016, the Financial Accounting Standards
Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326)” (“ASU
2016-13”), which requires the immediate recognition of management’s estimates of current and expected credit losses. In November
2018, the FASB issued ASU 2018-19, which makes certain improvements to Topic 326. In April and May 2019, the FASB issued ASUs 2019-04
and 2019-05, respectively, which adds codification improvements and transition relief for Topic 326. In November 2019, the FASB issued
ASU 2019-10, which delays the effective date of Topic 326 for Smaller Reporting Companies to interim and annual periods beginning after
December 15, 2022, with early adoption permitted. In November 2019, the FASB issued ASU 2019-11, which makes improvements to certain
areas of Topic 326. In February 2020, the FASB issued ASU 2020-02, which adds an SEC paragraph, pursuant to the issuance of SEC Staff
Accounting Bulletin No. 119, to Topic 326. Topic 326 is effective for the Company for fiscal years and interim reporting periods within
those years beginning after December 15, 2022. Early adoption is permitted for interim and annual periods beginning December 15, 2019.
The Company is currently evaluating the potential impact of adopting this guidance on the consolidated financial statements.
On January 1, 2020, the Company adopted ASU No.
2017-04, “Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment”, which eliminates the requirement
to calculate the implied fair value of goodwill, but rather requires an entity to record an impairment charge based on the excess of
a reporting unit’s carrying value over its fair value. Adoption of this ASU did not have a material effect on the condensed consolidated
financial statements.
On January 1, 2020, the Company adopted ASU No.
2018-13, “Fair Value Measurements (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement”.
The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820. Adoption of this ASU did not
have a material effect on the condensed consolidated financial statements.
The Company has reviewed all recently issued,
but not yet effective, accounting pronouncements and does 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.
3 GOING
CONCERN UNCERTAINTIES
The accompanying condensed consolidated financial
statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.
The Company has incurred a continuous loss of
$14,103,853 as of September 30, 2021. In addition, with respect to the ongoing and evolving coronavirus (COVID-19) outbreak, which was
designated as a pandemic by the World Health Organization on March 11, 2020, the outbreak has caused substantial disruption in international
economies and global trades and if repercussions of the outbreak are prolonged, could have a significant adverse impact on the Company’s
business.
The continuation of the Company as a going concern
through September 30, 2022 is dependent upon the continued financial support from its stockholders. Management believes the Company is
currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing
sufficient funds to sustain the operations.
These and other factors raise substantial doubt
about the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any
adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result
in the Company not being able to continue as a going concern.
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
4. AMOUNT
DUE TO A DIRECTOR
As of September 30, 2021 and December 31, 2020,
the amount due to a related party represented the temporary advances from the Company’s director, which was unsecured, interest-free
with no fixed repayment term. Imputed interest on this amount is considered insignificant.
5. STOCKHOLDERS’
DEFICIT
Preferred stock
As of September 30, 2021 and December 31, 2020,
the Company’s authorized shares were 30,000,000 shares of preferred stock, with a par value of $0.0001.
The Company has designated 10,000,000 shares
of its preferred stock as Series A Preferred Stock.
The Company has designated 1,000,000 shares of
its preferred stock as Series B Preferred Stock.
The Company has designated 1 share of its preferred
stock as Series C Preferred Stock.
As of September 30, 2021 and December 31, 2020,
the Company had 10,000,000 and 10,000,000 shares of Series A Preferred Stock issued and outstanding, respectively.
As of September 30, 2021 and December 31, 2020,
the Company had 361,999 and 361,999 shares of Series B Preferred Stock issued and outstanding, respectively.
As of September 30, 2021 and December 31, 2020,
the Company had 1 and 1 share of Series C Preferred Stock issued and outstanding, respectively.
Common stock
As of September 30, 2021 and December 31, 2020,
the Company’s authorized shares were 1,970,000,000 shares of common stock, with a par value of $0.0001.
As of September 30, 2021 and December 31, 2020,
the Company had 1,970,000,000 and 1,970,000,000 shares of common stock issued and outstanding, respectively.
Subsequently, on October 18, 2021, the Company
consummated the Share Exchange Transaction among Marvion Holdings Limited (“MHL”) and its shareholders. The Company acquired
all of the issued and outstanding shares of MHL from its shareholders, in exchange for 139,686,481,453 shares of the issued and outstanding
common stock. Upon completion of the Share Exchange Transaction, MHL became a 100% owned subsidiary of the Company. The Company will
issue 1,217,764,822 shares of common stock and will increase the authorized share to issue the remaining 138,468,716,631shares of its
common stock.
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
The provision for income taxes consisted of the
following:
Schedule of provision for income taxes | |
| | | |
| | |
| |
Nine months ended September 30, |
| |
2021 | |
2020 |
| |
| |
|
Current tax | |
$ | – | | |
$ | – | |
Deferred tax | |
| – | | |
| – | |
| |
| | | |
| | |
Income tax expense | |
$ | – | | |
$ | – | |
The effective tax rate in the years presented
is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company mainly
operates in Hong Kong that is subject to taxes in the jurisdictions in which they operate, as follows:
United States of America
BONZ is registered in the State of Nevada and
is subject to the tax laws of United States of America.
BVI
Under the current BVI law, the Company is not
subject to tax on income.
Singapore
The Company’s subsidiary is registered
in the Republic of Singapore and is subject to the tax laws of Singapore.
As of September 30, 2021, the operation in the
Singapore incurred $6,052 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating
loss carryforwards has no expiration. The Company has provided for a full valuation allowance against the deferred tax assets of $968
on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that
these assets will not be realized in the future.
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
Hong Kong
The Company’s subsidiary operating in Hong
Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits
arising in Hong Kong during the current period, after deducting a tax concession for the tax year. The reconciliation of income tax rate
to the effective income tax rate for the nine months ended September 30, 2021 and 2020 is as follows:
Schedule of income tax expense | |
| |
|
| |
Nine months ended September 30, |
| |
2021 | |
2020 |
| |
| |
|
Loss before income taxes | |
$ | (49,064 | ) | |
$ | (433 | ) |
Statutory income tax rate | |
| 16.5 | % | |
| 16.5 | % |
Income tax expense at statutory rate | |
| (8,307 | ) | |
| (71 | ) |
Valuation allowance not recognized as deferred tax | |
| 8,096 | | |
| 71 | |
Income tax expense | |
$ | – | | |
$ | – | |
As of September 30, 2021, the operations in incurred
$51,964 of cumulative net operating losses which can be carried forward to offset future taxable income. There is no expiry in net operating
loss carryforwards under Hong Kong tax regime. The Company has provided for a full valuation allowance against the deferred tax assets
of $8,574 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely
than not that these assets will not be realized in the future.
The following table sets forth the significant
components of the deferred tax assets of the Company as of September 30, 2021 and December 31, 2020:
Schedule of deferred tax assets | |
| |
|
| |
September 30, 2021 | |
December 31, 2020 |
| |
| |
|
Deferred tax assets: | |
| | | |
| – | |
Net operating loss carryforwards – Hong Kong tax regime (overseas) | |
$ | 8,574 | | |
$ | 479 | |
Net operating loss carryforwards – Singapore tax regime (overseas) | |
| 986 | | |
| – | |
| |
| 9,560 | | |
| 479 | |
Less: valuation allowance | |
| (9,560 | ) | |
| (479 | ) |
Deferred tax assets, net | |
$ | – | | |
$ | – | |
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
7. RELATED
PARTY TRANSACTIONS
From time to time, the director of the Company
advanced funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and had no fixed terms
of repayment.
During the nine months ended September 30, 2021
and 2020, the Company paid the $50,000 and $0 management fee to the related party, respectively.
During the nine months ended September 30, 2021
and 2020, the Company paid the $60,967 and $0 consultancy fees to the director, So Han Meng Julian, respectively.
During the nine months ended September 30, 2021
and 2020, the Company paid the $79,020 and $0 of compensation to the director, So Han Meng Julian, respectively.
Apart from the transactions and balances detailed elsewhere in these
accompanying condensed consolidated financial statements, the Company has no other significant or material related party transactions
during the periods presented.
8. CONCENTRATIONS
OF RISK
The Company is exposed to the following concentrations of risk:
(a) Major
customers
For the three months ended September 30, 2021
and 2020, the customers who accounted for 10% or more of the Company’s revenues and its outstanding receivable balances at year-end
dates, are presented as follows:
Schedules of concentrations | |
| | | |
| | | |
| | |
| |
Three months ended September 30, 2021 | |
September 30, 2021 |
Customer | |
Revenues | |
Percentage of revenues | |
Accounts receivable |
| |
| |
| |
|
Customer A | |
$ | 13,256 | | |
| 100 | % | |
$ | – | |
Customer B | |
| – | | |
| – | | |
| – | |
| |
| | | |
| | | |
| | |
| |
$ | 13,256 | | |
| 100 | % | |
$ | – | |
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
For the nine months ended September 30, 2021
and 2020, the customers who accounted for 10% or more of the Company’s revenues and its outstanding receivable balances at year-end
dates, are presented as follows:
| |
Nine months ended September 30, 2021 | |
September 30, 2021 |
Customer | |
Revenues | |
Percentage of revenues | |
Accounts receivable |
| |
| |
| |
|
Customer A | |
$ | 101,026 | | |
| 57 | % | |
$ | – | |
Customer B | |
| 75,315 | | |
| 43 | % | |
| – | |
| |
| | | |
| | | |
| | |
| |
$ | 176,341 | | |
| 100 | % | |
$ | – | |
For the three and nine months ended September
30, 2020, there were no customers.
|
(b) |
Economic and political
risk |
The Company’s major operations are conducted
in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s
economy may influence the Company’s business, financial condition, and results of operations.
The Company cannot guarantee that the current
exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable
periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD converted
to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.
|
(d) |
Risk from COVID-19 pandemic |
The pandemic has resulted in quarantines, travel
restrictions, and the temporary closure of stores and business facilities in Hong Kong in a limited period during 2020. Due to the nature
of the Company’s business, the impact of the closure on the operational capabilities was not significant. The extent to which the
COVID-19 outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot be predicted,
including new information that may emerge concerning the severity and mutation of the virus and the actions to contain its impact, that
are beyond the Company’s control. There is no guarantee that the Company’s revenues will grow or remain at a similar level
in the foreseeable period.
BONANZA GOLDFIELDS CORP.
NOTES TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021
AND 2020
(Currency expressed in United States Dollars
(“US$”), except for number of shares)
(Unaudited)
9. COMMITMENTS
AND CONTINGENCIES
As of September 30, 2021, the Company has no
material commitments or contingencies.
10. 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 condensed consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred
after September 30, 2021, up through the date the Company issued the unaudited condensed consolidated financial statements. The Company
had the following material recognizable subsequent events:
On August 27, 2021, Mr. LEE Ying Chiu Herbert
purchased a controlling interest in the Company, resulting in a change of control. On August 26, 2021, Mr. LEE Ying Chiu Herbert and
Mr. Tee Soo TAN were appointed to serve as directors of the Company and Mr. CHAN Man Chung was appointed to serve as the Chief
Executive Officer and a director of the Company.
On October 18, 2021, the Company consummated
the Share Exchange Transaction among Marvion Holdings Limited (“MHL”) and its shareholders. The Company acquired all of the
issued and outstanding shares of MHL from its shareholders, in exchange for 139,686,481,453 shares of the issued and outstanding common
stock. Upon completion of the Share Exchange Transaction, MHL became a 100% owned subsidiary of the Company.
On January 31, 2022, the Company acquired 100% equity interest of
Marvel Multi-dimensions Limited in consideration of HKD2 from a related party.