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 April 30, 2022 | |
| Common Stock, $.0001 par value |
TABLE OF CONTENTS
| 2 |
PART I FINANCIAL INFORMATION
ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF APRIL 30, 2022 AND JULY 31, 2021
(Currency expressed in United States Dollars (“US$”), except for number of shares)
| As of | As of | |||||||
| April 30, 2022 | July 31, 2021 | |||||||
| Unaudited | Audited | |||||||
| ASSETS | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Property, plant and equipment | $ | $ | ||||||
| Leased asset- Right of use | ||||||||
| INTANGIBLE ASSET | ||||||||
| Trademark | $ | $ | ||||||
| CURRENT ASSETS | ||||||||
| Prepayments and deposits | $ | $ | ||||||
| Amount due from related party | ||||||||
| Inventories | ||||||||
| Leased asset- Right of use | ||||||||
| Cash and cash equivalents | ||||||||
| Total Current Assets | $ | $ | ||||||
| TOTAL ASSETS | ||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| NON-CURRENT LIABILITY | ||||||||
| Lease liabilities | $ | $ | ||||||
| Loan from related party | ||||||||
| Loan from director | ||||||||
| Loan from third party | ||||||||
| Total Non-Current Liability | ||||||||
| CURRENT LIABILITIES | ||||||||
| Other payables and accrued liabilities | $ | $ | ||||||
| Amount due to related parties | ||||||||
| Deposit from franchisees | ||||||||
| Deposit from customers | ||||||||
| Loan from director | ||||||||
| Lease liabilities | ||||||||
| Total Current Liabilities | $ | $ | ||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $ par value; shares authorized; issued and outstanding | ||||||||
| Common Shares, par value $; shares authorized, shares issued and outstanding as of April 30, 2022 and July 31, 2021 | $ | $ | ||||||
| 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 AND NINE MONTHS ENDED APRIL 30, 2022 and 2021
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
Three Months Ended April 30, | Nine months Ended April 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| REVENUE | $ | $ | $ | $ | ||||||||||||
| COST OF REVENUE | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| GROSS PROFIT | $ | $ | $ | $ | ||||||||||||
| OTHER INCOME | ||||||||||||||||
| SELLING AND MARKETING EXPENSES | ||||||||||||||||
| GENERAL AND ADMINISTRATIVE EXPENSES | ( | ) |
( | ) | ( | ) | ( | ) | ||||||||
| LOSS BEFORE INCOME TAX | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| INCOME TAX PROVISION | ||||||||||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive income: | ||||||||||||||||
| - 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 THE NINE MONTHS ENDED APRIL 30, 2022 AND 2021
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
| Nine months ended April 30, 2022 (Unaudited) | ||||||||||||||||||||||||
| Common Shares | Additional | Accumulated Others | ||||||||||||||||||||||
| Number of Shares | Amount | Paid-In Capital | Comprehensive Loss | Accumulated Deficit | Total Equity | |||||||||||||||||||
| Balance as of August 1, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of October 31, 2021 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of January 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||
| Balance as of April 30, 2022 | $ | $ | ( | ) | ( | ) | ||||||||||||||||||
| Nine months Ended April 30, 2021 (Unaudited) | ||||||||||||||||||||||||
| Common Shares | Additional | Accumulated Others | ||||||||||||||||||||||
Number of Shares | Amount | Paid-In Capital | Comprehensive Loss | Accumulated Deficit | Total Equity | |||||||||||||||||||
| Balance as of August 1, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Net loss for the period | - | $ | ( | ) | ( | ) | ||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||
| Balance as of October 31, 2020 | $ | ( | ) | ( | ) | |||||||||||||||||||
| Net loss for the period | - | ( | ) | $ | ( | ) | ||||||||||||||||||
| Foreign currency translation adjustment | - | $ | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||
| Balance as of January 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| Net loss for the period | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation adjustment | - | |||||||||||||||||||||||
| Balance as of April 30, 2021 | ( | ) | ( | ) | ||||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
| F-4 |
MU GLOBAL HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED APRIL 30, 2022 and 2021
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
Nine months Ended April 30, | ||||||||
| 2022 | 2021 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Impairment | ||||||||
| Asset written off | ||||||||
| Reversal on termination of leased asset | ( | ) | ||||||
| Gain on disposal | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Other receivables | ||||||||
| Prepayments and deposits | ||||||||
| Trade payable | ||||||||
| Other payables and accrued liabilities | ( | ) | ( | ) | ||||
| Inventories | ||||||||
| Amount due to related party | ||||||||
| Amount due from related party | ( | ) | ( | ) | ||||
| Lease liabilities | ( | ) | ( | ) | ||||
| Deposit from customer | ( | ) | ||||||
| Deposit from franchisee | ( | ) | ( | ) | ||||
| Net cash generated from/(used in) operating activities | $ | $ | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceed on disposal of property, plant and equipment | $ | $ | ||||||
| Purchase of trademark | ( | ) | ||||||
| Purchase of property, plant and equipment | ( | ) | ||||||
| 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 (used in)/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 | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||
| Income taxes paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
See accompanying notes to condensed consolidated financial statements.
| F-5 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
1. DESCRIPTION OF BUSINESS AND ORGANIZATION
MU Global Holding Limited is organized as a Nevada limited liability company, incorporated on June 4, 2018. For purposes of consolidated financial statement presentation, MU Global Holding Limited and its subsidiary are herein referred to as “the Company” or “we”. The Company business of which planned principal operations are to provide wellness and beauty services to customers via Company owned outlets, franchised outlets or distribution of our product to third party wellness and beauty salon.
On
June 29, 2018, the Company acquired
Details of the Company’s subsidiary:
| Company name | Place and date of incorporation | Particulars of issued capital | Principal activities | ||||
| 1. | MU Worldwide Group Limited | ||||||
| 2. | MU Global Holding Limited | ||||||
| 3. | MU Global Health Management |
| F-6 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).
The Company has adopted its fiscal year-end to be July 31.
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
Financial Accounting Standards Board, or FASB, issued ASC 606. The standard is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services.
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:
| Categories | Estimated useful life | |
| Leasable equipment | ||
| Computer hardware and software | ||
| Office equipment | ||
| Outlet equipment | ||
| Outlet design |
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 statement of operations.
| F-7 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 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. There has been no impairment charge for the years presented.
Leases
Effective November 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset and a lease liability for virtually all leases. The implementation of ASC 842 did not have a material impact on the Company’s consolidated financial statements and did not have a significant impact on our liquidity. The Company adopted ASC 842 using a modified retrospective approach. (see Note 4).
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 Condensed Consolidated Statements of Operations and Comprehensive Income.
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,
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.
| F-8 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
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 April 30, 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.
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 Condensed Consolidated Statements of Operations and Comprehensive Income.
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 subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity.
Foreign currencies translation (cont’d)
Translation of amounts from RMB, TWD, and HK$ into US$1 has been made at the following exchange rates for the respective periods:
| As of and for the nine months ended April 30 | ||||||||
| 2022 | 2021 | |||||||
| Period-end RMB : US$1 exchange rate | ||||||||
| Period-average RMB : US$1 exchange rate | ||||||||
| Period-end HKD$ : US$1 exchange rate | ||||||||
| Period-average HKD$ : US$1 exchange rate | ||||||||
| Period-end TWD : US$1 exchange rate | ||||||||
| Period-average TWD : US$1 exchange rate | ||||||||
Related parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
| F-9 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), 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.
| F-10 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 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 April 30, 2022 and July 31, 2021 are summarized below:
As of April 30, 2022 (Unaudited) | As of July 31, 2021 (Audited) | |||||||
| Computer hardware and software | $ | $ | ||||||
| Outlet equipment | ||||||||
| Leasable equipment1 | ||||||||
| Outlet design fee and equipment | ||||||||
| App development fee | ||||||||
| Total | ||||||||
| Accumulated depreciation2 | $ | ( | ) | $ | ( | ) | ||
| Impairment | ( | ) | ||||||
| Foreign currency translation adjustment | ||||||||
| Property, plant and equipment, net | $ | $ | ||||||
| 1 |
| 2 |
DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT
As of April 30, 2022 (Unaudited) | As of July 31, 2021 (Audited) | |||||||
| Proceed from disposal of property, plant and equipment | $ | $ | ||||||
| Disposal of equipment at cost | ( | ) | ( | ) | ||||
| Accumulated depreciation | ||||||||
| Total gain on disposal | $ | $ | ||||||
4. LEASE
The Company officially adopted ASC 842 for the period on and after November 1, 2019 as permitted by ASU 2016-02. ASC 842 originally required all entities to use a “modified retrospective” transition approach that is intended to maximize comparability and be less complex than a full retrospective approach. On July 30, 2018, the FASB issued ASU 2018-11 to provide entities with relief from the costs of implementing certain aspects of the new leasing standard, ASU 2016-02 of which permits entities may elect not to recast the comparative periods presented when transitioning to ASC 842. As permitted by ASU 2018-11, the Company elect not to recast comparative periods, thusly.
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.
| F-11 |
The initial recognition of operating lease right and lease liability as follow:
| Gross lease payable | $ | |||
| Less: imputed interest | ( | ) | ||
| Initial recognition as of November 6, 2021 | $ |
As of April 30, 2022, the operating lease right of use asset as follow:
| Initial recognition as of November 6, 2021 | $ | |||
| Add: New Lease | ||||
| Less: Termination of lease | ( | ) | ||
| Balance | ||||
| Effect of translation exchange | ( | ) | ||
| Accumulated amortization | ( | ) | ||
| Balance as of April 30, 2022 | $ |
As of April 30, 2022, the operating lease liability as follow:
| Initial recognition as of November 1, 2020 | $ | |||
| Add: New operating lease liability | ||||
| Less: Termination of lease | ( | ) | ||
| Effect of translation exchange | ( | ) | ||
| Less: gross repayment | ( | ) | ||
| Add: imputed interest | ||||
| Balance as of April 30, 2022 | ||||
| Less: lease liability, current | ( | ) | ||
| Lease liability, non-current | $ |
For
the nine months ended April 30, 2022, the amortization of the operating lease right of use asset was $
Maturities of operating lease obligation as follow:
| Year ending | ||||
| July 31, 2022 (3 months) | $ | |||
| October 31, 2022 (3 months) | ||||
| Total | $ |
| F-12 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
Other information:
| Nine months ended April 30, | ||||||||
| 2022 | 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 April 30, 2022 | As of July 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Patent and trademark1 | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Impairment | ( | ) | ||||||
| Foreign currency translation adjustment | ( | ) | ||||||
| Total trademark | $ | $ | ||||||
| 1 |
Amortization
trademark for during the three and nine months ended April 30, 2022 was $
6. PREPAYMENTS AND DEPOSITS
Prepayments and deposits consisted of the following at April 30, 2022 and July 31, 2021:
As of April 30, 2022 | As of July 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Deposits | $ | $ | ||||||
| Prepayments | ||||||||
| Total prepayments and deposits | $ | $ | ||||||
| F-13 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
7. 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 $
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 April 30, 2022, MU Global Holding Limited has an issued and outstanding common share of .
| F-14 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
8. INVENTORIES
As of April 30, 2022 | As of July 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Finished goods, at cost | $ | $ | ||||||
| Total inventories | $ | $ | ||||||
9. AMOUNT DUE FROM RELATED PARTY
As of April 30, 2022 | As of July 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Tien Mu International Co., Ltd1 | $ | $ | ||||||
| Total | $ | $ | ||||||
| 1 |
10. OTHER PAYABLES AND ACCRUED LIABILITIES
Other payables and accrued liabilities consisted of the following at April 30, 2022 and July 31, 2021:
As of April 30, 2022 | As of July 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Accrued audit fees | $ | $ | ||||||
| Accrued professional fees | ||||||||
| Other payables | ||||||||
| Total payables and accrued liabilities | $ | $ | ||||||
| F-15 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
11. AMOUNT DUE TO RELATED PARTIES
As of April 30, 2022 | As of July 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Wu, Chun-Teh1 | $ | $ | ||||||
| Hsieh, Chang-Chung2 | ||||||||
| $ | $ | |||||||
As
of April 30, 2022, the balance $
| 1 | |
| 2 |
The amounts due to related parties are unsecured, interest-free and repayable on demand, for working capital purpose.
12. LOAN FROM DIRECTOR
| As of | As of | |||||||
| April 30, 2022 | July 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Current | $ | $ | ||||||
| Non-current | ||||||||
| Total loan from Director | $ | $ | ||||||
The short-term loan provided by director is unsecured, interest-free with repayable in one to two years, for working capital purpose.
The long-term loan provided by director is unsecured, interest-free and repayable on year 2023 and year 2024.
13. LOAN FROM RELATED PARTY
As of April 30, 2022 | As of July 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Hong Ting Network Technology (Xiamen) Limited1 | $ | $ | ||||||
| Total | $ | $ | ||||||
| 1 |
14. LOAN FROM THIRD PARTY
As of April 30, 2022 | As of July 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Shang Hai Shi Ba Enterprise Management Centre | $ | $ | ||||||
| Total | $ | $ | ||||||
The loan is unsecured, interest-free and repayable on July 22, 2023.
| F-16 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
15. INCOME TAXES
For the nine months period ended April 30, 2022, the local (United States) and foreign components of income/ (loss) before income taxes were comprised of the following:
| Nine months Ended April 30, | ||||||||
| 2022 | 2021 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| 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 April 30, 2022 | For the year April 30, 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 April 30, 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-17 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
16. CONCENTRATIONS OF RISK
(a) Major customers
For the nine months period ended April 30, 2022 and 2021, the customers who accounted for 10% or more of the Company’s revenues and its accounts receivable balance at period-end are presented as follows:
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Revenue | Percentage of revenue | Accounts receivable, trade | ||||||||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
| Customer A | $ | $ | % | $ | ||||||||||||||||||||
| $ | $ | % | $ | |||||||||||||||||||||
(b) Major suppliers
For
the nine months period ended April 30, 2022 and 2021, there is no vendor who accounted for
(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 April 30, 2022, the Company has the aggregate minimal rent payments due in the current year and next years as follows:
| Year ending July 31 | ||||
| 2022 | ||||
| 2023 | ||||
| Total | $ | |||
18. RELATED PARTY TRANSACTIONS
For the period ended April 30, 2022 the Company has following transactions with related parties:
For the period April 30, 2022 | For the year ended July 31, 2021 | |||||||
| (Unaudited) | (Audited) | |||||||
| Professional fee: | ||||||||
| - Related party A | $ | $ | ||||||
| Consultation fee: | ||||||||
| - Related party B | $ | $ | ||||||
| - Related party C | $ | $ | ||||||
| Total | $ | $ | ||||||
Related party A is the fellow subsidiaries of a corporate shareholder of the Company. Related party B and C are the employees of the Company and have provided consultancy service for business operation.
| F-18 |
MU GLOBAL HOLDING LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED APRIL 30, 2022
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(UNAUDITED)
For
the period ended April 30, 2022, the Company incurred professional fees of $
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 periods presented. Summarized financial information concerning the Company’s reportable segments is shown as below:
By Geography:
| For the period ended April 30, 2022 | ||||||||||||||||||||
| Nevada | Seychelles | Hong Kong | China | Total | ||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net loss before taxation | ( |
) | ( |
) | ( | ) | ( | ) | ( | ) | ||||||||||
| Total assets | $ | $ | $ | $ | $ | |||||||||||||||
| For the period ended April 30, 2021 | ||||||||||||||||||||
| Nevada | Seychelles | Hong Kong | China | Total | ||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||||||||
| Depreciation and amortization | ( | ) | ( | ) | ( | ) | ||||||||||||||
| Net loss before taxation | ( |
) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Total assets | $ | - | $ | $ | $ | $ | ||||||||||||||
*Revenues and costs are attributed to countries based on the location of customers.
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 April 30, 2022.
21. SUBSEQUENT EVENTS
The Company has evaluated subsequent events from the balance sheet date through April 30, 2022 the date the Company issued unaudited consolidated financial statements 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. During this period, there was no subsequent event that required recognition or disclosure.
| 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, 2021 filed with the Securities and Exchange Commission on November 15, 2021 (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. 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.
The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this transition report on Form 10-Q. The following should also be read in conjunction with the unaudited condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.
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, No. 3148, Chengliu-Chong Road, Jiading District, Shanghai, People Republic of China. 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 nine months ended April 30, 2022 and 2021
Revenue
For the nine months ended April 30, 2022 and 2021, the Company has generated revenue of $39,357 and $46,576 respectively. The revenue represented income from wellness and beauty services provided to customers and sales of products via Shanghai outlets and sharing of revenue from leasable equipment with business alliance and franchisee.
Cost of Revenue and Gross Margin
For the nine months ended April 30, 2022 and 2021, cost incurred arise in providing wellness and beauty services is $17,628 and $9,607 respectively, and generate a gross profit of $21,729 and $36,969 for the nine months ended April 30, 2022 and 2021.
Selling and marketing expenses
For the nine months ended April 30, 2022 and 2021, we had not incurred marketing expenses.
General and administrative expenses
For the nine months ended April 30, 2022 and 2021, we had incurred general and administrative expenses in the amount of $379,230 and $373,153 respectively. These expenses are comprised of salary, allowance, professional fees, consultancy fee for IT and system management, office and outlet operation expenses, depreciation and impairment loss.
Other Income
The Company recorded an amount of $51,495 and $30,214 as other income for the nine months ended April 30, 2022 and 2021. This income is derived from gain on disposal, foreign exchange and interest income.
Net Loss
Our net loss for nine months ended April 30, 2022 and 2021 were $306,006 and $305,970. The net loss mainly derived from the general and administrative expenses incurred.
Liquidity and Capital Resources
As of April 30, 2022 and 2021, we had cash and cash equivalents of $2,921 and $10,659 respectively. We expect increased levels of operations going forward will result in more significant cash flow and in turn working.
Cash Generated From/(Used In) Operating Activities
For the nine months ended April 30, 2022, net cash generated from operating activities was $23,073 as compared to net cash used in operating activities of $129,280 for the nine months ended April 30, 2021. The decrease in cash used in operating activities was mainly due to lower spend in general and administrative expenses.
Cash (Used In) / Provided By Financing Activities
For the nine months ended April 30, 2022, net cash used in financing activities was $32,775 and for the nine months ended April 30, 2021, net cash provided by financing activities was $111,059. The financing cash flow performance primarily reflects the provision of short-term and long-term loan by director and related party.
| 4 |
Cash (Used In) / Generated From Investing Activities
For the nine months ended April 30, 2022, net cash used in investing activities was $7,276 and for the nine months ended April 30, 2021, net cash generated from investing activities was $20,565. 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 April 30, 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.
For the three months ended April 30, 2022 and 2021
Revenue
For the three months ended April 30, 2022 and 2021, the Company has generated revenue of $570 and $5,500 respectively. The revenue represented income from wellness and beauty services provided to customers and sales of products via Shanghai outlets and sharing of revenue from leasable equipment with business alliance and franchisee.
Cost of Revenue and Gross Margin
For the three months ended April 30, 2022 and 2021, cost incurred arise in providing wellness and beauty services is $232 and $51 respectively, and generate a gross profit of $338 and $5,449 for the three months ended April 30, 2022 and 2021.
Selling and marketing expenses
For the three months ended April 30, 2022 and 2021, we had not incurred marketing expenses.
General and administrative expenses
For the three months ended April 30, 2022 and 2021, we had incurred general and administrative expenses in the amount of $210,092 and $78,879 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 $24,562 and $5,227 as other income for the three months ended April 30, 2022 and 2021. This income is derived from gain on disposal, foreign exchange and interest income.
Net Loss
Our net loss for three months ended April 30, 2022 and 2021 were $185,192 and $68,203. The net loss mainly derived from the general and administrative expenses incurred.
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 April 30, 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 April 30, 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 April 30, 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 April 30, 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 April 30, 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* | |
| 31.2 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial officer* | |
| 32.1 | Section 1350 Certification of principal executive officer * | |
| 32.2 | Section 1350 Certification of principal financial 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: June 17, 2022 | By: | /s/ NIU YEN YEN |
| Title: | Chief Executive Officer, President, Director, Secretary and Treasurer | |
| (Principal Executive Officer) | ||
| Date: June 17, 2022 | By: | /s/ HSIEH CHANG CHUNG |
| Title: | Chief Financial Officer, (Principal Financial Officer, Principal Accounting Officer) |
| 9 |