Discontinued Operations

12 Months Ended

Dec. 31, 2019

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note 3 - Discontinued Operations

Towards the end of 2019, the board of directors of the Company committed to a plan to dispose of Bright Swallow. On January 7, 2020, the Company transferred its entire interest in Bright Swallow to Y-Tone (Worldwide) Limited, an unrelated third party, for cash consideration of $2.50 million, pursuant to a formal agreement entered into on January 7, 2020. We received the payment on May 11, 2020.

As of December 31, 2019, operations of Bright Swallow were reported as discontinued operations in the accompanying consolidated financial statements for all periods presented. Accordingly, assets, liabilities, revenues, expenses and cash flows related to Bright Swallow have been reclassified in the consolidated financial statements as discontinued operations for all periods presented.

The following table presents the components of discontinued operations in relation to Bright Swallow reported in the consolidated statements of operations:

	2019			2018

Sales	$	6,547,538		$	7,467,194
Cost of sales		(6,223,468	)		(6,874,666	)
Operating expenses		(3,799,261	)		(471,729	)
(Loss) income before income taxes		(3,475,576	)		119,149
Income tax (benefit) expense		(1,011,532	)		78,849
(Loss) income from discontinued operations		(2,464,044	)		40,300

The following table presents the major classes of assets and liabilities of discontinued operations of Bright Swallow reported in the consolidated balance sheets:

	December 31, 2019		December 31, 2018

Cash and equivalents	$	1,462,200	$	646,857
Accounts receivable, net		969,841		864,598
Advance to suppliers, net		609,935		1,079,532
Prepaid expenses and other receivables		-		5,418
Current assets of discontinued operations		3,041,976		2,596,405

Intangible assets		-		3,795,904
Non-current assets of discontinued operations		-		3,795,904

Accounts payable	$	948	$	-
Advance from customers		126,916		-
Accrued liabilities and other payables		2,553		5,174
Income tax payable		85,028		-
Current liabilities of discontinued operations		215,445		5,174

Noncurrent FIN 48 liability		-		1,096,558
Non-current liabilities of discontinued operations		-		1,096,558