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Business Combination
 12 Months Ended
Dec. 31, 2022
Business Combinations [Abstract]  
BUSINESS COMBINATION

Note 3- BUSINESS COMBINATION

 

On October 31, 2021, the Company completed the acquisition of 51% equity interests of Far Ling’s Inc. and 100% equity interests of Bo Ling’s Chinese Restaurant, Inc.

 

Pursuant to the Stock Purchase Agreements executed on October 31, 2021, the Company acquired 51% equity interest of Far Ling’s Inc. for a total cash consideration of $850,000 and acquired 100% equity interest in Bo Ling’s Chinese Restaurant, Inc. for a total cash consideration of $170,000. The Company believes that the acquisition brings new revenue source for the Company going forward.

 

The transaction was accounted for as a business combination using the purchase method of accounting. The purchase price allocation of the transaction was determined by the Company with the assistance of an independent appraisal firm based on the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date.

 

The following table presents the purchase price allocation to assets acquired and liabilities assumed as of the acquisition date. The non-controlling interest represents the fair value of the 49% equity interest not held by the Company:

 

   As of
October 31,
2021		 
     
Cash acquired  $171,827 
Accounts receivable, net   68,551 
Inventories, net   30,306 
Prepaid expenses   198,939 
Other current assets   1,199 
Property and equipment, net   1,179,190 
Intangible assets   532,895 
Goodwill   355,570 
Customer deposit   (3,209)
Accrued rent   (357,619)
Accrued salary and other current liabilities   (177,650)
Noncontrolling interest   (980,000)
      
      
Total consideration  $1,020,000 

 

The intangible assets mainly include Bo Ling’s Chinese Restaurant, Inc.’s brand name of $532,895 to attract customers and bring in increased revenue to benefit the Company in the future. The goodwill is mainly attributable to the excess of the consideration paid over the fair value of the net assets acquired that cannot be recognized separately as identifiable assets under U.S. GAAP. Goodwill is not amortized and is not deductible for tax purposes.

 

The fair value of the non-controlling interest in Far Ling’s Inc. was determined based on the purchase price allocation report prepared by an independent third-party appraiser by using discount cash flow model.

 

There was no impairment of Bo Ling’s intangible assets as of December 31, 2022, because there was no impairment indicator as the Company’s restaurant business was profitable during the year ended December 31, 2022. There was no impairment of Bo Ling’s intangible assets as of December 31, 2022, because there was no impairment indicator as the Company’s restaurant business was profitable during the year ended December 31, 2022.

 

The amounts of revenue and net income (loss) of Far Ling’s Inc. and Bo Ling’s Chinese Restaurant, Inc. as included in the Company’s consolidated statement of operations for the years ended December 31, 2022 and 2021 are as follows:

 

   For the year
ended
December 31,
2022		   From
acquisition
date to
December 31,
2021		 
Net Revenue  $3,074,007   $606,463 
           
Net income (loss)  $104,720   $(1,215,613)