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v3.20.1
Document and Entity Information - USD ($)
12 Months Ended
Dec. 31, 2019
Apr. 01, 2020
Jun. 30, 2019
Document And Entity Information      
Entity Registrant Name Vitaxel Group Ltd    
Entity Central Index Key 0001623590    
Document Type 10-K    
Document Period End Date Dec. 31, 2019    
Amendment Flag false    
Current Fiscal Year End Date --12-31    
Entity a Well-known Seasoned Issuer No    
Entity a Voluntary Filer No    
Entity's Reporting Status Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business true    
Entity Emerging Growth Company false    
Entity Shell Company false    
Entity Interactive Data Current Yes    
Entity File Number 333-201365    
Entity Incorporation, State or Country Code NV    
Entity Public Float     $ 15,942,968
Entity Common Stock, Shares Outstanding   54,087,903  
Document Fiscal Period Focus FY    
Document Fiscal Year Focus 2019    
v3.20.1
CONSOLIDATED BALANCE SHEETS - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Current assets    
Cash and cash equivalents $ 63,436 $ 1,004,397
Accounts receivable 82
Amount due from related parties 5,132 4,928
Inventories 17,450 32,585
Other receivables, prepayments and other current assets 30,559 55,954
Total Current Assets 116,577 1,097,946
Non-current assets    
Property and equipment, net 62,221 141,730
Total Non-Current Assets 62,221 141,730
TOTAL ASSETS 178,798 1,239,676
CURRENT LIABILITIES    
Amounts due to related parties 4,372,856 4,862,363
Commission payables 133,743 138,118
Accounts payable 154 10,414
Accruals and other payables 340,112 381,514
Total current liabilities 4,846,865 5,392,409
TOTAL LIABILITIES 4,846,865 5,392,409
STOCKHOLDERS' EQUITY    
Preferred stock par value $0.0001:1,000,000 shares authorized; and 0 outstanding
Common stock par value $0.0001: 70,000,000 shares authorized; 54,087,903 and 54,087,903 shares issued and outstanding, respectively 5,409 5,409
Additional paid-in capital 4,749,798 4,749,798
Accumulated deficit (9,587,918) (9,111,400)
Accumulated other comprehensive income 164,644 203,460
Total Stockholders' Equity (4,668,067) (4,152,733)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 178,798 $ 1,239,676
v3.20.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2019
Dec. 31, 2018
Statement of Financial Position [Abstract]    
Preferred stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Preferred stock, authorized 1,000,000 1,000,000
Preferred stock, outstanding 0 0
Common stock, par value (in dollars per share) $ 0.0001 $ 0.0001
Common stock, authorized 70,000,000 70,000,000
Common stock, issued 54,087,903 54,087,903
Common stock, outstanding 54,087,903 54,087,903
v3.20.1
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Income Statement [Abstract]    
REVENUE $ 83,508 $ 35,191
COST OF REVENUE (74,122) (12,636)
GROSS PROFIT 9,386 22,555
OPERATING EXPENSES    
Selling expense (1,437) (5,706)
General and administrative expenses (993,620) (1,465,741)
Total Operating Expenses (995,057) (1,471,447)
LOSS FROM OPERATIONS (985,671) (1,448,892)
OTHER INCOME/(EXPENSE), NET    
Management fee income 480,000 240,000
Other income 88,016 1,346
Bad debts (82) (430,600)
Impairments (23,208) (612,056)
Other expense (35,573) (84,724)
Total other income / (expense), net 509,153 (886,034)
NET LOSS (476,518) (2,334,926)
OTHER COMPREHENSIVE (LOSS) / INCOME    
Foreign currency translation adjustment (38,816) 98,189
TOTAL COMPREHENSIVE LOSS $ (515,334) $ (2,236,737)
Weighted average number of common shares outstanding - basic and diluted 54,087,903 54,087,903
Net loss per share - Basic and diluted $ (0.01) $ (0.04)
v3.20.1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
Common Stock
Additional Paid-In Capital
Accumulated Deficit
Accumulated Other comprehensive income (loss)
Total
Balance, at beginning at Dec. 31, 2017 $ 5,409 $ 4,749,798 $ (6,776,474) $ 105,271 $ (1,915,996)
Balance, at beginning (in shares) at Dec. 31, 2017 54,087,903        
Net loss (2,334,926) (2,334,926)
Foreign currency translation adjustment 98,189 98,189
Balance, at end at Dec. 31, 2018 $ 5,409 4,749,798 (9,111,400) 203,460 $ (4,152,733)
Balance, at end (in shares) at Dec. 31, 2018 54,087,903       54,087,903
Net loss (476,518) $ (476,518)
Foreign currency translation adjustment (38,816) (38,816)
Balance, at end at Dec. 31, 2019 $ 5,409 $ 4,749,798 $ (9,587,918) $ 164,644 $ (4,668,067)
Balance, at end (in shares) at Dec. 31, 2019 54,087,903       54,087,903
v3.20.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss $ (476,518) $ (2,334,926)
Items not involving cash:    
Depreciation - property, plant and equipment 84,512 51,594
Impairment on long term investments 612,056
Impairment on amount due from related parties 279,810
Impairment on amount due from associate company 150,790
Impairment on accounts receivable 82
Property and equipment written off and disposal 29,149 50,986
Inventories written off 23,208 829
Changes in operating assets and liabilities    
Accounts receivable (82)
Other receivables, prepayments and other current assets 25,395 (11,649)
Inventories (8,073) (4,889)
Accounts Payable (10,260) (20,992)
Commission payables (4,375) (14,753)
Accrued expense and other payables (41,402) (111,299)
Net cash used in from operating activities (378,282) (1,352,525)
CASH FLOWS FROM INVESTING ACTIVITIES    
Amount due from associated (47,766)
Purchase of long term investments (629,151)
Purchase of property, plant and equipment (34,152) (13,252)
Net cash used in investing activities (34,152) (690,169)
CASH FLOWS FROM FINANCING ACTIVITIES    
Repayments to directors (40,491)
(Repayments to) / Proceeds from related parties (526,640) 2,417,635
Net cash provided by (used in) financing activities (526,640) 2,377,144
EFFECT OF EXCHANGE RATES ON CASH (1,887) (21,252)
NET CHANGE IN CASH AND CASH EQUIVALENTS (940,961) 313,198
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,004,397 691,199
CASH AND CASH EQUIVALENTS AT END OF YEAR 63,436 1,004,397
SUPPLEMENTAL OF CASH FLOW INFORMATION    
Cash paid for interest expenses
Cash paid for income tax
v3.20.1
ORGANIZATION AND BUSINESS
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND BUSINESS

 

1. ORGANIZATION AND BUSINESS

 

Vitaxel Group Limited (the “Company” or “Vitaxel”), incorporated in Nevada, is engaged in direct selling industry and online shopping platform primarily through its operating entities in Malaysia.

 

Vitaxel SDN BHD (“Vitaxel SB”), was incorporated in Malaysia on August 10, 2012. The Company is primarily engaged in the direct selling industry utilizing a multi-level marketing model with an emphasis on travel, entertainment and lifestyle products and services.

 

Vitaxel Online Mall SDN BHD (“Vionmall”), was incorporated in Malaysia on September 22, 2015. The Company is primarily in developing online shopping platforms geared to Vitaxel and its members and the third-party suppliers of products and services.

v3.20.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. dollars.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its subsidiaries. On consolidation, all intercompany balances and transactions are eliminated. The Company owns 100% interest in both of its subsidiaries, Vitaxel SB and Vionmall.

 

Use of estimates

 

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Significant areas of estimate include useful lives of property and equipment, impairment of long-term assets and deferred income tax obligations. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. 

 

Foreign currency translation and transactions

 

The functional currency of the Company is the Malaysian Ringgit (“MYR”) and reporting currency of the Company is United States Dollar (“USD”). The financial statements of the Company are translated into USD using the exchange rate as of the balance sheet date for assets and liabilities and average exchange rate for the year for income and expense items. Translation gains and losses are recorded in accumulated other comprehensive income or loss as a component of shareholders’ equity.

 

Cash and cash equivalents

 

Cash and cash equivalents consist of cash on hand and highly liquid investments, which are unrestricted from withdrawal or use, and which have original maturities of three months or less when purchased.

 

Accounts receivable

 

Accounts receivable are recognized and carried at original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Company generally does not require collateral from its customers. For the year ended December 31, 2019 and 2018, the Company write off $82 and $0 respectively of its accounts receivable as bad debts. For the year ended December 31, 2019 and 2018, the Company has provided an impairment on the amount due from HWGG of $0 and $279,810 respectively, and an impairment of $0 and $150,790 on the amount due from Vitaxel Thailand Co. Ltd respectively.

 

Fair value of financial instruments

 

FASB ASC 820, “Fair Value Measurement,” specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy:

 

Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

 

Level 2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly.

 

Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.

 

ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of December 31, 2019 and 2018, none of the Company’s assets and liabilities was required to be reported at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including cash, accounts receivables, payables and accrued liabilities, approximate their fair values due to the short-term nature of these financial instruments. There were no changes in methods or assumptions during the periods presented.

 

Inventories

 

Inventories consist of finished goods. Inventories are stated at lower of cost or net realizable value, with cost determined on a weighted-average method, and not to exceed net realizable value. The Company writes down its inventory balances for obsolete amounts estimated on an individual basis for the finished goods. For the year ended December 31, 2019 and 2018, the Company wrote down $23,208 and $829 respectively, of its inventories that have been obsolete.

 

Long-term investment

 

The Company’s interests in associated companies are accounted for under equity method under U.S. GAAP. Under the equity method, if the Company’s share of losses of an associated company equals or exceeds the amount of investment plus advances made by the Company, the Company ordinarily discontinues including its share of losses and the investment is reported at nil value. If the associated company subsequently reports net income, the Company will resume applying the equity method only after its share of that net income equals the share of net losses not recognized during the period the equity method was suspended.

 

Property and equipment, net

 

Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives: 

  

  Office equipment 5 years    
  Computer equipment 5 years    
  Furniture and fixtures 5 years    
  Electrical & fitting 5 years    
  Motor vehicle 5 years    
  Software and website 5 years    
  Leasehold improvement 5 years    

 

The residual values, useful lives and methods of depreciation of property and equipment are reviewed and adjusted if appropriate, on an annual basis. During the financial year ended December 31, 2018, the Company has revised the estimated useful of Computer equipment and Software and website from 10 years to 5 years. During the financial year ended December 31, 2019, the Company has revised the estimated useful of all assets from 10 years to 5 years.

 

Revenue recognition

 

Effective January 1, 2018, the Company recognizes revenue pursuant to FASB Accounting Standards Codification 606 (“ASC 606”) Revenue from Contracts with Customers , the standard applies a five step model (i) The standard applies to a company’s contracts with customers (ii) The unit of account for revenue recognition under the new standard is a performance obligation (a good or service) and the performance obligations will be accounted for separately if they are distinct (iii) The transaction price is determined based on the amount of consideration that a company expects to be entitled to from a customer (iv) The transaction price is allocated to all the separate performance obligations in an arrangement, and (v) Revenue will be recognized when an entity satisfies each performance obligation by transferring control of the promised goods or services to the customer. Goods or services can transfer at a point in time or over time.

 

Product sales − The Company recognizes revenue when it satisfies each performance obligation by transferring control of the goods to the independent members or purchasers of the products. Product sales are recognized net of product returns, discounts and taxes. A reserve for product returns is accrued based on historical experience. There was no deferred revenue accrued as of December 31, 2019 and 2018.

 

Membership fee − The Company recognizes the membership fee revenue over the term of the membership, which is 12 months. The revenue will not be recognized until the 10 days cooling-off period is expired. For the year ended December 31, 2019 and 2018, all membership fees were waived by the Company for promotion purpose, except for only 2 renewal fees totaling to $30 recognized in December 31, 2018.

 

ASC was adopted January 1, 2018 and applied using the partial retrospective method. There was no impact from the adoption of ASC 606 on the Company’s accounting for revenue.

 

Commission expense

 

Commission expense incurred by the Company is recognized as cost of revenue and as a liability (commission payable in the consolidated balance sheet. Commission expense is not recoverable once recognized and is expensed as incurred.

 

 Income Taxes

 

Income taxes are determined using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes that date of enactment. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. 

 

U.S. Corporate Income Tax

 

The Company is subject to U.S. corporate income tax on its taxable income at a rate of up to 21% for taxable years beginning after December 31, 2017 and U.S. corporate income tax on its taxable income of up to 35% for prior tax years. Recent U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump-sum payment. See Note 8 – Income Tax.

 

To the extent that portions of its U.S. taxable income, such as Subpart F income or global intangible low-taxed income (“GILTI”), are determined to be from sources outside of the U.S., subject to certain limitations, the Company may be able to claim foreign tax credits to offset its U.S. income tax liabilities. Any remaining liabilities are accrued in the Company’s consolidated statements of comprehensive income and estimated tax payments are made when required by U.S. law.

 

Uncertain Tax Positions

 

The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes are classified as a component of the provisions for income taxes. The Company did not recognize any income tax due to uncertain tax positions or incur any interest and penalties related to potential underpaid income tax expense as of December 31, 2019 and 2018.

 

Comprehensive loss

 

Comprehensive loss includes net loss and cumulative foreign currency translation adjustments and is reported in the Consolidated Statement of Comprehensive Loss.

 

Loss per share

 

The loss per share is computed using the weighted average number of shares outstanding during the fiscal years. For the years ended December 31, 2019 and 2018, there was no dilutive effect due to net loss.

 

Related party transactions

 

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification 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 registrant; (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 profit-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 financial statements 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 financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) 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) amounts 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.

 

Recently issued accounting pronouncements

 

 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Topic 842 is effective for public companies for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. Originally, entities were required to adopt ASU 2016-02 using a modified retrospective approach, which required prior periods to be presented under this new standard with certain practical expedients available. However, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. The Company adopted Topic 842 as of January 1, 2019 which did not result in any impact on the Company’s financial statements as the Company did not have leases with terms longer than 12 months.

 

 In August 2018, the FASB issued ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which improves fair value disclosure requirements by removing disclosures that are not cost beneficial, clarifying disclosures’ specific requirements and adding relevant disclosure requirements. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted and an entity can choose to early adopt any removed or modified disclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date. The adoption of ASU 2018-13 is not expected to have a material impact on the consolidated financial statements.

 

In December 2019, the FASB issued ASU2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, with the intent to reduce the complexity in accounting for income taxes. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and early adoption is permitted. The accounting update removes certain exceptions to the general principles in ASC 740 as well as provides simplification by clarifying and amending existing guidance. The Company is currently assessing the impact of the new standard on the consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the Securities and Exchange Commission (“SEC”) did not, or are not believed by management, to have a material impact on the Company’s present and future consolidated financial statements.

 

Reclassification: Certain reclassifications have been made to the prior period amounts to conform to the current period’s presentation.

v3.20.1
GOING CONCERN
12 Months Ended
Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GOING CONCERN

3. GOING CONCERN

 

These consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

 

For the year ended December 31, 2019, the Company reported a net loss of $476,518 and had a working capital deficit of $4,730,288. The Company had an accumulated deficit of $9,587,918 as of December 31, 2019.

 

The continuation of the Company as a going concern is dependent upon improving the profitability and the continuing financial support from its stockholders or other capital sources. Management believes that the continuing financial support from the existing shareholders or external debt financing will provide the additional cash to meet the Company’s obligations as they become due. There is no certainty that further funding will be available as needed. These factors raise substantial doubt about the ability of the Company to continue operating as a going concern.

 

In March 2020 the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. The impact on the Company is not currently determinable but management continues to monitor the situation. 

 

These consolidated 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 from the outcome of the Company’s ability to continue as a going concern.

v3.20.1
OTHER RECEIVABLES, PREPAYMENTS AND OTHER CURRENTASSETS
12 Months Ended
Dec. 31, 2019
Other Receivables And Other Assets  
OTHER RECEIVABLES, PREPAYMENTS AND OTHER CURRENTASSETS

4. OTHER RECEIVABLES, PREPAYMENTS AND OTHER CURRENT ASSETS

 

Other receivables, prepayments and other current assets consist of the following:

 

   As of 
December 31,
2019
  As of 
December 31,
2018
       
 Deposits (1)   $20,824   $47,161 
 Prepayments (2)    9,203    8,555 
 Others (3)    532    238 
     $30,559   $55,954 

 

(1)         Deposits represented payments for rental, utilities and deposit payment to product suppliers.

(2)         Prepayments mainly consists of prepayment for insurance and IT related fees.

(3)         Others mainly consists other miscellaneous payments

v3.20.1
LONG-TERM INVESTMENT
12 Months Ended
Dec. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]  
LONG-TERM INVESTMENT

5. LONG-TERM INVESTMENT

 

   As of 
December 31,
2019
  As of 
December 31,
2018
       
Investment in associated companies          
Vitaxel Corporation Thailand Co., Ltd (1)          
Cost  $27,539   $27,539 
Share of loss in investment in an associated company   (25,716)   (25,716)
Foreign currency translation adjustment   (1,823)   (1,823)
Total investment in associated companies   —     $—   
           
Other long-term investments          
Ho Wah Genting Group Ltd (2)          
Cost  $629,151   $629,151 
Impairment on carrying amount   (612,056)   (612,056)
Foreign currency translation adjustment   17,095    17,095 
Total other long-term investments  $—     $—   
Total Long-Term Investments  $—     $—   

 

(1)         On April 20, 2016, the Company invested 958,000 Thai Baht or $27,539 in Vitaxel Corporation Thailand Co., Ltd., a company registered in Thailand, and holds 47.99% shares of it. The long-term investment is accounted using the equity method.

 

The Company entered into a Sale and Purchase Agreement dated July 2, 2018 to sell all the total and outstanding shares of Vitaxel Corporation Thailand Co. Ltd. for total proceeds of $10,000. The disposal has been completed as of the date of this report.

 

As of December 31, 2018, the Company has provided impairment on the amount due from Vitaxel Corporation Thailand Co., Ltd of $150,790.

 

(2)         During the year ended December 31, 2018, the Company acquired 7,663,246 shares of common stock of Ho Wah Genting Group Limited (“HWGG”), which is listed on the U.S. OTC (Pink) Market (stock code: HWGG), for consideration of MYR2,466,993 or US$629,151 from certain shareholders of HWGG. This resulted in ownership by the Company of approximately 1.53% of HWGG

 

The President of the Company, Dato’ Lim Hui Boon, is also the President of HWGG.

 

In the absence of active market participants and liquidity for HWGG stock based on the review of the trading history of this stock, management concluded that there is no active market for the stock. There is significant doubt about HWGG’s ability to continue as a going concern and thus the management deemed that the stock has no readily determinable fair value.

 

As of December 31, 2018, the Company has provided impairment of $612,056 investment of HWGG.

v3.20.1
PROPERTY, PLANT AND EQUIPMENT
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment, Net [Abstract]  
PROPERTY, PLANT AND EQUIPMENT, NET

6. PROPERTY AND EQUIPMENT

 

Property and equipment, net consist of the following:

 

   As of 
December 31,
2019
  As of 
December 31,
2018
       
Office equipment  $28,100   $36,163 
Computer equipment   101,614    72,123 
Furniture and fittings   8,123    7,557 
Electrical & fitting   —      —   
Motor vehicle   —      —   
Software and website   16,589    12,757 
Renovations   —      103,038 
    154,426    231,638 
Less: Accumulated depreciation   (92,205)   (89,908)
 Balance at end of year  $62,221   $141,730 

 

Depreciation expenses charged to the statements of loss and comprehensive loss for the years ended December 31, 2019 and 2018 were $84,512 and $51,594 respectively. 

v3.20.1
ACCRUALS AND OTHER PAYABLES
12 Months Ended
Dec. 31, 2019
Payables and Accruals [Abstract]  
ACCRUALS AND OTHER PAYABLES

 

7. ACCRUALS AND OTHER PAYABLES

 

Accruals and other payables consist of the following:

 

    As of 
December 31,
2019
    As of 
December 31,
2018
 
             
Provisions and accruals   $ 38,224     $ 67,989  
Others (1)     301,888       313,525  
 Balance at end of year   $ 340,112     $ 381,514  

 

(1)         Other payables mainly consist of members allocated redemption points and commission payable.

v3.20.1
INCOME TAX
12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
INCOME TAX

 

8. INCOME TAX

 

Income taxes consisted of Malaysia income tax and U.S. income tax. Malaysia income tax rate is 24% (2018: 24%) and United States of America income tax rate is 21% (2018: 21%). A reconciliation of income taxes at statutory rates is as follows:

 

   For the year ended
   December 31,
2019
  December 31,
2018
Loss before income tax  $(476,518)  $(2,334,926)
Statutory rate   21%   21%
Expected income tax recovery  $(100,000)  $(490,000)
Permanent difference   21,000    179,000 
Effect of change in tax rate   —      45,000 
Change in valuation allowance   79,000    266,000 
Income tax recovery  $—     $—   

  

Deferred tax assets are as follows:  

 

   For the year ended
   December 31,
2019
  December 31,
2018
Non-capital loss carry-forwards  $816,000   $761,000 
Property and equipment   24,000    —   
    840,000    761,000 
Unrecognized deferred tax assets   (840,000)   (761,000)
Current tax expenses  $—     $—   

 

Total loss carry-forward is $1,014,597 for U.S and $2,514,339 for Malaysia.

v3.20.1
RELATED PARTIES TRANSCTIONS
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
RELATED PARTIES TRANSCTIONS

9. RELATED PARTY TRANSACTIONS

 

   As of 
December 31,
2019
  As of 
December 31,
2018
Amount due from related parties          
Ho Wah Genting Berhad (1)  $5,132   $4,928 
Total Amount due from related parties  $5,132   $4,928 

 

 

Amount of due to related parties          
Ho Wah Genting Holiday Sdn Bhd (2)   —      170 
Grande Legacy Inc. (3)   4,372,855    4,862,193 
Balance at end of year   4,372,855    4,862,363 
Total Amount due to related parties  $4,372,855   $4,862,363 

 

The related parties’ balances are unsecured, interest-free and repayable on demand.

 

  (1) The President of the Company, Dato’ Lim Hui Boon, is also the Group President of Ho Wah Genting Berhad (“HWGB”), a company listed in Bursa Malaysia Main Market.

 

The Company recognized rent expenses of $16,902 (2018 - $20,840) to HWGB during the years ended December 31, 2019.

 

During the year ended December 31, 2019, the Company has mutually agreed to terminate the lease with HWGB.

  

  (2) A director of the Company, Lim Wee Kiat, is also a director of Ho Wah Genting Holiday Sdn Bhd and of Vitaxel Sdn Bhd.

 

  (3) A director of the Company, Leong Yee Ming, is also a director of Grande Legacy Inc.

 

On January 5, 2017, the Company executed a license agreement with Grande Legacy Inc (“GL”). The agreement grants GL exclusive use of Vitaxel Marks to operate a Vitaxel business in countries other than Malaysia, Singapore and Thailand. However, GL is still in the process of obtaining online payment gateway for its credit card sales, GL is currently engaging Vitaxel SB to collect credit card sales proceeds on its behalf.

 

On July 1, 2018, the Company signed an amendment to licensing agreement with GL, providing the revised terms of royalty payment. GL shall pay the Company royalty equal to 55% of net profits on a quarterly basis, commencing July 1, 2018. During the year ended December 31, 2018, the Company recognized $nil royalty income due to GL incurring losses for the six months ended December 31, 2018.

 

On July 1, 2018, Vitaxel SB has entered into a management and administrative services agreement with GL. The agreement is to provide certain management and administrative support services for the operation of GL. For these services, Vitaxel SB shall charge a monthly management fee of $40,000 to GL. For the year ended December 31, 2019 and 2018, the Company charged to GL management fee income of $480,000 and $240,000 respectively.

 

On January 1, 2019, the Company signed an amendment to licensing agreement with GL, providing the revised terms of royalty payment. GL shall pay the Company royalty equal to 4% of revenue on a quarterly basis, commencing January 1, 2019. During the year ended December 31, 2019, the Company recognized royalty income of $16,527.

 

During the year ended December 31, 2019, the Company billed GL for product sales and VTrips income of $8,031 and $72,084 respectively.

 

  (4) Total payment made in the form of compensation, which includes salary, bonus, stock awards and all other compensation have been made to the following:

 

   December 31,
2019
  December 31,
2018
       
Dato’ Lim Hui Boon  $40,000   $230,000 
Lim Wee Kiat   52,154    65,158 
Leong Yee Ming   49,256    50,612 
   $141,410   $345,770 

 

Vitaxel also paid a former director $1,500 director’s fee for the year ended December 31, 2019.

v3.20.1
COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

10. COMMITMENTS AND CONTINGENCIES

 

Capital Commitments

 

As of December 31, 2019, and 2018, Company has no capital commitments.

 

Operation Commitments

 

The total future minimum lease payments under the non-cancellable operating lease with respect to the office and the dormitory, as well as hardware trading platform as of December 31, 2019 are payable as follows:

 

2020     39,824  
Total     $ 39,824  

 

Rental expense of the Company was $76,532 and $95,364 for the years ended December 31, 2019 and 2018, respectively.

v3.20.1
SHAREHOLDERS’ EQUITY
12 Months Ended
Dec. 31, 2019
Stockholders' Equity Note [Abstract]  
VITAXEL GROUP LIMITED SHAREHOLDERS' EQUITY

 

11. SHAREHOLDERS’ EQUITY

 

The Company has 1,000,000 shares authorized for preferred stock, with 0 outstanding during the year ended December 31, 2019 and 2018.

 

The Company also has 70,000,000 shares authorized for common stock, with 54,087,903 outstanding during the year December 31, 2019 and 2018.

v3.20.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Basis of presentation

Basis of presentation

 

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred. The Company’s financial statements are expressed in U.S. dollars.

Principles of Consolidation

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its subsidiaries. On consolidation, all intercompany balances and transactions are eliminated. The Company owns 100% interest in both of its subsidiaries, Vitaxel SB and Vionmall.

Use of estimates

Use of estimates

 

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience and various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Significant areas of estimate include useful lives of property and equipment, impairment of long-term assets and deferred income tax obligations. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. 

Foreign currency translation and transactions

Foreign currency translation and transactions

 

The functional currency of the Company is the Malaysian Ringgit (“MYR”) and reporting currency of the Company is United States Dollar (“USD”). The financial statements of the Company are translated into USD using the exchange rate as of the balance sheet date for assets and liabilities and average exchange rate for the year for income and expense items. Translation gains and losses are recorded in accumulated other comprehensive income or loss as a component of shareholders’ equity.

Cash and cash equivalents

Cash and cash equivalents

 

Cash and cash equivalents consist of cash on hand and highly liquid investments, which are unrestricted from withdrawal or use, and which have original maturities of three months or less when purchased.

Accounts receivable

Accounts receivable

 

Accounts receivable are recognized and carried at original invoiced amount less an allowance for any potential uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. The Company generally does not require collateral from its customers. For the year ended December 31, 2019 and 2018, the Company write off $82 and $0 respectively of its accounts receivable as bad debts. For the year ended December 31, 2019 and 2018, the Company has provided an impairment on the amount due from HWGG of $0 and $279,810 respectively, and an impairment of $0 and $150,790 on the amount due from Vitaxel Thailand Co. Ltd respectively.

Fair value of financial instruments

Fair value of financial instruments

 

FASB ASC 820, “Fair Value Measurement,” specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs). In accordance with ASC 820, the following summarizes the fair value hierarchy:

 

Level 1 Inputs – Unadjusted quoted market prices for identical assets and liabilities in an active market that the Company has the ability to access.

 

Level 2 Inputs – Inputs other than the quoted prices in active markets that are observable either directly or indirectly.

 

Level 3 Inputs – Inputs based on prices or valuation techniques that are both unobservable and significant to the overall fair value measurements.

 

ASC 820 requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurements. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. As of December 31, 2019 and 2018, none of the Company’s assets and liabilities was required to be reported at fair value on a recurring basis. Carrying values of non-derivative financial instruments, including cash, accounts receivables, payables and accrued liabilities, approximate their fair values due to the short-term nature of these financial instruments. There were no changes in methods or assumptions during the periods presented.

Inventories

Inventories

 

Inventories consist of finished goods. Inventories are stated at lower of cost or net realizable value, with cost determined on a weighted-average method, and not to exceed net realizable value. The Company writes down its inventory balances for obsolete amounts estimated on an individual basis for the finished goods. For the year ended December 31, 2019 and 2018, the Company wrote down $23,208 and $829 respectively, of its inventories that have been obsolete.

Long-term investment

Long-term investment

 

The Company’s interests in associated companies are accounted for under equity method under U.S. GAAP. Under the equity method, if the Company’s share of losses of an associated company equals or exceeds the amount of investment plus advances made by the Company, the Company ordinarily discontinues including its share of losses and the investment is reported at nil value. If the associated company subsequently reports net income, the Company will resume applying the equity method only after its share of that net income equals the share of net losses not recognized during the period the equity method was suspended.

Property, plant and equipment, net

Property and equipment, net

 

Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives: 

  

  Office equipment 5 years    
  Computer equipment 5 years    
  Furniture and fixtures 5 years    
  Electrical & fitting 5 years    
  Motor vehicle 5 years    
  Software and website 5 years    
  Leasehold improvement 5 years    

 

The residual values, useful lives and methods of depreciation of property and equipment are reviewed and adjusted if appropriate, on an annual basis. During the financial year ended December 31, 2018, the Company has revised the estimated useful of Computer equipment and Software and website from 10 years to 5 years. During the financial year ended December 31, 2019, the Company has revised the estimated useful of all assets from 10 years to 5 years.

Revenue recognition

Revenue recognition

 

Effective January 1, 2018, the Company recognizes revenue pursuant to FASB Accounting Standards Codification 606 (“ASC 606”) Revenue from Contracts with Customers , the standard applies a five step model (i) The standard applies to a company’s contracts with customers (ii) The unit of account for revenue recognition under the new standard is a performance obligation (a good or service) and the performance obligations will be accounted for separately if they are distinct (iii) The transaction price is determined based on the amount of consideration that a company expects to be entitled to from a customer (iv) The transaction price is allocated to all the separate performance obligations in an arrangement, and (v) Revenue will be recognized when an entity satisfies each performance obligation by transferring control of the promised goods or services to the customer. Goods or services can transfer at a point in time or over time.

 

Product sales − The Company recognizes revenue when it satisfies each performance obligation by transferring control of the goods to the independent members or purchasers of the products. Product sales are recognized net of product returns, discounts and taxes. A reserve for product returns is accrued based on historical experience. There was no deferred revenue accrued as of December 31, 2019 and 2018.

 

Membership fee − The Company recognizes the membership fee revenue over the term of the membership, which is 12 months. The revenue will not be recognized until the 10 days cooling-off period is expired. For the year ended December 31, 2019 and 2018, all membership fees were waived by the Company for promotion purpose, except for only 2 renewal fees totaling to $30 recognized in December 31, 2018.

 

ASC was adopted January 1, 2018 and applied using the partial retrospective method. There was no impact from the adoption of ASC 606 on the Company’s accounting for revenue.

Commission expense

Commission expense

 

Commission expense incurred by the Company is recognized as cost of revenue and as a liability (commission payable in the consolidated balance sheet. Commission expense is not recoverable once recognized and is expensed as incurred.

Income taxes

 Income Taxes

 

Income taxes are determined using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes that date of enactment. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that it is more likely than not that some portion of the deferred tax asset will not be realized. 

U.S. Corporate Income Tax

U.S. Corporate Income Tax

 

The Company is subject to U.S. corporate income tax on its taxable income at a rate of up to 21% for taxable years beginning after December 31, 2017 and U.S. corporate income tax on its taxable income of up to 35% for prior tax years. Recent U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into law on December 22, 2017. The U.S. Tax Reform significantly modified the U.S. Internal Revenue Code by, among other things, reducing the statutory U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating many business deductions; migrating the U.S. to a territorial tax system with a one-time transition tax on a mandatory deemed repatriation of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay the one-time transition tax over eight years, or in a single lump-sum payment. See Note 8 – Income Tax.

 

To the extent that portions of its U.S. taxable income, such as Subpart F income or global intangible low-taxed income (“GILTI”), are determined to be from sources outside of the U.S., subject to certain limitations, the Company may be able to claim foreign tax credits to offset its U.S. income tax liabilities. Any remaining liabilities are accrued in the Company’s consolidated statements of comprehensive income and estimated tax payments are made when required by U.S. law.

Uncertain Tax Positions

Uncertain Tax Positions

 

The impact of an uncertain income tax position on the income tax return is recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant tax authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Interest and penalties on income taxes are classified as a component of the provisions for income taxes. The Company did not recognize any income tax due to uncertain tax positions or incur any interest and penalties related to potential underpaid income tax expense as of December 31, 2019 and 2018.

Comprehensive loss

Comprehensive loss

 

Comprehensive loss includes net loss and cumulative foreign currency translation adjustments and is reported in the Consolidated Statement of Comprehensive Loss.

Loss per share

Loss per share

 

The loss per share is computed using the weighted average number of shares outstanding during the fiscal years. For the years ended December 31, 2019 and 2018, there was no dilutive effect due to net loss.

Related party transactions

Related party transactions

 

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification 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 registrant; (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 profit-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 financial statements 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 financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) 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) amounts 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.

Recently issued accounting pronouncements

Recently issued accounting pronouncements

 

 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). Topic 842 is effective for public companies for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record a ROU asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms longer than 12 months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the statement of income. Originally, entities were required to adopt ASU 2016-02 using a modified retrospective approach, which required prior periods to be presented under this new standard with certain practical expedients available. However, in July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which allows entities the option of recognizing the cumulative effect of applying the new standard as an adjustment to the opening balance of retained earnings in the year of adoption while continuing to present all prior periods under previous lease accounting guidance. The Company adopted Topic 842 as of January 1, 2019 which did not result in any impact on the Company’s financial statements as the Company did not have leases with terms longer than 12 months.

 

 In August 2018, the FASB issued ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which improves fair value disclosure requirements by removing disclosures that are not cost beneficial, clarifying disclosures’ specific requirements and adding relevant disclosure requirements. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted and an entity can choose to early adopt any removed or modified disclosures upon issuance of this ASU and delay adoption of the additional disclosures until their effective date. The adoption of ASU 2018-13 is not expected to have a material impact on the consolidated financial statements.

 

In December 2019, the FASB issued ASU2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, with the intent to reduce the complexity in accounting for income taxes. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and early adoption is permitted. The accounting update removes certain exceptions to the general principles in ASC 740 as well as provides simplification by clarifying and amending existing guidance. The Company is currently assessing the impact of the new standard on the consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the Securities and Exchange Commission (“SEC”) did not, or are not believed by management, to have a material impact on the Company’s present and future consolidated financial statements.

Reclassification

Reclassification: Certain reclassifications have been made to the prior period amounts to conform to the current period’s presentation.

v3.20.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
12 Months Ended
Dec. 31, 2019
Accounting Policies [Abstract]  
Schedule of property, plant and equipment estimated useful lives

Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the following estimated useful lives: 

  

  Office equipment 5 years    
  Computer equipment 5 years    
  Furniture and fixtures 5 years    
  Electrical & fitting 5 years    
  Motor vehicle 5 years    
  Software and website 5 years    
  Leasehold improvement 5 years    
v3.20.1
OTHER RECEIVABLES, PREPAYMENTS AND OTHER CURRENTASSETS (Tables)
12 Months Ended
Dec. 31, 2019
Other Receivables And Other Assets  
Schedule of other receivables and other assets

Other receivables, prepayments and other current assets consist of the following:

 

   As of 
December 31,
2019
  As of 
December 31,
2018
       
 Deposits (1)   $20,824   $47,161 
 Prepayments (2)    9,203    8,555 
 Others (3)    532    238 
     $30,559   $55,954 

 

(1)         Deposits represented payments for rental, utilities and deposit payment to product suppliers.

(2)         Prepayments mainly consists of prepayment for insurance and IT related fees.

(3)         Others mainly consists other miscellaneous payments

v3.20.1
LONG-TERM INVESTMENT (Tables)
12 Months Ended
Dec. 31, 2019
Equity Method Investments and Joint Ventures [Abstract]  
Schedule of long-term investment

   As of 
December 31,
2019
  As of 
December 31,
2018
       
Investment in associated companies          
Vitaxel Corporation Thailand Co., Ltd (1)          
Cost  $27,539   $27,539 
Share of loss in investment in an associated company   (25,716)   (25,716)
Foreign currency translation adjustment   (1,823)   (1,823)
Total investment in associated companies   —     $—   
           
Other long-term investments          
Ho Wah Genting Group Ltd (2)          
Cost  $629,151   $629,151 
Impairment on carrying amount   (612,056)   (612,056)
Foreign currency translation adjustment   17,095    17,095 
Total other long-term investments  $—     $—   
Total Long-Term Investments  $—     $—   

 

(1)         On April 20, 2016, the Company invested 958,000 Thai Baht or $27,539 in Vitaxel Corporation Thailand Co., Ltd., a company registered in Thailand, and holds 47.99% shares of it. The long-term investment is accounted using the equity method.

 

The Company entered into a Sale and Purchase Agreement dated July 2, 2018 to sell all the total and outstanding shares of Vitaxel Corporation Thailand Co. Ltd. for total proceeds of $10,000. The disposal has been completed as of the date of this report.

 

As of December 31, 2018, the Company has provided impairment on the amount due from Vitaxel Corporation Thailand Co., Ltd of $150,535.

 

(2)         During the year ended December 31, 2018, the Company acquired 7,663,246 shares of common stock of Ho Wah Genting Group Limited (“HWGG”), which is listed on the U.S. OTC (Pink) Market (stock code: HWGG), for consideration of MYR2,466,993 or US$629,151 from certain shareholders of HWGG. This resulted in ownership by the Company of approximately 1.53% of HWGG

v3.20.1
PROPERTY, PLANT AND EQUIPMENT (Tables)
12 Months Ended
Dec. 31, 2019
Property, Plant and Equipment, Net [Abstract]  
Schedule of property, plant and equipment, net

Property and equipment, net consist of the following:

 

   As of 
December 31,
2019
  As of 
December 31,
2018
       
Office equipment  $28,100   $36,163 
Computer equipment   101,614    72,123 
Furniture and fittings   8,123    7,557 
Electrical & fitting   —      —   
Motor vehicle   —      —   
Software and website   16,589    12,757 
Renovations   —      103,038 
    154,426    231,638 
Less: Accumulated depreciation   (92,205)   (89,908)
 Balance at end of year  $62,221   $141,730 
v3.20.1
ACCRUALS AND OTHER PAYABLES (Tables)
12 Months Ended
Dec. 31, 2019
Payables and Accruals [Abstract]  
Schedule of accruals and other payables

Accruals and other payables consist of the following:

 

    As of 
December 31,
2019
    As of 
December 31,
2018
 
             
Provisions and accruals   $ 38,224     $ 67,989  
Others (1)     301,888       313,525  
 Balance at end of year   $ 340,112     $ 381,514  

 

(1)         Other payables mainly consist of members allocated redemption points and commission payable.

v3.20.1
INCOME TAX (Tables)
12 Months Ended
Dec. 31, 2019
Disclosure Text Block [Abstract]  
Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of income taxes at statutory rates is as follows:

 

   For the year ended
   December 31,
2019
  December 31,
2018
Loss before income tax  $(476,518)  $(2,334,926)
Statutory rate   21%   21%
Expected income tax recovery  $(100,000)  $(490,000)
Permanent difference   21,000    179,000 
Effect of change in tax rate   —      45,000 
Change in valuation allowance   79,000    266,000 
Income tax recovery  $—     $—   
Schedule of Deferred Tax Assets

Deferred tax assets are as follows:  

 

   For the year ended
   December 31,
2019
  December 31,
2018
Non-capital loss carry-forwards  $816,000   $761,000 
Property and equipment   24,000    —   
    840,000    761,000 
Unrecognized deferred tax assets   (840,000)   (761,000)
Current tax expenses  $—     $—   
v3.20.1
RELATED PARTY TRANSACTIONS (Tables)
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Schedule of related party transactions

   As of 
December 31,
2019
  As of 
December 31,
2018
Amount due from related parties          
Ho Wah Genting Berhad (1)  $5,132   $4,928 
Total Amount due from related parties  $5,132   $4,928 

 

 

Amount of due to related parties          
Ho Wah Genting Holiday Sdn Bhd (2)   —      170 
Grande Legacy Inc. (3)   4,372,855    4,862,193 
Balance at end of year   4,372,855    4,862,363 
Total Amount due to related parties  $4,372,855   $4,862,363 

 

The related parties’ balances are unsecured, interest-free and repayable on demand.

 

  (1) The President of the Company, Dato’ Lim Hui Boon, is also the Group President of Ho Wah Genting Berhad (“HWGB”), a company listed in Bursa Malaysia Main Market.

 

The Company recognized rent expenses of $16,902 (2018 - $20,840) to HWGB during the years ended December 31, 2019.

 

During the year ended December 31, 2019, the Company has mutually agreed to terminate the lease with HWGB.

  

  (2) A director of the Company, Lim Wee Kiat, is also a director of Ho Wah Genting Holiday Sdn Bhd and of Vitaxel Sdn Bhd.

 

  (3) A director of the Company, Leong Yee Ming, is also a director of Grande Legacy Inc.

 

On January 5, 2017, the Company executed a license agreement with Grande Legacy Inc (“GL”). The agreement grants GL exclusive use of Vitaxel Marks to operate a Vitaxel business in countries other than Malaysia, Singapore and Thailand. However, GL is still in the process of obtaining online payment gateway for its credit card sales, GL is currently engaging Vitaxel SB to collect credit card sales proceeds on its behalf.

 

On July 1, 2018, the Company signed an amendment to licensing agreement with GL, providing the revised terms of royalty payment. GL shall pay the Company royalty equal to 55% of net profits on a quarterly basis, commencing July 1, 2018. During the year ended December 31, 2018, the Company recognized $nil royalty income due to GL incurring losses for the six months ended December 31, 2018.

 

On July 1, 2018, Vitaxel SB has entered into a management and administrative services agreement with GL. The agreement is to provide certain management and administrative support services for the operation of GL. For these services, Vitaxel SB shall charge a monthly management fee of $40,000 to GL. For the year ended December 31, 2019 and 2018, the Company charged to GL management fee income of $480,000 and $240,000 respectively.

 

On January 1, 2019, the Company signed an amendment to licensing agreement with GL, providing the revised terms of royalty payment. GL shall pay the Company royalty equal to 4% of revenue on a quarterly basis, commencing January 1, 2019. During the year ended December 31, 2019, the Company recognized royalty income of $16,527.

 

During the year ended December 31, 2019, the Company billed GL for product sales and VTrips income of $8,031 and $72,084 respectively.

 

  (4) Total payment made in the form of compensation, which includes salary, bonus, stock awards and all other compensation have been made to the following:

 

   December 31,
2019
  December 31,
2018
       
Dato’ Lim Hui Boon  $40,000   $230,000 
Lim Wee Kiat   52,154    65,158 
Leong Yee Ming   49,256    50,612 
   $141,410   $345,770 
v3.20.1
COMMITMENTS AND CONTINGENCIES (Tables)
12 Months Ended
Dec. 31, 2019
Commitments and Contingencies Disclosure [Abstract]  
Schedule of future minimum lease payments under the non-cancellable operating lease

The total future minimum lease payments under the non-cancellable operating lease with respect to the office and the dormitory, as well as hardware trading platform as of December 31, 2019 are payable as follows:

 

2020     39,824  
Total     $ 39,824  
v3.20.1
ORGANIZATION AND BUSINESS (Details Narrative)
12 Months Ended
Dec. 31, 2019
Vitaxel SDN BHD [Member]  
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]  
Date of incorporation Aug. 10, 2012
State of incorporation Malaysia
Vitaxel Online Mall SDN BHD [Member]  
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]  
Date of incorporation Sep. 22, 2015
State of incorporation Malaysia
v3.20.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)
12 Months Ended
Dec. 31, 2019
Office Equipment [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives P5Y
Computer Equipment [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives P5Y
Furniture and Fixtures [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives P5Y
Electrical and Fitting [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives P5Y
Motor Vehicle [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives P5Y
Software and Website [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives P5Y
Leasehold Improvements [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful lives P5Y
v3.20.1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Accounting Policies [Abstract]    
Accounts receivable write offs $ 82
Inventories written down $ 23,208 $ 829
Dilutive shares 0 0
Impairment on amount due from related parties $ (279,810)
Impairment on amount due from associate company (150,790)
Renewal fees   $ 30
Statutory U.S. federal corporate income tax rate 21.00% 35.00%
Interest and penalties $ 0 $ 0
Deferred revenue accrued $ 0 $ 0
v3.20.1
GOING CONCERN (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]    
Net Loss $ (476,518) $ (2,334,926)
Working capital deficit (4,730,288)  
Accumulated deficit $ (9,587,918) $ (9,111,400)
v3.20.1
OTHER RECEIVABLES, PREPAYMENTS AND OTHER CURRENT ASSETS (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Beedo SDN BHD [Member]    
Deposits [1] $ 20,824 $ 47,161
Prepayments [2] 9,203 8,555
Others [3] 532 238
Total other receivables, prepayments and other current assets $ 30,559 $ 55,954
[1] Deposits represented payments for rental, utilities and deposit payment to product suppliers.
[2] Prepayments mainly consists of prepayment for insurance and IT related fees.
[3] Others mainly consists other miscellaneous payments
v3.20.1
LONG-TERM INVESTMENT (Details) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Apr. 20, 2016
Impairment on carrying amount $ 612,056  
Vitaxel Corp Thailand, Ltd [Member]      
Long-term investment - cost 27,539 [1] 27,539 [1] $ 27,539
Share of loss in investment in an associated company (25,716) (25,716)  
Foreign currency translation adjustment (1,823) (1,823)  
Total investment in associated companies  
Ho Wah Genting Group Ltd [Member]      
Long-term investment - cost [2] 629,151 629,151  
Impairment on carrying amount (612,056) (612,056)  
Foreign currency translation adjustment 17,095 17,095  
Total other long-term investments  
Long-term investment  
[1] On April 20, 2016, the Company invested 958,000 Thai Baht or $27,539 in Vitaxel Corporation Thailand Co., Ltd., a company registered in Thailand, and holds 47.99% shares of it. The long-term investment is accounted using the equity method.
[2] During the year ended December 31, 2018, the Company acquired 7,663,246 shares of common stock of Ho Wah Genting Group Limited ('HWGG'), which is listed on the U.S. OTC (Pink) Market (stock code: HWGG), for consideration of MYR2,466,993 or US$629,151 from certain shareholders of HWGG. This resulted in ownership by the Company of approximately 1.53% of HWGG
v3.20.1
LONG-TERM INVESTMENT (Details Narrative) - USD ($)
12 Months Ended
Jul. 02, 2018
Dec. 31, 2019
Dec. 31, 2018
Apr. 20, 2016
Impairment   $ 23,208 $ 612,056  
Vitaxel Corp Thailand, Ltd [Member]        
Long-term investment -cost   27,539 [1] 27,539 [1] $ 27,539
Ownership percentage       47.99%
Proceeds from sale of shares $ 10,000      
Impairment     150,790  
Vitaxel Corp Thailand, Ltd [Member] | Thailand, Baht [Member]        
Long-term investment -cost       $ 958,000
Ho Wah Genting Group Ltd [Member]        
Long-term investment -cost [2]   $ 629,151 $ 629,151  
Ownership percentage     1.53%  
Impairment     $ 612,056  
Stock Issued During Period, Shares, Acquisitions     7,663,246  
Stock Issued During Period, Value, Acquisitions     $ 597,335  
[1] On April 20, 2016, the Company invested 958,000 Thai Baht or $27,539 in Vitaxel Corporation Thailand Co., Ltd., a company registered in Thailand, and holds 47.99% shares of it. The long-term investment is accounted using the equity method.
[2] During the year ended December 31, 2018, the Company acquired 7,663,246 shares of common stock of Ho Wah Genting Group Limited ('HWGG'), which is listed on the U.S. OTC (Pink) Market (stock code: HWGG), for consideration of MYR2,466,993 or US$629,151 from certain shareholders of HWGG. This resulted in ownership by the Company of approximately 1.53% of HWGG
v3.20.1
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Property, Plant and Equipment [Line Items]    
Balance at beginning of period/year $ 154,426 $ 231,638
Less: Accumulated depreciation (92,205) (89,908)
Balance at end of period/year 62,221 141,730
Office Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Balance at beginning of period/year 28,100 36,163
Computer Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Balance at beginning of period/year 101,614 72,123
Furniture and Fixtures [Member]    
Property, Plant and Equipment [Line Items]    
Balance at beginning of period/year 8,123 7,557
Electrical and Fitting [Member]    
Property, Plant and Equipment [Line Items]    
Balance at beginning of period/year
Motor Vehicle [Member]    
Property, Plant and Equipment [Line Items]    
Balance at beginning of period/year
Software and Website [Member]    
Property, Plant and Equipment [Line Items]    
Balance at beginning of period/year 16,589 12,757
Renovations [Member]    
Property, Plant and Equipment [Line Items]    
Balance at beginning of period/year $ 103,038
v3.20.1
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Property, Plant and Equipment, Net [Abstract]    
Depreciation expenses $ 84,512 $ 51,594
v3.20.1
ACCRUALS AND OTHER PAYABLES (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Payables and Accruals [Abstract]    
Provisions and accruals $ 38,224 $ 67,989
Others [1] 301,888 313,525
Balance at end of year $ 340,112 $ 381,514
[1] Other payables mainly consist of members allocated redemption points and commission payable.
v3.20.1
INCOME TAX (Details) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Disclosure Text Block [Abstract]    
Profit (loss) before income tax $ (476,518) $ (2,334,926)
Statutory rate 21.00% 21.00%
Expected income tax recovery $ (100,000) $ (490,000)
Permanent difference 21,000 179,000
Effect of change in tax rate 45,000
Change in valuation allowance 79,000 266,000
Income tax recovery
v3.20.1
INCOME TAX (Details 1) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Disclosure Text Block [Abstract]    
Non-capital loss carry-forwards $ 816,000 $ 761,000
Property and equipment 24,000
Deferred Tax Assets, Gross 840,000 761,000
Unrecognized deferred tax assets (840,000) (761,000)
Current tax expenses
v3.20.1
INCOME TAX (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Malaysia [Member]    
Loss carryforwards $ 2,514,339  
Income tax rate (in percent) 24.00% 24.00%
United States of America [Member]    
Loss carryforwards $ 1,014,597  
Income tax rate (in percent) 21.00% 21.00%
v3.20.1
RELATED PARTIES TRANSCTIONS (Details) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Amount of due from related parties $ 5,132 $ 4,928
Ho Wah Genting Berhad [Member]    
Amount of due from related parties $ 5,132 $ 4,928
v3.20.1
RELATED PARTIES TRANSCTIONS (Details 1) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Due to a related party $ 4,372,855 $ 4,862,363
Ho Wah Genting Holiday Sdn. Bhd [Member]    
Due to a related party 0 170
Grande Legacy Inc [Member]    
Due to a related party $ 4,372,855 $ 4,862,193
v3.20.1
RELATED PARTIES TRANSCTIONS (Details 2) - USD ($)
Dec. 31, 2019
Dec. 31, 2018
Amount due from director $ 141,410 $ 345,770
Dato Lim Hui Boon [Member]    
Amount due from director 40,000 230,000
Lim Wee Kiat [Member]    
Amount due from director 52,154 65,158
Leong Yee Ming [Member]    
Amount due from director $ 49,256 $ 50,612
v3.20.1
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
12 Months Ended
Jan. 02, 2019
Jul. 01, 2018
Dec. 31, 2019
Dec. 31, 2018
Rent expenses     $ 76,532 $ 95,364
Description of debt     Interest-free and repayable on demand  
Grande Legacy Inc [Member]        
Royalty income     $ 16,527  
Management fee income     480,000 240,000
Percentage of royality 4.00% 55.00%    
Product sales     8,031  
Ho Wah Genting Berhad [Member]        
Rent expenses     16,902 $ 20,840
VTrips [Member]        
Income     72,084  
Former Director [Member]        
Director’s fee     $ 1,500  
v3.20.1
COMMITMENTS AND CONTINGENCIES (Details)
Dec. 31, 2019
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Year ending December 31, 2020 $ 39,824
Total $ 39,824
v3.20.1
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)
12 Months Ended
Dec. 31, 2019
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]    
Rental expense $ 76,532 $ 95,364
v3.20.1
SHAREHOLDERS' EQUITY (Details Narrative) - shares
Dec. 31, 2019
Dec. 31, 2018
Stockholders' Equity Note [Abstract]    
Preferred stock, authorized 1,000,000 1,000,000
Preferred stock, outstanding 0 0
Common stock, authorized 70,000,000 70,000,000
Common stock, outstanding 54,087,903 54,087,903