TRANS GLOBAL GROUP INC. Item 1.01 Entry into Material Definitive Agreement
OnAugust 8, 2022 ,Trans Global Group Inc. ("TGGI," or the "Company") entered into a share exchange agreement (the "Share Exchange Agreement") withZXG Holdings Limited ("ZXGBVI"), a BVI Business company. the sole shareholder of ZXGBVI,Southsea Global Limited . ("Southsea"), aBVI Business Company , which is wholly 100% owned by Mrs.Woo Shuk Fan ("Woo"), and Woo, as the officer, director and shareholder of Southsea. Under the Share Exchange Agreement, One Hundred Percent (100%) of the ownership interest of ZXGBVI was exchanged for 1,465,761,689 shares of common stock of the Company at the Closing issued to the Southsea. The transaction has been accounted for as a recapitalization of the Company, whereby TGGI is the accounting acquirer. Immediately after completion of such share exchange, the Company will have a total of 21,838,187,608 issued and outstanding shares, with authorized share capital for common share of 99,995,000,000.
Consequently, the Company has ceased to fall under the definition of shell company as define in Rule 12b-2 under the Exchange Act of 1934, as amended (the "Exchange Act") and ZXGBVI is now a wholly-owned subsidiary.
Item 2.01 Completion of Acquisition or Disposition of Assets
As described in Item 1.01 above, onAugust 8, 2022 , we acquired all the issued and outstanding shares of ZXGBVI pursuant to the Share Exchange Agreement and ZXGBVI became our wholly-owned subsidiary.
As a result of the acquisition of all of the issued and outstanding shares of ZXGBVI, we have now assumed ZXGBVI's business operations as our own.
1
FORM 10 DISCLOSURE
As mentioned in Item 1.01, on August 8, 2022 , the Company effectively acquired
ZXGBVI in a reverse merger business combination transaction and of which the
Company was a shell company prior to such acquisition is now entering into a
business combination, other than a business combination with a shell company, as
those terms are defined in Rule 12b-2 under the Exchange Act, according to Item
2.01(f) of Form 8-K, the registrant is required to disclose the information that
would be required if the registrant were filing a general form for registration
of securities under the Exchange Act on Form 10.
We hereby provide below information that would be included in a Form 10
registration statement.
Description of Businesses
Corporate History
Trans Global Group, Inc. (the "Company") was originally incorporated in Colorado
on April 2, 1979 as Teletek, Inc. On September 23, 2020 , Matthew Dwyer , the
Company, and Chen Ren entered into that certain Stock Purchase Agreement,
pursuant to which Dwyer agreed to return 200,000 shares of Series AA Preferred
stock, par value $0.0001 per share to treasury for $150,000 , and the Company
agreed to issue 20,000 shares of Series B Preferred Stock, of the Company
representing approximately 93% of the outstanding voting power to Chen Ren . And
Matthew Dwyer resigned as sole officer of the Company (including as President,
Chief Executive Officer, Secretary and Treasure) and Chen Ren was appointed as
sole officer of the Company (including as President, Chief Executive Officer,
Secretary and Treasure) on the same date.
On April 20, 2022 , Woo became the sole member of Southsea in Birtish Virgin
Islands. Woo, in turn, incorporated ZXGBVI in Birtish Virgin Islands on May 16,
2022 . Woo then acquired Hong Kong Zuixiangui International Holding Co Ltd
("ZXGHK") on June 1, 2022 , and Zui Xian Gui International Holding (Shenzhen)
Co., Ltd ("ZXGWOFE") and reorganized these entities with ZXGBVI being a holding
entity and the only shareholder. As a result of the reorganization, ZXGBVI owns
100% interest in ZXGHK and ZXGHK owns 100% interest in ZXGWOFE and ZXGWOFEowns 100% interest in ZXGSZ. OnAugust 8, 2022 , we consummated a share exchange pursuant to a Share Exchange Agreement among the Company, ZXGBVI and Southsea, pursuant to which we acquired all the ordinary shares of ZXGBVI in exchange for the issuance to Southsea of an aggregate of 1,465,761,690 shares of the Company. As a result of the transactions contemplated by the Share Exchange, ZXGBVI became a wholly-owned subsidiary of the Company. Such reorganization was completed onAugust 8, 2022 . 2 Business OverviewTrans Global Group Inc. ("TGGI" or the "Company") is a US holding company incorporated inDelaware . We conduct our business through our PRC subsidiary "Shenzhen Zui Xian Gui Brewery Technology Limited " ("ZXGSZ"), which is a wine distribution and retail sales company based inGuangdong province,China . With the mission to let the world taste Chinese wine, and let the world fall in love with "ZuiXianGui". Through the offline and online promotion, we hope to deepen the customers' impression of the brand and the promote sales.
"Zui Xian Gui ???", the brand name was founded by Mr.Ren Chen , a famous singer and post-80s entrepreneur. He insisted on building Chinese flavored liquor and a Chinese liquor culture, building the brand with special quality and multi liquor culture, and striving to create a healthy and good wine belonging toChina and the world. ZXGSZ was principally engaged in the distribution and retail of the liquor for theChina market, through online and offline channels. ZXGSZ was found inApril 2019 , has a total of 18 full-time employees as of the date of this report. Its headquarters are located inShenzhen City,China , where it leased one principal executive office of 620 square meters and it has 162 distributors covering 136 cities inChina . We have five kinds of liquor series products with 53%vol and 500ml, including Zui Xian Gui International Classic, Zui Xian Gui International Premium, Zui Xian Gui International Collection,
MOGU DAXIA and DangBing DeRen.
As the date of this report, ZXGSZ is not a party to, and it is not aware of any
threat of, any legal proceeding that, in the opinion of its management, is
likely to have a material adverse effect on its business, financial condition or
operations.
3
Regulations
This section summarizes the principal PRC laws, rules and regulations related to our business and operations.
Regulations Relating to Food Business Operations
We operate our business inChina under a legal regime consisting of theNational People's Congress , which is the country's highest legislative body; theState Council , which is the highest authority of the executive branch of the PRC . . .
Item 3.02 Unregistered Sales of
Reference is made to the disclosure made under Item 1.01 which is incorporated herein by reference.
Item 5.06 Change in Shell Company Status
Prior to the Share Exchange, we were a "shell company" (as such term is defined in Rule 12b-2 under the Exchange Act). As a result of the Share Exchange, we have ceased to be a shell company. The information contained in this Report constitutes the current "Form 10 information" necessary to satisfy the conditions contained in Rule 144(i)(2) under the Securities Act.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statement of Business Acquired
The audited financial statements ofZXG Holdings Limited as ofDecember 31, 2021 and 2020 are appended to this report beginning on page 40. The audited financial statements ofZXG Holdings Limited as ofDecember 31, 2021 and 2020 were audited byEnrome LLP . 39 [[Image Removed]] Report of Independent Registered Public Accounting Firm To the Shareholders and Board ofDirectors Trans Global Group Inc. and Its Subsidiaries
Opinion on the Financial Statements
We have audited the accompanying Combined balance sheets ofZXG Holdings Limited (the Target Group) as ofDecember 31, 2021 and 2020 and the related Combined statement of income and other comprehensive loss, change in shareholders' deficit and cash flows for the years endedDecember 31, 2021 and 2020, and related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the Combined financial position of the Target Group atDecember 31, 2021 and 2020, and the Combined results of its operations and its cash flows for the years endedDecember 31, 2021 and 2020, in conformity with accounting principles generally accepted inthe United States of America (U.S. GAAP).
Substantial doubt about the Target Group's ability to continue as a going concern
The accompanying consolidated financial statements have been prepared assuming that Target Group will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Target Group has net current liabilities of$856,588 and stockholders' deficit of$770,687 . These factors raise substantial doubt about the Target Group's ability to continue as a going concern. Management's plans in regard to this matter are also discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Target Group's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with thePublic Company Accounting Oversight Board (United States ) ("PCAOB") and are required to be independent with respect to the Target Group in accordance with theU.S. federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Target Group is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Target Group's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis
for our opinion. /s/Enrome LLP
We have served as the Target Group's auditor since 2022.
Singapore August 08, 2022 40 ZXG HOLDINGS LIMITED CONSOLIDATED BALANCE SHEETS AS OFDECEMBER 31, 2021 AND 2020 As ofDecember 31, 2021 2020 Assets Current assets
Cash and cash equivalents$ 303,143 $ 190 Accounts receivable 47,584 - Prepayments 170,372 - Other receivables, net 401,554 431,192 Amount due from the related parties 51,250 46,824 Total current assets 973,903 478,206 Non-current assets Operating lease right-of-use assets 146,549 - Total Assets$ 1,120,452 $ 478,206 Liabilities and Stockholders' Deficit Current liabilities Accounts payable, net$ 402,826 $ - Accrued liabilities 32,890 9,704 Customer advances 1,307,359 1,249,646 Amount due to the related parties 1,200 1,532 Operating lease obligations - current 86,216 - Total current liabilities 1,830,491 1,260,882 Non-current liabilities Operating lease obligations- non-current 60,648 - Total Liabilities 1,891,139 1,260,882 Stockholders' Deficit Paid in capital 339,774 339,774 Accumulated other comprehensive loss (55,464 ) (34,290
) Accumulated deficit (1,054,997 ) (1,088,160 ) Total stockholders' deficit (770,687 ) (782,676 )
Total Liabilities and Stockholders' Deficit$ 1,120,452 $ 478,206 The accompanying notes are an integral part of these financial statements. 41 ZXG HOLDINGS LIMITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020 Year ended December 31, 2021 2020 Revenues$ 2,445,552 $ 286,509 Cost of revenues 602,919 46,731 Gross profit 1,842,633 239,778 Operating expenses: Selling and marketing expenses 1,523,108 1,095,984 General and administrative expenses 297,207 143,991 Operating expenses 1,820,315 1,283,975 Operating income (loss) 22,318 (1,044,197 ) Other income (expenses): Other income 11,272 1,141 Interest income 268 81 Other expenses (695 ) (407 ) Other income, net 10,845 815
Income (loss) before income tax 33,163 (1,043,382 ) Income tax expense - - Net income (loss)$ 33,163 $ (1,043,382 ) Other comprehensive income (loss): Foreign currency translation income (loss) (21,174 ) (36,547 ) Total comprehensive income (loss)$ 11,989 $ (1,079,929 ) The accompanying notes are an integral part of these financial statements. 42 ZXG HOLDINGS LIMITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020 Accumulated Total Other Stockholders' Paid-in Comprehensive Accumulated Equity Capital Income (Loss) Deficit (Deficit) Balance as of December 31, 2019$ 114,719 $ 2,257 $ (44,778 ) $ 72,198 Additional paid-in capital during the year 2021 225,055 - - 225,055 Net loss - - (1,043,382 ) (1,043,382 ) Foreign currency translation adjustment - (36,547 ) - (36,547 ) Balance as of December 31, 2020$ 339,774 $ (34,290 ) $ (1,088,160 ) $ (782,676 ) Net income - - 33,163 33,163 Foreign currency translation adjustment - (21,174 ) - (21,174 ) Balance as of December 31, 2021$ 339,774 $ (55,464 )
$ (1,054,997 ) $ (770,687 ) The accompanying notes are an integral part of these financial statements. 43 ZXG HOLDINGS LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020 Year ended December 31, 2021 2020 Cash flows from operating activities Net income (loss)$ 33,163 $ (1,043,382 ) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Non-cash lease expenses 30,091 - Changes in operating assets and liabilities Accounts receivable (46,866 ) - Prepayments (167,800 ) Other receivables, net 40,785 (341,815 ) Inventories - 6,664 Accounts payable 396,745 -
Accrued liabilities and other payables 22,575
1,845
Customer advances 23,241 1,178,888
Operating lease obligations (27,221 ) -Net cash provided by (used in) operating activities 304,713
(197,800 )
Cash flows from investing activities Advanced to the related parties (3,100 ) (35,119 ) Net cash used in investing activities (3,100
) (35,119 )
Cash flows from financing activities Investment from immediate holding company -
225,055
Advanced from the related parties (368 ) 1,449 Net cash (used in) provided by financing activities (368
) 226,504
Effect of exchange rate changes on cash and cash equivalents 1,708
5,321
Net changes in cash and cash equivalents 302,953 (1,094 ) Cash and cash equivalents-beginning of the period 190
1,284
Cash and cash equivalents-ended of the period$ 303,143
Supplementary cash flow information: Interest paid $ - $ - Income taxes paid $ - $ -
Non-cash investing and financing activities: Expenses paid by the related parties on behalf of the Company
$ 1,550
174,501 -
The accompanying notes are an integral part of these financial statements.
44
ZXG HOLDINGS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
OnApril 20, 2022 , Mrs.Woo Shuk Fan (Mrs. Woo ) to be the member ofSouthsea Global Limited inBritish Virgin Islands .Mrs. Woo in turn incorporatedZXG Holding Ltd ("ZXGBVI") in Birtish Virgin Islands onMay 16, 2022 .Mrs. Woo in turn acquiredHong Kong Zuixiangui International Holding Co Ltd ("ZXGHK") onJune 1, 2022 , andZui Xian Gui International Holding (Shenzhen) Co., Ltd ("ZXGWOFE") and reorganized these entities with ZXGBVI being a holding entity with the solely shareholder. As a result of the reorganization, ZXGBVI owns 100% interest in ZXGHK and ZXGHK owns 100% interest in ZXGWOFE and ZXGWOFE owns
100% interest in ZXGSZ. OnJune 30, 2022 , we consummated a share exchange pursuant to a Share Exchange Agreement among the Company, ZXGBVI and the shareholder of ZXGBVI, pursuant to which we acquired all the ordinary shares of ZXGBVI in exchange for the issuance to the shareholder of ZXGBVI of an aggregate of 1,465,761,690 shares of the Company. The shareholder a selling shareholder in this report and is not an affiliate. As a result of the transactions contemplated by the Share Exchange, ZXGBVI became a wholly-owned subsidiary of the Company. Such reorganization
was completed onJune 30, 2022 .
The Company's year-end is
NOTE 2 - GOING CONCERN UNCERTAINTIES
The accompanying 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. As reflected in the accompanying consolidated financial statements, the Company has net current liabilities of$856,588 and stockholders' deficit of$770,687 as atDecember 31, 2021 . Management believes these factors raise substantial doubt about the Company's ability to continue as a going concern for the next twelve months.
The continuation of the Company as a going concern through the next twelve months is dependent upon (1) the continued financial support from its stockholders or its ability to obtain external financing, and (2) further implement management's business plan to extend its operations and generate sufficient revenues to meet its obligations. While the Company believes in the viability of its strategy to increase sales volume and in its ability to raise additional funds, there can be neither any assurances to that effect, nor any assurance that the Company will be successful in securing sufficient funds
to sustain the operations. These conditions 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 effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provides the opportunity for the Company to continue as a going concern.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with theFinancial Accounting Standards Board ("FASB") "FASB Accounting Standard Codification™" (the "Codification") which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") inthe United States . Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and fulfilment of obligations in the normal course of business. The realization of assets and fulfilment of obligations in the normal course of business is dependent on, among other things, the Company's ability to generate sufficient cash flows from operations, and the Company's ability to arrange adequate financing arrangements. Because the Company does not expect that existing operational cash flow will be sufficient to fund presently anticipated operations, this raises substantial doubt about the Company's ability to continue as a going concern. Therefore, the Company will need to raise additional funds and is currently exploring alternative sources of financing. The Company will be required to continue to do so until its operations become profitable. There can be no assurance that such additional financing will be available to the Company on acceptable terms or at all. Basis of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. The results of subsidiaries acquired during the respective periods are included in the consolidated statements of operations from the effective date of acquisition or up to the effective date of disposal, as appropriate. The portion of the income or loss applicable to noncontrolling interests in subsidiaries is reflected in the consolidated statements of operations. 45 As ofDecember 31, 2021 , details of the Company's major subsidiaries were as follows: Place of Entity Name Date of Incorporation Parent Entity Nature of Operation Incorporation ZXG Holdings Limited May 16, 2022 Southsea Investment holding The British ("ZXGBVI") Global Ltd. Virgin Islands ("BVI") Hong Kong Zuixiangui March 22, 2021 ZXG Holdings Investment holding Hong Kong, International Limited PRC Holding Co., Ltd. ("ZXGHK") Zui Xian Gui September 15, 2021 Hong Kong Investment holding PRC International Zuixiangui Holding (Shenzhen) International Ltd. ("ZXGWFOE") Holding Co., Ltd. Shenzhen Zui Xian July 24, 2019 Zui Xian Gui Trading of beverages PRC Gui Brewery International Technology Ltd. Holding ("ZXGSZ") (Shenzhen) Ltd. Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of 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 reporting period. The most significant estimates relate to income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
Foreign currency translation and re-measurement
The functional currency of the Company is the Chinese Renminbi ("RMB").
The Company, whose translates their accounts into the
? Assets and liabilities at the rate of exchange in effect at the balance
sheet date
? Equities at the historical rate
? Revenue and expense items at the average rate of exchange prevailing
during the period
Adjustments arising from such translations are included in accumulated other comprehensive income in stockholders' equity.
As of and for the year ended December 31,
2021 2020
Spot USD: RMB exchange rate $ 6.35510 $ 6.52860Average USD: RMB exchange rate $ 6.45250 $
6.90320
The RMB is not freely convertible into foreign currency and all foreign exchange . . .
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