UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934. |
FOR THE QUARTERLY PERIOD ENDED December 31, 2018
OR
| [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
AIS HOLDINGS GROUP, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-90019 | 36-4877329 | ||
| (State or other jurisdiction of | (Commission File Number) | (IRS Employer | ||
| incorporation) | Identification No.) |
2-41-7-336, Shinsakae Naka-ku
Nagoya-shi, Aichi, Japan
(Address of principal executive offices)
Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 3 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 3 months (or for such shorter period that the registrant was required to submit and post such files). [X] Yes [ ] No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] Emerging Growth Company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [X] No
State the number of shares outstanding of each of the issuer’s classes of common equity, as of February 13, 2019: 20,000,000 shares of common stock.
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TABLE OF CONTENTS
INDEX
PART I - FINANCIAL INFORMATION
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| ITEM 1 FINANCIAL STATEMENTS |
AIS HOLDINGS GROUP, inc.
| As of | As of | ||||
| December 31, 2018 | March 31, 2018 | ||||
| (Unaudited) | |||||
| ASSETS | |||||
| Current Assets | |||||
| Cash and cash equivalents | $ | 14,625 | $ | 11,864 | |
| Accounts receivable, trade | 8,046 | - | |||
| TOTAL CURRENT ASSETS | 22,671 | 11,864 | |||
| Non-current Assets | |||||
| Software, net | $ | 12,857 | $ | 17,962 | |
| TOTAL NON-CURRENT ASSETS | 12,857 | 17,962 | |||
| TOTAL ASSETS | $ | 35,528 | $ | 29,826 | |
| LIABILITIES AND SHAREHOLDERS' DEFICIT | |||||
| Current Liabilities | |||||
| Due to related party | $ | 99,285 | $ | 51,575 | |
| Accrued expenses | - | 1,107 | |||
| TOTAL LIABILITIES | 99,285 | 52,682 | |||
| Shareholders' Deficit | |||||
| Preferred stock ($.0001 par value, 20,000,000 shares authorized; | |||||
| none issued and outstanding as of December 31, 2018 and March 31, 2018) | - | - | |||
| Common stock ($.0001 par value, 500,000,000 shares authorized, | |||||
| 20,000,000 shares issued and outstanding as of December 31, 2018 and March 31, 2018) | 2,000 | 2,000 | |||
| Additional paid-in capital | 11,554 | 6,111 | |||
| Accumulated deficit | (76,912) | (30,876) | |||
| Accumulated other comprehensive income (loss) | (399) | (91) | |||
| TOTAL SHAREHOLDERS' DEFICIT | (63,757) | (22,856) | |||
| TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT | $ | 35,528 | $ | 29,826 | |
| The accompanying notes are an integral part of these unaudited consolidated financial statements | |||||
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| Three months | Three months | Nine months | Nine months | ||||||
| Ended | Ended | Ended | Ended | ||||||
| December 31, 2018 | December 31, 2017 | December 31, 2018 | December 31, 2017 | ||||||
| Revenues | $ | 24,144 | $ | - | $ | 72,217 | $ | - | |
| OPERATING EXPENSE | |||||||||
| General and administrative expenses | $ | 16,065 | 5,271 | $ | 113,155 | 5,996 | |||
| Total Operating Expenses | 16,065 | 5,271 | 113,155 | 5,996 | |||||
| Interest expenses | 1,721 | - | 5,098 | - | |||||
| NET INCOME (LOSS) | $ | 6,358 | $ | (5,271) | $ | (46,036) | $ | (5,996) | |
| OTHER COMPREHENSIVE INCOME (LOSS) | |||||||||
| Foreign currency translation adjustment | (2,341) | 47 | (308) | 47 | |||||
| TOTAL COMPREHENSIVE INCOME (LOSS) | $ | 4,017 | $ | (5,224) | $ | (46,344) | $ | (5,949) | |
| BASIC AND DILUTED NET INCOME (LOSS) PER COMMON SHARE | $ | 0.00 | $ | (0.00) | $ | (0.00) | $ | (0.00) | |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 | |||||
| The accompanying notes are an integral part of these unaudited consolidated financial statements | |||||||||
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AIs HOLDINGS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine months | Nine months | ||||
| Ended | Ended | ||||
| December 31, 2018 | December 31, 2017 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||
| Net loss | $ | (46,036) | $ | (5,996) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||
| Imputed interest | 5,443 | - | |||
| Depreciation expense | 4,499 | 449 | |||
| Changes in operating assets and liabilities: | |||||
| Accounts receivable | (8,046) | - | |||
| Advance payment | - | - | |||
| Accrued expenses | (1,107) | (3,425) | |||
| Capital contribution | - | 4,150 | |||
| Net cash used in operating activities | (45,247) | (4,822) | |||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||
| Purchase of software | - | (21,778) | |||
| Net cash provided by (used in) investing activities | - | (21,778) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||
| Advances from related party | 48,316 | 32,394 | |||
| Net cash provided by financing activities | 48,316 | 32,394 | |||
| Net effect of exchange rate changes on cash | (308) | 47 | |||
| Net Change in Cash and Cash Equivalents | $ | 2,761 | $ | 5,841 | |
| Cash and cash equivalents - beginning of period | 11,864 | - | |||
| Cash and cash equivalents - end of period | $ | 14,625 | $ | 5,841 | |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |||||
| Interest paid | $ | - | $ | - | |
| Income taxes paid | - | - | |||
| The accompanying notes are an integral part of these unaudited consolidated financial statements. | |||||
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AIS HOLDINGS group, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2018
(UNAUDITED)
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
AIS Holdings Group, Inc., a Delaware corporation (“the Company”) was incorporated under the laws of the State of Delaware on January 30, 2017 with the name Superb Acquisition, Inc. On June 20, 2017, we changed our name to AIS Holdings Group, Inc.
On October 25, 2017, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Takehiro Abe. Pursuant to this Agreement, on October 25, 2017 transferred to the Company, 100 shares of the common stock of AIS Japan Co., Ltd.., a Japan corporation (“AIS Japan”), which represents all of its issued and outstanding shares, in consideration of 1,000,000 JPY ($8,875).
Following the effective date of the share purchase transaction above on October 25, 2017, the Company gained a 100% interest in the issued and outstanding shares of AIS Japan’s common stock and AIS Japan became a wholly owned subsidiary of the Company. The Company is now the controlling and sole shareholder of AIS Japan.
Effective February 28, 2018, our wholly owned subsidiary, which we operate exclusively through at this time, AIS Japan, purchased a "Software Platform Package," from Herol Gaibin in the amount of 2,000,000 JPY ($18,822).
The "Software Platform Package" is source code, intended to be used as a baseline which can be expanded upon to create third party websites for companies in the cryptocurrency industry. The Company currently, and intends to continue to, lease out the source code code, known as the "Software Platform Package", to third parties. Additionally, we offer supplementary IT services to alter the source code in order to add additional features, at the request of clients, for additional fees which may vary depending on the scope of the changes. We have developed a display website, which is not operational and is used solely for display purposes, herein called “Coindesuka”, to showcase features of the object code that can be generated from the source code.
Source code is the set of instructions and statements written by a programmer using a computer programming language. This code is later translated into machine language by a compiler. The translated code is referred to as object code.
References to our “source code” throughout are synonymous with our “Software Platform Package”, “Software System Package” and “Cryptocurrency Trading Platform”. They are all one in the same.
On April 1, 2018 the Company entered into an agreement with Trend Rich Global Limited to lease the Company’s Software System package. The Software System Package is source code that can be expanded upon to create custom websites for clients in the digital currency industry.
On August 16, 2018, AIS Japan entered into a Software Development Agreement with Herol Gaibin, whereas Herol Gaibin will improve upon the Company’s existing Software Platform Package which is owned by AIS Japan. The fee to further develop the software is in amount of 5,000,000 JPY (approximately $45,000).
Our principal executive offices are located at 2-41-7-336, Shinsakae Naka-ku Nagoya-shi, Aichi, 460-0007, Japan.
The Company has elected March 31st as its fiscal year end.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidations
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Basis of Presentation
This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the 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 reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.
Related party transaction
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
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Property, Plant and Equipment
Property, plant and equipment are stated at cost less depreciation and impairment loss. The initial cost of the assets comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the respective assets as follows: computer software developed or acquired for internal use, 2 to 5 years; computer equipment, 2 to 5 years; buildings and improvements, 5 to 15 years; leasehold improvements, 2 to 10 years; and furniture and equipment, 1 to 5 years.
Significant improvements are capitalized when it is probable that the expenditure resulted in an increase in the future economic benefits expected to be obtained from the use of the asset beyond its originally assessed standard of performance. When improvements are made to real property and those improvements are permanently affixed to the property, the title to those improvements automatically transfers to the owner of the property. The lessee’s interest in the improvements is not a direct ownership interest but rather it is an intangible right to use and benefit from the improvements during the term of the lease. The Company uses the straight-line method over the shorter of the estimated useful life of the asset or the lease term.
In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. For the period ended December 31, 2018 and 2017, the Company did not record any impairment charges on long-lived assets.
Routine repairs and maintenance are expensed when incurred. Gains and losses on disposal of fixed assets are recognized in the income statement based on the net disposal proceeds less the carrying amount of the assets.
Revenue Recognition
The Company recognizes revenue by applying the following steps in accordance with Accounting Standards Codification (“ASC”) Topic 606 - Revenue from contracts with Customers: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. The Company signed a technology license agreement with a third party at $8,000 per month which was first recognized during the period of the nine months ended December 31, 2018.
Accounts Receivable and Allowance
Accounts receivable are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off against the allowance when identified.
Foreign currency translation
The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity.
Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates:
| December 31, 2018 | |
| Current JPY: US$1 exchange rate | 109.56 |
| Average JPY: US$1 exchange rate | 111.35 |
Comprehensive income or loss
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of shareholders’ equity consists of changes in unrealized gains and losses on foreign currency translation.
Income Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using 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 the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at December 31, 2018 and March 31, 2018.
Basic Earnings (Loss) Per Share
The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.
The Company does not have any potentially dilutive instruments as of December 31, 2018 and 2017 and, thus, anti-dilution issues are not applicable.
Fair Value of Financial Instruments
The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
- Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
- Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
- Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued expenses.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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NOTE 3 - GOING CONCERN
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The Company demonstrates adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following the issuance of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency, and other adverse key financial ratios.
The Company has not established any source of revenue to cover its operating costs. Management plans to fund operating expenses with related party contributions to capital. There is no assurance that management's plan will be successful.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
NOTE 4 - ACCRUED EXPENSES
Accrued expenses totaled $0 as of December 31, 2018 as compared to March 31, 2018 which was $1,107.
NOTE 5 - INCOME TAXES
The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the local tax authority.
National income tax in Japan is charged at 21% of a company’s assessable profit. The Company’s subsidiary, AIS Japan, was incorporated in Japan and is subject to Japanese national income tax and city income tax at the applicable tax rates on the taxable income as reported in their Japanese statutory accounts in accordance with the relevant enterprises income tax laws applicable to foreign enterprises.
The Company, which acts as a holding company on a non-consolidated basis, does not plan to engage any business activities and current or future loss will be fully allowed. For the year ended March 31, 2018, the Company, as a holding company registered in the state of Delaware, has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry forward has been fully reserved. The cumulative net operating loss carry forward is approximately $65,606 as of December 31, 2018 and will expire beginning in the year 2037. Annual use of the net operating loss may be limited by Internal Revenue Code Section 382 due to an ownership change.
NOTE 6 - SHAREHOLDER EQUITY
Preferred Stock
The authorized preferred stock of the Company consists of 20,000,000 shares with a par value of $0.0001. The Company had no shares of preferred stock issued and outstanding at December 31, 2018 and March 31, 2018.
Common Stock
The authorized common stock of the Company consists of 500,000,000 shares with a par value of $0.0001. There were 20,000,000 shares of common stock issued and outstanding at December 31, 2018 and March 31, 2018.
On January 30, 2017, the Company issued 20,000,000 founder’s shares of restricted common stock valued at $2,000 at par value ($.0001) to our sole officer and director, Mr. Thomas DeNunzio, in exchange for the development of the business plan for the Company.
On June 18, 2017, Thomas DeNunzio of 780 Reservoir Avenue, #123, Cranston, RI 02910, the sole shareholder of the Company entered into and consummated a Share Purchase Agreement (the “Agreement”) with Takehiro Abe., with an address at 2-41-7-336, Shinsakae, Naka-ku Nagoya-shi, Aichi, Japan. Pursuant to the Agreement, Mr. DeNunzio transferred to Takehiro Abe 20,000,000 shares of our common stock, which represents all of our issued and outstanding shares.
The Company did not have any potentially dilutive instruments as of December 31, 2018 and March 31, 2018 and, thus, anti-dilution issues are not applicable.
Additional paid-in capital
During the nine months ended December 31, 2018, the Company had imputed interest of $5,443.
During the nine months ended December 31, 2018 and 2017 our sole officer and director paid expenses and accrued expenses on behalf of the Company totaling and $0 and $2,900. These expenses are considered contributions to the Company and consisted primarily of professional fees and imputed interests.
NOTE 7 - RELATED-PARTY TRANSACTIONS
Equity
On January 30, 2017, the Company issued 20,000,000 founder’s shares of restricted common stock valued at $2,000 at par value ($.0001) to our sole officer and director, Mr. Thomas DeNunzio, in exchange for the development of the business plan for the Company.
Additional paid-in capital
During the nine months ended December 31, 2018, the Company had imputed interest of $5,443.
During the nine months ended December 31, 2017, our former sole officer and director Thomas DeNunzio paid expenses on behalf of the Company totaling $2,900. These expenses are considered contributions to the Company and consisted primarily of professional fees.
Due to related party
For the nine months ended December 31, 2018, the Company borrowed $84,426 from Takehiro Abe, CEO of the Company. For the nine months ended December 31, 2018, the Company repaid $36,110 to Takehiro Abe. The total due as of December 31, 2018 was $99,285 and is unsecured, due on demand and non-interest bearing.
During the nine months ended December 31, 2018 and 2017, the Company had imputed interest of $5,443 and $0.
The Company utilizes home office space and equipment of our management at no cost. Management estimates such amounts to be immaterial.
NOTE 8 - SOFTWARE
Effective December 8, 2017, AIS Japan purchased the software and web applications for a customer management system named UQMS (Using Qrcode Management System) from Promotion Plus Co., Ltd. for the total amount of JPY 2,168,650 ($21,778). At present, all of the customer management services provided to Japanese customers (primarily small to mid-sized companies) by AIS Japan are intended to be provided via the UQMS software and web applications.
On February 28, 2018, AIS Japan sold UQMS to TetrastaR Co., Ltd. for the total amount of JPY 2,500,000 ($23,337). The Company had the gain of $3,091.
Effective February 28, 2018, AIS Japan purchased the basic software for cryptocurrency trading platform (“Cryptocurrency System”) from Herol Gaibin in amount of 2,000,000 JPY ($17,593). AIS Japan intends to provide the IT development service focused on financial technology field throughout Japan by using the Cryptocurrency System. The useful life of Cryptocurrency System is three years.
The following table presents details of our purchased software assets as of March 31, 2018 and December 31, 2018:
| | Balance at | Additions | Impairments | Amortization | Disposal | Net effect of | Balance at | |||||||
| March 31, 2018 | exchange rate | December 31, 2018 | ||||||||||||
| Cryptocurrency System | 17,962 | - | - | (4,499) | - | (606) | 12,857 | |||||||
| Total | $ | 17,962 | $ | - | $ | - | $ | (4,499) | $ | - | $ | (606) | $ | 12,857 |
The software assets are being amortized on a straight-line basis over their estimated useful lives of two to five years. Amortization expense for software assets was $4,499 and $449 for the nine months ended December 31, 2018 and 2017, respectively.
The estimated future amortization expense of our software assets as of December 31, 2018 is as follows:
| Year ending March 31 | Amount | ||
| 2019 | 1,500 | ||
| 2020 | 5,864 | ||
| 2021 | 5,493 | ||
| Total | $ | 12,857 | |
NOTE 9 – SUBSEQUENT EVENTS
None.
- F6 -
| ITEM 2 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Forward-Looking Statements
Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.”
These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions.
Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
Liquidity and Capital Resources
Our cash balance is $14,625 as of December 31, 2018. Our cash balance is not sufficient to fund our limited levels of operations for any period of time. We have been utilizing and may utilize funds from Takehiro Abe, our sole Director who has informally agreed to advance funds to allow us to pay for operating fees, and professional fees. Takehiro Abe, however, has no formal commitment, arrangement or legal obligation to advance or loan funds to the company. In order to implement our plan of operations for the next twelve-month period, we require further funding. Being a start-up stage company, we have very limited operating history. After a twelve-month period we may need additional financing but currently do not have any arrangements for such financing.
As of December 31, 2018, the Company has $99,285 due to the related party of Mr. Takehiro Abe, our sole officer and director.
On April 1, 2018 the Company entered into an agreement with Trend Rich Global Limited (“Trend Rich”) to lease the Company’s Software System package. The basic software is a pre-coded template that can be expanded upon to create custom websites for clients in the digital currency industry. Pursuant to this agreement, for the three months and nine months ended December 31, 2018, the Company generated the revenues of $24,144 and $72,217. These revenues did not cover our operating expenses.
References to our “source code” throughout are synonymous with our “Software Platform Package”, “Software System Package” and “Cryptocurrency Trading Platform”. They are all one in the same.
To cover our operating expenses we need to generate additional revenues. Upon creating a definitive marketing plan we intend to expand our customer base to lease the Company’s Software Platform Package. If we cannot generate sufficient revenues to cover our operating expenses, we may seek to secure long term financing from a third party, otherwise, we will need to capital from a director. If we need additional cash and cannot raise it, we will either have to suspend operations until we do raise the cash we need, or cease operations entirely.
Net Loss
We recorded a net loss of $46,036 for the nine months ended December 31, 2018 as opposed to $5,995 for the nine months ended December 31, 2017. The increase in net loss is attributed to increased operating expenses.
Going Concern
For the period ended December 31, 2018, the Company has suffered recurring losses from operations, yielded negative cash flows from operations, and had a net capital deficiency. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s management plans to engage in very limited activities without incurring any liabilities that must be satisfied in cash until a source of funding is secured. The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue- producing contracts or financing, or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders. These conditions and uncertainties raise substantial doubt as to the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
- 3 -
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
CRITICAL ACCOUNTING POLICIES
We prepare our unaudited interim financial statements in conformity with GAAP, which requires management to make certain estimates and apply judgments. We base our estimates and judgments on historical experience, current trends and other factors that management believes to be important at the time the interim financial statements are prepared. Due to the need to make estimates about the effect of matters that are inherently uncertain, materially different amounts could be reported under different conditions or using different assumptions. On a regular basis, we review our critical accounting policies and how they are applied in the preparation of our interim financial statements.
While we believe that the historical experience, current trends and other factors considered support the preparation of our financial statements in conformity with GAAP, actual results could differ from our estimates and such differences could be material.
| ITEM 3 | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
| ITEM 4 | CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
Our Principal Executive Officer and Principal Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2018. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were ineffective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding disclosure.
Material weaknesses noted were: lack of a functioning audit committee; lack of a majority of outside directors on board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; inadequate segregation of duties consistent with control objectives affecting authorization, recordkeeping, custody of assets, and reconciliations; and, management is dominated by a single individual/small group without adequate compensating controls.
Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors’ results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Changes in Internal Controls Over Financial Reporting
There have been no significant changes to the Company’s internal controls over financial reporting that occurred during our last fiscal quarter ended December 31, 2018 that materially affected, or were reasonably likely to materially affect, our internal controls over financial reporting.
PART II-OTHER INFORMATION
| ITEM 1 LEGAL PROCEEDINGS |
There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.
| ITEM 1A RISK FACTORS |
As a “smaller reporting company” defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.
| ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
During the period beginning between our fiscal year end through the date of this filing, there have been no unregistered sales of securities.
| ITEM 3 DEFAULTS UPON SENIOR SECURITIES |
None.
- 4 -
| ITEM 4 MINE SAFETY DISCLOSURES |
Not applicable.
| ITEM 5 OTHER INFORMATION |
None.
| ITEM 6 EXHIBITS |
| (a) Exhibits required by Item 601 of Regulation S-K. |
| Exhibit No. | Description | |
| 3.1 | Certificate of Incorporation (1) | |
| 3.2 | By-laws (1) | |
| 3.3 | Certificate of Amendment (2) | |
| 31.1 | Certification of the Company’s Principal Executive and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s report on Form 10-Q for the quarter ended December 31, 2018. (3) | |
| 32.1 | Certification of the Company’s Principal Executive and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (3) | |
| 101.INS | XBRL Instance Document (4) | |
| 101.SCH | XBRL Taxonomy Extension Schema (4) | |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase (4) | |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase (4) | |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase (4) | |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase (4) | |
| (1) | Filed as an exhibit to the Company's Form 10 Registration Statement on Form 10-12G, as filed with the SEC on April 17, 2017, and incorporated herein by this reference. |
| (2) | Filed as an exhibit to the Company’s Form 8-K, as filed with the SEC on June 22, 2017. |
| (3) | Filed herewith. |
| (4) | Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act of 1934 and otherwise are not subject to liability. |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.
AIS HOLDINGS GROUP, INC.
(Registrant)
By: /s/ Takehiro Abe
Principal Executive Officer
By: /s/ Takehiro Abe
Principal Financial Officer
Dated: February 13, 2019
- 5 -
EXHIBIT 31.1
AIS Holdings Group, INC.
OFFICER'S CERTIFICATE PURSUANT TO SECTION 302
I, Takehiro Abe, certify that:
1. I have reviewed this Form 10-Q of AIS Holdings Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4. The small business issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The small business owner’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small issuer's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
Dated: February 13, 2019
By: /s/ Takehiro Abe
Takehiro Abe,
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
AIS Holdings Group, INC.
OFFICER'S CERTIFICATE PURSUANT TO SECTION 302
I, Takehiro Abe, certify that:
1. I have reviewed this Form 10-Q of AIS Holdings Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4. The small business issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:
a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c. Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The small business owner’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small issuer's board of directors (or persons performing the equivalent functions):
a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
Dated: February 13, 2019
By: /s/ Takehiro Abe
Takehiro Abe,
Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 32.1
AIS Holdings Group, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the the Quarterly Report of AIS Holdings Group, Inc. (the Company) on Form 10-Q for the quarter ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Takehiro Abe, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to Takehiro Abe and will be retained by AIS Holdings Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Dated: February 13, 2019
By: /s/ Takehiro Abe
Takehiro Abe,
Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 32.2
AIS Holdings Group, INC.
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
In connection with the the Quarterly Report of AIS Holdings Group, Inc. (the Company) on Form 10-Q for the quarter ended December 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Takehiro Abe, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
A signed original of this written statement required by Section 906 has been provided to Takehiro Abe and will be retained by AIS Holdings Group, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Dated: February 13, 2019
By: /s/ Takehiro Abe
Takehiro Abe,
Chief Financial Officer
(Principal Financial Officer)
Document and Entity Information - USD ($) |
9 Months Ended | |
|---|---|---|
Dec. 31, 2018 |
Feb. 13, 2019 |
|
| Document And Entity Information | ||
| Entity Registrant Name | AIS Holdings Group, Inc. | |
| Entity Central Index Key | 0001702015 | |
| Amendment Flag | false | |
| Current Fiscal Year End Date | --03-31 | |
| Is Entity's Reporting Status Current? | Yes | |
| Is Entity a Well-Known Seasoned Issuer? | No | |
| Is Entity a Voluntary Filer? | No | |
| Document Type | 10-Q | |
| Document Period End Date | Dec. 31, 2018 | |
| Document Fiscal Year Focus | 2019 | |
| Document Fiscal Period Focus | Q3 | |
| Entity Filer Category | Smaller Reporting Company | |
| Entity Public Float | $ 0 | |
| Entity Common Stock, Shares Outstanding | 20,000,000 |
Consolidated Balance Sheets (December 31, 2018 Unaudited) - USD ($) |
Dec. 31, 2018 |
Mar. 31, 2018 |
|---|---|---|
| ASSETS | ||
| Cash and cash equivalents | $ 14,625 | $ 11,864 |
| Accounts receivable, trade | 8,046 | |
| TOTAL CURRENT ASSETS | 22,671 | 11,864 |
| Software, net | 12,857 | 17,962 |
| TOTAL NON-CURRENT ASSETS | 12,857 | 17,962 |
| TOTAL ASSETS | 35,528 | 29,826 |
| Current liabilities: | ||
| Due to related party | 99,285 | 51,575 |
| Accrued Expenses | 1,107 | |
| TOTAL LIABILITIES | 99,285 | 52,682 |
| Stockholders' deficit: | ||
| Preferred stock ($.0001 par value, 20,000,000 shares authorized; none issued and outstanding as of December 31, 2018 and March 31, 2018) | ||
| Common stock, $0.0001 par value; 500,000,000 shares authorized; 20,000,000 shares issued and outstanding as of December 31, 2018 and March 31, 2018 | 2,000 | 2,000 |
| Additional paid-in capital | 11,554 | 6,111 |
| Accumulated deficit | (76,912) | (30,876) |
| Accumulated other comprehensive income (loss) | (399) | (91) |
| Total stockholders' deficit | (63,757) | (22,856) |
| Total liabilities and stockholders' equity (deficit) | $ 35,528 | $ 29,826 |
Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2018 |
Mar. 31, 2018 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value | $ .0001 | $ .0001 |
| Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
| Preferred stock, shares issued | 0 | 0 |
| Preferred stock, shares outstanding | 0 | 0 |
| Common stock, par value | $ .0001 | $ .0001 |
| Common stock, shares authorized | 500,000,000 | 500,000,000 |
| Common stock, shares issued | 20,000,000 | 20,000,000 |
| Common stock, shares outstanding | 20,000,000 | 20,000,000 |
Consolidated Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
| Income Statement [Abstract] | ||||
| Revenues | $ 24,144 | $ 72,217 | ||
| Operating Expenses: | ||||
| General and administrative expenses | 16,065 | 5,271 | 113,155 | 5,996 |
| Total operating expenses | 16,065 | 5,271 | 113,155 | 5,996 |
| Interest expenses | 1,721 | 5,098 | ||
| Net Income/ loss | 6,358 | (5,271) | (46,036) | (5,996) |
| Foreign currency translation adjustment | (2,341) | 47 | (308) | 47 |
| TOTAL COMPREHENSIVE LOSS | $ 4,017 | $ (5,224) | $ (46,344) | $ (5,949) |
| Basic loss per common share | $ 0.00 | $ 0.00 | $ 0.00 | $ 0.00 |
| Basic weighted average common shares outstanding | 20,000,000 | 20,000,000 | 20,000,000 | 20,000,000 |
Note 1 - Organization and Description of Business |
9 Months Ended |
|---|---|
Dec. 31, 2018 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Organization and Description of Business |
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
AIS Holdings Group, Inc., a Delaware corporation (“the Company”) was incorporated under the laws of the State of Delaware on January 30, 2017 with the name Superb Acquisition, Inc. On June 20, 2017, we changed our name to AIS Holdings Group, Inc.
On October 25, 2017, the Company entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Takehiro Abe. Pursuant to this Agreement, on October 25, 2017 transferred to the Company, 100 shares of the common stock of AIS Japan Co., Ltd.., a Japan corporation (“AIS Japan”), which represents all of its issued and outstanding shares, in consideration of 1,000,000 JPY ($8,875).
Following the effective date of the share purchase transaction above on October 25, 2017, the Company gained a 100% interest in the issued and outstanding shares of AIS Japan’s common stock and AIS Japan became a wholly owned subsidiary of the Company. The Company is now the controlling and sole shareholder of AIS Japan.
Effective February 28, 2018, our wholly owned subsidiary, which we operate exclusively through at this time, AIS Japan, purchased a "Software Platform Package," from Herol Gaibin in the amount of 2,000,000 JPY ($18,822).
The "Software Platform Package" is source code, intended to be used as a baseline which can be expanded upon to create third party websites for companies in the cryptocurrency industry. The Company currently, and intends to continue to, lease out the source code code, known as the "Software Platform Package", to third parties. Additionally, we offer supplementary IT services to alter the source code in order to add additional features, at the request of clients, for additional fees which may vary depending on the scope of the changes. We have developed a display website, which is not operational and is used solely for display purposes, herein called “Coindesuka”, to showcase features of the object code that can be generated from the source code.
Source code is the set of instructions and statements written by a programmer using a computer programming language. This code is later translated into machine language by a compiler. The translated code is referred to as object code.
References to our “source code” throughout are synonymous with our “Software Platform Package”, “Software System Package” and “Cryptocurrency Trading Platform”. They are all one in the same.
On April 1, 2018 the Company entered into an agreement with Trend Rich Global Limited to lease the Company’s Software System package. The Software System Package is source code that can be expanded upon to create custom websites for clients in the digital currency industry.
On August 16, 2018, AIS Japan entered into a Software Development Agreement with Herol Gaibin, whereas Herol Gaibin will improve upon the Company’s existing Software Platform Package which is owned by AIS Japan. The fee to further develop the software is in amount of 5,000,000 JPY (approximately $45,000).
Our principal executive offices are located at 2-41-7-336, Shinsakae Naka-ku Nagoya-shi, Aichi, 460-0007, Japan.
The Company has elected March 31st as its fiscal year end. |
Note 2 - Summary of Significant Accounting Policies |
9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||
| Accounting Policies [Abstract] | |||||||
| Summary of Significant Accounting Policies |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidations
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.
Basis of Presentation
This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the 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 reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.
Related party transaction
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less depreciation and impairment loss. The initial cost of the assets comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the respective assets as follows: computer software developed or acquired for internal use, 2 to 5 years; computer equipment, 2 to 5 years; buildings and improvements, 5 to 15 years; leasehold improvements, 2 to 10 years; and furniture and equipment, 1 to 5 years.
Significant improvements are capitalized when it is probable that the expenditure resulted in an increase in the future economic benefits expected to be obtained from the use of the asset beyond its originally assessed standard of performance. When improvements are made to real property and those improvements are permanently affixed to the property, the title to those improvements automatically transfers to the owner of the property. The lessee’s interest in the improvements is not a direct ownership interest but rather it is an intangible right to use and benefit from the improvements during the term of the lease. The Company uses the straight-line method over the shorter of the estimated useful life of the asset or the lease term.
In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. For the period ended December 31, 2018 and 2017, the Company did not record any impairment charges on long-lived assets.
Routine repairs and maintenance are expensed when incurred. Gains and losses on disposal of fixed assets are recognized in the income statement based on the net disposal proceeds less the carrying amount of the assets.
Revenue Recognition
The Company recognizes revenue by applying the following steps in accordance with Accounting Standards Codification (“ASC”) Topic 606 - Revenue from contracts with Customers: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. The Company signed a technology license agreement with a third party at $8,000 per month which was first recognized during the period of the nine months ended December 31, 2018.
Accounts Receivable and Allowance
Accounts receivable are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off against the allowance when identified.
Foreign currency translation
The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity.
Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates:
Comprehensive income or loss
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of shareholders’ equity consists of changes in unrealized gains and losses on foreign currency translation.
Income Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using 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 the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at December 31, 2018 and March 31, 2018.
Basic Earnings (Loss) Per Share
The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.
The Company does not have any potentially dilutive instruments as of December 31, 2018 and 2017 and, thus, anti-dilution issues are not applicable.
Fair Value of Financial Instruments
The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
- Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. - Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. - Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued expenses.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations. |
Note 3 - Going Concern |
9 Months Ended |
|---|---|
Dec. 31, 2018 | |
| Going Concern [Abstract] | |
| Going Concern |
NOTE 3 - GOING CONCERN
The Company’s financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The Company demonstrates adverse conditions that raise substantial doubt about the Company's ability to continue as a going concern for one year following the issuance of these financial statements. These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency, and other adverse key financial ratios.
The Company has not established any source of revenue to cover its operating costs. Management plans to fund operating expenses with related party contributions to capital. There is no assurance that management's plan will be successful.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
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Note 4 - Accrued Expenses |
9 Months Ended |
|---|---|
Dec. 31, 2018 | |
| Payables and Accruals [Abstract] | |
| Accrued Expenses | NOTE 4 - ACCRUED EXPENSES
Accrued expenses totaled $0 as of December 31, 2018 as compared to March 31, 2018 which was $1,107. |
Note 5 - Income Taxes |
9 Months Ended |
|---|---|
Dec. 31, 2018 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | NOTE 5 - INCOME TAXES
The Company conducts its major businesses in Japan and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to examination by the local tax authority.
National income tax in Japan is charged at 21% of a company’s assessable profit. The Company’s subsidiary, AIS Japan, was incorporated in Japan and is subject to Japanese national income tax and city income tax at the applicable tax rates on the taxable income as reported in their Japanese statutory accounts in accordance with the relevant enterprises income tax laws applicable to foreign enterprises.
The Company, which acts as a holding company on a non-consolidated basis, does not plan to engage any business activities and current or future loss will be fully allowed. For the year ended March 31, 2018, the Company, as a holding company registered in the state of Delaware, has incurred net losses and, therefore, has no tax liability. The net deferred tax asset generated by the loss carry forward has been fully reserved. The cumulative net operating loss carry forward is approximately $65,606 as of December 31, 2018 and will expire beginning in the year 2037. Annual use of the net operating loss may be limited by Internal Revenue Code Section 382 due to an ownership change. |
Note 6 - Shareholder Equity |
9 Months Ended |
|---|---|
Dec. 31, 2018 | |
| Equity [Abstract] | |
| Shareholder Equity |
NOTE 6 - SHAREHOLDER EQUITY
Preferred Stock
The authorized preferred stock of the Company consists of 20,000,000 shares with a par value of $0.0001. The Company had no shares of preferred stock issued and outstanding at December 31, 2018 and March 31, 2018.
Common Stock
The authorized common stock of the Company consists of 500,000,000 shares with a par value of $0.0001. There were 20,000,000 shares of common stock issued and outstanding at December 31, 2018 and March 31, 2018.
On January 30, 2017, the Company issued 20,000,000 founder’s shares of restricted common stock valued at $2,000 at par value ($.0001) to our sole officer and director, Mr. Thomas DeNunzio, in exchange for the development of the business plan for the Company.
On June 18, 2017, Thomas DeNunzio of 780 Reservoir Avenue, #123, Cranston, RI 02910, the sole shareholder of the Company entered into and consummated a Share Purchase Agreement (the “Agreement”) with Takehiro Abe., with an address at 2-41-7-336, Shinsakae, Naka-ku Nagoya-shi, Aichi, Japan. Pursuant to the Agreement, Mr. DeNunzio transferred to Takehiro Abe 20,000,000 shares of our common stock, which represents all of our issued and outstanding shares.
The Company did not have any potentially dilutive instruments as of December 31, 2018 and March 31, 2018 and, thus, anti-dilution issues are not applicable.
Additional paid-in capital
During the nine months ended December 31, 2018, the Company had imputed interest of $5,443.
During the nine months ended December 31, 2018 and 2017 our sole officer and director paid expenses and accrued expenses on behalf of the Company totaling and $0 and $2,900. These expenses are considered contributions to the Company and consisted primarily of professional fees and imputed interests. |
Note 7 - Related Party Transactions |
9 Months Ended |
|---|---|
Dec. 31, 2018 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions |
NOTE 7 - RELATED-PARTY TRANSACTIONS
Equity
On January 30, 2017, the Company issued 20,000,000 founder’s shares of restricted common stock valued at $2,000 at par value ($.0001) to our sole officer and director, Mr. Thomas DeNunzio, in exchange for the development of the business plan for the Company.
Additional paid-in capital
During the nine months ended December 31, 2018, the Company had imputed interest of $5,443.
During the nine months ended December 31, 2017, our former sole officer and director Thomas DeNunzio paid expenses on behalf of the Company totaling $2,900. These expenses are considered contributions to the Company and consisted primarily of professional fees.
Due to related party
For the nine months ended December 31, 2018, the Company borrowed $84,426 from Takehiro Abe, CEO of the Company. For the nine months ended December 31, 2018, the Company repaid $36,110 to Takehiro Abe. The total due as of December 31, 2018 was $99,285 and is unsecured, due on demand and non-interest bearing.
During the nine months ended December 31, 2018 and 2017, the Company had imputed interest of $5,443 and $0.
The Company utilizes home office space and equipment of our management at no cost. Management estimates such amounts to be immaterial. |
Note 8 - Software |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Research and Development [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Software |
NOTE 8 - SOFTWARE
Effective December 8, 2017, AIS Japan purchased the software and web applications for a customer management system named UQMS (Using Qrcode Management System) from Promotion Plus Co., Ltd. for the total amount of JPY 2,168,650 ($21,778). At present, all of the customer management services provided to Japanese customers (primarily small to mid-sized companies) by AIS Japan are intended to be provided via the UQMS software and web applications.
On February 28, 2018, AIS Japan sold UQMS to TetrastaR Co., Ltd. for the total amount of JPY 2,500,000 ($23,337). The Company had the gain of $3,091.
Effective February 28, 2018, AIS Japan purchased the basic software for cryptocurrency trading platform (“Cryptocurrency System”) from Herol Gaibin in amount of 2,000,000 JPY ($17,593). AIS Japan intends to provide the IT development service focused on financial technology field throughout Japan by using the Cryptocurrency System. The useful life of Cryptocurrency System is three years.
The following table presents details of our purchased software assets as of March 31, 2018 and December 31, 2018:
The software assets are being amortized on a straight-line basis over their estimated useful lives of two to five years. Amortization expense for software assets was $4,499 and $449 for the nine months ended December 31, 2018 and 2017, respectively.
The estimated future amortization expense of our software assets as of December 31, 2018 is as follows:
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Note 9 - Subsequent Events |
9 Months Ended |
|---|---|
Dec. 31, 2018 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | NOTE 9 – SUBSEQUENT EVENTS
None. |
Significant Accounting Policies (Policies) |
9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Dec. 31, 2018 | |||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||
| Principles of Consolidations | Principles of Consolidations
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. |
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| Basis of Presentation | Basis of Presentation
This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements. |
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| Use of Estimates | Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the 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 reporting period. In the opinion of management, all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates. |
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| Related party transaction | Related party transaction
A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary course of business.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated. |
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| Cash and Cash Equivalents | Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. |
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| Property, Plant and Equipment | Property, Plant and Equipment
Property, plant and equipment are stated at cost less depreciation and impairment loss. The initial cost of the assets comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the respective assets as follows: computer software developed or acquired for internal use, 2 to 5 years; computer equipment, 2 to 5 years; buildings and improvements, 5 to 15 years; leasehold improvements, 2 to 10 years; and furniture and equipment, 1 to 5 years.
Significant improvements are capitalized when it is probable that the expenditure resulted in an increase in the future economic benefits expected to be obtained from the use of the asset beyond its originally assessed standard of performance. When improvements are made to real property and those improvements are permanently affixed to the property, the title to those improvements automatically transfers to the owner of the property. The lessee’s interest in the improvements is not a direct ownership interest but rather it is an intangible right to use and benefit from the improvements during the term of the lease. The Company uses the straight-line method over the shorter of the estimated useful life of the asset or the lease term.
In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. For the period ended December 31, 2018 and 2017, the Company did not record any impairment charges on long-lived assets.
Routine repairs and maintenance are expensed when incurred. Gains and losses on disposal of fixed assets are recognized in the income statement based on the net disposal proceeds less the carrying amount of the assets.
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| Revenue Recognition | Revenue Recognition
The Company recognizes revenue by applying the following steps in accordance with Accounting Standards Codification (“ASC”) Topic 606 - Revenue from contracts with Customers: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract; and (5) recognize revenue when each performance obligation is satisfied. The Company signed a technology license agreement with a third party at $8,000 per month which was first recognized during the period of the nine months ended December 31, 2018. |
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| Accounts Receivable and Allowance | Accounts Receivable and Allowance
Accounts receivable are recognized and carried at the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount is no longer probable. Bad debts are written off against the allowance when identified. |
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| Foreign currency translation |
Foreign currency translation
The Company maintains its books and record in its local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations.
The reporting currency of the Company is the United States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive income within the statements of shareholders’ equity.
Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates:
Comprehensive income or loss
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of shareholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. |
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| Comprehensive income or loss | Comprehensive income or loss
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of shareholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. |
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| Income Taxes | Income Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using 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 the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets or liabilities were recognized at December 31, 2018 and March 31, 2018. |
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| Basic Earnings (Loss) Per Share | Basic Earnings (Loss) Per Share The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.
The Company does not have any potentially dilutive instruments as of December 31, 2018 and 2017 and, thus, anti-dilution issues are not applicable. |
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
- Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. - Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. - Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2018. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include accrued expenses. |
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| Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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