NOTES
TO THE FINANCIAL STATEMENTS
NOTE
1 – ORGANIZATION AND PRINCIPAL ACTIVITIES
Achison
Inc. (the “Company”) was incorporated under the laws of the State of New York on December 29, 2014.
On
July 1, 2019, Lansdale Inc, the principal stockholder of the Company (“Seller”) and controlled by the Company’s prior
President, Mr. Wanjun Xie, entered into a Stock Purchase Agreement (the “Agreement”) with Dazhong 368 Inc, (the “Buyer”),
pursuant to which, a total of 9,000,000 shares of Class A common stock of the Company were transferred to the Buyer, representing approximately
90% of the Company’s issued and outstanding shares of Class A common stock, resulting in a change of the control of the Company.
Mr. Dingshan Zhang was appointed as the President and CEO of the Company at the same date. The Company currently engages in internet
advertising through www.dazhong368.com (the “Website”) in the New York area and we also seek other profitable business at
the same time.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying financial statements have been prepared in accordance with generally accepted accounting principles used in the United States
of America. The financial statements are presented in US dollar, which is the Company’s functional currency.
Use
of Estimates
The
accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”)
and the rules and regulations of the Securities and Exchange Commission (the “SEC”).
The
preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates, judgments and
assumptions that affect the amounts reported in the financial statements and footnotes thereto. Actual results may differ from those
estimates and assumptions.
Cash
and Cash Equivalents
Cash
and cash equivalents include cash in banks, bank deposits, and highly liquid investments with maturities of three months or less at the
date of origination.
Intangible
assets, net
The
Company’s intangible asset with definite useful lives consists of a website. The Company typically amortizes its intangible asset
with definite useful lives on a straight-line basis over the shorter of the contractual terms or the estimated useful lives. The Company
estimate the useful lives of the website is 10 years.
The
website – www.Dazhong368.com (the “Website”) was acquired from an entity under common control by issuing 10
million shares of Class A common stock in September 2019, and the zero carry value of the website at the related party’s book was
transferred for the assets purchase. As of March 31, 2022 and 2021, the Company had nil intangible assets.
Impairment
of Long-Lived and Intangible Assets in
Management
reviews long-lived assets and certain identifiable intangible assets with finite lives for impairment in accordance with Accounting Standards
Codification (“ASC”) 360, “Property, Plant, and Equipment.” Goodwill and intangible assets not subject to amortization
are reviewed annually for impairment in accordance with ASC 350, “Intangibles — Goodwill and Other,” or more often
if there are indications of possible impairment.
The
analysis to determine whether or not an asset is impaired requires significant judgment that is dependent on internal forecasts, including
estimated future cash flows, estimates of long-term growth rates for our business, the expected life over which cash flows will be realized
and assumed royalty and discount rates. Changes in these estimates and assumptions could materially affect the determination of fair
value and any impairment charge. While the fair value of these assets exceeds their carrying value based on management’s current
estimates and assumptions, materially different estimates and assumptions in the future in response to changing economic conditions,
changes in the business, increased competition or loss of market share, product innovation or obsolescence, product claims that result
in a significant loss of sales or profitability over the product life or for other reasons could result in the recognition of impairment
losses.
Revenue
Recognition
Revenue
is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration
we expect to be entitled to in exchange for those goods or services. The Company determines revenue recognition by applying the following
steps: 1) identification of the contract, or contracts, with a customer; 2) identification of the performance obligations in the contract;
3) determination of the transaction price; 4) allocation of the transaction price to the performance obligations in the contract; and
5) recognition of revenue when, or as, we satisfy a performance obligation.
Advertising
revenue is generated by displaying advertising products on our Website. The Company recognizes revenue from the display of impression-based
advertisements in the contracted period in which the impressions are displayed. Impressions are considered delivered when an advertisement
is displayed to the Website visitors. In general, the Company presents advertising revenue on a gross basis, since the Company controls
the advertising inventory before it is transferred to its customers. Control of advertisement inventory is evidenced by the Company’s
sole ability to monetize the advertising inventory before it is transferred to our customers. Pricing for our services is generally a
fixed amount at monthly level and is typically due within 30 days upon signing the contract with customers. Unsatisfied performance obligations
under advertising contracts are recorded as contract liabilities.
Income
Taxes
The
Company records income tax expense using the asset-and-liability method of accounting for deferred income taxes. Under this method, deferred
taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their
financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Deferred tax assets are reduced by a valuation allowance if, based on available evidence,
it is more likely than not that the deferred tax assets will not be realized.
When
tax returns are filed, it is likely some positions taken would be sustained upon examination by the taxing authorities, while others
are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The
benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management
believes it is more-likely-than-not the position will be sustained upon examination, including the resolution of appeals or litigation
processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not
recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement
with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount described
above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest
and penalties that would be payable to the taxing authorities upon examination. Interest associated with unrecognized tax benefits is
classified as interest expense and penalties are classified in general and administrative expenses in the statements of operations.
Earnings
Per Share
The
Company computes basic and diluted earnings per share amounts in accordance with ASC Topic 260, Earnings per Share. Basic earnings per
share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding
during the reporting period. Diluted earnings 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.
As
of March 31, 2022 and 2021, the Company does not have any potentially dilutive instrument.
Contingencies
Certain
conditions may exist as of the date the financial statements are issued, which could result in a loss to the Company which will be resolved
when one or more future events occur or fail to occur. The Company’s management assesses such contingent liabilities, and such
assessment inherently involves judgment. In assessing loss contingencies arising from legal proceedings pending against the Company or
unasserted claims that may rise from such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings
or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought.
If
the assessment of a contingency indicates it is probable a material loss will be incurred and the amount of the loss can be reasonably
estimated, then the estimated loss is accrued in the Company’s financial statements. If the assessment indicates a material loss
contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability,
together with an estimate of the range of possible loss if determinable and material would be disclosed.
Fair
Value Measurements
Fair
value accounting establishes a framework for measuring fair value and expands disclosure about fair value measurements. Fair value, which
is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. This framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques
used to measure fair value into three levels as follows:
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Level
1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
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Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that
are observable for the assets or liabilities, either directly or indirectly, for substantially the full term of the financial instruments. |
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Level
3 inputs to the valuation methodology are unobservable and significant to the fair value. |
The
Company’s financial instruments consisted of cash, note receivables, accounts payable, contract liability and loan from a shareholder.
The estimated fair value of those balances approximate its carrying amount due to the short maturity of these instruments.
Recent
Accounting Pronouncements
Credit
Losses
In
June 2016, the FASB issued ASU No. 2016-13, (Topic 326), Financial Instruments – Credit Losses: Measurement of Credit Losses on
Financial Instruments which amends the current accounting guidance and requires the use of the new forward-looking “expected loss”
model, rather than the “incurred loss” model, which requires all expected losses to be determined based on historical experience,
current conditions and reasonable and supportable forecasts. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective
date of ASU No. 2016-13 for public business entities eligible to be smaller reporting companies (SRCs) as defined by the SEC. ASU No.
2016-13 is effective for SRCs for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.
The Company is evaluating the impact of the adoption of ASU 2016-13 on its financial position and results of operations.
There
were other updates recently issued. The management does not believe that other than disclosed above, accounting pronouncements the recently
issued but not yet adopted will have a material impact on its financial position results of operations or cash flows.
NOTE
3 – GOING CONCERN
The
Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement
of liabilities and commitments in the normal course of business. During the year ended March 31, 2022, the Company incurred a net loss
of $43,436. The Company had an accumulated deficit of $239,702 as of March 31, 2022 and negative working capital of $50,331. These factors,
among others, raise substantial doubt about the Company’s ability to continue as a going concern.
Management’s
plan to alleviate the substantial doubt about the Company’s ability to continue as a going concern include attempting to improve
its business profitability, its ability to generate sufficient cash flow from its operations to meet its operating needs on a timely
basis, obtain additional working capital funds from the majority shareholder and President of the Company to eliminate inefficiencies
in order to meet its anticipated cash requirements. However, there can be no assurance that these plans and arrangements will be sufficient
to fund the Company’s ongoing capital expenditures and other requirements.
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 – NOTE RECEIVABLE
During
the year ended March 31, 2020, the Company loaned to Northern Ifurniture Inc in the amount of $70,000,
which bears an interest rate at 7%
per annum with a maturity on December
2, 2020. On June 25, 2020, Northern Ifurniture
Inc. repaid note receivable to the Company in the amount of $20,000.
On December 1, 2020, the Company approved to extend the maturity date to June 30, 2021, and then on June 29, 2021, the Company approved
the second amendment and extended the maturity date to September
30, 2021. In September 2021, the note receivable
was repaid in its entirety.
As
of March 31, 2022 and 2021, the outstanding principal and accrued interest income due from Northern Ifurniture Inc. were nil and $50,863,
respectively. For the years ended March 31, 2022 and 2021, the interest income were nil and $5,427, respectively.
NOTE
5 – RELATED PARTY TRANSACTIONS
Lease
The
Company has been provided office space by its President at no cost. The management determined that such cost is immaterial and did not
recognize the rent expense in its financial statements.
Loan
In
August 2019, the Company borrowed $71,000
from the President of the Company, which bears no interest with a maturity in December
2021. During the year ended March 31, 2022, the Company repaid $17,000
to the President of the Company after borrowed $5,000 more fund in May 2021. On December 29, 2021, the Company and our President
entered into the first amendment to extend the maturity date to December
31, 2022.
As
of March 31, 2022 and 2021, the outstanding balance of shareholder loan was $59,000 and $71,000, respectively.
NOTE
6 – CONTRACT LIABILITIES
Contract
liabilities represent payments received in advance of performance under the contract for the unsatisfied performance obligation and are
realized when the associated revenue is recognized under the advertising contracts. As of March 31, 2022 and 2021, contract liabilities
were $5,600 and $3,400, respectively.
NOTE 7 – SHAREHOLDER EQUITY
On October
11, 2021, the Company amended its article with New York State to increase the authorized Class A common shares with a par value of $0.001 to 100,000,000 shares,
and to add 20,000,000 shares of preferred stock with a par value of $0.001.
NOTE
8 – INCOME TAX
As
of March 31, 2021 and 2020, the Company has incurred an accumulated net loss of approximately $239,702 and $196,266 which resulted in
a net operating loss for income tax purposes. NOLs can carry forward indefinitely up to offset 80 percent of taxable income after CARES
Act effect on December 31, 2017. The deferred tax asset has been fully reserved for valuation allowance as the Company believes they
will most-likely-than-not realize the benefits.
Reconciliation
of income tax provision and the accounting profit multiplied by U.S. federal income tax rate for the years ended March 31, 2022 and 2021:
SCHEDULE
OF RECONCILIATION
OF INCOME TAX PROVISION
| | |
|
2022 | | |
|
2021 | |
| | |
Years Ended March 31, | |
| | |
2022 | | |
2021 | |
| Loss at 21% and 7.5% Federal and State statutory tax rate | |
$ | (11,945 | ) | |
$ | (18,291 | ) |
| | |
| | | |
| | |
| Increase (decrease) in income taxes resulting from: | |
| | | |
| | |
| Net operating loss carry forward | |
| - | | |
| - | |
| Change in valuation allowance | |
| 11,945 | | |
| 18,291 | |
| Income tax provision | |
$ | - | | |
$ | - | |
In
assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of
the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal
of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment,
management has established a full valuation allowance against all of the deferred tax assets for every period because it is more likely
than not that all of the deferred tax assets will not be realized.
NOTE
9 – SUBSEQUENT EVENTS
The
Company evaluated all events or transactions that occurred after March 31, 2022 through the date the financial statements were available
to be issued. During the period, the Company did not have any material recognizable subsequent events required to be disclosed or adjusted
as of and for the year ended March 31, 2022.