NOTES
TO THE UNAUDITED 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.
Prior
to July of 2019 the Company primarily engaged in trading spot gold and silver in Singapore Markets, crypto currency and US equity stocks.
The Company currently engages only in internet advertising through www.dazhong368.com (the “Website”) in the New York area
and has plans to seek other profitable business at the same time.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
In
the opinion of management, the unaudited interim condensed financial statements reflect all adjustments of a normal recurring nature
that are necessary for a fair presentation of the results for the interim periods presented. However, the results of operations included
in such financial statements may not necessary be indicative of annual results.
The
Company uses the same accounting policies in preparing quarterly and annual financial statements. Certain information and footnote disclosures
normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United
States of America (“U.S. GAAP”) have been condensed or omitted. These unaudited condensed financial statements should be
read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report
on Form 10-K for the year ended March 31, 2022 filed with the Securities and Exchange Commission (“SEC”) on June 28, 2022
(“2021 Form 10-K.”)
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 entities 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 September 30, 2022 and March 31, 2022, the Company had nil intangible assets.
Impairment
of Long-Lived and Intangible Assets
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 the Website. The Company recognizes revenue from the display of impression-based
advertisements in the contracted period in which the impressions are delivered. Impressions are considered delivered when an advertisement
is displayed to users. 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
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 September 30, 2022 and March 31, 2022, 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:
| |
● |
Level 1 inputs to the valuation
methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| |
● |
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. |
| |
● |
Level 3 inputs to the valuation
methodology are unobservable and significant to the fair value. |
The
Company’s financial instruments consisted of cash, 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.
Accounting
Standards Issued but Not Yet Adopted
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. This guidance amends the accounting for credit losses for most financial
assets and certain other instruments including trade and other receivables, held-to-maturity debt securities, loans and other instruments.
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 six months ended September 30, 2022, the Company incurred
a net loss of $22,625. The Company had an accumulated deficit of $262,327 as of September 30, 2022 and negative working capital of $72,799.
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 – 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 the Company borrowed $5,000 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.
From
June to August 2022, the Company borrowed $11,900 in aggregate from the President of the Company, which bears no interest and is due
on demand.
As
of September 30, 2022 and March 31, 2022, the outstanding balance of shareholder loan was $70,900 and $59,000, respectively.
NOTE
5 – CONTRACT LIABILITIES
Contract
liabilities include payments received in advance of performance under the contract and are realized when the associated revenue is recognized
under the contract. As of September 30, 2022 and March 31, 2022, contract liabilities were $3,200 and $5,600, respectively.
NOTE
6 – INCOME TAX
The
Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to
generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against
deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In
future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts
to be more likely than not.
For
the six months ended September 30, 2022 and the year ended March 31, 2022, the Company has incurred a net loss before tax of $
and $, respectively. Net operation losses (“NOLs”) can be carried forever based on the 2017 Tax Cuts and Jobs Act.
As of September 30, 2022 and March 31, 2022, deferred tax assets resulted from NOLs of approximately $37,637 and $31,323, which was fully
off-set by valuation allowance reserved.
NOTE
7 – SUBSEQUENT EVENTS
The
Company evaluated all events or transactions that occurred after September 30, 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 six months ended September 30, 2022.