| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis
of Presentation The
summary of significant accounting policies is presented to assist in the understanding of the financial statements. These policies conform
to accounting principles generally accepted in the United States of America and have been consistently applied. The Company has elected
a calendar year of December 31 year-end. Principles
of Consolidation The
Consolidated Financial Statements include the accounts of Kid Castle Educational Corporation and all of our controlled subsidiary companies.
All significant intercompany accounts and transactions have been eliminated. Investments in business entities in which we do not have
control, but we have the ability to exercise significant influence over operating and financial policies (generally 20 50 50.1 COVID-19
Risks, Impacts and Uncertainties COVID-19
Risks, Impacts and Uncertainties —We are subject to the risks arising from COVID-19’s impacts on the residential real estate
industry. Our management believes that these impacts, which include but are not limited to the following, could have a significant negative
effect on our future financial position, results of operations, and cash flows: (i) prohibitions or limitations on in-person activities
associated with residential real estate transactions; (ii) lack of consumer desire for in-person interactions and physical home tours;
and (iii) deteriorating economic conditions, such as increased unemployment rates, recessionary conditions, lower yields on individuals’
investment portfolios, and more stringent mortgage financing conditions. In addition, we have considered the impacts and uncertainties
of COVID-19 in our use of estimates in preparation of our consolidated financial statements. These estimates include, but are not limited
to, likelihood of achieving performance conditions under performance-based equity awards, net realizable value of inventory, and the
fair value of reporting units and goodwill for impairment. Since
April 2020, following the government lockdown order, we asked all employees to begin to work from their homes and we also reduced the
number of hours available to each of our employees by approximately by approximately 75%. These actions taken in response to the economic
impact of COVID-19 on our business resulted in a reduction of productivity for the period ended September 30, 2024. All cost related
to these actions are included in general and administrative expenses, as these costs were determined to be direct and incremental. Use
of Estimates and Assumptions The
preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) 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. Actual
results could differ from those estimates. Cash
and Cash Equivalents We
maintain cash balances in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of
the statements of cash flows, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents.
as of September 30, 2024 and December 31, 2023 we did maintain $ 0 7,004 Financial
Instruments The
estimated fair values for financial instruments were determined at discrete points in time based on relevant market information. These
estimates involved uncertainties and could not be determined with precision. The carrying amount of the our accounts payable and accruals,
our accruals- related parties and loans – related parties approximate their fair values because of the short-term maturities of
these instruments. Fair
Value Measurements ASC
Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), provides a comprehensive framework for measuring fair value
and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value
and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets
for identical assets and liabilities and the lowest priority to unobservable value inputs. The Company utilizes the provisions of Accounting
Standards Codification 820 – Fair Value (“ASC 820”). Under ASC 820, fair value is defined as the price that would be
received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market
participants at the measurement date. In
determining fair value, the Company uses various valuation approaches. ASC 820 establishes a fair value hierarchy for inputs used in
measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most
observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability
based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumption about
the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
The fair value hierarchy is categorized into three levels based on the inputs as follows: Level
1 – Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets
and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on
the New York Stock Exchange. Level
2 – Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported
date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced
with models using highly observable inputs. Level
3 – Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included
in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts
used to determine the fair value of financial transmission rights. The
availability of valuation techniques and observable inputs can vary from security to security and is affected by a wide variety of factors,
including the type of security, whether the security is new and not yet established in the marketplace, and other characteristics particular
to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market,
the determination of fair value requires more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately
realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation,
those estimated values may be materially higher or lower than the values that would have been used had a ready market for the securities
existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for securities categorized
in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such
cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety is
determined by the lowest level input that is significant to the fair value measurement. Fair
value is a market-based measure considered from the prospective of a market participant rather than an entity-specific measure. Therefore,
even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants
would use in pricing the asset or liability at the measurement date. The Company uses prices and inputs that are current as of the measurement
date, including during periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be
reduced for many securities. This condition could cause a security to be reclassified to a lower level within the fair value hierarchy. The
Company values its securities that are freely tradable and are listed on a national securities exchange or reported on the NASDAQ national
market at their last sales price as of the last business day of the year. Changes in fair value is reflected in the Company’s statement
of operations. Many
cash and over-the-counter (OTC) contracts have bid-and-ask prices that can be observed in the marketplace. Bid prices reflect the highest
price that the marketplace participants are willing to pay for an asset. Ask prices represent the lowest price that the marketplace participants
are willing to accept for an asset. For securities whose inputs are based on bid-ask prices, the Company’s policy for securities
traded in the OTC markets and listed securities for which no sale was reported on that date are valued at their last reported “bid”
price if held long, and last reported “asked” price if sold short. The Company considers these investments level 1 securities
for active markets and level 2 securities for thinly traded markets. Our
financial instruments consist of accounts payable and accruals and our accruals- related parties. The carrying amount of the out accounts
payable and accruals, accruals- related parties and loans – related parties approximates their fair values because of the short-term
maturities of these instruments. Investment
– Trading Securities All
investment securities are classified as trading securities and are carried at fair value in accordance with ASC 320 Investments —
Debt and Equity Securities. Investment transactions are recorded on a trade date basis. Realized gains or losses on sales of investments
are based on the first-in, first-out or the specific identification method. Realized and unrealized gains or losses on investments are
recorded in the statements of operations as realized and unrealized gains or losses as net revenue. All investment securities are held
and transacted by the Company’s broker firm. All
investments that are listed on a securities exchange are valued at their last sales price on the primary securities exchange on which
such securities are traded on such date. Securities that are not listed on any exchange but are traded over-the-counter are valued at
the mean between the last “bid” and “ask” price for such security on such date. The Company does not have any
investment securities for which market quotes are not readily available. The
Company’s trading securities are held by a third-party brokerage firm, and composed of publicly traded companies with readily available
fair value which are quoted prices in active markets. Investments The
Company makes certain strategic investments related to its business which are included in other assets in the condensed consolidated
statements of financial condition. The Company accounts for these investments as follows:
● Under
the equity method of accounting as required under FASB ASC Topic 323, “Investments – Equity Method and Joint Ventures.”
These investments, including where the investee is a limited partnership or limited liability company, are recorded at the fair value
amount of the Company’s initial investment and are adjusted each period for the Company’s share of the investee’s
income or loss. Contributions paid to and distributions received from equity method investees are recorded as additions or reductions,
respectively, to the respective investment balance.
● At
fair value, if the investment in equity securities has a readily determinable fair value.
● At
adjusted cost, if the investment does not have a readily determinable fair value. Adjusted cost represents the historical cost, less
impairment if any. If the Company identifies observable price changes in orderly transactions for the identical or a similar investment
of the same issuer, the Company measures the equity security at fair value as of the date that the observable transaction occurred
in accordance with FASB ASC Topic 321, “Investments in Equity Securities.” A
judgmental aspect of accounting for investments is evaluating whether a decline in the value of an investment has occurred. The evaluation
of impairment is dependent on specific quantitative and qualitative factors and circumstances surrounding an investment, including recurring
operating losses, credit defaults and subsequent rounds of financing. Most of the Company’s equity investments do not have readily
determinable market values. All investments are reviewed for changes in circumstances or occurrence of events that suggest the Company’s
investment may not be recoverable. An impairment loss, if any, is recognized in the period the determination is made. Significant
Transaction Significant
Transaction, also known as common control transactions occur frequently, particularly in the context of reorganizations, spinoffs, and
initial public offerings. Common control transactions are generally accounted for by the receiving entity based on the nature of the
transactions. For example, transactions involving the transfer of an asset (such as an unoccupied building) are accounted for by the
receiving entity at the carrying value of the asset transferred on a prospective basis. Conversely, transactions involving the transfer
of a business ordinarily will result in a change in reporting entity for the receiving entity and require retrospective combination of
the entities for all periods presented using the historical cost basis of the parent. ASC
850 covers transactions and relationships with related parties. It applies to all reporting entities, including the separate financial
statements of a subsidiary, as discussed in ASC 850-10-15-2. Identifying related party relationships and transactions requires a reporting
entity to first determine whether a party meets the definition of a “related party.” ASC
850-10-20 described r
a. Affiliates
of the entity
b. Entities
for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value
Option Subsection of Section 825-10-15, to be accounted for by the equity method by the investing entity
c. Trusts
for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management
d. Principal
owners of the entity and members of their immediate families
e. Management
of the entity and members of their immediate families
f. Other
parties with which the entity may deal if one party controls or can significantly influence the management or operating policies
of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests
g. Other
parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership
interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting
parties might be prevented from fully pursuing its own separate interests The
following definitions applies under ASC 850-10-20 Affiliate:
Control:
Immediate
family: Management:
Principal
owners: 10 FASB
Statement No. 141
● An
individual or enterprise holds more than 50
● A
group of shareholders holds more than 50
● Immediate
family members (married couples and their children, but not their grandchildren) hold more than 50 During
the period ended September 30, 2024, the Company recorded significant transactions including loans from our officers, directors, and
entities under the control or influence of our officers and directors. On
January 12, 2024, due to the company’s need to simplify its balance sheet in order to approach the regulators to remove the Caveat
Emptor tag from the company’s OTC Market profile, the company sold Alpharidge Capital LLC, its main operating subsidiary to American
Community Capital, LP., a California limited partnership controlled by our President and CEO Mr. Frank I Igwealor, in exchange for cash
payment of $ 1,560,992 240 6510 1,086,677 729,482 357,195 1,086,677 Related
Party Transactions A
related party is generally defined as (i) any person that holds 10% or more of our membership interests including such person’s
immediate families, (ii) our management, (iii) someone that directly or indirectly controls, is controlled by or is under common control
with us, or (iv) anyone who can significantly influence our financial and operating decisions. A transaction is considered to be a related
party transaction when there is a transfer of resources or obligations between related parties. Revenue,
Assets and Liabilities of Consolidated Subsidiary and Financial Statement Relationship Kid
Castle Educational Corporation is 81.75 Leases In
February 2016, the FASB issued ASU 2016-02, “Leases” that requires for leases longer than one year, a lessee to recognize
in the statement of financial condition a right-of-use asset, representing the right to use the underlying asset for the lease term,
and a lease liability, representing the liability to make lease payments. The accounting update also requires that for finance leases,
a lessee recognize interest expense on the lease liability, separately from the amortization of the right-of-use asset in the statements
of earnings, while for operating leases, such amounts should be recognized as a combined expense. In addition, this accounting update
requires expanded disclosures about the nature and terms of lease agreements. The Company has reviewed the new standard and does not
expect it to have a material impact to the statement of financial condition or its net capital. Prior
to January 1, 2019, the Company accounted for leases under Accounting Standards Codification (ASC) 840, Accounting for Leases. Effective
from January 1, 2019, the Company adopted the guidance of ASC 842, Leases, which requires an entity to recognize a right-of-use asset
and a lease liability for virtually all leases. On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases
(Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the
balance sheet and disclosing key information about leasing transactions. ASC 842 requires that lessees recognize right of use assets
and lease liabilities calculated based on the present value of lease payments for all lease agreements with terms that are greater than
twelve months. It requires for leases longer than one year, a lessee to recognize in the statement of financial condition a right·of·use
asset, representing the right to use the underlying asset for the lease term, and a lease liability, representing the liability to make
lease payments. ASC 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured
and presented in the statement of operations and statement of cash flows. ASC 842 supersedes nearly all existing lease accounting guidance
under GAAP issued by the Financial Accounting Standards Board (“FASB”) including ASC Topic 840, Leases. The
accounting update also requires that for finance leases, a lessee recognize interest expense on the lease liability, separately from
the amortization of the right-of-use asset in the statements of earnings, while for operating leases, such amounts should be recognized
as a combined expense. In addition, this accounting update requires expanded disclosures about the nature and terms of lease agreements. The
Company does not have operating and financing leases as of September 30, 2024. The adoption of ASC 842 did not materially impact our
results of operations, cash flows, or presentation thereof. The Company has reviewed the new standard and does not expect it to have
a material impact to the statement of financial condition or its net capital. Income
Taxes Under
the asset and liability method prescribed within ASC 740, Income Taxes, the Company recognizes deferred tax assets and liabilities for
the future tax consequences attributable to differences between financial statement carrying amounts of 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 realized or settled. The effect of a change in tax rates on deferred
tax assets and liabilities is recognized in income in the period that includes the enactment date. The realizability of deferred tax
assets is assessed throughout the year and a valuation allowance is recorded if necessary, to reduce net deferred tax assets to the amount
more likely than not to be realized. Certain prior period deferred tax disclosures were reclassified to conform with current period presentation. ASC
740 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will
be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of
the position. ASC 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim
periods, disclosure, and transition. The
Company’s practice is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in selling
and administrative expense. as of September 30, 2024, the Company had no accrued interest or penalties on unrecognized tax benefits. The
provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized
for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities,
and for operating losses and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted
tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. We record
a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. Uncertain
Tax Positions We
evaluate tax positions in a two-step process. We first determine whether it is more likely than not that a tax position will be sustained
upon examination, based on the technical merits of the position. If a tax position meets the more-likely-than-not recognition threshold
it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the
largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. We classify gross interest and
penalties and unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year as long term liabilities
in the financial statements. Revenue
Recognition The
Company recognizes revenue in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 606, Revenue from Contracts with Customers, which requires that five basic steps be followed to recognize revenue:
(1) a legally enforceable contract that meets criteria standards as to composition and substance is identified; (2) performance obligations
relating to provision of goods or services to the customer are identified; (3) the transaction price, with consideration given to any
variable, noncash, or other relevant consideration, is determined; (4) the transaction price is allocated to the performance obligations;
and (5) revenue is recognized when control of goods or services is transferred to the customer with consideration given, whether that
control happens over time or not. Determination of criteria (3) and (4) are based on our management’s judgments regarding the fixed
nature of the selling prices of the products and services delivered and the collectability of those amounts. The adoption of ASC 606
did not result in a change to the accounting for any of the in-scope revenue streams; as such, no cumulative effect adjustment was recorded. The
Company generates revenue primarily from: (1) the sale of homes/ Entrepreneurship
Development Initiative Revenue Alpharidge
Capital LLC, an operating subsidiary of the Company operates an Entrepreneurship Development Initiative through which it acquires abandoned
shell companies that are listed on the OTC expert market with the goal of cleaning them up and deploying them into the capital markets
for possible merger/acquisition to small businesses that are looking for vehicles to help boost their businesses and create jobs for
their family and friends. Alpharidge’s process flows as follows: (1) The acquisition of control of abandoned shell/pubco through
cash-purchase of custodianship process. All shells/pubcos acquired are held in the name of Alpharidge or one of its affiliates; (2) Alpharidge
cleanse and revives the shell/pubcos; (3) Alpharidge issues control-block-shares of the pubco to CED Capital an affiliate company, to
hold in trust for Alpharidge. (4) CED sells the control-block-shares of the pubco to buyers in exchange for cash or notes. The cash component
goes to Alpharidge immediately, while the note is simultaneously assigned to Alpharidge; and (5) Alpharidge releases control of the pubco
to the new buyer and recognize the revenue from the sale done on its behalf by CED Capital. On January 12, 2024, the Company sold Alpharidge
Capital LLC., and with it, the company’s Entrepreneurship Development Initiative, to American Community Capital LP., a California
limited partnership controlled by our President and CEO Mr. Frank I Igwealor, in exchange for cash payment of $ 1,560,992 240 6,510 1,086,677 729,482 357,195 1,086,677 Revenue
Recognition – Sale of homes/properties, This
business segment produced zero Revenue
Recognition – Principal (securities) transactions The
Company records securities transactions and related revenue and expenses on a trade-date basis. Other income is recognized when earned. Interest
Income and Expense The
Company earns interest income and incurs interest expense primarily in connection with its electronic brokerage customer business and
its securities lending activities, which are recorded on an accrual basis and are included in interest income and interest expense, respectively,
in the condensed consolidated statements of comprehensive income. During
the period ended September 30, 2024, the Company did not record any interest revenue. Principal
Transactions Principal
transactions include gains and losses as a result of changes in the fair value of financial instruments owned, at fair value, financial
instruments sold, but not yet purchased, at fair value, and other investments measured at fair value (i.e., unrealized gains and losses)
and realized gains and losses related to the Company’s principal transactions. Included are net gains and losses on stocks, options,
U.S. and foreign government securities, municipal securities, futures, foreign exchange, precious metals and other derivative instruments,
which are reported on a net basis in other income in the condensed consolidated statements of comprehensive income. Dividends are integral
to the valuation of stocks. Accordingly, dividend income and expense attributable to financial instruments owned, at fair value and financial
instruments sold, but not yet purchased, at fair value, are reported on a net basis in other income in the condensed consolidated statements
of comprehensive income. During
the period ended September 30, 2024, the Company did not record any revenue from principal transaction. Contract
balances Substantially
all receivables from contracts with customers within the scope of Accounting Standards Codification (ASC) 606 Revenue From Contracts
With Customers Unsatisfied
performance obligations We
do not have any unsatisfied performance obligations other than those that are subject to an elective practical expedient under ASC 606.
The practical expedient applies to and is elected for contracts where we recognize revenue at the amount to which we have the right to
invoice for services performed. During the period ended September 30, 2024, the Company did not have any unsatisfied performance obligations
(other than those that are subject to an elective practical expedient under ASC 606). Revenue
Recognition – Entrepreneurship Development Under
ASC 606, an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those goods or services. FASB ASC 606-10-05-3 through 05-4 and 606-10-10-2
through 10-4. To achieve the core principle of ASC 606, an entity should take the following actions: Step 1: Identify the contract with
a customer; Step 2: Identify the performance obligations in the contract; Step 3: Determine the transaction price; Step 4: Allocate the
transaction price; and Step 5: Recognize revenue when or as the entity satisfies a performance obligation. Revenue
is recognized when a company satisfies a performance obligation by transferring a promised good or service to a customer (which is when
the customer obtains control of that good or service). An entity should consider the terms of the contract and all relevant facts and
circumstances when applying the revenue recognition standard. An entity should apply the revenue recognition standard, including the
use of any practical expedients, consistently to contracts with similar characteristics and in similar circumstances. As
of September 30, 2024, our Entrepreneurship Development Revenue was derived from the sale of asset (control in pubco) to the buyer who
assumes control of the pubco at the close of the sales transaction. A sale transaction could involve cash-only, cash and note, or note-only.
For the contract that includes financing or convertible note, the seller evaluated the collectibility of the transaction price, and the
probability that the seller will collect the consideration. Seller addressed the risk of collectability by using a convertible note with
very favorable conversion. Determining
whether a sale is to a customer: Step
1: A sales contract/agreement Step
2: Identify the performance obligations in the contract. Step
3: Determine the transaction price. Step
4: Allocate the transaction price Step
5: Recognize revenue. Entrepreneurship
Development revenues As
of September 30, 2024, the pubco-control sales revenues and related costs we deferred related to these obligations were immaterial. Our
contract liabilities, consist of deposits received from customers for sold but undelivered pubco-control. To
account for the initial acquisition of the shells through custodianship processes or direct acquisition from other owners, Alpharidge
capitalizes all identifiable funds advanced to each shell to pay for its nominal activities including monthly Transfer Agent’s
fees, annual state charter dues, OTCIQ access fees, legal, accounting, reporting and publication cost. Each cost is accumulated under
the related asset as long-term receivable from that entity. It is classified as long-term receivable because it is only paid off when
the shell is sold to prospective entrepreneurs. Upon sale, the sale price is recognized as EDI revenue while the accumulated costs/receivable
is expensed as EDI Cost of Sales. Sales
Incentives: During
the period ended September 30, 2024, the Company did record $ 0 Advertising
Costs We
expense advertising costs when advertisements occur. During
the period ended September 30, 2024, the Company did recorded ad vertising costs 0 Concentrations
of Credit Risk The
Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents.
The Company places its cash and cash equivalents with financial institutions of high credit worthiness. The Company maintains cash balances
at financial institutions within the United States which are insured by the Federal Deposit Insurance Corporation (“FDIC”)
up to limits of approximately $ 250,000 Stock
Based Compensation The
cost of equity instruments i |
