| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE－3 SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements
reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed
consolidated financial statements and notes.
· Basis of presentation These accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US
GAAP”).
· Use of estimates and assumptions In preparing these unaudited condensed consolidated
financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance
sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.
· Basis of consolidation The unaudited condensed consolidated financial
statements include the accounts of ENMI and its subsidiaries. All significant inter-company balances and transactions within the Company
have been eliminated upon consolidation.
· Cash and cash equivalents Cash and cash equivalents are carried at cost
and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an
original maturity of three months or less as of the purchase date of such investments.
· Revenue recognition ASC 606, Revenue from Contracts with Customers The Company applies the following five steps in
order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
· identify the contract with a customer;
· identify the performance obligations in the contract;
· determine the transaction price;
· allocate the transaction price to performance obligations in the contract; and
· recognize revenue as the performance obligation is satisfied. The Company also follows the guidance provided
in ASC 606, Revenue from Contracts with Customers The Company derives its revenue from the sale
of the rapid tester kits and from commissions earned in its role as an agent. Where the Company acts as a principal, it sells
its products directly to healthcare providers, retailers and individual consumers through its retail channels. The Company considers customer
order confirmations to be a contract with the customer. Customer confirmations are executed at the time an order is placed. Revenue is
recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied),
which typically occurs at shipment date. As a result, the Company has a present and unconditional right to payment and record the amount
due from the customer in accounts receivable. For each contract, the Company considers the promise to transfer products to be the only
identified performance obligation. In determining the transaction price, the Company evaluates whether the price is subject to refund
or adjustment to determine the net consideration to which the Company expects to be entitled. Where the Company acts as an agent, the Company
recognizes revenue on a net basis as the Company is not responsible for the fulfillment, nor controls the delivery of the promised goods,
and has no discretion in establishing prices, and therefore is an agent in the arrangement. For each contract the Company considers the
promise to facilitate the arrangement between the parties as the identified performance obligation. The transaction price is determined
to be the contracted price to which the Company is entitled to upon completion of its performance obligation. The Company’s revenues for the nine months
ended December 31, 2023 and 2022 are recognized at a point in time, for both its roles as principal and as agent.
· Cost of revenue Cost of revenue consists primarily of the cost
of goods sold, which are directly attributable to the sales of products.
· Income taxes The Company adopted the ASC 740 Income tax The estimated future tax effects of temporary
differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs
and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides
valuation allowances as management deems necessary.
· Uncertain tax positions The Company did no
· Foreign currencies translation 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 condensed consolidated
statement of operations. The reporting currency of the Company is United
States Dollar ("US$") and the accompanying condensed consolidated financial statements have been expressed in US$. In addition,
the Company is operating in Hong Kong via its subsidiary, and maintains its books and records in its local currency, Hong Kong Dollars
(“HKD”), which is its functional currency, being the primary currency of the economic environment in which its operations
are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are
translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement Translation of amounts from HKD into US$ has been
made at the following exchange rates for the nine months ended December 31, 2023 and 2022:
Schedule of translation exchange rates
December 31, 2023 December 31, 2022
Period-end HKD:US$ exchange rate 0.1280 0.1282
Average HKD:US$ exchange rate 0.1278 0.1276
· Comprehensive income ASC Topic 220, “ Comprehensive Income
· Net loss per share The Company calculates net loss per share in accordance
with ASC 260, Earnings per Share
· Related parties The Company follows the ASC 850-10, “ Related
Party” Pursuant to section 850-10-20 the related parties
include a) affiliates of the Company; 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 Income-sharing trusts that are managed by or under
the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company
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; and 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 unaudited condensed consolidated financial
statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances,
and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation
of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature
of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were
ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding
of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for
which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding
period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent,
the terms and manner of settlement.
· Commitments and contingencies The Company follows the ASC 450-20, Commitments If the assessment of a contingency indicates that
it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would
be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potentially material
loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent
liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally
not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon
information available at this time that these matters will have a material adverse effect on the Company’s financial position, results
of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s
business, financial position, and results of operations or cash flows.
· Fair value of financial instruments The Company follows paragraph 825-10-50-10 of
the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37
of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments.
Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted
accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair
value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value
hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value
hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest
priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting
Standards Codification are described below:
Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their
fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant
model assumption or input is unobservable. The fair value hierarchy gives the highest priority
to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If
the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is
based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial
assets and liabilities, such as cash and cash equivalents, approximate their fair values because of the short maturity of these instruments.
· Recent accounting pronouncements In June 2016, the Financial Accounting Standards
Board (“FASB”) issued new accounting guidance ASU 2016-13 for recognition of credit losses on financial instruments, which
is effective January 1, 2020, with early adoption permitted on January 1, 2019. The guidance introduces a new credit reserving model known
as the Current Expected Credit Loss (“CECL”) model, which is based on expected losses, and differs significantly from the
incurred loss approach used today. The CECL model requires measurement of expected credit losses not only based on historical experience
and current conditions, but also by including reasonable and supportable forecasts incorporating forward-looking information and will
likely result in earlier recognition of credit reserves. In November 2019, the FASB issued ASU No. 2019-10, which is to update the effective
date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit
losses standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022, including interim periods
within those fiscal years. The Company has adopted this update on April 1, 2023, and the adoption does not have material impact on Company’s
consolidated financial statements and related disclosures. CECL adoption will have broad impact on the financial
statements of financial services firms, which will affect key profitability and solvency measures. Some of the more notable expected changes
include:
– Higher allowance on financial guarantee reserve and finance lease receivable levels and related deferred tax assets. While different asset types will be impacted differently, the expectation is that reserve levels will generally increase across the board for all financial firms.
– Increased reserve levels may lead to a reduction in capital levels.
– As a result of higher reserving levels, the expectation is that CECL will reduce cyclicality in financial firms’ results, as higher reserving in “good times” will mean that less dramatic reserve increases will be loan related income (which will continue to be recognized on a periodic basis based on the effective interest method) and the related credit losses (which will be recognized up front at origination). This will make periods of loan expansion seem less profitable due to the immediate recognition of expected credit losses. Periods of stable or declining loan levels will look comparatively profitable as the income trickles in for loans, where losses had been previously recognized. In March 2023, the FASB issued new accounting
guidance, ASU 2023-01, for leasehold improvements associated with common control leases, which is effective for fiscal years beginning
after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual
financial statements that have not yet been made available for issuance. The new guidance introduced two issues: terms and conditions
to be considered with leases between related parties under common control and accounting for leasehold improvements. The goals for the
new issues are to reduce the cost associated with implementing and applying Topic 842 and to promote diversity in practice by entities
within the scope when applying lease accounting requirements. The Company has reviewed all recently issued,
but not yet effective, accounting pronouncements and believe the future adoption of any such pronouncements may not be expected to cause
a material impact on its financial condition or the results of its operations. |
