| Summary of Significant Accounting Policies | NOTE—4 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES The accompanying 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 condensed consolidated
financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America
(“US GAAP”).
• Basis of consolidation The condensed consolidated financial statements
include the accounts of the Company and its subsidiaries. All significant inter-company balances and transactions within the Company
have been eliminated upon consolidation.
• Use of estimates and assumptions In preparing these 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.
• 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.
• Account receivable Accounts receivable consist of amounts
due from customers in connection with our normal business activities and are carried at sales value less allowance for doubtful
accounts. The allowance for doubtful accounts is established to reflect the expected losses of accounts receivable based on past
collection history, age, account payment status compared to invoice payment terms and specific individual risks identified. The
delinquency of a receivable account is determined based on these factors. The Company does not accrue interest on aged accounts
receivable. As of June 30, 2019, there were no allowances for doubtful accounts.
• Intangible assets Intangible assets represented the acquired
game right from a related party, which are stated at acquisition cost, less accumulated amortization. The Company amortizes its
intangible assets with definite lives over their estimated useful lives and reviews these assets for impairment when an indicator
for potential impairment exists. The Company is currently amortizing its intangible assets with definite lives over periods of
3 years.
• Property, plant and equipment Property, plant and equipment are stated
at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line
basis over the following expected useful lives from the date on which they become fully operational and after taking into account
their estimated residual values:
Expected useful lives
Building 38 years or lesser than term of lease
Leasehold improvements 3-10 years or lesser than term of lease
Furniture and fittings 3 years
Office equipment and computers 1- 3 years
Motor vehicle 2-3.33 years Expenditures for repairs and maintenance
are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from
the accounts and any resulting gain or loss is recognized in the results of operations. Depreciation expense for the three months
ended June 30, 2019 and 2018 were $49,765 and $31,289, as part of operating expenses, respectively.
• Impairment of long-lived assets In accordance with Accounting Standards
Codification ("ASC") Topic 360-10-5, “ Impairment or Disposal of Long-Lived Assets
• Revenue recognition Revenue is recognized when it is realized
or realizable and earned, in accordance with ASC 605 Revenue Recognition The Company records revenues from the sales
of third-party products on a “gross” basis pursuant to ASC 605-45 Revenue Recognition - Principal Agent Considerations
• Commission credits The Company maintains a membership program,
whereby certain members earn commission credits, based on the sales volume of certain other members who are sponsored directly
or indirectly by the member. Commission credits are redeemable on future spending of the products purchased or playing online games.
Commission credits are recorded and classified as operating expense when the products are delivered and revenue is recognized.
The estimated liability for unredeemed commission credit is included in commission liability on the accompanying balance sheets.
Management reviews the adequacy for the accrual for unredeemed commission credits by periodically evaluating the historical redemption
and projected trends.
• 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 not take any uncertain
tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25
for the three months ended June 30, 2019 and 2018.
• Finance leases Leases that transfer substantially all
the rewards and risks of ownership to the lessee, other than legal title, are accounted for as finance leases. Substantially all
of the risks or benefits of ownership are deemed to have been transferred if any one of the four criteria is met: (i) transfer
of ownership to the lessee at the end of the lease term, (ii) the lease containing a bargain purchase option, (iii) the lease term
exceeding 75% of the estimated economic life of the leased asset, (iv) the present value of the minimum lease payments exceeding
90% of the fair value. At the inception of a finance lease, the Company as the lessee records an asset and an obligation at an
amount equal to the present value of the minimum lease payments. The leased asset is amortized over the shorter of the lease term
or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with
the Company’s depreciation policy if the title is to eventually transfer to the Company. The periodic rent payments made
during the lease term are allocated between a reduction in the obligation and interest element using the effective interest method
in accordance with the provisions of ASC Topic 835-30, “Imputation of Interest”
• 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 consolidated statement of operations. The reporting currency of the Company is
United States Dollar ("US$") and the accompanying consolidated financial statements have been expressed in US$. In addition,
the Company’s operating subsidiaries in Singapore and Seychelles maintain their books and record in its local currency, Singapore
Dollars (“S$”), which is a functional currency as being the primary currency of the economic environment in which their
operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency
is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement Translation of amounts from S$ into US$1
has been made at the following exchange rates for the three months ended June 30, 2019 and 2018:
June 30, 2019 June 30, 2018
Period-end S$:US$1 exchange rate 1.3520 1.3619
Period average S$:US$1 exchange rate 1.3629 1.3339
• Comprehensive income ASC Topic 220, “ Comprehensive
Income
• Stock based compensation For stock options
granted as consideration for services rendered by non-employees, the Company recognizes compensation expense in accordance with
the requirements of ASC Topic 505-50 (“ASC 505-50”), “ Equity Based Payments to Non- Employees For restricted
common stock and stock option awards that have performance-based conditions, the Company recognizes the stock-based compensation
expense at the fair value of the award based on the date that the performance conditions have been met. The Company
calculates the fair value of the stock options using the Black Scholes option pricing model. The fair value of restricted
common stock awards is based on the closing price of the Company’s common stock on the applicable measurement date. The assumptions
used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties
and the application of management’s judgment. To date, the Company
has not granted any stock-based compensation awards to employees.
• Segment reporting ASC Topic 280, “ Segment Reporting
• 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 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 consolidated 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 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 February 2016, the Financial Accounting Standard
Board (“FASB”) issued Accounting Standards Update ASU No. 2016-02, Leases (Topic 842) (ASU 2016-02), which
requires a lessee to recognize most leases on the balance sheet as lease liabilities with corresponding right-of-use assets. The Company adopted ASU 2016-02 utilizing the modified retrospective transition method at the beginning of the first quarter of
2019. As a result of the adoption of ASC 842, the Company recorded finance lease liabilities of $28,333
at the beginning of the first quarter of 2019,
with no material impact to the statement of operations. In August 2017, the FASB issued ASU No. 2017-12, Derivatives
and Hedging (ASU 2017-12), which is intended to more closely align hedge accounting with companies’ risk management strategies,
simplify the application of hedge accounting, and increase transparency regarding the scope and results of hedging programs. The
guidance in this update is applied using a cumulative-effect adjustment to retained earnings at the beginning of the fiscal year
of adoption. ASU 2017-12 is effective for public business entities for fiscal years beginning after December 15, 2018, including
interim periods within those fiscal years. The adoption of ASU 2017-12 at the beginning of the first quarter of 2019 did not have
a significant impact on the Company’s financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments
– Credit Losses (ASU 2016-13), which changes the accounting for recognizing impairments of financial assets. Under the new
guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance
also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration
since their origination. ASU 2016-13 is effective for public business entities for fiscal years beginning after December 15, 2019,
including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the impact
that this guidance will have on its financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles
– Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-14). This new guidance eliminates
the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. Instead, entities will
record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-14 is
effective for public business entities for fiscal years beginning after December 15, 2019, including interim periods within those
fiscal years, and early adoption is permitted. The Company is currently evaluating the impact that this guidance will have on
its financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value
Measurement: Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (ASU 2018-13), which
adds and modifies certain disclosure requirements for fair value measurements. Under the new guidance, entities will no longer
be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, or valuation
processes for Level 3 fair value measurements. However, public business entities will be required to disclose the range and weighted
average of significant unobservable inputs used to develop Level 3 fair value measurements, and related changes in unrealized gains
and losses included in other comprehensive income. ASU 2018-13 is effective for public business entities for fiscal years beginning
after December 15, 2019, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently
evaluating the impact that this guidance will have on its financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles
- Goodwill and Other – Internal-Use Software: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing
Arrangement that is a Service Contract (ASU 2018-05). This new guidance requires a customer in a cloud computing arrangement to
determine which implementation costs to capitalize as assets or expense as incurred. Capitalized implementation costs related to
a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the
module or component of the hosting arrangement is ready for its intended use. ASU 2018-05 is effective for public business entities
for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, and early adoption is
permitted. Application of this guidance can be applied either prospectively or retrospectively. The Company is currently evaluating
the impact that this guidance will have on its financial statements. There are no
other recently issued accounting standards that apply to us or that are expected to have a material impact on our results of operations,
financial condition, or cash flows. |
