| Summary of Significant Accounting Policies | NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Basis of Presentation The Company’s consolidated financial
statements have been prepared in accordance with accounting principles generally accepted in the United States
of America (“U.S.
GAAP”). The preparation of financial statements in conformity with accounting principles generally accepted in the United
States of America 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. The Company's functional currency for
Chongqing CAT9is the Chinese Renminbi (“RMB”); however, the accompanying financial statements have been translated
and presented in the United States Dollars (“USD”). Principles of Consolidation The accompanying consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiary, CAT9 Cayman, and its subsidiaries, including CAT9 Investment
China, Chongqing CAT9 Industrial
Co., Ltd: Chongqing Yubei Branch Company of Chongqing
CAT9 Industrial Co., Ltd; Chengdu First Branch Company of Chongqing CAT9 Industrial Co., Ltd; and Chengdu Second Branch Company
of Chongqing CAT9 Industrial Co., Ltd. Translation Adjustment For the years ended December 31, 2020 and 2019,
the accounts of the Chongqing CAT9were maintained, and its financial statements were expressed, in RMB. Such financial
statements were translated into USD in accordance with the Foreign Currency Matters Topic of the Codification (ASC 830), with the
RMB as the functional currency. According to the Codification, all assets and liabilities were translated at the current
exchange rate at respective balance sheets dates, members’ capital are translated at the historical rates and income statement
items are translated at the average exchange rate for the period. The resulting translation adjustments are reported under other
comprehensive income in accordance with the Comprehensive Income Topic of the Codification (ASC 220), as a component of members’
capital. Transaction gains and losses are reflected in the income statement. Comprehensive Income The Company uses SFAS 130 “Reporting
Comprehensive Income” (ASC Topic 220). Comprehensive income is comprised of net income and all changes to the
statements of
members’ capital, except those due to investments by members, changes in paid-in capital and distributions
to members. Comprehensive
income for the years ended December 31, 2020 and 2019 is included net income and foreign currency translation
adjustments. Use of Estimates The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of America requires the Company to make estimates
and judgments that affect
the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent
assets and liabilities. These estimates and judgments are based on historical information, information that is currently available
to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results
could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash in hand
and cash in time deposits, certificates of deposit and
all highly liquid instruments with original maturities of three months or
less. Revenue recognition Effective January 1, 2018, we adopted Financial
Accounting Standards Board (“FASB”), Accounting Standards Codification (“ASC”) Topic 606, Revenue from
Contracts with Customers We only apply the five-step model to contracts
when it is probable that we will collect the consideration to which we are entitled in exchange for the goods or services we transfer
to our customer. Once a contract is determined to be within the scope of ASC Topic 606, at contract inception we review the contract
to determine which performance obligations we must deliver and which of these performance obligations are distinct. We recognize
as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance
obligation is satisfied or as it is satisfied. Generally, our performance obligations are transferred to customers at a point in
time, typically upon delivery. Accounts receivable Accounts receivable
are recorded net of allowance for doubtful accounts.
The Company provides an allowance for doubtful accounts equal to the estimated
uncollectible amounts. Periodically, management assesses customer credit history and relationships as well as performs accounts
receivable aging analysis. Inventories Inventories are valued at the lower of cost
or market. Management compares the cost of inventories with the market value and allowance is made for writing down their inventories
to market value, if lower. Inventories consist of raw materials and finished goods. When appropriate, allowances to inventories
are recorded to write down the cost of inventories to their net realizable value. For the years ended December 31, 2020 and 2019,
there were no such allowances. Capitalized software costs Per ASC 985-20 expenses in the development
of the software are expensed until technological feasibility has been reached and costs are determined to be recoverable. At this
point additional expenses are capitalized. Capitalization ends, and amortization begins when the product is available for general
release to customers. The capitalized software cost is being amortized using the straight-line method over the useful life of one
year. As of December 31, 2020, and 2019, the Company has $4,248 and $13,379, respectively, of capitalized software development
costs. Property and equipment Property and equipment are stated at cost net of accumulated depreciation
and impairment losses. Depreciation is provided over the estimated useful lives of the assets using the straight-line method from
the time the assets are placed in service. Estimated useful lives are as follows, taking into account the assets' estimated residual
value:
Classification Estimated useful life
Computer and office equipment 3-5 years
Vehicles 4
years Major additions, renewals and betterments are capitalized,
while maintenance and repairs are expensed as incurred. Gains or losses on dispositions of property and equipment are included
in operating income (loss). Management assesses the carrying value of property
and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is
indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and
its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized
to write down the asset to its estimated fair value. For the years ended December 31, 2020 and 2019, the Company had a loss on
disposal of its property and equipment of $0 and $5,711, respectively. 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 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 establishes a framework for
measuring fair value in accounting principles generally accepted
in the United States of America (U.S. 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 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 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 unobservable inputs
and not corroborated by market data. The carrying amount of the Company’s
financial assets and
liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the
short maturity of those instruments. The Company’s notes payable approximates
the fair value of such instruments based upon management’s best
estimate of interest rates that would be available to the
Company for
similar financial arrangements at December 31, 2020. The Company does not have any assets or liabilities
measured at fair value on a recurring or a non-recurring basis as of December 31, 2020 and 2019. Income taxes The Company follows Section 740-10-30
of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred
tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities
using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are
reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years
in which those temporary differences are expected to be recovered or settled. The effect on
deferred tax assets and liabilities
of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date. The Company adopted section 740-10-25
of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section
740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded
in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position
only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the
technical merits of the position. The tax benefits recognized in
the financial statements from such a position should be
measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement.
Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting
in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized
income tax benefits according to the provisions of Section 740-10-25. Earnings (Loss) per Share Basic earnings per share is computed by dividing
net income available to common
stockholders by the weighted average number of common shares outstanding during the period, excluding
the effects of any potentially dilutive securities. Diluted earnings per share gives effect to all dilutive potential of shares
of common stock outstanding during the period including stock options or warrants, using the treasury stock method (by using the
average stock price for the period to determine the number of shares assumed to be purchased from the exercise of stock options
or warrants), and convertible debt or convertible preferred stock, using the if-converted method. Earnings per share excludes all
potential dilutive shares of common stock if their effect is anti-dilutive. There were no potential dilutive securities at December
31, 2020 and 2019. Recently issued accounting pronouncements In November 2019,
the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivative and Hedging (Topic 815), and Leases
(Topic 842). This new guidance became effective for us on January 1, 2020. The adoption
of this guidance did not have a material
impact on the Company’s consolidated financial statements. On January 1, 2020
the Company adopted ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment The Company has implemented all
new accounting
pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise
disclosed, and the Company does not believe that there are any
other new accounting pronouncements that have been issued that might
have a material impact on its financial position or results of operations. |
