| Summary of Significant Accounting Policies | 2.
Summary of Significant Accounting Policies
a) Basis of Presentation
These consolidated financial
statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and
are expressed in U.S. dollars. The Company’s fiscal year end is February 28. The financial statements include the accounts
of the Company and its subsidiary Rent Pay. All significant intercompany transactions and accounts have been eliminated in consolidation.
b) Use of Estimates The preparation of consolidated
financial statements in conformity with U.S. generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The
Company regularly evaluates estimates and assumptions related to useful life and recoverability of long-lived assets, and deferred
income tax asset valuations. The Company bases its estimates and assumptions on current facts, historical experience and various
other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments
about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other
sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates.
To the extent there are material differences between the estimates and the actual results, future results of operations will be
affected.
c) Cash and Cash Equivalents Cash includes cash on hand
and cash held with banks. The Company considers all highly liquid instruments with maturity of three months or less at the time
of issuance to be cash equivalents.
d) Accounts Receivable
Trade accounts receivable
are recorded at net invoice value and such receivables are non-interest bearing. Receivables are considered past due based on the
contractual payment terms. Receivables are reviewed and specific amounts are reserved if collectability is no longer reasonably
assured.
e) Property and Equipment
Property and equipment
are stated at cost, less accumulated depreciation and any impairment in value. Depreciation is computed using the straight-line
method over the following estimated lives of the assets:
IT equipment 3 years
Motor vehicles 5 years
Office equipment 5 years
Furniture and fixtures 6 years
The Company periodically
performs impairment testing on its long-lived assets either annually or whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable in accordance with ASC 360. All long-lived assets were deemed recoverable at February
28, 2018, and February 28, 2017.
f) Value of Financial Instruments
The Company measures and discloses
the estimated fair value of financial assets and liabilities using the fair value hierarchy in accordance with ASC 820, “ Fair
Value Measurements and Disclosures The three-level hierarchy is defined as follows: Level 1 – quoted
prices for identical instruments in active markets. Level 2 – quoted
prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active;
and model derived valuations in which significant inputs and significant value drivers are observable in active markets. Level 3 – fair value
measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Financial instruments consist
principally of cash and cash equivalents, accounts receivable, accounts payable, and taxes payable. There were no transfers into
or out of “Level 3” during the years ended February 28, 2018, or 2017. The recorded values of all financial instruments
approximate their current fair values because of their nature and respective relatively short maturity dates or durations. Fair value estimates are
made at a specific point in time, based on relevant market information and information about the financial statement. These estimates
are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with
precision. Changes in assumptions could significantly affect the estimates.
g) Foreign Currency Translation
Management has adopted
ASC 830, “ Foreign Currency Translation Matters
h) Revenue Recognition
The Company derives revenue
through licensing its software and by collecting various transaction fees from third party debit orders. The Company recognizes
revenue when persuasive evidence of an arrangement exists, services have been rendered, the sales price is fixed or determinable
and collectability is reasonably assured. The Company has several
revenue streams and they are recognized as below: Branch Setup Fees This is a one-off cost
that the company charges when a customer is onboarded. The billing occurs in the same month that the debit order is collected.
This results in no accounts receivable at the end of the month. Data Migration Fees This only applies to a customer
applying to migrate client data from a previous system to our system. We invoice for this service as soon as data is successfully
transferred, imported and verified by our customer and when transactions begin to occur. Revenue is recognized upon invoicing and
payment is collected within two days due to debit order mandates signed by the customer as part of the agreement. This results
in no outstanding accounts receivable as of the end of each month. Monthly Rental Fees Our software is made available on a web-based
software platform and is offered as software as a service. Our agreement is an evergreen agreement (auto-renewed) and if not terminated
by a customer, remains intact. Termination may occur by either party at any point with 30 days’ notice. The monthly software
rental fee is payable every month per branch. Monthly software rental fees are payable in the
beginning of each month. The monthly rental fees are invoiced during the first few days of a month and payments are collected via
debit order a few days later, prior to the end of that month, due to debit order mandate signed by the customer. This results in
no accounts receivable as invoicing and payment happens within the same month. Development Service Fee We have some clients that
we do custom software development for, on some versions of our software. Here we adopt a scrum methodology with 2-week development
sprints. We agree on a price per hour for development with these clients. We send an invoice for the work completed and usually
get paid within the same month. On this revenue stream we do not run a debit order, but clients need to pay invoices before we
continue with the next development increment. Payments are due upon invoicing but at times it can take up to 30 days. Any unpaid
invoices, if any, are recorded to accounts receivable at the end of each month, but invoicing and payment usually happen within
the same month. Transactional Fees We offer an integrated
debit order facility built into our software. When our clients (lenders) create loans with consumers, the consumer contracts directly
with us on a separate agreement. We then act as a third-party payment provider, to facilitate the repayment of loans from the consumer
to the lender by debit order. We are registered as a
third-party payment provider and all payments collected on this stream are settled by the bank directly into our bank account.
We only charge a fee on successful debit order collections and retain that fee when we distribute funds collected on behalf of
consumers. The transaction fees charged for these transactions are called CTC and they are displayed on the signed agreement that
the consumer signs with us. The CTC fees are paid by the consumer, in addition to the loan installment collected. The loan installment
and CTC are collected as one amount, but the CTC is retained by us upon distribution of funds to lenders. Our software system counts
and accounts for each individual transaction and its amount and this is generated on a report on our Acpas software. We use this
report for revenue recognition in our billing system. Revenue is recorded as a lump sum based on this report at the end of each
month. If there are any CTC that still needs to be recognized at an end of a period, it is recorded as accounts receivable. Credit Protection Insurance
Commission Some insurance companies
offer insurance products on loans that cover the consumer for the full repayment of his debt to the lender, in case of unforeseen
events. There is an insurance product from one of our suppliers (an insurance company) that we make available for the insurance
company on our software program. In return for making this product available the insurance company would pay us monthly commission
on premiums they received. This is a product offered by the insurance company directly to the consumer and we only make it available
on our software platform. If this option is selected when a loan is created, an additional fee is added to the loan repayment amount.
The software system calculates the insurance premiums and all premiums for a given month are paid by lenders to the insurance company,
or lenders use our payment service and instruct us to manage the payments on their behalf. After receiving the premiums
and supporting reports, the insurance company will then calculate and verify the premiums paid and premium claw back to this point
and work out the commission payable based on the premiums received. The insurance company will then pay all commissions earned
by us and our clients. Commissions are not earned until collection of the premiums from the consumers and the remittance of the
premiums to the insurance company and when the insurance company do their final calculations. We distribute the commission amounts
due to our customers within two days of receiving such payments from the insurance company.
i) Stock-based Compensation
The Company records stock-based
compensation in accordance with ASC 718, “ Compensation – Stock Compensation Equity
Based Payments to Non-Employees
j) Comprehensive Income (Loss)
ASC 220, “ Comprehensive
Income”,
k) Earnings (Loss) Per Share
The Company computes earnings
(loss) per share (“EPS”) in accordance with ASC 260, “ Earnings per Share
l) Income Taxes
In accordance with FASB
ASC 740, “ Income Taxes ASC 740 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
ASC 740, 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 would be measured based on the largest benefit that has a greater than
50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets
and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties
associated with tax positions. As of February 28, 2018, the Company does not have a liability for any unrecognized tax benefits. All tax periods from inception
remain open to examination by taxing authorities due to the net operating losses. To date the Company’s acquired subsidiaries
have not filed the required income tax returns.
m) Going Concern
The accompanying consolidated
financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization
of assets and the liquidation of liabilities in the normal course of business. As of February 28, 2018, the Company does not have
revenues sufficient to execute its business plan. The Company intends to fund operations through equity financing arrangements.
There is no assurance that this will be successful. These factors, among others,
raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial
statements do not include any adjustments that might result from the outcome of this uncertainty.
n) Recent Accounting Pronouncements
In June 2018, the FASB
issued ASU 2018-07, which simplifies the accounting for nonemployee share-based payment transactions. The amendments specify that
Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed
in a grantor’s own operations by issuing share-based payment awards. The standard will be effective for us in the first quarter
of our fiscal year 2020, although early adoption is permitted (but no sooner than the adoption of Topic 606). The adoption of this
standard is not expected to have a significant impact on the Company’s results of operations, financial condition, cash flows,
and financial statement disclosures. On November 22, 2017 the FASB
issued “ASU 2017-14 — Income Statement—Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic
605), and Revenue from Contracts with Customers (Topic 606)”. This update amends SEC paragraphs pursuant to
the SEC Staff Accounting Bulletin No. 116 and SEC Release No. 33-10403, which bring existing guidance into conformity with Topic
606, Revenue from Contracts with Customers. This update is effective in fiscal years, including interim periods, beginning
after December 15, 2017. The adoption of this standard is not expected to have a significant impact on the Company’s results
of operations, financial condition, cash flows, and financial statement disclosures. In August 2016, the FASB issued
ASU No. 2016-15 related to the statement of cash flows. This new guidance addresses eight specific cash flow issues with the objective
of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the
statement of cash flows. This update is effective in fiscal years, including interim periods, beginning after December 15, 2017,
and early adoption is permitted. The adoption of this standard is not expected to have a significant impact on the Company’s
results of operations, financial condition, cash flows, and financial statement disclosures. In May 2014, the FASB issued
ASU No. 2014-09, “ Revenue from Contracts with Customers In February 2016, Topic
842, “ Leases Leases In March 2016, the FASB
issued ASU 2016-09, “ Improvements to Employee Share-Based Compensation Accounting In November 2016, the FASB
issued ASU 2016-18, “ Statement of Cash Flows In July 2017, the Financial
Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02 “ Income
Statement – Reporting Comprehensive Income (Topic 220) In July 2017, FASB issued
ASU 2017-11 “ Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity Derivatives and
Hedging In September 2017, FASB issued
and update to ASC 606— Revenue from Contracts with Customers In January 2018, FASB issued
Update 2018-01—Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 The Company has implemented
all new accounting pronouncements that are in effect and that may impact its financial statements and 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. |
