| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES Basis of Presentation and Principles of Consolidation The interim
unaudited condensed consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted
in the United States (“U.S. GAAP”). The unaudited condensed consolidated balance sheets
as of January 31 January 31 In the opinion of the management, the accompanying
condensed consolidated financial statements reflect all normal recurring adjustments, which are necessary for a fair presentation of financial
results for the interim periods presented. The Company believes that the disclosures are adequate to make the information presented not
misleading. The accompanying condensed consolidated financial statements have been prepared using the same accounting policies as used
in the preparation of the Company’s consolidated financial statements for the year ended July 31, 2023. The results of operations
for the three and six months ended January 31, 2024 and 2023 are not necessarily indicative of the results for the full years. The unaudited condensed consolidated financial
statements of the Company include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been
eliminated upon consolidation. Use of Estimates In preparing
the condensed consolidated financial statements in conformity with U.S. GAAP, management makes 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. These estimates are based on information as
of the date of the condensed consolidated financial statements. Significant estimates required to be made by management include, but are
not limited to, the allowance for credit losses, useful lives of property and equipment and intangible assets, the recoverability of long-lived
assets, revenue recognition, provision necessary for contingent liabilities and realization of deferred tax assets. Actual results could
differ from those estimates. Accounts
Receivable, net On August
1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic
326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition
method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more
timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected
credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables
resulting from the application of ASC 606, including contract assets. The adoption of the guidance had no impact on the allowance for
credit losses for accounts receivable. Prior to
the Company’s adoption of ASU 2016-13, accounts receivable are presented net of allowance for doubtful accounts. The Company usually
determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company
establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts
due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on
historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded
in the condensed consolidated statements of operations and comprehensive loss. Delinquent account balances are written off against the
allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. After the
adoption of ASU 2016-13, The Company maintains an allowance for credit losses and records the allowance for credit losses as an offset
to accounts receivable and the estimated credit losses charged to the allowance is classified as “General and administrative expenses”
in the condensed consolidated statements of operations and comprehensive loss. The Company uses loss-rate methods to estimate allowance
for credit loss. The Company assesses collectability by reviewing accounts receivable on an individual basis because the Company had limited
customers and each of them has difference characteristics, primarily based on business line and geographical area. In determining the
amount of the allowance for credit losses, the Company multiplied the loss rate with the amortized cost of accounts receivable. The loss
rate refers to the corporate default rate published by credit rating companies, which considers current economic conditions, reasonable
and supportable forecasts of future economic conditions. Delinquent account balances are written-off against the allowance for doubtful
accounts after management has determined that the likelihood of collection is not probable. Fair Value of Financial Instruments ASC 825-10 requires certain disclosures regarding
the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes
the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of
unobservable inputs. The three levels of inputs used to measure fair value are as follows:
● Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
● Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data.
● Level 3 – inputs to the valuation methodology are unobservable. Fair value
of investment in trading securities are based on quoted prices in active markets. The carrying amounts of the Company’s other financial
instruments including cash and cash equivalents, accounts receivable, deposits, due from related parties, and other current assets, due
to related parties and accrued expenses and other current liabilities approximate their fair values because of the short-term nature of
these assets and liabilities. For lease liabilities, fair value approximates their carrying value at the year-end as the interest rates
used to discount the host contracts approximate market rates. For the three and six months ended January 31, 2024 and 2023, there are
no transfers between different levels of inputs used to measure fair value. Revenue Recognition The Company
recognizes revenue in accordance with ASC 606 Revenue from Contracts with Customers (“ASC 606”). To determine
revenue recognition for contracts with customers, the Company performs the following five steps: (i) identify the contract with the
customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable
consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction
price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the
performance obligation. The Company
recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company
expects to be entitled in such exchange. For the
three and six months ended January 31, 2024 and 2023, the Company primarily generated revenues from consulting services to customers who
would like to go public. The Company
provides various consulting services to its members, especially to those who have the intention to be publicly listed in the stock exchanges
in the United States and other countries. The Company categorizes its consulting services into three Phases: Phase
I consulting services primarily include due diligence review, market research and feasibility study, business plan drafting, accounting
record review, and business analysis and recommendations. Management estimates that Phase I normally takes about three months to complete
based on its past experience. Phase
II consulting services primarily include reorganization, pre-listing education and tutoring, talent search, legal and audit firm recommendation
and coordination, VIE contracts and other public-listing related documents review, merger and acquisition planning, investor referral
and pre-listing equity financing source identification and recommendations, and independent directors and audit committee candidate’s
recommendation. Management estimates that Phase II normally takes about eight months to complete based on its past experience. Phase
III consulting services primarily include shell company identification and recommendation for customers expecting to become publicly listed
through reverse merger transaction; assistance in preparation of customers’ public filings for IPO or reverse merger transactions;
and assistance in answering comments and questions received from regulatory agencies. Management believes it is very difficult to estimate
the timing of this phase of service as the completion of Phase III services is not within the Company’s control. Each phase
of consulting services is stand-alone and fees associated with each phase are clearly identified in service agreements. Revenue from providing
Phase I and Phase II consulting services to customers is recognized ratably over the estimated completion period of each phase as the
Company’s performance obligations related to these services are carried out over the whole duration of each Phase. Revenue from
providing Phase III consulting services to customers is recognized upon completion of the reverse merger transaction or IPO transaction
when the Company’s promised services are rendered and the Company’s performance obligations are satisfied. Revenue that has
been billed and not yet recognized is reflected as deferred revenue on the balance sheet. Depending on the complexity of the underlying
service arrangement and related terms and conditions, significant judgments, assumptions, and estimates may be required to determine when
substantial delivery of contract elements has occurred, whether any significant ongoing obligations exist subsequent to contract execution,
whether amounts due are collectible and the appropriate period or periods in which, or during which, the completion of the earnings process
occurs. Depending on the magnitude of specific revenue arrangements, adjustment may be made to the judgments, assumptions, and estimates
regarding contracts executed in any specific period. Income Taxes The Company accounts for income taxes under ASC
740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated
financial statement carrying amounts of existing 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 recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the
period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. An uncertain tax position is recognized only if
it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest
amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more
likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified
as income tax expense in the period incurred. The Company did not have unrecognized uncertain tax positions or any unrecognized liabilities,
interest or penalties associated with unrecognized tax benefit as of January 31, 2024. As of January 31, 2024, all of the Company’s
income tax returns for the tax years ended December 31, 2019 through December 31, 2023 remain open for statutory examination
by relevant tax authorities. Segment reporting Operating segments are defined as components of
an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker
(“CODM”), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s
CODM is Mr. Liu, the Chairman of the Board of Directors and CEO. The Company’s organizational structure is
based on a number of factors that the CODM uses to evaluate, view and run its business operations which include, but not limited to, customer
base, homogeneity of service and technology. The Company’s operating segments are based on such organizational structure and information
reviewed by the CODM to evaluate the operating segment results. Based on management’s assessment, the management has determined
that the Company now operates in one operating segment with one reporting segment as of January 31, 2024 and July 31, 2023, which is the
consulting service business. Risks and Uncertainty (a) Credit risk As of January
31, 2024, the Company held cash and cash equivalents of approximately $0.1 million deposited in the banks located in the U.S., which
were insured by FDIC up to $250,000, and held cash and cash equivalents of $12,458 deposited in the investment bank accounts located
in the U.S. which are not insured by FDIC. (b) Concentration risk Accounts
receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk. The risk is mitigated
by the Company’s assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances. The Company
has a concentration of its revenues and receivables with specific customers. For the three months ended January 31, 2024, one customer
accounted for 100% of the Company’s consolidated revenue. For the
six months ended January 31, 2024, four customers accounted for 40%, 33%, 17% and 10% of the Company’s consolidated
revenue. As of January
31, 2024, two customers accounted for 60% and 40% of the Company’s consolidated accounts receivable, respectively.
As of July 31, 2023, two customers accounted for 54% and 46% of the Company’s consolidated accounts receivable,
respectively. For the
three and six months ended January 31, 2024 and 2023, substantially all of the Company’s revenues was generated from providing going
public related consulting services to customers. The concentration risk is mitigated by the Company’s plan to transition
its consulting services from the PRC based customers to more international customers. (c) Other
risks and uncertainties The Company’s business, financial condition
and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics
and other catastrophic incidents, which could significantly disrupt the Company’s operations. |
