| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation The accompanying consolidated financial statements are prepared in
accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant
to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”).
(b) Principles of consolidation The accompanying consolidated financial
statements include the financial statements of the Company and its wholly owned subsidiaries. All inter-company balances and transactions
are eliminated upon consolidation.
(c) Use of estimates The preparation of the consolidated financial
statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting
periods. These estimates are based on information as of the date of the consolidated financial statements. Significant accounting estimates
include, but are not limited to allowance for credit losses, inventory write-down, useful lives of property, plant and equipment and intangible
assets, recoverability of long-lived assets, and realization of deferred income taxes. Changes in facts and circumstances may result in
revised estimates. Actual results could differ from those estimates.
(d) Foreign currencies and foreign currency translation The functional currency and reporting currency of the Company is the
United States Dollar (“US$” or “$” ). The Company’s direct wholly-owned operating subsidiaries
in Hong Kong, mainland China, the Netherlands and the Serbia, use their respective currencies, Hong Kong dollar (“HK$”),
Renminbi (“RMB”) and Euro (“EUR”), as their functional currencies. The financial statements of the Company’s direct wholly-owned
operating subsidiaries were translated into the U.S. dollar using the exchange rate as of the balance sheet date for assets and liabilities
and average exchange rate for the year for income and expense items. Assets and liabilities denominated in functional currencies at the
balance sheet date were translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional
currency was translated at the historical rate of exchange at the time of the capital contribution. Because cash flows were translated
based on the average exchange rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows may
not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from
the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive (loss)
income included in consolidated statements of changes in shareholders’ equity. Gains and losses from foreign currency transactions
are included in the Company’s consolidated statements of income and comprehensive income. The following table outlines the currency
exchange rates that were used in preparing the consolidated financial statements:
March 31, 2024 March 31, 2023
Year-end Average rate Year-end Average rate
US$ against RMB US$1=RMB7.2203 US$1=RMB7.1671 US$1=RMB6.8676 US$1=RMB6.8516
US$ against EUR US$1=EUR0.9267 US$1=EUR0.9218 US$1=EUR0.9198 US$1=EUR0.9603
US$ against HK$ US$1=HK$7.8259 US$1=HK$7.8246 US$1=HK$7.8499 US$1=HK$7.8389
(e) Cash Cash consists of cash on hand and cash
in bank. The Company maintains cash with various financial institutions primarily in HK, mainland China and the Netherlands. The Company
has not experienced any losses in bank accounts.
(f) Restricted Cash Restricted cash consists of rental guarantee deposits and escrow deposits.
The rental guarantee deposit for the Company’s office located in the Netherlands cannot be withdrawn without certain approval or
notice. Escrow deposits in the designated escrow account are to cover possible indemnification claims against the underwriters for a period
of 12 months from the closing of the IPO. The amount of designated escrow account was $200,000 and nil
(g) Accounts receivable Accounts receivable represents the amounts that the Company has an
unconditional right to consideration, which are stated at the original amount less the expected credit losses of accounts receivable.
The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the
collectability of individual balances. The Company usually determines the adequacy of reserves for doubtful accounts based on individual
account analysis and historical collection trends. The Company considers many factors in assessing the expected credit losses model, such
as size, the age of the accounts, the customer’s payment history, credit-worthiness and other specific circumstances related to
the accounts, along with reasonable and supportable forecasts as a basis to develop the Company's expected loss estimates. The provision
is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of operations and
comprehensive (loss)/income. Delinquent account balances are written off against the credit losses of accounts receivable after management
has determined that the likelihood of collection is remote. As of March 31, 2024 and 2023, there were no credit losses recorded as
the Company considers all of the outstanding accounts receivable fully collectible. Adoption of Accounting Standards Update
(“ASU” 2016-13) In June 2016, the FASB issued ASU
No. 2016-13, “Financial Instruments — Credit Losses”, which will require the measurement of all expected
credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable
forecasts. Further, the FASB issued ASU No. 2021-04, ASU 2021-05, ASU 2021-10, ASU 2021-11 and ASU 2022-02
to provide additional guidance on the credit loss standards. For all other entities, the amendments for ASU 2016-13 are effective
for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, with early adoption
permitted. Adoption of the ASUs is on a modified retrospective basis. The Company adopted ASU 2016-13 from April 1, 2023 using
modified-retrospective transition approach with a cumulative-effect adjustment to shareholders’ equity amounting to nil recognized
as of April 1, 2023.
(h) Inventories, net Inventories, primarily consisting of
raw materials, work-in-process, finished goods and inventory in transit, are stated at the lower cost or net realizable value. Net realizable
value is the estimated selling price in the normal course of business less any costs to complete and sell products. Cost of inventory
is determined using the weighted average cost method. The Company reviews its inventories periodically to determine if any reserves are
necessary for potential shrinkage and obsolete or unusable inventory. The amounts of the inventory write-down were $188,268 and $369,512
for the years ended March 31, 2024 and 2023, respectively.
(i) Property, plant and equipment, net Property, plant and equipment are stated
at cost less accumulated depreciation and impairment, if any, and are depreciated on a straight-line basis over the estimated useful lives
of the assets as follows:
Category Estimated useful lives
Machinery and equipment 2 – 10 years
Office equipment, furniture and fixtures 2 – 5 years
Leasehold improvements Lesser of useful life and lease terms
Motor vehicle 4 years Cost represents the purchase price of
the asset and other costs incurred to bring the asset into its intended use. Repair and maintenance costs are charged
to expenses as incurred, whereas the cost of renewals and betterments that extend the useful lives of property, plant and equipment are
capitalized as additions to the related assets. Retirements, sales and disposals of assets are recorded by removing the costs, accumulated
depreciation and impairment with any resulting gain or loss recognized in the consolidated statements of operations and comprehensive
(loss)/income in other income or expenses.
(j) Intangible assets, net Intangible assets are stated at cost
less accumulated amortization and amortized in a method which reflects the pattern in which the economic benefits of the intangible assets
are expected to be consumed or otherwise used up. Intangible assets are amortized using the straight-line approach over the estimated
economic useful lives of the asset as follows: Category Estimated useful lives Software 5 years
(k) Impairment of long-lived assets The Company reviews its long-lived assets
for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable.
When these events occur, the Company measures impairment by comparing the carrying value of the long-lived assets to the estimated undiscounted
future cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted
cash flow is less than the carrying amount of the assets, the Company would recognize an impairment loss, which is the excess of the carrying
amount over the fair value of the assets, using the expected future discounted cash flows. There were no impairments of these long-lived
assets as of March 31, 2024 and 2023.
(l) Deferred Initial Public Offering (“IPO”) Costs The Company complies with the requirement of the Accounting Standards
Codification (“ASC”) 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses
of Offering.” Deferred offering costs consist of underwriting, legal, consulting, and other expenses incurred through the balance
sheet date that are directly related to the intended IPO. With the completion of the IPO on January 17, 2024, the deferred offering costs
have been charged against the gross proceeds of the offering as a reduction of additional paid-in capital. Deferred IPO costs amounted
to nil
(m) Fair value measurement The Company applies ASC 820, Fair
Value Measurements and Disclosures ASC 820 establishes a
three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
● Level 1 — Observable
inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
● Level 2 — Include
other inputs that are directly or indirectly observable in the marketplace.
● Level 3 — Unobservable inputs which are supported
by little or no market activity. ASC 820
describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach
and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving
identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future Financial assets and liabilities of the
Company primarily consisted of cash, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable,
income tax payable, and accrued expenses and other current liabilities. As of March 31, 2024 and 2023, the carrying amounts of the
Company’s financial instruments approximated to their fair value of the respective assets and liabilities based upon the short-term
nature of these assets and liabilities. The Company believes that the carrying
amount of long-term loans, current portion approximate fair value at March 31, 2024 and 2023 based on the terms of the borrowings
and current market rates, as the rates of the borrowings are reflective of the current market rates.
(n) Commitments and contingencies From time to time, the Company may be
a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when
they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed
as incurred. For the years ended March 31, 2024, 2023 and 2022, the Company did not have any material legal claims or litigation
that, individually or in aggregate, could have a material adverse impact on the Company’s consolidated financial position, results
of operations, and cash flows. The Company had contractual payment obligations
under its operating lease agreements with the landlords. The Company also had equipment purchase agreements with two independent
third-party vendors, with a future payment of $2,524,923 by the December 2024 and $822,408 in November 2024, respectively.
(o) Revenue recognition ASC 606 establishes principles for
reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts
to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods
or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those
goods or services recognized as performance obligations are satisfied. To determine revenue recognition for
contracts with customers, the Company performs the following five steps:
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations
in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to
the performance obligations in the contract
Step 5: Recognize revenue when the company
satisfies a performance obligation The Company manufactures and sells
interconnect products, including connectors, cables and wire harnesses. The Company recognizes revenue when it transfers its goods to customers
in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company accounts for the
revenue generated from sales of its products to its customers on a gross basis, because the Company is acting as a principal in these
transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide
customers the specified goods. All of the Company’s contracts have single performance obligation as the promise is to transfer the
individual goods at a fixed price to customers, and there are no other separately identifiable promises or financial component in the
contracts. The Company’s revenue is recognized
at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. The Company’s
products are sold with no right of return and the Company does not provide other credits or sales incentives to customers. Revenue is
reported net of value added tax (“VAT”). Disaggregation of Revenue The Company disaggregates its revenue
from contracts by product category and geographic regions, as the Company believes it best depicts how the nature, amount, timing and
uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the years
ended March 31, 2024, 2023 and 2022 are disclosed in Note 16 to these consolidated financial statements. Contract assets and liabilities Payment terms are established on the
Company’s pre-established credit requirements based upon an evaluation of customers’ credit. Accounts receivable represent
revenue recognized for the amounts invoiced and/or prior to invoicing when the Company has satisfied its performance obligation and has
unconditional right to the payment. Contract assets represent the Company’s right to consideration in exchange for goods or services
that the Company has transferred to a customer. Other than accounts receivable, the Company had no other material contract assets recorded
on its consolidated balance sheets as of March 31, 2024 and 2023, respectively. The Company’s contract liabilities
primarily relate to unsatisfied performance obligations when payment has been received from customers before the Company’s products
are delivered, and are recorded as “advance from customers” on the consolidated balance sheets. Costs of fulfilling customers’
purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general
and administrative expenses when incurred. Advance from customers amounted to $207,293 and $186,874 as of March 31, 2024 and
2023, respectively. Revenue included in the beginning balance of advance from customers and recognized in the years ended March 31,
2024, 2023 and 2022 amounted to $186,874, $75,374 and $167,824, respectively.
(p) Cost of revenue Cost of revenue consists primarily of
(i) cost of materials (ii) labor costs, (iii) inventory write-down (iv) depreciation and amortization, (v) rental
expenses for the factory and employee dormitory. Depreciation and amortization of manufacturing facilities and warehouses attributable
to manufacturing activities are capitalized as part of the cost of inventory, and expensed in costs of revenues when the inventory is
sold.
(q) Selling expenses Selling expenses mainly consist of (i) freight
fees and transportation fees; (ii) staff costs, rental and depreciation related to selling and marketing functions; and (iii) marketing
and entertainment expenses for promotion; and (iv) free sample expenses incurred for obtaining new customers and sales orders.
(r) General and administrative expenses General and administrative expenses mainly
consist of (i) staff costs, rental and depreciation related to general and administrative personnel; (ii) professional service
fees; and (iii) other corporate expenses.
(s) Research and development (“R&D”) expenses Research and development expenses mainly
consist of (i) costs of raw material for the research and development activities; and (ii) salaries, welfare and insurance expenses
paid to R&D employees and (iii) manufacturing expenses for producing samples related to research and development activities.
(t) Government Subsidies Government subsidy is recognized when
there is a reasonable assurance that the Company will comply with the conditions attached to it and the grant will be received. Government
grant for the purpose of giving immediate financial support to the Company with no future related costs or obligation is recognized in
the Company’s consolidated statements of operations and comprehensive (loss)/income when the grant becomes receivable. Government
subsidies received and recognized as other income totaled $7,255, $62,627 and $17,910 for the years ended March 31, 2024, 2023
and 2022, respectively.
(u) Employee Defined Contribution Plan The Company’s subsidiaries in the PRC participate in a government-mandated
multi-employer defined contribution plan pursuant to which pension, work-related injury benefits, maternity insurance, medical insurance,
unemployment benefits and housing funds are provided to eligible full-time employees. The relevant labor regulations require the Company’s
subsidiaries in the PRC to pay the local labor and social welfare authorities monthly contributions based on the applicable benchmarks
and rates stipulated by the local government. The contributions to the plan are expensed as incurred. Employee social security and welfare
benefits included as expenses in the accompanying consolidated statements of operations and comprehensive (loss)/income amounted to $372,130,
$584,060 and $605,267 for the years ended March 31, 2024, 2023 and 2022, respectively.
(v) Leases The Company leases premises for factory
and offices under non-cancellable operating leases. On April 1, 2018, the Company adopted
Accounting Standards Update (“ASU”) 2016-02, Lease (FASB ASC Topic 842). ASC 842 requires that lessees
recognize right-of-use (“ROU”) assets and lease liabilities calculated based on the present value of lease payments for all
lease agreements with terms that are greater than twelve months. ASC 842 distinguishes leases as either a finance lease or an
operating lease on the consolidated balance sheets that affects how the leases are measured and presented in the statement of operations
and statement of cash flows (see Note 10). Right-of-use (“ROU”) assets
represent the Company’s right to use underlying assets including factory, vehicles and production equipment for the lease term and
lease liabilities represent the Company’s obligation to make lease payments arising from the lease. At inception of a contract,
the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control
the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease,
the Company assesses whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all
the economic benefits from the use of the asset, and whether it has the right to control the use of the asset. The right-of-use assets and related lease
liabilities are recognized at the lease commencement date. The Company recognizes operating lease expenses and finance lease amortization
expenses on a straight-line basis over the lease term. Operating lease right-of-use of
assets and finance lease right-of-use of assets The right-of-use of asset is initially
measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred and less any lease incentive received. The Company has both operating lease and finance lease. For operating lease, lease expense is
recorded on a straight-line basis over the lease term. The amortization of the right-of-use asset is calculated as the difference between
the straight-line lease expense and the interest calculated on the lease liability. For finance lease, the amortization of the right-of-use
asset is calculated on a straight-line basis over the lease term. Operating lease liabilities and
finance lease liabilities Lease liability is initially measured
at the present value of the outstanding lease payments at the commencement date, discounted using the Company’s incremental borrowing
rate. Lease payments included in the measurement of the lease liability comprise fixed lease payments, variable lease payments that depend
on an index or a rate, amounts expected to be payable under a residual value guarantee and any exercise price under a purchase option
that the Company is reasonably certain to exercise. Lease liability is measured at amortized
cost using the effective interest rate method. It is re-measured when there is a change in future lease payments, if there is a change
in the estimate of the amount expected to be payable under a residual value guarantee, or if there is any change in the Company assessment
of option purchases, contract extensions or termination options.
(w) 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. The Company records uncertain tax positions in accordance with ASC
740, Income Taxes, on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the
tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not
recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon
ultimate settlement with the related tax authority. Penalties and interest incurred related to underpayment of income tax are classified
as income tax expense in the period incurred. The Company records interest and penalties related to unrecognized tax benefits on the income
tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included on the related
tax liabilities line in the consolidated balance sheets. The Company does not believe that there were any uncertain tax positions as of
March 31, 2024 and 2023, respectively. The Company’s operating subsidiary in mainland China is subject
to examination by the relevant PRC tax authorities. According to the PRC Tax Administration and Collection Law, the statute of limitations
is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute
of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB100 ($15).
In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of
tax evasion. The Company’s operating subsidiary in Hong Kong are subject
to examination by the Hong Kong Inland Revenue Department (the “HKIRD”) if the HKIRD has doubts regarding the source
of income, the completeness and accuracy of the tax returns filed by the taxpayers. According to the Inland Revenue Ordinance, the taxpayers
are required to keep sufficient records of income and expenditure for a period of not less than seven years to enable the assessable
profits to be readily ascertained.
(x) Value added tax (“VAT”) Sales revenue represents the invoiced
value of goods, net of VAT. The Company is subject to VAT and related surcharges on revenue generated from sales of products. The
Company records revenue net of VAT. Entities that are VAT general taxpayers are allowed to offset qualified input VAT, paid to suppliers
against their output VAT liabilities. The VAT is based on gross sales price.
The mainland China VAT rate is 13% for taxpayers selling consumer products, and was 16% prior to April 1, 2021. The primary applicable
rate of the Netherlands VAT is 21% for the years ended March 31, 2024, 2023 and 2022 and no VAT tax in Hong Kong.
(y) Segment Reporting An operating segment is a component of
the Company that engages in business activities from which it may earn revenue and incur expenses, and is identified on the basis of the
internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker (the “CODM”)
in order to allocate resources and assess the performance of the segment. In accordance with ASC 280, Segment
Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that
is evaluated regularly by the CODM or decision-making group, in deciding how to allocate resources and in assessing performance. The Company
uses the “management approach” in determining reportable operating segments. The management approach considers the internal
organization and reporting used by the Company’s CODM for making operating decisions and assessing performance as the source for
determining the Company’s reportable segments. Management, including the CODM, reviews operating results by the revenue of different
services. Based on management’s assessment, the Company has determined that it has one operating segment as defined by ASC 280
(see Note 16).
(z) Earnings/(loss) per share The Company computes earnings per share
(“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires
companies with complex capital structures to present basic and diluted EPS. Basic EPS are computed by dividing income available to
shareholders of the Company by the weighted average Ordinary Shares outstanding during the period. Diluted EPS take into account the potential
dilution that could occur if securities or other contracts to issue Ordinary Shares were exercised and converted into Ordinary Shares.
As of March 31, 2024 and 2023, there were no dilutive shares.
(aa) Comprehensive (loss)/income Comprehensive (loss)/income consists
of two components, net (loss)/income and other comprehensive (loss)/income. The foreign currency translation adjustment resulting from
translation of the consolidated financial statements expressed in RMB and other foreign currencies to US$ is reported in other comprehensive
(loss)/income in the consolidated statements of comprehensive (loss)/income.
(bb) Concentration and credit risk Financial instruments that potentially
subject the Company to significant concentration of credit risk consist primarily of cash, restricted cash and accounts receivable. As
of March 31, 2024, and 2023, the aggregate amounts of cash and restricted cash of $2,672,506 and $4,584,530, respectively, were held
at major financial institutions located in mainland China and $3,062,241 and $3,133,085, respectively, were deposited with major financial
institutions located outside mainland China. Management believes that these financial institutions are of high credit quality and continually
monitors the credit worthiness of these financial institutions. The Company’s exposure to credit risk associated with its trading
and other activities is measured on an individual counterparty basis, as well as by a group of counterparties that share similar attributes.
Substantially all of the Company’s sales are made to customers that are located primarily in Europe, Asia and the Americas. The
Company’s operating results could be adversely affected by government policies on exporting businesses, foreign exchange rate fluctuations,
and local market condition changes. There were two customers who accounted
for approximately 17.4% and 12.7% of total revenue for the year ended March 31, 2024, respectively. There were three customers
who accounted for approximately 12.0%, 10.6% and 10.5% of total revenue for the year ended March 31, 2023, respectively. There
was one customer who accounted for approximately 15.5% of total revenue for the year ended March 31, 2022. There
were two customers who accounted for approximately 21.6% and 10.4% of the accounts receivable balance as of March 31, 2024. There
was no customer who accounted for more than 10% of the accounts receivable balance as of March 31, 2023. There was one supplier who accounted
for 12.1% of the Company’s total purchases for the year ended March 31, 2024. There was no single supplier that accounted
for over 10% of the Company’s total purchases for the years ended March 31, 2023 and 2022. There were three suppliers who accounted
for approximately 10.7%, 10.6% and 10.2% of the accounts payable balance as of March 31, 2024. There was no customer who accounted
for more than 10% of the accounts payable balance as of March 31, 2023.
(cc) Related parties and transactions The Company identifies related parties,
and accounts for, discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other
relevant ASC standards. Related parties, which can be a corporation
or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial and operational decisions. Companies are also considered to be related
if they are subject to common control or common significant influence. Transactions between related parties
commonly occurring in the normal course of business are considered to be related party transactions. Transactions between related parties
are also considered to be related party transactions even though they may not be given accounting recognition. While ASC does not provide
accounting or measurement guidance for such transactions, it nonetheless requires their disclosure.
(dd) Risks and uncertainties The Company has substantial operations
in China through its PRC subsidiaries. Accordingly, the Company’s business, financial condition, and results of operations may be
influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s
results may be adversely affected by changes in the p |
