| Summary of significant accounting policies | 2 Summary of significant accounting policies This
summary of significant accounting policies is presented to assist in understanding the Company’s consolidated financial statements
and have been consistently applied in the preparation of the financial statements. Basis
of presentation The accompanying consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US
GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Consolidation The accompanying consolidated
financial statements include the accounts of the Company, its wholly owned subsidiaries. Significant inter-company balances, investment
and capital, if any, have been eliminated upon consolidation. Use
of estimates The preparation of consolidated
financial statements in conformity with US GAAP requires management to make judgements, estimates and assumptions that affect the application
of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis
of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Significant
accounting estimates reflected in the Company’s consolidated financial statements include, but are not limited to, professional
service revenue estimated for various projects, the useful lives and impairment of long-lived assets, and collectability of accounts
receivable and other current assets. Actual results may differ from these estimates.
2
Summary
of significant accounting policies (continued) Cash
and cash equivalents Cash and cash equivalents primarily
consist of bank deposits with original maturities of three months or less, which are unrestricted as to withdrawal and use. The Company
maintains most of its bank accounts in Singapore. Accounts
receivable, net Accounts receivable mainly represent
amounts due from clients that meet the revenue recognition criteria. These accounts receivables are recorded net of any allowance for
credit losses, do not bear interest, and specific customer credit allowances. The Company maintains an allowance for estimated credit
losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses
adjusted to take into account current market conditions and the Company’s customers’ financial condition, the receivable
amount in dispute, and the current receivables aging and current payment patterns, over the contractual life of the receivable. The Company
writes off the receivable when it is determined to be uncollectible. Other
current assets Other current assets, net, primarily
consists of deposits, prepayments made to vendors or services providers for future services that have not been provided, prepaid rent
and other receivables from third parties. These advances are unsecured and are reviewed periodically to determine whether their carrying
value has become impaired. As of December 31, 2022 and 2023, management believes that the Company’s other current assets are not
impaired. Property
and equipment, net Property and equipment are stated
at cost less accumulated depreciation and impairment if applicable. The Company computes depreciation using the straight-line method
over the estimated useful lives of the assets as follows: Schedule of
property and equipment expected useful life
Property
and equipment lesser
of lease term or expected useful life
Software 1
year
Furniture
& fixtures 3
years
Office
equipment 1 5 years
Leasehold
improvement Shorter
of the lease term or 5 years The cost and related accumulated
depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated
statement of income. Expenditures for maintenance and repairs are charged to expense as incurred, while additions renewals and betterments,
which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to
determine whether subsequent events and circumstances warrant revised estimates of useful lives.
2
Summary
of significant accounting policies (continued) Intangible
assets, net The useful life of the intangible
assets is assessed to be finite. Amortization is computed using the straight-line method over the estimated useful life as follows: Schedule of useful life of the intangible
assets
Software
cost 10
years
Patent 20
years The software cost is primarily
attributable to No-Code Rapid Mobile App Development (RMAD) platform which allows mobile and non-mobile developers to build mobile applications
with simple drag-and-drop. The software cost pertains to payroll and payroll-related costs for employee’s time spent on software
projects, and fees paid to third parties for development. Costs incurred in relation to individual projects are capitalized only when
the future economic benefit of the project is probable and the following main conditions are met: (i) the development cost can be measure
reliably, (ii) the technological feasibility of the product has been established and (iii) therefore it is the intention of management
to complete the intangible asset and sell it. Patents are patents of service
management, eMOBIQ® trademark, OK365® and TableQR® wordmarks. Impairment
of long-lived assets The Company evaluates the recoverability
of its long-lived assets (asset groups), including property and equipment and operating lease right-of-use assets, for impairment whenever
events or changes in circumstances indicate that the carrying amount of its asset (asset group) may not be fully recoverable. When these
events occur, the Company measures impairment by comparing the carrying amount of the assets to the estimated undiscounted future cash
flows expected to result from the use of the asset (asset group) and their eventual disposition. If the sum of the expected undiscounted
cash flows is less than the carrying amount of the asset (asset group), the Company recognizes an impairment loss based on the excess
of the carrying amount of the asset (asset group) over their fair value. Fair value is generally determined by discounting the cash flows
expected to be generated by the asset (asset group), when the market prices are not readily available. The adjusted carrying amount of
the asset is the new cost basis and is depreciated over the asset’s remaining useful life. Long-lived assets are grouped with other
assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets
and liabilities. As of December 31, 2022 and 2023, no Fair
value measurements ASC 820 defines fair value as
the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded
at fair value, the Company considers the principal or most advantageous market in pricing the asset or liability. 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 -
other inputs that are directly or indirectly observable in the marketplace.
Level
3 -
unobservable inputs which are supported by little or no market activity. The carrying amounts of cash
and cash equivalents, accounts receivable, other current assets, contract assets and liabilities, accounts payable, other payables to
related parties, contract liabilities, and accruals and other payables approximate their fair values because of their generally short
maturities.
2
Summary
of significant accounting policies (continued) Fair
value measurements The fair value of such loans
payable had been determined based on the variable nature of the interest rates and the proximity to the issuance date. The following
table presents the fair value and carrying value of the Company’s bank loans as of December 31, 2022 and 2023: Schedule of fair value and carrying value of the Company’s bank loans
Fair Value Carrying
Level 1 Level 2 Level 3 Value
Liabilities – December 31, 2022 (S$)
Bank loans $ - $ 463,410 $ - $ 485,154
Fair Value Carrying
Level 1 Level 2 Level 3 Value
Liabilities – December 31, 2023 (S$)
Bank loans $ - $ 749,202 $ - $ 828,366
Liabilities – December 31, 2023 (US$)
Bank loans $ - $ 567,878 $ - $ 627,883 Revenue
recognition The Company accounts for its
revenue under ASC Topic 606, Revenue from Contracts with Customers. The five-step model defined by ASC Topic 606 requires the Company
to: (1) identify its contracts with
customers; (2) identify its performance
obligations under those contracts; (3) determine the transaction
prices of those contracts; (4) allocate the transaction
prices to its performance obligations in those contracts; and (5) recognize revenue when each
performance obligation under those contracts is satisfied. Revenue is recognized when promised services are transferred to the client
in an amount that reflects the consideration expected in exchange for those services. Revenues are generally recognized
upon the transfer of control of promised products or services provided to our customers, reflecting the amount of consideration we expect
to receive for those products or services. The
Company generates revenue from the following streams: (1) Sales of Packaged software
solutions The Company enters into packaged
software solution contracts with brand-named software and IT product/service providers for consideration that can include various combinations
of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Certain contracts may include
the Company’s performance obligations to arrange the IT products/service to be provided by the brand-named providers. The Company
considers the following indicators amongst others when determining whether it is acting as a principal in the contract where revenue
would be recorded on a gross basis:
(i) the
Company is primarily responsible for arranging the promise to provide the specified products or services;
(ii) the
Company has inventory risk before the specified products/services have been transferred to a customer or after transfer of control
to the customer; and
(iii) the
Company has discretion in establishing the price for the specified products or services delivered.
2 Summary
of significant accounting policies (continued) Revenue
recognition (continued) In these arrangements, as the
company assumes the principle role in these transactions, revenue is recognized in the amount of the gross fee associated with them being
a principle. These arrangements primarily relate to the sale of third party software and services and the Company is in charge of providing
services for the coordination, holding, delivery and aftersales services of the software, and thereby assuming the inventory risk and
has the full discretion in setting the prices for their these products and services. Determining whether products
and services are considered distinct performance obligations that should be accounted for separately versus together may require judgment.
The Company allocates the transaction price to each performance obligation in a contract based on its relative standalone selling price,
or SSP. The SSP is the observable price at which the Company sells the product or service separately. Products sold are without a right
of return and consequently no sales returns allowance is considered necessary. Packaged software solutions we
contracted to sale include:
(a) Third
party licenses and services Revenue generated from third party
licenses sold are recognized upon transfer of control of licenses at point in time in an amount that reflects the consideration the Company
expects to receive in exchange for the licenses. Third party licenses include third party licenses and products, and subscription of
third-party hosting services. In respect of third-party hosting
services revenue, Microsoft Corporation (“Microsoft”) provides the hosting services when customers access their cloud offerings.
The Company will bill and collect in advance from customers before purchase through Microsoft portal at fixed subscription term at annual
basis. Microsoft will generate Admin ID, password, and Tenant ID based on the end customer’s name to register licenses for customer
to access the portal for resource creation, then the control of license is considered transferred to customer. The Company does not have
any other obligation during the remaining term. The third-party hosting services revenue is non-refundable based on Microsoft’s
policy.
(b)
Subscription
of No-code platform and mobile application
(a) No-code
platform and mobile application The annual subscription revenue
generated from our No-Code platform (eMOBIQ®, OK365®) are non-refundable while customer and Project Manager will sign off on
“GO LIVE” document for our own project customers or acceptance of invoice for third party resellers or subscribers as evidence
of right to access our platform. The subscription revenue is recognized over time of subscription.
(2) Professional
services and support revenue
(a) Professional
service revenue Our professional service is primarily
designed to modify or customize digital transformation solutions for our customers, among others, consultation, application development
and deployment assistance and training related to our customers. Professional services are billed
under fixed-fee arrangements. Each project is assigned a total man-day and each task is allocated a specific number of man days split
by specific tasks. Revenue is recognized based on the proportion of number of assigned man-days against the total allocated man days.
(b) Support
income Support fee is from support post
implementation of software projects. Revenue is recognized ratably over the contractual support period.
2
Summary
of significant accounting policies (continued) Contract
Assets and contract liabilities The contract assets primarily
relate to the Company’s rights to bill for work completed but not billed at the reporting date. The contract assets are transferred
to receivables until subsequent billing phase. The contract liabilities primarily relate to advance billing to customers based on the
contract, for which project task has yet completed. Segments 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 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 operation
results by the revenue of different services. Based on management’s assessment of their business operation and main product lines,
the Company has determined that it has two operating segments based on product offered as defined by ASC 280 as follow.
1. Sales
of Packaged software solutions
2. Sales
of No-code platform and mobile application Packaged
software solutions Organizations historically rely
on packaged software and custom software solutions for their operations and business automation. The packaged software solutions segment
acknowledges this reliance and aims to provide solutions to address unique business operating models and requirements, offering competitive
advantages. It recognizes that standardized frameworks often necessitate organizations to conform their individual processes, needs,
and systems of record. No-code
platform and mobile application This segment focuses on providing
a rapid development environment through a No-Code platform. The eMOBIQ® platform enables organizations to speed up their enterprise
application development cycle by offering an intuitive and visual interface that requires no coding. The platform includes easy-to-use
navigation tools and drag-and-drop application building components, facilitating the design process and enabling the launch of business
applications in a faster and more productive manner. Additionally, it allows professional and citizen developers to utilize the platform,
import custom plugins, and integrate with various ERP systems. Concentrations
and credit risk The Company maintains cash with
banks in Singapore (“SGN”). Should any bank holding cash become insolvent, or if the Company is otherwise unable to withdraw
funds, the Company would lose the cash with that bank; however, the Company has not experienced any losses in such accounts and believes
it is not exposed to any significant risks on its cash in bank accounts. In Singapore, a depositor has up to S$ 75,000 Financial
instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and cash equivalents and accounts
receivable. The Company has designed their credit policies with an objective to minimize their exposure to credit risk. The Company’s
accounts receivables are short term in nature and the associated risk is minimal. The Company conducts credit evaluations on its clients
and generally does not require collateral or other security. The Company periodically evaluates the creditworthiness of the existing
clients in determining the allowance for doubtful accounts primarily based upon the age of the receivables and factors surrounding the
credit risk of specific clients. As of December 31, 2022 and 2023,
the Company’s assets were located in Singapore and the Company’s revenue was principally derived from the operation in Singapore.
2
Summary
of significant accounting policies (continued) Concentrations
and credit risk (continued) For the year ended December 31,
2022, customer A accounted for 4% 11% 4% 11% 15% 0% For the year ended December 31,
2022, Microsoft Regional Sales Pte Ltd. and Ingram Micro Asia Marketplace Pte Ltd. accounted for 24% 10% 49% 13% 19% 6% 59% 20% Employee
benefits Employee benefits are recognized
as an expense, unless the cost qualifies to be capitalized as an asset.
i) Defined
contribution plans Defined contribution plans are
post-employment benefit plans under which the Company pays fixed contributions into separate entities such as the Central Provident Fund
on a mandatory, contractual or voluntary basis. The Company has no further payment obligations once the contributions have been paid.
ii) Short-term
compensated absences Employee entitlements to annual
leave are recognized when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services
rendered by employees up to the balance sheet date. Related
parties The Company follows ASC 850 Related
Party Disclosures for the identification of related parties and disclosure of related party transactions. Foreign
currency The accompanying consolidated
financial statements are presented in Singapore Dollars (“S$”), which is the reporting currency of the Company. The functional
currencies of the Company are the Singapore Dollar, United State Dollars and Malaysia Ringgit. Translations of the consolidated
balance sheet, consolidated statement of income and consolidated statements of cash flows from S$ into US$ as of and for the years ended
December 31, 2023 are solely for the convenience of the reader and were calculated at the rate of US$ 0.7580 = S$1
2
Summary
of significant accounting policies (continued) Income
taxes The Company accounts for income
taxes under FASB ASC 740. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences
between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred
tax assets are also provided for net operating loss carryforwards that can be utilized to offset future taxable income. 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. A valuation allowance is established, when necessary, to reduce net deferred tax assets to the amount
expected to be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The provisions of FASB ASC 740-10-25,
“Accounting for Uncertainty in Income Taxes,” prescribe a more-likely-than-not threshold for consolidated financial statement
recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance
on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting
for interest and penalties associated with tax positions, and related disclosures. The Company did not accrue any
liability, interest or penalties related to uncertain tax positions in its provision for income taxes for the years ended December 31,
2022 and 2023. The Company does not expect that its assessment regarding unrecognized tax positions will materially change over the next
12 months. Earnings
(loss) per share Basic earnings (loss) per share
is computed by dividing net earnings (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding
during the year. Diluted earnings per share reflect the potential dilution that could occur if outstanding stock options, warrants and
convertible debt were exercised or converted into ordinary shares. When the Company has a loss, diluted shares are not included as their
effect would be anti-dilutive. The Company has no Recent
Adopted Accounting Pronouncements In June 2016, the FASB issued
ASU 2016-13, “Financial Instruments—Credit Losses”. The standard, including subsequently issued amendments (ASU 2018-19,
ASU 2019-04, ASU 2019-05, ASU 2019-10 and ASU 2019-11), requires a financial asset measured at amortized cost basis, such as accounts
receivable and certain other financial assets, to be presented at the net amount expected to be collected based on relevant information
about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability
of the reported amount. In November 2019, the FASB issued ASU No. 2019-10 to postpone the effective date of ASU No. 2016-13 for public
business entities eligible to be smaller reporting companies defined by the SEC to fiscal years beginning after December 15, 2022, including
interim periods within those fiscal years. The Company adopted the updates as of January 1, 2023, with no material impact on the Company’s
consolidated financial statements. Recent
Issued Accounting Pronouncements The Company is an “emerging
growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until
such time as those standards apply to private companies. The Company made the election to delay the adoption of new or revised accounting
standards. As result of the election, the Company’s financial statements may not be comparable to companies that comply with public
company effective dates.
2
Summary
of significant accounting policies (continued) Recent
Accounting Pronouncements (continued) In October 2021, the FASB issued
ASU 2021-08, Accounting for Contract Assets and Contract
Liabilities from Contracts with Customers (Topic 805) In November 2023, the FASB issued
ASU 2023-07, Segment Reporting (Topic 280) Improvements
to Reportable Segment Disclosures In December 2023, the FASB issued
ASU 2023-09, Income Taxes (Topic 740): Improvements to Income
Tax Disclosures Except as mentioned above, the
Group does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material
effect on the Company’s consolidated balance sheets, statements of operations and cash flows. |
