| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial
statements in conformity with GAAP 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. Significant items subject to such estimates
and assumptions include valuation of intangible assets. Recent Accounting
Pronouncements In December
2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. In
2020, the Financial Accounting Standards Board issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic
470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible
Instruments and Contracts in an Entity’s Own Equity, to address the complexity in accounting for certain financial instruments
with characteristics of liabilities and equity. Amongst other provisions, the amendments in this ASU significantly change the
guidance on the issuer’s accounting for convertible instruments and the guidance on the derivative scope exception for
contracts in an entity’s own equity such that fewer conversion features will require separate recognition, and fewer
freestanding instruments, like warrants, will require liability treatment. The pronouncement will be effective for public business
entities that are SEC smaller reporting company filers in fiscal years beginning after December 15, 2023, including interim
periods within those fiscal years. Early application of the guidance will be permitted for all entities for fiscal years beginning
after December 15, 2020, including interim periods within those fiscal years. The Company adopted the standard during fiscal
2021. From time
to time, the FASB or other standards setting bodies issue new accounting pronouncements. Updates to the FASB ASC are communicated through
issuance of ASUs. Unless otherwise discussed, the Company believes that the recently issued guidance, whether adopted or to be adopted
in the future, is not expected to have a material impact on its consolidated financial statements upon adoption. Cash Equivalents and Short-Term Investments For purposes of the statement of cash flows, cash equivalents include
demand deposits, money market funds, and all highly liquid debt instructions with original maturities of three months or less. Financial Instruments The FASB issued ASC 820-10, Fair Value
Measurements and Disclosures
– Level 1: Quoted prices in active markets for identical assets or liabilities
– Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
– Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Concentrations and Credit Risk The Company’s financial instruments that
are exposed to concentrations and credit risk primarily consist of its cash, and accounts payable. Cash Foreign Currency Translation The accounts of the Company are accounted for
in accordance with the Statement of Financial Accounting Statements No. 52 (“SFAS 52”), “Foreign Currency Translation”.
The financial statements of the Company are translated into US dollars as follows: assets and liabilities at year-end exchange rates;
income, expenses and cash flows at average exchange rates; and shareholders’ equity at historical exchange rate. Monetary assets and liabilities, and the related
revenue, expense, gain and loss accounts, of the Company are re-measured at year-end exchange rates. Non-monetary assets and liabilities,
and the related revenue, expense, gain and loss accounts are re-measured at historical rates. Adjustments which result from the re-measurement
of the assets and liabilities of the Company are included in net income. Share-Based Compensation ASC 718, Compensation – Stock Compensation The Company accounts for stock-based compensation
issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – Based Payments to Non-Employees As of December 31, 2021 and 2020, respectively,
there was $Nil of unrecognized expense related to non-vested stock-based compensation arrangements granted. There have been nil and 900,000
options granted during the year ended December 31, 2021 and 2020, respectively. Income Taxes The Company accounts for income taxes under ASC
740, Income Taxes Commitments and Contingencies The Company follows ASC 450-20, Loss Contingencies Earnings per Share Net income (loss) per share is calculated in accordance
with ASC 260, Earnings per Share Basic net income (loss) per common share is based
on the weighted average number of shares of common stock outstanding at December 31, 2021 and December 31, 2020 respectively. Due to net
operating losses, there is no presentation of dilutive earnings per share, as it would be anti-dilutive. As of December 31, 2021, 900,000 options (2020:
900,000) were excluded from the diluted weighted-average number of ordinary shares calculation because their effect would have been anti-dilutive. Forgiveness of Indebtedness The Company follows the guidance of AS 470.10
related to debt forgiveness and extinguishment. Debts of the Company are considered extinguished when the statute of limitations in the
applicable jurisdiction expire, or when terminated by judicial authority such as the granting of a declaratory judgment. Debts to related
parties or shareholders are treated as capital transactions when forgiven or extinguished and credited to additional paid in capital.
Debts to non-related parties are treated as other income when forgiven or extinguished. Debt Issued with Warrants The Company considers guidance within ASC 470-20,
Debt (ASC 470), ASC 480, and ASC 815 when accounting for the issuance of convertible debt with detachable warrants. The Company classifies
stock warrants as either equity instruments, derivative liabilities, or liabilities depending on the specific terms of the warrant agreement.
In circumstances in which debt is issued with liability-classified warrants, the proceeds from the issuance of convertible debt are first
allocated to the warrants at their full estimated fair value and established as both a liability and a debt discount. The remaining proceeds,
as further reduced by discounts created by the bifurcation of embedded derivatives and a beneficial conversion feature, is allocated to
the debt. The Company accounts for debt as liabilities measured at amortized cost and amortizes the resulting debt discount from the allocation
of proceeds, to interest expense using the effective interest method over the expected term of the debt instrument pursuant to ASC 835,
Interest (ASC 835). |
