| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Method of Accounting The Company maintains its general ledger and journals
with the accrual method of accounting for financial reporting purposes. The financial statements and notes are representations of management.
Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have
been consistently applied in the presentation of financial statements. B. Basis of presentation The consolidated financial statements of the Company
have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). C. Principles of Consolidation The consolidated financial statements include
the accounts of the Company, its subsidiaries for which the Company is the primary beneficiary. All significant inter-company accounts
and transactions have been eliminated. The consolidated financial statements include 100% of assets, liabilities, and net income or loss
of those wholly-owned subsidiaries. As of March 31, 2022, the detailed identities
of the consolidating subsidiaries were as follows:
Name of Company Place of incorporation Attributable Registered
New York Link Capital Inc. (“NY Link”) New York 100 % $ 100
New York Tech Capital Inc. (“NY Tech”) New York 100 % 100
Center Florence, Inc. Delaware 100 % 1
Center St. Louis LLC (“St. Louis”) Delaware 100 % 1,000
Royal Park, LLC (“Royal Park”) South Carolina 100 % 1,000
Florence Development, LLC. (“Florence”) Delaware 100 % 1,000
Time Capital Inc. (“Time Capital”) New York 100 % 100
Time Capital Management Inc. (“Time Capital Management”) New York 100 % 100
Hudson Capital USA Inc. (“NY Link”) New York 100 % 100
Hongkong Internet Financial Services Limited (“HKIFS”) Hong Kong 100 % 0.14 As of December 31, 2021, the detailed identities
of the consolidating subsidiaries were as follows:
Name of Company Place of incorporation Attributable Registered
New York Link Capital Inc. (“NY Link”) New York 100 % $ 100
New York Tech Capital Inc. (“NY Tech”) New York 100 % 100
Center Florence, Inc. Delaware 100 % 1
Center St. Louis LLC (“St. Louis”) Delaware 100 % 1,000
Royal Park, LLC (“Royal Park”) South Carolina 100 % 1,000
Florence Development, LLC. (“Florence”) Delaware 100 % 1,000 D. Unaudited Interim Financial Information These unaudited interim condensed consolidated
financial statements have been prepared in accordance with GAAP for interim financial reporting and the rules and regulations of the Securities
and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally
included in financial statements prepared in accordance with GAAP have been condensed or omitted. In the opinion of management, all adjustments
of a normal recurring nature necessary for a fair presentation of the financial position, results of operations and cash flows for the
periods presented have been made. The results of operations for the interim periods presented are not necessarily indicative of the results
to be expected for the year ending December 31, 2022. The consolidated balance sheets and certain comparative
information as of December 31, 2021 are derived from the audited consolidated financial statements and related notes for the year ended
December 31, 2021 (“2021 Annual Financial Statements”), included in the Company’s 2021 Annual Report on Form 10-K. These
unaudited interim condensed consolidated financial statements should be read in conjunction with the 2021 Annual Financial Statements. E. Use of estimates The preparation of the financial statements in
conformity with U.S. 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. Estimates are used for, but not limited to, the accounting
for certain items such as allowance for doubtful accounts, depreciation and amortization, impairment, inventory allowance, taxes and contingencies. F. Contingencies Certain conditions may exist as of the date the
financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events
occur or fail to occur. The Company’s management assesses such contingent liabilities, and such assessment inherently involves an
exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted
claims that may result in such proceedings, the Company’s management evaluates the perceived merits of any legal proceedings or
un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought. If the assessment of a contingency indicates that
it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would
be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not
probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with
an estimate of the range of possible loss if determinable and material would be disclosed. Loss contingencies considered to be remote by
management are generally not disclosed unless they involve guarantees, in which case the guarantee would be disclosed. G. Cash and cash equivalents The Company classifies the following instruments
as cash and cash equivalents: cash on hand, unrestricted bank deposits, and all highly liquid investments purchased with original maturities
of three months or less. H. Accounts receivable Trade receivables are recognized and carried at
the original invoice amount less allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of
the full amount is no longer probable. Bad debts are written off as incurred. I. Other receivables Other receivables are recognized and carried at
the original invoice amount less allowance for any uncollectible amounts. An allowance for doubtful accounts is made when recovery of
the full amount is doubtful. J. Property, plant and equipment Lands are carried at cost and no depreciation
is provided. Plant and equipment are carried at cost less accumulated
depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method with a salvage value from 0%
- 10%. Estimated useful lives of the plant and equipment are as follows:
Building and improvement 15-40 years
Furniture and equipment 5-28 years
Digital mining machine 5 years
Office equipment 3 years
Office furniture 5 years
Motor vehicle 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 statement of income. The
cost of maintenance and repairs is charged to income as incurred, whereas significant renewals and betterments are capitalized. K. Intangible Assets Intangible assets, comprising digital assets,
accounting software and big data platform, which are separable from the property and equipment, are stated at cost less accumulated amortization.
Amortization is computed using the straight-line method over the estimated useful lives of the assets. Digital assets Digital assets (including Bitcoin and USDT) are
included in current assets in the accompanying consolidated balance sheets. Digital assets purchased are recorded at cost and digital
assets awarded to the Company through its mining activities are accounted for in connection with the Company’s revenue recognition
policy disclosed below. Digital assets held are accounted for as intangible
assets with indefinite useful lives. An intangible asset with an indefinite useful life is not amortized but assessed for impairment annually,
or more frequently, when events or changes in circumstances occur indicating that it is more likely than not that the indefinite-lived
asset is impaired. Impairment exists when the carrying amount exceeds
its fair value, which is measured using the quoted price of the cryptocurrency at the time its fair value is being measured. In testing
for impairment, the Company has the option to first perform a qualitative assessment to determine whether it is more likely than not that
an impairment exists. If it is determined that it is not more likely than not that an impairment exists, a quantitative impairment test
is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment
loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. For the periods ended March 31, 2022 and 2021,
the Company has recognized impairment loss of $0 and $0 of its digital assets, respectively. Purchases of digital assets by the Company, if
any, will be included within investing activities in the accompanying consolidated statements of cash flows, while digital assets awarded
to the Company through its mining activities are included within operating activities on the accompanying consolidated statements of cash
flows. The sales of digital assets are included within investing activities in the accompanying consolidated statements of cash flows
and any realized gains or losses from such sales are included in “realized gain (loss) on exchange of digital assets” in the
consolidated statements of operations and comprehensive income (loss). The Company accounts for its gains or losses in accordance with
the first-in first-out method of accounting. Separable Intangible Asset - Customer-related
intangible assets Customer-related intangible assets arising from
the acquisition of subsidiary which has been separated from goodwill by complying with ASC 805-20-55 which meets the contractual-legal
criterion for recognition separately from goodwill even though the Company cannot sell or otherwise transfer these lease contracts. Customer-related intangible assets are accounted
for as intangible assets with useful lives of five years. It would be amortized for the useful lives on monthly basis. The Company tests intangible assets for impairment
at the reporting unit level on an annual basis and between annual tests when an event occurs or circumstances change that could indicate
that the asset might be impaired. The Company first has the option to assess qualitative factors to determine whether it is more likely
than not that the fair value of a reporting unit is less than its carrying amount. If the Company decides, as a result of its qualitative
assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative
impairment test is mandatory. Otherwise, no further testing is required. L. Business combinations Business combinations are recorded using the acquisition
method of accounting. The assets acquired, the liabilities assumed and any non-controlling interests of the acquiree at the acquisition
date, if any, are measured at their fair values as of the acquisition date. Goodwill is recognized and measured as the excess of the total
consideration transferred plus the fair value of any non-controlling interests of the acquiree and fair value of previously held equity
interest in the acquiree, if any, at the acquisition date over the fair values of the identifiable net assets acquired. Common forms of
the consideration made in acquisitions include cash and common equity instruments. Consideration transferred in a business acquisition
is measured at the fair value as of the date of acquisition. M. Goodwill Goodwill is the excess of the consideration transferred
over the fair value of the acquired assets and assumed liabilities in a business combination. The Company tests goodwill for impairment at the
reporting unit level on an annual basis and between annual tests when an event occurs or circumstances change that could indicate that
the asset might be impaired. The Company first has the option to assess qualitative factors to determine whether it is more likely than
not that the fair value of a reporting unit is less than its carrying amount. If the Company decides, as a result of its qualitative assessment,
that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment
test is mandatory. Otherwise, no further testing is required. N. Impairment of Long-lived Assets The Company reviews long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets
to be held and used is measured by a comparison of the carrying amount of an asset to the future net undiscounted cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which
the carrying amount of the asset exceeds its fair value. For the periods ended March 31, 2022 and 2021, the Company did not recognize
any impairment loss of its long-lived assets. O. Long term investment The Company’s long-term investments include
equity securities without readily determinable fair values and available-for-sale investments. Equity securities without readily determinable
fair values As of March 31, 2022 and December 31, 2021, the
Company’s investment in two privately held companies over which the Company neither has control nor significant influence through
investment in common stock. Equity securities not accounted for using the
equity method are carried at fair value with unrealized gains and losses recorded in the consolidated income statements, according to
ASC 321, Investments - Equity Securities. The Company elected to record the equity investments in privately held companies using
the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly
transactions for identical or similar investments of the same issuer. Equity investments in privately held companies
accounted for using the measurement alternative are subject to periodic impairment reviews. The Company’s impairment analysis considers
both qualitative and quantitative factors that may have a significant effect on the fair value of these equity securities, including consideration
of the impact of the COVID-19 pandemic. In computing realized gains and losses on equity securities, the Company determines cost based
on amounts paid using the average cost method. Dividend income is recognized when the right to receive the payment is established. Available-for-sale investments For investments in investees’ shares which
are determined to be debt securities, the Group accounts for them as available-for-sale investments when they are not classified as either
trading or held-to-maturity investments. Available-for-sale investments are reported at fair value, with unrealized gains and losses recorded
in accumulated other comprehensive income as a component of shareholders’ equity. Declines in the fair value of individual available-for-sale
investments below their amortized cost due to credit-related factors are recognized as an allowance for credit losses, whereas if declines
in the fair value is not due to credit-related factors, the loss is recorded in other comprehensive income / (loss). P. Accounting for the Impairment of Long-lived
assets The long-lived assets held by the Company are
reviewed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
Subtopic 360-10-35, “Accounting for the Impairment or Disposal of Long-Lived Assets,” for impairment whenever events or changes
in circumstances indicate that the carrying amount of assets may not be recoverable. It is reasonably possible that these assets could
become impaired as a result of technology or other industry changes. Impairment is present if carrying amount of an asset is less than
its undiscounted cash flows to be generated. If an asset is considered impaired, a loss is
recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed of are reported
at the lower of the carrying amount or fair value less costs to sell. The Company believes no impairment has occurred to its assets during
2021 and 2020. Q. Income taxes The Company uses the accrual method of accounting
to determine income taxes for the year. The Company has implemented FASB ASC 740 Accounting for Income Taxes. Income tax liabilities computed
according to the United States, People’s Republic of China (PRC), and Hong Kong tax laws provide for the tax effects of transactions
reported in the financial statements and consists of taxes currently due, plus deferred taxes, related primarily to differences arising
from the recognition of expenses related to the depreciation of plant and equipment, amortization of intangible assets, and provisions
for doubtful accounts between financial and tax reporting. The deferred tax assets and liabilities represent the future tax return consequences
of those differences, which will be either taxable or deductible when the assets and liabilities are recovered or settled. Deferred taxes
also are recognized for operating losses that are available to offset future income taxes. A valuation allowance is recognized for deferred
tax assets if it is more likely than not, that the deferred tax assets will either expire before the Company is able to realize that tax
benefit, or that future realization is uncertain. R. Stock-based compensation The Company has elected to use the Black-Scholes-Merton
(“BSM”) pricing model to determine the fair value of stock options on the dates of grant. Also, the Company recognizes stock-based
compensation using the straight-line method over the requisite service period. The Company values stock awards using the market
price on or around the date the shares were awarded and includes the amount of compensation as a period compensation expense over the
requisite service period. For the periods ended
March 31, 2022 and 2021, $0 and $0 stock-based compensation was recognized. S. Foreign currency translation The accompanying financial statements are presented
in United States dollars (USD). For the period ended March 31, 2022, the functional
currency of the Company is the USD. For the period ended March 31, 2021, the functional
currency of the Company is the USD and Renminbi (RMB). The financial statements are translated into USD from RMB at period-end exchange
rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical
exchange rates when the capital transactions occurred.
Exchange rates March 31, December 31,
Year-end/period-end RMB : US$ exchange rate 6.5713 6.4515
Average annual/period RMB : US$ exchange rate 6.4844 6.3757 The RMB is not freely convertible into foreign
currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB
amounts could have been, or could be, converted into US Dollar at the rates used in translation. T. Revenue recognition The Company recognizes services revenue when the
following criteria have been met: 1) it has agreed and entered into a contract for service with it customers which the Company identifies
the contract and determines the transactions price with customers, 2) the contract has set forth a fixed fee for the services to be rendered
which the Company has determined the transactions price and the allocation of such price to performance obligations with the customers,
3) the Company has fully rendered service to its customers, and there are no additional obligations that exist that under the terms of
the contract that the Company has not fulfilled that the Company recognizes revenue when the performance obligation is satisfied, and
4) the Company has either received payment, or reasonably expects payment from the customer in accordance to the payment terms set forth
in the contract. Cryptocurrency When the cryptocurrency is sold in the exchange,
which time revenue is recognized. There is no significant financing component in these transactions. Fair value of the cryptocurrency award received
is determined using the quoted price of the related cryptocurrency at the time of receipt. There is currently no specific definitive guidance
under GAAP or alternative accounting framework for the accounting for cryptocurrencies recognized as revenue or held, and management has
exercised significant judgment in determining the appropriate accounting treatment. In the event authoritative guidance is enacted by
the FASB, the Company may be required to change its policies, which could have an effect on the Company’s consolidated financial
position and results from operations. Rental income Rental income from letting the Company’s
of investment properties is recognized on a straight-line basis over the lease term. Clubhouse services Clubhouse income is recognized when services are
rendered. U. Cost of revenue Cryptocurrency The cost of revenue of cryptocurrency is the corresponding
amount of intangible assets. Clubhouse services The cost of revenue of clubhouse services is mainly
the labour costs and cost of food and beverage. V. Earnings per share Basic earnings per share is computed on the basis
of the weighted average number of common stock outstanding during the period. Diluted earnings per share is computed on the basis of the
weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on
diluted earnings per share are excluded from the calculation. Dilution is computed by applying the treasury
stock method for options and warrants. Under this method, options and warrants are assumed to be exercised at the beginning of the period
(or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price
during the period. W. Comprehensive loss Comprehensive income (loss) is defined to include
all changes in equity except those resulting from investments by owners and distributions to owners. The Company presents components of
comprehensive income with equal prominence to other financial statements. The Company’s current component of other comprehensive
income is the foreign currency translation adjustment. X. Subsequent events The Company evaluates subsequent events that have
occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events: (1) recognized,
or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates
inherent in the process of preparing financial statements, and (2) non recognized, or those that provide evidence with respect to conditions
that did not exist at the date of the balance sheet but arose subsequent to that date. Y. Fair Value of Financial Instruments ASC 825, Financial Instruments, requires that
the Company discloses estimated fair values of financial instruments. The carrying amounts reported in the balance sheets for current
assets and current liabilities qualifying as financial instruments are a reasonable estimate of fair value. The Company applies the provisions of ASC 820-10,
Fair Value Measurements and Disclosures. ASC 820-10 defines fair value, and establishes a three-level valuation hierarchy for disclosures
of fair value measurement that enhances disclosure requirements for fair value measures. For certain financial instruments, including
cash and cash equivalents, loan receivables and short-term bank loans, the carrying amounts approximate fair value due to their relatively
short maturities. The three levels of valuation hierarchy are defined as follows:
● Level 1 inputs to the valuation methodology are quoted prices 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, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. The Company analyzes all financial instruments
with features of both liabilities and equity under ASC 480, “Distinguishing Liabilities from Equity,” and ASC 815. The following tables present the Company’s
financial assets and liabilities at fair value in accordance to ASC 820-10 As of March 31, 2022:
Quoted in Active (Level 1) Significant (Level 3) Significant (Level 3) Total
Financial assets:
Cash $ 555,717 $ - $ - $ 555,717
Total financial assets $ 555,717 $ - $ - $ 555,717 As of December 31, 2021:
Quoted in Active (Level 1) Significant (Level 3) Significant (Level 3) Total
Financial assets:
Cash $ 2,877,456 $ - $ - $ 2,877,456
Total financial assets $ 2,877,456 $ - $ - $ 2,877,456 Z. Recently issued accounting standards In April 2019, the FASB issued ASU 2019-04, Codification
Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments,
(“ASU 2019-04”). ASU 2019-04 clarifies and improves areas of guidance related to the recently issued standards on credit
losses (ASU 2016-13), hedging (ASU 2017-12), and recognition and measurement of financial instruments (ASU 2016-01). The amendments generally
have the same effective dates as their related standards. If already adopted, the amendments of ASU 2016-01 and ASU 2016-13 are effective
for fiscal years beginning after December 15, 2019 and the amendments of ASU 2017-12 are effective as of the beginning of the Company’s
next annual reporting period; early adoption is permitted. The standard did not have a material impact on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12,
Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 will simplify the accounting for income taxes by removing
certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for
other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this Update are
effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. ASU 2019-12 will be effective
for the Company in the first quarter of 2021. The Company does not expect the adoption of the new accounting rules to have a material
impact on the Company’s financial condition, results of operations, cash flows or disclosures. In March 2020, the FASB issued ASU 2020-03, Codification
Improvements to Financial Instruments, (“ASU 2020-03”). ASU 2020-03 improves various financial instruments topics, including
the CECL Standard. ASU 2020-03 includes seven different issues that describe the areas of improvement and the related amendments to GAAP,
intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments
related to Issue 1, Issue 2, Issue 4 and Issue 5 were effective upon issuance of ASU 2020-03. The amendments related to Issue 3, Issue
6 and Issue 7 were effective for the Company beginning on January 1, 2020. The Company does not anticipate that the adoption of the new
standard will have a material effect on its consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04,
Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 provides optional
expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform.
The amendments in this standard can be applied anytime between the first quarter of 2020 and the fourth quarter of 2022. The Company is
currently in the process of evaluating the impact of adoption of the new rules on the Company’s financial condition, results of
operations, cash flows and disclosures. In May 2021, the FASB issued ASU 2021-04, Earnings
Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic
718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain
Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). ASU 2021-04 provides guidance
as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written
call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a new
instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified
or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model
that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination,
debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for
all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should
apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. Early
adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt ASU 2021-04 in an
interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The adoption
of ASU 2021-04 is not expected to have any impact on the Company’s consolidated financial statement presentation or disclosures. In November 2021, the FASB issued ASU 2021-10,
Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This update requires certain annual disclosures
about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This update
is effective for annual periods beginning after December 15, 2021, and early application is permitted. This guidance should be applied
either prospectively to all transactions that are reflected in financial statements at the date of initial application and new transactions
that are entered into after the date of initial application or retrospectively to those transactions. The Company does not expect the
impact of this guidance to have a material impact on the Company’s consolidated financial statements. Other than the above, management does not believe
that any of the recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the
Company’s consolidated financial statements. |
