NOTES
TO THE FINANCIAL STATEMENTS
AS
OF AND FOR THE NINE MONTHS ENDED DECEMBER 31, 2020
(UNAUDITED)
NOTE
1 – ORGANIZATION AND BUSINESS
BYLOG
GROUP CORP. (the “Company”) is a corporation established under the corporation laws in the State of Nevada on August 21,
2015. The Company was in the business of web development and online advertising.
We
qualify as a “shell company” under Rule 12b-2 promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
under the Exchange Act because we currently have no or nominal assets (other than cash) and no or nominal operations. No revenue has
been generated since March 31, 2020.
The
Company hired external party to build up company reputation for the purpose of effecting a merger, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses.
The
Company has adopted March 31 fiscal year end.
NOTE
2 – GOING CONCERN
The
Company’s financial statements as of December 31, 2020, been prepared using generally accepted accounting principles in the United
States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal
course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow
it to continue as a going concern. The Company has accumulated loss from inception (August 21, 2015) to December 31, 2020 of $256,712.
These factors among others raise substantial doubt about the ability of the company to continue as a going concern for a reasonable period
of time.
In
order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan
is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its
minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that
the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to
the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company
be unable to continue as a going concern.
NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States
of America.
Interim
Financial Information
The
unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles (GAAP) applicable
to interim financial information and the requirements of Form 10-Q and Rule 8-03 of Regulation S-X of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and disclosure required by accounting principles generally accepted in the United
States of America for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the
opinion of management, all adjustments considered necessary for a fair presentation of the financial position and the results of operations
and cash flows for the interim periods have been included.
These
consolidated financial statements should be read in conjunction with the audited financial statements for the year ended March 31, 2020,
as not all disclosures required by generally accepted accounting principles for annual financial statements are presented. The interim
consolidated financial statements follow the same accounting policies and methods of computations as the audited financial statements
for the year ended March 31, 2020.
Use
of Estimates
Preparing
financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and
outcomes may differ from management’s estimates and assumptions.
Cash
and Cash Equivalents
For
purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity of three
months or less to be cash equivalents. The Company’s bank accounts are deposited in insured institutions. The funds are insured
up to $250,000. At December 31, 2020 the Company’s bank deposits did not exceed the insured amounts.
Advertising
Costs
The
Company’s policy regarding advertising is to expense advertising when incurred. The Company did not incur advertising expense during
the nine months ended December 31, 2020.
Fixed
Assets
The
Company records depreciation and amortization when appropriate using straight-line balance method over the estimated useful life of the
assets. The estimated useful lives as follows:
|
Software
|
3
years
|
|
Office
Furniture
|
5
years
|
Expenditures
for maintenance and repairs are charged to expense as incurred. Additions, major renewals and replacements that increase the property’s
useful life are capitalized. Property sold or retired, together with the related accumulated depreciation is removed from the appropriated
accounts and the resultant gain or loss is included in net income. We evaluate the recoverability of our long-lived assets whenever changes
in circumstances or events may indicate that the carrying amounts may not be recoverable. An impairment loss is recognized in the event
the carrying value of the assets exceeds the future undiscounted cash flows attributable to such assets.
Stock-Based
Compensation
As
of December 31, 2020, the Company has not issued any stock-based payments to its employees.
Stock-based
compensation is accounted for at fair value in accordance with ASC 718, when applicable. To date, the Company has not adopted a stock
option plan and has not granted any stock options.
Income
Taxes
The
Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are
recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective
income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized
in income in the period that includes the enactment date.
New
Accounting Pronouncements
In
July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases. The amendments in ASU 2018-10 provide additional
clarification and implementation guidance on certain aspects of the previously issued ASU No. 2016-02, Leases (Topic 842) (“ASU
2016-02”) and have the same effective and transition requirements as ASU 2016-02. Upon the effective date, ASU 2018-10 will supersede
the current lease guidance in ASC Topic 840, Leases. Under the new guidance, lessees will be required to recognize for all leases, lease
with the exception of short-term leases, a lease liability, which is a lessee’s obligation to make payments arising from a lease,
measured on a discounted basis. Concurrently, lessees will be required to recognize a right-of-use asset, which is an asset that represents
the lessee’s right to use, or control the use of, a specified asset for the lease term. ASU 2018-10 is effective for private companies
and emerging growth public companies for interim and annual reporting periods beginning after December 15, 2019, with early adoption
permitted. The guidance is required to be applied using a modified retrospective transition approach for leases existing at, or entered
into after, the beginning of the earliest comparative periods presented in the financial statements. During the nine months ended December
31, 2020, the Company assessed the impact this guidance had on its financial statements and concluded that at present ASU No. 2018-10
has no impact on its financial statements due to not having any commitment to stay in our property longer than a year.
Start-Up
Costs
In
accordance with ASC 720, “Start-up Costs”, the company expenses all costs incurred in connection with the start-up and organization
of the company.
Fair
Value Measurements
The
company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used
in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.
The
estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which
approximates their fair values because of the short-term nature of these instruments.
ASC
820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement
date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:
Level
1 — quoted prices in active markets for identical assets or liabilities
Level
2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level
3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)
The
company has no assets or liabilities valued at fair value on a recurring basis.
Revenue
Recognition
In
2014, the FASB issued guidance on revenue recognition (“ASC 606”), with final amendments issued in 2016. The underlying principle
of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC
606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1)
identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3)
determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing
revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that
the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. The Company has
concluded that the new guidance did not require any significant change to its revenue recognition processes.
The
Company’s web development and online advertising services are considered to be one performance obligation; therefore, revenue is
recognized when services have been provided as each performance obligation is satisfied.
For
the three and nine months ended December 31, 2020, no revenue was earned.
NOTE
4 – STOCKHOLDERS EQUITY
The
Company has 75,000,000 shares of common stock authorized with a par value of $0.001 per share.
On
March 7, 2016, the Company issued 9,000,000 shares of its common stock to the director at $0.001 per share for total proceeds of $9,000.
For
the year ended March 31, 2017, the Company issued 2,320,000 shares of its common stock to the director at $0.01 per share for total proceeds
of $23,200.
During
the year ended March 31, 2018, the Company issued 175,000 shares for the proceeds of $1,750.
On
October 17, 2017, the Company retired 90,000 shares and returned $900 to the shareholder.
On
July 9, 2018, as a result of a private transaction, 9,000,000 shares of common stock (the “Shares”) of Bylog Group Corp.
(the “Company”), has been transferred from Dmitrii Iaroshenko to the Purchasers, with Dehang Zhou becoming a 43% holder of
the voting rights of the Company, and the Purchasers becoming the controlling shareholders. The consideration paid for the Shares, which
represent 79% of the issued and outstanding share capital of the Company on a fully-diluted basis, was $424,000. The source of the cash
consideration for the Shares was personal funds of the Purchasers. In connection with the transaction, Dmitrii Iaroshenko released the
Company from all debts owed. There are no arrangements or understandings among members of both the former and new control persons and
their associates with respect to the election of directors of the Company or other matters.
NOTE
5 – RELATED PARTY TRANSACTIONS
In
support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company
can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal
written commitment for continued support by officers, directors, or shareholders. Amounts represent advances or amounts paid in satisfaction
of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.
Since
August 21, 2015 (Inception) through to June 30, 2018, the Company’s former sole officer and director, Dmitrii Iaroshenko, loaned
the Company $914 to pay for incorporation costs and operating expenses. As a result of a change of control, the loan from Dmitrii Iaroshenko
and the remaining balance of accrued expenses of $151 are transferred to the new president, Dehang Zhou, of the Company.
As
of December 31, 2020, the amount outstanding was $135,209. The loan is non-interest bearing, due upon demand and unsecured.
NOTE
6 - INCOME TAXES
As
of December 31, 2020, the Company had net operating loss carry forwards of $256,712 that may be available to reduce future years’
taxable income. Future tax benefits which may arise as a result of these losses have not been recognized in these financial statements,
as their realization is determined not likely to occur and accordingly, the Company has recorded a valuation allowance for the deferred
tax asset relating to these tax loss carry-forwards.
The
reconciliation of income tax benefit (expenses) at the U.S. statutory rate at 21% and 34% for the period ended as follows:
|
|
|
December 31, 2020
|
|
|
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
Tax benefit (expenses) at U.S. statutory rate
|
|
$
|
9,781
|
|
|
$
|
23,834
|
|
|
Change in valuation allowance
|
|
|
(9,781
|
)
|
|
|
(23,834
|
)
|
|
Tax benefit (expenses), net
|
|
$
|
-
|
|
|
$
|
-
|
|
The
tax effects of temporary differences that give rise to significant portions of the net deferred tax assets are as follows:
|
|
|
December 31, 2020
|
|
|
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
Net operating loss
|
|
$
|
53,910
|
|
|
$
|
44,129
|
|
|
Valuation allowance
|
|
|
(53,910
|
)
|
|
|
(43,129
|
)
|
|
Deferred tax assets, net
|
|
$
|
-
|
|
|
$
|
-
|
|
The
tax effects of temporary differences that give rise to significant portions of the net deferred tax assets are as follows:
|
|
|
December 31, 2020
|
|
|
|
|
|
|
|
Balance-Beginning
|
|
$
|
44,129
|
|
|
Increase/(Decrease) in Valuation allowance
|
|
|
9,781
|
|
|
Balance-Ending
|
|
$
|
53,910
|
|
On
December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”) was signed into law, making significant changes
to the Internal Revenue Code. Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax
years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system
and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. The Company has estimated its provision for income
taxes in accordance with the 2017 Tax Act and the guidance available as of the date of March 30, 2018, but has kept the full valuation
allowance. As a result, the Company has recorded no income tax expense in the fourth quarter of 2017, the period in which the 2017 Tax
Act was enacted.
On
December 22, 2017, the Securities and Exchange Commission published Staff Accounting Bulletin No. 118 (“SAB 118”), which
addressed the application of GAAP in situations where the Company does not have the necessary information (including computations) available,
prepared, or analyzed in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act. The deferred
tax expense to be recorded in connection with the remeasurement of deferred tax assets is to be a provisional amount and a reasonable
estimate at December 31, 2020, based upon the best information currently available. The ultimate result may differ from these provisional
amounts, possibly materially, due to, among other things, additional analysis, changes in the interpretations and assumptions that the
Company has made, additional regulatory guidance that may be issued, and actions that the Company may take as a result of the 2017 Tax
Act. Any subsequent adjustment to these amounts will be recorded in current tax expense in the quarter of 2020 when the analysis is complete.
NOTE
7 – SUBSEQUENT EVENTS
The
Company has evaluated all transactions December 31, 2020 through the date these financial statements were available to be issued, and
has determined that there are no events that would require disclosure in or adjustment to these financial statements.
