NOTES
TO THE FINANCIAL STATEMENTS
FOR
THE THREE-MONTHS PERIOD ENDED JUNE 30, 2018
(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 is in the business of web development and online advertising.
The
Company has adopted March 31 fiscal year end.
NOTE
2 – GOING CONCERN
The
Company’s financial statements as of June 30, 2018, 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 June 30,
2018 of $34,090. 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, 2018, 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, 2018.
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 June 30, 2018 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 period ended June 30, 2018.
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 June 30, 2018, 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
February 2016, the FASB issued ASU No. 2016-02, Leases, requiring lessees to recognize assets and liabilities for leases with
lease terms of more than 12 months in the balance sheet. Leases will be classified as either finance or operating, with classification
affecting the pattern of expense recognition in the income statement. The new guidance is effective for fiscal years and for interim
periods within those fiscal years, beginning after December 15, 2018. A modified retrospective transition approach is required
for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period
presented in the financial statements, with certain practical expedients available. The Company will adopt this guidance in April
of 2018.
In
April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations
and Licensing”. The amendments add further guidance on identifying performance obligations and also to improve the operability
and understandability of the licensing implementation guidance. The amendments do not change the core principle of the guidance
in Topic 606. The effective date and transition requirements for the amendments are the same as the effective date and transition
requirements in Topic 606. The Company has adopted this new guidance and has re-evaluated its revenue recognition principles to
ensure that they are in line with this guidance.
In
August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments, which is intended to
reduce diversity in practice in how certain cash receipts and payments are presented and classified in the statement of cash flows.
The standard provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent
consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions
received from equity method investees. The ASU also provides guidance for classifying cash receipts and payments that have aspects
of more than one class of cash flows. The Company has adopted the new guidance.
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 months ended June 30, 2018, no revenue was earned.
NOTE
4 – FIXED ASSETS
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
|
|
Office furniture
|
|
$
|
2,100
|
|
|
$
|
2,100
|
|
|
Computer Software
|
|
|
6,650
|
|
|
|
6,650
|
|
|
Accumulated depreciation & amortization
|
|
|
(8,750
|
)
|
|
|
(1,264
|
)
|
|
Total, net
|
|
$
|
-
|
|
|
$
|
7,486
|
|
Depreciation
and Amortization expenses were $991 and $616 for the three months ended June 30, 2018 and 2017, respectively.
The
Company has written-off all the fixed assets net of $6,495 as a result of a change of control of the Company which occurred on
July 9, 2018. Refer to Footnote 8 - Subsequent Events.
NOTE
5 – 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.
NOTE
6 – 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 June 30, 2018, the Company’s sole officer and director loaned the Company $914 to pay
for incorporation costs and operating expenses. As of June 30, 2018, the amount outstanding was $914. The loan is non-interest
bearing, due upon demand and unsecured.
NOTE
7 - INCOME TAXES
As
of June 30, 2018, the Company had net operating loss carry forwards of $34,090 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:
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
Tax benefit (expenses) at U.S. statutory rate
|
|
$
|
(1,861
|
)
|
|
$
|
(1,344
|
)
|
|
Change in valuation allowance
|
|
|
1,861
|
|
|
|
1,344
|
|
|
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:
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
|
|
|
|
|
|
|
|
|
|
Net operating loss
|
|
$
|
7,159
|
|
|
$
|
5,298
|
|
|
Valuation allowance
|
|
|
(7,159
|
)
|
|
|
(5,298
|
)
|
|
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:
|
|
|
June 30, 2018
|
|
|
|
|
|
|
|
Balance-Beginning
|
|
$
|
5,298
|
|
|
Increase/(Decrease) in Valuation allowance
|
|
|
1,861
|
|
|
Balance-Ending
|
|
$
|
7,159
|
|
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, 2017, 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 2018 when the analysis is complete.
NOTE
8 – SUBSEQUENT EVENTS
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.
