NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2022
(UNAUDITED)
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
AIS Holdings Group, Inc., a Delaware corporation (“the
Company”) was incorporated under the laws of the State of Delaware on January 30, 2017 with the name Superb Acquisition, Inc. On
September 20, 2017, we changed our name to AIS Holdings Group, Inc.
On April 1, 2018, the Company entered into an agreement
with Trend Rich Global Limited to lease the Company’s Software System package. The Software System Package is source code that can
be expanded upon to create custom websites for clients in the digital currency industry.
On August 16, 2018, AIS Japan entered into a Software
Development Agreement with GL Co., Ltd., whereas GL Co., Ltd. will improve upon the Company’s existing Software Platform Package
which is owned by AIS Japan. The fee to further develop the software is in amount of 5,000,000 JPY (approximately $45,000).
On March 6, 2020, the agreement between the Company
and GL Co., Ltd. was deemed to have been completed. GL Co., Ltd. successfully improved the software system’s administration system,
as well as user system, in ways which were deemed to be acceptable and complete by the Company, and the ongoing services of GL Co., Ltd.
were deemed to no longer be required.
On August 1, 2022, the Company and Trend Rich Global
Limited mutually agreed to alter the monthly fees charged to Trend Rich Global Limited by the Company. All material components of the
initial agreement entered into on April 1, 2018 remained unaltered, but the monthly basic fee was reduced from $3,600 to $2,000.
Our principal executive offices are located at 2-41-7-336,
Shinsakae Naka-ku Nagoya-shi, Aichi, 460-0007, Japan.
The Company has elected March 31st as its fiscal year
end.
NOTE 2
- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidations
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany
accounts and transactions have been eliminated.
Basis of Presentation
This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. These accounting
policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the
preparation of the financial statements.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles 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. In the opinion of management,
all adjustments necessary in order to make the financial statements not misleading have been included. Actual results could differ from
those estimates.
Related party transaction
A related party is generally defined as (i) any person
that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone
that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly
influence the financial and operating decisions of the Company. A transaction is considered to be a related party transaction when there
is a transfer of resources or obligations between related parties. The Company conducts business with its related parties in the ordinary
course of business.
Transactions involving related parties cannot be presumed
to be carried out on an arm's-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations
about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent
to those that prevail in arm's-length transactions unless such representations can be substantiated.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of six months or less when purchased to be cash equivalents.
- F5 -
Table of Contents
Property, Plant and Equipment
Property, plant and equipment are stated at cost less
depreciation and impairment loss. The initial cost of the assets comprises its purchase price and any directly attributable costs of bringing
the asset to its working condition and location for its intended use. Depreciation is calculated using the straight-line method over the
shorter of the estimated useful life of the respective assets as follows: computer software developed or acquired for internal use, 2
to 5 years; computer equipment, 2 to 5 years; buildings and improvements, 5 to 15 years; leasehold improvements, 2 to 10 years; and furniture
and equipment, 1 to 5 years.
Significant improvements are capitalized when it is
probable that the expenditure resulted in an increase in the future economic benefits expected to be obtained from the use of the asset
beyond its originally assessed standard of performance. When improvements are made to real property and those improvements are permanently
affixed to the property, the title to those improvements automatically transfers to the owner of the property. The lessee’s interest
in the improvements is not a direct ownership interest but rather it is an intangible right to use and benefit from the improvements during
the term of the lease. The Company uses the straight-line method over the shorter of the estimated useful life of the asset or the lease
term.
In accordance with ASC Topic 360, the Company reviews
long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be
fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows
is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated
fair value and its book value. For the period ended December 31, 2022 and 2021 the Company did not record any impairment charges on long-lived
assets.
Routine repairs and maintenance are expensed when
incurred. Gains and losses on disposal of fixed assets are recognized in the income statement based on the net disposal proceeds less
the carrying amount of the assets.
Revenue Recognition
The Company recognizes revenue by applying the following steps in accordance with Accounting Standards Codification (“ASC”)
Topic 606 - Revenue from contracts with Customers: (1) identify the contract with a customer; (2) identify the performance obligations
in the contract; (3) determine the transaction price; (4) allocate the transaction price to each performance obligation in the contract;
and (5) recognize revenue when each performance obligation is satisfied.
Accounts Receivable and Allowance
Accounts receivable 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 against the allowance
when identified.
Foreign currency translation
The Company maintains its books and record in its
local currency, Japanese YEN (“JPY”), which is a functional currency as being the primary currency of the economic environment
in which its operation is conducted. Transactions denominated in currencies other than the functional currency are translated into the
functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies
other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet
dates. The resulting exchange differences are recorded in the statements of operations.
The reporting currency of the Company is the United
States Dollars (“US$”) and the accompanying consolidated financial statements have been expressed in US$. In accordance with
ASC Topic 830-30, “Translation of Financial Statement”, assets and liabilities of the Company whose functional currency is
not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates
prevailing during the period. Shareholders’ equity is translated at historical exchange rate at the time of transaction. The gains
and losses resulting from translation of financial statements are recorded as a separate component of accumulated other comprehensive
income within the statements of shareholders’ equity.
Translation of amounts from the local currency of
the Company into US$1 has been made at the following exchange rates:
| |
December 31, 2022 |
December 31, 2021 |
| Current JPY: US$1 exchange rate |
131.11 |
115.08 |
| Average JPY: US$1 exchange rate |
136.50 |
111.28 |
Comprehensive income or loss
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income or loss, its
components and accumulated balances. Comprehensive income or loss as defined includes all changes in equity during a period from non-owner
sources. Accumulated comprehensive income, as presented in the accompanying consolidated statements of shareholders’ equity consists
of changes in unrealized gains and losses on foreign currency translation.
Income Taxes
The Company accounts for income taxes under ASC 740, “Income Taxes.” Under the asset and liability method of ASC 740, deferred
tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements
carrying amounts of existing assets and liabilities and their respective tax bases. 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 the enactment
occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize
tax assets through future operations. No deferred tax assets or liabilities were recognized at December 31, 2022 and March 31, 2022.
Basic Earnings (Loss) Per Share
The Company computes basic and diluted earnings (loss) per share in accordance with ASC Topic 260, Earnings per Share. Basic earnings
(loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the reporting
period. Diluted earnings (loss) per share reflects the potential dilution that could occur if stock options and other commitments to issue
common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company.
The Company does not have any potentially dilutive instruments as of December 31, 2022 and 2021 and, thus, anti-dilution issues are not applicable.
Fair Value of Financial Instruments
The Company’s balance sheet includes certain
financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively
short period of time between the origination of these instruments and their expected realization.
ASC 820, Fair Value Measurements and Disclosures,
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 that distinguishes between (1) market participant assumptions developed based on
market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant
assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists
of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
- Level 1 - Unadjusted quoted prices in active markets
that are accessible at the measurement date for identical, unrestricted assets or liabilities.
- Level 2 - Inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets
or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs
other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally
from or corroborated by observable market data by correlation or other means.
- Level 3 - Inputs that are both significant to the
fair value measurement and unobservable.
Fair value estimates discussed herein are based upon
certain market assumptions and pertinent information available to management as of December 31, 2022. The respective carrying value of
certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These
financial instruments include accrued expenses.
Recently Issued Accounting Pronouncements
The Company has implemented all new accounting pronouncements
that are in effect and that may impact its financial statements and does not believe that there are any other new pronouncements that
have been issued that might have a material impact on its financial position or results of operations.
In December 2019, the FASB issued ASU 2019-12, Income
Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”) as part of its overall simplification initiative
to reduce costs and complexity of applying accounting standards. ASU 2019-12 removes certain exceptions from Topic 740, Income Taxes,
including (i) the exception to the incremental approach for intra period tax allocation; (ii) the exception to accounting for basis differences
when there are ownership changes in foreign investments; and (iii) the exception in interim period income tax accounting for year-to-date
losses that exceed anticipated losses. ASU 2019-12 also simplifies GAAP in several other areas of Topic 740 such as (i) franchise taxes
and other taxes partially based on income; (ii) transactions with a government that result in a step up in the tax basis of goodwill;
(iii) separate financial statements of entities not subject to tax; and (iv) enacted changes in tax laws in interim periods. ASU 2019-12
is effective for public entities for annual reporting periods and interim periods within those years beginning after December 15, 2020,
and early adoption is permitted.
- F6 -
Table of Contents
NOTE 3
- GOING CONCERN
The Company’s financial statements are prepared
in accordance with generally accepted accounting principles applicable to a going concern that contemplates the realization of assets
and liquidation of liabilities in the normal course of business.
The Company demonstrates adverse conditions that raise
substantial doubt about the Company's ability to continue as a going concern for one year following the issuance of these financial statements.
These adverse conditions are negative financial trends, specifically operating loss, working capital deficiency, and other adverse key
financial ratios.
The Company has not had sufficient revenues to cover
its operating costs. Management plans to fund operating expenses with related party contributions to capital. There is no assurance that
management's plan will be successful.
The financial statements do not include any adjustments
relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be
necessary in the event that the Company cannot continue as a going concern.
NOTE
4 - Accrued receipts
Accrued expenses totaled $0 as of December 31, 2022
as compared to March 31, 2022 which was $45,372.
On April 5, 2022, the Company refunded accrued receipt
of $26,847 to one customer.
NOTE
5 - INCOME TAXES
The Company conducts its major businesses in Japan
and is subject to tax in this jurisdiction. As a result of its business activities, the Company files tax returns that are subject to
examination by the local tax authority.
National income tax in Japan is charged at 23.2% of
a company’s assessable profit. The Company’s subsidiary, AIS Japan, was incorporated in Japan and is subject to Japanese national
income tax and city income tax at the applicable tax rates on the taxable income as reported in their Japanese statutory accounts in accordance
with the relevant enterprises income tax laws applicable to foreign enterprises.
The Company, which acts as a holding company on a
non-consolidated basis, does not plan to engage any business activities and current or future loss will be fully allowed. For the year
ended March 31, 2023, the Company, as a holding company registered in the state of Delaware, has incurred net losses and, therefore, has
no tax liability. The net deferred tax asset generated by the loss carry forward has been fully reserved. The cumulative net operating
loss carry forward is approximately $120,974 as of December 31, 2022 and will expire beginning in the year 2041. Annual use of the net
operating loss may be limited by Internal Revenue Code Section 382 due to an ownership change.
NOTE 6
- SHAREHOLDER EQUITY
Preferred Stock
The authorized preferred stock of the Company consists
of 20,000,000 shares with a par value of $0.0001. The Company had no shares of preferred stock issued and outstanding at December 31, 2022 and March 31, 2022.
Common Stock
The authorized common stock of the Company consists
of 500,000,000 shares with a par value of $0.0001. There were 20,000,000 shares of common stock issued and outstanding at December 31, 2022 and March 31, 2022.
The Company did not have any potentially dilutive
instruments as of December 31, 2022 and March 31, 2022 and, thus, anti-dilution issues are not applicable.
Additional paid-in capital
During the nine months ended December 31, 2022 and
2021, the Company had imputed interest of $3,875
and $5,789.
NOTE 7
- RELATED-PARTY TRANSACTIONS
Additional paid-in capital
During the nine months ended December 31, 2022 and
2021, the Company had imputed interest of $3,875 and $5,789.
Due to related party
For the nine months ended December 31, 2022 and 2021,
the Company borrowed $1,229 and $1,947 from Takehiro Abe, CEO of the Company. For the nine months ended December 31, 2022 and 2021, the
Company repaid $0 and $0 to Takehiro Abe. The total due as of December 31, 2022 and March 31, 2022 were $67,521 and $70,794 and
were unsecured, due on demand and non-interest bearing.
During the nine months ended December 31, 2022 and
2021, the Company had imputed interest of $3,875 and $5,789.
The Company utilizes home
office space and equipment of our management at no cost. Management estimates such amounts to be immaterial.
NOTE
8 - SUBSEQUENT EVENTS
The
Company has evaluated subsequent events through February 2, 2023, the date on which the consolidated financial statements were
available to be issued.
- F7 -
Table of Contents