This discussion summarizes the significant factors affecting the operating
results, financial condition, liquidity and cash flows of the Company and its
subsidiary for the fiscal years ended March 31, 2022 and 2021. The discussion
and analysis that follows should be read together with the section entitled
"Cautionary Note Concerning Forward-Looking Statements" and our consolidated
financial statements and the notes to the consolidated financial statements
included elsewhere in this annual report on Form 10-K.



Except for historical information, the matters discussed in this section are
forward looking statements that involve risks and uncertainties and are based
upon judgments concerning various factors that are beyond the Company's control.
Consequently, and because forward-looking statements are inherently subject to
risks and uncertainties, the actual results and outcomes may differ materially
from the results and outcomes discussed in the forward-looking statements. You
are urged to carefully review and consider the various disclosures made by
us in
this report.


Currency and exchange rate



Unless otherwise noted, all currency figures quoted as "U.S. dollars", "dollars"
or "US$" refer to the legal currency of the United States. References to "Hong
Kong Dollar" are to the Hong Kong Dollar, the legal currency of the Hong Kong
Special Administrative Region of the People's Republic of China. Throughout this
report, assets and liabilities of the Company's subsidiaries are translated into
U.S. dollars using the exchange rate on the balance sheet date. Revenue and
expenses are translated at average rates prevailing during the period. The gains
and losses resulting from translation of financial statements of foreign
subsidiaries are recorded as a separate component of accumulated other
comprehensive income within the statement of stockholders' equity.



Forward-Looking Statements



Statements in the following discussion and throughout this registration
statement that are not historical in nature are "forward-looking statements."
You can identify forward-looking statements by the use of words such as
"expect," "anticipate," "estimate," "may," "will," "should," "intend,"
"believe," and similar expressions. Although we believe the expectations
reflected in these forward-looking statements are reasonable, such statements
are inherently subject to risk and we can give no assurances that our
expectations will prove to be correct. Actual results could differ from those
described in this registration statement because of numerous factors, many of
which are beyond our control. These factors include, without limitation, those
described under Item 1A "Risk Factors." We undertake no obligation to update
these forward-looking statements to reflect events or circumstances after the
date of this registration statement or to reflect actual outcomes. Please see
"Forward Looking Statements" at the beginning of this report.



The following discussion of our financial condition and results of operations should be read in conjunction with our combined and consolidated financial statements and accompanying notes and other financial information contained elsewhere in this report.


Overview


KingResources, Inc. is a holding company, through its subsidiaries, principally engaged in hong kong.

We are not required to obtain permission from the Chinese authorities to operate or issue securities to foreign investors.



We are currently at the market introduction phase as we are preparing to launch
our first batch of smart chargers to the market. For the years ended March 31,
2022 and 2021, we reported a net loss of $60,166 and $133,331, respectively. As
of March 31, 2022, we had current assets of $91,269 and current liabilities of
$1,887,152. As of March 31, 2021, we had current assets of $107,492 and current
liabilities of $1,844,578.





  34






Our financial statements for the years ended March 31, 2022 and 2021 have been
prepared assuming that we will continue as a going concern. Our continuation as
a going concern is dependent upon improving our profitability and the continuing
financial support from our stockholders. Our sources of capital in the past have
included the sale of equity securities, which include common stock sold in
private transactions and public offerings, capital leases and short-term and
long-term debts.



We operate through our wholly-owned subsidiary Powertech Corporation Limited, a
limited liability company organized under the laws of Hong Kong. We currently
provide solutions for other companies who are in the fields of developing high
power, high voltage power supply and wireless charging technologies. We are
currently preparing trial sales of our 65W AC-DC Type C PD chargers, USB-C
multiport hub, USB-C mini hub, 65W power bank with 30,000mAh and other
accessories through our online store.



Results of Operations


Comparison of the years ended March 31, 2022 and 2021



The following table sets forth certain operational data for the years indicated:



                                        Fiscal Years Ended March 31,
                                           2022                2021
Revenue, net                          $       385,406       $    77,389
Cost of revenue                               (68,046 )         (40,555 )
Gross profit                                  317,360            36,834
Operating expenses:
Research and development expenses             (59,385 )         (94,966 )
Sales and marketing expenses                     (915 )               -
General and administrative expenses          (317,226 )         (78,707 )
Loss from operation                           (60,166 )        (136,839 )
Other income, net                                   -             3,508
Loss before income taxes                      (60,166 )        (133,331 )
Income tax expense                                  -                 -
Net loss                              $       (60,166 )     $  (133,331 )




Revenue


During the year ended March 31, 2022the following customers accounted for 10% or more of our total net revenue


                                               Year ended March 31, 2022             March 31, 2022
                                                                  Percentage            Accounts
Customer                                     Revenues            of revenues           receivable
TLD Optoelectronic Technology Limited     $       385,406                 100%     $                -










  35





During the year ended March 31, 2021the following customers represented 10% or more of our total net revenue:


                                               Year ended March 31, 2021          March 31, 2021
                                                                 Percentage          Accounts
Customer                                     Revenues           of revenues         receivable
Intelligent Media (Hong Kong) Company
Limited (related party)                   $       77,389                 100%     $        38,587




Cost of Revenue



Cost of revenue for the years ended March 31, 2022 and 2021, was $68,046 and
$40,555, respectively. The increase was primarily attributable to the allocation
to direct staff cost associated with R&D of the wireless charging project.

Gross Profit



We achieved a gross profit of $317,360 and $36,834 for the years ended March 31,
2022 and 2021, respectively. The increase in gross profit was attributable to an
increase in revenue from our research businesses.



Research and development (“R&D”) expenses



Research and development expenses was $59,385 and $94,966 for the years ended
March 31, 2022 and 2021, respectively. The decrease in expenses was primarily
attributable to the decrease in R&D expenses associate with the wireless
charging project, and allocation to direct cost associated with R&D support
being rendered in revenue generating activities.



Sales and Marketing Expenses


Sales and marketing expenses was $915 and $0 for the years ended March 31, 2022
and 2021, respectively. The expenses primarily include costs related to public
relations and promotional expenses.



General and administrative (“G&A”) expenses

General and administrative expenses was $317,226 and $78,707 for the years ended
March 31, 2022 and 2021, respectively. These expenses primarily include
consulting fees, personnel related expenses, as well as costs incurred on other
professional fees incurred in connection with general operations of the Company.
The G&A expenses increased by approximately $238,519 in the year ended March 31,
2022 from $78,707 in the year of 2021. The increase was primarily attributable
to the increase in professional fees and salaries.



Income Tax Expense


No income tax expense incurred during the year ended March 31, 2022 and 2021.



Net loss



As a result of the above, we reported net loss of $60,166 for the year ended
March 31, 2022, as compared to $133,331 for the year ended March 31 ,2021, a
decrease was mainly attributable to market acceptance of our products and
services, which led to revenue growth in the business operation.







  36





Cash and capital resources

The following table summarizes the main components of our cash flows for the years ended March 31, 2022 and 2021.


                                                        Years ended March 31,
                                                         2022            2021

Net cash provided by (used in) operating activities $86,113 ($187,108)
Net cash used in investing activities

                      (8,087 )      

(13,097 ) Net cash (used in) provided by financing activities (103,654 ) 220,420

Net cash provided by (used in) operating activities



For the year ended March 31, 2022, net cash provided by operating activities was
$86,113, which consisted primarily of a net loss of $60,166, an increase in
inventories of $9,252, an increase in deposits, prepayments and other
receivables of $41,144, and a decrease of lease liabilities of $39,871, offset
by a decrease in accounts receivable, related party of $38,541, an increase in
accrued liabilities and other payables of $153,643, plus non-cash items such as,
depreciation of $38,685, amortization of $4,308 and non-cash lease expenses
of
$1,369.



For the year ended March 31, 2021, net cash used in operating activities was
$187,108, which consisted primarily of a net loss of $133,331, an increase in
prepayments and deposits of $9,021, and increase in accounts receivable, related
party of $38,587, an increase in inventories of $8,424, and a decrease of lease
liabilities of $40,242, offset by an increase in accrued liabilities and other
payables of $1,413, plus non-cash items such as, depreciation of $38,477 and
non-cash lease expenses of $2,607.



We expect to continue to rely on cash generated from our existing shareholder financing and private placements of our securities to fund our operations and future acquisitions.

Net cash used In investment activities

For the year ended March 31, 2022the net cash used in investing activities was
$8,087which consisted of the purchase of property, plant and equipment of $5,536 and addition of intangible assets of $2,551.

For the year ended March 31, 2021the net cash used in investing activities was
$13,097which consisted of the addition of intangible assets.

Net cash (Used in) Provided by Fundraising Event

For the year ended March 31, 2022the net cash used in financing activity was
$103,654which consisted of a reimbursement to related parties.

For the year ended March 31, 2021the net cash provided by financing activity was
$220,420which consisted of advances from related parties.


Working Capital


From March 31, 2022we had cash and cash equivalents of $14,864inventories of $17,617installments, installments and other receivables from $58,788.

From March 31, 2021we had cash and cash equivalents of $42,463accounts receivable, related party, of $38,587inventories of $8,424installments, installments and other receivables from $18,018.




  37





From March 31, 2022 and 2021, we had a working capital deficit of $1,795,883 and
$1,737,086respectively.

We expect to incur significantly greater expenses in the near future as we
expand our business or enter into strategic partnerships. We also expect our
technology and development, sales and marketing expenses to increase as we
enhance our e-commerce platform and spend more efforts in building up customers
and communities and incur additional costs in investors and partnerships
relationship for long-term corporate development.



During the year, we did not pay dividends on our Common Stock. Our present
policy is to apply cash to investments in product development, acquisitions or
expansion; consequently, we do not expect to pay dividends on Common Stock
in
the foreseeable future.



Going Concern



Our continuation as a going concern is dependent upon improving our
profitability and the continuing financial support from our stockholders. Our
sources of capital may include the sale of equity securities, which include
common stock sold in private transactions, capital leases and short-term and
long-term debts. While we believe that we will obtain external financing and the
existing shareholders will continue to provide the additional cash to meet our
obligations as they become due, there can be no assurance that we will be able
to raise such additional capital resources on satisfactory terms. We believe
that our current cash and other sources of liquidity discussed below are
adequate to support operations for at least the next 12 months.



We require additional funding to meet its ongoing obligations and to fund
anticipated operating losses. Our auditor has expressed substantial doubt about
our ability to continue as a going concern. Our ability to continue as a going
concern is dependent on raising capital to fund its initial business plan and
ultimately to attain profitable operations. These consolidated financial
statements do not include any adjustments to reflect the possible future effects
on the recoverability and classification of assets and liabilities that may
result in the Company not being able to continue as a going concern.



We expect to incur production, marketing and professional and administrative
expenses as well expenses associated with maintaining our filings with the
Commission. We will require additional funds during this time and will seek to
raise the necessary additional capital. If we are unable to obtain additional
financing, we may be required to reduce the scope of our business development
activities, which could harm our business plans, financial condition and
operating results. Additional funding may not be available on favorable terms,
if at all. We intend to continue to fund its business by way of equity or debt
financing and advances from related parties. Any inability to raise capital as
needed would have a material adverse effect on our business, financial condition
and results of operations.


If we cannot raise additional funds, we will have to cease our business activities. As a result, our common stock investors would lose their entire investment.


Material Cash Requirements



We have not achieved profitability since our inception, and we expect to
continue to incur net losses for the foreseeable future. We expect net cash
expended in 2023 to be significantly higher than 2022. As of March 31, 2022, we
had an accumulated deficit of $6,568,493. Our material cash requirements are
highly dependent upon the additional financial support from our major
shareholders in the next 12 - 18 months.



We had the following contractual obligations and commercial commitments as of
March 31, 2022:



                                            Less than                                              More than 5
Contractual Obligations       Total          1 year          1-3 Years          3-5 Years             Years
                                $               $                $                  $                   $
Amounts due to related
parties                      1,683,063       1,683,063                  -                  -                   -
Tax obligation                       -               -                  -                  -                   -
Operating lease
liability                       38,697          38,697
Other contractual
liabilities (1)                165,392         165,392                  -                  -                   -
Commercial commitments
Bank loan repayment                  -               -                  -                  -                   -
Total obligations            1,887,152       1,887,152                  -                  -                   -



(1) Includes all obligations included in “Accounts payable and other payables” in current liabilities of the “Consolidated balance sheet” which are contractually fixed as to their due date and amount.




  38





Off-balance sheet arrangements

We do not participate in any off-balance sheet transactions. We have no warranties or obligations other than those arising from normal business dealings.

Significant Accounting Policies and Estimates



The preparation of consolidated financial statements in conformity with
accounting principles generally accepted in the United States requires our
management to make assumptions, estimates and judgments that affect the amounts
reported, including the notes thereto, and related disclosures of commitments
and contingencies, if any. We have identified certain accounting policies that
are significant to the preparation of our consolidated financial statements.
These accounting policies are important for an understanding of our financial
condition and results of operations. Critical accounting policies are those that
are most important to the presentation of our financial condition and results of
operations and require management's subjective or complex judgment, often as a
result of the need to make estimates about the effect of matters that are
inherently uncertain and may change in subsequent periods. Certain accounting
estimates are particularly sensitive because of their significance to
consolidated financial statements and because of the possibility that future
events affecting the estimate may differ significantly from management's current
judgments. We believe the following accounting policies are critical in the
preparation of our consolidated financial statements.



  · Basis of presentation



These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in The United States of America (“US GAAP”).


  · Use of estimates and assumptions




In preparing these consolidated financial statements, management makes estimates
and assumptions that affect the reported amounts of assets and liabilities in
the balance sheet and revenues and expenses during the years reported. Actual
results may differ from these estimates. If actual results significantly differ
from the Company's estimates, the Company's financial condition and results of
operations could be materially impacted. Significant estimates in the year
include the valuation and useful lives of intangible assets and deferred tax
valuation allowance.



  · Basis of consolidation



The consolidated financial statements include the accounts of KRFG and its subsidiaries. All material intercompany balances and transactions within the Company have been eliminated on consolidation.


  · Segment reporting




ASC Topic 280, "Segment Reporting" establishes standards for reporting
information about operating segments on a basis consistent with the Company's
internal organization structure as well as information about geographical areas,
business segments and major customers in consolidated financial statements. For
the years ended March 31, 2022 and 2021, the Company operates in one reportable
operating segment in Hong Kong.



  · Cash and cash equivalents




Cash and cash equivalents are carried at cost and represent cash on hand, demand
deposits placed with banks or other financial institutions and all highly liquid
investments with an original maturity of three months or less as of the purchase
date of such investments.









  39






  · Accounts receivable




Accounts receivable are recorded at the invoiced amount and do not bear
interest, which are due within contractual payment terms, generally 30 to 90
days from completion of service. Credit is extended based on evaluation of a
customer's financial condition, the customer credit-worthiness and their payment
history. Accounts receivable outstanding longer than the contractual payment
terms are considered past due. Past due balances over 90 days and over a
specified amount are reviewed individually for collectibility. At the end of
fiscal year, the Company specifically evaluates individual customer's financial
condition, credit history, and the current economic conditions to monitor the
progress of the collection of accounts receivables. The Company will consider
the allowance for doubtful accounts for any estimated losses resulting from the
inability of its customers to make required payments. For the receivables that
are past due or not being paid according to payment terms, the appropriate
actions are taken to exhaust all means of collection, including seeking legal
resolution in a court of law. Account balances are charged off against the
allowance after all means of collection have been exhausted and the potential
for recovery is considered remote. The Company does not have any
off-balance-sheet credit exposure related to its customers. As of March 31, 2022
and 2021, there was no allowance for doubtful accounts.



  · Inventories



Inventories are stated at the lower of cost or market value (net realizable
value), cost being determined on a first-in-first-out method. Costs include
material costs. The Company provides inventory allowances based on excess and
obsolete inventories determined principally by customer demand. As of March 31,
2022 and 2021, the Company did not record an allowance for obsolete inventories,
nor have there been any write-offs.



· Intangible assets




Intangible assets consist of trademarks and trade names. The intangible assets
are stated at the purchase cost and are amortized based on their economic
benefits expected to be realized and assessed for impairment annually. There was
no impairment of intangible assets identified for the years ended March 31,
2022
and 2021.



  · Property and equipment



Property, plant and equipment are recorded at cost less accumulated amortization and accumulated impairment losses, if any. Depreciation is calculated on a straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:



                         Expected useful lives
Office equipment                3 years
Furniture and fixtures          3 years
Computer equipment              3 years




Expenditures for repair and maintenance are expensed as incurred. When assets
have been retired or sold, the cost and related accumulated depreciation are
removed from the accounts and any resulting gain or loss is recognized in the
results of operations.



  · Website development costs




The Company accounts for its website development costs in accordance with ASC
350-50, Website Development Costs. These costs, if any, are included in
intangible assets in the accompanying consolidated financial statements.
Upgrades or enhancements that add functionality are capitalized while other
costs during the operating stage are expensed as incurred. The Company amortizes
the capitalized website development costs over an estimated useful life of five
years.









  40






  · Impairment of long-lived assets



In accordance with the provisions of ASC Topic 360, Impairment or Disposal of
Long-Lived Assets, all long-lived assets such as property and equipment owned
and held by the Company are reviewed 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 evaluated by a
comparison of the carrying amount of an asset to its estimated future
undiscounted cash flows expected to be generated by the asset. If such assets
are considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amounts of the assets exceed the fair value of
the assets. There has been no impairment charge for the years ended March 31,
2022 and 2021.



  · Revenue recognition




The Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue
from Contracts with Customers (Topic 606) ("ASU 2014-09") using the full
retrospective transition method. The Company's adoption of ASU 2014-09 did not
have a material impact on the amount and timing of revenue recognized in its
consolidated financial statements.



Under ASU 2014-09, the Company recognizes revenue when control of the promised
goods or services is transferred to customers, in an amount that reflects the
consideration the Company expects to be entitled to in exchange for those goods
or services.


The Corporation applies the following five steps to determine the appropriate amount of revenue to recognize when fulfilling its obligations under each of its agreements:



· identify the contract with a customer;
· identify the performance obligations in the contract;
· determine the transaction price;
· allocate the transaction price to performance obligations in the contract; and
· recognize revenue as the performance obligation is satisfied.




The Company's services revenue is derived from performing the research and
development and technology development for the customers under fixed-price
contracts. On fixed-price contracts that are expected not more than one year in
duration, revenue is recognized pursuant to the proportional performance method
based upon the proportion of actual costs incurred to the total estimated costs
for the contract. The Company receives the periodic progress payments.



Costs incurred in connection with the research and development, are included in
cost of revenue. Product development costs charged to billable projects are
recorded as cost of revenue, which consist primarily of costs associated with
personnel, supplies and materials.



  · Government subsidies



A government subsidy is not recognized until there is reasonable assurance that:
(a) the enterprise will comply with the conditions attached to the grant; and
(b) the grant will be received. When the Company receives government subsidies
but the conditions attached to the grants have not been fulfilled, such
government subsidies are deferred and recorded under other payables and accrued
expenses, and other long-term liability. The classification of short-term or
long-term liabilities is depended on the management's expectation of when the
conditions attached to the grant can be fulfilled. For the years ended March 31,
2022 and 2021, the Company received government subsidies of $0 and $3,482, which
are recognized as subsidy income in the consolidated statements of operations.









  41






  · Income taxes




The Company adopted the ASC 740 Income taxprovisions of paragraph 740-10-25-13,
which addresses the determination of whether tax benefits claimed or expected to
be claimed on a tax return should be recorded in the consolidated financial
statements. Under paragraph 740-10-25-13, the Company may recognize the tax
benefit from an uncertain tax position only if it is more likely than not that
the tax position will be sustained on examination by the taxing authorities,
based on the technical merits of the position. The tax benefits recognized in
the consolidated financial statements from such a position should be measured
based on the largest benefit that has a greater than fifty percent (50%)
likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13
also provides guidance on de-recognition, classification, interest and penalties
on income taxes, accounting in interim periods and requires increased
disclosures. The Company had no material adjustments to its liabilities for
unrecognized income tax benefits according to the provisions of paragraph
740-10-25-13.



The estimated future tax effects of temporary differences between the tax basis
of assets and liabilities are reported in the accompanying balance sheets, as
well as tax credit carry-backs and carry-forwards. The Company periodically
reviews the recoverability of deferred tax assets recorded on its balance sheets
and provides valuation allowances as management deems necessary.



  · Uncertain tax positions



The Company did not take any uncertain tax positions and had no adjustments to
its income tax liabilities or benefits pursuant to the ASC 740 provisions of
Section 740-10-25 for the years ended March 31, 2022 and 2021.



  · Net loss per share



The Company calculates net loss per share in accordance with ASC Topic 260,
"Earnings per Share." Basic income per share is computed by dividing the net
income by the weighted-average number of common shares outstanding during the
period. Diluted income per share is computed similar to basic income per share
except that the denominator is increased to include the number of additional
common shares that would have been outstanding if the potential common stock
equivalents had been issued and if the additional common shares were dilutive.



  · Foreign currencies translation




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 consolidated statement of
operations.



The reporting currency of the Company is United States Dollar ("US$") and the
accompanying consolidated financial statements have been expressed in US$. In
addition, the Company is operating in Hong Kong and maintains its books and
record in its local currency, Hong Kong Dollars ("HKD"), which is a functional
currency as being the primary currency of the economic environment in which
their operations are conducted. In general, for consolidation purposes, assets
and liabilities of its subsidiaries whose functional currency is not US$ are
translated into US$, in accordance with ASC Topic 830-30, "Translation of
Financial Statement", using the exchange rate on the balance sheet date.
Revenues and expenses are translated at average rates prevailing during the
period. The gains and losses resulting from translation of financial statements
of foreign subsidiaries are recorded as a separate component of accumulated
other comprehensive income within the statements of changes in stockholder's
equity.


The conversion of amounts from HKD to US dollars has been made at the following exchange rates for the years ended March 31, 2022 and 2021:



                                           March 31, 2022      March 31, 

2021

Year-end HKD:US$ exchange rate                      0.1277              

0.1286

Annualized average HKD:US$ exchange rate            0.1285              0.1290










  42






  · Comprehensive income



ASC Topic 220, "Comprehensive Income", establishes standards for reporting and
display of comprehensive income, its components and accumulated balances.
Comprehensive income as defined includes all changes in equity during a period
from non-owner sources. Accumulated other comprehensive income, as presented in
the accompanying consolidated statements of changes in stockholders' equity,
consists of changes in unrealized gains and losses on foreign currency
translation. This comprehensive income is not included in the computation of
income tax expense or benefit.



  · Leases




At the inception of an arrangement, the Company determines whether the
arrangement is or contains a lease based on the unique facts and circumstances
present. Leases with a term greater than one year are recognized on the balance
sheet as right-of-use assets, lease liabilities and long-term lease liabilities.
The Company has elected not to recognize on the balance sheet leases with terms
of one year or less. Operating lease liabilities and their corresponding
right-of-use assets are recorded based on the present value of lease payments
over the expected remaining lease term. However, certain adjustments to the
right-of-use assets may be required for items such as prepaid or accrued lease
payments. The interest rate implicit in lease contracts is typically not readily
determinable. As a result, the Company utilizes its incremental borrowing rates,
which are the rates incurred to borrow on a collateralized basis over a similar
term an amount equal to the lease payments in a similar economic environment.



In accordance with the guidance in ASC Topic 842, components of a lease should
be split into three categories: lease components (e.g. land, building, etc.),
non-lease components (e.g. common area maintenance, consumables, etc.), and
non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed
and in-substance fixed contract consideration (including any related to
non-components) must be allocated based on the respective relative fair values
to the lease components and non-lease components.



The Company has chosen not to separate the rental elements and the other elements. Each rental component and related non-lease components are accounted for together as a single component.


  · Retirement plan costs




Contributions to retirement plans (which are defined contribution plans) are
charged to general and administrative expenses in the accompanying statements of
operation as the related employee service is provided.



  · Related parties



The Company follows ASC 850-10, Related party for the identification of related parties and the disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the
Company; b) entities for which investments in their equity securities would be
required, absent the election of the fair value option under the Fair Value
Option Subsection of section 825-10-15, to be accounted for by the equity method
by the investing entity; c) trusts for the benefit of employees, such as pension
and Income-sharing trusts that are managed by or under the trusteeship of
management; d) principal owners of the Company; e) management of the Company; f)
other parties with which the Company may deal if one party controls or can
significantly influence the management or operating policies of the other to an
extent that one of the transacting parties might be prevented from fully
pursuing its own separate interests; and g) other parties that can significantly
influence the management or operating policies of the transacting parties or
that have an ownership interest in one of the transacting parties and can
significantly influence the other to an extent that one or more of the
transacting parties might be prevented from fully pursuing its own separate
interests.



The consolidated financial statements shall include disclosures of material
related party transactions, other than compensation arrangements, expense
allowances, and other similar items in the ordinary course of business. However,
disclosure of transactions that are eliminated in the preparation of
consolidated or combined financial statements is not required in those
statements. The disclosures shall include: a) the nature of the relationship(s)
involved; b) a description of the transactions, including transactions to which
no amounts or nominal amounts were ascribed, for each of the periods for which
income statements are presented, and such other information deemed necessary to
an understanding of the effects of the transactions on the financial statements;
c) the dollar amounts of transactions for each of the periods for which income
statements are presented and the effects of any change in the method of
establishing the terms from that used in the preceding period; and d) amount due
from or to related parties as of the date of each balance sheet presented and,
if not otherwise apparent, the terms and manner of settlement.







  43






  · Commitments and contingencies




The Company follows the ASC 450-20, Commitmentsto report accounting for
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 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 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 therein.



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 consolidated financial
statements. If the assessment indicates that a potentially material loss
contingency is not probable but is reasonably possible, or is probable but
cannot be estimated, then the nature of the contingent liability, and an
estimate of the range of possible losses, if determinable and material, would be
disclosed.



Loss contingencies considered remote are generally not disclosed unless they
involve guarantees, in which case the guarantees would be disclosed. Management
does not believe, based upon information available at this time that these
matters will have a material adverse effect on the Company's financial position,
results of operations or cash flows. However, there is no assurance that such
matters will not materially and adversely affect the Company's business,
financial position, and results of operations or cash flows.



  · Fair value of financial instruments



The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards
Codification for disclosures about fair value of its financial instruments and
has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification
("Paragraph 820-10-35-37") to measure the fair value of its financial
instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards
Codification establishes a framework for measuring fair value in generally
accepted accounting principles (GAAP), and expands disclosures about fair value
measurements. To increase consistency and comparability in fair value
measurements and related disclosures, paragraph 820-10-35-37 of the FASB
Accounting Standards Codification establishes a fair value hierarchy which
prioritizes the inputs to valuation techniques used to measure fair value into
three (3) broad levels. The fair value hierarchy gives the highest priority to
quoted prices (unadjusted) in active markets for identical assets or liabilities
and the lowest priority to unobservable inputs. The three (3) levels of fair
value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting
Standards Codification are described below:



Level 1 Quoted market prices available in active markets for identical or

liabilities at the closing date.

Level 2 Pricing inputs other than quoted prices in active markets included in

level 1, which are either directly or indirectly observable at

report date.

Level 3 Pricing inputs that are generally observable and unsubstantiated inputs

          by market data.




Financial assets are considered Level 3 when their fair values are determined
using pricing models, discounted cash flow methodologies or similar techniques
and at least one significant model assumption or input is unobservable.



The fair value hierarchy gives highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and lowest priority to unobservable inputs. If the inputs used to value the financial assets and financial liabilities fall under more than one level described above, the categorization is based on the lowest level that is significant for measuring the fair value of the instrument.








  44






The carrying amounts of the Company's financial assets and liabilities, such as
cash and cash equivalents, approximate their fair values because of the short
maturity of these instruments.



  · Recent accounting pronouncements




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), ("ASU 2021-04"). This ASU reduces diversity in an
issuer's accounting for modifications or exchanges of freestanding
equity-classified written call options (for example, warrants) that remain
equity classified after modification or exchange. This ASU provides guidance for
a modification or an exchange of a freestanding equity-classified written call
option that is not within the scope of another Topic. It specifically addresses:
(1) how an entity should treat a modification of the terms or conditions or an
exchange of a freestanding equity-classified written call option that remains
equity classified after modification or exchange; (2) how an entity should
measure the effect of a modification or an exchange of a freestanding
equity-classified written call option that remains equity classified after
modification or exchange; and (3) how an entity should recognize the effect of a
modification or an exchange of a freestanding equity-classified written call
option that remains equity classified after modification or exchange. This ASU
became effective for all entities for fiscal years beginning after December 15,
2021. An entity should apply the amendments prospectively to modifications or
exchanges occurring on or after the effective date of the amendments. The
adoption of ASU 2021-04 on April 1, 2022 will not have a material impact on the
Company's financial statements or disclosures.



The Company has reviewed all recently issued but not yet effective accounting pronouncements and does not believe that the future adoption of such pronouncements could have a material impact on its financial condition or results of operations.

© Edgar Online, source Previews