Notes to the Condensed Financial Statements
March 31, 2023 and 2022
(Unaudited)
Note 1 – ORGANIZATION AND NATURE OF BUSINESS
MEDICALE CORP. (“the Company,”, “we,”
“us” or “our”) was incorporated in the State of Nevada on August 17, 2020. We plan to offer consulting services
and distribution of the dietary supplements. A dietary supplement is a manufactured product intended
to supplement the diet when taken by mouth as a pill, capsule, tablet, or liquid. A supplement can provide nutrients either
extracted from food sources or synthetic, individually or in combination, in order to increase the quantity of their consumption.
On December 28, 2022,
the previous majority shareholder of Medicale Corp. (the “Company”) Borisi Alborovi entered into a stock purchase agreement
for the sale of 3,200,000 shares of Common Stock of the Company (the “Shares”) to Magenta Acres, Inc.
As a result of the acquisition
of the Shares, Magenta Acres Inc. holds approximately 54% of the issued and outstanding shares of Common Stock of the Company, and as
such it is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required
and, ultimately, the direction of our Company.
On December 28, 2022,
the previous sole officer and director of the Company, Borisi Alborovi, resigned his positions with the Company. Upon such resignations,
Chen Zu De was appointed as Chief Executive Officer, Chairman of the Board, Treasurer and Secretary, and Director of the Company.
As of the date of this
report, the Company had not yet commenced any operations. All activity through the date of this report relates to preserving cash, attempting
to raise capital, and continuing the Company’s public reporting.
The principal place of business is now
located at 9314 Forest Hill Blvd #929, Wellington, FL 33411. Our telephone number is (407)
245-7339.
Note 2 – GOING CONCERN
The accompanying financial statements have been
prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), which contemplate
continuation of the Company as a going concern. The Company has an accumulated deficit of $94,868 as of March 31, 2023 and $80,494 as
of September 30, 2022. The Company currently has losses and has not completed its efforts to establish a stabilized source of revenues
sufficient to cover operating costs over an extended period of time. Therefore, there is substantial doubt about the Company’s ability
to continue as a going concern. Management anticipates that the Company will be dependent, for the near future, on additional investment
capital to fund operating expenses. The Company intends to position itself so that it will be able to raise additional funds through the
capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of
its endeavors or become financially viable and continue as a going concern.
Note 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial
statements have been prepared in accordance with the rules and regulations (Regulation S-X) of the Securities and Exchange Commission
(the “SEC”) and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for
the three and six months ended March 31, 2023 are not necessarily indicative of the operating results that may be expected for the year
ending September 30, 2023. These unaudited condensed financial statements should be read in conjunction with the September 30, 2022, financial
statements and notes thereto.
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 the financial statements and the reported amount
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Deferred Offering Costs
Financial Accounting Standard Board Accounting
Standards Codification number 340-10-S99-1, Other Assets and Deferred Costs, allows specific, incremental costs directly related
to securities offerings to be deferred and charged against the gross proceed of the offering. The Company defers applicable syndication
expenses based on these criteria. The Company will write off all deferred offering costs if a securities offering is aborted.
Cash and Cash Equivalents
The Company considers
all highly liquid investments with the original maturities of three months or less to be cash equivalents.
Fair Value of Financial Instruments
Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification (“ASC”) Topic 820 "Fair Value Measurement" defines fair value as the exchange
price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants on the measurement date. The standards apply to recurring and nonrecurring
fair value measurements of financial and non-financial assets and liabilities. The Company determines the fair values of its assets and
liabilities based on a fair value hierarchy that includes three levels of inputs that may be used to measure fair value.
For The three levels are defined as follows:
| Level 1: |
defined as observable inputs such as quoted prices in active markets; |
| Level 2: |
defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and |
| Level 3: |
defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. |
Due to its short-term nature, the carrying value
of receivables, accounts payable, and advances approximated fair value at March 31, 2023.
Revenue Recognition
The Company follows the guidance of Accounting
Standards Codification (ASC) 606, Revenue from Contracts. 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.
All revenue generated by the Company was done
so by operations that have been discontinued.
Income Taxes
Income taxes are computed using the asset and
liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences
between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.
A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.
Long-Lived Assets – Intangible Assets
We account for our intangible assets in accordance
with ASC Subtopic 350-30, General Intangibles Other Than Goodwill, and ASC Subtopic 360-10-05, Accounting for the Impairment or Disposal
of Long-Lived Assets. ASC Subtopic 350-30 requires assets to be measured based on the fair value of the consideration given or the fair
value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Further, ASC Subtopic
350-30 requires an intangible asset to be amortized over its useful life and for the useful life to be evaluated every reporting period
to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life
is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs
of internally developing, maintaining, or restoring intangible assets are recognized as an expense when incurred.
Basic Income (Loss) Per Share
The Company computes income (loss) per share in
accordance with FASB ASC 260 “Earnings per Share.” Basic loss per share is computed by dividing net income (loss) available
to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share
gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common
shares if their effect is anti-dilutive. As of March 31, 2023, there were no potentially dilutive debt or equity instruments issued or
outstanding.
Recent Accounting Pronouncements
We have reviewed all the recently issued, but
not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company.
Risks and Uncertainties
In December 2020, a novel strain of coronavirus
(COVID-19) emerged in Wuhan, Hubei Province, China. While initially the outbreak was largely concentrated in China and caused significant
disruptions to its economy, it has now spread to several other countries and infections have been reported globally.
The ultimate impact of the COVID-19 pandemic on
the Company’s operations is unknown and will depend on future developments, which are highly uncertain and cannot be predicted with
confidence, including the duration of the COVID-19 outbreak, new information which may emerge concerning the severity of the COVID-19
pandemic, and any additional preventative and protective actions that governments, or the Company, may direct, which may result in an
extended period of continued business disruption, reduced customer traffic and reduced operations. Any resulting financial impact cannot
be reasonably estimated at this time but is anticipated to have a material adverse impact on our business, financial condition and results
of operations.
Management expects that its business will be impacted
to some degree, but the significance of the impact of the COVID-19 outbreak on the Company’s business and the duration for which
it may have an impact cannot be determined at this time.
Financial Statement Reclassification
Certain account balances from prior periods have
been reclassified in these financial statements to conform to current period classifications.
Note 4 – DISCONTINUED OPERATION
Through March 31, 2023, the Company’s primary
business was the sale of various consumer products and accessories. As of January 1, 2023, the Company ceased operations. On January 9,
2023, a change in control completed as the Company’s former majority shareholder sold his 3,200,000 shares to an investor group.
After the change in control, the Company’s operations are determined by the new investor group. As such, the Company accounted for
all of its revenue (loss), liabilities and results of operations up to January 1, 2023 as discontinued operations.
The Company has reclassified its previously issued
financial statements to segregate the discontinued operations as of the earliest period reported.
The following table presents information related
to the liabilities that were classified as current liabilities from discontinued operations in our balance sheets:
| Schedule of discontinued operations - balance sheet | |
March 31,
2023 | | |
September 30,
2022 | |
| | |
(Unaudited) | | |
| |
| | |
| | |
| |
| Current Liabilities | |
| | | |
| | |
| Accounts payable and accrued expenses | |
$ | 12,000 | | |
$ | 12,000 | |
| | |
| | | |
| | |
| Total current liabilities from discontinued operations | |
$ | 12,000 | | |
$ | 12,000 | |
The following table presents information related
to the revenue and expenses of the discontinued operations that were classified as Income (Loss) from discontinued operations in our income
statement:
| Schedule of discontinued operations - income statement | |
March 31,
2023 | | |
September 30,
2022 | |
| | |
(Unaudited) | | |
| |
| | |
| | |
| |
| REVENUES | |
$ | 455 | | |
$ | – | |
| | |
| | | |
| | |
| GENERAL AND ADMINISTRATIVE EXPENSES | |
| – | | |
| – | |
| | |
| | | |
| | |
| AMORTIZATION OF INTANGIBLE ASSETS | |
| – | | |
| (1,200 | ) |
| | |
| | | |
| | |
| NET INCOME (LOSS) FROM OPERATION | |
$ | 455 | | |
$ | (1,200 | ) |
| | |
| | | |
| | |
| NET LOSS PER SHARE: BASIC AND DILUTED | |
| | | |
| | |
| FROM DISCONTINUED OPERATION | |
$ | 0.00 | | |
$ | (0.00 | ) |
| | |
| | | |
| | |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED | |
| 5,920,000 | | |
| 5,920,000 | |
Note 5 – COMMON STOCK
The Company has 75,000,000, $0.0001 par value
shares of voting common stock authorized.
All shares of common stock have voting rights
and are identical. All holders of shares of common stock shall at every meeting of the stockholders be entitled to one vote for each share
of the capital stock held by such stockholder.
On December 28, 2022, Borisi
Alborovi, the previous majority shareholder of Medicale Corp. (the “Company”), entered into a stock purchase agreement for
the sale of 3,200,000 shares of Common Stock of the Company (the “Shares”) to Magenta Acres, Inc.
As of March 31, 2023 the company had 5,920,000
shares issued and outstanding.
Voting Common Stock
All shares of common stock have voting rights
and are identical. All holders of shares of voting common stock shall at every meeting of the stockholders be entitled to one vote for
each share of the capital stock held by such stockholder.
Non-voting Common Stock
All of the other terms of the Non-Voting Common
Stock shall be identical to the Voting Common Stock, except for the right of first refusal that attaches to the Non-Voting Common Stock,
as explained in the Company’s Bylaws.
Note 6 – INTANGIBLE ASSETS
The Company purchased and possesses an asset
in a form of an operative website with news blog. The Company purchased the website for $12,000 and was amortizing the asset
straight-line over its five-year useful life or $2,400 per year. Due to the impairment evaluation analysis as of September 30, 2022 where
we deemed the asset’s carrying amount was not recoverable, we recognized impairment of $7,200, leaving the Intangible Assets with
the Net Book Value of $0 as of March 31, 2023 and September 30, 2022.
Note 7 – COMMITMENTS AND CONTINGENCIES
Management expects that its business will be impacted
to some degree, but the significance of the impact of the COVID-19 outbreak on the Company’s business and the duration for which
it may have an impact cannot be determined at this time.
Note 8 – RELATED PARTY TRANSACTIONS
The sole officer and director, Borisi Alborovi,
was the only related party with whom the Company had transactions with during the period from inception on August 17, 2020 through December
31, 2022.
On December
28, 2022, the previous sole officer and director, Borisi Alborovi, resigned his positions with the Company. Upon such resignations, Chen
Zu De was appointed as Chief Executive Officer, Chairman of the Board, Treasurer and Secretary, and Director of the Company.
As a result of the acquisition of the Shares on
December 28, 2022, the previous majority shareholder of Medicale Corp. (the “Company”) Borisi Alborovi forgive the debt that
due to him, with the amount of $51,192.
As of March 31, 2023 and September 30, 2022, the
Company owed Mr. Alborovi $0 and $17,774 respectively, for operating expenses on behalf of the Company. The amounts due to the related
party are unsecured and non-interest bearing with no set terms of repayment.
Note 9 – SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) the Company
has analyzed its operations subsequent to March 31, 2023 to the date these financial statements were issued and has determined that it
does not have any material subsequent events to disclose in these financial statements.