NOTES
TO FINANCIAL STATEMENTS
(Audited)
NOTE
1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION
On
March 6, 2015, SavMobi Technology Inc. (“the Company”, “we”, “us” or “our”) was incorporated
in the State of Nevada and established a fiscal year end of May 31. Initially the business platform was in providing application software
to a global vendor platform to connect people to businesses and provide a new shopping experience.
On
May 18, 2017, Lakwinder Singh Sidhu, the Company’s former Director and CEO, completed a transaction with New Reap Global Limited,
by which New Reap Global Limited acquired 32,500,000 shares of common stock, representing 68.4% ownership of the Company.
On
March 19, 2018, New Reap Global transferred 250,000 restricted shares to Eng Wah Kung.
On
May 10, 2018 and May 30, 2018, 16,959,684 shares were transferred to Arden Wealth and Trust. 2,000,000 free-trading shares were transferred
from HongLing Shang, 559,684 restricted shares were transferred from New Reap Global Limited and 2,400,000 restricted shares were transferred
each from Xuedong Zhang, Jingmei Jiang, Qianxian, Yulan Qi, Baoxin Song, Jianlong Wu, respectively.
On
June 15, 2018, New Reap Global Limited transferred 690,316 restricted shares to EMRD Global Holdings.
On
June 26, 2018, New Reap Global Limited transferred 3,000,000 restricted shares to Fortress Advisors, LLC and 3,000,000 restricted shares
to Baywall Inc.
On
November 10, 2020, ten (10) shareholders of the Company, including affiliates Arden Wealth & Trust (Switzerland) AG and New Reap
Global Limited, entered into stock purchase agreements with an aggregate of nineteen (19) non-U.S. accredited investors to sell an aggregate
of 42,440,316 shares of common stock of the “Company, which represents approximately 68.6% of the issued and outstanding shares
of common stock of the Company. After the change of ownership, the Company’s current principal offices is located in Room 502,
Unit 1, Building 108, Red Star Sea Phase 3, Dalian Development Zone, Dalian, Liaoning, China.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
accompanying audited financial statements have been prepared in accordance with generally accepted accounting principles for financial
information and with the instructions to Form 10-K. They do not include all information and footnotes required by United States generally
accepted accounting principles for complete financial statements. In the opinion of Management, all adjustments considered necessary
for a fair presentation, consisting solely of normal recurring adjustments, have been made. The Company has adopted May 31 as its fiscal
year end.
Use
of Estimates
The
preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect certain 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 period. The management makes its best
estimate of the outcome for these items based on information available when the financial statements are prepared, however, actual results
could differ from those estimates.
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. Our
cash is deposited with East West Bank.
Accounts
Receivable
Financial
instruments that potentially subject the Company to concentrations of credit risk consist primarily of accounts receivable. The Company
extends credit to its customers in the normal course of business and generally does not require collateral. The Company’s credit
terms are dependent upon the segment, and the customer. The Company assesses the probability of collection from each customer at the
outset of the arrangement based on a number of factors, including the customer’s payment history and its current creditworthiness.
If in management’s judgment collection is not probable, the Company does not record revenue until the uncertainty is removed.
Management
performs ongoing credit evaluations, and the Company maintains an allowance for potential credit losses based upon its loss history and
its aging analysis. The allowance for doubtful accounts is the Company’s best estimate of the amount of credit losses in existing
accounts receivable. Management reviews the allowance for doubtful accounts each reporting period based on a detailed analysis of trade
receivables. In the analysis, management primarily considers the age of the customer’s receivable, and also considers the creditworthiness
of the customer, the economic conditions of the customer’s industry, general economic conditions and trends, and the business relationship
and history with its customers, among other factors. If any of these factors change, the Company may also change its original estimates,
which could impact the level of the Company’s future allowance for doubtful accounts. If judgments regarding the collectability
of receivables were incorrect, adjustments to the allowance may be required, which would reduce profitability.
Accounts
receivable are recognized and carried at the original invoice amount less an allowance for any uncollectible amounts. An estimate for
doubtful accounts receivable is made when collection of the full amount is no longer probable. Bad debts are written off as identified.
No allowance for doubtful accounts was made for the year ended May 31, 2022.
Revenue
Recognition
Revenue
is generated through provision of commercial mobile technical support services. Revenue is recognized when a customer obtains control
of promised goods or services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange
for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue
and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company
expects to receive in exchange for those goods and services. The Company applies the following five-step model in order to determine
this amount:
(i)
identification of the promised goods and services in the contract;
(ii)
determination of whether the promised goods and services are performance obligations, including whether they are distinct in the context
of the contract;
(iii)
measurement of the transaction price, including the constraint on variable consideration;
(iv)
allocation of the transaction price to the performance obligations; and
(v)
recognition of revenue when (or as) the Company satisfies each performance obligation.
The
Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under Topic 606, the Company records revenue when persuasive
evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable.
The
Company records revenue from the provision of commercial mobile technical support services on monthly basis. No revenue has been recognized
in fiscal year 2022.
Cost
of revenues
Cost
of revenues consist of the outsourced services, including platform storage, maintenance and development, provided by a service provider
on monthly basis.
Earnings
Per Share
The
Company reports earnings per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of basic
and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic
earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common
shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities
or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common shares outstanding
increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of a basic
and diluted earnings per share shall be adjusted retroactively for all periods presented to reflect that change in capital structure.
The
Company’s basic earnings per share is computed by dividing the net income available to holders by the weighted average number of
the Company’s ordinary shares outstanding. Diluted earnings per share reflects the amount of net income available to each ordinary
share outstanding during the period plus the number of additional shares that would have been outstanding if potentially
dilutive securities had been issued.
Fair
Value of Financial Instruments
Fair
value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to
be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers
assumptions that market participants would use when pricing the asset or liability.
Authoritative
literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use or unobservable
inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest
level of input that is significant to the fair value measurement 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.
The
carrying amounts of accounts payables and accrued liabilities approximate its fair value due to its relatively short-term maturity.
It
is not, however, practical to determine the fair value of amounts due to related party because the transactions cannot be assumed to
have been consummated at arm’s length, the terms are not deemed to be market terms, there are no quoted values available for these
instruments, and an independent valuation would not be practical due to the lack of data regarding similar instruments, if any, and the
associated potential costs.
Related
Party Transactions
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.
Income
Taxes
The
Company accounts for income taxes using the asset and liability method prescribed by ASC 740 “Income Taxes” . Under
this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases
of assets and liabilities using enacted tax rates that will be in effect in the years in which the differences are expected to reverse.
The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not
that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is
recognized as income or loss in the period that includes the enactment date.
New
U.S. federal tax legislation, commonly referred to as the Tax Cuts and Jobs Act (the “U.S. Tax Reform”), was signed into
law on December 22, 2017. The U.S. Tax Reform modified the U.S. Internal Revenue Code by, among other things, reducing the statutory
U.S. federal corporate income tax rate from 35% to 21% for taxable years beginning after December 31, 2017; limiting and/or eliminating
many business deductions; migrating the U.S. to a territorial tax system with a one-time transaction tax on a mandatory deemed repatriation
of previously deferred foreign earnings of certain foreign subsidiaries; subject to certain limitations, generally eliminating U.S. corporate
income tax on dividends from foreign subsidiaries; and providing for new taxes on certain foreign earnings. Taxpayers may elect to pay
the one-time transition tax over eight years, or in a single lump-sum payment.
Recent
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 accounting pronouncements that have been issued that might have a material impact on its financial
position or results of operations.
COVID-19
Uncertainty
An
outbreak of respiratory illness caused by the novel coronavirus, commonly referred as “COVID- 19” emerged in late 2019 and
has spread globally. The COVID- 19 is considered to be highly contagious and poses a serious public health threat. The World Health Organization
labeled the COVID- 19 outbreak as a pandemic on March 11, 2020, given its threat beyond a public health emergency of international concern
the organization had declared on January 30, 2020.
The
epidemic has resulted in social-distancing restrictions, travel restrictions, and the temporary closure of stores and facilities during
the past few months. The negative impacts of the COVID- 19 outbreak on our business may include, but not strictly be limited to:
| |
- |
The
uncertain economic conditions may refrain clients from engaging our services. |
| |
|
|
| |
- |
The
operations of businesses in most industries have been, and could continue to be, negatively impacted by the epidemic, which may in
turn adversely impact their business performance. |
We
are unable to accurately predict the upcoming impact that the COVID- 19 will have due to various uncertainties, including the ultimate
geographic spread of the virus, the severity of the disease, the duration of the outbreak globally, and effectiveness of the actions
that may be taken by governmental authorities. Additionally, it is possible that we may face similar difficulties from future events,
such as this, should there be at any point another global pandemic. As of the current date, we do not believe that we have been directly
impacted by Covid- 19. However, economies throughout the world have been impacted significantly in a vast number of ways, and we cannot
state with any level of certainty to what extent we may have been indirectly impacted by market conditions as a result of the pandemic
and/or if the pandemic has forestalled, in any capacity, our growth to date.
NOTE
3 – GOING CONCERN
The
accompanying audited financial statements have been prepared assuming that the Company continues as a going concern. As shown in the
accompanying audited financial statements, the Company has working capital deficit of $43,026, net cash flows used in operating activities
of $47,060 for the year ended May 31, 2022. This factor raises substantial doubt as to the Company’s ability to continue as a going
concern.
The
Company intends to continue to fund its business by way of private placements and advances from related parties as may be required.
The
financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the
amount and classification of liabilities that may result should the Company be unable to continue as a going concern.
NOTE
4 – PREPAID EXPENSES
As
of May 31, 2022, the prepaid expenses $35 represent the advance payments made by the Company to transfer agent.
NOTE
5 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
As
of May 31, 2022, the accounts payable and accrued liabilities of $8,000, consist of payable to auditor.
NOTE
6 – RELATED PARTY TRANSACTIONS
As
of May 31, 2022, there was $76,537
due to related party, our former CEO Mr. Ma Hongyu.
On the same day, all the debt was forgiven and recognized as additional paid in capital of the Company.
The
Company’s executive office is located at Room 502, Unit 1, Building 108, Red Star Sea Phase 3, Dalian Development Zone, Dalian,
Liaoning, China. This office is furnished to the Company by our CEO at no charge.
NOTE
7 – COMMON STOCK
The
Company is authorized to issue 75,000,000 shares of common stock at a par value of $0.001.
As
of May 31, 2022 and 2021, there were 61,900,000 shares issued and outstanding.
NOTE
8 – INCOME TAX
The
loss from operation before income tax of the Company for the years ended May 31, 2022 and 2021 was comprised of the following:
SCHEDULE
OF LOSS FROM OPERATION BEFORE INCOME TAX
| | |
2022 | | |
2021 | |
| | |
For
the year ended May 31, | |
| | |
2022 | | |
2021 | |
| Tax
jurisdictions from: | |
| | | |
| | |
| –
Local | |
$ | 43,026 | | |
$ | 41,477 | |
United
States of America
The
Tax Act reduces the U.S. statutory corporate tax rate from 35% to 21% for our tax years beginning in 2018, which resulted in the re-measurement
of the federal portion of our deferred tax assets from the 35% to 21% tax rate. The Company is registered in the State of Nevada and
is subject to United States of America tax law. As of May 31, 2022, the operations in the United States of America incurred $128,106
of cumulative net operating losses (NOL’s) which can be carried forward to offset future taxable income. The NOL carryforwards
begin to expire in 2042, if unutilized. The Company has provided for a full valuation allowance of approximately $26,902 against
the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is
more likely than not that these assets will not be realized in the future.
The
following table sets forth the significant components of the aggregate deferred tax assets of the Company as of May 31, 2022:
SCHEDULE
OF DEFERRED TAX ASSETS
| | |
As
of
May
31, 2022 | | |
As
of
May
31, 2021 | |
| Deferred
tax assets: | |
| | | |
| | |
| | |
| | | |
| | |
| Net
operating loss carryforwards | |
| | | |
| | |
| -United
States of America | |
$ | 26,902 | | |
$ | 45,691 | |
| Less:
valuation allowance | |
| (26,902 | ) | |
| (45,691 | ) |
| Deferred
tax assets | |
$ | - | | |
$ | - | |
Management
believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company
provided for a full valuation allowance against its deferred tax assets of $26,902 as of May 31, 2022.
NOTE
9 – SUBSEQUENT EVENTS
The
Company has evaluated all transactions May 31, 2022 through the date these financial statements were available to be issued, and has
determined that there are no events that would require disclosure in or adjustment to these financial statements except for the event
listed below.
On
June 8, 2022, three (3) shareholders of SavMobi Technology, Inc. (the “Company”), including Ma Hongyu, Ye Caiyun, and Li
Wenzhe entered into stock purchase agreements with an aggregate of five (5) non-U.S. accredited investors (the “Purchase Agreements”)
to sell an aggregate of 25,095,788 shares of common stock of SavMobi Technology, Inc. (the “Company”), which represents approximately
40.54% of the issued and outstanding shares of common stock of the Company, for consideration of $250,958.
The
Purchase Agreements were fully executed and delivered on June 8, 2022. Zhang Yiping and Chen Xinxin acquired approximately 24.54% and
6.46% of the issued and outstanding shares of the Company, respectively, and the remaining purchasers each acquired less than 4.99% of
the issued and outstanding shares.
SCHEDULE OF
SHARES ACQUIRED BY PURCHASERS
| Purchasers | |
Shares acquired | | |
% | |
| Zhang Yiping | |
| 15,189,500 | | |
| 24.54 | % |
| Chen Xinxin | |
| 4,000,000 | | |
| 6.46 | % |
| Wang Yanfang | |
| 2,000,000 | | |
| 3.23 | % |
| Liu Chen | |
| 2,000,000 | | |
| 3.23 | % |
| Liu Ying | |
| 1,906,288 | | |
| 3.08 | % |
In
addition, on June 8, 2022, Mr. Ma Hongyu, submitted his resignation from all executive officer positions with the Company, including
Chief Executive Officer and Chief Financial Officer, respectively, effective immediately. On the same day, Mr. Ma Hongyu, the sole member
of the Company’s board of directors, appointed Ms. Chen Xinxin as Director and Chairman of the Board, and following such appointment,
Mr. Ma Hongyu submitted his resignation of members of the Board, President, Secretary and Treasurer, which resignations were effective
immediately.
On
June 8, 2022, Ms. Chen Xinxin was also appointed as Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer,
effective immediately.
Exhibits
