NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2017
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
The
accompanying unaudited condensed financial statements have been prepared by management in accordance with both accounting principles
generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes
that the disclosures made are adequate to make the information not misleading.
In
the opinion of management, the balance sheet as of December 31, 2016 which was derived from audited financial statements and these
unaudited condensed financial statements reflect all normal and recurring adjustments considered necessary to state fairly the
results for the periods presented. The results for the period ended September 30, 2017 are not necessarily indicative of the results
to be expected for the entire fiscal year ending December 31, 2017 or for any future period.
These
unaudited condensed financial statements and notes thereto should be read in conjunction with the Management’s Discussion
and the audited financial statements and notes thereto included in the Form 10-K for the year ended December 31, 2016.
2.
|
DESCRIPTION
OF BUSINESS AND ORGANIZATION
|
Bosy
Holdings Corp. (the “Company”) was incorporated in the State of Nevada on June 23, 2015. The Company is a development
stage company that intends to provide agarwood inoculation services and plantation management projects.
3.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
Basis
of presentation
The
accompanying financial statements are prepared in accordance with generally accepted accounting principles in the United States
of America (“US GAAP”).
Use
of estimates
Management
uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions
affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheet,
and the reported revenue and expenses during the periods reported. Actual results may differ from these 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.
Plant and equipment
Plant
and equipment are stated at cost less accumulated depreciation and impairment. Depreciation of plant, equipment and software are
calculated on the straight-line method over their estimated useful lives or lease terms generally as follows:
Classification
|
Useful
Life
|
Computer
and Software
|
3
years
|
Bosy
purchased 2 computers at the end of June 2017, the management expects the computers will be subject to depreciation in next quarter
because the utilization of computers has started since July 2017. Expenditures for maintenance and repairs will be expensed as
incurred.
Revenue
recognition
In
accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”)
Topic 605, “Revenue Recognition”, the Company recognizes revenue from sales of goods when the following four revenue
criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) selling price is fixed or determinable;
and (4) collectability is reasonably assured.
Revenue
from supplies of Saplings is recognized when title and risk of loss are transferred and there are no continuing obligations to
the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the products are collected
by the customer at the Company’s office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments
that are based upon management’s best estimates and historical experience and are provided for in the same period as the
related revenues are recorded. Based on limited operating history, management estimates that there was no sales return for the
period reported.
Cost
of revenue
Cost
of revenue includes the purchase cost of saplings for re-sale to customers and packing materials. It excludes purchasing and receiving
costs, inspection costs, warehousing costs, internal transfer costs and other costs of distribution network in cost of revenues.
Income
taxes
Income
taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under
this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets
and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.
ASC
740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements
uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized
in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities.
Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50%
likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant
facts.
BOSY
HOLDINGS CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2017
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
Fair
value of financial instruments
The
carrying value of the Company’s financial instruments: cash and cash equivalents, accounts receivable and other receivables,
amount due to a director, and other payables and accrued liabilities approximate at their fair values because of the short-term
nature of these financial instruments.
The
Company follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”),
with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value
hierarchy that prioritizes the inputs used in measuring fair value as follows:
|
●
|
Level
1 : Observable inputs such as quoted prices in active markets;
|
|
|
|
|
●
|
Level
2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
|
|
|
|
●
|
Level
3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own
assumptions
|
Recent
accounting pronouncements
In
May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU 2014-09),
which amends the existing accounting standards for revenue recognition. In August 2015, the FASB issued ASU No. 2015-14, Revenue
from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one
year. The FASB also agreed to allow entities to choose to adopt the standard as of the original effective date. In March 2016,
the FASB issued Accounting Standards Update No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent
Considerations (Reporting Revenue Gross versus Net) (ASU 2016-08) which clarifies the implementation guidance on principal versus
agent considerations. The guidance includes indicators to assist an entity in determining whether it controls a specified good
or service before it is transferred to the customers. The new revenue recognition standard will be effective for us in the first
quarter of 2018, with the option to adopt it in the first quarter of 2017. We currently anticipate adopting the new standard effective
January 1, 2018. The new standard also permits two methods of adoption: retrospectively to each prior reporting period presented
(full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the
date of initial application (the modified retrospective method). We currently anticipate adopting the standard using the modified
retrospective method. While we are still in the process of completing our analysis on the impact this guidance will have on our
financial statements and related disclosures, we do not expect the impact to be material.
In
June 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-10, “Development Stage Entities (Topic
915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in
Topic 810, Consolidation,” (“ASU 2014-10”). ASU 2014-10 removes the definition of a development stage entity
from the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities
from GAAP. In addition, ASU 2014-10 eliminates the requirements for development stage entities to (1) present inception-to-date
information in the statements of operations, cash flows, and stockholders’ equity, (2) label the financial statements as
those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged,
and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been
in the development stage. ASU 2014-10 is effective for annual reporting periods beginning after December 15, 2014, and interim
periods therein. Early adoption is permitted. The Company has elected to adopt ASU 2014-10 effective with this registration statement
on Form S-1 and its adoption resulted in the removal of previously required development stage disclosures.
BOSY
HOLDINGS CORP.
NOTES
TO CONDENSED FINANCIAL STATEMENTS
FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2017
(Currency
expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
In
October 2016, the FASB issued Accounting Standards Update No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers Other
than Inventory (ASU 2016-16), which requires companies to recognize the income-tax consequences of an intra-entity transfer of
an asset other than inventory. This guidance will be effective for us in the first quarter of 2018, with the option to adopt it
in the first quarter of 2017. We currently anticipate adopting the new standard effective January 1, 2018, and do not expect the
standard to have a material impact on our financial statements.
In
November 2016, the FASB issued Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU
2016-18), which requires companies to include amounts generally described as restricted cash and restricted cash equivalents in
cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash
flows. This guidance will be effective for us in the first quarter of 2018 and early adoption is permitted. We are still evaluating
the effect that this guidance will have on our financial statements and related disclosures.
As
of September 30, 2017, there are 201,965,520 shares of common stock issued and outstanding.
There
were no stock options, warrants or other potentially dilutive securities outstanding as of September 30, 2017.
|
|
2017
|
|
|
2016
|
|
Prepaid
expenses
|
|
$
|
900
|
|
|
$
|
-
|
|
Total
prepaid expenses
|
|
$
|
900
|
|
|
$
|
-
|
|
|
|
2017
|
|
|
2016
|
|
Equipment
|
|
$
|
3,731
|
|
|
$
|
-
|
|
Software
|
|
$
|
147
|
|
|
$
|
-
|
|
Total Plant and Equipment
|
|
$
|
3,878
|
|
|
$
|
-
|
|
Accumulated Depreciation
|
|
$
|
(323
|
)
|
|
$
|
-
|
|
Plant and equipment,
net
|
|
$
|
3,555
|
|
|
$
|
-
|
|
For
the Nine months ended September 30, 2017 and 2016, the local (United States) and foreign components of loss before income taxes
were comprised of the following:
|
|
Nine
months ended
September 30, 2017
|
|
Nine
months ended
September 30, 2016
|
|
|
|
|
|
Tax jurisdictions from:
|
|
|
|
|
|
|
|
|
-Local
|
|
$
|
(18,298
|
)
|
|
$
|
(10,224
|
)
|
|
|
|
|
|
|
|
|
|
Loss before income
tax
|
|
$
|
(18,298
|
)
|
|
$
|
(10,224
|
)
|
The
provision for income taxes consisted of the following:
|
|
Nine
months ended
September 30, 2017
|
|
|
Nine
months ended
September 30, 2016
|
|
|
|
|
|
|
|
|
Current:
|
|
|
|
|
|
|
|
|
-Local
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Deferred:
|
|
|
|
|
|
|
|
|
-Local
|
|
|
-
|
|
|
|
-
|
|
Income tax expense
|
|
|
-
|
|
|
|
-
|
|
The
effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply
a broad range of income tax rates. The Company and its subsidiary that operate in various countries: United States and Seychelles
that are subject to taxes in the jurisdictions in which they operate, as follows:
United
States of America
The
Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of September 30,
2017, there is no operations in the United States of America. The net operating loss carry forwards begin to expire in 2035, if
unutilized. The Company has provided for a full valuation allowance of $73,884 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.
8.
CONCENTRATIONS OF RISK
The
Company is exposed to the following concentrations of risk:
(a)
Major customers
For
three months ended September 30, 2017 and 2016, the customers who accounted for 10% or more of the Company’s purchases and
its outstanding payable balance at period-end are presented as follows:
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
Revenues
|
|
|
Percentage
of revenues
|
|
|
Accounts
receivable, trade
|
|
Customer
A
|
|
$
|
0
|
|
|
|
-
|
|
|
|
0
|
%
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
|
$
|
0
|
|
|
|
-
|
|
|
|
0
|
%
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
For
nine months ended September 30, 2017 and 2016, the customers who accounted for 10% or more of the Company’s purchases and
its outstanding payable balance at period-end are presented as follows:
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
Revenues
|
|
|
Percentage
of revenues
|
|
|
Accounts
receivable, trade
|
|
Customer
A
|
|
$
|
12,500
|
|
|
|
-
|
|
|
|
100
|
%
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
|
|
$
|
12,500
|
|
|
|
-
|
|
|
|
100
|
%
|
|
|
-
|
|
|
$
|
-
|
|
|
|
-
|
|
(b)
Major vendors
For
three months ended September 30, 2017 and 2016, the vendors who accounted for 10% or more of the Company’s purchases and
its outstanding payable balance at period-end are presented as follows:
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
Purchase
|
|
|
Percentage
of purchases
|
|
|
Accounts
payable, trade
|
|
Vendor
A
|
|
$
|
0
|
|
|
|
-
|
|
|
|
0
|
%
|
|
|
-
|
%
|
|
$
|
-
|
|
|
|
-
|
|
|
|
$
|
0
|
|
|
|
-
|
|
|
|
0
|
%
|
|
|
-
|
%
|
|
$
|
-
|
|
|
|
-
|
|
For
nine months ended September 30, 2017 and 2016, the vendors who accounted for 10% or more of the Company’s purchases and
its outstanding payable balance at period-end are presented as follows:
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
Purchase
|
|
|
Percentage
of purchases
|
|
|
Accounts
payable, trade
|
|
Vendor
A
|
|
$
|
10,000
|
|
|
|
-
|
|
|
|
100
|
%
|
|
|
-
|
%
|
|
$
|
-
|
|
|
|
-
|
|
|
|
$
|
10,000
|
|
|
|
-
|
|
|
|
100
|
%
|
|
|
-
|
%
|
|
$
|
-
|
|
|
|
-
|
|
All
vendors are located in Malaysia.
In
accordance with ASC Topic 855, “
Subsequent Events
”, which establishes general standards of accounting for and
disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated
all events or transactions that occurred after September 30, 2017 up through the date was the Company presented this condensed
financial statements. During the period, the Company did not have any material recognizable subsequent event.