REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors and
Stockholders of Rizzen Inc.
Opinion
on the Financial Statements
We
have audited the accompanying balance sheets of Rizzen Inc. (the Company) as of January 31, 2018 and 2017, and the related statements
of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended January 31, 2018,
and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present
fairly, in all material respects, the financial position of the Company as of January 31, 2018 and 2017, and the results of its
operations and its cash flows for each of the years in the two-year period ended January 31, 2018, in conformity with accounting
principles generally accepted in the United States of America.
Basis
for Opinion
These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error
or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but
not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.
Our
audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
Consideration
of the Company’s Ability to Continue as a Going Concern
The
accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note
5 to the financial statements, the Company has not yet established an ongoing source of revenues sufficient to cover its operating
costs, which raises substantial doubt about its ability to continue as a going concern. The financial statements do not
include any adjustment that might result from the outcome of this uncertainty.
/s/
Fruci
& Associates II, PLLC
Fruci
& Associates II, PLLC
We
have served as the Company’s auditor since 2017.
Spokane,
WA
May
14, 2018
NOTES
TO FINANCIAL STATEMENTS
1.
|
ORGANIZATION
AND PRINCIPAL ACTIVITIES
|
Rizzen Inc.
(the “Company”) was incorporated in Nevada on October 21, 2015. Our principal executive offices are located at Room
402, Unit B, Building 5,Guanghua Community, Guanghua Road, Tianning District, Changzhou, Jiangsu, China. Our phone number is
0519-89801180
.
We
are a shell company. Our prior business model was to provide vending and shipping services of electronic toys of various kinds
manufactured in the Republic of China and to distribute electronic kids toys of various price categories to both small and medium-sized
vendors and intended on selling, importing, and marketing our business to European and North American markets.
The
Company now seeks to acquire, through a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, exchangeable
share transaction or other similar business transaction with one or more operating businesses or assets that we have not yet identified.
At
present, we have no employees. Our officers and directors are listed below.
Name
|
|
Age
|
|
Position
|
Jin Na
|
|
36
|
|
CEO and
CFO
|
2.
|
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
|
|
(a)
|
Basis of Presentation
|
The
Company maintains its general ledger and journals with the accrual method of accounting for financial reporting purposes. The
financial statements and notes are representations of management. Accounting policies adopted by the Company conform to U.S. GAAP
and have been consistently applied in the presentation of financial statements. The accompanying financial statements are presented
in U.S. dollars in conformity with accounting principles generally accepted in the United States of America and pursuant to the
rules and regulations of the SEC. Management believes that all adjustments have been made for the years ended January 31, 2018
and 2017.
|
(b)
|
Net loss per common
share
|
The
Company complies with accounting and disclosure requirements of FASB ASC 260, “Earnings Per Share.” Net loss per common
share is computed by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding
for the period. At January 31, 2018 and 2017, the Company did not have any dilutive securities and other contracts that could,
potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted loss
per common share is the same as basic loss per common share for the period.
The
preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using
the best information available at the time the estimates are made; however actual results could differ materially from those estimates.
|
(d)
|
Recently issued
or adopted standards
|
The
Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s
results of operations, financial position or cash flow.
As
of January 31, 2018, and 2017, the Company had $200 and $765 in accrued liabilities, respectively.
Federal
Income taxes are not currently due since we have had losses since inception.
On
December 22, 2017 H.R. 1, originally known as the Tax Cuts and Jobs Act, (the “Tax Act”) was enacted. Among
the significant changes to the U.S. Internal Revenue Code, the Tax Act lowers the U.S. federal corporate income tax rate (“Federal
Tax Rate”) from 35% to 21% effective January 1, 2018. The Company will compute its income tax expense for the
December 31, 2017 fiscal year using a Federal Tax Rate of 21%.
Income
taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25
Income Taxes – Recognition.
Under
this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax
basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded
against deferred tax assets if management does not believe the Company has met the “more likely than not” standard
required by ASC 740-10-25-5.
Deferred
income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax reporting purposes.
Significant
components of the deferred tax asset amounts at an anticipated tax rate of 21% for the period ended January 31, 2017 and 35% for
the period ended December 31, 2016 are as follows:
As
of January 31, 2018, we had a net operating loss carry-forward of approximately $(63,032) and a deferred tax asset of approximately
$13,237 using the statutory rate of 21%. The deferred tax asset may be recognized in future periods, not to exceed 20 years.
However, due to the uncertainty of future events we have booked valuation allowance of $(13,237). FASB ASC 740 prescribes recognition
threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected
to be taken in a tax return. FASB ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting
in interim periods, disclosure and transition. At January 31, 2018, the Company had not taken any tax positions that would require
disclosure under FASB ASC 740.
|
|
January
31, 2018
|
|
January
31, 2017
|
Deferred
Tax Asset
|
|
$
|
13,237
|
|
|
$
|
11,038
|
|
Valuation
Allowance
|
|
|
(13,237
|
)
|
|
|
(11,038
|
)
|
Deferred
Tax Asset (Net)
|
|
$
|
—
|
|
|
$
|
—
|
|
At
January 31, 2018, the Company has net operating loss carryforwards of approximately $63,032 which will begin to expire in the
year 2033. The increase in the allowance account amount (and also in the deferred tax asset amount) from January 31, 2017
to January 31, 2018 was $2,199.
5.
|
GOING
CONCERN AND CAPITAL RESOURCES
|
The
Company does not currently engage in any business activities that provide cash flow. During the next 12 months we anticipate incurring
costs related to:
●
|
filing
of Exchange Act reports,
|
●
|
payment
of annual corporate fees, and
|
●
|
investigating,
analyzing and consummating an acquisition.
|
As
of January 31, 2018, the Company had an accumulated deficit of $(63,032). Management anticipates that fees associated with filing
of Exchange Act reports including accounting fees and legal fees and payment of annual corporate fees will not exceed $75,000
within next 12 months. We do not currently intend to retain any entity to act as a "finder" to identify and analyze
the merits of potential target businesses. Management intends to search for a business combination by contacting various sources
including, but not limited to, our affiliates, lenders, investment banking firms, private equity funds, consultants and attorneys
and does not plan to conduct a complete and exhaustive investigation and analysis of a business opportunity. Management decisions,
therefore, will likely be made without detailed feasibility studies, independent analysis, market surveys and the like which,
if we had more funds, would be desirable. If the management can find a suitable target company, we will have to budget for additional
fees relating to the investigation into the target company (including due diligence and possibly visiting the facilities) and
consummating the reverse merger, which may cost between $125,000 to $150,000. We expect that the expenses for the next 12 months
and beyond such time will be paid with amounts that may be loaned to or invested in us by our stockholders, management or other
investors. Since we have minimal assets and will continue to incur losses due to the expenses associated with being a reporting
company under the Exchange Act, we may cease business operations if we do not timely consummate a business combination.
Currently,
our ability to continue as a going concern is dependent upon our ability to generate future profitable operations and/or to obtain
the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they come
due. Our ability to continue as a going concern is also dependent upon our ability to find a suitable target company and enter
into a possible reverse merger with such company. Management’s plan includes obtaining additional funds by equity financing
through a reverse merger transaction and/or related party advance. However, there is no assurance of additional funding being
available, which raises substantial doubt about the company’s ability to continue as a going concern.
NOTE
6 – CAPITAL STOCK
The
Company has 75,000,000 shares of common stock authorized with a par value of $0.001 per share.
On
January 13, 2016 the Company issued 5,000,000 shares of its common stock at $0.001 per share for total proceeds of $5,000. On
January 26, 2016 the Company issued 1,000,000 shares of its common stock at $0.001 per share for total proceeds of $1,000. In
June and July 2016, the Company issued 1,285,000 shares of its common stock at $0.02 per share for total proceeds of $25,700.
As
of January 31, 2018 and January 31, 2017, the Company had 7,285,000 shares issued and outstanding.
NOTE
7 – RELATED PARTY TRANSACTIONS
In
support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that
the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing.
There is no formal written commitment for continued support by officers, directors, or shareholders. Amounts represent advances
or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by
a promissory note.
Since
October 21, 2015 (inception) through January 31, 2018, the Company’s sole officer and director loaned the Company $31,132
to pay for incorporation costs and operating expenses. As of January 31, 2018, the amount outstanding was $31,1320. The
loan is non-interest bearing, due upon demand and unsecured.
On
December 28, 2016, the controlling shareholders of Rizzen Inc. (the “Company”), Alexander Deshin and Shuisheng Zhu
sold to JLJ Group Corporation Limited, a Hong Kong registered corporation, (“JLJ”) 6 million shares of the Company’s
restricted common stock which had previously been issued to Mr. Zhu and Mr. Deshin. The sale was the result of a privately negotiated
transaction without the use of public dissemination of promotional or sales materials. The buyer represented that it was an accredited
investor and as such could bear the risk of such investment for an indefinite period of time and to afford a complete loss thereof.
This represented 82% of the outstanding common stock and resulted in a change in control.
NOTE
8 – SUBSEQUENT EVENTS
In
accordance with ASC 855, the Company has analyzed its operations subsequent to January 31, 2018 through 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.