GWIN Glorywin Entertainment Group Inc (PK)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – NATURE OF BUSINESS

Glorywin Entertainment Group Inc. ("Glorywin"), formerly known as Zippy Bags, Inc., was incorporated in the state of Nevada on August 26, 2010 ("Inception"). It was initially formed to market a snowboard carrying bag locally, in the Salt Lake City, Utah area to snowboard shops and outdoor retailers.

On June 17, 2014, Janet Somsen, the original owner of Glorywin, entered into a security purchase agreement to sell 44.5% of Glorywin's outstanding shares, or 4,365,000 shares, of common stock, to Taipan Pearl Sdn Bhd and Wenwei Wu in exchange for an aggregate purchase price of $189,004 in cash. At the closing of the transaction, Janet Somsen agreed that the previous officers would resign, and all the debts, consisting of $11,719 of taxes payable, $1,650 of accounts payable, and $3,500 of notes payable due to BK Consulting and Associates, P.C. ("BK Consulting"), would be repaid by Ms. Somsen. Glorywin is a shell company and has no operations.

On the same day, Glorywin entered into a share transfer agreement with Top Point Limited ("Top Point"), a company incorporated in Samoa on April 9, 2014.  Pursuant to the agreement, Glorywin issued 10,195,294 shares of common stock to Wenwei Wu, Taipan Pearl Sdn Bhd, Boom Siong Lee and Zhen Long Ho to acquire 1,000 common shares (100%) of Top Point. Top Point is a shell company and has no operations.

Simultaneously, Glorywin paid Macanese Pataca ("MOP") 60,000 (approximately $7,692) to acquire Wonderful Gate Strategy Company Limited ("Wonderful Gate"), a company incorporated on March 11, 2009 in Macau, China and had no operation prior to the acquisition , from Carmen Lum. Ms. Lum was later appointed as Chief Financial Officer of Glorywin and its subsidiaries, (collectively, the "Company", "us"). Since then, Wonderful Gate has been engaged in service of introducing sub-junkets and information technology infrastructure to land-based casinos and receiving an agreed percentage of total bets as revenue. The Company has introduced 25 sub-junkets to three land-based casinos in Cambodia to date, and the Company itself does not hold licence to operate casinos/junket or to conduct gaming promotion business in any country.

The acquisitions were accounted for as acquisitions by entities under common control due to the fact that each company was and continued to be held by the Company and its affiliates. As such, the transaction was recorded on the purchase method of accounting at historical amounts.

After the above transactions, Taipan Pearl Sdn Bhd owns 56.00% interest of the Company and became the biggest shareholder of the Company.

On October 30, 2014, the Company changed its name to Glorywin Entertainment Group, Inc.

Note 2 – SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

We prepared the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the U.S. Securities and Exchange Commission ("SEC") rules. We included all adjustments that are necessary for the fair presentation of our financial position, results of operations, and cash flows for the periods presented.

We have defined various periods that are covered in this report as follows:

Principles of Consolidation

The consolidated financial statements include the financial statements of Glorywin, and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated on consolidation.

The following table depicts the identity of our subsidiaries as of March 31, 2016:

None

Use of Estimates

The preparation of consolidated financial statements that conform with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company continually evaluates its estimates, including those related to bad debts, income taxes, and the valuation of equity transactions. The Company bases its estimates on historical experience and on various other assumptions that it believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Cash and Cash Equivalents

We maintain cash balances in non-interest-bearing accounts, which do not currently exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are presented net of an allowance for doubtful accounts. Management of the Company makes judgments as to its ability to collect outstanding receivables and provides allowances for the portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices. For those invoices not specifically reviewed, provisions are provided at different rates, based upon the age of the receivables. In determining these percentages, management analyzes its historical collection experience and current economic trends. If the historical data the Company uses to calculate the allowance for doubtful accounts does not reflect the future ability to collect outstanding receivables, additional provisions for doubtful accounts may be needed and the future results of operations could be materially affected. As of March 31, 2016 and 2015, the Company did not establish, based on a review of outstanding balances, an allowance for doubtful accounts.

Income Taxes

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 bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations. Current income taxes are provided for in accordance with the laws and regulations applicable to the Company as enacted by the relevant tax authorities.

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 of 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 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.

The Company's financial instruments consist principally of cash, accounts receivable, accrued liability and other payables. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature.

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.

It is not, however, practical to determine the fair value of other payables to related parties due to their related party nature.

Foreign Currency Translation

The accompanying consolidated financial statements are presented in United States dollars ("USD"). The functional currency of Wonderful Gate located in Macau is Hong Kong Dollars ("HKD"), and the functional currency of Glorywin and Top Point is the USD. For the entities whose functional currencies are the HKD, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into USD are included in determining comprehensive income. A summary of the conversion rates for the periods presented is as follows:

Revenue Recognition

Since Wonderful Gate was acquired, the Company has been engaged in service of introducing of sub-junkets and information technology (IT) company to land-based casinos and receiving an agreed percentage of total bets as revenue. For sub-junkets introduction service and IT infrastructure introduction service performed, the Company charge s 0.2% and 0.05%, respectively, of total bets played by players introduced by sub-junkets from the three casinos located in Cambodia.

At the end of each month, the IT company introduced by the Company generates a bet statement of the three casinos where all the playing information is presented, and that lays the ground for revenue calculation. After both the Company and the casinos agree with the information of the bet statement, settlement is prepared by the casinos and the Company usually gets paid on the 7th of the following month.

As all of the Company's revenues were derived from three casinos located in Cambodia, its revenues and accounts receivable are subject to concentrations of credit risk. If any of the casinos has operating difficulties and fails to make payment in time, the Company's cash flow would be suffered. Besides, the paying ability of the casinos is also dependent on the political, economic and legal environment in Cambodia. The Company has not experienced any losses in such accounts, however, no guarantee of future in-time payment can be made.

Basic and Diluted Earnings (Deficit) per Share

ASC 260 "Earnings per Share," requires dual presentation of basic and diluted earnings (deficit) per share ("EPS") with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings (deficit) of the entity. Basic net income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share is computed by dividing net income by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive common shares consist of common shares issuable upon the confirmation of subscriptions for shares and common stock options (using the treasury stock method). For the periods presented, there were no outstanding potential common stock equivalents and therefore basic and diluted earnings per share result in the same figure.

Stock-Based Compensation

The Company accounts for stock based compensation issued to employees in accordance with ASC 718 "Stock Compensation". ASC 718 requires companies to recognize an expense in the statement of income at the grant date of stock options and other equity based compensation issued to employees. The Company accounts for non-employee share-based awards in accordance with ASC 505-50 "Equity-based payments to nonemployees".

Reverse Stock Split

All preferred and common share amounts (except par value and par value per share amounts) have been retroactively restated to reflect the Company's one thousand-for-one reverse capital stock split effective August 19, 2013, as described in Note 6.

Related Party Transactions

A related party is generally defined as (i) any person that holds 10% or more of the Company's securities including such person's 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.

Note 3 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In April 2014, the FASB issued ASU 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity". The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. Early adoption is permitted. The Company does not expect the adoption to have a significant impact on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, "Revenue from contracts with Customers (Topic 606)". This ASU affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of non-financial assets. This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance. The ASU also supersedes some cost guidance included in Subtopic 605-35, Revenue Recognition-Construction-Type and Production-Type Contracts. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchanged for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.

In June 2014, the FASB issued ASU 2014-10, "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements". The amendments in this Update remove all incremental financial reporting requirements from U.S. GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The Company has elected to early adopt this ASU by removing the inception to date information and all references to development stage.

Note 4 – ACCOUNTS RECEIVABLE

Management of the Company makes judgments as to its ability to collect outstanding receivables and provides allowances for the portion of receivables when collection becomes doubtful, in our case, when the payment of the current month is not settled by the 7th of the following month. As of March 31, 2016, no postponement on payment of revenue incurred.

Accounts receivable consists of the following:

As of March 31, 2016 and 2015, there was no allowance for doubtful accounts provided.

Note 5 – INCOME TAXES

Wonderful Gate, the operating entity of the Company, is located in Macau, China. Income received in Macau is taxable under Macau's Complementary Tax provisions, irrespective of the beneficiary being an individual or a corporation, its particular line of business, its nationality or domiciliation, without prejudice to the particular deductions and allowances each taxpayer enjoys. Companies are required to declare their annual profit and such profit is subject to Complementary Tax. If dividend is declared, taxable profit is based on taxable profit (after dividends have been paid). Law No.5/2015 (the 2015 Budget Law) extends the exempted portion of income to MOP600, 000 and determines that the excess of taxable income be taxed at the relevant brackets (0% from MOP0 to MOP600, 000 and 12% on the excess). These measures implemented through the 2015 Budget Law are extraordinary and there can be no assurances that the exemption limit will increase, decrease or stay at its present level. These rates apply to the declared taxable profit (gross income less allowable deductions) from all income generating sources, except professional tax and property income, taxed separately under different regulations. The provision for income taxes as of March 31, 2015 and 2014 was $344,002 and $nil, respectively.

The Company's subsidiary, Top Point, is incorporated in Samoa, and is subject to company tax at a tax rate of 27%. No provision for income taxes in Samoa has been made as the Company had no Samoa taxable income as of March 31, 2016.

Glorywin is incorporated in the State of Nevada and is subject to the United States federal income tax at an effective tax rate of 34%.

Income taxes are calculated on a separate entity basis. Deferred income taxes 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 purposes. The provisions for income taxes for the years ended March 31, 2016 and 2015, respectively, are summarized as follows:

The table below summarizes the difference between the U.S. statutory federal tax rate and the Company's effective tax rate for the years ended March 31, 2015 and 2014:

The principal components of the deferred income tax assets as of March 31, 2015 and 2014 are as follows:

For the years ended March 31, 2016 and 2015, respectively, the Company produced net operating income (loss) before provision for income taxes of $1,666,134 and $(59,311), respectively. Based on the available objective evidence, including the Company's history of its loss, management believed it is more likely than not that future net deferred tax asset would not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax asset at March 31, 2015. No deferred tax assets or liabilities existed as of March 31, 2016.

The Company applied the provisions of ASC 740-10-50, "Accounting for Uncertainty in Income Taxes", which provides clarification related to the process associated with accounting for uncertain tax positions recognized in our financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company's liability for income taxes. Any such adjustment could be material to the Company's results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of March 31, 2015, the Company had no uncertain tax positions, and will continue to evaluate for uncertain positions in the future.

Note 6 - STOCKHOLDERS' EQUITY

Stock-splits

On August 19, 2013, the Company's board of directors and shareholders approved a one thousand-for-one reverse stock split of the Company's common stock. On November 7, 2013, the Company issued 336 shares of common stock as fractional shares from the August 19, 2013 reverse stock split. All reference to share and per share amounts in the consolidated financial statement and accompanying notes to the consolidated financial statements have been retroactively restated to reflect the one thousand-for-one reverse stock split, unless otherwise noted.

Shares Issued

On November 7, 2013, the Company issued 336 shares of common stock as fractional shares from the August 19, 2013 reverse stock split.

On March 7, 2014, Janet Somsen, elected to convert convertible notes in the amount of $8,530 into 4,265,000 shares of common stock.

On March 26, 2014, third party note holders elected to convert convertible notes in the amount of $9,759 into 4,879,500 shares of common stock.

On March 26, 2014, BK Consulting elected to convert convertible notes in the amount of $8,415 at a conversion price of $2 per share into 4,208 shares of common stock and convertible notes in the amount of $947 at a conversion price of $0.002 into 473,500 shares of common stock.

On June 17, 2014, the Company issued 10,195,294 restricted shares to Taipan Pearl Sdn Bhd, Wenwei Wu, Boom Siong Lee and Zhen Long Ho as consideration for 1,000 shares of Top Point. The shares were booked at par value issuance cost with a decrease to additional paid-in capital of $10,195 due to treatment requirements for stock granted for an acquisition of an entity under common control. The transaction was accounted for as an acquisition of entity under common control which requires booking the transaction at historical cost.

On November 18, 2014, the Company issued 600,000 restricted shares to Taipan Pearl Sdn Bhd, its major shareholder, 100,000 shares to Eng Wah Kung, its Chief Executive Officer, and 100,000 shares to its public relationship company as consideration for their services provided.  The total fair value of the common stock was $1,600,000 based on the closing price of the Company's common stock on the date of grant and the expense was included in general and administrative expenses for the year ended March 31, 2015. The restriction period is one year from the grant date.

Debt forgiveness by related party

On June 17, 2014, Janet Somsen paid and released the Company of $16,869 of outstanding liabilities. Due to related party relationship, the transaction was accounted for as contributed capital.

Note 7 – RELATED PARTY TRANSACTIONS

The Company's officers, directors and related parties, from time to time, provided advances to the Company for working capital purpose. These advances are short-term in nature, unsecured and payable on demand. The due to related parties amount on March 31, 2015 and 2014 was as follows:

The balance of $347,177 on March 31, 2015 included $7,692 that was paid by Weiwei Wu for acquisition of Wonderful Gate.

On February 17, 2014, the Company exchanged a note payable to Janet Somsen in the amount of $6,876 and accrued interest of $1,654 for a convertible promissory note in the amount of $8,530. On March 7, 2014, Janet Somsen, elected to convert convertible notes in the amount of $8,530 into 4,265,000 shares of common stock. The convertible note conversion was done within the conversion term. No gain (loss) was recorded for this conversion. Also see Note 8.

On June 17, 2014, Janet Somsen, the Glorywin's original owner, sold 4,365,000 shares to Taipan Pearl Sdn Bhd and Wenwei Wu. As part of the security purchase agreement, all the debts of the Glorywin as of the transaction date, including $11,719 of taxes payable, $1,650 of accounts payable, and $3,500 of notes payable due to BK Consulting, would be repaid by Ms. Somsen. On the same day, Glorywin issued 10,195,294 restricted shares to Wenwei Wu, Taipan Pearl Sdn Bhd, Boom Siong Lee and Zhen Long Ho for their interest in the 1,000 shares of Top Point. Simultaneously, Glorywin paid MOP60,000 (approximately $7,692) to acquire Wonderful Gate from Carmen Lum, who was later appointed as Chief Financial Officer of the Company. Also see Note 1.

On November 18, 2014, the Company issued 600,000 restricted shares of common stock to Taipan Pearl Sdn Bhd and 100,000 restricted shares of common stock to Eng Wah Kung, the Company's Chief Executive Officer, as consideration for their services provided. The total fair value of the common stock was $1,400,000 based on the closing price of the Company's common stock on the date of grant.

On October 22, 2014, the Company orally entered into a conditional sale agreement ("Conditional Sale Agreement"), which was later put into a written form on January 19, 2015, with Taipan Pearl Sdn Bhd, shareholder of 56.00% of the Company's interest. Pursuant to the Conditional Sale Agreement, the Company shall pay a total price of $2,000,000 to acquire Gwin Company Limited ("Target Company", or "Gwin"), which is solely owned by Mr Sing Hong Ting, the 100% beneficial owner of Taipan Pearl Sdn Bhd. The sale would be completed under conditions that the Target Company becomes profitable within 12 months from the date of the Conditional Sale Agreement and that the Target Company maintains all necessary licenses to be operational. If the two conditions are not satisfied, the amount paid will be fully refunded. On February 18, 2015, the Company signed a supplementary agreement to the Conditional Sale Agreement ("Supplementary Agreement") with Taipan Pearl Sdn Bhd, pursuant to which, another $2,000,000 would be paid by the Company for acquisition of the Target Company. The incremental $2,000,000 would be used in renovating and operating of the Target Company. As of March 31, 2015, the Company paid a total of $3,180,425 and additional 463,286 as of the filing date. Since both the Conditional Sale Agreement and Supplementary Agreement are signed between entities under common control, the transaction was recorded as a distribution to shareholder with the payment is reflected as a reduction of shareholders' equity (additional paid-in capital).

Also see debts with related parties in Note 8.

Note 8 - DEBT

Officer Note

From time to time, the Company's the original owner, Janet Somsen, advanced loans to the Company for operations at an 8% per annum interest date, due on demand. On February 17, 2014, the Company exchanged the outstanding principal of $6,876 and accrued interest of $1,654 for a convertible promissory note in the amount of $8,530. The convertible promissory note bears no interest and is convertible at the holders' discretion into common stock at a rate of $0.002. On March 7, 2014, Janet Somsen, elected to convert convertible notes in the amount of $8,530 into 4,265,000 shares of common stock.

The Company recorded interest expense in the amount of $487 for the year ended March 31, 2014 related to the officer notes payable and included in interest expense $32 of imputed interest on the convertible notes payable.

BK Consulting Notes Payable

From time to time the Company has received loans from BK Consulting to fund operations at an 8% per annum interest rate, due on demand. During the year ended March 31, 2014, the Company received proceeds in the amount of $1,419 and repaid $28,297 principal and $2,330 interest on notes payable to BK Consulting.

There was no principal balance due or accrued interest existed at March 31, 2014. The Company recorded interest expense in the amount of $1,234 for the year ended March 31, 2014 related to loans from BK Consulting.

Convertible Notes

During the year ended March 31, 2014, the Company issued convertible promissory notes for aggregate proceeds in the amount of $22,621, from BK Consulting. These loans are noninterest bearing and convertible at the holder discretion into common stock. Of the $22,621, $8,415 is convertible at a price of $2 per share, which was adjusted for the reverse stock split on August 19, 2013 and $14,206 is convertible at a price of $0.002 per share. The Company recorded $821 of imputed interest at a rate of 8% on these convertible notes during the year ended March 31, 2014. On March 26, 2014, BK Consulting, elected to convert $9,362 of convertible notes into 477,708 share of common stock. The convertible note conversions were done within the conversion term. No gain (loss) was recorded for these conversions.

On February 17, 2014, the Company exchanged a note payable to Janet Somsen in the amount of $6,876 and accrued interest of $1,654 for a convertible promissory note in the amount of $8,530. The convertible promissory note bears no interest and is convertible at the holders' discretion into common stock at a rate of $0.002. On March 7, 2014, Janet Somsen, elected to convert convertible notes in the amount of $8,530 into 4,265,000 shares of common stock. The Company recorded $32 of imputed interest at a rate of 8% on this convertible note during the year ended March 31, 2014. The convertible note conversion was done within the conversion term. No gain (loss) was recorded for this conversion.

On March 25, 2014, BK Consulting sold an aggregate of $9,759 in convertible notes to third party investors. On March 26, 2014, those note holders notified the Company and elected to convert convertible notes in the amount of $9,759 into 4,879,500 shares of common stock. The Company did not record any imputed interest on these third party convertible notes. The convertible note conversions were done within the conversion term. No gain (loss) was recorded for these conversions.

As of March 31, 2014, the balance due on convertible notes was $3,500. This balance was paid by Janet Somsen as part of the agreement to sell Glorywin's shares to Taipan Pearl Sdn Bhd and Wenwei Wu on June 17, 2014, also see Note 1.

Discounts on Convertible Notes Payable

The Company calculates any beneficial conversion feature embedded in its convertible notes via the intrinsic value method. The conversion feature was considered a discount to the notes, to the extent the aggregate value of the conversion feature did not exceed the face value of the notes. These discounts are amortized to interest expense through earlier of the term or conversion of the notes. During the year ended March 31, 2014, the Company recorded debt discounts in the amount of $31,151. During the year ended March 31, 2014, the Company amortized debt discounts to interest expense in the aggregate amount of $31,151.

Note 9 - COMMITMENTS AND CONTINGENCIES

On May 19, 2014, the Company entered into an agreement for the lease of an office place in Macau for monthly rental of MOP10,000 (approximately $1,290). The original lease term began on May 19, 2014 and expired on April 18, 2015. On April 19, 2015, the Company renewed the agreement for another six months. The monthly rental for the renewed lease is MOP11,000, or $1,419. The renewed lease will expire on November 18, 2015.

On May 1, 2014, the Company entered into an agreement for the lease of a staff dormitory in Macau for monthly rental of HKD8, 000 (approximately $1,032). The lease term began on May 1, 2014. The Company terminated the lease on January 31, 2015.

The total rent expenses for years ended March 31, 2016 and 2015 were $0 and $26,273, respectively.

On March 31, 2015, future annual lease payments due pursuant to operation leases amounts to the following:

Fiscal Years Ended March 31,