RELATED PARTY TRANSACTIONS AND BALANCES |
6 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
Jul. 31, 2026 | |||||||
| RELATED PARTY TRANSACTIONS AND BALANCES | |||||||
| RELATED PARTY TRANSACTIONS AND BALANCES | Note 4 – RELATED PARTY TRANSACTIONS AND BALANCES
Advances from Related Party
During the six months ended July 31, 2026, and 2025, the Company received cash advances of $0 and $2,500, respectively, from Cheng-Hsiang Kao, the Company’s former Chief Executive Officer and a major shareholder. In addition, the related party paid operating expenses on behalf of the Company totaling $147,599 and $104,415, respectively. These advances are unsecured, non-interest-bearing, and payable on demand. As of July 31, 2026, and January 31, 2026, the total amount of related party’s advances outstanding were $1,185,582 and $1,037,983, respectively.
Due to Related Party
In prior years, the Company sourced all of its inventory from a vendor wholly owned by shareholders who collectively hold more than 20% of the Company’s outstanding common shares as of July 31, 2026. As of January 31, 2026, amounts due to this related party totaled $2,411,000 and are disclosed in Accounts Payable – related party on the balance sheets.
As of January 31, 2026, the Company did not have written agreements governing the repayment terms of related-party balance. These obligations are unsecured, non-interest-bearing, and payable on demand.
On May 18, 2026, the Company entered into a deferred payment agreement with this related party, both parties agreed to defer collection efforts for a period of twenty-four (24) months from May 18, 2026, interest-free and the related party will not demand immediate repayment of the outstanding balance of $2,411,000. No assurance can be provided that related parties will continue to provide financial support or refrain from demanding repayment.
The Company evaluated the modification of terms of new agreement under ASC 470-60, “Troubled Debt Restructuring -TDR”, and concluded that the debt modification constitutes a Troubled Debt Restructuring (TDR). A restructuring of debt qualifies as a TDR when both of the following conditions are present:
Both conditions are present. The Company has not generated any revenue and has financed its operations through advances from a related party, and the related party agreed to a twenty-four month, interest-free deferral of the $2,411,000 balance that it would not otherwise have granted. Because the total future cash payments specified by the new terms ($2,411,000) are not less than the carrying amount of the payable immediately before the restructuring ($2,411,000), no gain is recognized, the carrying amount of the payable is not adjusted, and the new effective interest rate is 0%. Accordingly, no interest expense is recognized over the deferral period and no debt discount is recorded. As of July 31, 2026, the Company reclassified the $2,411,000 balance from current liabilities to long-term liability. No portion of the balance is due within twelve months of July 31, 2026. |