Company: RHNO
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001493152-25-022052
Chunk: 515

Company: RHINO BITCOIN INC.
Filing Date: 2025-11-13
Form: 10-K
Item: Item 7
Chunk 515
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 whether the investments are impairment and concluded that the investments will be impaired.

We
identified the impairment valuation of investments as a critical audit matter due to the significance of the balance to the financial
statements as a whole. These investments require significant judgements as they are equity securities without a readily determinable
fair value and require the Company to assess if there are any changes in circumstances that indicate that the carrying amount of an investment
may require impairment. There were significant judgements made by management to identify the indicators of impairment and estimating
the fair value of the investments which led to a high degree of auditor judgement, subjectivity and effort in evaluating management’s
estimation of the fair value of the investment including management’s assessment of the equity investment financial condition,
operating performance, prospects and other company-specific information.

F-2

Our
audit procedures in this area included the following, among others:

    (a)
    Inquired
    management to obtain an understanding of the Company’s process in evaluating the indication of impairment and fair value assessments;

    (b)
    Evaluated
    the Company’s assessment of impairment by assessing the appropriateness of the valuation methodologies used; 

    (c)
    Compared
    the Company’s assessment to our expectation based on our knowledge;

    (d)
    Considered
    the adequacy of the disclosure in the financial statements in relation to the investments.

The
investment is being impaired as to Phoenix Plus Corp. (now known as Rhino Bitcoin Inc.) through its solicitors, already file a
winding up petition to the Court of Malaysia against its investment.

Revenue
recognition

The
Company has determined that certain performance obligations in relation to project activities are satisfied over time and thus recognizes
revenue from this activity over time.

A
significant proportion of the Company’s revenues and profits are derived from project activities. For the financial year ended
July 31, 2025, project revenue and cost of sales are as follows:

    Project
    activities

    Revenue:
     
    USD478,159
     
    (100%
    of the Company’s revenue)

    Cost
    of sales:
     
    USD411,231
     
    (99.99%
    of the Company’s cost of sales)

We
identified revenue and cost of sales from project activities as an area requiring audit focus as significant management’s judgement
and estimates are involved in estimating the total project costs (which is used to determine gross profit margin of project activities
undertaken