FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our" and "our company" mean Caro Holdings Inc., unless otherwise indicated.





General Overview

Our company was incorporated on March 29, 2016 in the State of Nevada. We had been engaged in the subscription box business with our initial focus on offering sock subscriptions to our customers. Our subscription box was a package of a pair of socks that will be sent directly to a customer on a recurring basis. For example, a potential subscriber would subscribe to receive a pair of socks once a month for either a period of 6 months or 12 months. Our subscription sock boxes were a marketing strategy and a method of product distribution, allowing us to target a wide range of customers and cater to their variety of specific needs and interests.

We are a small early-stage development company. To date, our company's activities have been limited to the sourcing of our advertising channels, initial branding efforts, and in our formation and the raising of equity capital.

We have no revenues and have limited cash on hand. We have sustained losses since inception and have relied upon loans from directors and officers and the sale of our securities for funding. We have never declared bankruptcy, been in receivership, or involved in any kind of legal proceeding.





Our Current Business

Since our original idea, online commerce and the direct-to-consumer market has had sustained growth. As a result of Covid, this method of sales and distribution has grown exponentially. There are thousands of manufacturers and retailers that have traditionally sold their goods and services offline. Our plan has evolved from the original idea from being both the merchant and the distribution marketplace to strictly a marketplace and a direct-to-consumer enabler.

We are now engaged in the development of our Direct To Consumer systems and methodologies where we analyze the marketplace and work with mid-size brands that have a strong bricks and mortar presence, and have a desire to increase their digital presence.

Our Direct to Consumer System (D2C) will be a fully integrated, end-to-end system that allows full control of data that provides insight from multiple channels so together with our clients successful marketing decisions can be based on the entire business' performance. Based on these analytics, the system can immediately deploy personalization and optimization independently and readily understand how customer interactions vary across different regions. Furthermore, we believe we have the necessary infrastructure to take advantage of growth opportunities with minimal additional costs.

We have not developed any new or unique products or services that have not already been announced, but have plans to create or acquire complementary systems in the next year.

Marketing, Advertising, and Promotion

We believe that our systems will become one of our most important assets. Our ability to successfully create brand awareness is dependent upon our ability to address the changing needs and priorities of each brand's target customers. To that end, we plan to focus much of our marketing efforts to recruit partners and then to apply our methodologies to better understand their customers and their needs and ensure we align our brand messages in our marketing, and the channels through which we deliver these messages, to our target customers.






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Results of Operations



Three Months Ended September 30, 2022 Compared to Three Months Ended September
30, 2021



                         Three Months Ended
                            September 30,           Change          Change
                         2022          2021         Amount        Percentage
Operating expenses     $  25,875     $  15,100     $  10,775               71 %
Loss from operations     (25,875 )     (15,100 )     (10,775 )             71 %
Net loss               $ (25,875 )   $ (15,100 )   $ (10,775 )             71 %

During the three months ended September 30, 2022 and 2021, we did not generate revenues.

Operating expenses for the three months ended September 30, 2022 consisted of consulting fees, audit and accounting fees, transfer agent fees, and legal fees. The increase in operating expenses was primarily a result of an increase in development activities.





Six Months Ended September 30, 2022 Compared to Six Months Ended September 30,
2021



                          Six Months Ended
                            September 30,           Change        Change
                         2022          2021         Amount      Percentage
Operating expenses     $  36,447     $  34,279        2,168               6 %
Loss from operations     (36,447 )     (34,279 )     (2,168 )             6 %
Net loss               $ (36,447 )   $ (34,279 )   $ (2,168 )             6 %

During the six months ended September 30, 2022 and 2021, we did not generate revenues.

Operating expenses for the six months ended September 30, 2022 consisted of consulting fees, audit and accounting fees, transfer agent fees and legal fees. The increase in operating expenses was primarily a result of an increase in development activities.

Liquidity and Financial Condition





Working Capital (Deficiency)

                                         September 30,      March 31,
                                             2022              2022
Current Assets                          $         7,045     $        -
Current Liabilities                              65,495         22,003
Working Capital (Deficiency)            $       (58,450 )   $  (22,003 )

Cash Flows

                                               Six Months Ended
                                                September 30,
                                             2022              2021
Cash used in Operating Activities       $             -     $     (359 )
Cash provided by Financing Activities   $             -     $      500
Net changes in cash during period       $             -     $      141

Our total current assets as of September 30, 2022 were $7,045 as compared to total current assets of $0 as of March 31, 2022. The increase was primarily due to an increase in prepaid deposits.

Our total current liabilities as of September 30, 2022 were $65,495 as compared to total current liabilities of $22,003 as of March 31, 2022. The increase was attributed by an increase in due to related party.

Working capital deficiency increased from $22,003 as of March 31, 2022 to $58,450 as of September 30, 2022 mainly due to an increase in due to related party.

The report of our auditors on our audited financial statements for the fiscal year ended March 31, 2022, contains a going concern qualification as we have suffered losses since our inception. We have minimal assets and have achieved limited operating revenues since our inception. We have been dependent on sales of equity securities to conduct operations. Unless and until we commence material operations and achieve material revenues, we will remain dependent on financings to continue our operations.






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Operating Activities

For the six months ended September 30, 2022, net cash used in operating activities was $0, related to our net loss of $36,447, increased by an increase in prepaid expense of $7,045 and offset by an increase in accounts payable and accrued liabilities of $43,492.

For the six months ended September 30, 2021, net cash used in operating activities was $359, related to our net loss of $34,279 which was offset by an increase in accounts payable and accrued liabilities of $33,920.





Investing Activities

We did not use any funds for investing activities for the six months ended September 30, 2022 and September 30, 2021.





Financing Activities

We did not have any financing activities for the six months ended September 30, 2022.

During the six month ended September 30, 2021, net cash provided by financing activities was $500 from advancement from the former Director of the Company.





Cash Requirements

We will require additional cash as we expand our business. Initially, to carry out our business plan, we will need to raise additional capital. There can be no assurance that we will be able to raise additional capital or, if we are able to raise additional capital, the terms we be acceptable to us. Currently we do not have any inventory.

These conditions indicate a material uncertainty that casts significant doubt about our ability to continue as a going concern. We require additional debt or equity financing to have the necessary funding to continue operations and meet our obligations. We have continued to adopt the going concern basis of accounting in preparing our financial statements.

We will require additional financing in order to enable us to proceed with our plan of operations. There is no assurance that any party will advance additional funds to us in order to continue our future plans for operations.

We anticipate continuing to rely on equity sales of our common stock in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing stockholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our planned business activities.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.





Critical Accounting Policies



Basis of Presentation

The financial statements are prepared in accordance with generally accepted accounting principles used in the United States of America ("US GAAP").





Use of Estimates

In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as 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.






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Fair Value of Financial Instruments

ASC 820, "Fair Value Measurements and Disclosures", defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows:

Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 - inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value.

Our Company's financial instruments primarily include accrued liabilities. It is management's opinion that the carrying values are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their stated interest rate approximates current rates available.

Management believes it is not practical to determine the fair value of accounts payable and accrued liabilities, and note payable to related parties and lease and management arrangement with related parties, if any, because the transactions cannot be assumed to have been consummated at arm's length, the terms are not deemed to be market terms, there are no quoted values available for these instruments, and an independent valuation would not be practical due to the lack of data regarding similar instruments, if any, and the associated potential costs.

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.





Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed similar to basic net income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. If applicable, diluted net income per share assumes the conversion, exercise or issuance of all common stock instruments, such as convertible notes, unless the effect is to reduce a loss or increase earnings per share.





Income Taxes

Income tax expense is based on reported income before income taxes. Our company accounts for income taxes using the asset and liability 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 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income in the period that includes the enactment date. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Recently Issued Accounting Pronouncements

Management has considered all recent accounting pronouncements issued. Our company's management believes that these recent pronouncements will not have a material effect on our company's financial statements.

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