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EXCEL - IDEA: XBRL DOCUMENT - Asia Atlantic ResourcesFinancial_Report.xls
EX-32.1 - CERTIFICATION OF CHIEF EXECUTIVE OFFICER UNDER SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.* - Asia Atlantic Resourcesf10k2013ex32i_asiaatlantic.htm
EX-31.1 - OFFICERS CERTIFICATIONS UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002* - Asia Atlantic Resourcesf10k2013ex31i_asiaatlantic.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K
_________________

(Mark One)
   
þ
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended Period Ended April 30, 2013
or
   
o
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition Period from                      to                     

Commission File Number 333-146572

ASIA ATLANTIC RESOURCES
(Exact name of registrant as specified in its charter)

Nevada
 
27-4984032
(State or Other Jurisdiction of
 
(I.R.S. Employer Identification No.)
Incorporation or Organization)
   

2101 Vista Pkwy. – Ste. 292
West Palm Beach, FL  33411
(Address of principal executive offices and zip code)

Registrant’s telephone number, including area code: (786) 290-8054
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in rule 405 of Securities Act. Yes o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o No þ
 
 
 

 
 
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  * Yes o   No   o
* Not Applicable

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes  þ   No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer  ¨
  
Accelerated filer  ¨
     
Non-accelerated filer  ¨
(Do not check if smaller reporting company)
  
Smaller reporting company  x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  þ    No  ¨

There was no determinable market value for the voting and non-voting common equity held by non-affiliates of the registrant as of November 30, 2009 as it is on the “grey market” and is not listed, traded or quoted on any stock exchange, the Over-the-Counter Bulletin Board or the Pink Sheets. To the knowledge of management there have been no recorded trades in the stock. The total number of shares of Common Stock issued and outstanding as of July 19, 2013 is 13,100,000.
 
 
 

 
 
TABLE OF CONTENTS

Item 1:
Business
4
Item 1A:
Risk Factors
5
Item 1B:
Unresolved Staff Comments
6
Item 2:
Properties
6
Item 3:
Legal Proceedings
6
Item 4:
Removed and Reserved
6
     
PART II
   
Item 5:
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
6
Item 6:
Selected Financial Data
7
Item 7:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
7
Item 7A:
Quantitative and Qualitative Disclosures About Market Risk
8
Item 8:
Financial Statements and Supplementary Data
8
Item 9:
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
8
Item 9A
Controls and Procedures
8
Item 9B:
 
10
     
PART III
   
Item 10:
Directors, Executive Officers and Corporate Governance
10
Item 11:
Executive Compensation
11
Item 12:
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
12
Item 13:
Certain Relationships and Related Transactions, and Director Independence
12
Item 14:
Principal Accounting Fees and Services
13
     
PART IV
   
Item 15:
Exhibits, Financial Statement Schedules
13
Signatures
14
 
 
3

 
 
PART I

The Issuer , is Asia Atlantic Resources, a Nevada corporation ("Company"). When used herein the terms "we", "us" and/or "our" shall mean the Company.

This Annual Report contains forward-looking statements that involve a number of risks and uncertainties.  Such forward-looking statements are not historical facts and constitute or rely upon projections, forecasts, assumptions or other forward-looking information. Generally these statements may be identified by the use of forward-looking words or phrases such as "believes", "expects", "anticipates", "intends", "plans", "estimates", "may", and "should". These statements are inherently subject to known and unknown risks, uncertainties and assumptions. Our future results could differ materially from those expected or anticipated in the forward-looking statements. Specific factors that might cause such differences include factors described and discussed in Risk Factors in Item 1A below.

Item 1.  Business.

The Company was organized as a Nevada corporation on January 22, 2007.  We were formed as an exploration stage company to acquire, explore and, if warranted, develop and operate mineral properties.

On February 9, 2007, we acquired 100% ownership in a mineral prospect property located in central British Columbia known as the “KL Baez Property.”  The KL Baez Property was acquired from an individual not affiliated with us.  It was acquired for $8,000.00 (USD).

The results of the preliminary exploration work on the KL Baez Property were unsatisfactory.  Accordingly, we concluded to let this mineral claim expire on September 17, 2008.

On October 29, 2008, management and control of the Company changed.  Ms. Patricia Cooke acquired 2,000,000 shares of our stock from Christopher Murphy, our then President and a director.  Ms. Cooke became our President, Chief Executive Officer and sole director.  On November 6, 2008, Preystone Investment Corp.., a Panamanian corporation (“Preystone”), with offices in Panama City, Panama purchased 4,000,000 newly issued shares of our common stock for $100,000.00 (USD).  In January of 2009, Preystone Investment Corp. sold its 4,000,000 shares to 10 investors as “restricted securities” in a private placement.

We are presently operating as a “shell company” in the process of seeking a new business opportunity. We will endeavor to enter into a corporate business combination or acquisition of assets by which we become engaged in an active business venture. There are no present binding arrangements for such a business combination or acquisition of assets.
 
 
4

 
 
We do not presently have sufficient funds to pay our administrative and operating expenses or to finance any potential business acquisitions.  Accordingly, we are dependent upon our ability to raise funds to be able to continue our existence and finance our efforts to seek a business acquisition.

We presently have no employees other than our President and sole director.  If we are able to complete a business acquisition and enter into an active business, we will have to employ personnel with knowledge of and experience in that industry.  We anticipate that we will use outside independent consultants and advisors to assist us in our acquisition efforts.

Item 1A.  Risk Factors.

Our status as a “shell company” without any active business or revenue producing assets increases the risks involved in an investment in our stock. The risk factors involved in such an investment include, but are not limited to, those set out below

OUR AUDITOR HAS EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN.

As set forth in the financial statements and their footnotes, our auditor has expressed substantial doubt as to our ability to continue as a going concern.  Our future is dependent upon our acquisition, development and/or operation of a viable business and the acquisition of sufficient capital to continue our existence and to finance these activities, none of which are assured.

OUR PROPOSED OPERATIONS ARE DEPENDENT UPON ACQUISTION OF A BUSINESS OR ASSETS WHICH CAN BE DEVELOPED INTO A VIABLE ON-GOING BUSINESS AND ACQUIRE THE NECESSARY CAPITAL TO FINANCE OUR ACTIVITIES.

We presently have no potential revenue producing assets and no binding arrangements for the acquisition of any such assets.  Our future operations are dependent upon our ability to acquire a business or assets and develop it or them into a viable business venture.  Since we have no present source of revenue and we anticipate that it will be a significant period of time before we can develop any material revenue even if our proposed activities have good results, we will have to raise significant amounts of capital to finance any proposed acquisition and maintain our operations.  There are no present arrangements or assurance for any capital acquisitions.

THERE IS NO PRESENT MARKET FOR OUR STOCK AND NO ASSURANCE OF ANY FUTURE MARKET WILL DEVELOP.

Our common stock is presently treated as a “grey market stock.”  It is not listed, traded or quoted on any stock exchange, the Over-the-Counter Bulletin Board of the Pink Sheets and there is no market maker for it.  See Item 5. Market for the Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities in Part II following.  Thus, there is essentially no existing market for our common stock or any assurance that a future market will develop.  Any investment in our common stock must be considered as illiquid.
 
 
5

 
 
WE DO NOT HAVE MANAGEMENT TO OPERATE ANY ACQUIRED BUSINESS
 
Our President is our sole officer, director and employee.  We do not have management to operate any business acquired by us, nor any arrangements to acquire such personnel.  Accordingly, if we are able to complete a business operation, it future will be dependent upon our ability to develop a management team.
 
Item 1B.  Unresolved Staff Comments.
 
None.
 
Item 2. Properties.
 
We have no material physical properties or assets.

 Item 3.  Legal Proceedings.
 
We are not involved in material pending legal proceedings as of the date of this Annual Report on Form 10-K.

Item 4.  (Removed and Reserved)
 
PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
 
Our common stock was previously been quoted on the Over-the-Counter Bulletin Board from February 1, 2008 through April 30, 2009.  However, to our knowledge, there have been no trades of our stock on the OTC Bulletin Board or otherwise.  During the fiscal year ending April 30, 2012, our common stock became a “grey stock.”  There is no market maker for our common stock.  It is not listed, traded or quoted on any stock exchange, the Over-the-Counter Bulletin Board or the Pink Sheets. Trades in grey market stocks are reported by broker-dealers to their Self Regulatory Organization (SRO) and the SRO distributes the trade data to market data vendors and financial websites so investors can track price and volume. Since grey market securities are not traded or quoted on an exchange or interdealer quotation system, investor's bids and offers are not collected in a central spot so market transparency is diminished and Best Execution of orders, or any execution at all, is difficult.
 
 
6

 
 
The following table sets forth the high and low bid of the common stock in the Pink Sheets and the Bulletin Board for the periods indicated. The bid price represents prices between dealers, which do not indicate retail markups, markdown or commissions and the bid prices may not represent actual transactions:
 
Quarter Period
 
High
   
Low
 
             
May – June 2008
 
$
0.10
   
$
0.10
 
August – October 2008
 
$
0.10
   
$
0.10
 
November 2008 – January 2009
 
$
0.10
   
$
0.10
 
February 2009 – April 2009
 
$
0.10
   
$
0.10
 

The number of record holders of our common stock at July 19, 2013 was 42.

The holders of our common stock are entitled to receive dividends as may be declared by the Board of Directors out of funds legally available.  We have never had any material earnings and do not presently have any capacity to generate any such earnings.  We have never declared any dividends. We do not anticipate declaring and paying any cash dividends in the foreseeable future.
 
Item 6. Selected Financial Data.

Not applicable to a smaller reporting company.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

As set out in Item 1. above, we are presently operating as a “shell company” in the process of seeking a new business opportunity.  We will endeavor to enter into a corporate business combination or acquisition of assets by which we become engaged in an active business venture.  We are presently concentrating these efforts in the mineral resources industry.  There are no present binding arrangements for such a business combination or acquisition of assets.

We have no present source of revenue and we will have to acquire significant amounts of additional capital to finance our search for and development of a new business opportunity.  Our auditor has expressed substantial doubt as to our ability to continue as a going concern.

We incurred operating expenses in the amount of $11,320 for the fiscal year ended April 30, 2013 as compared to $13,761 for the fiscal year ended April 30, 2012.  Our net loss for the year ended April 30, 2013 was $11,320 compared to $13,761 for the year ended April 30, 2012.  These decreases in expenses and loss were caused mainly by a decrease in management fees and professional fees.
 
 
7

 
 
At April 30, 2013 our assets consisted of cash in the amount of $1,861. At April 30, 2013, our liabilities consisted of accounts payable and accrued liabilities of $9,100, amounts due of $38,750 on convertible notes and advances from a related party of $63,136.
 
Item 7A. Quantitive and Qualitive Disclosures About Market Risk.
 
Not applicable to smaller reporting company.
 
Item 8. Financial Statements and Supplementary Data.
 
Our consolidated financial statements appear immediately following the Signature Page to this Form 10-K beginning at page F-1.
 
Item 9.  Changes in and Disagreements With Accountants on Accounting and Financial  Disclosure.
 
We have made no changes in our independent accountants since our formation.
 
Item 9A.Controls and Procedures.
 
Disclosure Controls and Procedures
 
We maintain “disclosure controls and procedures”, as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer, our principal financial officer and our principal accounting officer, as appropriate, to allow timely decisions regarding required disclosure.
 
As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer, our principal financial officer and our principal accounting officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this annual report on Form 10-K. Based on this evaluation, our management concluded that as of the end of the period covered by this annual report on Form 10-K, our disclosure controls and procedures were effective.
 
Management’s Report on Internal Control over Financial Reporting.
 
Our management, including our principal executive officer, our principal financial officer and our principal accounting officer and our Board of Directors, is responsible for establishing and maintaining a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
 
 
8

 
 
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our internal control over financial reporting as of April 30, 2013. Our management’s evaluation of our internal control over financial reporting was based on the framework in Internal Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.
 
Based on such evaluation, management determined that our internal control over financial reporting was not effective as of April 30, 2013 because the following material weakness in internal control over financial reporting existed as of April 30, 2013.  

(i)  lack of segregation of incompatible duties due to insufficient personnel; and 
(ii) Insufficient Board of Directors representation.

Though no material misstatements have resulted our management has determined that until such time as sufficient representation on our Board of Directors can be achieved the Company’s inability to formulate an audit committee represents a significant risk.
 
A material weakness is a deficiency or a combination of control deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
 
This annual report does not include an attestation report of our company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our company’s independent registered public accounting firm pursuant to temporary rules of the SEC that permit our company to provide only management’s report in this annual report.
 
Limitations on Effectiveness of Controls
 
Our principal executive officer and principal financial officer does not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additional controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
 
 
9

 
 
Changes in Internal Control over Financial Reporting
 
There were no changes in our internal control over financial reporting during the fourth quarter of our fiscal year ended April 30, 2013 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
 
Item 9B. Other Information.

None
 
PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The following table sets forth information regarding the sole director and executive officer of the Company.

Name
 
Age
 
Position
         
J. Francisco Terreforte
 
42
 
President, Chief Executive Officer and Director
 
J. Francisco Terreforte has served as President, Chief Executive Officer and the sole director of the Company since February 8, 2011.    Mr. Terreforte, age 42, Sole Officer and Director, is currently an independent Consultant to several companies, specifically in the mortgage and realty investment sector.  Prior to becoming an independent Consultant, Mr. Terreforte oversaw the Mortgage Administration Division of Central Florida Investments, Inc.  Mr. Terreforte was with Central Florida Investments for eight (8) years.  Mr. Terreforte holds a Bachelor's Degree in Business Administration from the A.G.M - University of Puerto Rico and is fluent in Spanish.

There are no family relationships between any of the directors, officers or significant employees.

The Company has adopted a Code of Business Conduct and Ethics which applies to all directors, officers and employees.  This Code provides, among other things, for written standards designed to deter wrongdoing and to promote:  (i) honest and ethical conduct; (ii) full, complete, timely and understandable disclosure in all reports filed or submitted to the Securities and Exchange Commission and other Company public communications; (iii) compliance with applicable governmental laws, rules and regulations; (iv) prompt internal reporting of violations of the ethics code; and (v) accountability for adherence to the ethics code.  A copy of the Code of Business Conduct and Ethics is filed with our Annual Report on Form 10-K for the fiscal year ended April 30, 2009 as an exhibit.
 
 
10

 
 
The Company has also adopted a “Policy Statement for the Protection of Material, Non-Public and Other Confidential Information and Prevention of Insider Trading and Tipping.”  A copy of this Policy Statement is filed with our Annual Report on Form 10-K for the fiscal year ended April 30, 2009 as an exhibit .

The Company has not adopted any specified procedures by which the security holders of the Company may recommend nominees to the Company’s Board of Directors.

The Company has not established a separately-designated standing audit committee.  The entire Board of Directors acts as the Company’s audit committee.

The Company does not presently have any independent director or director qualified as an audit committee financial expert.

Item 11. Executive Compensation.

The following Summary Compensation Table sets forth the compensation of the names executive officers of the Company for each of the two fiscal years ended April 30, 2013 and 2012.

SUMMARY COMPENSATION TABLE

 
 
Name and Principal Position
 
 
 
Year
 
Salary
($)
   
Bonus
($)
   
Stock
Awards
($)
   
Option
Awards
($)
   
All Other
Compensation
($)
 
                                   
J. Francisco Terreforte
 
2012
 
$
-0-
     
-0-
     
-0-
     
-0-
     
-0-
 
                                             
J. Francisco Terreforte   2013   $ -0-       -0-       -0-       -0-       -0-  

 (1)
Mr. Terreforte has served as President and Chief Executive Officer since February 8, 2011.
 
 
11

 
 
We did not pay any compensation to our director for acting as such.  Mr. Terreforte is presently serving without compensation due to our lack of funds.  If sufficient funds become available, it is anticipated he will be paid a monthly management fee not to exceed $5,650 per month during the fiscal year ending April 30, 2013.

Since we only presently have one director, the Board does not have any formal Compensation Committee.

We do not presently have any employment or consulting agreements with any officer, director or employee.
 
Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth information with respect to the only person known to the Company to be the beneficial owner of more than 5% of any class of the Company’s voting securities:
 
 
 
 
Title of Class
 
 
 
Name and Address of
Beneficial Owner
 
Amount and
Nature of
Beneficial
Ownership
   
 
Percent of
Class
 
                 
Common Stock
 
Patricia Cooke
119-600 Eglinton Avenue East, Suite 409
Toronto, Ontario
Canada M4G 2K2
   
2,000,000
     
15.2
%
 
Item 13.  Certain Relationships and Related Transactions, and Director Independence.

Ms. Cooke, our former sole officer and director, may be deemed to be a “parent” of the Company as such is defined under the Securities Exchange Act of 1934, as amended, by virtue of her position since she had the duty under Delaware corporate law to control and direct the actions of the Company and since she is the only shareholder owning 5% or more of our outstanding stock.

Since May 1, 2007, there has been no transaction to which the Company was a party and in which any officer, director of the Company or any holder of more than 5% of any class of its stock had or is to have a material interest.
 
 
12

 
 
Item 14.  Principal Accounting Fees and Services.

The Board of Directors approved the engagement of K. R, Margetson Ltd., chartered accountant, as our independent accountant to audit our financial statements for the fiscal years ending April 30, 2013, 2012, 2011, 2010, 2009 and our interim statements for 2012-2013.

Our Board of Directors has unanimously approved all audit and non-audit services provided by the independent auditors. The independent accountants and management are required to periodically report to the Board of Directors regarding the extent of services provided by the independent accountants, and the fees for the services performed to date.

Audit Fees

For the fiscal years ended April 30, 2013 and 2012, the aggregate fees billed for services rendered for the audits of the annual financial statements and the review of the financial statements included in the quarterly reports on Form 10-QSB/Form 10-Q and the services provided in connection with the statutory and regulatory filings or engagements for those fiscal years and registration statements filed with the SEC were $6,450 and $6,450, respectively.

Audit-Related Fees

For the fiscal years ended April 30, 2013 and 2012, there were no fees billed for the audit or review of the financial statements that are not reported above under Audit Fees.

Tax Fees

For the fiscal years ended April 30, 2013 and 2012, there were no fees billed for tax services.
 
All Other Fees
 
For the fiscal years ended April 30, 2013 and 2012, there were no fees billed for services other than services described above.
 
PART IV

Item 15.  Exhibits, Financial Statement Schedules.

Exhibit No.
 
Description of Exhibits
3.1*
 
Articles of Incorporation
     
3.2*
 
Bylaws
     
5.1*
 
Legal opinion of Fox Law Offices, PA with consent to use
     
10.1*
 
Mineral property purchase agreement dated February 7, 2007
     
14.1**
 
Code of Business Conduct and Ethics
     
14.2**
 
Policy Statement of Asia Atlantic Resources – Protection of Material, Nonpublic and Other Confidential Information and Prevention of Insider Trading and Tipping
     
31.1***
 
Officers Certifications under Section 302 of the Sarbanes-Oxley Act of 2002*
     
32.1***
 
Certification of Chief Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002.*
_____________________
*Originally filed as an exhibit to our Registration Statement on Form SB-2, dated December 9, 2007.
**Filed with our Annual Report on Form 10-K for the fiscal year ended April 30, 2009.
***Filed herewith.
 
 
13

 

SIGNATURES
 
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
  
ASIA ATLANTIC RESOURCES
 
 
  
  
 
Date:  July 19, 2013
By:
/s/ J. Francisco Terreforte
 
  
  
J. Francisco Terreforte
 
  
  
President, Chief Executive and Financial Officer and Director
 
 
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
Date:  July 19, 2013
By:
/s/ J. Francisco Terreforte
 
  
  
J. Francisco Terreforte
 
  
  
President, Chief Executive and Financial Officer and Director
 
 
 
14

 
 
Part IV

Item 15 – Financial Statements
 
ASIA ATLANTIC RESOURCES
 
(An Exploration Stage Company)
 
April 30, 2013
 
 
15

 
 
K. R. MARGETSON LTD.  Chartered Accountants
#210, 905 West Pender Street
Vancouver BC V6C 1L6
Tel:  604.641.4450
Toll free fax: 1.855.603.3228
 


Report of Independent Registered Public Accounting Firm

To the Shareholders of
Asia Atlantic Resources:
 
We have audited the accompanying balance sheets of Asia Atlantic Resources referred to as the “Company”) as at April 30, 2013 and 2012 and the related statements of operations, stockholders’ equity (deficit) and cash flows the years ended April 30, 2013 and 2012 and for the period from January 22, 2007 (date of inception) to April 30, 2013.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as at April 30 2013 and 2012 and the results of its operations, changes in stockholders’ equity (deficit) and changes in cash flows for the years ended April 30, 2013 and 2012 and for the period from January 22, 2007 (date of inception) to April 30, 2013 in accordance with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company is an exploration stage company and has yet to commence active operations, which raises substantial doubt about its ability to continue as a going concern.  Management’s plans in regard to these matters are also described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ K.R. Margetson Ltd.

Chartered Accountants
 
Vancouver, Canada
July 12, 2013
 
 
F-1

 
 
ASIA ATLANTIC RESOURCES.
(An Exploration Stage Company)
BALANCE SHEETS

   
April 30,
   
April 30,
 
ASSETS
 
2013
   
2012
 
             
Current
           
   Cash and cash equivalents
  $ 1,861     $ 7,781  
                 
Total Assets
  $ 1,861     $ 7,781  
LIABILITIES
               
                 
Current
               
   Accounts payable and accrued liabilities
  $ 9,100     $ 8,700  
   Convertible notes payable – Note 4
    38,750       6,500  
   Advances payable – Note 3
    63,136       -  
   Advances payable to related party – Note 3
    -       63,136  
      110,986       78,336  
                 
Convertible note payable – Note 4
    -       27,250  
                 
Total Liabilities
    110,986       105,586  
                 
Going concern – Note 1
               
                 
STOCKHOLDERS’ DEFICIT
               
                 
Capital Stock- Note 5
               
  Authorized:
               
75,000,000 common shares with a par value of $.001
               
  Issued and outstanding:
               
  13,100,000 common shares
    13,100       13,100  
Additional paid in capital
    154,400       154,400  
Deficit accumulated during the exploration stage
    (276,625 )     (265,305 )
                 
Total Stockholders’ Deficit
    (109,125 )     (97,805 )
                 
Total Liabilities and Stockholders’ Equity Deficit
  $ 1,861     $ 7,781  

See Accompanying Notes
 
 
F-2

 
 
ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
STATEMENT OF OPERATIONS
For the years ended April 30, 2013 and 2012, and
from the period January 22, 2007 (Date of Inception) to April 30, 2013

   
For the year
   
For the year
   
Accumulated for
 
   
ended
   
ended
   
from January 22, 2007
 
   
April 30,
   
April 30,
   
(Date of Inception)
 
   
2013
   
2012
   
to April 30, 2013
 
Expenses  
                 
   Geological, mineral and prospect costs
  $ -     $ -     $ 8,000  
   General and administrative
    1,820       4,411       159,373  
   Incorporation costs
            -       441  
   Professional fees
    9,500       9,350       108,925  
Operating loss for the period
    (11,320 )     (13,761 )     (276,740 )
Interest revenue
                    114  
                         
Net Loss and Comprehensive Loss for the Period
  $ (11,320 )   $ (13,761 )   $ (276,625 )
                         
Basic and fully diluted net loss
                       
   per common share
  $ (0.000 )   $ (0.000 )        
                         
Weighted average common
                       
   shares outstanding
    13,100,000       13,100,000          
 
See Accompanying Notes
 
 
F-3

 

ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)
for the period from January 22, 2007 (Date of Inception) to April 30, 2013

               
Additional
   
Share
             
   
Common Stock
   
Paid-in
   
Subscriptions
   
Accumulated
       
   
Shares
   
Amount
   
Capital
   
Received
   
Deficit
   
Total
 
Balance, January 22, 2007
    -     $ -     $ -     $ -     $ -     $ -  
Shares issued for cash
                                               
  at $.001
    2,000,000        2,000       -       -       -       2,000  
Shares issued for cash
                                               
  at $.005
    5,600,000        5,600        22,400       -       -        28,000  
Net loss and comprehensive loss for the period
    -       -       -       -       (12,072 )     (12,072 )
Balance, April 30, 2007
    7,600,000        7,600       22,400       -       (12,072 )     17,928  
                                                 
Net loss and comprehensive loss for the year
    -       -       -       -       (13,588 )     (13,588  
Balance, April 30, 2008
    7,600,000       7,600       22,400       -       (25,660 )     4,340  
                                                 
Shares issued for cash
                                               
  at $.025
    4,000,000       4,000       96,000       -       -       100,000  
Net loss and comprehensive loss for the year
    -       -       -       -       (61,279 )     (61,279 )
Balance, April 30, 2009
    11,600,000       11,600       118,400       -       (86,939 )     43,061  
                                                 
Share subscriptions received
            -       -       25,000       -       25,000  
Shares issued from
                                               
   subscriptions
    1,000,000       1,000       24,000       (25,000 )     -       -  
Shares issued for cash
                                               
  of $0.025
    500,000       500       12,000       -               12,500  
Net loss and comprehensive loss for the year
    -       -       -       -       (103,153 )     (103,153 )
Balance, April 30, 2010
    13,100,000       13,100       154,400       -       (190,092 )     (22,592 )
                                                 
Net loss and comprehensive loss for the year
    -       -       -       -       (61,452 )     (61,452 )
Balance, April 30, 2011
    13,100,000       13,100       154,400       -       (251,544 )     (84,044 )
                                                 
Net loss and comprehensive loss for the year
    -       -       -       -       (13,761 )     (13,761 )
Balance, April 30, 2012
    13,100,000       13,100       154,400       -       (265,305 )     (97,805 )
                                                 
Net loss and comprehensive loss for the year
    -       -       -       -       (11,320 )     (11,320 )
Balance, April 30, 2013
    13,100,000     $ 13,100     $ 154,400       -     $ (276,625 )   $ (109,125 )

See Accompanying Notes
 
 
F-4

 

ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
STATEMENT OF CASH FLOWS
For the years ended April 30, 2013 and 2012, and
 from the period January 22, 2007 (Date of Inception) to April 30, 2013

   
For the year
   
For the year
   
From January 22, 2007
 
   
ended
   
ended
   
(Date of Inception)
 
   
April 30, 2013
   
April 30, 2012
   
To April 30, 2013
 
                   
Operating Activities
                 
    Net loss for the period
  $ (11,320 )   $ (13,761 )   $ (276,625 )
Cash provided by (used in) changes in operating assets and liabilities
                       
       Accounts payable and accrued liabilities
    400       2,106       9,100  
                         
Net cash provided by (used in) Operating Activities
    (10,920 )     (11,655 )     (267,525 )
                         
Financing Activities
                       
   Advances
    -       -       63,136  
   Convertible note payable
    5,000       17,250       32,250  
   Note payable
    -       -       6,500  
   Common stock issued for cash
     -       -       167,500  
                         
Net cash provided by (used in) Financing Activities
    5,000       17,250       269,386  
                         
Increase in cash and cash equivalents during the period
    (5,920 )     5,595       1,861  
                         
Cash and cash equivalents, beginning of the period
    7,781       2,186        -  
                         
Cash and cash equivalents, end of the period
  $ 1,861     $ 7,781     $ 1,861  
                         
Supplemented disclosure of cash flow
                       
Information:
                       
  Cash paid for:
                       
     Interest
  $ -       -       -  
     Income Taxes
  $ -       -       -  

See Accompanying Notes

 
F-5

 
 
ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2013

Note 1 - Nature and Continuance of Operations

The Company was incorporated in the State of Nevada on January 22, 2007 and is in the exploration stage.  The Company acquired a mineral property located in the Province of British Columbia, Canada, which expired on September 17, 2008.  

The Company has adopted April 30 as its fiscal year end.

These financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next fiscal year.  Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.  At April 30, 2013, the Company had not yet achieved profitable operations, has accumulated losses of $276,625 since its inception. The Company expects to incur further losses in the development of its business, all of which casts substantial doubt about the Company’s ability to continue as a going concern.  The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.  Management anticipates that additional funding will be in the form of equity financing from the sale of common stock.  Management may also seek to obtain short-term loans from the directors of the Company.  There are no current arrangements in place for equity funding or short-term loans.

Note 2 - Summary of Significant Accounting Policies

Basis of presentation and interim reporting

The Company’s financial statements included herein are prepared under the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America

Development Stage Company

The Company is a development stage company as defined in the Financial Accounting Standards Board (“SASB”) Accounting Standards Codification (“ASC”) Topic 205-915, “Development Stage Entities.” 

 
F-6

 
 
ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2013

Note 2 - Summary of Significant Accounting Policies - continued

The Company is still in the developmental stage, devoting substantially all of its present efforts to establish its business and its planned principal operations have not commenced, as only one subsidiary has started to realize some revenues but has not achieved full operations.  All losses accumulated since inception have been considered as part of the Company’s development stage activities.

Fair Value Measurements

The Company follows FASB ASC 820, “Fair Value Measurements and Disclosures,” for all financial instruments and non-financial instruments accounted for at fair value on a recurring basis.  This accounting standard established a single definition of fair value and a framework for measuring fair value, sets out a fair value hierarchy to be used to classify the source of information used in fair value measurement and expands disclosures about fair value measurements required under other accounting pronouncements. It does not change existing guidance as to whether or not an instrument is carried at fair value.  The Company defines fair value as 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, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.  The Company has adopted FASB ASC 825, “Financial Instruments”, which allows companies to choose to measure eligible financial instruments and certain other items at fair value that are not required to be measured at fair value.  The Company has not elected the fair value option for any eligible financial instruments.

Financial Instruments

The carrying values of cash and cash equivalents, accounts payable and accrued liabilities, due to/from related parties and convertible note payable approximate fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.

Revenue Recognition

The Company recognizes revenue when a contract is in place, minerals are delivered to the purchaser and collectability is reasonably assured.

Cash and cash equivalents

The Company considers all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less to be cash equivalents.
 
 
F-7

 
 
ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2013

 Note 2 - Summary of Significant Accounting Policies - continued

Mineral Property Costs

Mineral property acquisition, exploration and development costs are expensed as incurred until such time as economic reserves are quantified.  From that time forward, the Company will capitalize all costs to the extent that future cash flows from mineral reserves equal or exceed the costs deferred.  The deferred costs will be amortized over the recoverable reserves when a property reaches commercial production.  Costs related to site restoration programs will be accrued over the life of the project.  

Environmental Costs

Environmental expenditures that relate to current operations are expensed or capitalized as appropriate.  Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are expensed.  Liabilities are recorded when environmental assessments and/or remedial efforts are probable, and the cost can be reasonably estimated.  Generally, the timing of these accruals coincides with the earlier of:

i)           completion of a feasibility study; or

ii)          the Company’s commitment to a plan of action based on the then known facts.

Basic and Diluted Net Income (Loss) Per Share

The Company computes net loss per share in accordance with FASB ASC Topic 260, "Earnings Per Share".  This topic requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.  Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the year.  Diluted EPS gives effect to all dilutive potential common shares outstanding during the year including stock options, using the treasury stock method, and convertible preferred stock, using the if-converted method.  In computing diluted EPS, the average stock price for the year is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all dilutive potential common shares if their effect is anti dilutive.

Cash and Currency Risks
 
The Company incurs expenditures in Canadian and U.S. dollars. Consequently, some assets and liabilities are exposed to Canadian dollar foreign currency fluctuations.  As at April 30, 2013, there were no amounts denominated in Canadian dollars included in the financial statements. The Company has cash balances at well-known financial institutions.  Balances in U.S. dollars at Canadian institutions are not protected by insurance and are therefore subject to deposit risk.  As at April 30, 2013, all cash and equivalents represented cash in US dollars at American financial institutions.

 
F-8

 
 
ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2013
 
Note 2 - Summary of Significant Accounting Policies - continued

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 revenue and expenses during the reporting period. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates.

Derivative Instruments
 
The Company accounts for derivative instruments according to FASB ASC topic 815. These standards establish accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities.
 
If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.  The Company has not entered into derivatives contracts to hedge existing risks or for speculative purposes.
 
During the year ended April 30, 2009, the Company issued a convertible debt note, which the Company accounts for under FASB ASC topic 815 as an embedded derivative.  Under this standard, the Company has determined that its conversion right provision is not clearly and closely related to the characteristics of the note.  Accordingly, this conversion feature qualifies to be accounted for separately from the debt instrument.  As the conversion is at the discretion of the holder and may only be converted into equity, the conversion feature is recognized as equity and valued at its fair value at inception.

Foreign Currency Translations

The Company's functional currency is US dollars. Foreign currency balances are translated into US dollars as follows:

Monetary assets and liabilities are translated at the period-end exchange rate. Non-monetary assets are translated at the rate of exchange in effect at their acquisition, unless such assets are carried at market or nominal value, in which case they are translated at the period-end exchange rate. Revenue and expense items are translated at the average exchange rate for the period. Foreign exchange gains and losses in the period are included in operations,

 
F-9

 
 
ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2013

Note 2 - Summary of Significant Accounting Policies – continued

Comprehensive Income

The Company has adopted ASU 220 “Reporting Comprehensive Income,” which establishes standards for reporting and display of comprehensive income, its component and accumulated balances.   Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners.

The Company does not have any reconciling items between the net loss presented in the statements of operations and comprehensive loss as defined by ASU 220.

Income Taxes

The Company follows FASB ASC Topic 820, “Income Taxes” which requires the use of the asset and liability method of accounting for income taxes.  Under this method, deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carry forwards and their respective tax bases.  Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled.

Recent Accounting Pronouncements

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. Management does not believe that any pronouncement not yet effective but recently issued would, if adopted, have a material effect on the accompanying financial statements.

Note 3 - Advances payable and related party advances payable

The Company’s former director advanced funds to the Company in the form of cash and unpaid management fees.  There are no repayment terms or interest attached to the advances and no payments have been made since her resignation.  

Note 4 - Convertible Notes Payable

On August 19, 2008, the Company received financing of $6,500 in exchange for a note payable that is non-interest bearing and due on demand. Each $0.005 of the principal outstanding of the note may be converted into one common stock of the Company at the discretion of the note holder.  Should the conversion feature be exercised, the Company would be required to issue 1,300,000 shares in exchange for the note.

 
F-10

 

ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2013

Note 4 - Convertible Notes Payable - continued

On February 15, 2011, the Company entered into a convertible line of credit note, which bears no interest, has a maturity date of December 31, 2013 and is unsecured. The line allows for draws up to $100,000, of which the Company has drawn $32,250.  At April 30, 2013, the Company has $67,750 which can be drawn. It is convertible at the option of the holder at the lesser of 60% of the 3 day prior closing price, $0.01 or the price shares are sold to a third party.

The Company accounts for this financial instrument in accordance with FASB ASC Topic 815, ``Derivatives and Hedging,`` Subtopic 40, “Contracts in Entity`s Own Equity.”  At its inception the conversion feature was recorded separately from the debt instrument and using level 1 inputs the fair value was calculated as $nil.

Note 5 - Capital Stock

On February 12, 2007, the Company issued 2,000,000 common shares for $2,000 in cash to the sole director.

On February 15, 2007, the Company issued 5,600,000 common shares for $28,000 in cash.

On November 6, 2008, the Company issued 4,000,000 commons shares for $100,000 in cash.

On October 13, 2009, the Company received share subscriptions for 500,000 common shares for $12,500 in cash.

On October 22, 2009, the Company received share subscriptions for 500,000 common shares for $12,500 in cash.

On December 29, 2009, the Company issued 1,000,000 common shares in fulfillment of the subscriptions.

On December 29, 2009, the Company issued 500,000 common shares for $12,500 in cash.

There are no shares subject to options, warrants or other agreements as at January 31, 2013.

Note 6 - Mineral Property

On February 9, 2007, the Company purchased a mineral claim in the Province of British Columbia for $8,000.  The claim expired on September 17, 2008.
 
Note 7 - Income Taxes

Potential benefits of income tax losses have not been recognized in these financial statements  because the Company cannot be assured it is more likely-than-not it will utilize the net operating losses carried forward in future years.

 
F-11

 
 
ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2013

Note 7 - Income Taxes – continued

Income tax recovery differs from that which would be expected by applying the effective rates to net income (loss) as follows:
 
               
Cumulative from
 
               
Inception on
 
   
April 30
   
April 30
   
January 22, 2007
 
   
2013
   
2012
   
to April 30, 2013
 
                   
Net income (loss) for the period
  $ (11,320 )   $ (13,761 )   $ (276,625 )
Statutory and effective tax rates
    25.5 %     26.25 %     25.5 %
                         
Income tax expense (recovery at the Effective rate)
  $ (2,887 )     $ (3,612 )   $ (70,539
Effect of permanent differences
     -       -       28  
Effect of temporary differences
    (4 )     (4 )     51  
Effect of change in tax rate
    1,987       4,930       -  
Tax losses carry forward deferred
    904       (1,314 )      70,461  
Corporate income tax expense  (recovery) recognized in the accounts
  $  -     $    -     $  -  

The Company has accumulated net operating losses totaling approximately $276,000 for income tax purposes which expire starting in 2027.  The components of the net deferred tax asset at April 30, 2013 and the statutory tax rate, the effective tax rate and the amount of the valuation allowance are scheduled below:

   
2013
   
2012
 
             
Cumulative net loss for income tax purposes
  $ 276,316     $ 264,981  
                 
Statutory and effective tax rate
    25.5 %     26.25 %
                 
Deferred tax asset
  $ 70,461     $ 69,557  
                 
Valuation allowance
     (70,461 )       (69,557 )
                 
Net deferred tax asset
  $ -     $ -  
 
 
F-12

 
 
ASIA ATLANTIC RESOURCES
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
April 30, 2013
 
Note 8 - Subsequent Events

Management has evaluated subsequent events through the date these financial statements were issued, and determined that there were no other subsequent events or transactions that require recognition or disclosures in the financial statements.
 
 
F-13