UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-K

 

(Mark One)

 

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended December 31, 2016

 

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from_________ to __________

 

 

 

EliteSoft Global Inc.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

 

Delaware 000-55240 47-1208256

 

(STATE OR OTHER JURISDICTION OF (COMMISSION FILE (IRS EMPLOYEE IDENTIFICATION

INCORPORATION OR NO.) NO.)

ORGANIZATION)

 

18582 N.W. Holly St., Unit #202, Beaverton, Oregon 97006-7014, USA

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

 

(503) 830-2918

(ISSUER TELEPHONE NUMBER)

 

Securities registered under Section 12(b) of the Exchange Act:
None.

 

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $0.0001 par value per share
(Title of Class)

 

 

Check whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [   ]    No [ X] 

 

Check whether the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes [   ] No [X] 

 

Check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 [X]  No [   ] 

 

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 [ X ] No [  ]  

 

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this chapter) contained herein, and no disclosure will 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. [X]  

 

Check whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer  [   ]	Accelerated filer  [   ]
Non-accelerated filer [    ]	Smaller reporting company  [X]
(Do not check if a smaller reporting company)

 

 

Check whether the issuer is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ]   No [ X ] 

 

The aggregate market value of the common stock held by non-affiliates of the issuer was $0.0001 on December 31, 2016.

 

As of the filing of this annual statement, there were 12,000,000 shares of common stock, par value $.0001, outstanding.

 

 

 

TABLE OF CONTENTS
		Page
PART I
Item 1.	Business	5
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	9
Item 2.	Properties	9
Item 3.	Legal Proceedings	10
Item 4.	Mine Safety Disclosures	10
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
Item 6.	Selected Financial Data	13
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 8.	Financial Statements and Supplementary Data	17
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	17
Item 9A.	Controls and Procedures	17
Item 9B.	Other Information	19
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	20
Item 11.	Executive Compensation	22
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	23
Item 13.	Certain Relationships and Related Transactions, and Director Independence	23
Item 14.	Principal Accountant Fees and Services	23
PART IV
Item 15.	Exhibits, Financial Statement Schedules	25

 

 

PART I

 

Special Note Regarding Forward-Looking Statements

 

Information included or incorporated by reference in this Annual Report on Form 10-K contains forward-looking statements. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Forward-looking statements may contain the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions, and are subject to numerous known and unknown risks and uncertainties. Additionally, statements relating to implementation of business strategy, future financial performance, acquisition strategies, capital raising transactions, performance of contractual obligations, and similar statements may contain forward-looking statements.  In evaluating such statements, prospective investors and shareholders should carefully review various risks and uncertainties identified in this Report, including the matters set forth under the captions “Risk Factors” and in the Company’s other SEC filings. These risks and uncertainties could cause the Company’s actual results to differ materially from those indicated in the forward-looking statements. The Company disclaims any obligation to update or publicly announce revisions to any forward-looking statements to reflect future events or developments.

 

Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Risk Factors Related to Our Business” below, as well as those discussed elsewhere in this Annual Report on Form 10-K. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. We file reports with the Securities and Exchange Commission (“SEC”). You can read and copy any materials we file with the SEC at the SEC’s Public Reference Room, 100 F. Street, NE, Washington, D.C. 20549. You can obtain additional information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.

 

We disclaim any obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this Annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

 

 

Item 1.   Business

 

General Corporate History

 

ANDES 3, Inc., the Company’s predecessor-in-name, was incorporated in the State of Delaware on June 23, 2014. On February 27, 2015, EliteSoft Asia Bhd Sdn (“Elite Soft Asia”) purchased 10,000,000 shares of the Company’s common stock, which constituted all issued and outstanding shares of the Company. Elite Soft Asia proceeded to vote its shares in approving a change in control and the amendment to its articles of incorporation on March 16, 2015 changing the name of the Company to EliteSoft Global Inc. (referred to herein as the “Company,” “we,” “us” or “our” depending on context). The change of ownership was effected through EliteSoft Asia electing Eugene Wong as the sole director of the Company. Immediately following his election, Mr. Wong accepted the resignation of Mr. Chiang as the Company’s President, Chief Executive Officer, Secretary, Treasurer, and Chairman of the Board. Thereafter, Elite Soft Asia transferred its 10,000,000 shares of the Company’s common stock to three directors, with Mr. Wong receiving 4,000,000 shares, and Cornelius Ee and Khoo Mae Ling receiving 3,000,000 shares each. Elite Soft Asia is a related party and affiliate by virtue of the fact that it owns 2,000,000 shares, or 16.6%, of the Company’s registered common stock as a result of the Assignment Assumption Agreement, discussed below.

 

We are a smaller reporting company under SEC Rule 405 (17 C.F.R. § 230.405) because we have a public float of zero and annual revenues of less than $50 million during the most recently completed fiscal year for which audited financial statements are available. As a smaller reporting company, pursuant to Rule 8-01 of Regulation S-X, the Company is only required to produce financial statements as follows: (a) audited balance sheet as of the end of each of the most recent two fiscal years, or as of a date within 135 days if the issuer has existed for a period of less than one fiscal year, (b) audited statements of income, cash flows and changes in stockholders' equity for each of the two fiscal years preceding the date of the most recent audited balance sheet (or such shorter period as the registrant has been in business), and (c) interim reviewed financial statements for the current period if the filing is more than 135 days after the end of your fiscal year.  Any and all amendments shall include updated interim or audited financial statements if the financial statements in the prior filing are more than 135 days old.

 

We are an information technology (IT) web, systems integration and applications solutions company. We combine leading technology and draw upon our experience as professional IT specialists to create, design, develop and maintain corporate websites, e-commerce, social media strategies, server monitoring and supply computer hardware equipment on a global basis. We market third-party vendor software, IT services, and hardware that deliver new opportunities, greater convenience, and enhanced value to our client's business. We have also established our in-house research and development (R&D) team to focus on e-commerce solutions, mobile payment, and financial services as an increasing effort for our company to provide full life cycle solutions to clients. The company maintains an office in Beaverton, Oregon as its headquarters, and an office in Kuala Lumpur, Malaysia, as its location servicing clients within the Asia-Pacific region.

 

 

Business Developments in Fiscal Year 2016

 

We currently generate revenue by providing web and IT services for several clients. On June 1, 2015, the Company entered into an Assignment Assumption Agreement with Elite Soft Asia (the “Assignment Agreement”). Under the Assignment Agreement, we acquired the NZ Financial Limited Technology Services Agreement (the “NZ Agreement”) from Elite Soft Asia in consideration for 2,000,000 shares of the Company’s restricted common stock. Under the NZ Agreement, we support NZ Financials’ initiatives in developing, designing, and maintaining its e-commerce website, create its corporate image, supply necessary computer hardware equipment, monitor server, and develop social media strategies. In exchange, NZ Financial pays the Company $2,000 per month. The NZ Agreement earned $14,000.00 in gross revenue in fiscal year 2015 under this agreement, and $24,000 in gross revenue in fiscal year 2016.

 

Also on June 1, 2015, the Company entered into a Technology Services Agreement with Youthlite Sdn Bhd (the “Youthlite Agreement”). Youthlite is a natural skin care and cosmetics company based in Malaysia. Under the Youthlite Agreement, we are responsible for the following: (a) Creation and design of corporate images and materials, (b) Design and development of the Youthlite website, (c) Development of e-commerce software for sales transactions, (d) Provide required computer hardware to operate its online business, (e) 24/7 server monitoring, (f) Create social media strategy via Facebook, Twitter, Instagram, (g) Provide video production services for infomercials. In exchange for these services, Youthlite pays the Company $3,963 per month. The Company earned $27,714 in gross revenue in fiscal year 2015 under the Youthlite Agreemen, and $47,556 in gross revenue in fiscal year 2016.

 

On September 1, 2015, the Company entered into an agreement with OD Alliance Sdn Bhd. to provide technical software, development and web maintenance. The agreement term is for two years and carries a contract value of $32,500. Services commenced on October 1, 2015 and will continue through October 1, 2017, subject to renewal with written consent from both parties. Under the agreement, the Company is to be paid $12,500 for website design and development, $2,000 per year for domain hosting, and $2,000 per year for system maintenance. The Company earned $0 in gross revenue in fiscal year 2015 under this agreement, but generated accounts receivable in the amount of $14,500. The Company earned $8,000 in gross revenue under this contract in fiscal year 2016.

 

On October 15, 2015, the Company entered into an agreement with Ashita Communication Sdn Bhd. (“Ashita”) to provide technical software, CRM integration, rebranding, development of web-based automated tracking system, system and web maintenance, and web-based training services. The agreement term is for two years and carries a contract value of $1,453,490. Services commenced on October 15, 2015 and will continue through October 14, 2017, subject to renewal with written consent from both parties. All of the Company’s obligations under this contract have since been completed, providing the Company with $1,162,791 in gross revenue in fiscal year 2016.

 

On October 19, 2015, the Company, entered into an agreement with MPS Telecommunication Sdn Bhd. to provide technical software, development and web maintenance. The agreement term is for two years and carries a contract value of $28,000. Services commenced on October 20, 2015 and will continue through October 19, 2017, subject to renewal with written consent from both parties. The Company earned $6,000 in gross revenue in fiscal year 2016 under this agreement.

 

On July 10, 2016, the Company entered into an agreement with Soon Fai Motor Trading ("Soon Fai") to provide website design and development and web maintenance. The agreement term is for 2 years and carries a contract value of $16,000. Services commenced on July 15, 2016 and will continue through July 15, 2018, subject to renewal with written consent from both parties. The Company earned $4,517 in gross revenue in fiscal year 2016 under this agreement.

On August 15, 2016, the Company entered into an agreement with Mysmartgold Bullion Sdn Bhd ("Mysmartgold") to provide technical software, website design and development and web maintenance. The agreement term is for 2 years and carries a contract value of $33,000. Services commenced on August 20, 2016 and will continue through October 14, 2018, subject to renewal with written consent from both parties. The Company earned $8,061 in gross revenue in fiscal year 2016 under this agreement.

The Company maintains a lean workforce with only part-time IT staff. Therefore, we rely on third-party vendors to supply the labor for the scope of work associated with our contracts. Cornelius Ee is an IT graduate. Therefore, he supervises the entire project to ensure timely completion of work from third-party vendors. However, the actual day-to-day tasks and projects are done almost exclusively by third-party vendors who contract with the Company.

 

 

Our market opportunity is in Asia and in particular, countries such as Singapore, Thailand, Indonesia, Japan, Hong Kong, Korea, and China. We also find that markets in New Zealand and Australia are favorable to our industry as well. Our primary goals are to become the leading IT services company in Asia with a strong focus on the financial sector, e-commerce, business-web-based training and certification.

 

ESG Primary Services

 

ESG integrates customer backend software development with CRM tools to enhance its overall experience with e-commerce and customer database solutions. Allowing ESG to manage backend software to handle internet traffic gives the enterprise a more robust, efficient operational platform that is also scalable and dynamic. Customer feedback is processed through integration of legacy data collection methods including phone, postal mail, OCR, and IVR. ESG aggregates these messages through a single, easily managed and secure solution to manage response action through an organization.

 

ESG develops corporate websites with e-commerce functionality through the deployment of complete end to end solutions. ESG's approach is to develop customizable websites that maintain a professional and effective retail presence with database driven storefronts that is enabled to handle large volumes of internet traffic, and ability to securely manage transactions. From backend, to frontend functionality, ESG develops the entire e-commerce experience in between, including product, payment, shipping and taxation functionality. ESG incorporates shopping cart solutions into its software to allow customers to sell practically anything they desire. Additionally, ESG features compatibility with all PHP 4 coding versions, object oriented languages, and multilingual language support.

 

ESG offers a comprehensive multimedia package solution. The integration of text, photos, animation, narration, music, and interactivity, we create presentations for clients for a memorable experience. Our designers have the ability to create a multimedia presentation on an interactive website, flash introductions, CD presentations, interactive tutorials, and/or, an e-brochure or e-catalog.

 

As the most prominent visual element of a company's products, or services, branding communicates a message to potential customers. ESG has developed a branding department that is central of our customer's brand identity needs. ESG's graphic design team creates logos, images, and identity marks in print media or digital media for brand marketing purposes. ESG believes that brand marketing through corporate identity, logo design, print and digital media, and marketing brochures will enhance customer brand awareness.

 

Customers

 

We currently provide our IT web, systems integration and applications solutions to four companies, as identified above. We seek to provide these services primarily to the Asia-Pacific region in particular, countries such as Singapore, Thailand, Indonesia, Japan, Hong Kong, Korea, and China. We also find that markets in New Zealand and Australia are favorable to our industry as well and have begun marketing our efforts in those markets. Ashita accounted for 95% of our revenue in the fiscal year 2016. The Company has fully performed under the agreement with Ashita, and as such, the agreement has termed out and the Company has collected all payments under the agreement. The Company’s loss of this source of revenue will have an adverse effect on the Company’s ongoing and future business and operations in the event the Company is unable to replace this source of revenue.

 

 

Third Party Products  

 

With the execution of our client agreements, we began integrating systems from Dell, Lenovo, Samsung, Apple, Acer and ASUS. Our business strategy is to implement and integrate third party products into our client's network.

 

Marketing Strategy

 

We plan on launching marketing in the Asia-Pacific region through an online advertising campaign leveraging our experience and utilizing our business contacts in the Asia-Pacific region.

 

Research and Development Activities

 

The Company has limited resources to dedicate exclusively to research and development. The Company has spent less than $5,000 on internal research and development activities. Major contracts have been outsourced to third-party vendors, including OD Alliance and EliteSoft Asia. These vendors provide the Company with necessary consultancy, technical knowledge and content for our contracts. As a result, the Company relies on the third-party vendors in performing its contracts. Mr. Cornelius Ee, the Company’s Vice President of Information Technology, is instrumental in coordinating with and supervising third-party vendors in order to complete work in a timely manner in order to comply with the Company’s contractual obligations.

 

Industry, Competition, and Future Operations

 

The IT web, System Integration and Application Solutions Industry

 

The IT web, systems integration and applications solutions market is a highly fragmented industry. There are numerous companies that have established businesses and command large market share, such as Accenture, BAE Systems, Cognizant Technology, Fujitsu, Hewlett-Packard, IBM, Infosys, Lockheed Martin, Oracle, Tata Consultancy that we compete against. We also compete with Alibaba, eBay, Amazon, Rakuten, Groupon, ASOS, Expedia and other e-commerce platform companies specifically in our e-commerce business in the Asia-Pacific region. Additionally, many of the vendor companies that the industry purchases products from may compete against their clients by offering full life cycle solutions and packages that support compatible software and hardware products, a role that IT web and system integrators normally play, therefore, emerging companies in our industry have taken to a full solution approach that offers clients a robust, 'best of breed' and customized software programming with a higher emphasis on customer service relations. Additionally, in the Asia-Pacific markets, companies offer other options such as managing payroll, and accounting as well as recruitment and human resources on behalf of clients to further differentiate themselves from competitors. According to Transparency Market Research in 2014, the firm believes that the global market for system integration services was valued at $191.36 billion in 2013, and is expected to reach $377.59 billion by 2020, growing at a CAGR (compound annual growth rate) of 10.9% during the period. Their assessment of the industry was that the Asia Pacific region was expected to be the fastest growing regional market for system integration, during the forecasted period. The rapidly growing economies of the Asia-Pacific region and globalization of firms are key drivers in propelling demand for the IT, system integration and services business.

 

Our company has developed a strategy that will encompass a broader approach to traditional IT web and system integration by focusing efforts on the emerging mobile payment industry. Our approach is to offer our clients full mobile payment integration with their IT strategy and developing a competitive mobile solution to their commerce needs. According to McKinsey, a global business consultancy firm, the Asia-Pacific region will account for more than 50% of the global payments growth over the next five years and cashless transactions will increase by more than 20% growth in countries such as Thailand, China, Indonesia and China.

 

 

Competition

 

The mobile payments industry in the Asia-Pacific region is highly competitive. Given the outlook in the Asia-Pacific region, we believe that competition for revenues will intensify. In the mobile payments space, we compete with stand-alone players such as PayPal, Netteller, China Union Pay, AliPay, and BitPay, additionally, we compete with three categories of institutional players, Non-Bank payment companies, Asia-Pacific banks in home markets, and Banks in non-home markets.

 

Non-Bank payment companies are telecom or "telco" companies, that are seeking to expand their existing technologies by offering mobile payment solutions integrated into mobile phones and consumer machines such as ticketing services. Asia-Pacific banks are banks in home markets in Asia such as HSBC, Citi, and Standard Chartered. These banking institutions seek to increase their footprint with clients by offering mobile bank payment solutions in order to capture more revenue.

Banks in non-home markets are banks outside the Asia-Pacific region that offer competitive services with the objective to increase cash management services through either low cost fees or no fee accounts. These banks are generally the least sophisticated members of the current competitive landscape based upon their inexperience in operating within the Asia-Pacific region, however, the amount of financial resources these banks control are formidable.

 

Employees

 

As of December 31, 2016, we employed a total of three people. The company considers its relationship with its employees to be stable, and anticipates growing its workforce.

 

 

Item 1A. Risk Factors.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 1B. Unresolved Staff Comments.

 

None.

 

Item 2. Description of Property.

 

The company maintains an office in Beaverton, Oregon as its headquarters, and an office in Kuala Lumpur, Malaysia, as its location servicing clients within the Asia-Pacific region. Our office in Beaverton is a 1,100 square foot facility owned by our President, Chief Executive Officer, Chairman, and we have secured this space without cost. Our office in Kuala Lumpur is a 2,000 square foot leased facility under a two year lease agreement. Our office currently maintains the following positions; business development manager, admin and accounts manager, human resources executive, web specialist, and full/part time programmers.

 

 

The following table lists our current location. 

 

Location	Address	Size
Beaverton, OR   Kuala Lumpur, Malaysia	18582 HW Holly Street, Unit 202   Unit A-9-4, Northpoint Office Suite, Mid Valley City No 1., Medan Syed Putra Utara Kuala Lumpur, Malaysia 59200	1,100, square feet   2,000 square feet

 

See Note 7 to the financial statements for a description of leases. We do not own any properties. We currently have no policy with respect to investments or interests in real estate, real estate mortgages or securities of, or interests in, persons primarily engaged in real estate activities.

 

Item 3.   Legal Proceedings.

 

There are not presently any material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.

 

Item 4.   Mine Safety Disclosures.

 

Not applicable.

 

 

PART II

 

Item 5.   Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities.

 

Common Stock

 

Our Certificate of Incorporation authorizes the issuance of up to 100,000,000 shares of common stock, par value $.0001 per share (the “Common Stock”). The Company did not have any Common Stock registered pursuant to the Securities Act or the Exchange Act in fiscal year 2016. However, the Company did propose to register 12,000,000 shares of Common Stock held by the Company’s four shareholders on its Registration Statement on Form S-1 (the “Shareholder Shares”). The Registration Statement was effective January 25, 2017. The Shareholder Shares is being offered by selling shareholders of the Company, and as such, the Company does not stand to directly profit from the sale of the Shareholder Shares.

 

The Company’s Common Stock is not listed on a publicly-traded market. As of December 31, 2016, there were four holders of record of the Common Stock. The four holders collectively held 12,000,000 shares of Common Stock that could be sold pursuant to 17 C.F.R. § 230.144 (“Rule 144), however none were sold pursuant to Rule 144 in fiscal year 2016.

 

As of the date of this filing, there are 4 holders of record of the Common Stock.

 

Preferred Stock

 

Our Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock, par value $.0001 per share (the “Preferred Stock”). The Company has not yet issued any of its preferred stock.

 

Dividends

 

We have not paid any dividends on our common stock to date and do not intend to pay dividends prior to the completion of a business combination. The payment of dividends in the future will be contingent upon our revenues and earnings, if any, capital requirements and general financial condition subsequent to completion of a business combination. The payment of any dividends subsequent to a business combination will be within the discretion of our then board of directors. It is the present intention of our board of directors to retain all earnings, if any, for use in our business operations and, accordingly, our board does not anticipate declaring any dividends in the foreseeable future.

 

Securities Authorized for Issuance under Equity Compensation Plans

 

The Company does not have any equity compensation plans or any individual compensation arrangements with respect to its common stock or preferred stock. The issuance of any of our common or preferred stock is within the discretion of our Board of Directors, which has the power to issue any or all of our authorized but unissued shares without stockholder approval.

 

 

Recent Sales of Unregistered Securities

 

On June 23, 2014, the Company offered and sold 10,000,000 shares of Common Stock to Richard Chiang, its sole officer and director, in exchange for incorporation fees and annual resident agent fees in the State of Delaware, and developing our business concept and plan. The Company sold these shares of Common Stock under the exemption from registration provided by Section 4(2) of the Securities Act.

 

On February 20, 2015, the sole officer and director of the Company, Richard Chiang, entered into a Share Purchase Agreement (the "SPA") pursuant to which he entered into an agreement to sell an aggregate of 10,000,000 shares of his shares of the Company’s common stock to EliteSoft Asia Sdn Bhd. These shares represent 100% of the Company’s issued and outstanding common stock. Effective upon the closing date of the Share Purchase Agreement, February 27, 2015, Richard Chiang executed the agreement, resigned from his positions, and owned no shares of the Company’s stock and EliteSoft Asia Sdn Bhd was the majority stockholder of the Company. Effective on the same date and following the execution of the SPA, EliteSoft Asia Sdn Bhd elected Eugene Wong, as a director of the Company and transferred its shares to the officers and directors of the Company.

 

We relied upon Section 4(2) of the Securities Act of 1933, as amended for the above issuances. We believed that Section 4(2) was available because:

 

	•	None of these issuances involved underwriters, underwriting discounts or commissions;
	•	We placed restrictive legends on all certificates issued;
	•	No sales were made by general solicitation or advertising;
	•	Sales were made only to accredited investors

On May 1, 2015, the Company entered into a six-month consulting agreement with Tech Associates, Inc. (“Tech”), an entity owned by Richard Chiang. As part of the total consideration paid, the Company issued 250,000 shares of restricted common stock on October 1, 2015 to Tech. However, on March 23, 2016, the Company and Tech entered into a Mutual Release Agreement, releasing any and all further obligations by the Company and/or Tech under the Consulting Agreement. Tech requested the Company cancel the 250,000 shares issued to Tech. The Company granted Tech’s request. 

 

In connection with the above transactions, we provided the following to all investors:

 

	•	Access to all our books and records.
	•	Access to all material contracts and documents relating to our operations.
	•	The opportunity to obtain any additional information, to the extent we possessed such information, necessary to verify the accuracy of the information to which the investors were given access.

 

The Company’s Board of Directors has the power to issue any or all of the authorized but unissued Common Stock without stockholder approval. The Company currently has no commitments to issue any shares of common stock. However, the Company will, in all likelihood, issue a substantial number of additional shares in connection with a business combination. Since the Company expects to issue additional shares of common stock in connection with a business combination, existing stockholders of the Company may experience substantial dilution in their shares. However, it is impossible to predict whether a business combination will ultimately result in dilution to existing shareholders. If the target has a relatively weak balance sheet, a business combination may result in significant dilution. If a target has a relatively strong balance sheet, there may be little or no dilution.

 

Issuer Purchases of Equity Securities

 

None.

 

Item 6.  Selected Financial Data

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

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

 

We are an information technology (IT) web, systems integration and applications solutions company. We combine leading technology and draw upon our experience as professional IT specialists to create, design, develop and maintain corporate websites, e-commerce, social media strategies, server monitoring and supply computer hardware equipment on a global basis. We work to achieve this mission by using technology that is scalable, off-the-shelf, customizable, and communicates a clear message to our clients target market. We market third-party vendor software, IT services, and hardware that deliver new opportunities, greater convenience, and enhanced value to our client's business. We have also established our in-house research and development (R&D) team to focus on ecommerce solutions, mobile payment, and financial services as an increasing effort for our company to provide full life cycle solutions to clients. The company maintains an office in Kuala Lumpur, Malaysia, as its primary business focus is obtaining and servicing clients within the Asia-Pacific region.

 

Overview

 

The Company was organized as a vehicle to investigate and, if such investigation warrants, acquire a target company or business seeking the perceived advantages of being a publicly held corporation. Our principal business objective for the next 12 months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. The Company will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.

 

During 2016, the Company provided services to seven customers pursuant to applicable service agreements. The Company recognized revenue in the amount of $1,260,925 associated with services provided to these clients.

 

 

During the next 12 months we anticipate incurring costs related to:

 

(i)       filing of Exchange Act reports, and

 

(ii)       investigating, analyzing and consummating an acquisition.

 

We anticipate that these costs may be in the range of eight to nine thousand dollars, and that we will be able to meet these costs as necessary, to be loaned to or invested in us by our stockholders, management or other investors. We anticipate allocating the entire amount towards the filing of Exchange Act reports.

 

The Company may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.

 

Our management has not had any preliminary contact or discussions with any representative of any other entity regarding a business combination with us. Any target business that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.

 

Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing, and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.

 

The Company anticipates that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking even the limited additional capital that we will have and/or the perceived benefits of becoming a publicly traded corporation. Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.

 

 

Fiscal Year

 

Our fiscal year ends on December 31.

 

Results of Operations

 

Sources of Revenues. The Company derives its revenues primarily from providing web and IT services. Web and IT services revenues consist of fees from web design, software development, domain and hosting, and maintenance and other services. The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered, the price is fixed and determinable and collectability is reasonably assured. The Company's service arrangements are generally non-cancelable and do not provide for refunds to customers in the event of cancellations. The Company records revenues net of sales taxes. Revenues from web design, software development are generally recognized after the projects are completed and when delivery is made or title and risk of loss otherwise transfers to the customer, and the collection is reasonably assured. Revenues from IT consulting services, domain and hosting, and maintenance services are generally recognized on a straight-line basis over the length of the contract.

 

The Company also enters into arrangements with multiple deliverables that generally include web design and software development, domain and hosting, and maintenance and other services, with the term ranging from one month to two years. The Company analyzes its agreements to determine whether the elements can be separated and accounted for individually or as a single unit of accounting in accordance with the Financial Accounting Standards Board's (the “FASB”) Accounting Standards Codification (“ASC”) 605-25, “Revenue Arrangements with Multiple Deliverables,” and Staff Accounting Bulletin (“SAB”) 104, “Revenue Recognition”. Allocation of revenue to individual elements that qualify for separate accounting is based on the element’s fair value in accordance with ASC 605 and related revenues are recognized pursuant to the criteria described above. During the year ended December 31, 2016, in one of the arrangements that contain multiple deliverables, the Company acted as an agent in the transaction. As the agent, it records revenues on a net basis. Customer payments received in advance of the performance of services are recorded as deferred revenues in the balance sheets, and are recognized as revenue when the web and IT services are rendered.

 

As of December 31, 2016, we had one customer whom individually accounted for over 90% of our revenues during 2016. We expect revenues to decrease for the next several quarters, primarily due to the completion of the Ashita contract, as discussed above. However, obtaining new clients may increase revenues. The Company is working diligently to obtain additional customers. Net revenue for the twelve months ended December 31, 2016 was $1,260,925 as compared to $71,241 for the twelve months ended December 31, 2015. The increase in net revenue was primarily due to our completion of the agreement with Ashita.

 

Cost of Revenues. Cost of revenues includes all costs associated with the providing website development and IT services for its clients and primarily consists of subcontracted services. We expect Cost of Revenues as a percentage of total revenues to increase for the next several quarters. Cost of revenues for the twelve months ended December 31, 2016 was $1,104,648, as compared to $22,600 the twelve months ended December 31, 2015. This increase in costs was primarily attributable to the outsourcing of major scope of works of the Ashita’s contract to a couple of third party vendors.

 

 

General and Administrative Expenses. General and Administrative expenses consist of salaries and related expenses, including stock-based compensation, and stock issued for the assumption of a service contract, and professional fees, including legal and accounting costs. We expect that in the future, general and administrative expenses will increase in absolute dollars as we invest in our infrastructure and we incur additional employee related costs, professional fees and insurance costs related to the growth of our business and international expansion. We expect general and administrative expenses as a percentage of total revenues to increase for the next several quarters. Total general and administrative expenses were $104,847 for the twelve months ended December 31, 2016, as compared to $80,567 for the twelve months ended December 31, 2015. This increase was primarily attributable to stock-based compensation, stock issued for the assumption of a service contract, and professional fees.

 

Liquidity and Capital Resources

 

As of December 31, 2016, our principal source of liquidity was cash and cash equivalents totaling $261,905.

Net cash provided by operating activities was $61,531 during 2016 and $150,374 for the twelve months ended December 31, 2015. Cash provided by operating activities during 2016 was affected by the amount of net loss adjusted for non-cash expense items such as the expense associated with stock-based awards and stock issued for the assumption of a major service contract; the timing of collections from our customers, and changes in working capital accounts. Net cash provided by operating activities during 2016 decreased by $88,843 over the same period a year ago primarily due to increase in accounts payable and accrued liabilities and offset by the recognition of deferred revenue during 2016.

 

Our working capital accounts consist of cash and accounts receivables assets. Claims against working capital include accounts payable and accrued expenses, amounts due to related parties and income tax payable. Our working capital may be impacted by factors in future periods, certain amounts and timing of which are seasonal, such as billings to customers for support services and the subsequent collection of those billings. The Company had working capital of $57,890 and working capital deficit of $13,540 as of December 31, 2016 and 2015.

 

Net cash provided by financing activities was $nil during 2016 and $50,000 during the same period a year ago. During the year ended December 31, 2015, the Company received proceeds of $50,000 from issuance of a note payable to related party.

 

Our cash and cash equivalents are comprised primarily of money market funds.

 

Off-Balance Sheet Arrangements

 

We have not entered into any off-balance sheet arrangements or contractual commitments 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 and would be considered material to investors.

 

For an unlimited period of time additional funds will be contributed from existing stockholders, including Swee Seong "Eugene" Wong, our Chief Executive Officer, and Chairman of the Board of Directors, or another source, in the form of a loan. There can be no assurances that any loan obtained by another source will be on favorable terms, if at all.

 

 

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

 

Item 8.   Financial Statements and Supplementary Data.

 

Please see the financial statements beginning on page F-1 located in this annual report on Form 10-K and incorporated herein by reference.

 

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

 

On May 5, 2016, the Board of Directors of the Company notified MaloneBailey, LLP (“MB”) that it had determined to dismiss MB as the Company’s independent registered public accounting firm, effective as of that same date. On and effective as of that same date, the Company entered into an engagement letter with Yichien Yeh, CPA (“YY”), approved by the Board of Directors, and engaged YY as the Company’s independent registered public accounting firm. MB’s reports on the Company’s financial statements for the year ended December 31, 2015 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles other than to state that there is substantial doubt as to the ability of the Company to continue as a going concern. Similarly, the Company’s independent registered public accounting firm for the year ended December 31, 2014 – Anton & Chia, LLP (“A&C”), contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.  

During the Company’s most recent fiscal year and the subsequent interim period preceding MB’s dismissal, there were: (i) no “disagreements” (within the meaning of Item 304(a) of Regulation S-K) with MB on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of MB, would have caused it to make reference to the subject matter of the disagreements in its reports on the financial statements of the Company; and (ii) no “reportable events” (as such term is defined in Item 304(a)(1)(v) of Regulation S-K).

There are not and have not been any disagreements between the Company and its accountants on any matter of accounting principles, practices or financial statement disclosure.

 

Item 9A. Controls and Procedures.

 

The Company's Chief Financial Officer – Khoo Mae Ling, and Chief Executive Officer – Eugene Wong, are responsible for establishing and maintaining disclosure controls and procedures for the Company.

 

Evaluation of Disclosure Controls and Procedures

For purposes of this Item 9A., the term disclosure controls and procedures means controls and other procedures of the Company (i) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (15 U.S.C. 78a et seq. and hereinafter the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “Commission”), and (ii) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our disclosure controls and procedures do not yet comply with the requirements in (i) and (ii) above.

On December 31, 2016, Eugene Wong and Mae Ling Khoo reviewed the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) as of the end of the period covered by this report and has concluded that (i) the Company’s disclosure controls and procedures are not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Commission due to material weaknesses identified. The material weaknesses identified relate to the lack of proper segregation of duties and the lack of sufficient qualified accounting and other finance personnel with an appropriate level of U.S. GAAP knowledge and experience.

Report of Management on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes in accordance with accounting principles generally accepted in the United States of America. Internal control over financial reporting includes maintaining records that in reasonable detail accurately and fairly reflect our transactions; providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements; providing reasonable assurance that receipts and expenditures of Company assets are made in accordance with management authorization; and providing reasonable assurance that unauthorized acquisition, use or disposition of Company assets that could have a material effect on our financial statements would be prevented or detected on a timely basis. Because of its inherent limitations, our internal control over financial reporting does not provide assurance that a misstatement of our financial statements would be prevented or detected and is not effective.

On December 31, 2016, management conducted an evaluation of the effectiveness of our internal control over financial reporting and found it to be not effective subsequent to filing our Annual Report on Form 10-K for the year ended December 31, 2016 with the Commission. Management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management has concluded that the Company’s internal controls over financial reporting are not effective. The material weaknesses identified relate to the lack of proper segregation of duties and the lack of sufficient qualified accounting and other finance personnel with an appropriate level of U.S. GAAP knowledge and experience. As we obtain additional funding and employ additional personnel, we will implement programs recommended by the Treadway Commission to remediate the material weaknesses.

 

Our independent public accountant, Yichien Yeh, CPA (“YY”) has not conducted an audit of our controls and procedures regarding internal control over financial reporting. Consequently, YY expresses no opinion with regards to the effectiveness or implementation of our controls and procedures with regards to internal control over financial reporting.

 

Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with our evaluation of these controls as of the end of the fiscal year, December 31, 2016 as covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls 

The Company's management does not expect that its disclosure controls or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. 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. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the 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 simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or management override of the controls. The design of any system of controls is based in part on 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. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

 

Item 9B. Other Information.

 

Not applicable.

 

 

PART III

 

Item 10. Directors, Executive Officers and Corporate Governance

 

A. Identification of Directors and Officers. The current officers and directors will serve for one year or until their respective successors are elected and qualified. They are:

Name		Age		Position(s)
Eugene Wong		53		President, Chief Executive Officer, Chairman of the Board of Directors,
Khoo Mae Ling		44		Chief Financial Officer, Secretary and Director
Cornelius Ee		29		Vice President, Information Technology and Director
Finny Fung Lin Chu		54		Assistant Secretary

 

Biographical Information for Eugene Wong

 

Eugene Wong, President, Chief Executive Officer and Chairman of the Board of Directors

 

Mr. Wong began his career with Northwestern Mutual Life and throughout his career, he received numerous awards and certifications in the insurance industry. He has extensive experience in the banking industry, unit trust, insurance, and working with publicly-listed and multi-national companies. He has obtained numerous licenses and completed the Certified Financial Planner conversion program in 2001. Mr. Wong served as an executive director in Fitters Diversified Berhad from 1994 to 2010, a publicly-traded company listed on the Kuala Lumpur Stock Exchange. He recently received the Oxcell fellowship from the Oxford Centre for Excellence in the United Kingdom in 2012 and became a panel facilitator for Oxcell. Mr. Wong graduated from Portland State University in Portland, Oregon with a B.Sc. Business Administration and post graduate certificate in International Business in 1990.

 

Biographical Information for Khoo Mae Ling

 

Khoo Mae Ling, Chief Financial Officer, Secretary and Director

 

Ms. Khoo has been the Corporate Affairs Manager for EliteSoft Asia since 2014. She began her career as a litigation lawyer since 1998 and has expanded her field of practice into real estate law in 1998. She was a partner with Wang & SB Wong from 2007 to 2014 where she worked closely with realtors, banks and developers. Ms. Khoo graduated from the University of Glamorgan, in Wales, the United Kingdom in 1994 with a bachelors of law (honors) and obtained her Certificate of Legal Practice in 1996. She was called to the Bar in the Kuala Lumpur High Court in 1998.

 

 

Biographical Information for Cornelius Ee

 

Cornelius Ee, Vice President, Information Technology and Director

 

Mr. Ee began his career in 2008 as a director for Getbyte Solutions. He remained a director until 2012. He became a marketing and sales executive for YTT Motorsports in 2013 and from 2014 to present, he has been the Director of Information Technology for EliteSoft Asia Sdn Bhd. Mr. Ee graduated from the University of Nottingham (Malaysia Campus) in 2011 with a bachelor's degree in Computer Science.

 

Biographical Information for Finny Fung Lin Chu

 

Finny Fung Lin Chu, Assistant Secretary

 

Ms. Chu, who was recently appointed to the Assistant Secretary position, has significant experience in the financial sector. Ms. Chu is employed by Bank of the West as a Financial Service Representative, she was formerly a sales/products consultant for L'Occitane En Provence. Ms. Chu Attended Executive Institute of Hair Design from 1981-1982 and graduated with a diploma and State License. She attended Portland State University in 1983.

 

B. Significant Employees.

 

As of the date hereof, the Company has no significant employees.

 

C. Family Relationships.

 

Ms. Chu is the wife of Eugene Wong, our President, Chief Executive Officer and Chairman of the Board of Directors.

 

D. Involvement in Certain Legal Proceedings.

 

There have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any director, executive officer, promoter or control person of Registrant during the past five years.

 

Code of Ethics

 

We have not adopted a Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions in that our sole officer and director serve in these capacities. The Company anticipates it will adopt a Code of Ethics as the Company continues to grow in the coming year.

 

Nominating Committee

 

We have not adopted any procedures by which security holders may recommend nominees to our Board of Directors.

 

 

Audit Committee

 

The Board of Directors acts as the audit committee. The Company does not have a qualified financial expert at this time because it has not been able to hire a qualified candidate. Further, the Company believes that it has inadequate financial resources at this time to hire such an expert. The Company intends to continue to search for a qualified individual for hire.

 

Item 11.   Executive Compensation.

 

Our officers and directors do not receive any compensation for services rendered to the Company since inception, have not received such compensation in the past, and are not accruing any compensation pursuant to any agreement with the Company. No remuneration of any nature has been paid for or on account of services rendered by a director in such capacity. Our officers and directors intend to devote no more than a few hours per week to our affairs.

 

Our officers and directors will not receive any finder’s fee, either directly or indirectly, as a result of any efforts to implement our business plan outlined herein.

 

It is possible that, after we successfully consummates a business combination with an unaffiliated entity, that entity may desire to employ or retain one or a number of members of our management for the purposes of providing services to the surviving entity. However, we have adopted a policy whereby the offer of any post-transaction employment to members of management will not be a consideration in our decision whether to undertake any proposed transaction.

 

No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted for the benefit of its employees.

 

There are no understandings or agreements regarding compensation our management will receive after a business combination that is required to be included in this table, or otherwise.

 

Summary Compensation Table

 

Name and Principle Position	Year	Salary	Bonus	Stock Awards	Option Awards	Nonequity Incentive Plan Compensation	Nonqualified Deferred Compensation Earnings	All Other Compensation	Total
Eugene Wong (PEO)	2016	$0	$0	$0	$0	$0	$0	$0	$0
Khoo Mae Ling (PFO)	2016	$0	$0	$0	$0	$0	$0	$0	$0
Cornelius Ee	2016	$0	$0	$0	$0	$0	$0	$0	$0

 

 

Outstanding Equity Awards at Fiscal Year-End

 

Name	Option awards					Stock awards
	Number of securities underlying unexercised options  (#) exercisable	Number of securities  underlying  unexercised  options  (#) unexercisable	Equity  incentive  plan awards: Number of  securities  underlying  unexercised unearned  options  (#)	Option  exercise price  ($)	Option expiration date	Number of shares or units of stock that have not vested  (#)	Market value of shares of units of stock that have not vested ($)	Equity  incentive plan awards: Number of  unearned shares, units or other rights that have not vested  (#)	Equity  incentive plan awards: Market or payout value of  unearned shares, units or other rights that have not vested  ($)
Eugene Wong (PEO)	0	0	0	0	0	0	0	0	0
Khoo Mae Ling (PFO)	0	0	0	0	0	0	0	0	0
Cornelius Ee	0	0	0	0	0	0	0	0	0

 

 

Director Compensation

 

Name	Fees earned or paid in cash  ($)	Stock awards ($)	Option awards  ($)	Non-equity incentive plan compensation ($)	Nonqualified deferred  compensation earnings  ($)	All other compensation ($)	Total ($)
Eugene Wong	$0	$0	$0	$0	$0	$0	$0
Khoo Mae Ling	$0	$0	$0	$0	$0	$0	$0
Cornelius Ee	$0	$0	$0	$0	$0	$0	$0

 

Director Compensation

 

We do not currently pay any cash fees to our directors, nor do we pay directors’ expenses in attending board meetings.

 

Employment Agreements

 

The Company is not a party to any employment agreements.

 

 

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

 

(a) Security ownership of certain beneficial owners.

 

The following table sets forth, as of April 11, 2016, the number of shares of Common Stock owned of record and beneficially by executive officers, directors and persons who hold 5% or more of the outstanding Common Stock of the Company. Also included are the shares held by all executive officers and directors as a group.

 

Name and Address		Amount and Nature of Beneficial Ownership		Percentage of Class(1)
Eugene Wong		4,000,000		34%
Khoo Mae Ling		3,000,000		25%
Cornelius Ee		3,000,000		25%
All Officers and Directors as a group (3 persons)		10,000,000		84%
EliteSoft Asia Sdn Bhd		2,000,000		16%
All outstanding		12,000,000		100%

(1) The above percentages are based on 12,000,000 shares of common stock outstanding as of March 30, 2017.

 

Item 13. Certain Relationships and Related Transactions.

 

Except as otherwise indicated herein, there have been no related party transactions, or any other transactions or relationships required to be disclosed pursuant to Item 404 of Regulation S-K.

 

Item 14.  Principal Accounting Fees and Services.

 

Yinchien Yeh, CPA is the Company’s independent registered public accounting firm. Set below are aggregate fees billed by Yinchien Yeh, CPA for professional services rendered for the year ended December 31, 2016.

 

Audit Fees

 

The fees for the audit services billed and to be billed by Malone-Bailey, LLP for the year ended December 31, 2016 amounted to $18,400. The fees for the audit services billed and to be billed by Anton & Chia, LLP for the year ended in December 31, 2016 amounted to $3,500. The fees for the audit services billed and to be billed Yinchien Yeh, CPA for the year ended December 31, 2016 amounted to $6,000.

 

Audit-Related Fees

 

None.

 

 

Tax Fees

 

There were no fees billed by Malone-Bailey, LLP, Anton & Chia, LLP, or Yichien Yeh, CPA for professional services for tax compliance, tax advice, and tax planning for 2016.

 

All Other Fees

 

There were no fees billed by Malone-Bailey, LLP, Anton & Chia, LLP, or Yichien Yeh, CPA for other products and services for 2016.

 

Audit Committee’s Pre-Approval Process

 

The Board of Directors acts as the audit committee of the Company, and accordingly, all services are approved by all the members of the Board of Directors.

 

 

 Item 15. Exhibits, Financial Statement Schedules.

 

(a)

Exhibits:

 

			Incorporated by reference
Exhibit	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
3.1	Certificate of Incorporation		10-12G		3.1	7/7/2014
3.2	By-Laws		10-12G		3.2	7/7/2014
4.1	Specimen Stock Certificate		10-12G		4.1	7/7/2014
99.1	Share Purchase Agreement		8-K		99.1	3/5/2015
31	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	X
32	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	X
101.INS	XBRL Instance Document	X
101.SCH	XBRL Taxonomy Extension Schema Document	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Definition	X

 

(b) The following documents are filed as part of the report:

 

1. Financial Statements: Balance Sheet, Statement of Operations, Statement of Stockholder’s Equity, Statement of Cash Flows, and Notes to Financial Statements.

 

We are an inactive entity as defined by Section 3-11 of Regulation S-X. Accordingly, the financial statements required for purposes of reports pursuant to the Securities Exchange Act of 1934 are unaudited.

 

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

EliteSoft Global, Inc.

 

Dated: March 30, 2017

	By: /s/ Eugene Wong Eugene Wong, Chief Executive Officer (Principal Executive Officer) and Chairman of the Board of Directors   By: /s/ Khoo Mae Ling Khoo Mae Ling, Chief Financial Officer (Principal Financial Officer), Secretary and Director

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

 

Name		Title		Date
By:  /s/ Eugene Wong Eugene Wong		Chief Executive Officer (Principal Executive Officer) and Chairman  of the Board of Directors		March 30, 2016
By:  /s/ Khoo Mae Ling Khoo Mae Ling		Chief Financial Officer (Principal Financial Officer), Secretary and Director		March 30, 2016

 

 

 

 

EliteSoft Global, Inc.
(FKA ANDES 3 Inc.)

FINANCIAL STATEMENTS

As of December 31, 2016 and 2015

And For the Year Ended December 31, 2016 and 2015

 

 

 

Contents

Financial Statements	PAGE
Report of Independent Registered Public Accounting Firm	F-1
Balance Sheets as of December 31, 2016 and 2015	F-3
Statements of Operations for the Years Ended December 31, 2016 and 2015	F-4
Statement of Changes in Stockholders’ Equity (Deficit) for the Years Ended December 31, 2016 and 2015	F-5
Statements of Cash Flows for the Years Ended December 31, 2016 and 2015	F-6
Notes to Financial Statements	F-7

 

 

Yichien Yeh, CPA

21738 51stAVENUE– OAKLAND GARDENS, NY 11364 – TEL (646) 243-0425 – FAX (646) 389-0987

 

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors and Stockholders of

EliteSoft Global Inc.

 

We have audited the accompanying balance sheets of EliteSoft Global Inc. as of December 31, 2016, and the related statement of operations, stockholders’ equity, and cash flows for each of the year ended December 31, 2016. EliteSoft Global Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits 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. Our audit included 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 examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated 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 EliteSoft Global Inc. as of December 31, 2016, and the results of operations and cash flows for the year ended December 31, 2016 in conformity 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 3 to the financial statements, The Company is still in development stage and has not created sufficient revenue to cover any operating losses it may incur, which raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans concerning this matter are also described in Note 3. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

 

Yichien Yeh, CPA Oakland Gardens, New York March 28, 2017

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors and Shareholders of EliteSoft Global, Inc.,

 

We have audited the accompanying balance sheet of Elitesoft Global, Inc. (the “Company”) as of December 31, 2015, and the related statements of operations, changes in stockholders’ equity (deficit), and cash flows for the year then ended. 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 audit.

 

We conducted our audit 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. Our audit included 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 examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides 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 EliteSoft Global, Inc. as of December 31, 2015, and the results of its operations and its cash flows for the year then ended, in conformity 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 2, the Company has incurred recurring losses since inception, which raises substantial doubt as to the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/MaloneBailey,LLP www.malonebailey.com Houston, Texas

April 14, 2016

 

 

 

 

EliteSoft Global Inc. Balance Sheets
		December 31,				December 31,
		2016				2015
ASSETS
Current Assets:
Cash		$	261,905			$	200,374
Accounts receivable. net			54,415				40,226
Prepaid expense			–				1,000
Total Assets		$	316,320			$	241,600
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued liabilities		$	118,363			$	14,729
Accounts payable and accrued expenses – related party			82,790				10,000
Deferred revenue			1,722				150,000
Due to related parties			53,331				53,331
Income tax payable			2,224				–
Total Liabilities			258,430				228,060
Stockholders' Equity:
Preferred stock, $.0001 par value, 5,000,000
shares authorized; none issued and outstanding			–				–
Common stock $.0001 par value, 100,000,000
shares authorized; 12,000,000 and 12,250,000 shares
issued and outstanding at December 30, 2016 and 2015, respectively			1,200				1,225
Additional paid-in capital			44,085				49,060
Retained earnings (accumulated deficit)			12,605				(36,745	)
Total Stockholders' Equity			57,890				13,540
Total Liabilities and Stockholders' Equity		$	316,320			$	241,600

 

 

The accompanying notes are an integral part of these financial statements.

 

 

 

  

EliteSoft Global Inc. Statements of Operations
																Year Ended December 31,
																2016			2015
Revenue															$	1,260,925		$	71,241
Cost of revenues																1,104,648			22,600
Gross Profit																156,277			48,641
General and administrative expenses																(104,847)			(80,567)
Income (loss) from operations																51,430			(31,926)
Other income:
		Interest income														144			9
Net income (loss) before income tax																51,574			(31,917)
Income tax expense																(2,224)			–
Net income (loss)															$	49,350		$	(31,917)
Basic & diluted income (loss) per common share															$	0.00		$	(0.00)
Basic & diluted weighted average common shares outstanding																12,056,694			11,229,452

 

The accompanying notes are an integral part of these financial statements.

 

 

 

EliteSoft Global Inc. Statements of Stockholders’ Equity (Deficit) For the Years Ended December 31, 2016 and 2015
				Additional		Retained Earnings		Total
	Common Stock			Paid-in		(Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit)		Equity (Deficit)
Balance, December 31, 2014	10,000,000	$	1,000	$	1,000	$	(4,828)	$	(2,828)
Stock-based compensation	250,000		25		4,975		–		5,000
Stock issued for assumption of service contract	2,000,000		200		43,085		–		43,285
Net loss	–		–		–		(31,917)		(31,917)
Balance, December 31, 2015	12,250,000		1,225		49,060		(36,745)		13,540
Cancellation of stock-based compensation	(250,000)		(25)		(4,975)		–		(5,000)
Net income	–		–		–		49,350		49,350
Balance, December 31, 2016	12,000,000	$	1,200	$	44,085	$	12,605	$	57,890

 

The accompanying notes are an integral part of these financial statements.

 

 

EliteSoft Global Inc. Statements of Cash Flows
		Year Ended December 31,
		2016				2015
Cash Flows from Operating Activities:
Net income (loss)		$	49,350			$	(31,917	)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Stock issued for assumption of service contract			–				43,285
Stock-based compensation (cancellation)			(5,000	)			5,000
Changes in operating assets and liabilities that (used)
provided cash:
Accounts receivable			(14,189	)			(40,226	)
Prepaid expenses			1,000				(1,000	)
Accounts payable and accrued liabilities			103,634				13,049
Accounts payable and accrued liabilities – related party			72,790				10,000
Deferred revenue			(148,278	)			150,000
Due to related parties			–				2,183
Income tax payable			2,224				–
Net Cash Provided by Operating Activities			61,531				150,374
Cash Flows from Financing Activities:
Proceeds from note payable to related party			–				50,000
Net Cash Provided by Financing Activities			–				50,000
Net Increase in Cash and Cash Equivalents			61,531				200,374
Cash and Cash Equivalents, Beginning of Year			200,374				–
Cash and Cash Equivalents, End of Year		$	261,905			$	200,374
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest		$	–			$	–
Cash paid for taxes		$	–			$	–

 

 

The accompanying notes are an integral part of these financial statements.

  

 

EliteSoft Global Inc.

NOTES TO FINANCIAL STATEMENTS

December 31, 2016

 

1.    NATURE OF BUSINESS

EliteSoft Global Inc., (the “Company”, or “EliteSoft Global”) was incorporated in the State of Delaware on June 23, 2014. The Company was formerly known as ANDES 3 Inc. and changed its name to EliteSoft Global Inc. on March 23, 2015.

 

The Company currently generates revenue by providing web and IT services to a limited number of clients. The Company provides the following services: (a) Creation and design of corporate images and materials, (b) Website design and development, (c) Development of e-commerce software for sales transactions, (d) Supplying required computer hardware to operate online businesses, (e) 24/7 server monitoring, (f) Creation of social media strategies via Facebook, Twitter, Instagram, and (g) Video production services for infomercials.

 

Our primary goals are to become the leading IT services company in Asia with a strong focus on the financial

sector, e-commerce, business-web-based training and certification.

  

2. SUMMARY OF SIGNIFICANT POLICIES

 

Basis of Presentation 

 

The accompanying audited financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission.  

 

Concentrations

 

The Company deposits cash with a national bank within the United States of America and at times throughout the year may maintain balances that exceed federally insured limits of $250,000 per depositor, per insured bank. There was no uninsured cash at December 31, 2016 or 2015. The Company has not experienced any losses in such accounts, and management believes the Company is not exposed to any unusual credit risk on cash and cash equivalents.

 

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 disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 

 

 

Cash and Cash Equivalents 

 

The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Cash equivalents are placed with high credit quality financial institutions and are primarily in money market funds. The carrying value of those investments approximates fair value.

 

Accounts Receivable

 

Accounts receivable are uncollateralized customer obligations due under normal trade terms, and are stated at the amount the Company expects to collect from outstanding balances. The Company records an allowance for doubtful accounts based on specifically identified amounts that are believed to be uncollectible. Management considers accounts receivable to be fully collectible at December 31, 2016.

 

 

Revenue Recognition

 

The Company derives its revenues primarily from providing web and IT services. Web and IT services revenues consist of fees from web design, software development, domain and hosting, and maintenance and other services. The Company recognizes revenue when persuasive evidence of an arrangement exists, services have been rendered, the price is fixed and determinable and collectability is reasonably assured. The Company's service arrangements are generally non-cancelable and do not provide for refunds to customers in the event of cancellations. The Company records revenues net of sales taxes. Revenues from web design, software development are generally recognized after the projects are completed and when delivery is made or title and risk of loss otherwise transfers to the customer, and the collection is reasonably assured. Revenues from IT consulting services, domain and hosting, and maintenance services are generally recognized on a straight-line basis over the length of the contract.  

 

The Company also enters into arrangements with multiple deliverables that generally include web design and software development, domain and hosting, and maintenance and other services, with the term ranging from one month to two years. The Company analyzes its agreements to determine whether the elements can be separated and accounted for individually or as a single unit of accounting in accordance with the Financial Accounting Standards Board's (the “FASB”) Accounting Standards Codification (“ASC”) 605-25, “Revenue Arrangements with Multiple Deliverables,” and Staff Accounting Bulletin (“SAB”) 104, “Revenue Recognition”. Allocation of revenue to individual elements that qualify for separate accounting is based on the element’s fair value in accordance with ASC 605 and related revenues are recognized pursuant to the criteria described above. During the year ended December 31, 2015, in one of the arrangements that contain multiple deliverables, the Company acted as an agent in the transaction. As the agent, it records revenues on a net basis. Customer payments received in advance of the performance of services are recorded as deferred revenues in the balance sheets, and are recognized as revenue when the web and IT services are rendered.

 

Cost of Revenues

 

Cost of revenues includes all costs associated with the providing website development and IT services for its clients and primarily consists of subcontracted services.

 

 

Earnings (loss) per share

 

Basic earnings (loss) per common 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 earnings per common share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued. At December 31, 2016, the Company had a $50,000 loan from a stockholder which is convertible on demand. Management has not determined the conversion rate on this potentially dilutive security at December 31, 2016.

 

Stock-based compensation 

 

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with FASB ASC 718-10, “Compensation- Stock Compensation”, and FASB ASC 505-50, “Equity- Based Payments to Non-Employees”. Costs are measured at the estimated fair value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably measurable. The value of the equity instruments issued for consideration other than employee services is determined on the earliest of a performance commitment or completion of performance by the provider of goods or services.

 

Related Parties

 

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

 

Income Taxes

 

The Company records income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carryforwards. Accounting standards regarding income taxes requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a more-likely-than-not realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, the Company’s experience with operating loss and tax credit carryforwards not expiring unused, and tax planning alternatives.

 

The Company recorded valuation allowances on the net deferred tax assets. Management will reassess the realization of deferred tax assets based on the accounting standards for income taxes each reporting period. To the extent that the financial results of operations improve and it becomes more likely than not that the deferred tax assets are realizable, the Company will be able to reduce the valuation allowance.

 

 

Significant judgment is required in evaluating the Company’s tax positions and determining its provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than 50% likely, based solely on the technical merits, of being sustained on examinations. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes.

 

Fair Value of Financial Instruments

 

The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are as follows:

 

Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

 

Level 2 – Inputs are inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly or indirectly.

 

Level 3 – Inputs are unobservable inputs for the asset or liability.

 

The Company does not have any financial assets or liabilities that are required to be fair valued on a recurring basis. For certain of the Company's financial instruments, including cash and cash equivalents, accounts receivables, accounts payable and accrued liabilities, amounts due to related parties and income tax payable, the carrying amounts approximate fair values due to their short maturities.

 

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 amounts due from/to related parties due to their related party nature.

  

Foreign Currency Transactions and Translation

 

The Company records and settles all transactions in U.S. Dollars based on the current exchange rate prevailing at each transaction date, therefore there are no translation adjustments at the balance sheet date that should be included in accumulated other comprehensive income.

 

 

Accounting Standards Note Yet Adopted

In August 2015, FASB issued ASU 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date”. The amendments in ASU 2015-14 defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently in the process of evaluating the impact of the adoption on its financial statements.

 

In November 2015 the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes”, which changes how deferred taxes are classified on the Company’s balance sheets and is effective for financial statements issued for annual periods beginning after December 15, 2016, with early adoption permitted. ASU 2015-17 requires all deferred tax assets and liabilities to be classified as non-current. Upon adoption, we anticipate no effect on our balances sheets as the Company has no deferred tax assets and liabilities at December 31, 2016 and recorded a valuation allowance reducing our net deferred tax assets and liabilities to zero at December 31, 2016 and 2015.

 

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes ASC 840, Leases.  This ASU is based on the principle that entities should recognize assets and liabilities arising from leases.  The ASU does not significantly change the lessees’ recognition, measurement and presentation of expenses and cash flows from the previous accounting standard.  Leases are classified as finance or operating.  The ASU’s primary change is the requirement for entities to recognize a lease liability for payments and a right of use asset representing the right to use the leased asset during the term on operating lease arrangements.  Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less.  Lessors’ accounting under the ASC is largely unchanged from the previous accounting standard.  In addition, the ASU expands the disclosure requirements of lease arrangements.  Lessees and lessors will use a modified retrospective transition approach, which includes a number of practical expedients.  The effective date will be the first quarter of fiscal year 2020 with early adoption permitted.  Management continues to assess the overall impact the adoption of ASU 2016-02 will have on the Company’s financial statements.

  

In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”. The amendments in this ASU are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations by amending certain existing illustrative examples and adding additional illustrative examples to assist in the application of the guidance. The effective date and transition of these amendments is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. Public entities should apply the amendments in ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein. The Company is currently in the process of evaluating the impact of the adoption on its financial statements.

 

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The Company is currently in the process of evaluating the impact of the adoption on its financial statements.

 

 

 

In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customer (Topic 606): Identifying Performance Obligations and Licensing.” The amendments in this ASU clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. The effective date and transition of these amendments is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. Public entities should apply the amendments in ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein. The Company is currently in the process of evaluating the impact of the adoption on its financial statements.

 

In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customer (Topic 606): Narrow-Scope Improvements and Practical Expedients.” The amendments in this ASU affect only the narrow aspects of Topic 606. The effective date and transition of these amendments is the same as the effective date and transition of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. Public entities should apply the amendments in ASU 2014-09 for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein. The Company is currently in the process of evaluating the impact of the adoption on its financial statements.

 

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company is currently in the process of evaluating the impact of the adoption on its financial statements.

 

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force). ASU 2016-15 reduces diversity in practice in how certain transactions are classified in the statement of cash flows. The effective date will be the first quarter of fiscal year 2018 with early adoption permitted. Management continues to assess the overall impact the adoption of ASU 2016-15 will have on the Company’s financial statements.

 

The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

3.    GOING CONCERN

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is still in development stage and has not created sufficient revenue to cover any operating losses it may incurThe Company requires capital for its contemplated operational and marketing activities. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

 

4. EARNINGS (LOSS) PER SHARE

A reconciliation of components of basic and diluted net income per common share is presented in the tables below:

 

	For the Year Ended December 31,
	2016			2015
	Income (Loss)	Weighted Average Common Shares Outstanding	Per Share	Income (Loss)	Weighted Average Common Shares Outstanding	Per Share
Basic:
Income (loss) attributable to common stock	$      49,350	12,056,694	$          0.00	$ (31,917)	11,229,452	$    (0.00)
Effective of Dilutive Securities:
Stock options and other	–	–	–	–	–	–
Diluted:
Income (loss) attributable to common stock including assumed conversions	$      49,350	12,056,694	$         0.00	$ (31,917)	11,229,452	$    (0.00)

 

5.    RELATED PARTY TRANSACTIONS

In February 2015, Mr. Ee Chang Ku, the Company stockholder advanced the Company $50,000 and the cash was received in May 2015. The advance is unsecured, bears no interest, contains no formal repayment terms and is convertible on demand into shares of restricted common stock. Management has not determined the conversion rate on this potentially dilutive security at December 31, 2016. The Loan is not yet convertible as the shares are not publicly traded on an exchange.

 

During the quarter ended September 30, 2015, Mr. Cornelius Ee, Vice President of the Company, advanced the Company $3,331 for general operating expenses. The advance is unsecured, non-interest bearing and has no specific terms of repayment. As of December 31, 2016, the Company owed $3,331 (2015 - $3,331) to Mr. Cornelius Ee.

 

 

During 2015, the Company entered into a six-month service contract with ELITESOFT ASIA PTE LTD, a shareholder of the Company, to provide the Company with website design, development and integration with the Company’s CRM Program as well as web-based automated tracking system for the Company’s nationwide operations–customer relation management program. The total contract value is approximately $414,000. During the year ended December 31, 2016, the Company incurred cost of $413,952 under this contract. Included in accounts payable and accrued expenses – related party is $82,790 (2015 - $10,000) related to this contract. 

 

6.    STOCKHOLDERS’ EQUITY

 

Preferred Stock – The Company is authorized to issue 5,000,000 shares of $.0001 par value preferred stock. The Company’s board of directors may designate the rights, preferences, privileges, and restrictions of the preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, and number of shares constituting any series or the designation of any series. The issuance of preferred stock could have the effect of restricting dividends on the Company’s common stock, diluting the voting power of its common stock, impairing the liquidation rights of its common stock, or delaying or preventing a change in control. As of December 31, 2016 and 2015, no shares of preferred stock had been issued.

 

Common Stock - The Company is authorized to issue 100,000,000 shares of $.0001 par value common stock. As of December 31, 2016 and 2015, 12,000,000 and 12,250,000 shares were issued and outstanding, respectively.

 

On February 20, 2015, Richard Chiang, then the Company’s sole director and shareholder, entered into a Stock Purchase Agreement (the "SPA") whereby EliteSoft Asia Sdn Bhd.("ESA") purchased 10,000,000 shares of the Company’s common stock from Mr. Chiang, which constituted 100% of our issued and outstanding shares of common stock for $40,000. Upon Mr. Chiang's resignation following the execution of the SPA, ESA, as the Company’s sole shareholder elected Mr. Eugene Wong, as a Director of the Company.

 

Pursuant to its assignment assumption agreement, dated June 1, 2015, the Company issued 2,000,000 shares of the Company’s restricted common stock to ESA. The agreement provides for revenue of $2,000 a month and will cease on January 1, 2018 subject to yearly renewal with the consent of both parties. The shares for the agreement were valued at $43,285. The shares were valued based on expected revenue over the initial term of the agreement of $62,000 less cost of revenue.

 

On May 1, 2015, the Company entered into a six-month consulting agreement with Tech Associates, Inc., an entity owned by the Company’s former stockholder, Richard Chiang. As part of the total consideration paid, the

Company issued 250,000 shares of restricted common stock on October 1, 2015 to Tech Associates, Inc. The fair value of the shares issued was determined to be $5,000 based on the share price from the most recent share issuance on June 1, 2015 with ESA. The compensation cost was recognized over the initial service term of six months. For the year ended December 31, 2015, $5,000 of stock-based compensation was recognized.

 

On March 23, 2016, the Company cancelled 250,000 shares of common stock of the Company that had been previously issued due to termination of consulting agreement dated May 1, 2015 and reversed stock-based compensation of $5,000 that was recognized during the year ended December 31, 2015.  The $5,000 was recorded as a recovery of general and administrative expenses during the year ended December 31, 2016.

 

 

 

7.    LEASES

 

The company maintains a sales office located at 18582, NW Holly Street, Unit 202, Beaverton, Oregon 97006. This office is 1,100 square feet and owned by Finny Chu, Wife of CEO of the Company. No formal lease agreement was available and no rent was charged by landlord in 2016. 

 

We also share a representative office located at Unit A-9-4, Northpoint office suite, Mid Valley City. No. 1, Medan Syed Putra Utara, 59200, Kuala Lumpur Malaysia. This office is 2,000 square feet. No formal lease agreement was available and no rent was paid for this office in 2016.

 

8.    CUSTOMER CONCENTRATION 

During the year ended December 31, 2016, the Company generated revenues from seven customers and one major customer accounted for 92% of the Company’s revenue. No other customer accounted for more than 10% of revenues. The accounts receivable from the major customer was 0% of the total accounts receivable. The accounts receivable from four of the other six customers accounted for more than 92% of total accounts receivable. The loss of the major customer could have an adverse effect on the Company’s business, operating results, or financial condition.

 

9. INCOME TAXES

The following table summarizes a reconciliation of income tax expense compared with the amounts at the U.S. federal statutory income tax rate for the years ended December 31, 2016 and 2015:

 

	2016	2015
Income tax expense at U.S. federal statutory rates	$                    7,736	$                            –
Deferred tax benefit of net operating loss carryforward	–	4,800
Non-capital losses applied against taxable income	(5,512)	–
Change in valuation allowance	–	(4,800)
Income tax expense	$                    2,224	–

 

Deferred income tax assets and liabilities at December 31, 2016 and 2015 reflect the effect of temporary differences between amounts of assets, liabilities and equity for financial reporting purposes and the bases of such assets, liabilities and equity as measured by tax laws, as well as tax loss and tax credit carryforwards. The following table summarizes the components of temporary differences and carryforwards that give rise to deferred tax assets and liabilities at December 31:

 

	2016	2015
Deferred tax assets
Net operating loss carryforward	$                           –	$                      5,500
Less: valuation allowances	–	(5,500)
Total deferred tax assets, net	$                           –	$                             –

 

The Company’s effective tax rate was 4.5% and 0% for the year ended December 31, 2016 and 2015, respectively, which was lower than the U.S. federal statutory tax rate of 34%. The lower tax rate was primarily attributable to the net operating loss carry forwards from prior fiscal years being utilized.

10.   SUBSEQUENT EVENTS

Management has evaluated subsequent events up to and including March 30, 2017, which is the date the statements were available for issuance and determined there are no reportable subsequent events.