Attached files
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| EX-32.2 - CERTIFICATION - LNPR GROUP INC. | naei_ex322.htm |
| EX-32.1 - CERTIFICATION - LNPR GROUP INC. | naei_ex321.htm |
| EX-31.2 - CERTIFICATION - LNPR GROUP INC. | naei_ex312.htm |
| EX-31.1 - CERTIFICATION - LNPR GROUP INC. | naei_ex311.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended: December 31, 2016
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission File No. 000-54171
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NEW ASIA ENERGY, INC. |
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(Exact name of registrant as specified in its charter) |
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Colorado |
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26-1381565 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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Level 23, Nu Tower 2, Jalan Tun Sambanthan, Sentral, 50470 Kuala Lumpur, Malaysia. |
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(Address of principal executive offices) |
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+603 2727 1688 |
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(Registrant's telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, $0.001 par value
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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 o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
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Large Accelerated Filer |
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Accelerated Filer |
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Non-Accelerated Filer |
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Smaller reporting company |
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(Do not check if a smaller reporting company) |
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Indicate by check mark whether registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes x No o
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. As of December 31, 2016, the aggregate market value was $8,897,938.
The number of shares outstanding of each of the issuer's classes of common stock, as of April 17, 2017 is as follows:
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Classes of Common Stock |
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Shares Outstanding |
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Common Stock, $0.001 par value |
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424,508,156 |
DOCUMENTS INCORPORATED BY REFERENCE
None.
New Asia Energy, Inc.
Annual Report on Form 10-K
For the Fiscal Years Ended December 31, 2016 and 2015
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Special Note Regarding Forward Looking Statements
Certain statements contained in this annual filing, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-K and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
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PART I
Overview
New Asia Energy, Inc. changed its management team on December 19, 2016, and since then our company is involved in events solution company which aims to provide excellent, efficient and quality products and services for all types of corporate events. In order to stay ahead of an increasingly competitive market, New Asia Energy, Inc. strives to provide a wide range of event related products and services to its prestigious clients. The Company’s philosophy is to provide high quality products and services and ensure that its clients experience the most memorable event possible.
New Asia Energy, Inc.’s mission is to harness the professional expertise and experience of its internal staff, as well as the potential and power available in the events industry. It aims to portray as dynamic, innovative, and creative with easily affordable options to fulfil any event requirements.
Event management is a very important application of project management to the creation and development of large scale events such as festivals, conferences, ceremonies, formal parties, concerts. Event planning includes budgeting, scheduling, acquiring necessary permits, site selection, and arranging for speakers, security, catering services, etc. It is primarily focused on communication with the public, e.g. the potential buyers and the media. By communicating relevant information about the Company including its products and services, event management specialists also help in the promotion of the business. They create a positive public image and establish a relationship with the target audience and media, and earn the consumers’ trust gradually.
Corporate History
New Asia Energy, Inc. (the “Company”), was incorporated in the State of Colorado on November 6, 2007. The Company was originally formed to develop and market music based on technology solutions. Prior to February 2015, when the Company underwent a change in control, and management adopted a new business plan based on the development of a “Pure Play” Renewable/Alternative/Distributed Energy Technology Solutions and Wastes to Resources and Energy platforms, our primary mission was to create music utilizing recognized talented artists with a substantial fan base as well as develop an Internet website and, thereafter, deliver the music to consumers through the website in several media forms as a marketing tool that would generate revenue. The Company would have sought advertisers for the website and would have been paid on a per “click” basis for ads which would have been viewed on our website. In addition, the Company planned to use the results of these activities as well as our sponsoring of performance events by such artists (both virtual and non-virtual festivals) to provide ongoing royalties to the Company and for the artists including song royalties, sales of CD's and down-loads, ringtone revenue, video and gaming.
In October 2014, FINRA announced the effectiveness of the Company's name change from Univest Tech, Inc. to High Desert Assets, Inc. and our ticker symbol changed from “UVST” to “HDAI.” At formation, the Company was authorized to issue 50,000,000 shares of $.001 par value common stock. In March 2014, we incorporated two wholly owned subsidiaries, Auto Search Consulting, Inc. and Contour Consulting, Inc., which were spun-off to shareholders on or about April 7, 2014.
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On April 10, 2014, the Company had a change in ownership resulting in the outstanding accounts payable, notes payable, and interest payable being paid by a shareholder.
On May 13, 2014, the Company's Board of Directors, receiving the majority vote of the Company's shareholders, approved of: (a) increasing the aggregate number of authorized shares of common stock of the Company from fifty million (50,000,000) shares, par value $0.001, to two hundred fifty million (250,000,000) shares, par value $0.001 per share; (b) establishing a new class of shares by authorizing 1,000,000 shares of preferred stock, par value $0.10 per share (“Preferred Stock”), to have such preferences as the Directors of the Company may assign from time to time; and (c) a 9-for-1 forward stock split (“Forward Split”) of the issued and outstanding shares of common stock of the Company. As a result of the Forward Split, the-then 23,044,500 issued and outstanding shares of common stock represented 207,400,500 post Forward Split shares, while fractional shares resulting from the Forward Split were rounded up to the next whole share.
On May 13, 2014, the Company filed Articles of Amendment to its Articles of Incorporation with the Secretary of State of Colorado to increase the authorized number of shares of common stock from fifty million (50,000,000) shares, par value $0.001 per share, to two hundred fifty million (250,000,000) shares, par value $0.001 per share, and to authorize 1,000,000 shares of preferred stock, par value $0.10 per share, to have such preferences as the Directors of the Company may assign from time to time..
On May 16, 2014, FINRA approved the Forward Split, to take effect on May 20, 2014.
On October 21, 2014, Jaitegh Singh, the Company's previous President, Chief Executive Officer, Chief Financial Officer, Secretary, and Treasurer and the controlling shareholder of the Company ("Mr. Singh") cancelled and returned to treasury an aggregate of 183,739,875 shares of the Company's common stock beneficially owned by Mr. Singh (the "Cancellation") pursuant to the terms of an agreement with the Company's then President, Derrick Mains. Following the Cancellation of the 183,739,875 common shares, there were a total of 23,660,625 common shares of the Company outstanding.
On February 6, 2015 (the “Closing Date”), the Company entered into Stock Purchase Agreements (the “Agreement”) with two U.S. accredited investors, Scott C. Kline and Jose A. Capote, the Secretary and Chief Technical Officer of the Company, respectively, and two foreign investors, including Rock Capital Limited, the new majority owner of the Company, pursuant to which the Company issued an aggregate of 17,446,673 shares of common stock, or approximately 42.3% of the issued and outstanding common stock of the Company, at an aggregate purchase price of approximately $17,446 The sales of common stock were made following the acquisition by Rock Capital Limited.
On December 31, 2015, Rock Capital Limited acquired 14,250,000 shares of common stock of the Company, representing approximately 34.7% of the issued and outstanding shares of common stock of the Company as of the Closing Date, from Jaitegh Singh, the previous majority shareholder of the Company. At December 31, 2015, Rock Capital Limited also acquired an additional 1,565,450 shares of common stock from several minority holders, including Loro Verde Investments, representing approximately 3.8% of the issued and outstanding shares of common stock of the Company. As a result of the foregoing, as of December 31, 2015, Rock Capital Limited acquired common stock representing approximately 76% of the issued and outstanding shares of common stock of the Company.
In addition, on the December 31, 2015, Alan Smith, the sole officer and Director of the Company at that time, submitted his resignation from all executive officer positions with the Company, including Chief Executive Officer and President, and as a member of the Board. On the Closing Date, Lin Kok Peng, Ph.D. was appointed as Chief Executive Officer, Chief Financial Officer and Chairman of the Board, Jose A. Capote was appointed Chief Technical Officer (CTO), and Scott C. Kline was appointed as Secretary. Allister Lim Wee Sing was appointed a member of the Board.
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On June 26, 2015, the Company filed an Information Statement (“The PRE 14C”) with the Securities and Exchange Commission (“SEC”), pursuant to Section 14C of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), notifying the holders of common stock, par value $0.001 per share, of the Company that on June 26, 2015, the Company received a written consent of shareholders holding in aggregate more than a majority of the total voting power of all issued and outstanding capital stock of the Company in lieu of a meeting of the shareholders, authorizing the following:
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Changing the name of the Company from High Desert Assets, Inc. to New Asia Energy, Inc.; and | |
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Increasing the Company's authorized common stock, par value $0.001 per share, from 250,000,000 shares to 500,000,000 shares and to increase of the Company's authorized preferred stock, par value $0.10 per share, from 1,000,000 shares to 10,000,000 shares (the “Preferred Stock Increase”). | |
On July 7, 2015, the Company filed the final Form 14C with the SEC.
On July 23, 2015, the Company filed Articles of Amendment to its Articles of Incorporation with the Colorado Secretary of State to (i) change the name of the Company from High Desert Assets, Inc. to New Asia Energy, Inc. (the “Name Change”), (ii) increase the Company's authorized common stock, par value $0.001 per share, from 250,000,000 shares to 500,000,000 shares (the “Common Stock Increase”), and (iii) increase the Company's authorized preferred stock, par value $0.10 per share, from 1,000,000 shares to 10,000,000 shares (the “Preferred Stock Increase”, together with the Common Stock Increase and Name Change, the “Corporate Actions”). On July 29, 2015, the Financial Industry Regulatory Authority (FINRA) approved the Corporate Actions. The Company's stock is quoted on the OTCQB under the ticker symbol NAEI.
On August 19, 2015, the Board of Directors of the Company approved a resolution acknowledging that Rock Capital Limited, the principal controlling shareholder of the Company, (i) had been advancing all the funds to the Company since February 6, 2015 to pay for operating expenses of the Company (“Prior Advances”) and (ii) would be required to advance an additional $250,000 to the Company to fund further operating expenses and investments of the Company (“Future Advances”, and together with Prior Advances, “Advances”). The Board further resolved that these Advances would constitute an interest-free loan to the Company to be repaid by the close of business on October 31, 2015. However, if the Company was unable to repay these Advances by such date, Rock Capital Limited, at its sole discretion, would have the option to extend the repayment deadline or convert all or a portion of the above Advances into common stock at a conversion price of $0.02 per share. As of December 31, 2015, the principal shareholder, Rock Capital Ltd, had not yet acted to exercise its option to convert the Advances to shares of common stock, thus the Advances remained as an interest-free loan to the Company. In a letter dated January 8, 2016, Rock Capital Ltd requested repayment of the advances made to date and on January 31, 2016, the Company issued a letter to Rock Capital Ltd confirming its agreement to repay the advances. On March 17, 2016, the Company repaid a total of $468,243 to Rock Capital Ltd.
On September 7, 2015, Mr. Scott C. Kline (“Mr. Kline”) resigned as Secretary of the Company. The resignation was not as a result of any disagreement with the Company on any matter relating to the Company's operations, policies or practices. On that date, Mr. Jose A. Capote (“Mr. Capote”) was appointed to serve as the Company's Secretary and remains as well as his current position as the Company's Chief Technical Officer. There is no family relationship between Mr. Capote and any of the Company's directors or officers. Mr. Capote is currently a shareholder of the Company through his 50% ownership of Earth Heat Ltd.
On December 31, 2015, the Company went through a change of control of ownership when (i) the Company issued under Regulation S an aggregate of 285,750,001 shares of the Company's common stock to a total of 10 accredited foreign persons in exchange for the receipt of an aggregate of $300,000, including, but not limited to, Rong Yi Rong (Beijing) Asset Management Limited (167,995,350 shares), Platinum Starlight HK Limited (15,176,877 shares), Beijing Run Zheng Da Technology Development Limited (27,297,224 shares), and Million Leader HK Limited (27,297,224 shares), and (ii) Rock Capital Limited sold 14,250,000 of its shares of the Company's common stock to Platinum Starlight HK Limited in exchange for the receipt of an aggregate of $100,000, altogether representing approximately 91.8% of the issued and outstanding common stock of the Company.
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On November 28th, 2016, the Company entered into a Debt Settlement Agreement (the “Settlement Agreement”) with Rock Capital Limited, a shareholder of the Company (“Rock Capital”). Rock Capital has previously advanced funds to the Company that the Company has used for Operating Expenses, and the purpose of the Settlement Agreement was to memorialize the provision of these and any future funds to be provided by Rock Capital, and to provide for their repayment or conversion as discussed below. Through November 28th, 2016, Rock Capital has advanced a total of $102,420 to the Company. These funds were an interest-free loan to the Company and were due and payable on November 28, 2016. The Settlement Agreement provides that if the advanced funds are not repaid by November 28, 3016, Rock Capital may, in its sole discretion, extend the repayment deadline or convert all or a portion of the advances into common stock of the Company, par value $0.001 per share (the “Common Stock”) at a conversion price of $0.00105 per share. On November 28th, 2016, the amounts due by the Company to Rock Capital under the Settlement Agreement as described above were not paid. Therefore, on that date and pursuant to the terms of the Settlement Agreement, Rock Capital elected to convert the $102,420 owed to it by the Company into shares of Common Stock at the $0.00105 conversion price, thus resulting in the loss on debt extinguishment of $199,966 and issuance to Rock Capital of 97,542,857 shares of Common Stock.
On December 19th, 2016, the Company entered into a Release Agreement (the “Release Agreement”) with Lin Kok Peng (“Peng”), Allister Lim Wee Sing (“Sing”) and Jose A. Capote (“Capote”), collectively, the “Released Parties” and each individually a “Released Party”). Pursuant to the Release Agreement, the Company released the Released Parties from and against any and all claims that the Company many have against any such persons related to the actions or inactions of such persons as an officer or director of the Company or a party related thereto. On December 19th, 2016, the Board adopted resolutions to expand the size of the Board from two persons to four persons, and, pursuant to the authority granted to the Board in the Company's Bylaws, to name Mr. Veng Kun Lun and Mr. Poh Kee Liew to fill the newly created vacancies. Mr. Veng Kun Lun was also named to be the Chief Executive Officer and Secretary of the Company, and Mr. Poh Kee Liew was named as Chief Financial Officer of the Company.
Following the resolutions by the Board as described above, on December 19th, 2016, the Company's Directors, Lin Kok Peng, PhD, Chairman of the Board, and the Company's Chief Executive Officer and Chief Financial Officer, and Allister Lim Wee Sing, a Director of the Company, resigned from the Board and from their positions as officers of the Company. On the same date, Jose Capote resigned as the Secretary of the Company. None of the resignations was the result of any disagreement with the Company known to an executive officer of the Company on any matter relating to the Company's operations, policies or practices.
Following the resignations of Mr. Link Kok Peng and Mr. Allister Lim Wee Sing, on December 12th, 2016, the Board adopted resolutions to reduce the size of the Board from four persons to two persons.
Employees
The Company currently has no employees. Management of the Company expects to use consultants, attorneys and accountants as necessary, and does not anticipate a need to engage any full-time employees so long as it is seeking and evaluating business opportunities. The need for employees and their availability will be addressed in connection with the decision whether or not to acquire or participate in specific business opportunities.
Smaller Reporting Company Status
We qualify as a “smaller reporting company” under Rule 12b-2 of the Exchange Act, which is defined as a company with a public equity float of less than $75 million. To the extent that we remain a smaller reporting company at such time as are no longer an emerging growth company, we will still have reduced disclosure requirements for our public filings, some of which are similar to those of an emerging growth company, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
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RISK FACTORS CONCERNING OUR BUSINESS AND OPERATIONS
New Business Plan makes Potential Profits to Company
Prior to change of management team, the Company's previous operations are not growing and are not sustainable. As of December 31, 2016, we have no successful operating history. There can be no guarantee that we will ever be profitable. From our inception through December 31, 2016, we generated no revenue. We had stockholders' deficit at December 31, 2016, following the change of management team. The Company will commence our new business as event solution company in first quarter of 2017 and we believed revenue to be generated from this new business will be sufficient to cover company expenses and will bring profits to the Company in year 2017.
Because we have incurred operating losses since our inception, our accountants have expressed doubts about our ability to continue as a going concern. However, company believed the new business commenced will generate sufficient income and make profits to the Company.
For the years ended December 31, 2016 and 2015, our accountants have expressed substantial doubt about our ability to continue as a going concern as a result of our continued net losses.
There is No Agreement for a Business Combination and No Minimum Requirements for a Business Combination for previous business
In connection with the private placement completed on December 31, 2015, on November 20, 2015, the Company signed a Memorandum of Understanding (“MOU”) with Jun Wei Kang Biotechnology Ltd, (“JWK”) a Company registered in the People's Republic of China and listed on the Shanghai Equity Exchange under the symbol “SEEQ:206322”. JWK owns and operates extensive facilities for the cultivation, harvesting, processing, production, distribution and sale of value-added ginseng and other related products that enhance and promote healthy living. JWK has over 5,000 square meters of office and laboratory space and research and development facilities, processing and production plants and over 50 retail stores located throughout China. Jilin Province provides over 85% of the Ginseng raw feedstocks produced in China and 70% of the ginseng raw feedstocks produced world-wide and JWK is a leading provider of Ginseng value-added products in Jilin Province and throughout China. Although there is no agreement for a business combination and no minimum requirements for a business combination, the parties to the MOU have agreed to evaluate the potential for the Company to (i) develop, install and operate renewable energy facilities at JWK's cultivation, production and R&D facilities in Jilin Province, China, and (ii) supply renewable energy to JWK's facilities under “take-or-pay,” Build-Own-Operate or Build-Own-Operate-and Transfer contractual vehicles, in order to reduce the carbon footprint of the JWK facilities, offset the use of fossil fuels and potentially provide some cost savings to JWK. Through its cultivation, harvesting and processing activities, JWK has access to agricultural wastes and other by-products of production that are expected to be excellent sources of feedstock for these renewable energy facilities. The Company is currently evaluating the potential for the development of these projects.
The Company has no other current arrangement, agreement or understanding with respect to engaging in a business combination with a specific entity. There can be no assurance that the Company will be successful in developing and closing any of the projects identified in the JWK MOU, nor in identifying and evaluating suitable business opportunities or in concluding a business combination. No particular industry or specific business within an industry has been selected for a target company. The Company has not established a specific length of operating history or a specified level of earnings, assets, net worth or other criteria which it will require a target company to have achieved, or without which the Company would not consider a business combination with such business entity. Accordingly, the Company may enter into a business combination with a business entity having no significant operating history, losses, limited or no potential for immediate earnings, limited assets, negative net worth or other negative characteristics. There is no assurance that the Company will be able to negotiate a business combination on terms favorable to the Company.
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No Assurance of Success or Profitability
New management was on board on December 19, 2016 and there is a new business plan carries out by company new management since then. Company is planning to commence global communications marketing business which including Public Relationship, Investor Relationship and Event Organizer, in first quarter of 2017. However, due to lack of history record, the new business’s profitability is uncertain.
Lack of Diversification
Because of the limited financial resources that the Company has, it is unlikely that the Company will be able to diversify its acquisitions or operations. The Company's probable inability to diversify its activities into more than one area will subject the Company to economic fluctuations within a particular business or industry and therefore increase the risks associated with the Company's operations. Company might only diversity to other business after the new business in Public Relationship, Investor Relationship and Event Organizer is making sufficient profits to the company.
Limited Number of Directors and Officers
New management consists of only two people, i.e. (i) Veng Kun LUN, who serves as Company’s Chief Executive Officer cum board of director, and (ii) Pok Kee LIEW, who servces as Company’s Chief Financial Officer cum board of director. They will be the only persons responsible in conducting the day-to-day operations of the Company. The Company does not benefit from multiple judgments that a greater number of directors or officers would provide, and the Company will rely completely on the judgment of its two officers and two directors when selecting a target company. Our officers anticipate devoting only a limited amount of time per month to the business of the Company. Neither of our officers has entered into a written employment agreement with the Company and they are not expected to do so. The Company does not anticipate obtaining key man life insurance on our officers. The loss of the services of our officers would adversely affect development of the Company's business and its likelihood of continuing operations.
Dependence upon Management, Limited Participation of Management
The Company will be entirely dependent upon the experience of its two officers and two directors in making decisions regarding the Company's new business operations. Because investors will not be able to evaluate the merits of possible future new business operation of the Company, they should critically assess the information concerning the Company's officers and directors. (See Management.)
We have a lack of liquidity and will need additional financing in the future. However, new management is willing to advance fund into the Company to commence and operate the new business in Public Relationship, Investor Relationship and Event Organizer.
Dependence upon Outside Advisors
To supplement the business experience of its officers and directors, the Company may be required to employ accountants, technical experts, appraisers, attorneys, or other consultants or advisors in order to operate the new business plan. The selection of any such advisors will be made by the Company's officers, without any input by shareholders. Furthermore, it is anticipated that such persons may be engaged on an as needed basis without a continuing fiduciary or other obligation to the Company. In the event the officers of the Company consider it necessary to hire outside advisors, he may elect to hire persons who are affiliates, if those affiliates are able to provide the required services.
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Regulation of Penny Stocks
The U. S. Securities and Exchange Commission (SEC) has adopted a number of rules to regulate “penny stocks.” Because the securities of the Company may constitute “penny stocks” within the meaning of the rules (as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, other than a security registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in that security are provided by the exchange or system), the rules would apply to the Company and to its securities. The Commission has adopted Rule 15g-9 which established sales practice requirements for certain low price securities. Unless the transaction is exempt, it shall be unlawful for a broker or dealer to sell a penny stock to, or to effect the purchase of a penny stock by, any person unless prior to the transaction: (i) the broker or dealer has approved the person's account for transactions in penny stock pursuant to this rule and (ii) the broker or dealer has received from the person a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stock, the broker or dealer must: (a) obtain from the person information concerning the person's financial situation, investment experience, and investment objectives; (b) reasonably determine that transactions in penny stock are suitable for that person, and that the person has sufficient knowledge and experience in financial matters that the person reasonably may be expected to be capable of evaluating the risks of transactions in penny stock; (c) deliver to the person a written statement setting forth the basis on which the broker or dealer made the determination (i) stating in a highlighted format that it is unlawful for the broker or dealer to affect a transaction in penny stock unless the broker or dealer has received, prior to the transaction, a written agreement to the transaction from the person; and (ii) stating in a highlighted format immediately preceding the customer signature line that (A) the broker or dealer is required to provide the person with the written statement and (B) the person should not sign and return the written statement to the broker or dealer if it does not accurately reflect the person's financial situation, investment experience, and investment objectives; and (d) receive from the person a manually signed and dated copy of the written statement. It is also required that disclosure be made as to the risks of investing in penny stock and the commissions payable to the broker-dealer, as well as current price quotations and the remedies and rights available in cases of fraud in penny stock transactions. Statements, on a monthly basis, must be sent to the investor listing recent prices for the “penny stock” and information on the limited market. Shareholders should be aware that, according to Securities and Exchange Commission Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include: (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) “boiler room” practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid ask differential and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. The Company's management is aware of the abuses that have occurred historically in the penny stock market. Although the Company does not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to the Company's securities.
Reporting Requirements May Delay or Preclude Acquisition
Pursuant to the requirements of Section 13 of the Exchange Act, the Company is required to provide certain information about significant acquisitions including audited financial statements of the acquired company. These audited financial statements must be furnished within 4 days following the effective date of a business combination. Obtaining audited financial statements are the economic responsibility of the target company. The additional time and costs that may be incurred by some potential target companies to prepare such financial statements may significantly delay or essentially preclude consummation of an otherwise desirable acquisition by the Company. Acquisition prospects that do not have or are unable to obtain the required audited statements may not be appropriate for acquisition so long as the reporting requirements of the Exchange Act are applicable. When a non-reporting company becomes the successor of a reporting company by merger, consolidation, exchange of securities, and acquisition of assets or otherwise, the successor company is required to provide in a Current Report on Form 8-K the same kind of information that would appear in a Registration Statement or an Annual Report on Form 10-K, including audited and pro forma financial statements. The Commission treats these Form 8-K filings in the same way it treats the filing of Registration Statements on Form 10. The Commission subjects them to its standards of review selection, and the Commission may issue substantive comments on the sufficiency of the disclosures represented. If the Company enters into a business combination with a non-reporting company, such non-reporting company will not receive reporting status until the Commission has determined that it will not review the 8-K filing or all of the comments have been cleared by the Commission.
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Lack of Market Research or Marketing Organization
The Company has neither conducted, nor have others made available to it, market research indicating that demand exists for the transactions contemplated by the Company. In the event demand exists for a transaction of the type contemplated by the Company, there is no assurance the Company will be successful in completing any such business combination.
Change in Control of the Company and/or Management
In conjunction with completion of a business acquisition, it is anticipated that the Company will issue an amount of the Company's authorized but unissued common stock that represents the greater majority of the voting power and equity of the Company, which will, in all likelihood, result in shareholders of a target company obtaining a controlling interest in the Company. As a condition of the business combination agreement, the current shareholder of the Company may agree to sell or transfer all or a portion of the Company's common stock he owns so to provide the target company with all or majority control. The resulting change in control of the Company will likely result in removal of the present officers and directors of the Company and a corresponding reduction in or elimination of his participation in the future affairs of the Company.
Possible Dilution of Value of Shares upon Business Combination
A business combination normally will involve the issuance of a significant number of additional shares. Depending upon the value of the assets acquired in such business combination, the per share value of the Company's common stock may increase or decrease, perhaps significantly.
Limited or No Public Market Exists
There is currently a limited public market for the Company's common stock, via the OTCQB and no assurance can be given that a market will develop or that a shareholder ever will be able to liquidate his investment without considerable delay, if at all. If a market should develop, the price may be highly volatile. Factors such as those discussed in this “Risk Factors” section may have a significant impact upon the market price of the securities offered hereby. Due to the low price of the securities, many brokerage firms may not be willing to effect transactions in the securities. Even if a purchaser finds a broker willing to effect a transaction in these securities, the combination of brokerage commissions, state transfer taxes, if any, and any other selling costs may exceed the sales proceeds.
Registration of Shares is Required
It is the SEC's position that securities issued by a “shell” company cannot be sold under the exemption from registration provided by Rule 144 promulgated under the Securities Act of 1933 (the “Act”), but must be registered under the Securities Act of 1933. Any other securities issued to individuals in the capacity of management, affiliates, control persons and promoters will also be registered with the SEC prior to resale and shall be issued with appropriate restricted legend to reflect the registration requirements. The Company will make appropriate provisions under the Securities Act of 1933 to register the Company's shares for resale.”
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Blue Sky Consideration
Because the securities registered hereunder have not been registered for resale under the blue sky laws of any state, the holders of such shares and persons who desire to purchase them in any trading market that might develop in the future, should be aware, that there may be significant state blue sky law restrictions upon the ability of investors to sell the securities and of purchasers to purchase the securities. Accordingly, investors should consider the secondary market for the Company's securities to be a limited one.
Additional Risks Doing Business in a Foreign Country
The new business to be carried out by new management will having headquarters, place of formation or primary place of business outside the United States of America. In such event, the Company may face the significant additional risks associated with doing business in that country. In addition to the language barriers, different presentations of financial information, different business practices, and other cultural differences and barriers that may make it difficult to evaluate such a merger target, ongoing business risks result from the international political situation, uncertain legal systems and applications of law, prejudice against foreigners, corrupt practices, uncertain economic policies and potential political and economic instability that may be exacerbated in various foreign countries.
Taxation
Federal and state tax consequences will, in all likelihood, be major considerations in any business combination that the Company may undertake. Currently, such transactions may be structured so as to result in tax-free treatment to both companies, pursuant to various federal and state tax provisions. The Company intends to structure any business combination so as to minimize the federal and state tax consequences to both the Company and the target entity; however, there can be no assurance that such business combination will meet the statutory requirements of a tax-free reorganization or that the parties will obtain the intended tax-free treatment upon a transfer of stock or assets. A non-qualifying reorganization could result in the imposition of both federal and state taxes, which may have an adverse effect on both parties to the transaction.
We May Issue Additional Shares of Common Stock Or Preferred Stock In The Future, Which Could Cause Significant Dilution To All Shareholders
We have a large amount of authorized but unissued common stock and preferred stock which our Board of Directors may issue without shareholder approval. We will need additional capital to bring our operations to a sustainable level over the next twelve months, and may seek this capital in the form of equity financing. We may also seek to raise additional equity capital in the future to fund business alliances, develop new prototypes, and grow our manufacturing and sales capabilities organically or otherwise.
In addition to additional issuances of our common stock or preferred stock in private placements or public offerings, we may issue shares as part or all of the consideration in any merger, acquisition, joint venture or other strategic alliance that we enter.
Any issuance of additional shares of our common stock or preferred stock will dilute the percentage ownership interest of all shareholders and may dilute the book value per share of our common stock, and may negatively impact the market price of our common stock.
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We Have Not in the Past and We Do Not Currently Intend to Pay Cash Dividends on Our Common Stock
We have never declared or paid cash dividends on our common stock. We currently intend on retaining any future earnings to fund our operations and growth and do not expect to pay cash dividends in the foreseeable future of the common stock. Future dividends, if any, will be determined by our board of directors, based upon our earnings, financial condition, capital resources, capital requirements, charter restrictions, contractual restrictions, and such other factors as our board of directors deem relevant.
RISK FACTORS CONCERNING OUR NEW BUSINESS
New Establish Business and Limited Experience of Directors and Officers
We will carry out new business plan in first quarter of 2017 involve in one stop solution for Public Relationship, Investor Relationship and event organizer. As a new established business, the viability and sustainability of the new business is uncertainty. It may generate profits if we able to identify new customers to provide services to them and received retainer fee from them.
Besides, both officers have no experiences in this new business. However, they have numerous contacts of professional PR and IR service provider. Our plan is to consolidate and solve all issues of clients to become one stop solution centre to clients, then we will outsource the servicing to certain parties who are experienced and professional.
Collection Risk is minimal for new business
Our new business strategy is to receive upfront retainer monthly fee prior to provide any services to clients. Hence the collection risk for new business is deemed minimal.
Outsource the business to professional parties has minimize the operation risk
After we obtain new clienteles for the PR/IR services, Company is plans to outsource the servicing to experienced service providers. It will minimize the operation risk to our Company and we will grow faster even with minimal internal employees in the future.
We plan to have few outsourced service providers for our future clients to avoid rely on single service provider. With liaise with more outsourced service providers, will benefits the clients as well as our company because we can always filter out those bad service providers and liaise only with those with excellence service providers.
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ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not Applicable.
The Company currently uses an office at Level 23, Jalan Tun Sambanthan, KL Sentral, 50470 Kuala Lumpur, Malaysia from New Asia Energy Consultants Sdn Bhd for free. New Asia Energy Consultants Sdn Bhd was founded by Poh Kee Liew, Chief Financial Officer of the Company, and another individual. The Company is currently planning to acquire New Asia Energy Consultants Sdn Bhd.
The Company was sued by Sharon Morrison and Morrison Enterprises on June 9, 2016 as one of the party-defendant for the main defendant's failure to deliver 5,000 shares (worth $10,000 stated in contract) of the Company’s common stock. See Note 7 to the accompanying audited financial statements for details.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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The Company's stock is quoted on the OTCQB under the ticker symbol NAEI.
Market Information
Our common stock is currently quoted on the OTC Markets. The OTC Market is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current “bids” and “asks”, as well as volume information. Since April 28, 2015, our shares of common stock have been quoted on the OTCQB tier of the OTC Markets under the symbol “HDAI” from April 28, 2015 until August 11, 2015 and “NAEI” since August 11, 2015. In February 2017, our shares have been quoted on OTCPink due to some unforeseen circumstances. OTC Markets Group Inc. (“OTC Markets”) sent us a letter mentioning they have become aware of promotional activities concerning our company and touting our common stock traded on the OTCQB Marketplace. However, new management of the company is totally unaware about the “promotional activities” and company has officially replied to OTC Markets. We will continue liaise with OTC Markets to clear their doubts and company will try to uplift OTCQB as soonest possible.
The following table sets forth the range of high and low closing bid quotations for our common stock for each of the periods indicated as reported by the OTC Markets. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
Fiscal Year Ended December 31, 2016
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High |
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|
Low |
| ||
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Fiscal Quarter Ended: |
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|
|
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| ||
|
June 30, 2016 |
|
$ | 0.045 |
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|
$ | 0.045 |
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|
September 30, 2016 |
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$ | 0.060 |
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|
$ | 0.060 |
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|
December 31, 2016 |
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$ | 0.009 |
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|
$ | 0.009 |
|
On December 31, 2016, the closing price for our common stock on the OTC Markets was $0.009 per share with respect to an insignificant volume of shares. The volume of shares traded on the OTC Markets was insignificant and therefore, does not represent a reliable indication of the fair market value of these shares.
Approximate Number of Holders of Our Common Stock
As of January 9, 2017, there were approximately 151 active holders of record of our common stock. The number of record holders does not include beneficial owners of common stock whose shares are held in the names of banks, brokers, nominees or other fiduciaries.
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Common Stock
The Company's Articles of Incorporation authorize the issuance of 500,000,000 shares of common stock, par value of $0.001 per share (“Common Stock”). Each record holder of Common Stock is entitled to one vote for each share held on all matters properly submitted to the stockholders for their vote. The Company's Articles of Incorporation do not permit for cumulative voting for the election of directors. As of January 9, 2017, we had 424,508,156 outstanding shares of our Common Stock.
Holders of outstanding shares of Common Stock are entitled to such dividends as may be declared from time to time by the Board of Directors out of legally available funds; and, in the event of liquidation, dissolution or winding up of the affairs of the Company, holders are entitled to receive, ratably, the net assets of the Company available to stockholders after distribution is made to the preferred stockholders, if any, who are given preferred rights upon liquidation. Holders of outstanding shares of Common Stock have no preemptive, conversion or redemptive rights. All of the issued and outstanding shares of Common Stock are, and all unissued shares when offered and sold will be, duly authorized, validly issued, fully paid, and non-assessable. To the extent that additional shares of the Company's Common Stock are issued, the relative interests of then existing stockholders may be diluted.
Preferred Stock
The Company's Articles of Incorporation allow for the issuance of up to 10,000,000 shares of preferred stock, par value of $0.10 per share (“Preferred Stock”). As of the date of this filing, there are no shares of Preferred Stock issued and outstanding.
Stock Option Plan
The Company currently has no stock option plan.
Dividend policy
No dividends have been paid to date and the Company's Board of Directors does not anticipate paying dividends in the foreseeable future. It is the current policy to retain all earnings, if any, to support future growth and expansion.
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Recent Issuances of Unregistered Securities
On February 6, 2015, the Company entered into Stock Purchase Agreements (the “Agreement”) with two U.S. accredited investors, Scott C. Kline and Jose A. Capote, the Secretary and Chief Technical Officer of the Company, respectively, and two foreign investors, including Rock Capital Limited, the new majority owner of the Company, pursuant to which the Company issued an aggregate of 17,446,673 shares of common stock, or approximately 42.3% of the issued and outstanding common stock of the Company, at an aggregate purchase price of approximately $17,446. The sales of common stock were made following the acquisition by Rock Capital Limited.
On the same date, Rock Capital Limited acquired 14,250,000 shares of common stock of the Company, representing approximately 34.7% of the issued and outstanding shares of common stock of the Company as of the Closing Date, from Jaitegh Singh, the previous majority shareholder of the Company. As of February 6, 2015, Rock Capital Limited also acquired an additional 1,565,450 shares of common stock from several minority holders, including Loro Verde Investments, representing approximately 3.8% of the issued and outstanding shares of common stock of the Company. As a result of the foregoing, as of February 6, 2015, Rock Capital Limited acquired common stock representing approximately 76% of the issued and outstanding shares of common stock of the Company.
On August 19, 2015, the Board of Directors of the Company approved a resolution acknowledging that Rock Capital Limited, the principal controlling shareholder of the Company, (i) had been advancing all the funds to the Company since February 6, 2015 to pay for operating expenses of the Company (“Prior Advances”) and (ii) would be required to advance an additional $250,000 to the Company to fund further operating expenses and investments of the Company (“Future Advances”, and together with Prior Advances, “Advances”). The Board further resolved that these Advances would constitute an interest-free loan to the Company to be repaid by the close of business on October 31, 2015. However, if the Company was unable to repay these Advances by such date, Rock Capital Limited, at its sole discretion, would have the option to extend the repayment deadline or convert all or a portion of the above Advances into common stock at a conversion price of $0.02 per share. As of December 31, 2015, the principal shareholder, Rock Capital Limited, had not yet acted to exercise its option to convert the Advances to shares of common stock, thus the Advances remained as an interest-free loan to the Company. In a letter dated January 8, 2016, Rock Capital Ltd requested repayment of the advances made to date and on January 31, 2016, the Company issued a letter to Rock Capital Ltd confirming its agreement to repay the advances. On March 17th 2016, the Company repaid a total of $ 468,243 to Rock Capital Ltd.
On November 20, 2015, the Company entered into a Memorandum of Understanding (“MOU”) with Jun Wei Kang Biotechnology Co Ltd, a company registered in the People's Republic of China and listed on the Shanghai Equity Exchange under the symbol “SEEQ:206322” (“JWK”). The parties agreed that within 30 days after the execution of the MOU, JWK and/or its nominees will make an initial purchase of equity in the Company for an amount to be determined by mutual agreement of the parties thereto. This purchase will be set forth in one or more definitive purchase agreements, which will be negotiated and executed by the parties during the 30-day period. Subsequent to the signing of this MOU, On December 31, 2015, New Asia Energy, Inc. (the “Company”) issued an aggregate of 285,750,001 shares of the Company's common stock to a total of 10 persons in exchange for the receipt of an aggregate of $300,000.
On November 28, 2016, the Company entered into a Debt Settlement Agreement with Rock Capital Limited, a shareholder of the Company. Rock Capital Limited has previously advanced funds to the Company that the Company has used for operating expenses, and the purpose of the agreement was to memorialize the provision of these and any future funds to be provided by Rock Capital, and to provide for their repayment or conversion as discussed below. Through November 28, 2016, the balance due to Rock Capital Limited was $102,420. These funds were an interest-free loan to the Company and were due and payable on November 28, 2016. The agreement provides that if the advanced funds are not repaid by November 28, 3016, Rock Capital Limited may, in its sole discretion, extend the repayment deadline or convert all or a portion of the advances into common stock of the Company, par value $0.001 per share at a conversion price of $0.00105 per share. On November 28, 2016, the amounts due by the Company to Rock Capital Limited under the Agreement as described above were not paid. Therefore, on that date and pursuant to the terms of the agreement, Rock Capital Limited elected to convert the $102,420 owed to it by the Company into shares of Common Stock at the $0.00105 conversion price, thus resulting in the loss of debt extinguishment of $199,966 and issuance to Rock Capital Limited of 97,542,857 shares of common stock.
The securities issuances described above were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on an exemption provided by Regulation S promulgated pursuant to the Securities Act. The issuances involved offers and sales of securities outside the United States. The offers and sales were made in offshore transactions and no directed selling efforts were made by the issuer, a distributor, their affiliates or any persons acting on their behalf.
Recent Acquisition of Securities
None
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Restricted Securities
As of January 9, 2017, we currently have approximately 416,001,465 shares of issued and outstanding common stock that qualify as “restricted securities” as defined by Rule 144 of the Securities Exchange Act of 1933, as amended.
Transfer Agent
Our independent stock transfer agent is Pacific Stock Transfer. Their address is 4045 S. Spencer Street, Suite 403, Las Vegas, NV 89119. Their contact numbers are 702-361-3033 for voice calls and 702-433-1979 for fax transmissions. Their website is located at www.pacificstocktransfer.com.
Reports to Stockholders
The Company intends to remain compliant with its obligations under the Securities Exchange Act of 1934, as amended, and, therefore, plans to furnish its stockholders with an annual report for each fiscal year ending December 31 containing financial statements audited by its registered independent public accounting firm. In the event the Company enters into a business combination with another Company, it is the present intention of management to continue furnishing annual reports to stockholders. Additionally, the Company may, in its sole discretion, issue unaudited quarterly or other interim reports to its stockholders when it deems appropriate. The Company intends to maintain compliance with the periodic reporting requirements of the Securities Exchange Act of 1934.
ITEM 6. SELECTED FINANCIAL DATA.
A smaller reporting company is not required to provide the information in this Item.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
(1) Caution Regarding Forward-Looking Information
This Management's Discussion and Analysis or Plan of Operation contains forward-looking statements that involve future events, our future performance and our expected future operations and actions. In some cases, you can identify forward-looking statements by the use of words such as “may”, “will”, “should”, “anticipate”, “believe”, “expect”, “plan”, “future”, “intend”, “could”, “estimate”, “predict”, “hope”, “potential”, “continue”, or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including, but not limited to, the matters discussed in this report under the caption “Risk Factors”. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly update any forward looking-statements, whether as a result of new information, future events or otherwise.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this report.
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(2) Results of Operations.
The following table provides selected financial data about us for the fiscal years ended December 31, 2016 and December 31, 2015. For detailed financial information, see the audited Financial Statements included in this report.
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Balance Sheet Data: at December 31, 2016 |
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| |
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| |
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Cash |
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$ | 1,130 |
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Total assets |
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$ | 1,130 |
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Total liabilities |
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$ | 5,130 |
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Shareholders' deficit |
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$ | 4,000 | |
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Operating Data: for the year ended December 31, 2016 |
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Revenues |
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$ | - |
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Operating Expenses |
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$ | 439,917 |
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Net Loss |
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$ | 439,917 | |
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Balance Sheet Data: at December 31, 2015 |
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Cash |
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$ | 574,211 |
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Total assets |
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$ | 574,211 |
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Total liabilities |
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$ | 471,283 |
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Shareholders' equity |
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$ | 102,928 |
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|
Operating Data: for the year ended December 31, 2015 |
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|
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|
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|
|
|
|
|
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Revenues |
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$ | - |
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Operating Expenses |
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$ | 169,442 |
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Net Loss |
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$ | 169,442 | |
From our inception on November 6, 2007 through December 31, 2016, we have generated no revenue and have no operations. As a result we have no operating history upon which to evaluate our intended business. In addition, we have a history of losses.
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As of our fiscal years ended December 31, 2016 and December 31, 2015, our accountants have expressed substantial doubt about our ability to continue as a going concern as a result of our history of net losses. However, with new business plan to involve in Public Relationship, Investor Relationship and Event Organizer business, we believe we will be able to generate revenue from this new business and achieve and maintain profitability and positive cash flow in coming 2017.
Operating expenses, which consisted solely of general and administrative expenses for the year ended December 31, 2016 was $439,917. This compares with operating expenses for the year ended December 31, 2015 of $169,442. The major components of general and administrative expenses include office rental, travel, accounting fees, consulting fees, legal and professional fees and stock transfer fees. The increase in such expense in the year ended December 31, 2016 were related to increased administrative, legal, professional and accounting fees in connection with our change in control and the subsequent implementation of our new business plans. As a result of the foregoing, we had a net loss of $439,917 for the year ended December 31, 2016. This compares with a net loss for the year ended December 31, 2015 of $169,442.
As of December 19, 2016, after the change in management team, the Company is focused on a new Business Model. Our Business Model incorporates investor relation cum public relation consultancy.
The new Company’s plan is to provide investor relations cum public relations consultant services that help clients’ companies to shape and communicate their positioning and fair value, and to manage perception among their target audiences.
The Company’s positioning is the place it holds in the minds of its key publics: as an investment, as an employer, or as a corporate citizen. Every company has a positioning. The critical point is this: in the absence of a planned programme, the company loses control over its positioning.
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Each company – big or small, listed or not – has a fair value. If a company is listed, fair value takes on greater importance as it has an impact on share prices and ultimately, the perceived value of the company’s stock. In the absence of a planned investor relations programme, companies will find that the perception of their fair value could be lower than the reality.
The Company’s team specialises in helping consultancy, professional services, fintech and business technology firms stand out as leaders in their markets. The company achieve this by delivering ambitious, high-impact public relations, inbound marketing and thought leadership campaigns. We will also support event management, marketing, advertisement and media promotion. All this will contribute greatly to our revenue and profits.
(3) Liquidity and Capital Resources.
As of December 31, 2016, we had cash of $1,130 and as of December 31, 2015, we had cash of $574,211.
Net cash used for operating activities was $235,951 for the year ended December 31, 2016. This compares to net cash used for operating activities of $181,058 for the year ended December 31, 2015. The change resulted mainly from our increased net loss during the fiscal year ended December 31, 2016.
Net cash used in financing activities was $337,130 for the year ended December 31, 2016. This compares to net cash provided from financing activities of $755,231 for the year ended December 31, 2015. We had negative cash flows from financing activities for year ended December 31, 2016 because the Company changed its management team and had repaid and settled all amount due to related parties.
We had no other cash flows from financing activities for the years ended December 31, 2016 and 2015.
Over the next twelve months we estimate our principal source of liquidity will be derived from the revenue generated from the new business plan to become PR and IR consultant as well as event organizer. We projected to receive advance retainer of consultancy fee from clients who engage us as their PR and IR consultant.
Off-Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
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Future Financings
We will continue to rely on advances from our principal shareholder as well as from other sources of financing, including private placements of our common shares prior to commence our new business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund our operations and other activities.
(4) Critical Accounting Policies
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (GAAP). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note 2 of our financial statements. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The full text of our audited financial statements as of December 31, 2016 and 2015 begins on page F-1 of this report.
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2016. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Mr. Veng Kun Lun and Mr. Poh Kee Liew. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2016 our disclosure controls and procedures are not effective.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
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Management's Annual Report 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 refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP, and includes those policies and procedures that:
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· |
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
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· |
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors; and |
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· |
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because of its inherent limitation, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluations of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. Accordingly, even an effective system of internal control over financial reporting will provide only reasonable assurance with respect to financial statement preparation.
Management, under the supervision of the Company's Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of 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. Based on our evaluation, our management concluded that our internal controls over financial reporting were not effective as of December 31, 2016 and identified material weakness in internal control over financial reporting.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
We note the following deficiencies that management believes to be material weaknesses:
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a) | The Company does not have sufficient knowledge of all the necessary financial statement disclosures that are required to be made in accordance with US GAAP. |
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b) | Lack of audit committee and independent directors. |
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c) | Inadequate segregation of duties. |
Changes in Internal Controls over Financial Reporting
There have been no significant changes in our internal controls over financial reporting during fourth quarter of 2016 that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
We have no other information to disclose that was required to be disclosed in a report on Form 8-K during fourth quarter of fiscal year 2016, but was not reported.
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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
Directors and Executive Officers
The following sets forth the name and position of each of our current executive officers and directors.
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NAME |
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AGE |
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POSITION |
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Veng Kun LUN |
55 |
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Chief Executive Officer and Director | |
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Poh Kee LIEW |
45 |
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Chief Financial Officer and Director |
Veng Kun LUN
Mr. Veng Kun Lun, aged 55, holds a Diploma in Business Administrative. Prior to joining the Company, he was Sales Manager of Jardine Office Solution, Macau and founder and director of All-In-One Officer Solution Co Ltd, a company which he has run since 2000. He has more than 25 years' experience in the marketing and sales industry. He also was the founder and president of Green Environment Protection Association of Macau. In 2015, he was invited to be the Advisor of Overseas Chinese Federation of Fangchengang & Baise City in Guanxi, China.
Poh Kee LIEW
Mr. Poh Kee Liew, aged 45, was awarded a Diploma in Graphic Design from the PJ College Art and Design, Malaysia in 1995. Before joining the Company, he was the Business Development Director of AD Channel Creative, a Malaysian sole proprietorship company, since 2008. He has more than 20 years of experience in marketing materials graphic design, power point presentations and internet social media platform development as well as internal financial management. Mr. Liew will use his intensive financial and public relations management experience to lead the Company in the future, particularly in formulation of financial strategy of the Company.
| 25 |
| Table of Contents |
Indemnification of Officers and Directors.
Under the Colorado Revised Statutes (CRS), director immunity from liability to a company or its shareholders for monetary liabilities applies automatically unless it is specifically limited by a company's Articles of Incorporation. The Company's Articles of Incorporation do not specifically limit the directors' immunity. Excepted from that immunity are: (a) a willful failure to deal fairly with the Company or its shareholders in connection with a matter in which the director has a material conflict of interest; (b) a violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful; (c) a transaction from which the director derived an improper personal profit; and (d) willful misconduct.
The Company's Bylaws provide that (i) no officer or director of the Company shall liable for any acts, defaults or omissions of any other officer or director of the Company, or for any loss sustained by the Company unless the loss resulted from such officer's or director's willful misconduct, willful neglect, or gross negligence, (ii) the Company shall indemnify officers, directors and certain other individuals against all reasonable costs imposed or resulting from such person's role as an officer, director or agent of the Company unless such person is adjudged to be liable from willful misconduct, willful neglect, or gross negligence, and (iii) the Company may purchase and maintain officers and directors liability insurance.
The above discussion of the Company's Bylaws and of the CRS is not intended to be exhaustive and is respectively qualified in its entirety by such charter documents and statutes.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission (SEC), such indemnification is against public policy as expressed in the act and is therefore unenforceable.
Conflicts of Interest
The officer, director and principal stockholder of the Company may actively negotiate for the purchase of a portion of their common stock as a condition to, or in connection with, a proposed merger or acquisition transaction. It is anticipated that a substantial premium may be paid by the purchaser in conjunction with any sale of shares by the Company's officer, director and principal stockholder made as a condition to, or in connection with, a proposed merger or acquisition transaction. The fact that a substantial premium may be paid to the Company's officers and directors to acquire their shares creates a conflict of interest for them and may compromise their state law fiduciary duties to the Company's other stockholders. In making any such sale, the Company's officers and directors may consider their own personal pecuniary benefit rather than the best interests of the Company and the Company's other stockholders, and the other stockholders are not expected to be afforded the opportunity to approve or consent to any particular buy-out transaction involving shares held by Company management.
The Company has adopted a policy under which any consulting or finder's fee that may be paid to a third party for consulting services to assist management in evaluating a prospective business opportunity would be paid in stock rather than in cash. Any such issuance of stock would be made on an ad hoc basis. Accordingly, the Company is unable to predict whether, or in what amount, such stock issuance might be made.
| 26 |
| Table of Contents |
It is not currently anticipated that any salary, consulting fee, or finder's fee shall be paid to any of the Company's directors or executive officers, or to any other affiliate of the Company except as described under Executive Compensation above.
Although management has no current plans to cause the Company to do so, it is possible that the Company may enter into an agreement with an acquisition candidate requiring the sale of all or a portion of the common stock held by the Company's current stockholders to the acquisition candidate or principals thereof, or to other individuals or business entities, or requiring some other form of payment to the Company's current stockholders, or requiring the future employment of specified officers and payment of salaries to them. It is more likely than not that any sale of securities by the Company's current stockholders to an acquisition candidate would be at a price substantially higher than that originally paid by such stockholders. Any payment to current stockholders in the context of an acquisition involving the Company would be determined entirely by the largely unforeseeable terms of a future agreement with an unidentified business entity.
Involvement on Certain Material Legal Proceedings During the Past Five (5) Years
(1) No director, officer, significant employee or consultant has been convicted in a criminal proceeding, exclusive of traffic violations or is subject to any pending criminal proceeding.
(2) No bankruptcy petitions have been filed by or against any business or property of any director, officer, significant employee or consultant of the Company nor has any bankruptcy petition been filed against a partnership or business association where these persons were general partners or executive officers.
(3) No director, officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities.
(4) No director, officer or significant employee has been convicted of violating a federal or state securities or commodities law.
Committee of our Board of Directors
Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our Board of Directors.
| 27 |
| Table of Contents |
We have not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, any committee performing a similar function. The functions of those committees are being undertaken by Board of Directors as a whole. Because we have only two directors, none of whom are independent, we believe that the establishment of these committees would be more form over substance.
We do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors. Given our relative size and lack of directors and officers insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our Board.
None of our directors is an “audit committee financial expert” within the meaning of Item 401(e) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or Board of Directors who:
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|
· |
understands generally U.S. GAAP and financial statements, |
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· |
is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves, |
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· |
has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements, |
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· |
understands internal controls over financial reporting, and |
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|
· |
understands audit committee functions. |
Communications with the Board
Individuals may communicate with the Company's Board of Directors or individual directors by writing to the Company's office at Level 23, Nu Tower 2, Jalan Tun Sambanthan, Sentral, 50470 Kuala Lumpur, Malaysia. The Secretary will review all such correspondence and forward to the Board of Directors a summary of all such correspondence and copies of all correspondence that, in the opinion of the Secretary, relates to the functions of the Board or committees thereof or that he otherwise determines requires their attention. Directors may review a log of all such correspondence received by the Company and request copies. Concerns relating to accounting, internal control over financial reporting or auditing matters will be immediately brought to the attention of the Board of Directors and handled in accordance with its procedures established with respect to such matters.
Code of Ethics
The Company's Board of Directors has adopted a Code of Ethics which applies to its principal executive officer and principal financial officer. A copy of the Code of Ethics is available in print without charge to any person who sends a request to the office of the Secretary of the Company Level 23, Nu Tower 2, Jalan Tun Sambanthan, Sentral, 50470 Kuala Lumpur, Malaysia.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Exchange Act requires the Company's directors, executive officers and persons who own more than ten percent of a registered class of the Company's equity securities (“10% holders”), to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Directors, officers and 10% holders are required by SEC regulation to furnish the Company with copies of all of the Section 16(a) reports they file.
Based solely on a review of reports furnished to the Company during the fiscal year ended December 31, 2016 or written representations from the Company's directors and executive officers, there are no known incidents of non-compliance for the reporting year, except as follows: (i) each of Lin Kok Peng, Rock Capital Limited, Allister Lim Wee Sing, Jose A. Capote, Scott C. Kline, and Rong Yi Rong (Beijing) Asset Management Limited failed to timely file a Form 3; (ii) Lin Kok Peng and Rock Capital Limited failed to timely file a Form 4 for one transaction; and (iii) Allister Lim Wee Sing failed to timely file a Form 4 for one transaction.
ITEM 11. EXECUTIVE COMPENSATION
Since the change of management in December 2016, new management of the Company requires work five (5) days per week. Company will paying monthly salary to both new directors and officers including reimbursement for out-of-pocket expenses incurred on behalf of the Company.
| 29 |
| Table of Contents |
The Company has no stock option, retirement, pension, or profit-sharing programs for the benefit of directors, officers or other employees, but the Board of Directors may recommend adoption of one or more such programs in the future.
SUMMARY COMPENSATION TABLE
|
Name and |
|
Year |
|
Salary |
|
|
Bonus |
|
|
Stock |
|
|
Option |
|
|
Non-Equity |
|
|
Change in |
|
|
All Other |
|
|
Total |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
Veng Kun LUN |
|
2016 |
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
Current CEO |
|
2015 |
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Poh Kee Liew |
|
2016 |
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
Current CFO |
|
2015 |
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lin Kok Peng, |
|
2016 |
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
Former Principal Executive Officer |
|
2015 |
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jose A. Capote Former Secretary |
|
2016 |
|
$ | 17,973 |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | 17,973 |
|
|
and Director |
|
2015 |
|
$ | 12,000 |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | -0- |
|
|
$ | 12,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allister Lim Wee Sing |
|
2016 |
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
Former Director |
|
2015 |
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
|
$ |
-0- |
|
The Company has no other Executive Compensation issues which would require the inclusion of other mandated table disclosures.
| 30 |
| Table of Contents |
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of January 9, 2017, 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 & Address of Beneficial Owner |
|
Office, If Any |
|
Title of Class |
|
Amount & |
|
|
Percent of Class (1) (3) |
| ||
|
|
|
Officers and Directors |
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
| ||
|
Veng Kun LUN |
|
Chief Executive Officer and Director |
|
Common Stock, $0.001 par value |
|
|
0 |
|
|
|
0 | % |
|
Poh Kee LIEW |
|
Chief Financial Officer and Director |
|
Common Stock, $0.001 par value |
|
|
0 |
|
|
|
0 | % |
|
All Officers and Directors as a group (2 persons named above) |
|
|
|
|
|
|
|
|
|
|||
|
|
5% Security Holders |
|||||||||||
|
| ||||||||||||
|
PLATINUM STARLIGHT LIMITED |
|
Common Stock, $0.001 par value |
|
29,426,877 |
|
6.93 |
% | |||||
|
ROCK CAPITAL LIMITED |
|
Common Stock, $0.001 par value |
|
114,621,557 |
|
27.00 |
% | |||||
|
RONG YI RONG (BEIJING) ASSET MANAGEMENT LIMITED |
|
Common Stock, $0.001 par value |
|
83,656,610 |
|
19.71 |
% | |||||
|
MILLION LEADER (HK) LIMITED |
|
Common Stock, $0.001 par value |
|
27,297,224 |
|
6.43 |
% | |||||
|
HAO TONG XIN |
|
Common Stock, $0.001 par value |
|
24,750,000 |
|
5.83 |
% | |||||
_________
* Less than 1%
|
(1) |
On January 9, 2017, there were 424,508,156 shares of our common stock outstanding and no shares of Preferred Stock issued and outstanding. We have no outstanding stock warrants or outstanding stock options. |
|
|
|
|
(2) |
Under applicable SEC rules, a person is deemed the “beneficial owner” of a security with regard to which the person directly or indirectly, has or shares (a) the voting power, which includes the power to vote or direct the voting of the security, or (b) the investment power, which includes the power to dispose, or direct the disposition, of the security, in each case irrespective of the person's economic interest in the security. Under SEC rules, a person is deemed to beneficially own securities which the person has the right to acquire within 60 days through the exercise of any option or warrant or through the conversion of another security. |
|
|
|
|
(3) |
In determining the percent of voting stock owned by a person on January 9, 2017: (a) the numerator is the number of shares of common stock beneficially owned by the person, including shares the beneficial ownership of which may be acquired within 60 days upon the exercise of options or warrants or conversion of convertible securities, and (b) the denominator is the total of (i) the 424,508,156 shares of common stock outstanding on January 9, 2017, and (ii) any shares of common stock which the person has the right to acquire within 60 days upon the exercise of options or warrants or conversion of convertible securities. Neither the numerator nor the denominator includes shares which may be issued upon the exercise of any other options or warrants or the conversion of any other convertible securities. |
|
|
|
|
(4) |
Lin Kok Peng owns shares beneficially as a result of his ownership of Rock Capital Limited. Jose A. Capote owns shares through his 50% ownership of Earth Heat, Ltd. |
| 31 |
| Table of Contents |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The Company has two directors, including Veng Kun LUN, who is the Chief Executive Officer and Poh Kee LIEW, who is the Chief Financial Officer.
In the year ended December 31, 2015, Rock Capital Limited, a related party advanced the Company $471,283 for working capital purposes. Total advances through December 31, 2015 were $471,283. On March 17, 2016, the Company repaid a total of $468,243 to Rock Capital Limited.
In the year ended December 31, 2016, the Company continued to borrow from Rock Capital Limited. Through November 28, 2016, the balance due to Rock Capital Limited was $102,420. These funds were an interest-free loan to the Company and were due and payable on November 28, 2016. On November 28, 2016, the Company entered into a Debt Settlement Agreement with Rock Capital Limited. The agreement provides that if the advanced funds are not repaid by November 28, 2016, Rock Capital Limited may, in its sole discretion, extend the repayment deadline or convert all or a portion of the advances into common stock of the Company, at a conversion price of $0.00105 per share. On the same day, Rock Capital Limited elected to convert the $102,420 owed by the Company into shares of common stock at the $0.00105 conversion price, thus resulting in the loss on debt extinguishment of $199,966 and the issuance to Rock Capital Limited of 97,542,857 shares of common stock. See Note 3 to the accompanying financial statements for more details.
On April 1, 2016, the Company entered into an agreement with New Asia Momentum Pte Ltd, a Singapore private company owned and controlled by Lin Kok Peng, chairman of the Board and the Company’s Chief Executive Officer and Chief Financial Officer at the time, for leasing its office space for one year. The monthly rent is around $3,476.
Since December 19, 2016, the new CEO Mr. Veng Kun LUN has been funding the Company for its routine operating expenditures. He has advanced to the Company $1,130 as of December 31, 2016.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Independent Registered Public Accounting Firm's Fees
The Company paid or accrued the following fees in each of the prior two fiscal years to its principal accountant.
|
|
|
December 31, 2016 |
|
|
December 31, 2015 |
| ||
|
Audit Fees |
|
$ | 10,000 |
|
|
$ | 4,725 |
|
|
Audit Related Fees |
|
|
- |
|
|
|
- |
|
|
Tax Fees |
|
|
- |
|
|
|
- |
|
|
All Other Fees |
|
|
- |
|
|
|
- |
|
|
TOTAL |
|
$ | 10,000 |
|
|
$ | 4,725 |
|
“Audit Fees” consisted of the fees billed for professional services rendered for the audit of our annual financial statements and the reviews of the financial statements included in our Forms 10-Q and for any other services that were normally provided by our independent auditors in connection with our statutory and regulatory filings or engagements.
“Tax Fees” consisted of the fees billed for professional services rendered for tax compliance, tax advice and tax planning. Included in such Tax Fees were fees for preparation of our tax returns and consultancy and advice on other tax planning matters.
| 32 |
| Table of Contents |
The Company has not designated a formal audit committee. However, as defined in the Sarbanes-Oxley Act of 2002, the entire Board of Directors (Board), in the absence of a formally appointed committee, is, by definition, the Company's audit committee.
Our audit committee has considered whether the provision of the non-audit services described above is compatible with maintaining auditor independence and determined that such services are appropriate. Before auditors are engaged to provide us audit or non-audit services, such engagement is (without exception, required to be) approved by the audit committee of our Board of Directors.
In discharging the audit committee's oversight responsibility as to the audit process, commencing with the engagement of our independent auditors, the Board obtained from the independent auditors a formal written statement describing all relationships between the auditors and the Company that might bear on the auditors' independence as required by auditing standards generally accepted in the United States of America. The Board discussed with the auditors any relationships that may impact their objectivity and independence, including fees for non-audit services, and satisfied itself as to the auditors' independence.
The Board discussed and reviewed with the independent auditors all matters required to be discussed by auditing standards generally accepted in the United States of America, including those described in the applicable auditing standards regarding communications with Audit Committees.
The Board reviewed the audited financial statements of the Company as of and for the years ended December 31, 2016 and 2015 with management and the independent auditors. Management has the sole ultimate responsibility for the preparation of the Company's financial statements and the independent auditors have the responsibility for their examination of those statements.
Based on the above-mentioned review and discussions with the independent auditors and management, the Board of Directors approved the Company's audited financial statements and recommended that they be included in its Annual Report on Form 10-K for the year ended December 31, 2016 for filing with the U. S. Securities and Exchange Commission.
The Company's principal accountant did not engage any other persons or firms other than the principal accountant's full-time, permanent employees.
| 33 |
| Table of Contents |
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
Financial Statements and Schedules
The financial statements are set forth under Item 8 of this annual report on Form 10-K. Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.
Exhibit List
The following exhibits are filed as part of this report or incorporated by reference:
|
Exhibit No. |
|
Description |
|
| ||
|
3.1 |
|
Articles of Incorporation (1) |
|
3.2 |
|
Articles of Amendment dated July 23, 2015 (2) |
|
3.3 |
|
Bylaws (1) |
|
21.1* |
|
List of Subsidiaries |
|
|
Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
|
Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
|
|
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
|
101.INS** |
|
XBRL Instance Document |
|
101.SCH** |
|
XBRL Taxonomy Extension Schema Document |
|
101.CAL** |
|
XBRL Taxonomy Extension Calculation Linkbase Document |
|
101.DEF** |
|
XBRL Taxonomy Extension Definition Linkbase Document |
|
101.LAB** |
|
XBRL Taxonomy Extension Label Linkbase Document |
|
101.PRE** |
|
XBRL Taxonomy Extension Presentation Linkbase Document |
___________
|
(1) |
Previously included as an Exhibit to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on May 18, 2009 and incorporated herein by reference. |
|
(2) |
Previously included as an Exhibit to the Form 8-K filed with the Securities and Exchange Commission on July 31, 2015 and incorporated herein by reference. |
* Filed herewith.
** In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this Annual Report on Form 10-K shall be deemed “furnished” and not “filed”.
| 34 |
| Table of Contents |
In accordance with section 13 or 15(d) of the Securities Exchange Act of 1934, the Company caused this Report on Form 10-K to be signed on its behalf by the undersigned, thereto duly authorized individual.
|
|
New Asia Energy, Inc. |
| |
|
| |||
|
Date: April 17, 2017 |
By: |
/s/ Veng Kun LUN |
|
|
|
Veng Kun LUN |
| |
|
|
Chief Executive Officer |
| |
In accordance with the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the date as indicated.
|
Signature |
|
Title |
|
Date |
|
|
|
|
|
|
|
/s/ Veng Kun LUN |
|
Chief Executive Officer, Principal Executive Officer, Director |
|
April 17, 2017 |
|
Veng Kun LUN |
|
|
| |
|
|
|
|
|
|
|
/s/ Poh Kee LIEW |
|
Chief Financial Officer, Principal Financial Officer and Director |
|
April 17, 2017 |
|
Poh Kee LIEW |
|
|
|
| 35 |
| Table of Contents |
| F-1 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Stockholders
New Asia Energy, Inc.
We have audited the accompanying balance sheet of New Asia Energy, Inc. (the "Company") as of December 31, 2016, and the related statements of operations and comprehensive loss, shareholders’ 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 an 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 New Asia Energy, Inc. as of December 31, 2016, 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 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency and negative operating cash flows that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ MaloneBailey, LLP
Houston, Texas
April 17, 2017
| F-2 |
| Table of Contents |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
New Asia Energy, Inc.
We have audited the accompanying balance sheet of New Asia Energy, Inc. (the "Company") as of December 31, 2015, and the related statement of operations, changes in stockholders' deficit and cash flows for the year then ended. This financial statement are the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with 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 statement are free of material misstatement. The Company was 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2015, and the results of their operations and their cash flows for the year then ended; in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statement has been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statement, the Company has had no revenues and incurred an accumulated deficit of $407,391 since inception. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans concerning these matters are also described in Note 1, which includes the raising of additional equity financing. The financial statement does not include any adjustments that might result from the outcome of this uncertainty.
/s/ Anton & Chia, LLP
Newport Beach, CA
April 8, 2016
| F-3 |
BALANCE SHEETS
AS OF DECEMBER 31, 2016 AND 2015
|
|
|
December 31, |
|
|
December 31, |
| ||
|
|
|
2016 |
|
|
2015 |
| ||
|
ASSETS | ||||||||
|
Current Assets |
|
|
|
|
|
| ||
|
Cash |
|
$ | 1,130 |
|
|
$ | 574,211 |
|
|
TOTAL ASSETS |
|
$ | 1,130 |
|
|
$ | 574,211 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ | 4,000 |
|
|
$ | - |
|
|
Advances from related parties |
|
|
1,130 |
|
|
|
471,283 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
|
5,130 |
|
|
|
471,283 |
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
|
Preferred stock, par value $.10 per share; Authorized 10,000,000 shares; issued and outstanding -0- shares. |
|
|
- |
|
|
|
- |
|
|
Common Stock, par value $.001 per share; Authorized 500,000,000 shares; issued and outstanding 424,508,156 and 326,965,299 shares respectively as of December 31, 2016 and 2015. |
|
|
424,508 |
|
|
|
326,965 |
|
|
Capital paid in excess of par value |
|
|
418,762 |
|
|
|
213,919 |
|
|
Stock subscriptions receivable |
|
|
- |
|
|
|
(30,603 | ) |
|
Accumulated other comprehensive income |
|
|
38 |
|
|
|
38 |
|
|
Accumulated deficit |
|
|
(847,308 |
) |
|
|
(407,391 | ) |
|
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) |
|
|
(4,000 | ) |
|
|
102,928 |
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |
|
$ | 1,130 |
|
|
$ | 574,211 |
|
The accompanying notes are an integral part of these financial statements.
| F-4 |
| Table of Contents |
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
|
|
|
Year Ended |
|
|
Year Ended |
| ||
|
|
|
December 31, |
|
|
December 31, |
| ||
|
|
|
2016 |
|
|
2015 |
| ||
|
Operating Expenses: |
|
|
|
|
|
| ||
|
General and Administrative |
|
$ | 239,951 |
|
|
$ | 179,442 |
|
|
Loss (Gain) on Debt Extinguishment |
|
|
199,966 |
|
|
|
(10,000 | ) |
|
Total Operating Expenses |
|
|
439,917 |
|
|
|
169,442 |
|
|
Net Operating Loss |
|
|
(439,917 | ) |
|
|
169,442 | |
|
Provision for Income Tax |
|
|
- |
|
|
|
- |
|
|
Net Loss |
|
$ | (439,917 | ) |
|
$ | (169,442 | ) |
|
Foreign Currency Translation Adjustment |
|
|
- |
|
|
|
38 |
|
|
Comprehensive Loss |
|
$ |
(439,917 | ) |
|
$ |
(169,404 | ) |
|
Net Loss Per Common Share - Basic |
|
$ | (0.00 | ) |
|
$ | (0.00 | ) |
|
Net Loss Per Common Share - Diluted |
|
$ | (0.00 | ) |
|
$ | (0.00 | ) |
|
Weighted Average Common Shares Outstanding - Basic |
|
|
335,760,147 |
|
|
|
40,218,659 |
|
|
Weighted Average Common Shares Outstanding - Diluted |
|
|
335,760,147 |
|
|
|
40,218,659 |
|
The accompanying notes are an integral part of these financial statements.
| F-5 |
| Table of Contents |
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
|
|
|
Year Ended |
|
|
Year Ended |
| ||
|
|
|
December 31, |
|
|
December 31, |
| ||
|
|
|
2016 |
|
|
2015 |
| ||
|
|
|
|
|
|
|
| ||
|
Net Loss |
|
$ | (439,917 | ) |
|
$ | (169,442 | ) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
Loss (gain) on debt extinguishment |
|
|
199,966 |
|
|
|
(10,000 | ) |
|
Accounts payable |
|
|
4,000 |
|
|
|
(8,022 | ) |
|
Expenses paid on behalf of Company |
|
|
- |
|
|
|
6,406 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash used in operating activities |
|
|
(235,951 | ) |
|
|
(181,058 | ) |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock |
|
|
30,603 |
|
|
|
286,989 |
|
|
Borrowings from related party |
|
|
100,510 |
|
|
|
468,242 |
|
|
Repayment on borrowings from related party |
|
|
(468,243 | ) |
|
|
- |
|
|
Net cash provided by (used in) financing activities |
|
|
(337,130 | ) |
|
|
755,231 |
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash |
|
|
(573,081 | ) |
|
|
574,173 |
|
|
Effects on changes in foreign exchange rate |
|
|
- |
|
|
|
38 |
|
|
Cash at beginning of the year |
|
|
574,211 |
|
|
|
- |
|
|
Cash at end of the year |
|
$ | 1,130 |
|
|
$ | 574,211 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure information: |
|
|
|
|
|
|
|
|
|
Income taxes paid |
|
$ | - |
|
|
$ | - |
|
|
Interest paid |
|
$ | - |
|
|
$ | - |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash transactions: |
|
|
|
|
|
|
|
|
|
Debt settled with issuance of common stock |
|
$ | 102,420 |
|
|
$ | - |
|
The accompanying notes are an integral part of these financial statements.
| F-6 |
| Table of Contents |
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2016 AND 2015
|
|
|
Number Of Common |
|
|
|
|
|
Capital Paid in Excess |
|
|
|
|
|
Accumulated Other |
|
|
|
|
|
|
| |||||||
|
|
|
Shares Issued |
|
|
Common Stock |
|
|
of Par Value |
|
|
Stock Receivable |
|
|
Comprehensive Income |
|
|
Accumulated Deficit |
|
|
Total |
| |||||||
|
Balance at December 31, 2014 |
|
|
23,660,625 |
|
|
$ | 23,661 |
|
|
$ | 193,226 |
|
|
$ | - |
|
|
$ | - |
|
|
$ | (237,949 |
) |
|
$ | (21,062 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock issued for cash |
|
|
303,304,674 |
|
|
|
303,304 |
|
|
|
14,288 |
|
|
|
(30,603 | ) |
|
|
- |
|
|
|
- |
|
|
|
286,989 |
|
|
Expenses paid on behalf of Company |
|
|
- |
|
|
|
- |
|
|
|
6,406 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
6,406 |
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
38 |
|
|
|
(169,442 |
) |
|
|
(169,404 |
) |
|
Balance at December 31, 2015 |
|
|
326,965,299 |
|
|
|
326,965 |
|
|
|
213,919 |
|
|
|
(30,603 | ) |
|
|
38 |
|
|
|
(407,391 |
) |
|
|
102,928 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for debt settlement |
|
|
97,542,857 |
|
|
|
97,543 |
|
|
|
204,843 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
302,386 |
|
|
Proceeds from issuance of common stock |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
30,603 |
|
|
|
- |
|
|
|
- |
|
|
|
30,603 |
|
|
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(439,917 |
) |
|
|
(439,917 |
) |
|
Balance at December 31, 2016 |
|
|
424,508,156 |
|
|
$ | 424,508 |
|
|
$ | 418,762 |
|
|
$ | - |
|
|
$ | 38 |
|
|
$ | (847,308 |
) |
|
$ | (4,000 |
) |
The accompanying notes are an integral part of these financial statements.
| F-7 |
| Table of Contents |
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2016 and 2015
Note 1 – Organization and Summary of Significant Accounting Policies
ORGANIZATION
New Asia Energy, Inc. (formerly known as High Desert Assets, Inc. and previously known as Univest Tech, Inc, (the "Company"), was incorporated in the State of Colorado on November 6, 2007. The Company was originally formed to develop and market music based on technology solutions. In February 2015, the Company underwent a change in control, and management adopted a new business plan based on the development of a "Pure Play" Renewable/Alternative/Distributed Energy Technology Solutions and Wastes to Resources and Energy platforms.
On February 6, 2015, the Company entered into Stock Purchase Agreements with two U.S. accredited investors, Scott C. Kline and Jose A. Capote, the Secretary and Chief Technical Officer of the Company at the time, respectively, and two foreign investors, including Rock Capital Limited, the new majority owner of the Company, pursuant to which the Company issued an aggregate of 17,446,673 shares of common stock, or approximately 42.3% of the issued and outstanding common stock of the Company, at an aggregate purchase price of approximately $17,446. The sales of common stock were made following the acquisition by Rock Capital Limited.
On February 6, 2015 (the “Closing Date”), Rock Capital Limited acquired 14,250,000 shares of common stock of the Company, representing approximately 34.7% of the issued and outstanding shares of common stock of the Company as of the Closing Date, from Jaitegh Singh, the previous majority shareholder of the Company. On the same date, Rock Capital Limited also acquired an additional 1,565,450 shares of common stock from several minority holders, including Loro Verde Investments, representing approximately 3.8% of the issued and outstanding shares of common stock of the Company. As a result of the foregoing, as of the February 6, 2015, Rock Capital Limited acquired common stock representing approximately 76% of the issued and outstanding shares of common stock of the Company.
On July 23, 2015, the Company filed Articles of Amendment to its Articles of Incorporation with the Colorado Secretary of State to change the name of the Company from High Desert Assets, Inc. to New Asia Energy, Inc. On July 29, 2015, the Financial Industry Regulatory Authority (FINRA) approved the change.
On December 31, 2015, the Company went through a change of control of ownership when (i) the Company issued under Regulation S an aggregate of 285,750,001 shares of the Company's common stock to a total of 10 accredited foreign persons in exchange for the receipt of an aggregate of $300,000, including, but not limited to, Rong Yi Rong (Beijing) Asset Management Limited (167,995,350 shares), Platinum Starlight HK Limited (15,176,877 shares), Beijing Run Zheng Technology Development Limited (27,297,224 shares), and Million Leader HK Limited (27,297,224 shares), and (ii) Rock Capital Limited sold 14,250,000 of its shares of the Company's common stock to Platinum Starlight HK Limited in exchange for the receipt of an aggregate of $100,000, altogether representing approximately 91.8% of the issued and outstanding common stock of the Company. The Company received $269,435 as of December 31, 2015. The remaining amount was received in March 2016.
On December 19, 2016, Lin Kok Peng, chairman of the Board and the Company's Chief Executive Officer and Chief Financial Officer, Allister Lim Wee Sing, director of the Company, and Jose Capote, secretary of the Company, resigned from the Board and their positions as Company officers. On the same day, the Board named Mr. Veng Kun Lun and Mr. Poh Kee Liew as new directors. Mr. Veng Kun Lun was also named to be the Chief Executive Officer and secretary of the Company, and Mr. Poh Kee Liew was named as Chief Financial Officer of the Company.
In November 2016, Rock Capital Limited transferred part of the Company’s common stock to individuals, and converted debt of $102,420 to 97,542,857 shares of the Company’s common stock. As of December 31, 2016, Rock Capital Limited remained as the largest shareholder of the Company.
| F-8 |
| Table of Contents |
NEW ASIA ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2016 and 2015
Note 2 – Summary of Significant Accounting Policies
This summary of significant accounting policies is presented to assist the reader in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates.
EARNINGS PER SHARE
The Company has adopted the Financial Accounting Standards Board (FASB) ASC Topic 260 regarding earnings / loss per share, which provides for calculation of “basic” and “diluted” earnings / loss per share. Basic earnings / loss per share includes no dilution and is computed by dividing net income / loss available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings / loss per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings / loss per share.
There were no potentially dilutive instruments outstanding during the years ended December 31, 2016 and 2015.
| F-9 |
| Table of Contents |
NEW ASIA ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2016 and 2015
NOTE 2 – Summary of Significant Accounting Policies (Continued)
INCOME TAXES
In accordance with ASC 740 - Income Taxes, the provision for income taxes is computed using the asset and liability method. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities have been adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.
The Company expects to recognize the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a “more-likely-than-not” threshold, the amount to be recognized in the financial statements will be the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of December 31, 2016 and 2015, the Company had no uncertain tax positions. The Company recognizes interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. The Company currently has no federal or state tax examinations nor has it had any federal or state examinations since its inception. To date, the Company has not incurred any interest or tax penalties.
FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company applies the provisions of accounting guidance, FASB Topic ASC 825, Financial Instruments. ASC 825 requires all entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet, for which it is practicable to estimate fair value, and defines fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. As of December 31, 2016 and 2015, the fair value of cash and accounts payable approximated carrying value due to the short maturity of the instruments.
| F-10 |
| Table of Contents |
NEW ASIA ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2016 and 2015
NOTE 2 – Summary of Significant Accounting Policies (Continued)
FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. 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 unobservable inputs (Level 3 measurements).
Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.
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 to related parties due to their related party nature.
RELATED PARTIES
A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.
| F-11 |
| Table of Contents |
NEW ASIA ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2016 and 2015
NOTE 2 – Summary of Significant Accounting Policies (Continued)
IMPACT OF NEW ACCOUNTING STANDARDS
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. Among other things, in the amendments in ASU 2016- 02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all public business entities and all non-public business entities upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. 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”. These amendments provide cash flow statement classification guidance for: 1. Debt Prepayment or Debt Extinguishment Costs; 2. Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; 3. Contingent Consideration Payments Made after a Business Combination; 4. Proceeds from the Settlement of Insurance Claims; 5. Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies; 6. Distributions Received from Equity Method Investees; 7. Beneficial Interests in Securitization Transactions; and 8. Separately Identifiable Cash Flows and Application of the Predominance Principle. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted, including adoption in an interim period. The Company is currently in the process of evaluating the impact of the adoption on its financial statements.
GOING CONCERN
The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses and has working capital deficiency and negative operating cash flows.
These matters, among others, raise substantial doubt about our ability to continue as a going concern. While the Company's cash position may not be significant enough to support the Company's daily operations, management intends to raise additional funds by way of equity and/or debt financing to fund operations. The financial statements do not include any adjustments that may result should the Company be unable to continue as a going concern.
Note 3 – Capital Stock
At formation, the Company was authorized to issue 50,000,000 shares of $.001 par value common stock.
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| Table of Contents |
NEW ASIA ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2016 and 2015
Note 3 – Capital Stock (continued)
On June 26, 2015, the Company filed an Information Statement (“The PRE 14C”) with the Securities and Exchange Commission (“SEC”), pursuant to Section 14C of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), notifying the holders of common stock, par value $0.001 per share, of the Company that on June 26, 2015, the Company received a written consent of shareholders holding in aggregate more than a majority of the total voting power of all issued and outstanding capital stock of the Company in lieu of a meeting of the shareholders, authorizing the following:
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Changing the name of the Company from High Desert Assets, Inc. to New Asia Energy, Inc.; and |
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Increasing the Company's authorized common stock, par value $0.001 per share, from 250,000,000 shares to 500,000,000 shares and to increase of the Company's authorized preferred stock, par value $0.10 per share, from 1,000,000 shares to 10,000,000 shares (the “Preferred Stock Increase”). |
On July 7, 2015, the Company filed the final Form 14C with the SEC. On July 23, 2015, the Company filed Articles of Amendment to its Articles of Incorporation with the Colorado Secretary of State on the above changes. On July 29, 2015, the FINRA approved the Corporate Actions. The Company's stock is quoted on the OTCQB under the ticker symbol NAEI.
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| Table of Contents |
NEW ASIA ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2016 and 2015
Note 3 – Capital Stock (continued)
On August 19, 2015, the Board of Directors of the Company approved a resolution acknowledging that Rock Capital Limited, the principal controlling shareholder of the Company at the time, (i) had been advancing all the funds to the Company since February 6, 2015 to pay for operating expenses of the Company ("Prior Advances") and (ii) would be required to advance an additional $250,000 to the Company to fund further operating expenses and investments of the Company (together with Prior Advances, "Advances"). The Board further resolved that these Advances would constitute an interest-free loan to the Company due on October 31, 2015. However, if the Company was unable to repay these Advances by such date, Rock Capital Limited, at its sole discretion, would have the option to extend the repayment deadline or convert all or a portion of the Advances into common stock at a conversion price of $0.02 per share. As of December 31, 2015, Rock Capital Limited, did not convert the Advances to common stock, and thus the Advances remained as an interest-free loan to the Company. On March 17, 2016, the Company repaid a total of $468,243 to Rock Capital Limited. On November 28, 2016, the Company entered into a Debt Settlement Agreement with Rock Capital Limited, pursuant to which both parties acknowledged that the advances to the Company as of that day, $102,420, were interest-free and due on the same day. The agreement also allows Rock Capital Limited to extend the repayment deadline or convert all or a portion of the advances into common stock of the Company at $0.00105 per share. On November 28, 2016, Rock Capital Limited elected to convert the $102,420 owed to it by the Company into shares of common stock at the $0.00105 conversion price, resulting in the loss of debt extinguishment of $199,966 and issuance to Rock Capital Limited of 97,542,857 shares of common stock.
On December 31, 2015, the Company went through a change of control of ownership when (i) the Company issued under Regulation S an aggregate of 285,750,001 shares of the Company's common stock to a total of 10 accredited foreign persons in exchange for the receipt of an aggregate of $300,000. (ii) Rock Capital Limited sold 14,250,000 of its shares of the Company's common stock to Platinum Starlight HK Limited in exchange for the receipt of an aggregate of $100,000, altogether representing approximately 91.8% of the issued and outstanding common stock of the Company. See Note 1 for more details.
Note 4 – Loss Per Share
The following table sets forth the computation of basic and diluted net loss per share:
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For the Years Ending December 31, |
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2016 |
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2015 |
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Net loss attributable to common stockholders |
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$ | (439,917 | ) |
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$ | (169,442 | ) |
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Basic weighted average outstanding shares of common stock |
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335,760,147 |
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40,218,659 |
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Dilutive effects of common share equivalents |
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- |
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- |
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Dilutive weighted average outstanding shares of common stock |
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335,760,147 |
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40,218,659 |
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Net loss per share of common stock - basic and diluted |
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$ | 0.00 |
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$ | 0.00 |
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| Table of Contents |
NEW ASIA ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2016 and 2015
Note 5 – Income Taxes
Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur. The Company accounts for income taxes pursuant to ASC 740.
The types of temporary differences between the tax basis of assets and their financial reporting amounts that give rise to a significant portion of the deferred assets and liabilities are as follows:
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December 31, 2016 |
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December 31, 2015 |
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Temporary Difference |
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Tax Effect |
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Temporary Difference |
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Tax Effect |
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Deferred tax assets: |
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Net operating loss |
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$ | 847,308 |
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$ | 327,315 |
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$ | 407,391 |
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$ | 157,375 |
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Valuation allowance |
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(847,308 | ) |
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(327,315 | ) |
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(407,391 | ) |
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(157,375 | ) |
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Total deferred tax asset |
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-0- |
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-0- |
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-0- |
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-0- |
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Deferred income taxes arise from the temporary differences between financial statement and income tax recognition of net operating losses. These loss carryovers are limited under the Internal Revenue Code should a significant change in ownership occur.
At December 31, 2016 and December 31, 2015, the Company had approximately $847,308 and $407,391, respectively, in unused federal net operating loss carry-forwards, which begin to expire principally in the year 2029. A deferred tax asset at each date of approximately $327,315 and $157,375 resulting from the loss carry-forwards has been offset by a 100% valuation allowance.
The following table reconciles the statutory U.S. federal income tax rate to the Company's effective income tax rate.
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For the year ended December 31, 2016 |
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For the year ended December 31, 2015 |
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U.S. Federal statutory rate |
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34 | % |
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34 | % |
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State income tax rate (net of federal benefit) |
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4.63 | % |
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4.63 | % |
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Changes in valuation allowance for DTA |
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-38.63 |
% |
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-38.63 |
% |
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Effective income tax rate |
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0 | % |
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0 | % |
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NEW ASIA ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2016 and 2015
Note 6 – Related Party Activity
In the year ended December 31, 2015, Rock Capital Limited, a related party advanced the Company $471,283 for working capital purposes. Total advances through December 31, 2015 were $471,283. On March 17, 2016, the Company repaid a total of $468,243 to Rock Capital Limited.
In the year ended December 31, 2016, the Company continued to borrow from Rock Capital Limited. Through November 28, 2016, the balance due to Rock Capital Limited was $102,420. These funds were an interest-free loan to the Company and were due and payable on November 28, 2016. On November 28, 2016, the Company entered into a Debt Settlement Agreement with Rock Capital Limited. The agreement provides that if the advanced funds are not repaid by November 28, 2016, Rock Capital Limited may, in its sole discretion, extend the repayment deadline or convert all or a portion of the advances into common stock of the Company, at a conversion price of $0.00105 per share. On the same day, Rock Capital Limited elected to convert the $102,420 owed by the Company into shares of common stock at the $0.00105 conversion price, resulting in the loss on debt extinguishment of $199,966 and the issuance to Rock Capital Limited of 97,542,857 shares of common stock. See Note 3 for more details.
On April 1, 2016, the Company entered into an agreement with New Asia Momentum Pte Ltd, a Singapore private company owned and controlled by Lin Kok Peng, chairman of the Board and the Company’s Chief Executive Officer and Chief Financial Officer at the time, for leasing its office space for one year. The monthly rent is around $3,476.
Since December 19, 2016, the new CEO Mr. Veng Kun LUN has been funding the Company for its routine operating expenditures. He has advanced to the Company $1,130 as of December 31, 2016.
Note 7 – Commitments and Contingencies
On June 9, 2016, Sharon Morrison and Morrison Enterprises ("Plaintiffs") filed a lawsuit ("Complaint") in the Circuit Court of The Seventeenth Judicial Circuit In And For Broward County, Florida, naming Univest Tech Inc. (now known as New Asia Energy Inc. ("NAEI"), which is the Company's current name) as a defendant as well as naming other defendants (including, but not limited to, Manminderjit ("Manny") Singh, Esq., a Florida attorney, Luke Zouvas, Esq., a California attorney, and Zouvas Law Group, P.C. ("ZLG"), which is the law practice corporation owned by Mr. Zouvas) (collectively, "Defendants"). According to the Complaint, on March 24, 2014, (prior to the Change in Control), Manny Singh, Esq., allegedly emailed Ms. Morrison offering to sell her 5,000 shares in an investment opportunity he called "Chino Valley Arizona." Allegedly, Ms. Morrison wired $10,000 in U.S. funds the next day to Luke Zouvas, Esq.'s trust account maintained by ZLG. The wire instructions stated "For Chino Valley Arizona 5000.00 Shares." On September 10, 2014, Ms. Morrison allegedly received an email from an employee of ZLG that had attached to it a September 9, 2014, letter signed by Manny Sing, Esq., transmitting a Stock Purchase Agreement that offered to sell Ms. Morrison, personally, 10,000 shares of Univest Tech Inc. (now NAEI) through a private resale of shares of capital stock purportedly held by Sandman Holdings Corp. which allegedly was a record or beneficial owner of Univest Tech, Inc., (now NAEI) stock at the time. Plaintiffs allege that they did not sign the Stock Purchase Agreement with Sandman Holdings Corp. and did not receive any shares of the capital stock of Univest Tech, Inc., (now NAEI). Plaintiffs are seeking $10,000 U.S. in damages from Defendants Manny Singh, Esq., ZLG, and Luke Zouvas, Esq., related to the Chino Valley Investment Opportunity based on various causes of action solely alleged against Defendants Manny Singh, Esq., ZLG, and Luke Zouvas, Esq. Although Plaintiffs have named Univest Tech, Inc., (now NAEI) as a party defendant in the Complaint, the Plaintiffs have not alleged any causes of action against Univest Tech, Inc. (now NAEI) for damages or to enforce or set aside the unsigned Stock Purchase Agreement for Sandman Holdings' stock in Univest Tech, Inc., (now NAEI). Because Univest Tech, Inc., (now NAEI) has only been named in the lawsuit without seeking any damages from the Company, an estimate of the potential loss, or range of loss, if any, to the Company relating to these proceedings is not possible at this time. Although, if Plaintiffs amended the Complaint to state a cause of action for damages against Univest Tech, Inc., (now NAEI), then, based on the Plaintiffs' present allegations, such a claim for damages would be for the same $10,000 U.S. in damage Plaintiffs are seeking against Defendants Manny Sing, Esq., ZLG, and Luke Zouvas, Esq. Based on the allegations of the Complaint, the Company is of the opinion that it should not have been named as a party-defendant to the proceedings just as Jaitegh Singh, Esq. (Manny Singh's son and the Company's principal shareholder in 2014) was not named as a party-defendant. There are no allegations that the Company was involved in offering or selling (i) the Chino Valley Investment Opportunity, (ii) the Stock Purchase Agreement with Sandman Holdings Corp. (which is not named as a party-defendant) or (iii) any other shares of the Company.
The Company has enlisted a Florida counsel to obtain the dismissal of the Complaint against the Company. The Company is vigorously defending itself in the litigation. The Company's Florida counsel has filed a Motion to Dismiss for Lack of Jurisdiction seeking dismissal of the lawsuit on the grounds that the Florida Court lacks jurisdiction over the Company. In early October 2016, the Company's Florida counsel has also served a Motion for Sanctions Pursuant to Section 57.105 of the Florida Statutes (the "57.105 Motion") requesting that the Plaintiffs voluntarily dismiss the Company within 21 days or be subject to sanctions for continuing to pursue the lawsuit. Plaintiffs did not drop the Company from the law suit within 21 days or thereafter. Therefore, the Company’s Florida counsel filed the 57.105 Motion.
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NEW ASIA ENERGY, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 2016 and 2015
In order to keep their case from being dismiss for failure to allege any claim or cause of action against Univest Tech, Inc. (now NAEI), Plaintiffs amended their original complaint by filing an Amended Complaint making allegations against Univest Tech, Inc. (now NAEI). After receiving Plaintiffs’ Amended Complaint, the Company filed another motion to dismiss on the grounds of a lack of jurisdiction and for an inconsistency in the pleadings. Plaintiffs changed no allegations from the original complaint about where it sent the $10,000 or who might have or did receive those funds. Without any allegations being made as to how Univest Tech, Inc. (now NAEI) would have converted Plaintiffs’ funds to the Company’s own use or any allegation that Univest Tech, Inc. (now NAEI) ever received any of Plaintiffs’ funds, Plaintiffs brought two counts in the Amended Complaint against Univest Tech, Inc. (now NAEI), one for conversion and the other for unjust enrichment. These claims are deficient because of the failure to allege that Univest Tech, Inc. (now NAEI) actually ever received and had dominion or control over the Plaintiffs’ funds.
Although Plaintiffs have alleged causes of action against other defendants that could exceed $10,000, Plaintiffs have only alleged a cause of action against NAEI that could result in a $10,000 judgment against Plaintiffs which is outside the jurisdiction of the Florida Circuit Court because it can only consider cases with damages in excess of $15,000. Therefore, in addition to the other basis for dismissal for lack of jurisdiction, NAEI could be dismissed for want of the Circuit Court’s jurisdiction. As such, the Company’s motion to dismiss the Amended Complaint still alleges a lack of any basis to have sued Univest Tech, Inc. (now NAEI) as well as a lack of any jurisdiction over Univest Tech, Inc. (now NAEI). The Company also included in that motion a claim that Plaintiffs have acted in Bad Faith in suing Univest Tech, Inc. (now NAEI) and should be sanctioned for having done so by an award of attorney’s fees and costs against Plaintiffs and their counsel for having sued Univest Tech, Inc. (now NAEI) in the Amended Complaint. While the Company is of the opinion that NAEI will ultimately be dismissed from the action, the Company cannot assure that result under any circumstance.
On April 1, 2016, the Company entered into an agreement with New Asia Momentum Pte Ltd. to lease its office space for one year. The monthly rent is around $3,476. See Note 6 for more details.
For the years ended December 31, 2016 and 2015, the rental expense is $37,284 and $0, respectively. As of December 31, 2016, future minimum lease commitments under the non-cancellable lease was $10,428 in 2017.
Note 8 – Subsequent Events
Starting from January 1, 2017, the Company uses an office space from New Asia Energy Consultants Sdn Bhd for free. New Asia Energy Consultants Sdn Bhd was founded by Poh Kee Liew, Chief Financial Officer of the Company, and another third party individual. The Company is currently planning to acquire New Asia Energy Consultants Sdn Bhd.
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F-17 |