Item 1. Financial Statements.
ATI NATIONWIDE HOLDING CORP.
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F/K/A EXA, INC.
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BALANCE SHEETS
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June 30,
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December 31,
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2017
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2016
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(Unaudited)
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Assets
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Current assets
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Cash and cash equivalents
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$197
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$1,010
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Total Current Assets
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197
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1,010
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Total Assets
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$197
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$1,010
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Liabilities and Stockholders' Equity
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Current Liabilities
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Due to related party
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$83,710
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$44,839
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Total Current Liabilities
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83,710
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44,839
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Total Liabilities
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83,710
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44,839
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Commitments and Contingencies
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Stockholders' Equity
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Common stock, par value $0.001; 500,000,000 shares authorized; 218,175,486 and 199, 175,486 shares issued and outstanding
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99,175
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99,175
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Common stock reserved
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147
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147
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Additional paid in capital
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432,253
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432,253
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Accumulated deficit
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-615,089
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-575,404
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Total stockholders' equity
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-83,514
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-43,829
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Total liabilities and stockholders' equity
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$197
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$1,010
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See Notes to Financial Statements
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ATI NATIONWIDE HOLDING CORP.
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F/K/A EXA, INC.
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STATEMENTS OF OPERATIONS
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(UNAUDITED)
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For the Three Months Ended
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For the Six Months Ended
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June 30
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June 30
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2017
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2016
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2017
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2016
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Revenue
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$ -
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$ 1,235
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$ -
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$ 2,607
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Operating Expenses
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General and Administrative
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7,545
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7,899
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15,045
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9,002
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Professional Fees
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15,440
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500
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24,640
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1,000
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Total Operating Expenses
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22,985
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8,399
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39,685
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10,002
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Net Loss from Operation
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(22,985)
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(7,164.00)
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(39,685)
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(7,395)
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Other Expenses
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-
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2,296
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-
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3,208
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Net Income (Loss) from Operation before Taxes
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(22,985)
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(9,460.00)
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(39,685)
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(10,603)
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Provision for Income Taxes
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-
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-
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-
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-
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Net Loss
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$ (22,985)
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$ (9,460)
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$ (39,685)
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$ (10,603)
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Net Loss per Common Share-Basic and Diluted
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$ (0.00)
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$ (0.00)
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$ (0.00)
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$ (0.00)
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Weighted Average Number of Common
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Shares Outstanding Basic and diluted
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218,175,486
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69,175,486
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217,125,762
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69,175,486
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See Notes to Financial Statements
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ATI NATIONWIDE HOLDING CORP.
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F/K/A EXA, INC.
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STATEMENTS OF CASH FLOWS
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(UNAUDITED)
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For the Six Months Ended
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June 30
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2017
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2016
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Operating Activities
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Net loss of the period
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$ (39,685)
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$ (10,603)
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Change in assets and liabilities
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Accounts receivable
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-
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-
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Accounts payable and accrued liabilities
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-
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6,125
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Interest payable
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-
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1,854
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Net cash used in operating activities
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(39,685)
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(2,624)
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Financing Activities
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Advances from related party
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38,871
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1,000
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Net cash provided by financing activities
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38,871
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1,000
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Net increase (decrease) in cash and equivalents
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(813)
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(1,624)
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Cash and equivalents at beginning of the period
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1,010
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4,025
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Cash and equivalents at end of the period
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$ 197
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$ 2,401
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Supplemental cash flow information:
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Interest paid
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$ -
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$ -
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Income taxes paid
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$ -
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$ -
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See Notes to Financial Statements
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Notes to Financial Statements
(Unaudited)
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
ATI
Nationwide Holding Corp., defined above and herein as the “Company” or the “Issuer,” formerly EXA
,
Inc., was incorporated under the laws of the State of Florida on September 24, 2001. The Company is a holding company whose
purpose is to develop into full-fledged national savings and loan operating in Ghana and elsewhere internationally. As with any
business plan that is aspirational in nature, there is no assurance we will be able to accomplish all of our objective or that
we will be able to meet our financing needs to accomplish our objectives.
On October 3, 2016, pursuant to
its obligations under the Joint Venture Agreement, AmericaTowne purchased 30,000,000 shares of the Company’s common stock
from Joseph Passalaqua for $100,000, and 35,000,000 shares of the Company’s common stock from Carson Holdings, LLC, a Nevada
limited liability company and related party to Joseph Passalaqua (“Carson Holdings”) for $75,000. AmericaTowne used
operating capital for the purchase. Joseph Passalaqua resigned as Chief Executive Officer and the Company’s sole director.
Mr. Perkins was appointed as the Company’s sole director and officer on October 14, 2016. On the same day, the Company formally
changed its name from EXA, Inc., to ATI Nationwide Holding Corp. The Company also increased its authorized common stock from 100,000,000
shares to 500,000,000 shares.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These financial statements have
been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
Interim
Financial Statements
These interim unaudited financial
statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial
information. They do not include all the information and footnotes required by generally accepted accounting principles for complete
financial statements. Therefore, these financial statements should be read in conjunction with the Company's audited financial
statements and notes for the year ended December 31, 2016.
Accounting Method
The Company's financial statements
are prepared using the accrual method of accounting. The Company has elected a fiscal year ending on December 31.
Use of Estimates
The preparation of financial
statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reporting period. In the opinion of management, all adjustments
necessary in order to make the financial statements not misleading have been included. Actual results could differ from those estimates.
Financial Instruments
The carrying amount reported
in the balance sheet for cash, accounts receivable, accounts payable, accrued expenses, interest payable and short-term notes payable
approximate fair value because of the immediate or short-term maturity of these financial instruments.
Cash Equivalents
The Company considers all highly liquid investments
with maturity of three months or less when purchased to be cash equivalents.
Accounts Receivable
Accounts' receivables are stated
at the amount management expects to collect from outstanding balances. Management provides for probable uncollected amounts through
a charge to earnings and a credit to an allowance for bad debts based on its assessment of the current status of individual accounts.
Balances that are still outstanding after management has used reasonable collection efforts are written off through a charge to
the allowance for bad debts and a credit to accounts receivable.
Our bad debt policy is determined
by the Company's periodic review of each account receivable for reasonable assurance of collection.
Factors considered are the exporter's
financial condition, past payment history if any, any conversations with the exporter about the exporter's financial conditions
and any other extenuating circumstances. Based upon the above factors the Company makes a determination whether the receivable
are reasonable as of June 30, 2017, based upon our limited history, our allowance for bad debt is just above bad debt we anticipate
will be written off for the year.
Concentration of Credit Risk
Financial instruments that potentially
subject the Company to a significant concentration of credit risk consist primarily of cash and cash equivalents. The Company maintains
deposits in federally insured financial institutions in excess of federally insured limits. However, management believes the Company
is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits
are held.
Income Taxes
Income taxes are provided in
accordance with Statement of Financial Accounting Standards ASC 740 Accounting for Income Taxes. A deferred tax asset or liability
is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax
expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred
tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.
The Company was established
under the laws of the State of Delaware and is subject to U.S. federal income tax and Delaware state income tax. Deferred income
tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities
that will result in future taxable or deductible amounts and are based on enacted tax laws and rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred
income tax assets to the amount expected to be realized.
Earnings per Share
In February 1997, the FASB issued
ASC 260, “Earnings per Share,” which specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. ASC 260 supersedes the provisions of APB No. 15, and requires the
presentation of basic earnings (loss) per share and diluted earnings (loss) per share. The Company has adopted the provisions of
ASC 260 effective (inception).
Basic earnings or net loss per
share amounts are computed by dividing the net income or loss by the weighted average number of common shares outstanding. Diluted
earnings per share are the same as basic earnings per share due to the lack of dilutive items in the Company.
Impact of New Accounting Standards
The Company does not expect
the adoption of recently issued accounting pronouncements to have a significant impact on the Company's results of operations,
financial position, or cash flow.
Revenue Recognition
The Company's revenue
recognition policies comply with
FASB
ASC
Topic
605.
The Company follows paragraph 605-10-S99-1 of the
FASB
Accounting Standards
Codification for revenue recognition. The Company will recognize revenue when it is realized or realizable and earned. The
Company considers revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive
evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer,
(iii) the sales price is fixed or determinable, and (iv) collectability is reasonably assured.
The Company does not provide
unconditional right of return, price protection or any other concessions to its customers.
NOTE 3. GOING CONCERN
The Company's financial statements
are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that
contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The Company is still in development
stage and has not created sufficient revenue to cover any operating losses it may incur. The Company has incurred losses since
inception resulting in an accumulated deficit of $615,089 as of June 30, 2017 that includes loss of $39,685 for the six months
ended June 30, 2017. Management's plans include the raising of capital through the equity markets to fund future operations, seeking
additional acquisitions, and generating of revenue through our business. However, there can be no assurances the Company will be
successful in its efforts to secure additional equity financing and obtaining sufficient revenue producing contracts. These factors
raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities
that might result from this uncertainty.
NOTE 4. RELATED PARTIES TRANSACTIONS
At December 31, 2016 and 2015, the
Company has an outstanding payable of $0 and $11,000 to Lyboltd-Daly, Inc. (the company controlled by Joseph Passalaqua, the Company’s
former president). The payables are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore are deemed
payable on demand.
From 2011 to 2013, the Company entered
into fourteen (14) Promissory Notes with Cobalt Blue, LLC (a company controlled by Joseph Passalaqua, the Company’s former
president). On December 22, 2012, the Company entered into a Promissory Note with Joseph Passalaqua, personally. The above note
payables are due on demand and carry 8% annual interest rate. On September 21, 2016, the principal and interest payable were converted
to 30,000,000 shares of common stock. The related interest expenses are $0 and $1,824 for the six months ended June 30, 2017 and
2016, respectively.
At June 30, 2017 and December 31,
2016, the Company has an outstanding payable of $83,710 and $44,839 to Yilaime Corporation (a company controlled by Alton Perkins,
the Company’s director). The payables are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore
are deemed payable on demand
The Company paid $15,000 rent expenses
to Yilaime Corporation for the six months ended June 30, 2017.
NOTE 5. COMMON STOCK
The Company has 500,000,000, $0.001 par value shares of common stock
authorized.
On December 30, 2016, the Company issued 80,000,000
shares to Nationwide Microfinance Limited (“Nationwide”) and 20,000,000 share to AmericaTowne Inc. in accordance with
Joint Venture and Operational Agreement for exchange of Nationwide’s shares. On January 10, 2017, 19,000,000 shares were
also issued for this Agreement. Since Nationwide’s shares were not issued on June 30, 2017, the transaction has not been
completed and no related accounting entry was booked.
There were 146,583 shares in reserve account as of June 30, 2017
and December 31, 2016.
NOTE 6. INCOME TAXES
Deferred income taxes reflect the
net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes.
The cumulative tax effect at the expected rate of 34% of significant
items comprising the net deferred tax amount is at June 30, 2017 and December 31, 2016 as follows:
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June 30, 2017
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December 31, 2016
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Deferred tax assets:
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Net operating losses
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$
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5,678
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$
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19,057
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Total deferred tax assets
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13,493
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19,057
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Less: valuation allowance
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(13,493)
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(19,057)
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Deferred tax assets, net
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$
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-
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$
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-
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Reconciliation of Effective Income Tax Rate
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For the Six Months Ended June 30, 2017
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For the Six Months Ended June 30, 2016
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Statutory U.S. tax rate
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34.00%
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34.00%
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Less: valuation allowance
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(
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34.00%
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(
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34.00%
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Effective income tax rate
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0%
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0%
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Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations.
Special Note Regarding Forward-Looking Statements
Information included or incorporated by reference
in this Quarterly Report on Form 10-Q contains forward-looking statements. All forward-looking statements are inherently uncertain
as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers
are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of
the date hereof. Forward-looking statements may contain the words “believes,” “project,” “expects,”
“anticipates,” “estimates,” “forecasts,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely
result,” and similar expressions, and are subject to numerous known and unknown risks and uncertainties. Additionally, statements
relating to implementation of business strategy, future financial performance, acquisition strategies, capital raising transactions,
performance of contractual obligations, and similar statements may contain forward-looking statements. In evaluating such statements,
prospective investors and shareholders should carefully review various risks and uncertainties identified in this Report, including
the matters set forth under the captions “Risk Factors” and in the Company’s other SEC filings. These risks and
uncertainties could cause the Company’s actual results to differ materially from those indicated in the forward-looking statements.
The Company disclaims any obligation to update or publicly announce revisions to any forward-looking statements to reflect future
events or developments.
Although forward-looking statements in this
Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known
by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes
may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that
could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed
under the heading “Risk Factors Related to Our Business” below, as well as those discussed elsewhere in this Form 10-Q.
Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form
10-Q. We file reports with the Securities and Exchange Commission (“SEC”). You can read and copy any materials we file
with the SEC at the SEC’s Public Reference Room, 100 F. Street, NE, Washington, D.C. 20549. You can obtain additional information
about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet
site (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC, including us.
We disclaim any obligation to revise or
update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this
Quarterly Report on Form 10-Q. Readers are urged to carefully review and consider the various disclosures made throughout the
entirety of this Quarterly Report, which attempt to advise interested parties of the risks and factors that may affect our
business, financial condition, results of operations and prospects.
General Description of Business
The Company was organized consistent with the
Joint Venture Agreement and First Amendment between our majority and controlling shareholder – AmericaTowne, Inc., a Delaware
corporation (“AmericaTowne”), a reporting company with the United States Securities and Exchange Commission (the “Commission”),
and Nationwide Microfinance Limited, a Ghanaian corporation (“Nationwide”). The Joint Venture Agreement was disclosed
on AmericaTowne’s Form 8-K dated July 14, 2016 and was subsequently amended on December 19, 2016 (the “First Amendment”).
The Company is a holding company whose
purpose is to develop into full-fledged national savings and loan operating in Ghana and elsewhere internationally. The
Company is exploring other business opportunities, such as microfinancing, in countries around the world. There are no
definitive plans to expand the Company’s objectives, however management will continue to analyze the market to
determine how the Company can achieve success in this competitive industry. As with any business plan that is aspirational in
nature, there is no assurance we will be able to accomplish all of our objective or that we will be able to meet our
financing needs to accomplish our objectives.
Our principal business objective for the next
twelve (12) months and beyond such time will be to achieve long-term growth potential through the further development of those
objectives set forth above, or through a combination with a business rather than relying on short-term earnings. The Company will
not restrict potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire
any type of business.
The Company does not currently engage in any
business activities that provide cash flow. The costs of furthering our business objectives, and/or in investigating and analyzing
business combinations, maintaining the filing of Exchange Act reports, the investigation, analyzing, and consummation of an acquisition
for an unlimited period of time will be paid without recompense from additional money contributed by AmericaTowne and/or Nationwide,
or their respective affiliates, subsidiaries or control persons, or possibly another source. These financial contributions for
operations might take the form of a loan, which will result in additional debt incurred by the Company.
Over the following twelve (12) months of operations,
we anticipate incurring costs related to the filing of Exchange Act reports and in furthering our business objectives. We anticipate
that these costs may be in the range of $10,000 to $20,000, and that we will be able to meet these costs as necessary, to be loaned
to or invested in us by our stockholders, management or other investors.
The Company may consider a business which has
recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets,
is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating
difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or
merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market
for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may
occur in a public offering.
Our management has not had any preliminary
contact or discussions with any representative of any other entity regarding a business combination with us. Any target business
that is selected may be a financially unstable company or an entity in its early stages of development or growth, including entities
without established records of sales or earnings. In that event, we will be subject to numerous risks inherent in the business
and operations of financially unstable and early stage or potential emerging growth companies. In addition, we may effect a business
combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to
evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess
all significant risks.
Our management anticipates that it will likely
be able to effect only one business combination, due primarily to our limited financing, and the dilution of interest for present
and prospective stockholders, which is likely to occur as a result of our management’s plan to offer a controlling interest
to a target business in order to achieve a tax-free reorganization. This lack of diversification should be considered a substantial
risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.
The Company anticipates that the selection
of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances
being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking
even the limited additional capital that we will have and/or the perceived benefits of becoming a publicly traded corporation.
Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms
on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating
a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring
acquisitions, joint ventures and the like through the issuance of stock. Potentially available business combinations may occur
in many different industries and at various stages of development, all of which will make the task of comparative investigation
and analysis of such business opportunities extremely difficult and complex.
Emerging Growth Company
We are an emerging growth company under the
JOBS Act. We shall continue to be deemed an emerging growth company until the earliest of:
(a) the last day
of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for
inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by
the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;
(b) the last day
of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the
issuer pursuant to an effective IPO registration statement;
(c) the date on
which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or
(d) the date on
which such issuer is deemed to be a ‘large accelerated filer’, as defined in section 240.12b-2 of title 17, Code of
Federal Regulations, or any successor thereto.
As an emerging growth company we are exempt
from Section 404(b) of Sarbanes Oxley. Section 404(a) requires Issuers to publish information in their annual reports concerning
the scope and adequacy of the internal control structure and procedures for financial reporting. This statement shall also assess
the effectiveness of such internal controls and procedures. Section 404(b) requires that the registered accounting firm shall,
in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures
for financial reporting.
As an emerging growth company we are also exempt
from Section 14A (a) and (b) of the Securities Exchange Act of 1934 which require the shareholder approval of executive compensation
and golden parachutes. We have elected to use the extended transition period for complying with new or revised accounting standards
under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have
different effective dates for public and private companies until those standards apply to private companies. As a result of this
election, our financial statements may not be comparable to companies that comply with public company effective dates.
Results of Operations for the Six Months
Ended June 30, 2017 and 2017
Our operating results for the three months
ended June 30, 2017 and 2016 are summarized as follows:
|
|
Six Months Ended
|
|
|
June 30, 2017
|
|
June 30, 2016
|
Revenue
|
|
$
|
-
|
|
|
$
|
2,607
|
|
|
Cost of Revenues
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Operating Expense
|
|
$
|
39,685
|
|
|
$
|
10,002
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
|
|
$
|
(39,685
|
)
|
|
$
|
(10,603)
|
|
|
Revenues
During the second quarter
of 2017, the Company generated revenue of $0 in revenue compared to $2,607 in 2016. We can make no assurances that we will find
commercial success in any of our revenue generating contracts or endeavors. Our revenues, thus far, rely entirely on related parties.
We are a new company and thus have very limited experience in sales expectations and forecasting. We also have not fully discovered
any seasonality to our business as we began operations in the third quarter of 2016.
Operating Expenses
Our expenses for the
six months ended June 30, 2017 and 2016 are outlined in the table below:
|
|
Six Months Ended
|
|
|
June 30, 2017
|
|
June 30, 2016
|
General and Administrative
|
|
$
|
15,045
|
|
|
$
|
9,002
|
|
|
Professional Fees
|
|
$
|
24,640
|
|
|
$
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
$
|
39,685
|
|
|
$
|
10,002
|
|
|
Our operating expenses
are largely attributable to administrative and professional expenses related to our reporting requirements as a public company
and implementation of our business plan. This includes the retention of attorneys, accountants, and auditors associated with our
reporting obligations under the Securities Exchange Act.
Net Income
As a result of our operations, the Company
reported net loss of $39,685 for the second quarter of 2017.
Liquidity and Capital Resources
Working Capital
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
Current Assets
|
|
$
|
197
|
|
|
$
|
1,010
|
|
|
Current Liabilities
|
|
$
|
83,710
|
|
|
$
|
44,839
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital (Deficit)
|
|
$
|
83,513
|
|
|
$
|
43,829
|
|
|
Cash Flow
|
|
Six Months Ended
|
|
|
June 30, 2017
|
|
June 30, 2016
|
Net Cash Used In Operating Activities
|
|
$
|
39,685
|
|
|
$
|
2,624
|
|
|
Net Cash Provided by Financing Activities
|
|
$
|
38,871
|
|
|
$
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in Cash
|
|
$
|
(813)
|
|
|
$
|
(1,624)
|
|
|
Cash Used in Operating Activities
Increase in net loss were is main contributing
factor for the increase in the cash used in operating activities for the six months ended June 30, 2017.
Cash Provided by Financing Activities
We received $38,871 and $1,000 from advances
from related parties to cover operational costs in the six months ended June 30, 2017 and 2016, respectively.
Off-Balance Sheet Arrangements
We have not entered into any 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.
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 (“US
GAAP”). US GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles
that have an impact on the assets, liabilities, revenues and expenses 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.
We believe the following is among
the most critical accounting policies that impact our consolidated financial statements. We suggest that our significant accounting
policies, as described in our financial statements in the Summary of Significant Accounting Policies, be read in conjunction with
this Management's Discussion and Analysis of Financial Condition and Results of Operations.
Revenue Recognition
The Company recognizes revenue at
the date of delivery to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed,
no other significant obligations of the Company exist and collectability is reasonably assured. The Company's Revenue Recognition
policy is provided in detail at Note 2 of the Financial Statements.
Income Taxes
The Company accounts for income taxes
in accordance with ASC Topic 740, “Income Taxes.” ASC 740 requires a company to use the asset and liability method
of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax
liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts
of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized
as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with
a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50%
likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit
is recorded. The adoption had no effect on the Company's consolidated financial statements.
Recent Accounting Pronouncements
The Company does not expect the adoption
of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial
position, or cash flow.