Notes to Financial Statements
Note 1 – Organization
Asia Training Institute, Inc. (the “Company”) was incorporated under the laws of the State of Nevada on May 14, 2014 under the name WeWearables, Inc. The Company issued 17,000,000 shares of its common stock to its founder, Thomas Chen, as consideration for the purchase of a business plan.
On February 12, 2016 Mr. Chen sold all 17,000,000 shares of common stock to
Chien Heng “George” Chiang. That same date, two other stockholders sold all their shares, totaling 2,000,000 to Mr. Chiang, making him the principle stockholder of the Company.
On February 12, 2016, Mr. Chiang became the sole director, President, Chief Financial Officer and Secretary of the Company and the Company’s name was changed to Asia Training Institute, Inc.
The Company’s current business strategy is to investigate and, if such investigation warrants, acquire a target operating company or business seeking the perceived advantages of being a publicly held corporation. The Company’s principal business objective for the next twelve months and beyond such time will be to achieve long-term growth potential through a combination with an operating business rather than immediate, short-term earnings. The Company will not restrict its potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.
However, the Company currently expects to focus on finding an operating business with significant operations in Asia
.
Note 2 – Summary of Significant Accounting Policies
The Company’s financial statements are prepared in conformity with U.S. generally accepted accounting principles. The Company has elected March 31 as its fiscal year end.
For purposes of the balance sheet and statement of cash flows, the Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.
(c)
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Stock-based Compensation
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The Company follows ASC 718-10,
Stock Compensation
, which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized. The Company has not adopted a stock option plan and has not granted any stock options.
(d)
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Use of Estimates and Assumptions
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Preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. The Company has adopted the provisions of ASC 260.
The basic loss per share is calculated by dividing the Company’s net loss available to common stockholders by the weighted average number of common shares during the year. The diluted loss per share is calculated by dividing the Company’s net loss available to common stockholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted loss per share are the same as basic earnings loss per share due to the lack of dilutive items in the Company.
(f)
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Fair Value Measurements and Disclosures
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ASC Topic 820 defines fair value, establishes a framework for measuring fair value, establishes a three-level valuation hierarchy for disclosure of fair value measurement and enhances disclosure requirements for fair value measurements. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The Company’s adoption of fair value measurements and disclosures did not have a material impact on the financial statements and financial statement disclosures
Income taxes are provided in accordance with ASC 740,
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 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.
No provision was made for Federal or State income taxes.
Advertising will be expensed in the period in which it is incurred. There have been no advertising expenses for the reporting periods presented.
(i)
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Recently Issued Accounting Pronouncements
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In June 2014, the FASB issued ASU 2014-10,
Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements.
ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company adopted ASU 2014-10 during the period ended March 31, 2015, thereby no longer presenting or disclosing any information required by Topic 915.
The Company reviewed all recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC and they did not or are not believed by management to have a material impact on the Company’s present or future financial statements.
Note 3 – Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As reflected in the accompanying financial statements, the Company had a negative working capital of ($11,434) and an accumulated deficit of ($199,233) at March 31, 2016. As of March 31, 2016, the Company had not generated any revenue and had no committed sources of capital or financing.
While the Company is attempting to merge with an operating business, the Company’s cash position may not be significant enough to support the Company’s daily operations. While the Company believes in the viability of its strategy to merge with an operating business and in its ability to raise additional funds, there can be no assurances to that effect. The Company’s ability to continue as a going concern is dependent upon its ability to achieve its objective or obtain adequate financing.
The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Note 4 – Accrued Expenses
Accrued expenses totaled $11,434 and $105,000 at March 31, 2016 and March 31, 2015, respectively and consisted primarily of professional fees.
Note 5 – Forgiveness of Debt
On February 12, 2016, professional service fees owed to two service providers, NYX Capital Advisors and Mass Depth Corporation, for the amount of $140,250 and $41,250, respectively, was released. The Company had paid $134,750, which $131,599 was contributed by Mr. Chiang, the CEO, to settle the amount owed. The total amount of forgiveness of debt was $46,750.
Note 6 – Note Payable – Related Party
On August 19, 2014, the Company issued a note payable to the former CEO, Mr. Thomas Chen, for $110,000. The note and interest were paid in full on April 29, 2015.
Note 7 – Share Capital
The Company is authorized to issue 150,000,000 shares of common stock and 25,000,000 shares of preferred stock. The Company issued 17,000,000 shares of its common stock to its former president and chief executive officer as founder shares. The Company issued 3,050,000 shares of its common stock for services with a value attributed to them of $20,000.
In January 2015, the Company completed a public offering whereby it sold 362,600 shares of common stock at $0.10 per share for total gross proceeds of $36,200.
At March 31, 2015, there were 20,412,000 shares of common stock issued and outstanding.
On February 12, 2016 Mr. Chen sold all 17,000,000 of his shares of common stock to Mr.
Chiang. That same date, two other stockholders sold all of their shares, totaling 2,000,000, to Mr. Chiang, making him the principle stockholder of the Company.
On February 16, 2016, the Company’s transfer agent canceled 1,000,000 shares of common stock previously outstanding at the request of the previous stockholder. At March 31, 2016 there were 19,412,000 shares of common
stock issued and outstanding.
Note 8 – Related Party
On February 12, 2016, Mr. Chiang, the CEO, made payments to two professional service providers—NYX Capital Advisors for $99,099 and Mass Depth Corp. for $32,500—on behalf of the Company. These transactions are considered as Additional Paid-In Capital.
Note 9 – Commitments and Contingencies
The Company follows ASC 450-20,
Los
s
Contingencies,
to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of March 31, 2016.
Note 10 – Income Taxes
The Company has not recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could not be considered more likely than not. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not. As of March 31, 2016, the Company has incurred a net loss of approximately $199,233 which resulted in a net operating loss for income tax purposes. NOLs begin expiring in 2033. The loss results in a deferred tax asset of approximately $69,732 at the effective statutory rate of 35%. The deferred tax asset has been off-set by an equal valuation allowance.
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March 31, 2016
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|
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2016
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2015
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Deferred tax asset, generated from net operating loss at statutory rates
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$
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69,732
|
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$
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50,324
|
|
Valuation allowance
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|
(69,732
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)
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(50,324
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)
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$
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—
|
|
$
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—
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|
The reconciliation of the effective income tax rate to the federal statutory rate is as follows:
Federal income tax rate
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35.0
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%
|
|
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35.0
|
%
|
Valuation allowance
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(35.0
|
%)
|
|
|
(35.0
|
%)
|
Effective income tax rate
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0.0
|
%
|
|
|
0.0
|
%
|