Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations
The following discussion
should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual
report. The following discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties,
such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from
those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Item
1A. Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this Form 10-K. We use
words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,”
“ongoing,” “expect,” “believe,” “intend,” “may,” “will,”
“should,” “could,” and similar expressions to identify forward-looking statements.
Our audited financial
statements are stated in United States Dollars and are prepared in accordance with Generally Accepted Accounting Principles of
the United States of America (the U.S. GAAP).
Overview
We are currently a
“shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating
company.
The Company was incorporated
on June 15, 2006 under the laws of the State of Nevada as Jupiter Resources, Inc. 75,000,000 shares of stock was authorized all
as Common par value $0.001, and no other classes of stock were authorized. On March 27, 2007, we entered into an agreement with
Ms. Helen Louise Robinson of Vernon, British Columbia, whereby she agreed to sell to us one mineral claim located approximately
30 kilometers northwest of Vernon, British Columbia in an area having the potential to contain silver or copper mineralization
or deposits. In order to acquire a 100% interest in this claim, we paid $7,500 to Ms. Robinson. However, we were unable to keep
the mineral claim in good standing due to lack of funding and our interest in it has lapsed.
On March 25, 2009,
the articles were amended to authorize an addition of 10 million preferred shares making a total of 85,000,000 shares authorized
(75M common, 10 preferred).
On April 30, 2009 the
company filed an amendment to change the name of the corporation to Rineon Group, Inc. On March 30, 2009, Jupiter Resources, Inc.
(the “Company”) entered into a binding letter of intent (the “Letter of Intent”) with NatProv Holdings,
Inc., a British Virgin Islands corporation (“Natprov”). Pursuant to the terms of the Letter of Intent, Natprov and
the Company will commence the negotiation and preparation of a definitive share exchange agreement which shall contain customary
representations, warranties and indemnities as agreed upon by Natprov, the Company and the shareholders of Natprov, whereby the
Company, Natprov and the shareholders of Natprov will complete a share exchange transaction (the “Transaction”) on
or before May 26, 2009, subject to certain conditions precedent to the closing of the Transaction.
On May 01, 2009 the
Company filed a Certificate of Designation to designate 36,000 shares of Series A Convertible Preferred Stock, out of the 10 million
preferred stock. These shares have no votes for matters brought before the common shareholders, only with matters regarding the
Series A shares where they will be the only voters. They can convert into common but cannot at anytime convert to hold more than
4.95% of the issued and outstanding common shares.
On May 14, 2009 the
Company entered into a preferred stock purchase agreement dated as of April 30, 2009 (the “Preferred Stock Purchase Agreement”)
under which the Company sold an aggregate of 36,000 shares of its Series A convertible preferred stock (the “Series A Preferred
Stock”) to Intigy Absolute Return Ltd., a British Virgin Islands corporation (“Intigy”), for a purchase price
of $36,000,000, or $1,000 per share of Series A $.001 Par Value Preferred Stock. In addition, pursuant to the terms of a stock
purchase agreement dated as of May 14, 2009, Rineon agreed to acquire 1,985,834 shares of Amalphis from NatProv Holdings Inc (“NatProv”)
for a total consideration of $36,000,000. Of the 2,437,500 shares of Amalphis held by NatProv, 1,985,834 were converted into Class
A Preferred non-voting shares, which were then assigned by NatProv to Rineon. As a result, NatProv now owns 451,666 Common Shares
of Amalphis, representing 100% of the voting shares of Amalphis, and Rineon owns 1,985,834 of Amalphis’ Class A Preferred
Shares which have the same rights and privileges as the common shares except that they have a liquidation preference and no voting
rights. Amalphis’ Class A Preferred Shares are not convertible into Common Shares.
The transactions consummated
as set forth above resulted in a change of control of the Company. In connection with such change in control, on May 14, 2009,
the board of directors of the Company authorized a change in the fiscal year end of the Company from May 31 to December 31.
Amalphis Group, Inc.,
(“Amalphis”) was formed in July 2008 as a British Virgin Islands (BVI) Business Company. Amalphis, through its wholly
owned subsidiary Allied Provident, Inc. (“API”), offers customized reinsurance products in markets where traditional
reinsurance alternatives are limited. In addition, Amalphis was formed to directly sell a variety of property and casualty insurance
products to businesses around the world. In September 2008, Amalphis acquired API, an entity that issues customized reinsurance
to a United States insurance carrier that offers automotive insurance coverage to drivers who are unable to obtain insurance from
standard carriers. API was formed in Barbados on November 9, 2007 by NatProv Holdings Inc., (“NatProv”) a British Virgin
Islands corporation.
There was no business
activity between the filing of the Form 15 on November 10, 2010, and prior to August 9, 2018. The Company had Exchange Act disclosure
requirements from January 11, 2008 to November 10, 2010. The Company has no knowledge or records related to the assets referenced
above and therefor there is some level of uncertainty in the above descriptions.
Prior Company management
was unresponsive to shareholders and had refused to respond to requests to meet statutory requirements to get current with the
secretary of state and with the required filings of the Securities and Exchange Commission (“SEC”).
On August 9, 2018,
XTC, Inc. was appointed to serve as the custodian of the Company in a shareholder filed action with the Eighth Judicial District
Court in Clark County, Nevada and was instructed to revive the Company. XTC, Inc. was a shareholder of record as shown in the court
documents (500 shares) attached as Exhibit 99.1 to this Current Report. XTC acquired its 500 common shares on June 14, 2018 in
the open market at a price of $0.05 per share.
Enclosed as Exhibit
99.1 hereto are the entire court records, from filing to closing documents.
On September 25, 2018,
the Company filed a Certificate of Designation whereby the following preferred shares were designated by the Company and the rights,
privileges and designations of the Series A Convertible Preferred
Stock were amended and restated.
|
·
|
The number
of Series A Convertible Preferred Stock was increased from 36,000 to 1,000,000.
|
|
·
|
3,000,000 Series B Preferred Stock were
created with no voting rights, and conversion rights of 1000:1, with the restriction that holders cannot convert to hold more the
4.95% of issued and outstanding common stock.
|
|
·
|
1,000,000 Series C Preferred Stock were
created. (each Series C shall have 100,000 vote per share, with 1:1 conversion rights.
|
On September 25, 2018,
the Company issued 964,000 shares of Series A Convertible Preferred shares to XRC, LLC at $0.001 per share and 1,000,000 shares
of Series C Convertible Preferred shares at $0.001 per share to XRC, LLC, a company controlled by Chris Lotito, in exchange for
paying the costs to revive the company with the State of Nevada, giving it voting control.
On September 28, 2018,
a shareholders meeting was held wherein the shareholders gave the board authority to reorganize the Company, including making a
possible name change, and/or engaging in a reverse stock split. In addition, the Series A shareholders voted to approve a reverse
split of 1 preferred share for each 1,000 shares outstanding of the Series A Convertible Preferred and to authorize a new designation.
On October 1, 2018,
the Company made filings with the Nevada Secretary of State to change our name to "AS Capital, Inc.” and to exercise
a 10 to 1 reverse stock split for the Common stock and a 1,000 to 1 reverse of the Series A Convertible Preferred, with conversion
rights of 1 common share for every 12,000 shares of Series A Convertible Preferred Stock held. As a result, the number of issued
and outstanding Series A Convertible Preferred Stock was reduced to 1,000 shares.
On December 6, 2018,
the Court granted an Order discharging the custodian and approved all actions taken by the custodian.
Change in Control
On June 4, 2019, AS
Capital, Inc., a Nevada corporation (“we,” “ASIN” or the “Company”), XRC, LLC, a Colorado limited
liability company (“XRC”) and Gao Xue Ran (“Purchaser”) entered into a Stock Purchase Agreement (the “SPA”),
pursuant to which Purchaser agreed to purchase from XRC 11,000,000 shares of common stock of the Company, par value $0.0001, and
964 shares of Series A Convertible Preferred Stock Preferred Stock
of the Company, par value $0.00001 (collectively, the “Shares”), for aggregate consideration of Four Hundred and Ten
Thousand Dollars ($410,000) in accordance with the terms and conditions of the SPA. XRC is the controlling shareholder of the Company.
On June 13, 2019, and in anticipation of the sales transaction with Ms. Gao, the Company assigned its line of credit and the current
balance due thereunder, including all outstanding principal and accrued interest, to XRC in consideration of 10,000,000 shares
of common stock of the Company. At the time of the transfer, $48,595 was due under the line of credit. At the same time XRC converted
its 1,000,000 shares of Series C Convertible Preferred Stock into
1,000,000 shares of common stock. Chris Lotito is the managing member of XRC.
The acquisition of
the Shares consummated on July 18, 2019, and the Shares were ultimately purchased by the following three individuals using their
own personal funds:
Name
|
No. of Shares
|
Percentage of Issued and Outstanding
|
Consideration Paid
|
Gao Xue Ran
|
8,581,063 of Common Stock;
964 shares of Series A Preferred Stock
|
76.61%
|
$319,840
|
Zhang Yan Hua
|
1,935,633 of Common Stock
|
17.28%
|
$72,146
|
Cheung Kwok Chiu Kris
|
483,304 of Common Stock
|
4.31%
|
$18,014
|
Immediately after the
acquisition, Ms. Gao held a controlling interest in the Company and could unilaterally determine the election of the Board and
other substantive matters requiring approval of the Company’s stockholders.
Upon the consummation
of the sale of the Shares, Chris Lotito, our Chief Executive Officer and sole director, and John Karatzaferis, our President, resigned
from all of their positions with the Company, effective July 18, 2019. Their resignations were not due to any dispute or disagreement
with the Company on any matter relating to the Company's operations, policies or practices.
Concurrently with such
resignations, Gao Xue Ran was appointed to serve as the Chief Executive Officer, Chief Financial Officer, President, Secretary
and sole Director of the Company, until the next annual meeting of stockholders of the Company and until such director’s
successor is elected and qualified or until such director’s earlier death, resignation or removal. None of the directors
or executive officers has a direct family relationship with any of the Company’s directors or executive officers, or any
person nominated or chosen by the Company to become a director or executive officer. Ms. Gao will serve in her positions without
compensation.
We are in active discussions
with an operating business affiliated with our executive officers regarding potential acquisition. There is no assurance that we
will be able to successfully acquire such company or any company in the near future.
Limited Operating History; Need
for Additional Capital
We have had limited
operations and have been issued a "going concern" opinion by our auditor, based upon our reliance on the sale of our
common stock and loans from a related party, as the sole source of funds for our future operations.
There
is no historical financial information about us upon which to base an evaluation of our performance. We have not generated any
revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks
inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the launching
of our games and market or wider economic downturns. We do not believe we have sufficient funds to operate our business for the
next 12 months.
We
have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on
satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional
dilution to existing shareholders. If we are unable to raise additional capital to maintain our operations in the future, we may
be unable to carry out our full business plan or we may be forced to cease operations.
Going Concern
Our
financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and
discharge its liabilities in the normal course of business for the foreseeable future. As of December 31, 2019, the Company had
working capital deficiency of $142,659 and has incurred losses since its inception resulting in an accumulated deficit of $36,254,706.
Further losses are anticipated in the development of the business, raising substantial doubt about the Company’s ability
to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this
uncertainty.
The
ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain
the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come
due. Management intends to finance operating costs over the next twelve months with loans from directors and/or private placements
of common stock.
Results of Operations
The following tables
provide selected financial data about our company as of and for the years ended December 31, 2019 and 2018.
Balance Sheet Data
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Cash
|
|
$
|
–
|
|
|
$
|
65
|
|
Total Assets
|
|
$
|
–
|
|
|
$
|
65
|
|
Total Liabilities
|
|
$
|
142,659
|
|
|
$
|
48,595
|
|
Stockholders’ Deficit
|
|
$
|
(142,659
|
)
|
|
$
|
(48,530
|
)
|
Summary Income Statement Data
|
|
For the Years Ended December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Net Revenues
|
|
$
|
–
|
|
|
$
|
–
|
|
Total Operating Expenses
|
|
|
153,516
|
|
|
|
30,248
|
|
Loss Before Income Taxes
|
|
|
(153,516
|
)
|
|
|
(32,562
|
)
|
Net Loss
|
|
$
|
(153,516
|
)
|
|
$
|
(32,562
|
)
|
Revenue.
During the fiscal years ended December 31, 2019, and 2018, we did not generate any revenues.
Operating
Expenses. Operating expenses were $153,516 and $30,248 for the years ended December 31, 2019 and 2018, respectively.
Operating expenses mainly consisted of professional fees and office and miscellaneous expenses. The increase in operating expenses
resulted primarily from the addition of professional fees, such as, US legal, audit and consulting expenses. We expect our operating
expenses to increase once we identify and consummate the acquisition of an operating company.
Loss Before
Income Taxes. For the years ended December 31, 2019, and 2018, we incurred a
loss before income taxes of $153,516 and $32,562, respectively. The increase in loss from operations was attributable to the addition
of professional fees.
Net Loss.
For the years ended December 31, 2019, and 2018, we incurred a net loss of $153,516 and $32,562, respectively. The increase in
net loss was primarily attributable to the addition of professional fees.
Liquidity and Capital Resources
Working Capital
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
Change
|
|
|
%
|
|
Current Assets
|
|
$
|
–
|
|
|
$
|
65
|
|
|
|
(65
|
)
|
|
|
(100
|
%)
|
Current Liabilities
|
|
|
142,659
|
|
|
|
48,595
|
|
|
|
94,064
|
|
|
|
193.5
|
%
|
Working Capital Deficit
|
|
$
|
(142,659
|
)
|
|
$
|
(48,530
|
)
|
|
|
94,129
|
|
|
|
193.9
|
%
|
As of December
31, 2019, we had working capital deficit of $142,659 as compared to working capital deficit of $48,530 as of December 31, 2018.
The increase in working capital deficit was mainly due to increase in general and administrative expense.
Cash Flows
|
|
Year Ended
December 31, 2019
|
|
|
Year Ended
December 31, 2018
|
|
Net cash used in operating activities
|
|
$
|
(131,920
|
)
|
|
$
|
65
|
|
Net cash provided by investing activities
|
|
$
|
–
|
|
|
$
|
–
|
|
Net cash provided by financing activities
|
|
$
|
131,855
|
|
|
$
|
–
|
|
Cash Flow from Operating Activities
During
the year ended December 31, 2019, net cash used in operating activities was $131,920, compared to $65 for the year ended December
31, 2018. Net cash used in operating activities consisted of a net loss of $153,516 offset by an increase in accrued liabilities
of $21,596. The increase in net cash used in operating activities was mainly due to the increase in accrued liabilities.
During the year
ended December 31, 2018, net cash used in operating activities consisted of a net loss of $32,562 offset by an increase in accrued
liabilities of $24,967 and $7,660 recognized in connection with the issuance of preferred stock as payment of expenses.
Cash Flow from Investing Activities
During the years
ended December 31, 2019, and 2018, we had no cash flow from investing activities.
Cash Flow from Financing Activities
During the year
ended December 31, 2019, financing activities provided net cash of $131,855, consisting of proceeds from a director of $121,063,
Xue Ran Gao and proceeds from related parties of $19,700, and offset by repayments of $8,908 to Chris Lotito, the former CEO.
During the year
ended December 31, 2018, financing activities did not provide any net cash.
Off-Balance Sheet Arrangements
We do not have
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
that is material to investors.
Critical Accounting Policies
The preparation of financial statements
in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires
estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures
of contingent assets and liabilities in the financial statements and accompanying notes. The SEC has defined a company’s
critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and
results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of
the need to make estimates of matters that are inherently uncertain. Based on this definition, we have not identified any additional
critical accounting policies and judgments. We also have other key accounting policies, which involve the use of estimates, judgments
and assumptions that are significant to understanding our results, which are described in Note 3 to our financial statements. Although
we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available. Actual
results may differ significantly from these estimates under different assumptions, judgments or conditions.
Item 8. Financial Statements and Supplementary
Data
AS CAPITAL, INC.
INDEX TO FINANCIAL STATEMENTS
2nd
Floor, Nurses House, PC 43, Churchgate Street,
(formerly
Afribank Street) Victoria Island, Lagos State.
14,
Osuntokun Street, Off Ayandipo Road,
New
Bodija, Ibadan, Oyo State.
10333
Harwin Dr Suite #677, Houston TX 77036, USA.
0803
333 8600, 0809 833 8600.
E-mail:
olayinka_oyebola@hotmaii.com
yinka@olayinkaoyeboiaandco.com
www.olayinkaoyebolaandco.com
|
OLAY1NKN OYEBOLA
& CO.
Chartered Accountants
|
Report of Independent Registered Public Accounting
Firm
To the shareholders and the board of directors
of AS Capital, Inc.
Opinion
on the Financial Statements
We have audited the accompanying balance
sheets of AS CAPITAL INC (the "Company") as of December 31, 2019 and 2018, the related statements of operations,
changes in shareholders' equity and cash flows, for each of the two years in the period ended December 31, 2019, and the related
notes collectively referred to as the "financial statements". In our opinion, the financial statements present fairly,
in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations
and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with U.S. generally accepted
accounting principles.
Basis
for Opinion
These financial statements are the
responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based
on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards
of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis
for our opinion.
Critical Audit
Matters
Critical audit matters are matters
arising from the current period audit of the financial statements that were communicated or required to be communicated to the
audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved
our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
Other Explanatory
Paragraph
The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements,
the company has an accumulated deficit of $36,254,706 and net loss of $153,516 as of December 31, 2019. And limited
operations during the period. Furthermore, the ability to raise additional capital through the future issuance of common stock
or debt financing is unknown. These conditions and the ability to successfully resolve these factors raised substantial doubt about
the company ability to continue as a going concern.
/s/ Olayinka Oyebola
OLAYINKA OYEBOLA & CO.
(Chartered Accountants)
We have served as the Company's auditor since May 2018.
March 20, 2020.
AS CAPITAL, INC,
BALANCE SHEETS
|
|
December 31, 2019
|
|
|
December 31, 2018
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
–
|
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
|
Total Current Assets
|
|
$
|
–
|
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accrued expenses
|
|
$
|
21,596
|
|
|
$
|
–
|
|
Accrued interest – related party
|
|
|
–
|
|
|
|
2,314
|
|
Due to a related party
|
|
|
121,063
|
|
|
|
46,281
|
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities
|
|
|
142,659
|
|
|
|
48,595
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
142,659
|
|
|
|
48,595
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Deficiency:
|
|
|
|
|
|
|
|
|
Preferred Stock, par value; $0.0001, 5,000,000 shares authorized, no shares issued and outstanding
|
|
|
–
|
|
|
|
–
|
|
Preferred Stock, Series A, par value; $0.0001, 1,000,000 shares authorized, 1,000 and 1,000 shares issued and outstanding; respectively
|
|
|
–
|
|
|
|
–
|
|
Preferred Stock, Series B, par value; $0.0001, 3,000,000 shares authorized, no shares issued and outstanding
|
|
|
–
|
|
|
|
–
|
|
Preferred Stock, Series C, par value; $0.0001, 1,000,000 shares authorized, none and 1,000,000 shares issued and outstanding, respectively
|
|
|
–
|
|
|
|
100
|
|
Common stock, $0.0001 par value, 75,000,000 shares authorized; 11,201,030 and 201,030 shares issued and outstanding; respectively
|
|
|
1,120
|
|
|
|
20
|
|
Additional paid-in capital
|
|
|
36,110,927
|
|
|
|
36,052,540
|
|
Accumulated deficit
|
|
|
(36,254,706
|
)
|
|
|
(36,101,190
|
)
|
|
|
|
|
|
|
|
|
|
Total Shareholders’ Deficiencies
|
|
|
(142,659
|
)
|
|
|
(48,530
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIENCIES
|
|
$
|
–
|
|
|
$
|
65
|
|
The accompanying notes are an integral part
of the financial statements
AS CAPITAL, INC.
STATEMENTS OF OPERATIONS
|
|
Years ended December 31,
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
|
(153,516
|
)
|
|
|
(30,248
|
)
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
(153,516
|
)
|
|
|
(30,248
|
)
|
|
|
|
|
|
|
|
|
|
Other expense:
|
|
|
|
|
|
|
|
|
Interest expenses
|
|
|
–
|
|
|
|
2,314
|
|
|
|
|
|
|
|
|
|
|
Total other expense
|
|
|
–
|
|
|
|
2,314
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes
|
|
|
(153,516
|
)
|
|
|
(32,562
|
)
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
NET LOSS
|
|
$
|
(153,516
|
)
|
|
$
|
(32,562
|
)
|
|
|
|
|
|
|
|
|
|
Basic and diluted net loss per share
|
|
$
|
0.01
|
|
|
$
|
0.16
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted weighted average shares outstanding
|
|
|
11,201,030
|
|
|
|
201,000
|
|
The accompanying notes are an integral part
of the financial statements
AS CAPITAL, INC.
STATEMENTS OF CHANGES
IN STOCKHOLDERS’ DEFICIENCY
|
|
Year
ended December 31, 2019
|
|
|
|
Series A Preferred
Stock
|
|
|
Series C Preferred
Stock
|
|
|
Ordinary shares
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
No. of
shares
|
|
|
Amount
|
|
|
No. of
shares
|
|
|
Amount
|
|
|
No. of
shares
|
|
|
Amount
|
|
|
paid-in
capital
|
|
|
Accumulated deficit
|
|
|
Total
|
|
Balance as of January 1, 2019
|
|
|
1,000
|
|
|
$
|
–
|
|
|
|
1,000,000
|
|
|
$
|
100
|
|
|
|
201,030
|
|
|
$
|
20
|
|
|
$
|
36,052,540
|
|
|
$
|
(36,101,190
|
)
|
|
$
|
(48,530
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares converted
to common
|
|
|
–
|
|
|
|
–
|
|
|
|
(1,000,000
|
)
|
|
|
(100
|
)
|
|
|
1,000,000
|
|
|
|
100
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
Common shares issued for
conversion of debt – related party
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
10,000,000
|
|
|
|
1,000
|
|
|
|
58,387
|
|
|
|
–
|
|
|
|
59,387
|
|
Net
loss for the year
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(153,516
|
)
|
|
|
(153,516
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December
31, 2019
|
|
|
1,000
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
11,201,030
|
|
|
|
1,120
|
|
|
|
36,110,927
|
|
|
|
(36,254,706
|
)
|
|
|
(142,659
|
)
|
|
|
Year
ended December 31, 2018
|
|
|
|
Series A Preferred
Stock
|
|
|
Series C Preferred
Stock
|
|
|
Ordinary shares
|
|
|
Additional
|
|
|
|
|
|
|
|
|
|
No. of
shares
|
|
|
Amount
|
|
|
No. of
shares
|
|
|
Amount
|
|
|
No. of
shares
|
|
|
Amount
|
|
|
paid-in
capital
|
|
|
Accumulated deficit
|
|
|
Total
|
|
Balance as of January 1, 2018
|
|
|
36
|
|
|
$
|
–
|
|
|
|
–
|
|
|
$
|
–
|
|
|
|
201,030
|
|
|
$
|
20
|
|
|
$
|
36,044,980
|
|
|
$
|
(36,068,628
|
)
|
|
$
|
(23,628
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred shares issued
|
|
|
–
|
|
|
|
–
|
|
|
|
1,000,000
|
|
|
|
100
|
|
|
|
–
|
|
|
|
–
|
|
|
|
7,560
|
|
|
|
–
|
|
|
|
7,660
|
|
Net
loss for the year
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(32,562
|
)
|
|
|
(32,562
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December
31, 2018
|
|
|
36
|
|
|
|
–
|
|
|
|
1,000,000
|
|
|
|
100
|
|
|
|
201,030
|
|
|
|
20
|
|
|
|
36,052,540
|
|
|
|
(36,101,190
|
)
|
|
|
(48,530
|
)
|
The accompanying notes are an integral part
of these financial statements.
AS CAPITAL, INC.
STATEMENTS OF CASH
FLOWS
|
|
Years ended December 31,
|
|
|
|
2019
|
|
|
2018
|
|
Cash flow from operating activities
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(153,516
|
)
|
|
$
|
(32,562
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
Preferred stock issued for payment of expenses
|
|
|
–
|
|
|
|
7,660
|
|
|
|
|
|
|
|
|
|
|
Change in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Increase in accrued liabilities
|
|
|
21,596
|
|
|
|
24,967
|
|
|
|
|
|
|
|
|
|
|
Cash used in operating activities
|
|
|
(131,920
|
)
|
|
|
65
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Proceeds from a director
|
|
|
121,063
|
|
|
|
–
|
|
Proceeds from a related party
|
|
|
19,700
|
|
|
|
–
|
|
Repayments to a related party
|
|
|
(8,908
|
)
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
131,855
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
|
|
|
(65
|
)
|
|
|
65
|
|
Cash, beginning of year
|
|
|
65
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
Cash, end of year
|
|
$
|
–
|
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
–
|
|
|
$
|
–
|
|
Income taxes
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash activity:
|
|
|
|
|
|
|
|
|
Common stock issued for related party debt
|
|
$
|
48,595
|
|
|
$
|
–
|
|
The accompanying notes are an integral part
of the financial statements
AS CAPITAL, INC.
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2019
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
AS Capital, Inc. (the “Company”)
was incorporated under the laws of the State of Nevada on June 15, 2006 as Jupiter Resources, Inc. On August 9, 2018, XTC, Inc.,
a Company owned by Chris Lotito, CEO, was awarded custodianship in a shareholder filing with the Eighth Judicial District Court
in Clark County Nevada. On April 30, 2018 the company filed an amendment to change the name of the corporation to Rineon Group,
Inc. On October 1, 2018, the company filed for a name change to AS Capital, Inc. The Company currently intends to serve as a vehicle
to effect an asset acquisition, merger, in exchange of capital stock or other business combination with a domestic or foreign business
On June 4, 2019, the Company, XRC, LLC,
a Colorado limited liability company (“XRC”) and Xue Ran Gao (“Purchaser”) entered into a Stock Purchase
Agreement (the “SPA”), pursuant to which Purchaser agreed to purchase from XRC 11,000,000 shares of common stock of
the Company and 964 shares of Series A Preferred Stock of the Company, for aggregate consideration of Four Hundred Ten Thousand
Dollars ($410,000) in accordance with the terms and conditions of the SPA. XRC is the controlling shareholder of the Company. This
acquisition closed on July 18, 2019. As a result of the purchase, the Purchaser holds a controlling interest in the Company, and
may unilaterally determine the election of the Board and other substantive matters requiring approval of
the Company’s stockholders.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The accompanying financial statements of
the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and
the rules of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited financial
statements and notes for the year ended December 31, 2018. In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of the results of operations for the interim periods presented have been
reflected herein. The results of operations for such interim periods are not necessarily indicative of operations for the full
year. Notes to the financial statements which would substantially duplicate the disclosures contained in the audited financial
statements for the most recent fiscal year ended December 31, 2018, have been omitted.
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. Actual results could differ from those estimates.
NOTE 3 – GOING CONCERN
As reflected in the accompanying financial
statements, the Company has no current operations from which to generate revenue, has an accumulated deficit of $36,254,706 at
December 31, 2019 and had a net loss of $153,516 for the ended December 31, 2019. These factors raise substantial doubt about our
ability to continue as a going concern. The financial statements have been prepared assuming that the Company will continue as
a going concern. These 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 be necessary should the Company be unable to continue
as a going concern.
NOTE 4 – PREFERRED STOCK
On September 25, 2018, the Company filed
a Certificate of Designation to designate 1,000,000 shares of Series A Preferred Stock and provide for the rights, privileges,
and preferences of the Series A Preferred Stock. Shares of Series A Preferred Stock may be converted at the holder’s election
into shares of common stock, at the conversion rate of one share of common stock for 12,000 shares of Series A Preferred Stock.
Series A preferred stock has no dividends, liquidation or redemption rights and may vote only on matters pertaining to the Series
A stock.
On September 25, 2018, the Company filed
a Certificate of Designation to designate 3,000,000 shares of Series B Preferred Stock and provide for the rights, privileges,
and preferences of the Series B Preferred Stock. Shares of Series B Preferred Stock may be converted at the holder’s election
into shares of common stock, at the conversion rate of 1,000 shares of common stock for one share of Series B Preferred Stock.
Series B preferred stock has no dividends, liquidation, redemption or voting rights.
On September 25, 2018, the Company filed a
Certificate of Designation to designate 1,000,000 shares of Series C Preferred Stock and provide for the rights, privileges, and
preferences of the Series C Preferred Stock. Shares of Series C Preferred Stock may be converted at the holder’s election
into shares of common stock, at the conversion rate of one share of common stock for one share of Series C Preferred Stock. Series
C preferred stock has no dividends, liquidation or redemption rights. Each share is entitled to 100,000 votes.
Refer to Note 5 for related party transactions.
NOTE 5 – RELATED PARTY TRANSACTIONS
On August 13, 2018, the Company entered
into a line of credit with MDX, Inc, for up to $50,000 until December 31, 2018. The line of credit bears interest at 5% of the
balance at December 31, 2018. Chris Lotito, CEO, is also the majority member of MDX, Inc. The line of credit had been extended
until December 31, 2019. As of December 31, 2019, and December 31, 2018, there is $0 and $46,281, respectively due on the line
of credit. In addition, there is $2,314 of accrued interest due.
On June 13, 2019, and in anticipation of
the sales transaction with Ms. Gao, MDX, Inc. transferred its line of credit, and assigned the current balance due, including all
outstanding principal and accrued interest, to XRC in consideration of 10,000,000 shares of common stock of the Company. At the
time of the transfer, $48,595 was due under the line of credit. At the same time XRC converted its 1,000,000 shares of Series C
preferred stock into 1,000,000 shares of common stock. Chris Lotito is the managing member of XRC.
NOTE 6 – SUBSEQUENT EVENTS
Management has evaluated subsequent events
pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were available
to be issued, and has determined that there are no material subsequent events that require disclosure in these financial statements.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure
controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange
Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed,
summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such
information is accumulated and communicated to our management, including our Chief Executive Officer ("CEO")/Chief Financial
Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation
(the “Evaluation”), under the supervision and with the participation of our CEO/CFO of the effectiveness of the design
and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered
by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this evaluation and the existence of the material weaknesses
discussed below in “Management's Report on Internal Control over Financial Reporting,” our management, including
our CEO/CFO concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of the
end of the period covered by this Report.
We do not expect that
our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures,
no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure
controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are
resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure
controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected
all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly
on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions.
Management's Report on Internal Control
Over Financial Reporting
Our management is responsible
for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting
is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, as a process designed by, or
under the supervision of, our principal executive and principal financial officers and effected by our Board, management and other
personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
|
·
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the
transactions and dispositions of our assets;
|
|
·
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures of
the company are being made only in accordance with authorizations of our management and directors; and
|
|
·
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the company's assets that could have a material effect on the financial statements.
|
Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Additionally, projections of any
evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management assessed
the effectiveness of our internal control over financial reporting as of December 31, 2019. In making this assessment, management
used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated
Framework (2013). Based on this assessment, management concluded that our internal control over financial reporting was not
effective as of December 31, 2019, due to the existence of the material weaknesses as of December 31, 2019, discussed below. A material
weakness is a control deficiency, or a combination of control deficiencies, that results in more than a remote likelihood that
a material misstatement of the annual or interim financial statements will not be prevented or detected in the following areas:
|
·
|
Because of the company’s limited resources, there are limited controls over information processing.
|
|
·
|
There is an inadequate segregation of duties consistent with control objectives. Our Company’s
management is composed of only one person, resulting in a situation where limitations on segregation of duties exist. In order
to remedy this situation, we would need to hire additional staff to provide greater segregation of duties. Currently, it is not
feasible to hire additional staff to obtain optimal segregation of duties. Management will reassess this matter in the following
year to determine whether improvement in segregation of duty is feasible.
|
|
·
|
The Company does not have a sitting audit committee financial expert, and thus the Company lacks
the board oversight role within the financial reporting process.
|
|
·
|
There is a lack of formal policies and procedures necessary to adequately review significant accounting
transactions. The Company utilizes a third-party independent contractor for the preparation of its financial statements. Although
the financial statements and footnotes are reviewed by our management, we do not have a formal policy to review significant accounting
transactions and the accounting treatment of such transactions. The third-party independent contractor is not involved in the day
to day operations of the Company and may not be provided information from management on a timely basis to allow for adequate reporting/consideration
of certain transactions.
|
Management believes
that the material weaknesses set forth above were the result of the scale of our operations and are intrinsic to our small size.
Management believes these weaknesses did not have a material effect on our financial results and intends to take remedial actions
upon receiving funding for the Company’s business operations.
Our management will
continue to monitor and evaluate the effectiveness of our internal controls and procedures and our internal controls over financial
reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements,
as necessary and as funds allow.
This Annual Report
on Form 10-K does not include an attestation report of the Company’s registered public accounting firm regarding internal
control over financial reporting due to permanent exemptions for smaller reporting companies.
Changes in Internal Control Over Financial
Reporting
Other than as described
above, there have been no changes in our internal control over financial reporting during the fourth quarter of fiscal 2019 that
have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Because of its inherent
limitations, a system of internal control over financial reporting can provide only reasonable assurance and may not prevent or
detect misstatements. Further, because of changes in conditions, effectiveness of internal controls over financial reporting may
vary over time. Our system contains self-monitoring mechanisms, and actions are taken to correct deficiencies as they are identified.