NOTES TO THE AUDITED FINANCIAL STATEMENTS
September 30, 2017 and 2016
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Ando Holdings Ltd., fka PC Mobile Media Corp. (Ando Holdings Ltd., fka PC Mobile Media Corp. or the Company) was incorporated in the State of Nevada on August 22, 2015 and its fiscal year end is September 30. The primary business of the company is to offer mobile billboard display advertising. Our mobile displays deliver a visual presentation that leaves the audience with an indelible impression.
The Company is currently devoting its time to attracting advertising clients. The Companys ability to generate sufficient funds to meet its working capital requirements is dependent upon its ability to acquire a sufficient number of clients interested in mobile advertising.
On June 28, 2017, Paul Conforte, the holder of an aggregate of 8,000,000 shares of Common Stock of PC Mobile Media Corp sold all 8,000,000 Shares to twelve (12) purchasers for a total price of $275,000 or $.034 per share. As a result, a change of control occurred which resulted in the purchasers owning approximately 66.67% of the issued and outstanding shares of the Company. In addition, per an Assignment of Rights and Assumption of Liabilities Agreement, dated June 28, 2017, Mr. Conforte retained all assets and assumed all liabilities of the Company through June 30, 2017.
On the same day, Mr. Conforte resigned all officer positions, including Chairman of the Board. Lam Chi Kwong Leo was appointed Chairman of the Board and Chief Executive Officer. Lee Hiu Lan was appointed as Secretary, Treasurer, and Chief Financial Officer. Chan Tung Ngai and Hu Jiasheng were both appointed as a Director. The appointments were effective on June 28, 2017. At present, the Company is strategizing the business plan of the previous owner to determine if that is the direction in which it wants to move forward.
On September 5, 2017, the amendment to the Companys articles of incorporation was declared effective in the State of Nevada, changing the Companys name from PC Mobile Media Corp. to Ando Holdings Ltd. As of September 25, 2017, FINRA accepted the name change and issued ADHG as the new trading symbol of the Company.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the period from inception on August 22, 2015 through September 30, 2017, the Company has had minimal operations, and has accumulated a deficit of $79,590. In view of this, the Companys ability to continue as a going concern is dependent upon the Companys ability to continue operations and to achieve a level of profitability large enough to cover the Companys expenses. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities, with some additional funding from other traditional financing sources, until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. Management has evaluated these factors and has determined that they raise substantial doubt about the Companys ability to continue as a going concern within one year after the date that the financial statements are issued.
The sole officer/director has agreed to advance funds to the Company to meet its obligations.
15
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted accounting principles requires us to establish accounting policies and make estimates and assumptions that affect our reported amounts of assets and liabilities at the date of the financial statements. These financial statements include some estimates and assumptions that are based on informed judgments and estimates of management. We evaluate our policies and estimates on an on-going basis and discuss the development, selection, and disclosure of critical accounting policies with the Board of Directors. Predicting future events is inherently an imprecise activity and as such requires the use of judgment. Our financial statements may differ based upon different estimates and assumptions.
Basis of Presentation
The financial statements present the balance sheets, statements of operations and cash flows, and changes in stockholders' equity (deficit), of the Company. These financial statements are presented in United States dollars and have been prepared in accordance with U.S. GAAP.
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Cash and Cash Equivalents
For the purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. At September 30, 2017 and 2016, the Company had cash of $0 and $4,050, respectively.
Accounts Receivable
Accounts receivable are measured at amortized cost and shown net of allowance for doubtful accounts. At September 30, 2017 and September 30, 2016, the Company had $0 and $0 in accounts receivable, and $0 and $0 in allowance for doubtful accounts, respectively. The Company canceled the Mobile Billboard Rental Agreement in April 2017 due to non-payment (See Note 8). No services were provided during the quarter ending September 30, 2017.
Revenue and Cost Recognition
The Company recognizes 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:
·
persuasive evidence of an arrangement exists
·
the product has been shipped or the services have been rendered to the customer
·
the sales price is fixed or determinable collectability is reasonably assured.
Cash Flow Reporting
The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (Indirect method) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.
16
The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.
Financial Instruments
The Companys balance sheet includes certain financial instruments, including cash, accounts payable, accrued expenses and related party payable. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
ASC 820,
Fair Value Measurements and Disclosures
, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entitys own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities
Level 2
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3
Inputs that are both significant to the fair value measurement and unobservable.
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2017. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.
Net Loss per Share
Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive loss per share reflects the potential dilution of securities that could share in the losses of the Company. Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.
Advertising
Advertising costs are expensed as incurred. As of September 30, 2017 and September 30, 2016, no advertising costs have been incurred.
17
Income Taxes
The Company accounts for income taxes as outlined in Accounting Standard Codification (ASC) 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued that we adopt as of the specified effective date. We believe that the impact of recently issued standards that are not yet effective may have an impact on our results of operations and financial position.
ASU Update 2014-09
Revenue from Contracts with Customers
(Topic 606) issued May 28, 2014 by FASB and IASB converged guidance on recognizing revenue in contracts with customers on an effective date after December 31, 2017 will be evaluated as to impact and implemented accordingly.
ASU Update 2014-15
Presentation of Financial Statements-Going Concern
(Sub Topic 205-40) issued August 27, 2014 by FASB defines managements responsibility to evaluate whether there is a substantial doubt about an organizations ability to continue as a going concern. The additional disclosure became effective for periods ending after December 15, 2016. Management has evaluated these factors and has determined that they raise substantial doubt about the Companys ability
to
continue as a going concern, and has included the appropriate disclosures in Note 2 to these financial statements.
In February 2016, the FASB issued ASU No. 2016-02,
Leases,
to improve financial reporting about leasing transactions. This ASU will require organizations that lease assets ("lessees") to recognize a lease liability and a right-of-use asset on its balance sheet for all leases with terms of more than twelve months. A lease liability is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis and a right-of-use asset represents the lessee's right to use, or control use of, a specified asset for the lease term. The amendments in this ASU simplify the accounting for sale and leaseback transactions primarily because lessees must recognize lease assets and lease liabilities. This ASU leaves the accounting for the organizations that own the assets leased to the lessee ("lessor") largely unchanged except for targeted improvements to align it with the lessee accounting model and Topic 606, Revenue from Contracts with Customers.
The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is evaluating the potential impact of ASU 2016-02 on its Financial Statements.
NOTE 4 - PREPAID EXPENSES
Transfer agent fees in the amount of $400, and OTCQB annual fees of $7,500 are included as prepaid expenses. These expenses are stated at acquisition cost and are charged to expense over the periods the Company expects to benefit from them. At September 30, 2017 and 2016, the Company has prepaid expenses of $7,900 and $0, respectively.
18
NOTE 5 - CAPITAL STOCK
The Company is authorized to issue 75,000,000 common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued. At both September 30, 2017 and 2016, 12,000,000 common shares are issued and outstanding.
On September 22, 2015, the Company issued 5,750,000 Founders shares at $0.001 per share (par value) for total cash of $5,750.
On September 22, 2015, the Company issued 2,250,000 shares for services provided since inception. These shares were issued at par value ($0.001 per share) for services valued at $2,250.
During the quarter ended June 30, 2016, the Company issued 4,000,000 shares to 27 shareholders at $0.01 per share for total cash of $40,000.
As of June 28, 2017, and prior to his resignation, the Companys President released the liability owed to him in the amount of $22,840 as part of the Assignment of Rights and Assumption of Liabilities Agreement. This amount was added to the Equity Statement as Contributed Capital.
At September 30, 2017, there are no warrants or options outstanding to acquire any additional shares of common stock of the Company.
NOTE 6 - INCOME TAXES
We did not provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. Accounting for Uncertainty in Income Taxes when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that we will not earn income sufficient to realize the deferred tax assets during the carry forward period.
The components of the Companys deferred tax asset and reconciliation of income taxes computed at the statutory rate to the income tax amount recorded as of 2017 is as follows:
|
|
| |
|
September 30, 2017
|
|
September 30, 2016
|
Net operating loss carry forward
|
79,590
|
|
63,395
|
Effective Tax rate
|
34%
|
|
34%
|
Deferred Tax Assets
|
27,061
|
|
21,554
|
Less: Valuation Allowance
|
(27,061)
|
|
(21,554)
|
Net deferred tax assets
|
$ 0
|
|
$ 0
|
The net federal operating loss carry forward will expire in 2037. This carry forward may be limited upon the consummation of a business combination under IRC Section 381. The Company has open tax years of September 30, 2015, 2016 and 2017.
19
NOTE 7 - RELATED PARTY TRANSACTIONS
At September 30, 2017, an affiliate has paid expenses on behalf of the Company in the amount of $14,150. The loans are unsecured, payable on demand, and carry no interest.
At September 30, 2016, a former officer had loaned the Company $45. The loan was unsecured, payable on demand, and carried no interest.
At June 30, 2017, a related party provided the Company with a memo stating that he had paid the amount due to Island Capital Management of $7,000, and had been paid back by the former President personally. The $7,000 was booked against Accounts Payable, and was included in the Shareholder loan amount that was released at June 30, 2017.
The Company does not own or rent any property. The office space is provided by the CEO at no charge.
NOTE 8 - CUSTOMER CONTRACTS
On October 1, 2016, the Company entered into a Mobile Billboard Rental Agreement with 2 Drink LLC for 12 months of mobile billboard advertising at $2,000 per month. The agreement was initially set up to run from October 1, 2016 through September 30, 2017, but the first month of service was November 2016. At June 30, 2017, the company had performed five months of service for a total of $10,000 in total revenue. The Company canceled the agreement in April 2017 due to non-payment. No services were provided during the quarters ending June 30, 2017 and September 30, 2017. At September 30, 2017 and September 30, 2016, $0 and $0, respectively, was owed to the Company.
NOTE 9 - LEASES
On October 5, 2015, the Company entered into a 5-year agreement to lease a custom-built truck equipped with an advertising display at $200 per month. At the end of the lease period, the agreement automatically renews for an additional 5-year period unless terminated by either party 90 days prior to the expiration date. The lease was cancelled as of June 30, 2017.
At June 30, 2017, Mr. Todd, the owner of the leased vehicle, provided the Company with a memo stating that the amount due to him of $4,200 had been personally paid by the former President. The $4,200 was booked against Accounts Payable, and was included in the Shareholder loan amount that was released at June 30, 2017.
NOTE 10 - COMMITMENTS AND CONTINGENCIES
On March 18, 2017, Ando Capital Investment Limited engaged Acorn Assets & Equity Limited to identify and precipitate the purchase of a public company through a Consulting Agreement. On August 29, 2017, a supplement to the Consulting Agreement was signed to clarify certain terms of the agreement. The supplementary document states that the transfer agent fees incurred in the purchase, such as cancelation or issuance of share certificates, new CUSIP application, and printing of new share certificate templates, will be paid by Acorn Assets & Equity Limited until the completion of the initial Consulting Agreement.
As of September 30, 2017, Acorn Assets & Equity Limited has paid transfer agent fees in the amount of $1,215 on behalf of Ando Holdings Ltd.
20
From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Companys financial position or results of operations.
NOTE 11 - SUBSEQUENT EVENTS
As stated in Note 10, Acorn Assets & Equity Limited (Acorn) is responsible for paying transfer agent fees on behalf of the Company per the supplement to their Consulting Agreement. From October 1, 2017 to November 30, 2017, Acorn has paid transfer agent fees in the amount of $2,615 on behalf of Ando Holdings Ltd.
21