The accompanying notes are an integral part of these unaudited financial statements
The accompanying notes are an integral part of these unaudited financial statements
The accompanying notes are an integral part of these unaudited financial statements
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2017
Note 1 - Organization
ORGANIZATION
New Asia Energy, Inc. (formerly known as High Desert Assets, Inc. and previously known as Univest Tech, Inc.) (the “Company”), was incorporated in the State of Colorado on November 6, 2007. The Company was originally formed to develop and market music based on technology solutions. In February 2015, the Company underwent a change in control, and management adopted a new business plan based on the development of a “Pure Play” Renewable/Alternative/Distributed Energy Technology Solutions and Wastes to Resources and Energy platforms.
On February 6, 2015, the Company entered into Stock Purchase Agreements with two U.S. accredited investors, Scott C. Kline and Jose A. Capote, the Secretary and Chief Technical Officer of the Company at the time, respectively, and two foreign investors, including Rock Capital Limited, the new majority owner of the Company, pursuant to which the Company issued an aggregate of 17,446,673 shares of common stock, or approximately 42.3% of the issued and outstanding common stock of the Company, at an aggregate purchase price of approximately $17,446. The sales of common stock were made following the acquisition by Rock Capital Limited.
On February 6, 2015 (the “Closing Date”), Rock Capital Limited acquired 14,250,000 shares of common stock of the Company, representing approximately 34.7% of the issued and outstanding shares of common stock of the Company as of the Closing Date, from Jaitegh Singh, the previous majority shareholder of the Company. On the same date, Rock Capital Limited also acquired an additional 1,565,450 shares of common stock from several minority holders, including Loro Verde Investments, representing approximately 3.8% of the issued and outstanding shares of common stock of the Company. As a result of the foregoing, as of the February 6, 2015, Rock Capital Limited acquired common stock representing approximately 76% of the issued and outstanding shares of common stock of the Company.
On July 23, 2015, the Company filed Articles of Amendment to its Articles of Incorporation with the Colorado Secretary of State to change the name of the Company from High Desert Assets, Inc. to New Asia Energy, Inc. On July 29, 2015, the Financial Industry Regulatory Authority (FINRA) approved the change.
On December 31, 2015, the Company went through a change of control of ownership when (i) the Company issued under Regulation S an aggregate of 285,750,001 shares of the Company’s common stock to a total of 10 accredited foreign persons in exchange for the receipt of an aggregate of $300,000, including, but not limited to, Rong Yi Rong (Beijing) Asset Management Limited (“Rong Yi Rong”) (167,995,350 shares), Platinum Starlight HK Limited (15,176,877 shares), Beijing Run Zheng Technology Development Limited (27,297,224 shares), and Million Leader HK Limited (27,297,224 shares), and (ii) Rock Capital Limited sold 14,250,000 of its shares of the Company’s common stock to Platinum Starlight HK Limited in exchange for the receipt of an aggregate of $100,000, altogether representing approximately 91.8% of the issued and outstanding common stock of the Company. The Company received $269,435 as of December 31, 2015. The remaining amount was received in March 2016.
On December 19, 2016, Lin Kok Peng, chairman of the Board and the Company’s Chief Executive Officer and Chief Financial Officer, Allister Lim Wee Sing, director of the Company, and Jose Capote, secretary of the Company, resigned from the Board and their positions as Company officers. On the same day, the Board named Mr. Veng Kun Lun and Mr. Poh Kee Liew as new directors. Mr. Veng Kun Lun was also named to be the Chief Executive Officer and secretary of the Company, and Mr. Poh Kee Liew was named as Chief Financial Officer of the Company.
In November 2016, Rock Capital Limited transferred part of the Company’s common stock to certain individuals, and converted debt of $102,420 to 97,542,857 shares of the Company’s common stock.
On March 28, 2017, Rong Yi Rong and other shareholders transferred 133,131,711 shares of the Company’s common stock to LWH Biomass SDN BHD, a consulting company of Rong Yi Rong. The shares transferred represented approximately 31.4% of the issued and outstanding shares of common stock of the Company. As a result, LWH Biomass SDN BHD, on behalf of Rong Yi Rong, became the largest shareholder of the Company on March 28, 2017 and as of the filing date.
NEW ASIA ENERGY, INC.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2017
Note 2 - Summary of Significant Accounting Policies
This summary of significant accounting policies is presented to assist the reader in understanding the Company’s financial statements. The unaudited interim financial statements and notes are representations of the Company’s management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.
BASIS OF PRESENTATION
The interim unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q and Article 8 of SEC Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature and considered necessary for a fair presentation of its financial condition and results of operations for the interim periods presented in this Quarterly Report on Form 10-Q have been included. Operating results for the interim periods are not necessarily indicative of financial results for the full year. These unaudited interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amount of expenses during the reporting periods. Actual results could differ from those estimates.
GOING CONCERN
The accompanying unaudited interim financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses and has working capital deficiency and negative operating cash flows.
These matters, among others, raise substantial doubt about our ability to continue as a going concern. While the Company’s cash position may not be significant enough to support the Company’s daily operations, management intends to raise additional funds by way of advances from shareholders, advances from CEO, equity and/or debt financing to fund operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
NEW ASIA ENERGY, INC.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2017
Note 3 - Related Party Activity
Since December 19, 2016, Mr. Veng Kun LUN, Chief Executive Officer of the Company, has been funding the Company for its routine operating expenditures. The Company had advances from Mr. LUN in the amount of $59,802 and $1,130 as of June 30, 2017 and December 31, 2016, respectively. Of the total advances of $59,802 as of June 30, 2017, $58,672 was for expenses directly paid by Mr. LUN on behalf of the Company.
Starting from January 1, 2017, the Company uses an office space from New Asia Energy Consultants Sdn Bhd for free. New Asia Energy Consultants Sdn Bhd was founded by Poh Kee LIEW, Chief Financial Officer of the Company, and another third party individual. The Company is planning to acquire New Asia Energy Consultants Sdn Bhd.
NEW ASIA ENERGY, INC.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
JUNE 30, 2017
Note 4 – Litigation
On June 9, 2016, Sharon Morrison and Morrison Enterprises (“Plaintiffs”) filed a lawsuit (“Complaint”) in the Circuit Court of The Seventeenth Judicial Circuit In And For Broward County, Florida, naming Univest Tech Inc. (now known as New Asia Energy Inc. (“NAEI”), which is the Company’s current name) as a defendant as well as naming other defendants (including, but not limited to, Manminderjit (“Manny”) Singh, Esq., a Florida attorney, Luke Zouvas, Esq., a California attorney, and Zouvas Law Group, P.C. (“ZLG”), which is the law practice corporation owned by Mr. Zouvas) (collectively, “Defendants”). According to the Complaint, on March 24, 2014, (prior to the Change in Control), Manny Singh, Esq., allegedly emailed Ms. Morrison offering to sell her 5,000 shares in an investment opportunity he called “Chino Valley Arizona.” Allegedly, Ms. Morrison wired $10,000 in U.S. funds the next day to Luke Zouvas, Esq.’s trust account maintained by ZLG. The wire instructions stated “For Chino Valley Arizona 5,000 Shares.” On September 10, 2014, Ms. Morrison allegedly received an email from an employee of ZLG that had attached to it a September 9, 2014, letter signed by Manny Sing, Esq., transmitting a Stock Purchase Agreement that offered to sell Ms. Morrison, personally, 10,000 shares of Univest Tech Inc. (now NAEI) through a private resale of shares of capital stock purportedly held by Sandman Holdings Corp. which allegedly was a record or beneficial owner of Univest Tech, Inc., (now NAEI) stock at the time. Plaintiffs allege that they did not sign the Stock Purchase Agreement with Sandman Holdings Corp. and did not receive any shares of the capital stock of Univest Tech, Inc., (now NAEI). Plaintiffs are seeking $10,000 U.S. in damages from Defendants Manny Singh, Esq., ZLG, and Luke Zouvas, Esq., related to the Chino Valley Investment Opportunity based on various causes of action solely alleged against Defendants Manny Singh, Esq., ZLG, and Luke Zouvas, Esq. Although Plaintiffs have named Univest Tech, Inc., (now NAEI) as a party defendant in the Complaint, the Plaintiffs have not alleged any causes of action against Univest Tech, Inc. (now NAEI) for damages or to enforce or set aside the unsigned Stock Purchase Agreement for Sandman Holdings’ stock in Univest Tech, Inc., (now NAEI). Because Univest Tech, Inc., (now NAEI) has only been named in the lawsuit without seeking any damages from the Company, an estimate of the potential loss, or range of loss, if any, to the Company relating to these proceedings is not possible at this time. Although, if Plaintiffs amended the Complaint to state a cause of action for damages against Univest Tech, Inc., (now NAEI), then, based on the Plaintiffs’ present allegations, such a claim for damages would be for the same $10,000 U.S. in damage Plaintiffs are seeking against Defendants Manny Sing, Esq., ZLG, and Luke Zouvas, Esq. Based on the allegations of the Complaint, the Company is of the opinion that it should not have been named as a party-defendant to the proceedings just as Jaitegh Singh, Esq. (Manny Singh’s son and the Company’s principal shareholder in 2014) was not named as a party-defendant. There are no allegations that the Company was involved in offering or selling (i) the Chino Valley Investment Opportunity, (ii) the Stock Purchase Agreement with Sandman Holdings Corp. (which is not named as a party-defendant) or (iii) any other shares of the Company.
The Company has enlisted a Florida counsel to obtain the dismissal of the Complaint against the Company. The Company is vigorously defending itself in the litigation. The Company’s Florida counsel has filed a Motion to Dismiss for Lack of Jurisdiction seeking dismissal of the lawsuit on the grounds that the Florida Court lacks jurisdiction over the Company. In early October 2016, the Company’s Florida counsel has also served a Motion for Sanctions Pursuant to Section 57.105 of the Florida Statutes (the “57.105 Motion”) requesting that the Plaintiffs voluntarily dismiss the Company within 21 days or be subject to sanctions for continuing to pursue the lawsuit. Plaintiffs did not drop the Company from the law suit within 21 days or thereafter. Therefore, the Company’s Florida counsel filed the 57.105 Motion.
In order to keep their case from being dismiss for failure to allege any claim or cause of action against Univest Tech, Inc. (now NAEI), Plaintiffs amended their original complaint by filing an Amended Complaint making allegations against Univest Tech, Inc. (now NAEI). After receiving Plaintiffs’ Amended Complaint, the Company filed another motion to dismiss on the grounds of a lack of jurisdiction and for an inconsistency in the pleadings. Plaintiffs changed no allegations from the original complaint about where it sent the $10,000 or who might have or did receive those funds. Without any allegations being made as to how Univest Tech, Inc. (now NAEI) would have converted Plaintiffs’ funds to the Company’s own use or any allegation that Univest Tech, Inc. (now NAEI) ever received any of Plaintiffs’ funds, Plaintiffs brought two counts in the Amended Complaint against Univest Tech, Inc. (now NAEI), one for conversion and the other for unjust enrichment. These claims are deficient because of the failure to allege that Univest Tech, Inc. (now NAEI) actually ever received and had dominion or control over the Plaintiffs’ funds.
Although Plaintiffs have alleged causes of action against other defendants that could exceed $10,000, Plaintiffs have only alleged a cause of action against NAEI that could result in a $10,000 judgment against Plaintiffs which is outside the jurisdiction of the Florida Circuit Court because it can only consider cases with damages in excess of $15,000. Therefore, in addition to the other basis for dismissal for lack of jurisdiction, NAEI could be dismissed for want of the Circuit Court’s jurisdiction. As such, the Company’s motion to dismiss the Amended Complaint still alleges a lack of any basis to have sued Univest Tech, Inc. (now NAEI) as well as a lack of any jurisdiction over Univest Tech, Inc. (now NAEI). The Company also included in that motion a claim that Plaintiffs have acted in Bad Faith in suing Univest Tech, Inc. (now NAEI) and should be sanctioned for having done so by an award of attorney’s fees and costs against Plaintiffs and their counsel for having sued Univest Tech, Inc. (now NAEI) in the Amended Complaint. While the Company is of the opinion that NAEI will ultimately be dismissed from the action, the Company cannot assure that result under any circumstance.