UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the Quarterly Period Ended
or
For the transition period from ______ to ______
Commission
File Number
(Exact name of registrant issuer as specified in its charter)
| 7389 | ||||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Number) |
(IRS Employer Identification Number) |
(Address of principal executive offices, including zip code)
Issuer’s
telephone number: +
Company email: Afbltd87@gmail.com
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| Large Accelerated Filer ☐ | Accelerated Filer ☐ | Smaller
reporting company | |
| Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
N/A
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name on each exchange on which registered | ||
| N/A | N/A | N/A |
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding on March 21, 2025 | |
| Common Stock, $ par value |
TABLE OF CONTENTS
| -2- |
PART I — FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
AFB LIMITED
CONDENSED BALANCE SHEETS
AS OF FEBRUARY 28, 2025 (UNAUDITED) AND NOVEMBER 30, 2024 (AUDITED)
(CURRENCY EXPRESSED IN UNITED STATES DOLLARS (“US$”), EXCEPT FOR NUMBER OF SHARES)
| As of February 28, 2025 | As of November 30, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Prepayments | ||||||||
| TOTAL CURRENT ASSETS | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Other payables and accrued liabilities | ||||||||
| Amount due to a director | ||||||||
| TOTAL CURRENT LIABILITIES | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Common stock – Par value $ ; Authorized: shares; Issued and outstanding: shares as of February 28, 2025 and November 30, 2024 respectively | $ | $ | ||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY | $ | ( | ) | $ | ( | ) | ||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| F-1 |
AFB LIMITED
CONDENSED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS
FOR THE THREE MONTHS ENDED FEBRUARY 28, 2025 (UNAUDITED) AND FOR THE THREE MONTHS ENDED FEBRUARY 29, 2024 (UNAUDITED)
(CURRENCY EXPRESSED IN UNITED STATES DOLLARS (“US$”), EXCEPT FOR NUMBER OF SHARES)
| Three months ended February 28, 2025 | Three months ended February 29, 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| REVENUE | $ | $ | ||||||
| COST OF REVENUE | ( | ) | ( | ) | ||||
| GROSS (LOSS)/PROFIT | $ | ( | ) | $ | ||||
| GENERAL AND ADMINISTRATIVE EXPENSES | ( | ) | ( | ) | ||||
| (LOSS)/PROFIT FROM OPERATION BEFORE INCOME TAX | $ | ( | ) | $ | ||||
| INCOME TAX EXPENSES | ||||||||
| NET (LOSS)/PROFIT | $ | ( | ) | $ | ||||
| OTHER COMPREHENSIVE INCOME | ||||||||
| TOTAL COMPREHENSIVE (LOSS)/PROFIT | $ | ( | ) | $ | ||||
| NET (LOSS)/PROFIT PER SHARE- BASIC AND DILUTED | ) | |||||||
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING, BASIC AND DILUTED | ||||||||
The accompanying notes are an integral part of these financial statements.
| F-2 |
AFB LIMITED
CONDENSED STATEMENT OF SHAREHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED FEBRUARY 28, 2025 (UNAUDITED) AND FOR THE THREE MONTHS ENDED FEBRUARY 29, 2024
(UNAUDITED)
(CURRENCY EXPRESSED IN UNITED STATES DOLLARS (“US$”), EXCEPT FOR NUMBER OF SHARES)
| COMMON STOCK | ADDITIONAL | |||||||||||||||||||
| Number of shares | Amount | PAID-IN CAPITAL | ACCUMULATED DEFICIT | TOTAL EQUITY | ||||||||||||||||
| Balance as of November 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of February 28, 2025 | ( | ) | ( | ) | ||||||||||||||||
| COMMON STOCK | ADDITIONAL | |||||||||||||||||||
| Number of shares | Amount | PAID-IN CAPITAL | ACCUMULATED DEFICIT | TOTAL EQUITY | ||||||||||||||||
| Balance as of November 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net profit | - | |||||||||||||||||||
| Balance as of February 29, 2024 | ( | ) | ( | ) | ||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-3 |
AFB LIMITED
CONDENSED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED FEBRUARY 28, 2025 (UNAUDITED) AND FOR THE THREE MONTHS ENDED FEBRUARY 29, 2024 (UNAUDITED)
(CURRENCY EXPRESSED IN UNITED STATES DOLLARS (“US$”), EXCEPT FOR NUMBER OF SHARES)
| Three months ended February 28, 2025 | Three months ended February 29, 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss)/income | $ | ( | ) | $ | ||||
| Changes in operating assets and liabilities: | ||||||||
| Prepayments | ( | ) | ||||||
| Other payables and accrued liabilities | ( | ) | ||||||
| Amount due to a director | $ | $ | ||||||
| Net cash (used in)/provided by operating activities | $ | ( | ) | $ | ||||
| Effect of exchange rate changes on cash and cash equivalents | $ | $ | ||||||
| Net (decrease)/increase in cash and cash equivalents | $ | ( | ) | $ | ||||
| Cash and cash equivalents, beginning of period | ||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||
| Income taxes paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| F-4 |
AFB LIMITED
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED FEBRUARY 28, 2025 (UNAUDITED) AND FOR THE THREE MONTHS ENDED FEBRUARY 29, 2024 (UNAUDITED)
(CURRENCY EXPRESSED IN UNITED STATES DOLLARS (“US$”), EXCEPT FOR NUMBER OF SHARES)
1. ORGANIZATION AND BUSINESS BACKGROUND
AFB Limited, a Nevada corporation, (herein referred as “the Company”) was incorporated under the laws of the State of Nevada on August 18, 2023.
AFB Limited is an e-commerce advisory firm specializing in helping businesses navigate the complex world of online commerce. With our expertise and industry insights, we empower companies to develop and execute winning e-commerce strategies, enabling them to thrive in the digital marketplace.
The Company’s executive office is located at R27 3/F, New Timely Building, 497 Castle Peak Road, Lai Chi Kok, Kowloon, Hong Kong.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements for AFB Limited for the period ended February 28, 2025 are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The Company has adopted November 30 as its fiscal year end.
The reporting currency of the Company is United States Dollars (“US$”), which is also the functional currency of the Company.
Use of Estimates
Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.
Cash and Cash Equivalents
Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.
| F-5 |
Revenue Recognition
Revenue is generated through provision distinct phases of services to customer, encompassing provision of advisory services on e-commerce & digital marketing strategy, execution of website development and design services and post execution monitor and review services to customers.
Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company recognizes the revenue for planning and execution services upon the client’s signing of the service completion confirmation. Meanwhile, revenue for performance monitoring and review services is recognized by equally allocating it over a fixed period stipend in agreement and might varies customer to customer.
In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods and services. The Company applies the following five-step model in order to determine this amount:
(i) identification of the promised goods and services in the contract;
(ii) determination of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the contract;
(iii) measurement of the transaction price, including the constraint on variable consideration;
(iv) allocation of the transaction price to the performance obligations; and
(v) recognition of revenue when (or as) the Company satisfies each performance obligation.
The Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under Topic 606, the Company records revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is probable. The Company records revenue from the wholesale of goods upon the delivery of the finalized website service to the customer.
The Company reports earnings per share in accordance with ASC 260 “Earnings Per Share”, which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings per share excludes dilution and is computed by dividing income available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share takes into account the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock. Further, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split, the computations of a basic and diluted earnings per share shall be adjusted retroactively for all periods presented to reflect that change in capital structure.
The Company’s basic earnings per share is computed by dividing the net income available to holders by the weighted average number of the Company’s ordinary shares outstanding. Diluted earnings per share reflects the amount of net income available to each ordinary share outstanding during the period plus the number of additional shares that would have been outstanding if potentially dilutive securities had been issued.
Income Taxes
The Company accounts for income taxes using the asset and liability method prescribed by ASC 740 “Income Taxes”. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the years in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the period that includes the enactment date.
Measurement of Credit Losses on Financial Instruments
The Company adopted ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326), which replaces the incurred loss methodology with an expected credit loss methodology known as the Current Expected Credit Loss (CECL) model. This new standard requires entities to estimate credit losses over the life of a financial asset based on historical experience, current conditions, and reasonable forecasts.
| F-6 |
The adoption of the CECL model applies to the Company’s portfolio of trade receivables and other financial assets, and resulted in changes to the methodology for determining the allowance for credit losses. Under the CECL model, the Company recognizes an allowance for credit losses at the inception of a financial asset and adjusts it over the life of the asset based on updated expectations of credit losses.
Related Parties
Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
Fair Value Measurement
Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements and Disclosures”, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The statement clarifies that the exchange price is the price in an orderly transaction between market participants to sell the asset or transfer the liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. It also emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and that market participant assumptions include assumptions about risk and effect of a restriction on the sale or use of an asset.
This ASC establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). 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: Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).
Recently issued and adopted accounting pronouncements
The Company has reviewed all recently issued, but not yet effective, considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.
In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The ASU 2023-07 is effective for annual reporting periods beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact this ASU may have on its unaudited condensed consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact of this ASU may have on its unaudited condensed consolidated financial statements and related disclosures.
The Company does not expect that any other recently issued accounting pronouncements will have a significant effect on its condensed consolidated financial statements.
| F-7 |
3. GOING CONCERN UNCERTAINTIES
The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the three months
ended February 28, 2025, the Company incurred loss from operations of $
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 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 improve profitability and the ability to acquire funding through public offering. If funding from public offering is insufficient, then the Company shall rely on the financial support from its controlling shareholder.
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that financial statements are issued. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.
4. PREPAYMENTS
As of February 28, 2025 and November 30, 2024, the company has prepayments consists of following:
| As of February 28, 2025 | As of November 30, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Prepaid OTC markets fee | $ | $ | ||||||
| Prepaid transfer agent fee | ||||||||
| Prepaid filing fee | ||||||||
| Total prepayments | $ | $ | ||||||
5. CASH AND CASH EQUIVALENTS
As
of February 28, 2025 and November 30, 2024, the company has cash and cash of equivalents which comprises of $
6. AMOUNT DUE TO A DIRECTOR
As
of February 28, 2025 and November 30, 2024, the sole director of the Company advanced $
Our
director, Mr. Wong, has been compensated for the services, with a monthly salary of $
| F-8 |
7. OTHER PAYABLES AND ACCRUED LIABILITIES
As of February 28, 2025 and November 30, 2024, the Company has other payables and accrued liabilities consist of following:
| As of February 28, 2025 | As of November 30, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| Deferred revenue | $ | $ | ||||||
| Other payable | ||||||||
| Accrued audit fee | ||||||||
| Total other payables and accrued liabilities | $ | $ | ||||||
8. STOCKHOLDERS’ EQUITY
On August 18, 2023, upon the incorporation of the Company, Tak Chun Wong, subscribed shares of common stock at par value of $ per share for a total subscription value of $.
As of November 30, 2024, the Company has shares of commons stock authorized and shares of common stock issued and outstanding, respectively.
During the three months ended February 28, 2025, the Company has t issued shares.
As of February 28, 2025 the Company has shares of commons stock authorized and shares of common stock issued and outstanding, respectively.
9. INCOME TAX
The (loss)/profit from operation before income taxes of the Company for the three months ended February 28, 2025 and February 29. 2024 were comprised of the following:
| For the three months ended February 28, 2025 | For the three months ended February 29, 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Tax jurisdictions from: | $ | $ | ||||||
| – Local | ( | ) | ||||||
| (Loss)/profit from operation before income tax | $ | ( | ) | $ | ||||
United States of America
The
Company is registered in the State of Nevada and is subject to United States of America tax law. As of February 28, 2025, the operations
in the United States of America incurred $
The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of February 28, 2025 and November 30, 2024:
| As of February 28, 2025 | As of November 30, 2024 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforwards | ||||||||
| – United States of America | $ | $ | ||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Deferred tax assets | $ | $ | ||||||
Management
believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company
provided for a full valuation allowance against its deferred tax assets of $
| F-9 |
10. CONCENTRATIONS OF RISK
Customer Concentration
For the three months ended February 28, 2025 and February 29, 2024, there were two customers and four customers respectively who accounted for more than 10% of the Company’s revenues. The customer who accounted for more than 10% of the Company’s revenues and its outstanding receivable balance at period-end is presented below:
| For the three months ended February 28, 2025 | For the three months ended February 29, 2024 | For the three months ended February 28, 2025 | For the three months ended February 29, 2024 | For the three months ended February 28, 2025 | For the three months ended February 29, 2024 | |||||||||||||||||||
| Revenues | Percentage of revenues | Accounts receivable, trade | ||||||||||||||||||||||
| Customer A | $ | $ | % | % | $ | $ | ||||||||||||||||||
| Customer B | % | % | ||||||||||||||||||||||
| Customer C | % | % | ||||||||||||||||||||||
| Customer D | % | % | ||||||||||||||||||||||
| Total | $ | $ | % | % | $ | $ | ||||||||||||||||||
11. SEGMENT REPORTING
ASC
280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with
the Company’s internal organization structure as well as information about services categories, business segments and major customers
in financial statements.
In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes.
| For the Three Months Ended and As of February 28, 2025 | ||||||||
| By Business Unit | IT Business | Total | ||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| Total assets | $ | $ | ||||||
| Capital expenditure | $ | $ | ||||||
| F-10 |
| For the Three Months Ended and As of February 29, 2024 | ||||||||
| By Business Unit | IT Business | Total | ||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Profit from operations | ||||||||
| Total assets | $ | $ | ||||||
| Capital expenditure | $ | $ | ||||||
| For the Three Months Ended and As of February 28, 2025 | ||||||||
| By Country | Hong Kong | Total | ||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Loss from operations | ( | ) | ( | ) | ||||
| Total assets | $ | $ | ||||||
| Capital expenditure | $ | $ | ||||||
| For the Three Months Ended and As of February 29, 2024 | ||||||||
| By Country | Hong Kong | Total | ||||||
| Revenue | $ | $ | ||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Loss from operations | ||||||||
| Total assets | $ | $ | ||||||
| Capital expenditure | $ | $ | ||||||
12. SUBSEQUENT EVENTS
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after February 28, 2025 up through the date the Company issued the financial statements.
| F-11 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this quarter report on Form 10-Q is intended to update the information contained in our Form S-1/A dated June 24, 2024, for the period from inception on August 18, 2023 to November 30, 2023 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis” and other information contained in such Form S-1/A. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.
The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarter report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form S-1/A registration statement, filed on June 24, 2024, in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarter report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Financial Statements and notes thereto that appear elsewhere in this report.
Company Overview
AFB Limited, a Nevada corporation, (herein referred as “the Company”) was incorporated under the laws of the State of Nevada on August 18, 2023.
AFB Limited is an e-commerce advisory firm specializing in helping businesses navigate the complex world of online commerce. With our expertise and industry insights, we empower companies to develop and execute winning e-commerce strategies, enabling them to thrive in the digital marketplace.
The Company’s executive office is located at R27 3/F, New Timely Building, 497 Castle Peak Road, Lai Chi Kok, Kowloon, Hong Kong.
| -3- |
Results of operations
For the three months ended February 28, 2025 and February 29, 2024
Revenues
For the three months ended February 28, 2025, the Company generated revenue in the amount of $3,683. The revenue generated was from the Company providing eCommerce and digital marketing consultant services to the customers. The cost of revenue for the three months ended February 28, 2025 was $4,500 solely incurred for director salary.
For the three months ended February 29, 2024, the Company generated revenue in the amount of $22,000. The revenue generated was from the Company providing eCommerce and digital marketing consultant services to the customers. The cost of revenue for the three months ended February 29, 2024 was $4,500 solely incurred for director salary.
General and Administrative Expenses
For the three months ended February 28, 2025, the Company had general and administrative expenses in the amount of $9,922. These were primarily comprised of audit fees, transfer agent fees and other professional fees.
For the three months ended February 29, 2024, the Company had general and administrative expenses in the amount of $9,914. These were primarily comprised audit fees, bank charges and legal and professional fees.
Net (Loss)/Profit
For the three months ended February 28, 2025 and February 29, 2024, the Company has incurred a net loss of $10,739 and net profit of $7,586 respectively.
Liquidity and Capital Resources
Cash (Used in)/Provided by Operating Activities
Net cash used in operating activities was $8,745 for the three months ended February 28, 2025. The cash used in operating activities was primarily consist of net loss, increase in prepayment contra by increase in amount due to our director and increase in other payables and accrued liabilities.
Net cash provided by operating activities was $5,500 for the three months ended February 29, 2024. The cash provided by operating activities was primarily consist of net income, decrease in prepayment and increase in amount due to our director contra by decrease in other payables and accrued liabilities.
Cash Used in Investing Activity
For the three months ended February 28, 2025 and February 29, 2024 the Company did not generate nor used any cash in investing activity.
Cash Used in Financing Activity
For the three months ended February 28, 2025 and February 29, 2024, the Company did not generate nor used any cash in financing activity.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
| -4- |
Critical Accounting Policies
Recent accounting pronouncements
In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including trade receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 is effective for the Company beginning December 15, 2022, and early adoption is permitted.
The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company’s financial statements.
Item 3 Quantitative and Qualitative Disclosures About Market Risk.
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 4 Controls and Procedures.
Disclosure Controls and Procedures
We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer, of the effectiveness of our disclosure controls and procedures as of February 28, 2025. Based on the evaluation of these disclosure controls and procedures, and in light of the material weaknesses found in our internal controls over financial reporting, our chief executive officer concluded that our disclosure controls and procedures were not effective. The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (i) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (ii) inadequate segregation of duties and effective risk assessment; and (iii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines. The aforementioned material weaknesses were identified by our chief executive officer in connection with the review of our financial statements as of February 28, 2025.
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Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed 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. The internal controls for the Company are provided by executive management’s review and approval of all transactions. Our internal control over financial reporting also includes those policies and procedures that:
| 1. | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; | |
| 2. | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of our management; and | |
| 3. | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our 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. Also, projections of any evaluation of effectiveness to future periods are subject to the risk 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 the Company’s internal control over financial reporting as of February 28, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of these controls.
As of February 28, 2025, management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in 2013 and SEC guidance on conducting such assessments. Based on such evaluation, the Company’s management concluded that, during the period covered by this Report, our internal control over financial reporting were not effective due to the presence of material weaknesses.
Changes in Internal Control over Financial Reporting:
There were no changes in our internal control over financial reporting during the three months ended February 28, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We are not subjected to nor engaged in any litigation, arbitration or claim of material importance, and no litigation, arbitration or claim of material importance is known to us to be pending or threatened by or against our Company that would have a material adverse effect on our Company’s results of operations or financial condition. Further, there are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to our Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information.
Insider Trading Arrangements
During
the quarter ended February 28, 2025, none of our directors or officers
ITEM 6. Exhibits
| 31.1 | Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer | |
| 32.1 | Section 1350 Certification of principal executive officer | |
| 101.INS | Inline XBRL Instance Document* | |
| 101.SCH | Inline XBRL Schema Document* | |
| 101.CAL | Inline XBRL Calculation Linkbase Document* | |
| 101.DEF | Inline XBRL Definition Linkbase Document* | |
| 101.LAB | Inline XBRL Label Linkbase Document* | |
| 101.PRE | Inline XBRL Presentation Linkbase Document* | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, at the location of Kowloon, Hong Kong, on March 21, 2025.
| AFB Limited | ||
| By: | /s/ Tak Chun Wong | |
| Name: | Tak Chun Wong | |
| Title: | Chief Executive Officer, Chief Financial Officer, Director | |
| Date: | March 21, 2025 | |
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