UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
to
FORM 10-Q
(MARK ONE)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2018
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to ____
Commission File No. 000-54126
ALPHA NETWORK ALLIANCE VENTURES INC.
(Exact name of registrant as specified in its charter)
Delaware | 45-1649826 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
11801 Pierce St., 2nd Floor
Riverside, California 92505
(Address of principal executive offices, zip code)
(888) 770-5084
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the issuer (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. Yes ☑ No ☐
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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☐ No ☑
Indicate by checkmark 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”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):
Large Accelerated Filer ☐ Accelerated Filer ☐ Non-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 Exchange Act Rule 12b-2 of the Exchange Act): Yes ☐ No ☑
As of June 8, 2018, there were 113,405,751 shares of common stock, $0.0001 par value per share, outstanding.
ALPHA NETWORK ALLIANCE VENTURES INC.
(A Development Stage Company)
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED MARCH 31, 2018
INDEX
Index | Page | |||
Part I. | Financial Information | |||
Item 1. | Financial Statements | |||
Balance Sheets as of March 31, 2018 (Unaudited) and December 31, 2017. | 1 | |||
Statements of Operations (Unaudited) for the three months ended March 31, 2018 and 2017. | 2 | |||
Statements of Cash Flows (Unaudited) for the nine months and ended March 31, 2018 and 2017. | 3 | |||
Notes to Financial Statements (Unaudited). | 4 | |||
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 10 | ||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 15 | ||
Item 4. | Controls and Procedures. | 15 | ||
Part II. | Other Information | |||
Item 1. | Legal Proceedings. | 15 | ||
Item 1A. | Risk Factors. | 15 | ||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 15 | ||
Item 3. | Defaults Upon Senior Securities. | 15 | ||
Item 4. | Mine Safety Disclosures. | 15 | ||
Item 5. | Other Information. | 15 | ||
Item 6. | Exhibits. | 16 | ||
Signatures | 16 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Amendment No. 1 to Quarterly Report on Form 10-Q of Alpha Network Alliance Ventures Inc., a Delaware corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: the volatility of housing prices, the possibility that we will not receive sufficient customers to grow our business, the Company’s need for and ability to obtain additional financing, the exercise of the approximately 93.2% control the Company’s sole officer and two directors hold of the Company’s voting securities, other factors over which we have little or no control; and other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).
Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ALPHA NETWORK ALLIANCE VENTURES, INC.
A Development Stage Company
Balance Sheets
Unaudited
March 31, | December 31, | |||||||
2018 | 2017 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 6,560 | $ | 2,068 | ||||
Accounts receivable | 74,605 | 41,557 | ||||||
Total current assets | 81,165 | 43,625 | ||||||
Property and equipment, net | 8,516 | 10,089 | ||||||
Total assets | $ | 89,681 | $ | 53,714 | ||||
LIABILITIES | ||||||||
Current liabilities: | ||||||||
Related Party: | ||||||||
Advances from related party | $ | 929,595 | $ | 857,421 | ||||
Accounts payable | 38,892 | 37,559.00 | ||||||
Accrued compensation | 1,400,000 | 1,250,000 | ||||||
Total current liabilities | 2,368,487 | 2,144,980 | ||||||
Total liabilities | 2,368,487 | 2,144,980 | ||||||
STOCKHOLDERS' DEFICIT | ||||||||
Common stock, $.0001 par value, 8,000,000,000 shares authorized, 113,405,751 and 113,405,751 shares issued and outstanding, respectively | 11,341 | 11,341 | ||||||
Capital in excess of par value | 903,664 | 903,664 | ||||||
Deficit accumulated during the development stage | (3,193,811 | ) | (3,006,271 | ) | ||||
Total stockholders' deficit | (2,278,806 | ) | (2,091,266 | ) | ||||
Total liabilities and stockholders' deficit | $ | 89,681 | $ | 53,714 |
1
ALPHA NETWORK ALLIANCE VENTURES, INC.
A Development Stage Company
Statements of Operations
Unaudited
Three months | Three months | |||||||
ended | ended | |||||||
March 31, | March 31, | |||||||
2018 | 2017 | |||||||
Revenue | $ | 33,048 | $ | 3,492 | ||||
Cost of revenue | 24,258 | 2,662 | ||||||
Gross profit | 8,790 | 830 | ||||||
General and Administrative expenses: | ||||||||
Marketing expenses | 325 | — | ||||||
Wages | 151,000 | 95,015 | ||||||
Rent | 206 | 297 | ||||||
Travel | 20,260 | 12,435 | ||||||
Professional | 7,535 | 6,830 | ||||||
Office supplies | 6 | 14 | ||||||
Computer and internet | 2,779 | 2,841 | ||||||
Other general and administrative expenses | 14,218 | 11,953 | ||||||
Total operating expenses | 196,329 | 129,385 | ||||||
Net loss | (187,539 | ) | (128,555 | ) | ||||
Other comprehensive income/(loss) | — | — | ||||||
Comprehensive income/(loss) | $ | (186,206 | ) | $ | (128,555 | ) | ||
Basic earnings/(loss) per common share | $ | (0.01 | ) | $ | (0.00 | ) | ||
Weighted average number of shares outstanding | 113,405,751 | 113,405,751 |
2
ALPHA NETWORK ALLIANCE VENTURES, INC.
A Development Stage Company
Statements of Cash Flows
Unaudited
Three months | Three months | |||||||
ended | ended | |||||||
March 31, | March 31, | |||||||
2018 | 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (186,206 | ) | $ | (128,555 | ) | ||
Adjustments to reconcile net (loss) to cash provided (used) by developmental stage activities: | ||||||||
Shares issued for services | ||||||||
Depreciation | 1,573 | 1,573 | ||||||
Change in current assets and liabilities: | ||||||||
Accounts receivable | (33,048 | ) | 36,298 | |||||
Accounts Payable | 1,333 | |||||||
Accrued compensation | 150,000 | 75,000 | ||||||
Inventory | — | |||||||
Net cash used from operating activities | (67,681 | ) | (15,684 | ) | ||||
Cash flows from investing activities: | ||||||||
Net cash flows provided in investing activities | — | — | ||||||
Cash flows from financing activities: | ||||||||
Loan from related party | 72,173 | 11,743 | ||||||
Net cash flows provided by financing activities | 72,173 | 11,743 | ||||||
Net increase (decrease) in cash flows | 4,492 | (3,941 | ) | |||||
Cash and equivalents, beginning of period | 2,068 | 10,833 | ||||||
Cash and equivalents, end of period | $ | 6,560 | $ | 6,892 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS FOR: | ||||||||
Interest | $ | — | $ | — | ||||
Income taxes | $ | — | $ | — |
3
ALPHA NETWORK ALLIANCE VENTRUES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
March 31, 2018
Note 1 - Summary of Significant Accounting Policies:
The Company was originally organized in the State of Delaware on March 24, 2011 as Daedalus Ventures, Inc.
In December 2011 the Company completed a merger with Alpha Network Alliance Ventures Inc. Immediately upon the completion of the merger, the Company changed its name to Alpha Network Alliance Ventures Inc.
The Company is focused on building and operating a social networking software application and other internet driven applications. The Company builds Social Network Marketing tools that enable buyers, sellers, users to connect, share, discover and communicate with each other. The software application also allows its users to post reviews and share shopping and fashion tips and opinions or to integrate their 3rd party websites or shopping store sites. It also offers products that enable companies, advertisers and marketers to engage with its users using a Social Network Marketing campaign and Social Medial Marketing campaign platform to boost the sales and membership for every affiliate who wants to participate.
The Company’s market is mostly Overseas Contract Workers (OCW) and majority is from the Philippines. The Company decided that it’s appropriate to sell our KababayanKo.com Premium Packages membership with products included to be more attractive and lucrative to every affiliate who buys and upgrades to Premium Packages Membership, and as a result of the promotion they can also purchase the products inside Kababayanko.com Market Place if they want it more.
During 2014, The Company also moved its primary operations to the Philippines. The purpose of this move was to better centrally locate to its primary market. Additionally, the Company plans to recognize lower costs and better distribution.
Recognizing the efficiency and cost effectivity of its operations in the Philippines, the company appointed an independent distributor that will primarily handle the distribution of its product in the Philippines. As a result of this, during 2015, the company has moved its primary operations back in the California, United States.
The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s market penetration before another company develops a similar product.
The Company is in the development stage as defined under Statement on Financial Accounting Standards Accounting Standards Codification FASB ASC 915-205 "Development-Stage Entities.” The Company has adopted the new provision of FASB ASC 915-275 and is not reporting inception to date activities as previously required.
Basis of presentation
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company for the three months ended March 31, 2018 and for the year ended December 31, 2017.
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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
4
ALPHA NETWORK ALLIANCE VENTRUES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
March 31, 2018
Cash and cash equivalents
The Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of March 31, 2017 and December 31, 2017.
Fair value of financial instruments and derivative financial instruments
The Company’s financial instruments include cash, accounts payable, and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at March 31, 2018 and December 31, 2017. The Company did not engage in any transaction involving derivative instruments.
Inventory
Inventory is recorded at the lower of cost or market and is computed on a first-in first-out basis. The inventory consists of weight loss products, energy and performance solutions products and healthy aging solution products.
Property and Equipment
Property and equipment are stated at cost. Major repairs and betterments are capitalized and normal maintenance and repairs are charged to expense as incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the related assets. Office and general equipment are depreciated over useful lives of 10 years and leasehold improvements are depreciated shorter of term lease and useful life of 20 years. Upon retirement or sale of an asset, the cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operations.
Federal income taxes
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted Accounting Standards Codification 740.10.05 “Accounting for Income Taxes” as of its inception. Pursuant to Accounting Standards Codification 740.10.05, the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward to future years. The U. S. Tax Act known as Tax Cuts and Jobs Act (the “2017 Act”) signed on December 22, 2017 may have changed the consequences to U. S. shareholders that own, or are considered to own, as a result of the attribution rules, 10% or more of the voting power or value of a non-U. S. corporation ( a “10% U.S. shareholder) under the U.S. Federal income tax law applicable to owners of U.S. controlled foreign corporations (“CFCs”). We did not believe any of our shareholders, or our subsidiaries were CFCs, and there will be no such impact for 2017 Act for the three months ended March 31, 2018 and for the year ended December 31, 2017.
Net income per share of common stock
Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share ("EPS") is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive.
Common Stock Registration Expenses
The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.
5
ALPHA NETWORK ALLIANCE VENTRUES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
March 31, 2018
Research and Development
Costs for research and development, including predevelopment efforts prior to establishing technological feasibility of software expected to be marketed, are expensed as incurred. Development costs are capitalized when technological feasibility has been established and anticipated future revenues support the recoverability of the capitalized amounts. Capitalization stops when the product is available for general release to customers. The Company has not capitalized any software development, and has expensed these costs as incurred. These costs are included in research and development expense.
Revenue Recognition:
The company recognizes revenues when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those good or services. The company generates wholesale revenues primarily from sale of products to retailers or distributors who are mostly Overseas Contract Workers (OCW) and majority is from the Philippines. The company typically extend credit terms to its wholesale customers based on their creditworthiness and generally do not receive advance payments. As such, we record accounts receivable at the time of shipment, when our right to the consideration becomes unconditional. Accounts receivable from our wholesale customers are typically due within 30 to 60 days of invoicing. An allowance for doubtful accounts is provided based on a periodic analysis of individual accounts balances, including an evaluation of days outstanding, payment history, recent payment trends, and the company's assessment of its customers' creditworthiness, As of March 31, 2018 and December 31, 2017 and 2016, no allowance for doubtful accounts has been provided..
Recently Issued Accounting Pronouncements:
For the three months ended March 31, 2018 and for the year ended December 31, 2017, the Company does not expect any of the recently issued accounting pronouncements to have a material impact on its financial condition or results of operations.
Note 2 - Uncertainty, going concern:
The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. As of March 31, 2018, the Company had an accumulated deficit of $3,193,811. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. 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 result from this uncertainty.
6
ALPHA NETWORK ALLIANCE VENTRUES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
March 31, 2018
Note 3 – Property and Equipment, net
Property and equipment at year-end consisted of:
March 31, | December 31, | |||||||
2017 | 2017 | |||||||
Transportation Equipment | $ | 44,132 | $ | 44,132 | ||||
Less: Accumulated Depreciation | 35,616 | 34,043 | ||||||
Property and equipment, net | $ | 8,516 | $ | 10,089 |
The Company recorded depreciation expense of $1,573 and $6,292 for the three months ended March 31, 2018 and for the year ended December 31, 2017, respectively.
Note 4 - Related Party Transactions:
Due to related parties included in the balance sheets as of December 31, 2017 and December 31, 2016 were loans from the Company’s director and CEO, Mr. Eleazar Rivera. He has lent the Company noninterest bearing amounts of $ 929,595 as of March 31, 2018 and $857,421 as of December 31, 2017. Of this amount, $629,595 is designated as advances from stockholders, while $300,000 is designated as deposit for future share subscriptions. No subscribed shares are outstanding that cannot be legally issued until paid for. These advances are unsecured and there are no terms for repayment.
Note 5 - Common Stock:
Since inception, the Company has issued 108,531,251shares of stock for $169,567 cash.
During the year ended December 31, 2012, the Company issued for cash 158,500 shares of stock for $18,750
During the year ended December 31, 2013, the Company issued for cash 205,868 shares of stock for $30,800. Additionally, the Company received $43,887 cash for 277,366 unissued shares of common stock. These shares were issued in the first quarter 2014.
The Company had the following stock transactions for the year ended December 31, 2014:
The Company issued 277,366 shares of stock for the funds received and recorded as a stock subscription for the period ending December 31, 2013.
The Company issued 514,317 shares of stock for 78,332 cash.
The company had no new shares issued for the three month ended March 31, 2018, and the years 2017, 2016 and 2015.
7
ALPHA NETWORK ALLIANCE VENTRUES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
March 31, 2018
Note 6 – Employment Contract
On November 24, 2014, the Company entered into an employment agreement with its Chief Executive Officer and majority shareholder for a (5) five year employment agreement. The employment agreement calls for an annual salary of $300,000 plus a monthly bonus of 2% of all sales paid on a monthly basis. The agreement also includes a 10% increase every December 1st. This contract renews on an annual basis following the (5) year term and can be canceled by the Company or the employee.
On December 1, 2017, another employment agreement, with the same terms and conditions, was entered into by the company with its Chairman of the board.
The balance of this accrued compensation as of March 31, 2018 was $1,400,000. The balance at December 31, 2017 was $1,250,000.
Note 7 - Subsequent Events
Alpha’s management has evaluated events occurring between March 31, 2018 and May 21, 2018, which is the date of the financial statements were available to be issued, and has recognized in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at May 21, 2018, including the estimates inherent in the processing of the financial statements.
On April 4, 2018, the company filed with the Securities and Exchange Commission a registration statement (Form S-1) under the Securities Act of 1933 to register securities for initial public offering of 100,000,000 shares of common stock at a fixed price $0.45 per share and 10,000,000 shares of common stock offered by selling stockholders at an initial price of $0.45 and may eventually be offered at prevailing market prices or privately negotiated prices. The offering is being conducted on a self-underwritten, best effort basis, which means that management, will attempt to sell the shares. The common stock offered by the selling stockholders will not be sold until the company sells all of the 100,000,000 sales in its offering.
Any funds that will be raised from the offering of 100,000,000 common shares shall be immediately available for use as follows:
Product Development | 10% | Expansion to 10 countries | 20% | ||||||||
Infrastructure | 10% | Inventory for 6 months allocations | 25% | ||||||||
Executive salaries | 10% | Legal and accounting | 2% | ||||||||
Staff salaries | 20% | Transfer agent, contingencies | |||||||||
And other expenses | 3% | ||||||||||
Total | 100% |
The offering price of the 100,000,000 shares being offered has been determined arbitrarily by the management. The price does not bear any relationship to the company’s assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the number of shares to be offered and the offering price, the company took into consideration its cash on hand and the amount of money the company would need to implement its business plan. Accordingly, the offering price should not be considered an indication of the actual value of the securities. The will not receive any of the proceeds from the sale of the 10,000,000 common shares being offered for sale by the selling stockholders, which 10,000,000 shares of our common stock may be offered and sold from time to time by the selling stockholders. The selling shareholders will sell our shares at prevailing market prices or privately negotiated prices.
8
ALPHA NETWORK ALLIANCE VENTRUES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
March 31, 2018
The common shares being offered for resale by the 2 selling stockholders consist 5,000,000 of our common stock, $0.0001 par value. The following table sets forth the shares beneficially owned, as of the date of the prospectus, by the selling stockholders prior to the offering by existing stockholders contemplated by this prospectus, the number of shares each selling stockholder is offering by this prospectus and the number of shares which each would own beneficially if all such offered shares are sold.
Beneficial ownership is determined in accordance with Securities and Exchange Commission rules. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
The percentages below are calculated based on 113,405,751 shares of the company’s common stock issued and outstanding as of the date of the prospectus. The company does not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock. None of the selling stockholders is a broker-dealer or an affiliate of a broker-dealer.
Name of Selling Shareholder | Shares Owned Before the Offering | Total Number of Shares to be Offered for the Security Holder’s Account | Total Shares Owned After the Offering is complete | Percentage of Shares Owned After the Offering is complete | ||||||||||||
Eleazar Rivera | 50,543,020 | 5,000,000 | 45,543,020 | 21.34% | ||||||||||||
Ronie Tan | 51,418,000 | 5,000,000 | 46,418,000 | 21.75% | ||||||||||||
Totals | 101,961,020 | 10,000,000 | 91,961,020 | 43.09% |
9
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Alpha Network Alliance Ventures Inc. was incorporated under the laws of the state of Delaware on August 12, 2010. From March 2011 through the end of December 2017, we were engaged in the development of a social networking website, www.kababayanko.com, for overseas workers from the Philippines and others who share or are interested in their lifestyle. Since January 2018, our business has focused on the marketing and sale of food supplements and vitamins. Our fiscal year end is December 31, and we have no subsidiaries. Our social networking website aims to provide overseas workers from the Philippines with a platform to share their overseas working and living experiences, and interact with a community of Filipino overseas workers from around the world.
Our business offices are currently located at 11801 Pierce St., 2nd Floor, Riverside, California 92505. We have a website located at www.kababayanko.com; however, the information contained on our website does not form a part of this Form 10-Q.
Going Concern
To date the Company has had little operations and little revenues and consequently has incurred recurring losses from operations. No material revenues are anticipated until we obtain sufficient funds to implement our initial business plan. The ability of the Company to continue as a going concern is dependent on raising capital to fund our business plan and ultimately to attain profitable operations. There are no assurances that we will be able to obtain further funds required for our continued operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.
Our activities have been financed primarily from cash loans from our sole director and officer. Due to related parties included in the balance sheets as of March 31, 2018 and December 31, 2017 were loans from the Company’s director and Chief Executive Officer, Eleazar Rivera. He has lent the Company noninterest bearing amounts of $929,595 as of March 31, 2018. Of this amount, $629,595 is designated as advances from stockholders, while $300,000 is designated as deposit for future share subscriptions. No subscribed shares are outstanding that cannot be legally issued until paid for. These advances are unsecured and there are no terms for repayment.
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the policies below as critical to our business operations and to the understanding of our financial results:
10
Development Stage Company
The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) No. 7, “Accounting and Reporting by Development Stage Enterprises”. The Company has devoted substantially all of its efforts to business planning, and development. Additionally, the Company has allocated a substantial portion of their time and investment in bringing their product to the market, and the raising of capital.
Use of Estimates
The Company prepares financial statements in conformity with generally accepted accounting principles that require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with maturities of one year or less to be cash equivalents.
Property and Equipment
Property and equipment are stated at cost. Major repairs and betterments are capitalized and normal maintenance and repairs are charged to expense as incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the related assets. Upon retirement or sale of an asset, the cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operations.
Fair Value of Financial Instruments
The fair value of cash and cash equivalents and accounts receivable and accounts payable approximates their carrying amount.
PLAN OF OPERATION
We are a development stage corporation which operates a food products and beverage business and have not yet generated or realized only nominal revenues from our business.
Our plan of operation for the following 12 months is as follows, provided that we raise sufficient funds to commence such plan:
We have filed with the SEC a Registration Statement on Form S-1 with respect to a public offering of 100,000,000 shares of our common stock, which offering is being made on a self-underwritten basis, and no minimum number of shares must be sold in order for the offering to proceed. The net proceeds to us from the sale of up to 100,000,000 shares offered at a public offering price of $0.45 per share will vary depending upon the total number of shares sold. Regardless of the number of shares sold, we expect to incur offering expenses estimated at $16,899 for legal, accounting, printing and other costs in connection with this prospective offering.
The following table sets forth the uses of proceeds from the primary offering would be used assuming the sale of 25%, 50%, 75% and 100%, respectively, of the securities offered for sale by the Company. There is no assurance that we will raise the full $45,000,000 as anticipated.
11
If 25% of Shares Sold | If 50% of Shares Sold | If 75% of Shares Sold | If 100% of Shares Sold | |||
Gross Proceeds from this offering | Itemized % | Total % | $11,250,000 | $22,500,000 | $33,750,000 | $45,000,000 |
Product Development | ||||||
Company Acquisition and Development | 10% | $1,125,000 | $2,250,000 | $3,375,000 | $4,500,000 | |
Health and Wellness Industry | 5% | $562,500 | $1,125,000 | $1,687,500 | $2,250,000 | |
Technology Company | 5% | $562,500 | $1,125,000 | $1,687,500 | $2,250,000 | |
TOTAL | $1,125,000 | $2,250,000 | $3,375,000 | $4,500,000 | ||
Infra Structures | 10% | $1,125,000 | $2,250,000 | $3,375,000 | $4,500,000 | |
Licensing & Development | 5% | $562,500 | $1,125,000 | $1,687,500 | $2,250,000 | |
Corporate Office Acquisition | 5% | $562,500 | $1,125,000 | $1,687,500 | $2,250,000 | |
TOTAL | $1,125,000 | $2,250,000 | $3,375,000 | $4,500,000 | ||
Executives Salaries (Max 10) | 10% | $1,125,000 | $2,250,000 | $3,375,000 | $4,500,000 | |
Founder Dato | 1.35% | $151,875 | $303,750 | $455,625 | $607,500 | |
Founder Lance | 1.35% | $151,875 | $303,750 | $455,625 | $607,500 | |
CEO | 1.20% | $135,000 | $270,000 | $405,000 | $540,000 | |
President | 1.10% | $123,750 | $247,500 | $371,250 | $495,000 | |
CFO | 1.00% | $112,500 | $225,000 | $337,500 | $450,000 | |
COO | 1.00% | $112,500 | $225,000 | $337,500 | $450,000 | |
CMO | 1.00% | $112,500 | $225,000 | $337,500 | $450,000 | |
CIO | 1.00% | $112,500 | $225,000 | $337,500 | $450,000 | |
CSO | 1.00% | $112,500 | $225,000 | $337,500 | $450,000 | |
TOTAL | $1,125,000 | $2,250,000 | $3,375,000 | $4,500,000 | ||
Staffs Salary (Max 70) | 20% | $2,250,000 | $4,500,000 | $6,750,000 | $9,000,000 | |
VP Country (10 Countries) | 4.0% | $450,000 | $900,000 | $1,350,000 | $1,800,000 | |
HR Manager (10 C'ries) | 2.5% | $281,250 | $562,500 | $843,750 | $1,125,000 | |
Sales & Marketing Manager (10 C) | 2.5% | $281,250 | $562,500 | $843,750 | $1,125,000 | |
Marketing Manager (10 C) | 2.50% | $281,250 | $562,500 | $843,750 | $1,125,000 | |
Finance Manager (10 C) | 2.50% | $281,250 | $562,500 | $843,750 | $1,125,000 | |
CS Manager (10 C) | 2.50% | $281,250 | $562,500 | $843,750 | $1,125,000 | |
Rank & File (10 C) | 3.50% | $393,750 | $787,500 | $1,181,250 | $1,575,000 | |
TOTAL | $2,250,000 | $4,500,000 | $6,750,000 | $9,000,000 | ||
12
Expansion (10 Countries Max) | 20% | $2,250,000 | $4,500,000 | $6,750,000 | $9,000,000 | |
USA | 3% | $337,500 | $675,000 | $1,012,500 | $1,350,000 | |
Canada | 1.50% | $168,750 | $337,500 | $506,250 | $675,000 | |
Mexico | 2% | $225,000 | $450,000 | $675,000 | $900,000 | |
Malaysia | 2% | $225,000 | $450,000 | $675,000 | $900,000 | |
Philippines | 2% | $225,000 | $450,000 | $675,000 | $900,000 | |
Indonesia | 2% | $225,000 | $450,000 | $675,000 | $900,000 | |
Singapore | 1.50% | $168,750 | $337,500 | $506,250 | $675,000 | |
Thailand | 2% | $225,000 | $450,000 | $675,000 | $900,000 | |
Russia | 2% | $225,000 | $450,000 | $675,000 | $900,000 | |
Turkey | 2% | $225,000 | $450,000 | $675,000 | $900,000 | |
TOTAL | $2,250,000 | $4,500,000 | $6,750,000 | $9,000,000 | ||
Inventory (6 Months Allocation) | 25% | $2,812,500 | $5,625,000 | $8,437,500 | $11,250,000 | |
Weight Loss Products | 10% | $1,125,000 | $2,250,000 | $3,375,000 | $4,500,000 | |
Dental Products | 5% | $562,500 | $1,125,000 | $1,687,500 | $2,250,000 | |
Suplements Products | 2.50% | $281,250 | $562,500 | $843,750 | $1,125,000 | |
Beverage Products | 2.50% | $281,250 | $562,500 | $843,750 | $1,125,000 | |
Technology Gadgets | 2.50% | $281,250 | $562,500 | $843,750 | $1,125,000 | |
Kits & Promotional & Collaterals | 2% | $225,000 | $450,000 | $675,000 | $900,000 | |
Others eg stationanary | 0.50% | $56,250 | $112,500 | $168,750 | $225,000 | |
TOTAL | $2,812,500 | $5,625,000 | $8,437,500 | $11,250,000 | ||
Legal & Accounting | 2% | $225,000 | $450,000 | $675,000 | $900,000 | |
SEC Lawyer | 0.20% | $22,500 | $45,000 | $67,500 | $90,000 | |
Residence Legal Team | 0.70% | $78,750 | $157,500 | $236,250 | $315,000 | |
External Auditor | 0.20% | $22,500 | $45,000 | $67,500 | $90,000 | |
Internal Auditor | 0.20% | $22,500 | $45,000 | $67,500 | $90,000 | |
Residence Finance Team | 0.70% | $78,750 | $157,500 | $236,250 | $315,000 | |
TOTAL | $225,000 | $450,000 | $675,000 | $900,000 | ||
Transfer Agent | 0.20% | $22,500 | $45,000 | $67,500 | $90,000 | |
Over All Media Advertising & Printing | 0.80% | $90,000 | $180,000 | $270,000 | $360,000 | |
Contingency | 2% | $225,000 | $450,000 | $675,000 | $900,000 | |
GRAND TOTAL | 100.00% | $11,250,000 | $22,500,000 | $33,750,000 | $45,000,000 |
The above figures represent only estimated costs. All proceeds will be deposited into our corporate bank account. Any funds that we raise from our offering of 100,000,000 shares will be deposited in a Company bank account in the United States immediately available for our use and will not be returned to investors. We do not have any arrangements to place the funds received from our offering of $45,000,000 in an escrow, trust or similar account. Accordingly, if we file for bankruptcy protection or a petition for involuntary bankruptcy is filed by creditors against us, your funds will become part of the bankruptcy estate and administered according to the bankruptcy laws. If a creditor sues us and obtains a judgment against us, the creditor could garnish the bank account and take possession of the subscriptions.
13
We currently do not have any arrangements for further financing and we may not be able to obtain financing when required. Our future is dependent upon our ability to obtain further financing, the successful development of our planned business consulting services, a successful marketing and promotion program, and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There are no assurances that we will be able to obtain further funds required for our continued operations. Even if additional financing is available, it may not be available on terms we find favorable. At this time, there are no anticipated sources of additional funds in place. Failure to secure the needed additional financing will have an adverse effect on our ability to remain in business.
Results of Operations
Results of Operations for the Three Months Ended March 31, 2018 and 2017
The Company’s revenue was $33,048 and $3,492 for the quarters ended March 31, 2018 and 2017, respectively, an increase of $29,556, or 90%. All of the Company’s revenue was derived from sale of products through social marketing.
Total expenses were $196,329 for the quarter ended March 31, 2018 as compared to $129,385 for the quarter ended March 31, 2017, an increase of $66,944 or 35%. Wages were $151,000 or 73% of the Company’s total expenses for the quarter ended March 31, 2018 and $95,015 or 94.3% of the Company’s total expenses for the quarter ended March 31, 2017. Travel was $20,260 for the quarter ended March 31, 2018 and $12,435 for the quarter ended March 31, 2017. Professional fees were 7,535 for the quarter ended March 31, 2018 and $6,830 for the quarter ended March 31, 2017. Rent was $206 for the quarter ended March 31, 2018 and $297 for the quarter ended March 31, 2017. Computer and Internet expenses were $2,779 for the quarter ended March 31, 2018 and $2,841 for the quarter ended March 31, 2017. Other general and administrative expenses were $14,218 for the quarter ended March 31, 2018 and $11,953 for the quarter ended September 30, 2016.
Net income (loss) was a net loss of $187,539 for the quarter ended March 31, 2018, compared to a net loss of $128,555 for the quarter ended March 31, 2017, an increase of $58.984 or 31.5%. The increase in net loss was primarily the result of the Company’s increased wages to employees, increased travel costs .
Liquidity and Capital Resources
As of March 31, 2018, we had cash totaling $6,560, total assets of $89,681, total liabilities of $2,368,487 and working capital of $(2,278,806). We do not have sufficient cash on hand to commence our 12-month plan of operation or to fund our ongoing operational expenses. We will need to raise funds to commence our 12-month plan of operation and fund our ongoing operational expenses. Additional funding will likely come from equity financing from the sale of our common stock. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our 12-month plan of operation and ongoing operational expenses. In the absence of such financing, our business will likely fail. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our 12-month plan of operation and our business will fail.
14
Subsequent Events
None through date of this filing.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.
ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, our principal executive officer and our principal financial officer are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of March 31, 2018.
There were no changes in the Company’s internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.
ITEM 1A. RISK FACTORS
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
ITEM 5. OTHER INFORMATION.
None.
15
ITEM 6. EXHIBITS.
(a) Exhibits required by Item 601 of Regulation SK.
Exhibit | Description | |
2.1 | Agreement and Plan of Merger dated June 1, 2011 by and between Registrant and Alpha Network Alliance Ventures Inc. (1) | |
3.1.1 | Certificate of Incorporation of Registrant (2) | |
3.1.2 | Certificate of Merger (3) | |
3.1.3 | Certificate of Amendment to Articles of Incorporation (3) | |
3.2 | Bylaws (2) | |
31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.INS * | XBRL Instance Document | |
101.SCH * | XBRL Taxonomy Extension Schema Document | |
101.CAL * | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF * | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB * | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE * | XBRL Taxonomy Extension Presentation Linkbase Document |
* | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
(1) | Incorporated by reference to the Registrant’s Form 8-K (File No. 000-54126) filed with the Commission on June 13, 2011. |
(2) | Incorporated by reference to the Registrant’s Form 10 (File No. 000-54126) filed with the Commission on September 23, 2010. |
(3) | Incorporated by reference to the Registrant’s Form S-1 (File No 333-182596) filed with the Commission on July 10, 2012. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ALPHA NETWORK ALLIANCE VENTURES INC. | |||
(Name of Registrant) | |||
Date: June 11, 2018 | By: | /s/ Eleazar Rivera | |
Name: Eleazar Rivera | |||
Title: President, Secretary and Treasurer (principal executive officer, principal financial officer, and principal accounting officer) |
16
EXHIBIT 31.1
SECTION 302 CERTIFICATION OF
PRINCIPAL EXECUTIVE OFFICER OF ALPHA NETWORK ALLIANCE VENTURES INC.
I, Eleazar Rivera, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Alpha Network Alliance Ventures Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: June 11, 2018 | /s/ Eleazar Rivera |
Eleazar Rivera | |
President, Secretary and Treasurer | |
(principal executive officer, principal financial officer, and principal accounting officer) |
EXHIBIT 31.2
SECTION 302 CERTIFICATION OF
PRINCIPAL FINANCIAL OFFICER OF ALPHA NETWORK ALLIANCE VENTURES INC.
I, Eleazar Rivera, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Alpha Network Alliance Ventures Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: June 11, 2018 | /s/ Eleazar Rivera |
Eleazar Rivera | |
President, Secretary and Treasurer | |
(principal executive officer, principal financial officer, and principal accounting officer) |
EXHIBIT 32.1
SECTION 906 CERTIFICATION OF PRINCIPAL EXECUTIVE
OFFICER AND
PRINCIPAL FINANCIAL OFFICER OF ALPHA NETWORK ALLIANCE VENTURES INC.
In connection with the accompanying Quarterly Report on Form 10-Q of Alpha Network Alliance Ventures Inc. for the quarter ended March 31, 2018, the undersigned, Eleazar Rivera, President of Alpha Network Alliance Ventures Inc., does hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) such Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in such Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 fairly presents, in all material respects, the financial condition and results of operations of Alpha Network Alliance Ventures Inc.
Date: June 11, 2018 | /s/ Eleazar Rivera |
Eleazar Rivera | |
President, Secretary and Treasurer | |
(principal executive officer, principal financial officer, and principal accounting officer) |
Document and Entity Information |
3 Months Ended |
---|---|
Mar. 31, 2018
shares
| |
Document And Entity Information | |
Entity Registrant Name | Alpha Network Alliance Ventures Inc. |
Entity Central Index Key | 0001491829 |
Document Type | 10-Q/A |
Document Period End Date | Mar. 31, 2018 |
Amendment Flag | true |
Amendment Description | Changes to financials |
Current Fiscal Year End Date | --12-31 |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Smaller Reporting Company |
Entity Common Stock, Shares Outstanding | 113,405,751 |
Document Fiscal Period Focus | Q1 |
Document Fiscal Year Focus | 2018 |
Balance Sheets (Unaudited) - USD ($) |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Current Assets: | ||
Cash | $ 6,560 | $ 2,068 |
Accounts receivable | 74,605 | 41,557 |
Total current assets | 81,165 | 43,625 |
Property and equipment, net | 8,516 | 10,089 |
Total Assets | 89,681 | 53,714 |
Related party: | ||
Advances from related party | 929,595 | 857,421 |
Accounts payable | 38,892 | 37,559 |
Accrued compensation | 1,400,000 | 1,250,000 |
Total current liabilities | 2,368,487 | 2,144,980 |
Total Liabilities | 2,368,487 | 2,144,980 |
Stockholders' Deficit | ||
Common stock | 11,341 | 11,341 |
Capital in excess of par value | 903,664 | 903,664 |
Deficit accumulated during the development stage | (3,193,811) | (3,006,271) |
Total stockholders' deficit | (2,278,806) | (2,091,266) |
Total Liabilities and stockholders' deficit | $ 89,681 | $ 53,714 |
Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized shares | 8,000,000,000 | 8,000,000,000 |
Common stock, issued shares | 113,405,751 | 113,405,751 |
Common stock, outstanding shares | 113,405,751 | 113,405,751 |
Statement of Operations (Unudited) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Income Statement [Abstract] | ||
Revenue | $ 33,048 | $ 3,492 |
Cost of revenue | 24,258 | 2,662 |
Gross profit | 8,790 | 830 |
General and Administrative Expenses | ||
Marketing expenses | 325 | |
Wages | 151,000 | 95,015 |
Rent | 206 | 297 |
Travel | 20,260 | 12,435 |
Professional | 7,535 | 6,830 |
Office supplies | 6 | 14 |
Computer and internet | 2,779 | 2,841 |
Other general and administrative expenses | 14,218 | 11,953 |
Total operating expenses | 196,329 | 129,385 |
Net loss | (187,539) | (128,555) |
Comprehensive income/(loss) | $ (187,539) | $ (128,555) |
Basic earnings/(loss) per common share | $ (0.01) | $ 0.00 |
Weighted average number of shares outstanding | 113,405,751 | 113,405,751 |
Statements of Cash Flows (Unaudited) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Cash Flows From Operating Activities: | ||
Net loss | $ (187,539) | $ (128,555) |
Adjustments to reconcile net (loss) to cash provided by (used in) developmental stage activities: | ||
Depreciation | 1,573 | 1,573 |
Change in current assets and liabilities: | ||
Accounts receivable | (33,048) | 36,298 |
Accounts Payable | 1,333 | |
Accrued compensation | 150,000 | 75,000 |
Net cash flows used from operating activities | (67,681) | (15,684) |
Cash flows from financing activities: | ||
Loan from related party | 72,173 | 11,743 |
Net cash flows provided (used) from financing activities | 72,173 | 11,743 |
Net increase (decrease) in cash flows | 4,492 | (3,941) |
Cash and equivalents, beginning of period | 2,068 | 10,833 |
Cash and equivalents, end of period | $ 6,560 | $ 6,892 |
Summary of Significant Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 - Summary of Significant Accounting Policies:
The Company was originally organized in the State of Delaware on March 24, 2011 as Daedalus Ventures, Inc.
In December 2011 the Company completed a merger with Alpha Network Alliance Ventures Inc. Immediately upon the completion of the merger, the Company changed its name to Alpha Network Alliance Ventures Inc.
The Company is focused on building and operating a social networking software application and other internet driven applications. The Company builds Social Network Marketing tools that enable buyers, sellers, users to connect, share, discover and communicate with each other. The software application also allows its users to post reviews and share shopping and fashion tips and opinions or to integrate their 3rd party websites or shopping store sites. It also offers products that enable companies, advertisers and marketers to engage with its users using a Social Network Marketing campaign and Social Medial Marketing campaign platform to boost the sales and membership for every affiliate who wants to participate.
The Company’s market is mostly Overseas Contract Workers (OCW) and majority is from the Philippines. The Company decided that it’s appropriate to sell our KababayanKo.com Premium Packages membership with products included to be more attractive and lucrative to every affiliate who buys and upgrades to Premium Packages Membership, and as a result of the promotion they can also purchase the products inside Kababayanko.com Market Place if they want it more.
During 2014, The Company also moved its primary operations to the Philippines. The purpose of this move was to better centrally locate to its primary market. Additionally, the Company plans to recognize lower costs and better distribution.
Recognizing the efficiency and cost effectivity of its operations in the Philippines, the company appointed an independent distributor that will primarily handle the distribution of its product in the Philippines. As a result of this, during 2015, the company has moved its primary operations back in the California, United States.
The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s market penetration before another company develops a similar product.
The Company is in the development stage as defined under Statement on Financial Accounting Standards Accounting Standards Codification FASB ASC 915-205 "Development-Stage Entities.” The Company has adopted the new provision of FASB ASC 915-275 and is not reporting inception to date activities as previously required.
Basis of presentation The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company for the three months ended March 31, 2018 and for the year ended December 31, 2017.
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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents The Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of March 31, 2018 and December 31, 2017.
Fair value of financial instruments and derivative financial instruments The Company’s financial instruments include cash, accounts payable, and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at March 31, 2018 and December 31, 2017. The Company did not engage in any transaction involving derivative instruments.
Inventory Inventory is recorded at the lower of cost or market and is computed on a first-in first-out basis. The inventory consists of weight loss products, energy and performance solutions products and healthy aging solution products.
Property and Equipment Property and equipment are stated at cost. Major repairs and betterments are capitalized and normal maintenance and repairs are charged to expense as incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the related assets. Office and general equipment are depreciated over useful lives of 10 years and leasehold improvements are depreciated shorter of term lease and useful life of 20 years. Upon retirement or sale of an asset, the cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operations.
Federal income taxes Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted Accounting Standards Codification 740.10.05 “Accounting for Income Taxes” as of its inception. Pursuant to Accounting Standards Codification 740.10.05, the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward to future years. The U. S. Tax Act known as Tax Cuts and Jobs Act (the “2017 Act”) signed on December 22, 2017 may have changed the consequences to U. S. shareholders that own, or are considered to own, as a result of the attribution rules, 10% or more of the voting power or value of a non-U. S. corporation ( a “10% U.S. shareholder) under the U.S. Federal income tax law applicable to owners of U.S. controlled foreign corporations (“CFCs”). We did not believe any of our shareholders, or our subsidiaries were CFCs, and there will be no such impact for 2017 Act for the three months ended March 31, 2018 and for the year ended December 31, 2017.
Net income per share of common stock Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share ("EPS") is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive.
Common Stock Registration Expenses The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions. As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.
Research and Development Costs for research and development, including predevelopment efforts prior to establishing technological feasibility of software expected to be marketed, are expensed as incurred. Development costs are capitalized when technological feasibility has been established and anticipated future revenues support the recoverability of the capitalized amounts. Capitalization stops when the product is available for general release to customers. The Company has not capitalized any software development, and has expensed these costs as incurred. These costs are included in research and development expense.
Revenue Recognition: The company recognizes revenues when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those good or services. The company generates wholesale revenues primarily from sale of products to retailers or distributors who are mostly Overseas Contract Workers (OCW) and majority is from the Philippines. The company typically extend credit terms to its wholesale customers based on their creditworthiness and generally do not receive advance payments. As such, we record accounts receivable at the time of shipment, when our right to the consideration becomes unconditional. Accounts receivable from our wholesale customers are typically due within 30 to 60 days of invoicing. An allowance for doubtful accounts is provided based on a periodic analysis of individual accounts balances, including an evaluation of days outstanding, payment history, recent payment trends, and the company’s assessment of its customers’ creditworthiness, As of March 31, 2018 and December 31, 2017, no allowance for doubtful accounts has been provided.
Recently Issued Accounting Pronouncements: For the three months ended March 31, 2018 and for the year ended December 31, 2017, the Company does not expect any of the recently issued accounting pronouncements to have a material impact on its financial condition or results of operations. |
Uncertainty, Going Concern |
3 Months Ended |
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Mar. 31, 2018 | |
Notes to Financial Statements | |
Uncertainty, Going Concern | Note 2 - Uncertainty, going concern:
The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. As of March 31, 2018, the Company had an accumulated deficit of $3,193,811. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. 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 result from this uncertainty. |
Property and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment, Net | Note 3 – Property and Equipment, net
Property and equipment at year-end consisted of:
The Company recorded depreciation expense of $1,573 and $6,292 for the three months ended March 31, 2018 and for the year ended December 31, 2017, respectively. |
Related Party Transaction |
3 Months Ended |
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Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transaction | Note 4 - Related Party Transactions:
Due to related parties included in the balance sheets as of December 31, 2017 and December 31, 2016 were loans from the Company’s director and CEO, Mr. Eleazar Rivera. He has lent the Company noninterest bearing amounts of $ 929,595 as of March 31, 2018 and $857,421 as of December 31, 2017. Of this amount, $629,595 is designated as advances from stockholders, while $300,000 is designated as deposit for future share subscriptions. No subscribed shares are outstanding that cannot be legally issued until paid for. These advances are unsecured and there are no terms for repayment. |
Common Stock |
3 Months Ended |
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Mar. 31, 2018 | |
Equity [Abstract] | |
Common Stock | Note 5 - Common Stock:
Since inception, the Company has issued 108,531,251shares of stock for $169,567 cash.
During the year ended December 31, 2012, the Company issued for cash 158,500 shares of stock for $18,750
During the year ended December 31, 2013, the Company issued for cash 205,868 shares of stock for $30,800. Additionally, the Company received $43,887 cash for 277,366 unissued shares of common stock. These shares were issued in the first quarter 2014.
The Company had the following stock transactions for the year ended December 31, 2014:
The Company issued 277,366 shares of stock for the funds received and recorded as a stock subscription for the period ending December 31, 2013.
The Company issued 514,317 shares of stock for 78,332 cash.
The company had no new shares issued for the three months ended March 31, 2018, and the years 2017, 2016 and 2015. |
Employment Contract |
3 Months Ended |
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Mar. 31, 2018 | |
Compensation Related Costs [Abstract] | |
Employment Contract | Note 6 – Employment Contract
On November 24, 2014, the Company entered into an employment agreement with its Chief Executive Officer and majority shareholder for a (5) five year employment agreement. The employment agreement calls for an annual salary of $300,000 plus a monthly bonus of 2% of all sales paid on a monthly basis. The agreement also includes a 10% increase every December 1st. This contract renews on an annual basis following the (5) year term and can be canceled by the Company or the employee.
On December 1, 2017, another employment agreement, with the same terms and conditions, was entered into by the company with its Chairman of the board.
The balance of this accrued compensation as of March 31, 2018 was $1,250,000. The balance at December 31, 2017 was $1,250,000. |
Subsequent Events |
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Subsequent Events | Note 7 - Subsequent Events
Alpha’s management has evaluated events occurring between March 31, 2018 and May 21, 2018, which is the date of the financial statements were available to be issued, and has recognized in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at May 21, 2018, including the estimates inherent in the processing of the financial statements.
On April 4, 2018, the company filed with the Securities and Exchange Commission a registration statement (Form S-1) under the Securities Act of 1933 to register securities for initial public offering of 100,000,000 shares of common stock at a fixed price $0.45 per share and 10,000,000 shares of common stock offered by selling stockholders at an initial price of $0.45 and may eventually be offered at prevailing market prices or privately negotiated prices. The offering is being conducted on a self-underwritten, best effort basis, which means that management, will attempt to sell the shares. The common stock offered by the selling stockholders will not be sold until the company sells all of the 100,000,000 sales in its offering.
Any funds that will be raised from the offering of 100,000,000 common shares shall be immediately available for use as follows:
The offering price of the 100,000,000 shares being offered has been determined arbitrarily by the management. The price does not bear any relationship to the company’s assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the number of shares to be offered and the offering price, the company took into consideration its cash on hand and the amount of money the company would need to implement its business plan. Accordingly, the offering price should not be considered an indication of the actual value of the securities. The will not receive any of the proceeds from the sale of the 10,000,000 common shares being offered for sale by the selling stockholders, which 10,000,000 shares of our common stock may be offered and sold from time to time by the selling stockholders. The selling shareholders will sell our shares at prevailing market prices or privately negotiated prices.
The common shares being offered for resale by the 2 selling stockholders consist 5,000,000 of our common stock, $0.0001 par value. The following table sets forth the shares beneficially owned, as of the date of the prospectus, by the selling stockholders prior to the offering by existing stockholders contemplated by this prospectus, the number of shares each selling stockholder is offering by this prospectus and the number of shares which each would own beneficially if all such offered shares are sold.
Beneficial ownership is determined in accordance with Securities and Exchange Commission rules. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, or investment power, which includes |