10-Q 1 andes7q22018.htm FORM 10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

  For the quarterly period ended June 30, 2018

 

    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number: 000-55491 

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ANDES 7 Inc.

(Exact name of registrant as specified in its charter)

 

  Delaware   47-4683655  
         
  (State or Other Jurisdiction of   (I.R.S. Employer  
  Incorporation or Organization)   Identification No.)  
         
         
  424 Clay Street, Lower Level, San Francisco, CA   94111  
         
  (Address of Principal Executive Offices)   (Zip Code)  
         

 

Registrant’s telephone number, including area code: 415 463 7827

 

  N/A

(Former name, former address and former fiscal year, if changed since last report)

 

 Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth 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.

Large accelerated filer 

Non-accelerated filer 

Emerging growth company  

Accelerated filer 

Smaller reporting 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  

 

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: As of August 10, 2018, the issuer had 120,100,000 shares of its common stock issued and outstanding.

 

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TABLE OF CONTENTS

PART I      
Item 1. Unaudited Financial Statements 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 12  
Item 4. Controls and Procedures 12  
PART II      
Item 1. Legal Proceedings 13  
Item 1A. Risk Factors 13  
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 13  
Item 3. Defaults Upon Senior Securities 13  
Item 4. Mine Safety Disclosures 13  
Item 5. Other Information 13  
Item 6. Exhibits 13  
  Signatures 14  

 

 

 

 

 

  

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PART I - FINANCIAL INFORMATION

Item 1, Financial Statements

(Unaudited)

Contents

 

Financial Statements PAGE
   
Balance Sheets as of June 30, 2018 and December 31, 2017(Unaudited) 5
   
Condensed Statements of Operations for the three and six months ended June 30, 2018 and 2017 (Unaudited) 6
   
Condensed Statements of Cash Flows for the six months ended June 30, 2018 and 2017 (Unaudited) 7
   
Notes to Unaudited Condensed Financial Statements (Unaudited) 8
   

 

 

 

 4 

 

ANDES 7 Inc. 
Condensed Balance Sheets 

(Unaudited)

 

   June 30, 
2018
  December 31, 
 2017
           
ASSETS          
           
Current Assets:          
           
Cash  $—     $—   
           
Total Current Assets   —      —   
           
TOTAL ASSETS  $—     $—   
           
LIABILITIES & STOCKHOLDERS’ DEFICIT          
           
Current Liabilities:          
           
Due to related parties  $67,799   $50,270 
Total Current Liabilities   67,799    50,270 
           
TOTAL LIABILITIES   67,799    50,270 
           
Shareholders' Deficit:          
Preferred stock, $0.0001 par value, 5,000,000 shares authorized; 500,000 and 0 shares Series A Preferred issued and outstanding, respectively   50    —   
Common stock $0.0001 par value, 1,000,000,000 shares authorized; 10,100,000 and 10,100,000 shares issued and outstanding, respectively   1,010    1,010 
Additional paid-in capital   23,050    23,050 
Accumulated deficit   (91,909)   (74,330)
Total Stockholders’ Deficit   (67,799)   (50,270)
           
TOTAL LIABILITIES & STOCKHOLDERS’ DEFICIT  $—     $—   
           

 

 The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 

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ANDES 7 Inc. 
Condensed Statements of Operations

(Unaudited)

 

    Three Months Ended 
June 30,
 

Six Months Ended

June 30,

    2018   2017   2018   2017
                     
Revenue   $     $   $ -   $ -
                         
Operating Expenses:                        
                         
General and administrative     7,904     10,430     17,579     20,610
                         
Total operating expenses     7,904     10,430     17,579     20,610
                         
Net loss from operations   $ (7,904)   $ (10,430)   $ (17,579)   $ (20,610)
                         
Provision for income taxes     -         -     -
Net Loss   $ (7,904)   $ (10,430)   $ (17,579)   $ (20,610)
Basic and diluted loss per share   $ (0.00)   $ (0.00)   $ (0.00)   $ (0.00)
                         
Weighted average number of common shares outstanding, basic and diluted     10,100,000     10,100,000     10,100,000     10,100,000

  

 The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 6 

 

ANDES 7 Inc. 
Statements of Cash Flows

(Unaudited)

 

   Six Months Ended
June 30,
   2018  2017
       
Cash flows from operating activities:          
           
Net loss  $(17,579)  $(20,610)
Changes in operating assets and liabilities:   —      —   
     Net cash used in operating activities   (17,579)   (20,610)
           
Cash flows from investing activities:   —      —   
           
Cash flows from financing activities:          
Advances from related party   17,529    20,610 
Proceeds from the sale of preferred stock   50    —   
     Net cash provided by financing activities   17,579    20,610 
           
    Net increase (decrease) in cash   —      —   
           
    Cash at beginning of period   —      —   
           
    Cash at end of period  $—     $—   
           
Supplemental Disclosures of Cash Flow Information:          
Cash paid for interest  $—     $—   
Cash paid for taxes  $—     $—   

 

The accompanying notes are an integral part of these unaudited condensed financial statements. 

  

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ANDES 7 Inc.

Notes to Condensed Financial Statements

June 30, 2018

(Unaudited)

 

1.     DESCRIPTION OF BUSINESS AND HISTORY

 

Description of business – ANDES 7 Inc., (the “Company”) was incorporated under the laws of the State of Delaware on July 27, 2015, and has been inactive since inception. The Company intends to serve as a vehicle to effect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business.

 

On February 12, 2016, the Company entered into a Subscription Agreements with three subscribers for the issuance of its restricted common stock – AbinaAsean, Co. Ltd., an entity organized under the laws of the Republic of Seychelles (8,000,000 shares), Toh Kean Ban (1,000,000 shares) and Dr. Ir. H.M. ItocTochija (1,000,000 shares). Each of the Subscription Agreements were the result of privately negotiated transactions without the use of public dissemination of promotional or sales materials. Each of the buyers represented they were “accredited investors,” and as such could bear the risk of such investment for an indefinite period of time and to afford a complete loss thereof.

  

 2.   SUMMARY OF SIGNIFICANT POLICIES

 

Basis of presentation - The accompanying unaudited financial statements of ANDES 7 Inc. have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The financial statements should be read in conjunction with the audited financial statements ANDES 7 Inc in our Form 10-K/A filed on April 16, 2018.

  

The interim unaudited financial statements present the balance sheets, statement of operations and cash flows of ANDES 7 Inc. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States. In the opinion of management, all adjustments necessary to present fairly the financial position as of June 30, 2018 and the results of operations and cash flows presented herein have been included in the financial statements. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results of operations for the full year.

 

Use of estimates – The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.

 

Recent Accounting Pronouncements – The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

   

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          3.     GOING CONCERN

 

The accompanying unaudited financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and had an accumulated deficit of $91,909 as of June 30, 2018. The Company requires capital for its contemplated operational and marketing activities. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The ability to successfully resolve these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties.

 

4.    STOCKHOLDERS’ EQUITY

 

Preferred Stock – The Company is authorized to issue 5,000,000 shares of $0.0001 par value preferred stock. As June 30, 2018, 500,000 shares of Series A preferred stock had been issued.

 

On May 10, 2018, Manichan Khor, the wife of Andrew Khor Poh Kiang, thePresident, CEO and Chairman entered into a stock purchase agreement with the Company to purchase 500,000 shares of Series A preferred stock at par value.

 

Common Stock - The Company is authorized to issue 1,000,000,000 shares of $0.0001 par value common stock. As of June 30, 2018, 10,100,000 shares were issued and outstanding.

 

5.    RELATED PARTY TRANSACTIONS

 

As June 30, 2018 and December 31, 2017, the Company owed Richard Chiang $990 for the redemption of 9,900,000 shares at par value, which had previously been issued to him in serving in director and officer capacities.

 

Since 2016 a related party has advanced the Company to pay for general operating expenses. The funds are unsecured, non-interest bearing and due on demand. As of June 30, 2018, and December 31, 2017the balance due is $67,799and $50,270, respectively.

 

On May 10, 2018, Manichan Khor, the wife of Andrew Khor Poh Kiang, the President, CEO and Chairman entered into a stock purchase agreement with the Company to purchase 500,000 shares of Series A preferred stock at par value.

 

6.     SUBSEQUENT EVENTS

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statements were available to be issued, and has determined that no material subsequent events exist except the following.

 

On July 2, 2018, the Company entered into an Agreement and Plan of Merger between the Company, ANDES 7 Acquisition Corp, (“Merger Sub”) a Delaware corporation and Abina Co. Ltd. (the “Target”). The Target is a corporation organized under the Kingdom of Thailand and has operated under the name “Abina Co. Ltd.” since August 3, 2015. The Agreement and Plan of Merger provided for the acquisition by the Company of all the outstanding shares of the target through a reverse merger of merger sub into the target, the surviving corporation. The Company filed its Agreement and Plan of Merger as exhibits 3.4 and 2.1 within its Current Report on Form 8-K dated July 2, 2018 and with the State of Delaware.

 

As part of the Agreement and Plan of Merger with Abina Co. Ltd. the parties agreed to an exchange of shares, in which all of the 100,000 issued and outstanding shares of Abina Co. Ltd were exchanged for 111,000,000 shares in the Company, additionally, shares of ANDES 7 which were held by Abina Co. Ltd were divided amongst the shareholders of Abina Co. Ltd and provided amounts according to their respective holding in Abina Co. Ltd. pursuant to the merger.

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Special Note Regarding Forward-Looking Statements

 

The following discussion should be read in conjunction with our financial statements, which are included elsewhere in this Form 10-Q (the “Report”). This Report contains forward-looking statements which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The Company was incorporated in the State of Delaware on July 27, 2015 and filed its registration statement on Form 10 to register with the U.S. Securities and Exchange Commission as a public company on August 7, 2015. We were originally organized as a vehicle to investigate and, if such investigation warrants, to acquire a target company or business seeking the perceived advantages of being a publicly held corporation.

 

On July 2, 2018, ANDES 7 Inc. a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger between the Company, ANDES 7 Acquisition Corp, (“Merger Sub”) a Delaware corporation and Abina Co. Ltd. (the “Target”). Abina Co. Ltd (“Abina”) was incorporated in Thailand on August 3, 2015 and has since then operated a diverse business involved in investments in hotels, resorts, and commercial property.

The Company pursuant to the merger is planning a leisure and tourist destination in Thailand with interests in merchandising, souvenirs, retail and real estate projects. The Company is seeking to develop a fully integrated hotel and entertainment center in Chiang Rai, Thailand that will include souvenir shops, a hotel, office buildings, a shopping mall, and a resort entertainment center catering to both local and foreign tourists.

Results of Operations

 

Three Months Ended June 30, 2018 compared to the Three Months Ended June 30, 2017

 

Revenues 

For the three months ended June 30, 2018 and 2017, we had no revenues. We are completely dependent upon the willingness of our management to fund our initial operations by way of loans from our Chief Executive Officer, shareholders and/or others.

 

Operating Expenses 

General and administrative expenses were $7,904 for the three months ended June 30, 2018, compared to $10,430 for the three months ended June 30, 2017. General and administrative expense consists of consulting and other professional fees related to the requirements of SEC filings.

 

Net Loss 

Net loss for the three months ended June 30, 2018 was $7,904 compared to $10,430 for the prior period. Net loss is due to general and administrative expenses as discussed above.

 

Six Months Ended June 30, 2018 compared to the Six Months Ended June 30, 2017

  

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Revenues 

For the six months ended June 30, 2018 and 2017, we had no revenues. We are completely dependent upon the willingness of our management to fund our initial operations by way of loans from our Chief Executive Officer, shareholders and/or others.

 

Operating Expenses 

General and administrative expenses were $17,579 for the six months ended June 30, 2018, compared to $20,610 for the six months ended June 30, 2017. General and administrative expense consists of consulting and other professional fees related to the requirements of SEC filings.

 

Net Loss 

Net loss for the six months ended June 30, 2018 was $17,579 compared to $20,610 for the prior period. Net loss is due to general and administrative expenses as discussed above.

 

Liquidity 

The accompanying unaudited financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. As of June 30, 2018, we had cash of $0 and total liabilities of $67,799. We used $17,579 of cash flows from operating activities for the six months ended June 30, 2018. Our current cash balance and cash flow from operating activities will not be sufficient to fund our operations. The Company has a working capital deficiency of $67,799 and a shareholders’ deficit of $67,799 at June 30, 2018.

 

Over the next 12 months we expect to expend approximately $30,000 in cash for legal, accounting and related services. Cash used for other expenditures is expected to be minimal. We hope to be able to attract suitable investors for our business plan, which will not require us to use our cash, although there can be no assurances that we will be successful in these efforts.

 

We expect to be able to secure capital through advances from our Chief Executive Officer, shareholders and others in order to pay expenses such as organizational costs, filing fees, accounting fees and legal fees. We believe it will be difficult to secure capital in the future because we have no assets to secure debt and there is currently no trading market for our securities. We will need additional capital in the next twelve months and if we cannot raise such capital on acceptable terms, we may have to curtail our operations or terminate our business entirely.

 

The inability to obtain financing or generate sufficient cash from operations could require us to reduce or eliminate expenditures for acquiring suitable partners or otherwise curtail or discontinue our operations, which could have a material adverse effect on our business, financial condition and results of operations. Furthermore, to the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of such securities may result in dilution to existing stockholders. If we raise additional funds through the issuance of debt securities, these securities may have rights, preferences and privileges senior to holders of our common stock and the terms of such debt could impose restrictions on our operations. Regardless of whether our cash assets prove to be inadequate to meet our operational needs, we may seek to compensate providers of services by issuing stock in lieu of cash, which may also result in dilution to existing stockholders.

 

Operating Capital and Capital Expenditure Requirements

 

Our controlling shareholders expect to advance us additional funding for operating costs in order to implement our business plan. The funds are loaned to the Company as required to pay amounts owed by the Company. As such, our operating capital is currently limited to the resources of our controlling shareholders. The loans from our controlling shareholders are unsecured and non-interest bearing and have no set terms of repayment. We anticipate receiving additional capital once we are able to have our securities actively trading on a public exchange. There is no guarantee our stock will develop a market on that public exchange.

 

Plan of Operation and Funding

 

We do not currently engage in enough business activities that provide cash flow. During the next twelve months we anticipate incurring costs related to:

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   (i) filing of Exchange Act reports, and

 

  (ii) costs relating to developing our business plan

 

We believe we will be able to meet these costs through amounts, as necessary, to be loaned to or invested in us by our controlling shareholder.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

None.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report, June 30, 2018. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

Based upon that evaluation, including our Chief Executive Officer and Chief Financial Officer, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report due to a material weakness in our internal control over financial reporting, which is described below.

 

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 Rule 13a-15(f) under the Securities Exchange Act of 1934). Management has assessed the effectiveness of our internal control over financial reporting as of June 30, 2018, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that, as of June 30, 2018, our internal control over financial reporting was not effective. Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

 

We plan to take steps to enhance and improve the design of our internal control over financial reporting. During the period covered by this quarterly report on Form 10-Q, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we hope to implement the following changes during our fiscal year ending December 31, 2018: (i) appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management; and (ii) adopt sufficient written policies and procedures for accounting and financial reporting. The remediation efforts set out in (i) and (ii) are largely dependent upon our securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected in a material manner.

  

Changes in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2018 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.

 

There are not presently any material pending legal proceedings to which the Registrant is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.

 

Item 1A. Risk Factors

 

A smaller reporting company is not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

On May 10, 2018, Manichan Khor, the wife of Andrew Khor Poh Kiang, the President, CEO and Chairman entered into a stock purchase agreement with the Company to purchase 500,000 shares of Series A preferred stock at par value.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable. 

 

Item 5. Other Information.

 

None. 

 

Item 6. Exhibits.  

  Exhibit Exhibit Description Filed herewith Form Period ending Exhibit Filing date
  3.1 Certificate of Incorporation   10   3.1 08/07/15
  3.2 By-Laws   10   3.2 08/07/15
  4.1 Specimen Stock Certificate   10   4.1 08/07/15
  31 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X        
  32 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X        
  101.INS XBRL Instance Document X        
  101.SCH XBRL Taxonomy Extension Schema Document X        
  101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X        
  101.LAB XBRL Taxonomy Extension Label Linkbase Document X        
  101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X        
  101.DEF XBRL Taxonomy Extension Definition Linkbase Definition X        

 

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SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  ANDES 7 Inc.
     
  By: /s/ Andrew Khor Poh Kiang
   

Andrew Khor Poh Kiang

President, Chief Executive Officer, Chairman of the Board of Directors

 

     
  By: /s/ Lee KokKeing
   

Lee KokKeing

Chief Financial Officer

 

Dated: August 10, 2018

 

 

 

 

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