Notes to the Audited Financial Statements
September 30, 2018 and 2017
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Ando Holdings Ltd. (Ando Holdings Ltd. or the Company) was incorporated in the State of Nevada on August 22, 2015 and its fiscal year end is September 30. The primary business of the company was previously to offer mobile billboard display advertising. After thorough analysis, the Company terminated its advertising business. The Company is currently pursuing business opportunities in Hong Kong. The Company is contemplating purchasing two existing companies, one in financing and the other in the retail tea business. As of September 30, 2018, there has been no major progress regarding these acquisitions.
NOTE 2 - GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. For the period from inception on August 22, 2015 through September 30, 2018, the Company has had minimal operations, and has accumulated a deficit of $110,833. In view of this, the Companys ability to continue as a going concern is dependent upon the Companys ability to continue operations and to achieve a level of profitability large enough to cover the Companys expenses. The Company intends on financing its future development activities and its working capital needs largely from the sale of public equity securities, with some additional funding from other traditional financing sources, until such time that funds provided by operations are sufficient to fund working capital requirements. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. Management has evaluated these factors and has determined that they raise substantial doubt about the Companys ability to continue as a going concern within one year after the date that the financial statements are issued.
The officers and directors have agreed to advance funds to the Company to meet its obligations.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted accounting principles requires us to establish accounting policies and make estimates and assumptions that affect our reported amounts of assets and liabilities at the date of the financial statements. These financial statements include some estimates and assumptions that are based on informed judgments and estimates of management. We evaluate our policies and estimates on an on-going basis and discuss the development, selection, and disclosure of critical accounting policies with the Board of Directors. Predicting future events is inherently an imprecise activity and as such requires the use of judgment. Our financial statements may differ based upon different estimates and assumptions.
Basis of Presentation
The financial statements present the balance sheets, statements of operations and cash flows, and changes in stockholders' equity (deficit), of the Company. These financial statements are presented in United States dollars and have been prepared in accordance with U.S. GAAP.
Use of Estimates and Assumptions
Preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
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Cash and Cash Equivalents
For the purposes of the statement of cash flows, the Company considers highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. At September 30, 2018 and 2017, the Company had cash of $0 and $0, respectively.
Revenue and Cost Recognition
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration expected in exchange for those products and services. Revenue is recognized net of all allowances.
For the years ended September 30, 2018 and 2017, the Company realized revenue in the amount of $0 and $10,000 respectively.
Cash Flow Reporting
The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (Indirect method) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.
The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.
Net Loss per Share
Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Dilutive loss per share reflects the potential dilution of securities that could share in the losses of the Company. Because the Company does not have any potentially dilutive securities, the accompanying presentation is only of basic loss per share.
Advertising
Advertising costs are expensed as incurred. As of September 30, 2018 and 2017, no advertising costs have been incurred.
Income Taxes
The Company accounts for income taxes as outlined in Accounting Standard Codification (ASC) 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard update on revenue recognition from contracts with customers (Topic 606). The new guidance replaces all current GAAP guidance on this topic and requires entities to recognize revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted the new accounting standard on October 1, 2018. The Company evaluated the adoption of Topic 606 and has determined that it will not have a material impact on the Companys financial statements as of September 30, 2018.
Other than as noted above the Company has not implemented any pronouncements that had material impact on the financial statements, 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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NOTE 4 - CAPITAL STOCK
The Company is authorized to issue an aggregate of 75,000,000 common shares with a par value of $0.001 per share. No preferred shares have been authorized or issued. At both September 30, 2018 and 2017, 12,000,000 common shares were issued and outstanding.
On June 30, 2017, the former shareholder released the debt owed to him in the amount of $22,840, per the June 28, 2017 Assignment of Rights and Assumption of Liabilities Agreement. This amount is represented in the financial statements as Contributed Capital.
At September 30, 2018, there are no warrants or options outstanding to acquire any additional shares of common stock of the Company.
NOTE 5 - RELATED PARTY TRANSACTIONS
At September 30, 2018 and 2017, an affiliate has paid expenses on behalf of the Company in the amount of $48,958 and $14,150, respectively. The loans are unsecured, payable on demand, and carry no interest.
The Company does not own or rent any property. The office space is provided by the CEO at no charge.
NOTE 6 - INCOME TAXES
The Company provides for income taxes under ASC 740,
Income Taxes
. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.
On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the Act) resulting in significant modifications to existing law. The Company has considered the accounting impact of the effects of the Act during the year ended September 30, 2018 including a reduction in the corporate tax rate from 34% to 21% among other changes.
The components of the Companys deferred tax asset and reconciliation of income taxes computed at the new statutory rate of 21% to the income tax amount recorded as of September 30, 2018 and September 30, 2017 are as follows:
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September 30, 2018
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September 30, 2017
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Net operating carryforward
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$
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(110,833)
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$
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(79,590)
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Effective tax rate
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21%
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|
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21%
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Tax benefit of net operating loss carryforward
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23,275
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16,714
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Valuation allowance
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(23,275)
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(16,714)
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Deferred income tax assets
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$
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-
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$
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-
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As of September 30, 2018, the Company had $110,833 in net operating losses (NOLs) that may be available to offset future taxable income, which begin to expire between 2033 and 2038. In accordance with Section 382 of the U.S. Internal Revenue Code, the usage of the Companys net operating loss carry forwards is subject to annual limitations following greater than 50% ownership changes.
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NOTE 7 - PREPAID EXPENSES
OTCQB annual fees are included as prepaid expenses at September 30, 2018, and OTCQB and transfer fees are included at September 30, 2017. These expenses are stated at cost and are charged to expense over the periods the Company expects to benefit from them. At September 30, 2018 and 2017, the Company has prepaid expenses of $9,000 and $7,900, respectively.
NOTE 8 - DISCONTINUED OPERATIONS
On June 28, 2017, Paul Conforte, the holder of 8,000,000 shares of Common Stock of PC Mobile Media Corp sold 100% of his shares to twelve (12) purchasers resulting in a change of control. with all assets and all liabilities retained by Mr. Conforte.
On the same day, Mr. Conforte resigned all officer positions, and the Company appointed a new Chairman of the Board/CEO, Secretary/Treasurer/CFO, and two Directors. effective June 28, 2017. On September 5, 2017, the Company changed its name from PC Mobile Media Corp. to Ando Holdings Ltd, The name change was subsequently accepted by FINRA resulting in the Company being issued ADHG as its new trading symbol.
The primary business of the Company was previously to offer mobile billboard display advertising. As of September 30, 2017, the Company decided to discontinue the mobile billboard operations.
For accounting purposes, the Company has accounted for those operations as discontinued operations.
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Results of Operations:
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Year ended
September
30, 2017
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Net Revenues from discontinued operations
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$
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10,000
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Operating expenses
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26,195
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Loss from discontinued operations before taxes
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(16,195)
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Provision for income taxes
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-
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Net Loss from discontinued operations, net of tax
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$
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(16,195)
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Basic and diluted loss per common share
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$
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(0.00)
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NOTE 9 - COMMITMENTS AND CONTINGENCIES
On March 18, 2017, Ando Capital Investment Limited engaged Acorn Assets & Equity Limited to identify and precipitate the purchase of a public company through a Consulting Agreement. On August 29, 2017, a supplement to the Consulting Agreement was signed to clarify certain terms of the agreement. The supplementary document states that the transfer agent fees incurred in the purchase, such as cancelation or issuance of share certificates, new CUSIP application, and printing of new share certificate templates, will be paid by Acorn Assets & Equity Limited until the completion of the initial Consulting Agreement.
At a September 30, 2018 and 2017, Acorn Assets & Equity Limited has paid transfer agent fees in the amounts of $3,830 and $1,215, respectively, on behalf of Ando Holdings Ltd.
From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Companys financial position or results of operations.
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