NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2019
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Anvi Global Holdings, Inc., (the Company) was incorporated under the laws of the State of Nevada on August 15, 2012, and intended to sell crepes in Czech Republic. That proposed business was abandoned when a change of control of the Company was effected May 6, 2014.
On April 30, 2014, Tatiana Fumioka (the Seller), entered into a Common Stock Purchase Agreement (the Stock Purchase Agreement) pursuant to which the Seller agreed to sell to Mr. Rama Mohan R. Busa (the Purchaser), with his principal place of business in Cary, NC, the 72,000,000 shares of common stock of the Company owned by Ms. Fumioka, constituting approximately 75.83% of the Companys outstanding common stock at that time, to be transferred to the name of Mr. Rama Mohan R. Busa, for $375,000. The sale was consummated on May 6, 2014. As a result of the sale, there was a change of control of the Registrant. This was a private transaction between the Seller and Purchaser, and no new shares of the Company were sold or issued.
On September 27, 2017 the Company changed its name from Vetro Inc. to Anvi Global Holdings, Inc. On November 21, 2017, FINRA approved the new symbol ANVI, and a 9-for-1 forward split of the Companys common shares. The Companys corporate office is at 1135 Kildaire Farm Rd., Suite 319-4, Cary, NC 27511.
As reported in a Form 8-K filed with the SEC on May 24, 2018, the Company entered into a Memorandum of Business Association (MOA) with Team Universal Infratech Pvt. Ltd (TUI), pursuant to which TUI, a 12-year old Indian infrastructure development company based in Hyderabad, agreed to enter into a Joint Venture (the JV) with the Registrant, to execute certain projects TUI is currently holding, and also which may include TUIs future projects which are in the pipeline. The Company and TUI have agreed and proposed to create a legally valid joint venture entity (JV), with the Company having majority control of the JV stock and control of all operations of the specified projects which are executed pursuant to the JV. Because of the signing of that MOA, the Company also announced that it was no longer a shell, as that term is defined in the SECs Rule 12b-2.
The Companys obligation under the MOA is to raise $6,000,000 within 60 days of the signing of the MOA; however, on February 14, 2019, the date by which the Registrant was required to raise these funds, the date was extended by mutual agreement for nine months, to November 14, 2019. To date, the Company has not raised any of the funds required by the MOA.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Companys financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).
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 amounts of revenues and expenses during the reporting period. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
Concentrations of Credit Risk
We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.
Cash and Cash Equivalents
We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the years February 28, 2019 and February 28, 2018.
F-7
ANVI GLOBAL HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2019
Reclassifications
Certain reclassifications have been made to the prior-year financial information to conform to the presentation used in the financial statements for the year ended February 28, 2019.
Fair Value of Financial Instruments
We follow Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 825-10-50-10,
Financial InstrumentsOverallDisclosure,
for disclosures about fair value of our financial instruments and ASC 820-10-35-37,
Fair Value MeasurementOverallSubsequent MeasureFair Value Hierarchy,
to measure the fair value of our financial instruments. ASC 820-10-35-37 establishes a framework for measuring fair value GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, ASC 820-10-35-37 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of fair value hierarchy defined by ASC 820-10-35-37 are described below:
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Level 1:
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Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
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Level 2:
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Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
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Level 3:
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Pricing inputs that are generally unobservable inputs and not corroborated by market data.
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The carrying amount of our financial assets and liabilities, such as cash, prepaid expenses, and accrued expenses, approximate their fair value because of the short maturity of those instruments. Our notes payable approximate the fair value of such instruments based upon managements best estimate of interest rates that would be available to us for similar financial arrangements at February 28, 2019.
Income taxes
The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (Section 740-10-25) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
F-8
ANVI GLOBAL HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2019
Stock-based Compensation
We account for equity-based transactions with nonemployees under the provisions of ASC 505-50,
Equity-Based Payments to Non-Employees
. ASC 505-50 establishes that equity-based payment transactions with nonemployees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of common stock issued for payments to nonemployees is measured at the market price on the date of grant. The fair value of equity instruments, other than common stock, is estimated using the Black-Scholes option valuation model. In general, we recognize the fair value of the equity instruments issued as deferred stock compensation and amortize the cost over the term of the contract.
We account for employee stock-based compensation in accordance with the guidance of ASC 718,
CompensationStock Compensation,
which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.
Net income (loss) per common share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented. There are no potentially dilutive shares as of February 28, 2019 and February 28, 2018.
Income Taxes
Income taxes are provided for the tax effects of the transactions reported in the financial statements and consist of taxes currently due plus deferred taxes related primarily to tax net operating loss carryforwards. The deferred tax assets and liabilities represent the future tax return consequences of these differences, which will either be taxable or deductible when assets and liabilities are recovered or settled, as well as operating loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is established against deferred tax assets when in the judgment of management, it is more likely than not that such deferred tax assets will not become available. Because the judgment about the level of future taxable income is dependent to a great extent on matters that may, at least in part, be beyond the Companys control, it is at least reasonably possible that managements judgment about the need for a valuation allowance for deferred taxes could change in the near term.
Tax benefits are recognized only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon settlement. A liability for unrecognized tax benefits is recorded for any tax benefits claimed in the Companys tax returns that do not meet these recognition and measurement standards. As of February 28, 2019, and 2018, no liability for unrecognized tax benefits was required to be reported.
Recent Accounting Pronouncements
In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Clarification of Certain Cash Receipts and Cash Payments (ASU 2016-15), which eliminates the diversity in practice related to classification of certain cash receipts and payments in the statement of cash flows, by adding or clarifying guidance on eight specific cash flow issues. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted, including adoption in an interim period. The adoption of this ASU has had no material impact on the Companys financial statements and disclosures.
F-9
ANVI GLOBAL HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2019
In November 2016, the FASB issued ASU 2016-18,
Statement of Cash Flows (Topic 230): Restricted Cash
(ASU 2016-18), which provides guidance that will require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, and interim periods within those fiscal years and early adoption is permitted, including adoption in an interim period. The adoption of this ASU has had no material impact of the Companys Statement of Cash Flows.
In January 2017, the FASB issued ASU 2017-01,
Business Combinations (Topic 805): Clarifying the Definition of a Business.
This ASU clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The adoption of this ASU has had no material impact on the Companys financial statements and disclosures.
In January 2017, the FASB issued ASU 2017-04,
IntangiblesGoodwill and Other (Topic 350)
. This ASU simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test, which required computing the implied fair value of goodwill. Under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting units fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This new guidance will be effective January 1, 2020. The Company is currently in the process of evaluating the potential effect that the adoption of this standard will have on its financial position and results of operations.
In May 2017, the FASB issued ASU 2017-09,
Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting.
This ASU clarifies an entitys ability to modify the terms or conditions of a share-based payment award presented. An entity should account for the effects of a modification unless all the following are met: the fair value of the modified award has not changed from the fair value on the date of issuance; the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and, the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those periods. The adoption of this ASU has had no material impact on the Companys financial statements and disclosures.
In July 2017, the FASB issued ASU 2017-11,
Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception
. This ASU clarifies the recognition, measurement, and effect on earnings per share of certain freestanding equity-classified financial instruments that include down round features affect entities that present earnings per share in accordance with the guidance in Topic 260,
Earnings Per Share
. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entitys own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. This new guidance will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within those periods. The Company adopted this ASU and it did not have a material impact on the Companys financial statements.
F-10
ANVI GLOBAL HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2019
In February 2016, the FASB issued ASU 2016-02,
Leases (Topic 842)
. The ASU requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. This new guidance will be effective for annual reporting periods beginning after December 15, 2018, including interim periods within those annual reporting periods, and early adoption is permitted. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company adopted this ASU and it did not have a material impact on the Companys financial statements.
In May 2014, the Financial Accounting Standards Board (FASB) issued ASU 2014-09, Revenue from Contracts with Customers, to establish ASC Topic 606, (ASC 606). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, Revenue Recognition and most industry-specific guidance throughout the Industry Topics of the Codification. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance includes a five-step framework that requires an entity to: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when the entity satisfies a performance obligation. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers.
In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, which amended the effective date for nonpublic entities to annual reporting periods beginning after December 15, 2018. In March 2016, the FASB issued an update (ASU 2016-08) to ASC 606, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the guidance on principal versus agent considerations. In April 2016, the FASB issued an update (ASU 2016-10) to ASC 606, Identifying Performance Obligations and Licensing, which provides clarification related to identifying performance obligations and licensing implementation guidance under ASU 2014-09. In May 2016, the FASB issued an update (ASU 2016-12) to ASC 606, Narrow-Scope Improvements and Practical Expedients, which amends guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. In December 2016, the FASB issued an update (ASU 2016-20) to ASC 606, Technical Corrections and Improvements, which outlines technical corrections to certain aspects of the new revenue recognition standard such as provisions for losses on construction type contracts and disclosure of remaining performance obligations, among other aspects. The effective date and transition requirements are the same as those in ASU 2014-09 for all subsequent clarifying guidance discussed herein.
The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company has elected to apply the modified retrospective method. Accordingly, the new revenue standard will be applied prospectively in the Companys financial statements from January 1, 2019 forward and reported financial information for historical comparable periods will not be revised and will continue to be reported under the accounting standards in effect during those historical periods.
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.
F-11
ANVI GLOBAL HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2019
NOTE 3 - GOING CONCERN
The accompanying 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 had no revenue and has accumulated a deficit of $919,033 as of February 28, 2019. The Company requires capital for its contemplated operational and marketing activities. The Companys ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Companys contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. These conditions and the ability to successfully resolve these factors raise substantial doubt about the Companys 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 uncertainties.
The Company has discussed ways in order to mitigate conditions or events that may raise substantial doubt about its ability to continue as a going concern, there are no assurances that any of these measures will successfully mitigate or be effective at all. (1) The Company shall pursue financing plans to raise funds to judiciously spend towards operational expenses, (2) The Company shall continue to employ low cost measures to operate its business and analyze any unnecessary cost or expense, (3) The Company will seek to avoid unnecessary expenditures, travel, and lodging costs that are not mission critical to its business.
NOTE 4 PREPAID TRANSACTIONS
As of February 28, 2019, the Company has $22,500 of prepaid expenses, of which $10,000 is being amortized over the next ten months for OTC Markets annual fee and $12,500 is for prepaid legal fees.
NOTE 5 - RELATED PARTY TRANSACTIONS
On May 28, 2014, the Company executed a service agreement with Strategic-IT Group Inc. Strategic-IT Group Inc. is owned and operated by Rama Mohan R. Busa, CEO. Services to be provided at $12,000 a month include, but are not limited to, providing office space, IT and related services, business consulting, and investor relations. As of February 28, 2019, and 2018, the Company has an accrued, unpaid balance due of $684,000 and $540,000, respectively.
On December 6, 2017, Anvi Global, Inc., a privately-owned related party company (Anvi Private) was issued 25,000,000 post-forward split shares, in exchange for Anvi Privates investment of $25,000 into ANVI ($.001 per share).
During the years ended February 28, 2019 and 2018, Rama Mohan R. Busa, CEO, advanced funds to the Company from his personal account and related companies. The advances are to pay for operating expenses, are unsecured, non-interest bearing and due on demand. As of February 28, 2019, and 2018, the balance due was $189,765 and $112,904, respectively.
On March 22, 2018, Anvi Global, Inc. the privately-owned company which is controlled by Rama Mohan R. Busa, the Companys majority shareholder and sole officer and director, transferred 13,417,963 of its 25,000,000 shares to several people, including 12,000,000 shares (10.04%) to one individual, who is otherwise unaffiliated with either the Company or Mr. Busa. Anvi Global, Inc. now owns 11,582,037 shares (9.66%).
NOTE 6 COMMON STOCK
On September 27, 2017, the Board consented to increase the Companys authorized common shares to 500,000,000, to effect a 9-for-1 forward split of the Companys 10,550,000 issued and outstanding common shares. The forward split was approved by FINRA on November 21, 2017. All shares throughout these financial statements have been retroactively adjusted to reflect the forward split.
See Note 4 for related party stock issuance.
F-12
ANVI GLOBAL HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 2019
NOTE 7 PREFERRED STOCK
On September 27, 2017, the Board consented to authorize 50,000,000 Preferred Shares, par value $0.001.
The Preferred Stock may be issued in one or more series, each series to be appropriately designated by a distinguishing letter or title, prior to the issuance of any shares thereof. As of February 28, 2019, no Preferred Shares have been issued.
NOTE 8 INCOME TAXES
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss, and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate of 21% is being used.
Net deferred tax assets consist of the following components as of:
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February 28,
2019
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February 28,
2018
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Federal income tax benefit attributable to:
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Current Operations
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$
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46,400
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$
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56,400
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Less: valuation allowance
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(46,400
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)
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(56,400
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)
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Net provision for Federal income taxes
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$
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$
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The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the year ended February 28, due to the following:
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February 28,
2019
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February 28,
2018
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Deferred tax asset attributable to:
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Net operating loss carryover
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$
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(193,000
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)
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$
|
(146,600
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)
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Less: valuation allowance
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193,000
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146,600
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Net deferred tax asset
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$
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$
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At February 28, 2019, the Company had net operating loss carry forwards of approximately $193,000 that may be offset against future taxable income from the year 2019 to 2038. No tax benefit has been reported in the February 28, 2019 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur net operating loss carry forwards may be limited as to use in future years.
NOTE 9 SUBSEQUENT EVENTS
In accordance with SFAS 165 (ASC 855-10) management has performed an evaluation of subsequent events through the date that the financial statements were available to be issued and has determined that it does not have any material subsequent events to disclose in these financial statements, other than the following:
As part of the mining operations in the African region, the Company received a sales advance of $137,910.00 in two deposits of $102,170 on April 18, 2019 and $35,740 on May 29, 2019 towards the supply of chromium ore from an unaffiliated South African-based company. It is intended that the agreement with the unaffiliated South African company will be signed, and the proposed sale of chromium ore will be completed, only if and when the regulatory hurdles have been resolved.
The Company has advanced $87,000 respectively as $50,000 on April 3, 2019, $10,000 on June 3, 2019, and $27,000 on June 4, 2019 to Anvi Private, towards the operating expenses involved in procurement and logistics of supplying the ore to the unaffiliated South African company from which the Company received the sales advance.
F-13