Attached files
file | filename |
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EX-31.1 - Asia Document Transition, Inc. | v210943_ex31-1.htm |
EX-32.1 - Asia Document Transition, Inc. | v210943_ex32-1.htm |
EX-31.2 - Asia Document Transition, Inc. | v210943_ex31-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-Q
QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE
ACT OF 1934
For the
Quarter ended December 31, 2010
Commission
File Number: 333-153888
ASIA DOCUMENT TRANSITION,
INC.
|
(Exact
name of registrant as specified in its
charter)
|
Nevada
|
20-4889194
|
|
(State
of organization)
|
|
(I.R.S.
Employer Identification
No.)
|
15D,
Eton Building
|
288
Des Voeux Road
|
Central,
Hong Kong
|
(Address
of principal executive
offices)
|
011/852-2545-9133
|
Registrant’s
telephone number, including area
code
|
|
Former
address if changed since last
report
|
Check whether
the issuer (1) filed all reports required to be filed by Section 13
or 15(d) of
the Exchange Act during the past
12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes x No ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T 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 check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
Accelerated Filer ¨
|
Accelerated
Filer ¨
|
Non-Accelerated
Filer
¨
(Do not check if a
smaller
reporting
company)
|
Smaller
Reporting Company
þ
|
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes ¨ No
x
Securities
registered under Section 12(g) of the Exchange Act:
Common
Stock $.001 par value
There
were 25,000,000 shares of common stock outstanding as of January 31,
2011.
TABLE
OF CONTENTS
_________________
PART
I - FINANCIAL INFORMATION
|
||
|
||
ITEM
1.
|
FINANCIAL
STATEMENTS
|
3
|
ITEM
2.
|
MANAGEMENT'S
DISCUSSION OF OPERATIONS AND FINANCIAL CONDITION
|
12
|
ITEM
3
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
16
|
ITEM
4.
|
CONTROLS
AND PROCEDURES
|
16
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PART
II - OTHER INFORMATION
|
||
ITEM
1.
|
LEGAL
PROCEEDINGS
|
17
|
ITEM
1A
|
RISK
FACTORS
|
17
|
ITEM
2.
|
UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
17
|
ITEM
3.
|
DEFAULTS
UPON SENIOR SECURITIES
|
17
|
ITEM
4.
|
(REMOVED
AND RESERVED)
|
17
|
ITEM
5.
|
OTHER
INFORMATION
|
17
|
ITEM
6.
|
EXHIBITS
|
17
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SIGNATURES
|
18
|
2
PART
I
FINANCIAL INFORMATION
Item
1—Financial Statements
CONDENSED
CONSOLIDATED BALANCE SHEETS
(A
Development Stage Company)
As of
December 31, 2010
|
As of
June 30, 2010
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 1,617 | $ | 4,036 | ||||
Prepaid
expenses
|
2,076 | - | ||||||
Total
Current Assets
|
3,693 | 4,036 | ||||||
PROPERTY
AND EQUIPMENT, net
|
1,960 | 2,624 | ||||||
OTHER
ASSETS
|
||||||||
Deposits
|
6,396 | 6,396 | ||||||
TOTAL
ASSETS
|
12,049 | 13,056 | ||||||
LIABILITIES AND STOCKHOLDERS'
DEFICIT
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable and accrued expenses
|
$ | 2,500 | $ | - | ||||
Other
payable
|
- | 256 | ||||||
Related
party notes payables
|
160,595 | 146,756 | ||||||
Total
Current Liabilities
|
163,095 | 147,013 | ||||||
NON-CURRENT
LIABILITIES
|
- | - | ||||||
TOTAL
LIABILITIES
|
163,095 | 116,181 | ||||||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
||||||||
Common
stock, $0.001 par value, 100,000,000 shares authorized, 25,000,000 shares
issued and outstanding
|
25,000 | 25,000 | ||||||
Additional
paid-in capital
|
2,007 | - | ||||||
Deficit
accumulated during the development stage
|
(178,053 | ) | (158,957 | ) | ||||
Total
Stockholders' Deficit
|
(151,046 | ) | (133,957 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIT
|
$ | 12,049 | $ | 13,056 |
The accompanying notes are an integral
part of the financial statements.
3
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(A
Development Stage Company)
From
Inception
April 13,
3006 to
|
||||||||||||||||||||
Three months ended
December 31,
|
Six months ended
December 31,
|
December
31, 2010
|
||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
(Cumulative)
|
||||||||||||||||
SALES
|
$ | 2,372 | $ | 2,372 | $ | 4,744 | $ | 4,744 | $ | 64,081 | ||||||||||
COST
OF SALES
|
— | — | — | — | (500 | ) | ||||||||||||||
Gross
Profit:
|
$ | 2,372 | $ | 2,372 | $ | 4,744 | $ | 4,744 | $ | 63,581 | ||||||||||
EXPENSES
|
||||||||||||||||||||
Depreciation
expenses
|
$ | 333 | $ | 333 | $ | 666 | $ | 666 | $ | 11,662 | ||||||||||
Selling,
general and administrative expenses
|
10,217 | 18,466 | 21,168 | 25,953 | 195,326 | |||||||||||||||
Total
Expenses
|
10,550 | 18,799 | 21,834 | 26,619 | 206,988 | |||||||||||||||
LOSS
FROM OPERATIONS
|
(8,178 | ) | (16,427 | ) | (17,090 | ) | (21,875 | ) | (143,407 | ) | ||||||||||
OTHER
INCOME (EXPENSES)
|
||||||||||||||||||||
Interest
expense
|
(2,007 | ) | — | (2,007 | ) | — | ( 2,007 | ) | ||||||||||||
Loss
on disposal of property and equipment
|
— | — | — | — | (7,640 | ) | ||||||||||||||
Write-off
of goodwill
|
— | — | — | — | (25,000 | ) | ||||||||||||||
Provision
for income taxes
|
— | — | — | — | — | |||||||||||||||
Net
Loss
|
$ | (10,185 | ) | $ | (16,427 | ) | $ | (19,097 | ) | $ | (21,875 | ) | (178,054 | ) | ||||||
PER
SHARE DATA:
|
||||||||||||||||||||
Basic
loss per common share
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
Weighted
Average Common Shares Outstanding
|
25,000,000 | 25,000,000 | 25,000,000 | 25,000,000 |
The
accompanying notes are an integral part of the financial
statements.
4
ASIA
DOCUMENT TRANSITION, INC.
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
(A
Development Stage Company)
For the six-month period ended
|
April 13, 2006
(inception) to
|
|||||||||||
December 31,
2010
|
December 31,
2009
|
December 31,
2010
|
||||||||||
CASH
FLOW FROM OPERATING ACTIVITIES
|
||||||||||||
Net
Loss
|
$ | (19,097 | ) | $ | (21,875 | ) | $ | (178,054 | ) | |||
Interest
accrued on related party notes payable
|
2,007 | - | 2,007 | |||||||||
Loss
on disposal of property and equipment
|
- | - | 7,640 | |||||||||
Depreciation
Expense
|
666 | 666 | 11,662 | |||||||||
Write-off
of goodwill
|
- | - | 25,000 | |||||||||
Increase
in Pre-payment and deposit
|
(2,076 | ) | 1,975 | (14,923 | ) | |||||||
Increase
in Accrued Expenses
|
2,500 | - | 2,500 | |||||||||
Decrease
in other payables
|
(256 | ) | - | - | ||||||||
Net
Cash provided by (used in) Operating Activities
|
$ | (16,256 | ) | $ | (19,235 | ) | $ | (144,168 | ) | |||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
Purchase
of property and equipment
|
- | - | (48,144 | ) | ||||||||
Disposal
of property and equipment
|
- | - | 33,333 | |||||||||
Net
Cash provided by (used in) Investing activities
|
$ | - | $ | - | $ | (14,811 | ) | |||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Loans
from (repayment to) related parties
|
13,837 | 20,142 | 160,596 | |||||||||
Net
Cash provided by (used in) Financing Activities
|
$ | 13,837 | $ | 20,142 | $ | 160,596 | ||||||
NET
INCREASE (DECREASE) IN CASH
|
(2,419 | ) | 907 | 1,617 | ||||||||
Cash
beginning of period
|
4,036 | 1,673 | - | |||||||||
Cash
end of period
|
$ | 1,617 | $ | 2,580 | $ | 1,617 |
The
accompanying notes are an integral part of the financial
statements.
5
ASIA
DOCUMENT TRANSITION, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Asia Document Transition, Inc. (the
“Company”) was incorporated in the State of Nevada on April 13, 2006. The
Company is in the business of (a) providing services consisting of converting
documents from word processing format to HTML in order that they may be filed
with the U.S. Securities and Exchange Commission ("SEC")
electronically through EDGAR, the SEC's Electronic Data
Gathering, Analysis, and Retrieval system and (b) providing of
mailing address, phone and fax service, internet access temporary meeting space
(“Virtual Office Services”) to small and single operator businesses
within Hong Kong. The Company has been in the development stage since
formation on April 13, 2006 and has only generated minimal revenue to
date. On April
26, 2006, the
Company acquired all of
the issued and outstanding shares of Vast Opportunity Limited, (VOL) a Hong Kong
incorporated limited company, through the issuance of
24,500,000 common shares to the shareholders of VOL.
VOL has been since its
inception, a corporation with minimal operations. As of the date of the acquisition, V OL
had assets of $374 and
total liabilities of $1,302. The acquisition
resulted in the shareholders of VOL becoming the
controlling shareholders of the Company, accordingly the transaction was
recorded as a recapitalization of VOL.
Notes to
the financial statements that would substantially duplicate the disclosure
contained in the audited financial statements for the most recent fiscal year
ended June 30, 2010, as reported the Company’s Annual Report on Form 10-K
for the year ended June 30, 2010, have been omitted.
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A.
Basis of
Accounting
The
Company’s financial statements are prepared using the accrual method of
accounting. The Company has elected a June 30 fiscal year-end. The
consolidated financial statements include the accounts of the Company and its
wholly owned subsidiary VOL. All material intercompany balances have
been eliminated.
B. Revenue
Recognition
Revenues
from document formatting and virtual office services are recognized at the time
the services have been provided to the customer.
C.
Basic
Earnings (Loss) Per Share
Basic net
loss per share amounts is computed by dividing the net loss by the weighted
average number of common shares outstanding. Diluted earnings per share
are the same as basic earnings per share due to the lack of dilutive items in
the Company.
6
ASIA
DOCUMENT TRANSITION, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D.
Cash and
Cash Equivalents
For
purpose of reporting the statement of flows, cash and cash equivalents include
highly liquid investments with investments with maturities of three months or
less at the time of purchase.
E. Property and
Equipment
The value
of fixed assets is at historical cost as required by generally accepted
accounting principles. Depreciation is calculated on a straight-line over the 5
year expected useful life of the asset as follows:
Fixed
assets at December 31, 2010 are comprised as follows:
Office
and computer equipment
|
$ | 44,140 | ||
Furniture
and Fixtures
|
1,397 | |||
Leasehold
improvement
|
2,716 | |||
Accumulated
Depreciation
|
(46,293 | ) | ||
Net
Property and Equipment
|
$ | 1,960 |
Depreciation
of $333 had been accounted for during the quarter ended December 31,
2010.
F.
Foreign currency
translation
Assets
and liabilities of the Company whose functional currency is the Hong Kong dollar
are translated into U.S. dollars at exchange rates prevailing at the balance
sheet date. Revenues and expenses are translated at average exchange rates for
the year. The net exchange differences resulting from these translations will be
reported in other income. Gains and losses resulting from foreign currency
transactions will be included the consolidated statements of operations. There
are no exchange differences or gains and losses resulting from foreign currency
translations to report for the period commencing with inception and ending
December 31, 2010.
G.
Related Party Notes
Payable
Notes
Payable consists of $160,595 in loans made by an officer and shareholder of the
Company to the Company and its wholly owned subsidiary, VOL. These loans bear
interest at a rate of 5% per annum, are unsecured and due and payable upon
demand.
7
ASIA
DOCUMENT TRANSITION, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
H.
Use
of Estimates
The
preparation of the 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 statement and the
reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
I.
Development
Stage
The
Company continues to devote substantially all of its efforts in the development
of its plan to(a) provide services consisting of converting documents from word
processing format to HTML in order that they may be filed with the
SEC electronically through EDGAR, the SEC's Electronic
Data Gathering, Analysis, and Retrieval system and (b) providing of
mailing address, phone and fax service, internet access temporary meeting space
(“Virtual Office Services”) to small and single operator businesses
within Hong Kong .
J.
Income
Taxes
The
Company accounts for income taxes in accordance with authoritative guidance on
deferred income taxes which requires the use of an asset and
liability approach in accounting for income taxes. Deferred tax assets and
liabilities are recorded based on the differences between the financial
statement and tax bases of assets and liabilities and the tax rates in effect
when these differences are expected to reverse. SFAS No. 109 requires the
reduction of deferred tax assets by a valuation allowance if, based on the
weight of available evidence, it is more likely than not that some or all of the
deferred tax assets will not be realized.
The
provision for income taxes differs from the amounts which would be provided by
applying the statutory federal income tax rate to net loss before provision for
income taxes for the following reasons:
December
31,
|
||||
2010
|
||||
Income
tax expense at statutory rate
|
$ | 4,900 | ||
Valuation
allowance
|
(4,900 | ) | ||
Income
tax expense per books
|
$ | -0- |
8
ASIA
DOCUMENT TRANSITION, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J.
Income
Taxes (Continued)
Net
deferred tax assets consist of the following components as of:
December
30,
|
||||
2010
|
||||
NOL
Carryover
|
$ | 59,006 | ||
Valuation
allowance
|
(59,006 | ) | ||
Net
deferred tax asset
|
$ | -0- |
The
Company has a net operating loss carryover of $173,547 as of December 31, 2010
which expires in 2028. 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.
K.
Equity-based
compensation.
The
Company adopted SFAS No. 123-R effective January 1, 2006 using the
modified prospective method. Under this transition method, stock compensation
expense includes compensation expense for all stock-based compensation awards
granted on or after January 1,2006, based on the grant-date fair value
estimated in accordance with the provisions of SFAS No. 123-R.
L.
Restatement of
Financial Statements (in
Part)
The
Company discovered an erroneous entry being made in year 2006, which required a
reclassification of this entry. The effects of the restatement on the
Company’s consolidated balance sheet as of June 30, 2007 and 2008, as well as
the effects of these changes on the Company’s consolidated statements of income
and consolidated statements of cash flows for fiscal years 2008 and
2007. The cumulative effect of the restatement relating to fiscal
years 2008 and 2007 is the increase of additional paid-in capital from
negative $21,000 to zero; write-off of goodwill in the amount of $25,000; and a
decrease in selling, general and administrative expenses of
$3,125. As a result, deficit accumulated fiscal years ended June 30,
2007 and 2008 increased by $21,875.
NOTE
3. COMMON STOCK TRANSACTIONS
The
Company did not issue any shares of common stock during the reporting quarter
ended December 31, 2010.
9
ASIA
DOCUMENT TRANSITION, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
4. WARRANTS AND OPTIONS
There are
no warrants or options outstanding to acquire any additional shares of common
stock.
NOTE
5. TRANSACTIONS WITH RELATED PARTY
As of
December 30, 2010, the Company is indebted to Bernard Chan in the amount of
$160,595 for loans made by Bernard Chan to the Company and the Company’s wholly
owned subsidiary, VOL. These loans are unsecured and bear interest at a rate of
5% per annum and are due and payable by the Company upon
demand. Interest paid year-to-date to the officer and shareholder of
the Company was $-0- at December 31, 2010.
NOTE 6. RECENT ACCOUNTING
PRONOUNCEMENTS
In April
2010, the FASB issued authoritative guidance on Stock Compensation and its
Effect of Denominating the Exercise Price of a Share-Based Payment Award in the
Currency of the Market in Which the Underlying Equity Security
Trades. The guidance provides amendments to clarify that an employee
share-based payment award with an exercise price denominated in the currency of
a market in which a substantial portion of the entity’s equity securities trades
should not be considered to contain a condition that is not a market,
performance, or service condition. Therefore, an entity would not classify such
an award as a liability if it otherwise qualifies as the adoption of this
guidance is not expected to have a material impact on the Company’s financial
position or results of operations.
NOTE
7. GOING CONCERN
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principle, which contemplate continuation of the
Company as a going concern. However, The Company has a negative net
working capital of US$159,402 as of December 31, 2010 and a net loss of $8,178
and $16,427 for the quarters ended December 31, 2010 and 2009
respectively. The Company currently has limited liquidity, and has
not completed its efforts to establish a stabilized source of revenues
sufficient to cover operating costs over an extended period of time. These
factors, among others, raise substantial doubt as to the Company’s ability to
continue as a going concern.
Management
anticipates that the Company will be dependent, for the near future, on
additional investment capital to fund operating expenses. The Company
intends to position itself so that it may be able to raise additional funds
through the capital markets. In light of management’s efforts, there are no
assurances that the Company will be successful in this or any of its endeavors
or become financially viable and continue as a going concern.
10
ASIA
DOCUMENT TRANSITION, INC.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO FINANCIAL STATEMENTS
NOTE
8. COMMITMENTS
The
Company leases its facilities under an operating lease commencing April 16, 2010
and expiring April 15, 2012.
Pursuant
to the lease, the Company is obligated to pay monthly rent of approximately
$1,823 as well as a management fee of $253.
11
ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
PRELIMINARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
discussion contains forward-looking statements. The reader should understand
that several factors govern whether any forward-looking statement contained
herein will be or can be achieved. Any one of those factors could cause actual
results to differ materially from those projected herein. These forward-looking
statements include plans and objectives of management for future operations,
including plans and objectives relating to the products and the future economic
performance of the company. Assumptions relating to the foregoing involve
judgments with respect to, among other things, future economic, competitive and
market conditions, future business decisions, and the time and money required to
successfully complete development projects, all of which are difficult or
impossible to predict accurately and many of which are beyond the control of the
company. Although the company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of those
assumptions could prove inaccurate and, therefore, there can be no assurance
that the results contemplated in any of the forward-looking statements contained
herein will be realized. Based on actual experience and business development,
the company may alter its marketing, capital expenditure plans or other budgets,
which may in turn affect the company's results of operations. In light of the
significant uncertainties inherent in the forward-looking statements included
therein, the inclusion of any such statement should not be regarded as a
representation by the company or any other person that the objectives or plans
of the company will be achieved.
RESULTS OF
OPERATIONS
The
following table shows the financial data of the consolidated statements of
operations of the Company and its subsidiaries for the 3-month periods ended
December 31, 2010 and December 31, 2009, as well as the
6-month periods ended December 31, 2010 and December 31,
2009. The data should be read in conjunction with the audited
consolidated financial statements of the Company and related notes
thereto.
3-month Ended
|
6-month Ended
|
|||||||||||||||
December 31,
|
December 31,
|
December 31,
|
December 31,
|
|||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
(In
US$ except per share data)
|
||||||||||||||||
Net
Sales
|
$ | 2,372 | $ | 2,372 | $ | 4,744 | $ | 4,744 | ||||||||
Operating
expenses
|
||||||||||||||||
Depreciation
expenses
|
(333 | ) | (333 | ) | (666 | ) | (666 | ) | ||||||||
Selling,
general and administrative expenses
|
(10,217 | ) | (18,466 | ) | (21,168 | ) | (25,953 | ) | ||||||||
Total
Operating expenses
|
(10,550 | ) | (18,799 | ) | (21,834 | ) | (26,619 | ) | ||||||||
Loss
from operations
|
(8,178 | ) | (16,427 | ) | (17,090 | ) | (21,875 | ) | ||||||||
Non-operating
income (expense)
|
||||||||||||||||
Interest
expense
|
(2,007 | ) | — | (2,007 | ) | — | ||||||||||
Loss
on disposal of property and equipment
|
— | — | — | — | ||||||||||||
Profit/(loss)
before income tax and minority interests
|
(10,185 | ) | (16,427 | ) | (19,097 | ) | (21,875 | ) | ||||||||
Provision
for income taxes
|
— | — | — | — | ||||||||||||
Minority
interests
|
— | — | — | — | ||||||||||||
Net
income/(loss)
|
(10,185 | ) | (16,427 | ) | (19,097 | ) | (21,875 | ) | ||||||||
Earnings
(loss) per share
|
||||||||||||||||
Basic
|
(0.00 | ) | (0.00 | ) | (0.00 | ) | (0.00 | ) |
12
3 MONTHS
ENDED DECEMBER 31, 2010 COMPARED TO 3 MONTHS ENDED DECEMBER 31,
2009.
OPERATING
REVENUE
Since
commencing operations in April 2006, we have been engaged to providing
Edgarizing and Virtual Office businesses. However, due mainly to the
inefficient minimal scale of operating the Edgarizing business, we temporarily
ceased its operation and continue only the operation of Virtual
Office.
For the
3-month period ended December 31, 2010, Asia Document Transition, Inc. generated
revenue in the amount of $2,372, as compared to $2,372 for the same
corresponding period in year 2009, the revenue remained
unchanged. During the quarter ended December 31, 2010, we provided
our virtual office services for an average of 3 clients with an average monthly
fee earned per client in the amount of approximately US$260, which remained the
same for the corresponding period in year 2009. In addition, the
existing clients are being charged in a similar manner.
DEPRECIATION
EXPENSES
Depreciation
expenses for the 3-month period ended December 31, 2010 amounted to $333, as
compared to $333 for the same corresponding period in year 2009, it remained
unchanged. The remaining of these expenses was related to the
depreciation charged on office equipments and computers.
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES
For the
3-month period ended December 31, 2010, selling, general and administrative
expenses were $10,217, compared to $18,466 for the same corresponding period in
year 2009, a decrease of $8,249 or 44.7%. This decrease was primarily
the result of lower and less professional fees being paid due to the
management’s effort to trim costs.
INTEREST
INCOME/EXPENSE
Interest income
was none for the reporting 3-month period ended December 31, 2010, compared
to none for the same corresponding period in year 2009. Interest expense
was $2,007 for the reporting 3-month period ended December 31, 2010,
compared to none for the same corresponding period in year
2009.
13
NET
LOSS
Net loss
was $10,185 for the reporting 3-month period ended December 31, 2010, as
compared to the net loss of $16,427 for the same corresponding period in year
2009, a decrease of $6,242 or 38%. The decrease was
primarily the result of the decrease of SG&A expenses mentioned
above.
6 MONTHS
ENDED DECEMBER 31, 2010 COMPARED TO 6 MONTHS ENDED DECEMBER 31,
2009.
OPERATING
REVENUE
For the
6-month period ended December 31, 2010, Asia Document Transition, Inc. generated
revenue in the amount of $4,744, as compared to $4,744 for the same
corresponding period in year 2008, it remained the same. During the
6-month period ended December 31, 2010, we provided our virtual office services
for an average of 3 clients with an average monthly fee earned per client in the
amount of approximately US$260. In addition, the existing clients are
being charged the same as that of the year 2009.
DEPRECIATION
EXPENSES
Depreciation
expenses for the 6-month period ended December 31, 2010 amounted to $666, as
compared to $666 for the same corresponding period in year 2009, it remained the
same. The remaining of these expenses was related to the depreciation
charged on office equipments and computers.
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES
For the
6-month period ended December 31, 2010, selling, general and administrative
expenses were $21,168, compared to $25,953 for the same corresponding period in
year 2009, a decrease of $4,785 or 18.4%. This decrease was primarily
the result of lower and less professional fees being paid due to the
management’s effort to trim costs.
INTEREST
INCOME/EXPENSE
Interest
income was none for the reporting 6-month period ended December 31, 2010,
compared to none for the same corresponding period in year 2009. Interest
expense was $2,007 for the reporting 6-month period ended December 31,
2010, compared to none for the same corresponding period in year
2009.
14
NET
LOSS
Net loss
was approximately $19,097 for the reporting 6-month period ended December 31,
2010, as compared to $21,875 for the same corresponding period in year 2009, a
decrease of $2,778 or 12.7%. The decrease was
primarily the result of the decrease of SG&A expenses mentioned
above.
LIQUIDITY
AND CAPITAL RESOURCES
As of
December 31, 2010, cash and cash equivalents totaled $1,617. This
cash position was the result of a result of net cash provided by financing
activities in the amount of $13,837, offsetting by net cash used in operating
activities in the amount of $16,256. The cash increase in financing
activities was the result of additional loans from related party. The
net cash used by operating activities was mainly the result of professional fees
and overheads for the maintenance of the office space.
We
believe that the level of financial resources is a significant factor for our
future development, and accordingly we may choose at any time to raise capital
through private debt or equity financing to strengthen its financial position,
facilitate growth and provide us with additional flexibility to take advantage
of business opportunities. However, we do not have immediate plans to
have a public offering of our common stock.
CRITICAL
ACCOUNTING POLICIES
In
presenting our financial statements in conformity with generally accepted
accounting principles, we are required to make estimates and assumptions that
affect the amounts reported therein. Several of the estimates and assumptions we
are required to make relate to matters that are inherently uncertain as they
pertain to future events. However, events that are outside of our control cannot
be predicted and, as such, they cannot be contemplated in evaluating such
estimates and assumptions. If there is a significant unfavorable change to
current conditions, it could result in a material adverse impact to our
consolidated results of operations, financial position and liquidity. We believe
that the estimates and assumptions we used when preparing our financial
statements were the most appropriate at that time. Presented below are those
accounting policies that we believe require subjective and complex judgments
that could potentially affect reported results. However, the majority of our
businesses operate in environments where we pay a fee for a service performed,
and therefore the results of the majority of our recurring operations are
recorded in our financial statements using accounting policies that are not
particularly subjective, nor complex.
Allowance for Doubtful
Accounts
We
perform ongoing credit evaluations of our customers and adjust credit limits
based upon customer payment history and current creditworthiness. We
continuously monitor collections and payments from our customers and maintain a
provision for estimated credit losses based upon our historical experience and
any specific customer collection issues that have been identified. While such
credit losses have historically been within our expectations and the provisions
established, we cannot guarantee that we will continue to experience credit loss
rates similar to those we have experienced in the past. Measurement of such
losses requires consideration of historical loss experience, including the need
to adjust for current conditions, and judgments about the probable effects of
relevant observable data, including present economic conditions such as
delinquency rates and financial health of specific customers.
15
Going
Concern
The
accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. To date, the Company generated only
nominal revenue, is considered a development stage company, has experienced
recurring net operating losses, had a net loss of $(10,185) for the three months
ended December 31, 2010, and a working capital deficiency of $151,046 at
December 31, 2010. These factors raise substantial doubt about the
Company’s ability to continue as a going concern. 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. We will need to raise funds
or implement our business plan to continue operations.
Off-Balance Sheet
Arrangements
We do not
have any off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that is material to investors.
ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide information required by this Item.
ITEM
4. INTERNAL CONTROL OVER FINANCIAL REPORTING
Evaluation
of Disclosure Controls and Procedures
Under the
supervision and with the participation of our management, including our
principal executive officer and principal financial officer, we conducted an
evaluation of our disclosure controls and procedures, as such term is
defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated
under the Securities Exchange Act of 1934, as amended (Exchange Act), as of
December 31, 2010. Based on this evaluation, our principal executive officer and
principal financial officer have concluded that our disclosure controls and
procedures are effective to ensure that information required to be disclosed by
us in the reports we file or submit under the Exchange Act is recorded,
processed, summarized, and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms and that our disclosure and
controls are designed to ensure that information
required to be disclosed by us in the reports that we file
or submit under the Exchange Act is accumulated and communicated to
our management, including our principal executive officer and
principal financial officer, or persons
performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.
Changes
in Internal Control Over Financial Reporting
There
were no changes (including corrective actions with regard to significant
deficiencies or material weaknesses) in our internal controls over financial
reporting that occurred during the second quarter of fiscal 2011 that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.
16
PART
II - OTHER INFORMATION
ITEM 1.
|
LEGAL
PROCEEDINGS
|
There are
no legal proceedings which are pending or have been threatened against us or any
of our officers, directors or control persons of which management is
aware.
ITEM 1A.
|
RISK
FACTORS.
|
As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide information required by this Item
ITEM 2.
|
UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF
PROCEEDS
|
Except as
may have previously been disclosed on a current report on Form 8-K or the
Company’s Registration Statement on Form S-1, we have not sold any of our
securities in a private placement transaction or otherwise during the past three
years.
ITEM 3.
|
DEFAULTS UPON SENIOR
SECURITIES
|
Not
applicable.
ITEM 4.
|
(REMOVED AND
RESERVED)
|
None.
ITEM 5.
|
OTHER
INFORMATION
|
None
ITEM 6.
|
EXHIBITS
|
Exhibit
No.
|
Description
|
|
31.1
|
Certification
of Principal Executive Officer filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification
of Principal Financial Officer filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification
of Principal Executive Officer and Principal Financial Officer furnished
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of
2002.
|
17
SIGNATURES
In
accordance with the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities
and on the dates indicated.
ASIA
DOCUMENT TRANSITION, INC.
|
||
Date:
February 11, 2011
|
By:
|
/s/ Bernard Chan
|
Bernard
Chan
|
||
Director,
CEO, President and Treasurer
|
EXHIBIT
INDEX
Exhibit
No.
|
Description
|
|
31.1
|
Certification
of Principal Executive Officer filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
31.2
|
Certification
of Principal Financial Officer filed pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
|
|
32.1
|
Certification
of Principal Executive Officer and Principal Financial Officer furnished
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of
2002.
|
18