UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2016

 

OR

 

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

 

Commission File Number: 333-192272

 

ASIA EQUITY EXCHANGE GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		46-3366428
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)
Room 2101, 21/F, Sino Plaza, 255-257 Gloucester Rd., Causeway Bay, Hong Kong		None
(Address of principal executive offices)		(Zip Code)

 

(+852 2180 7433)

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [X] 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 [X] 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 filed,” “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 [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act. Yes [X] No [  ]

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:  As of May 12, 2016, the Company had 1,146,000,000 shares of common stock outstanding.

 

 

 

ASIA EQUITY EXCHANGE GROUP, INC.

Quarterly Report on Form 10-Q

For the Quarterly Period March 31, 2016

 

FORWARD-LOOKING STATEMENTS

 

This Form 10-Q for the quarterly period ended March 31, 2016 contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this document include, among others, statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve assumptions, risks and uncertainties regarding, among others, the success of our business plan, availability of funds, government regulations, operating costs, our ability to achieve significant revenues, our business model and products and other factors. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. In evaluating these statements, you should consider various factors, including the assumptions, risks and uncertainties set forth in reports and other documents we have filed with or furnished to the SEC. These factors or any of them may cause our actual results to differ materially from any forward-looking statement made in this document. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding future events, our actual results will likely vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. The forward-looking statements in this document are made as of the date of this document and we do not intend or undertake to update any of the forward-looking statements to conform these statements to actual results, except as required by applicable law, including the securities laws of the United States.

 

 

TABLE OF CONTENTS

  

Part I	Financial Information
Item 1.	Financial Statements	4
	Balance Sheets	5
	Statements of Operations	6
	Statements of Cash Flows	7
	Notes to the Unaudited Condensed Interim Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	18
Part II	Other Information	20
SIGNATURES		21

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

The accompanying unaudited condensed interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with U.S. generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three month period ended March 31, 2016 are not necessarily indicative of the results that can be expected for the year ending December 31, 2016.

 

 

ASIA EQUITY EXCHANGE GROUP, INC.

 

Condensed Interim Balance Sheets

 

		March 31, 2016				December 31, 2015
ASSETS
Current Assets
Cash and cash equivalents		$	-			$	-
Prepaid expenses			4,163				5,833
Total current assets			4,163				5,833
TOTAL ASSETS		$	4,163			$	5,833
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities		$	251			$	1,056
Note payable - related party			20,392				14,408
Total current liabilities			20,643				15,464
TOTAL LIABILITIES			20,643				15,464
COMMITMENTS AND CONTINGENCIES			-				-
STOCKHOLDERS’ DEFICIT
Preferred stock, 1,000,000 shares authorized; par value $0.001, none issued and outstanding			-				-
Common stock, 3,000,000,000 shares authorized; par value $0.001, 1,146,000,000 shares issued as of March 31, 2016 and December 31, 2015, respectively			1,146,000				1,146,000
Capital deficiency			(1,023,713	)			(1,023,713	)
Accumulated deficit			(138,767	)			(131,918	)
Total Stockholders’ Deficit			(16,480	)			(9,631	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT		$	4,163			$	5,833

 

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

 

 

ASIA EQUITY EXCHANGE GROUP, INC.

 

Condensed Interim Statements of Operations

 

		For the Three months Ended
		March 31, 2016				March 31, 2015
REVENUE		$	-			$	-
OPERATING EXPENSES
General and administrative			-				81
Professional fees			5,000				2,381
Transfer agent			1,849				-
Total Operating Expenses			6,849				2,462
Net loss from operations			(6,849	)			(2,462	)
Other Income and Expense			-				-
Provision for income taxes			-				-
Net Loss		$	(6,849	)		$	(2,462	)
Basic and diluted loss per common share		$	(0.00	)		$	(0.00	)
Weighted average number of common shares outstanding - basic and diluted *			146,000,000				146,000,000

 

*Common stock retroactively adjusted for 10:1 forward stock split, effective July 8, 2015

 

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

 

 

ASIA EQUITY EXCHANGE GROUP, INC.

 

Condensed Interim Statements of Cash Flows

 

		For the Three Months End
		March 31, 2016				March 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(6,849	)		$	(2,462	)
Changes in operating activities:
Prepaid expenses			1,670				-
Accounts payable and accrued liabilities			(805	)			-
Note payable – related party			5,984				-
Net cash used in operating activities			-				(2,462	)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used in Investing Activities			-				-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from note payable - related parties
Net payments to related party
Commons shares issued for cash			-				-
Net Cash Provided by Financing Activities			-				-
Net increase (decrease) in cash and cash equivalents			-				(2,462	)
Cash and cash equivalents, beginning of period			-				32,956
Cash and cash equivalents, end of period		$	-			$	30,494
Supplemental Cash Flow Disclosure:
Cash paid for interest		$	-			$	-
Cash paid for income taxes		$	-			$	-
Non-cash financing activities:
Note payable related party forgiven to contributed capital		$	-			$	-

 

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

 

 

ASIA EQUITY EXCHANGE GROUP, INC.

 

Notes to the Unaudited Condensed Interim Financial Statements

 

March 31, 2016

 

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

 

ASIA EQUITY EXCHANGE GROUP, INC. (the “Company”, “AEEX”) is a Nevada corporation incorporated on July 15, 2013. It is based in Hong Kong, the People’s Republic of China. The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America, and the Company’s fiscal year end December 31.

 

The Company aims to build and complement the multi-layer capital market system in Asia, and create a unique and authoritative intercontinental equity information platform which will effectively complement in business functions, service means and financing channels with OTC markets in countries and regions in Asia. AEEX also endeavors to build a system of global cooperation to provide listed enterprises with equity financing means through domestic and overseas channels, and to offer nurturing, pre-listing tutoring, incubating and supporting services for their listing on overseas capital markets.

 

To date, the Company’s activities have been limited to its formation and the raising of equity capital.

 

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The Financial Statements and related disclosures have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

 

Cash and Cash Equivalents

 

Cash and cash equivalents include cash in banks, money market funds, and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. The Company had $Nil in cash and cash equivalents as of March 31, 2016 and December 31, 2015, respectively.

 

Net Loss Per Share of Common Stock

 

The Company has adopted ASC Topic 260, “Earnings per Share,” (“EPS”) which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

 

 

The following table sets forth the computation of basic earnings per share, for the three months ended March 31, 2016 and March 31, 2015:

 

		Three Months Ended
		March 31, 2016				March 31, 2015
Net loss		$	(6,849	)		$	(2,462	)
Weighted average common shares outstanding (basic and diluted) *			146,000,000				146,000,000
Net loss per common share, basic and diluted		$	(0.00	)		$	(0.00	)

 

*Common stock retroactively adjusted for 10:1 forward stock split, effective July 8, 2015

 

The Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 

Concentrations of Credit Risk

 

The Company’s financial instruments that are exposed to concentrations of credit risk primarily consist of its cash and cash equivalents and related party payables that it will likely incur in the near future. The Company places its cash and cash equivalents with financial institutions of high credit worthiness. At times, its cash and cash equivalents with a particular financial institution may exceed any applicable government insurance limits. The Company’s management plans to assess the financial strength and credit worthiness of any parties to which it extends funds, and as such, it believes that any associated credit risk exposures are limited.

 

Financial Instruments

 

The Company follows ASC 820, “Fair Value Measurements and Disclosures,” which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

 

Level 1

 

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

 

Level 2

 

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

 

Level 3

 

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

 

Share-based Expenses

 

ASC 718 “Compensation – Stock Compensation” prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).

 

The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity – Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.

 

Advertising Costs

 

The Company follows ASC 720, “Advertising Costs,” and expenses costs as incurred. No advertising costs were incurred for the three months ended March 31, 2016 and March 31, 2015.

 

Related Parties

 

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. See note 6.

 

Commitments and Contingencies

 

The Company follows ASC 450-20, “Loss Contingencies,” to report accounting for contingencies.  Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no commitments or contingencies as of March 31, 2016 and December 31, 2015.

 

 

Revenue Recognition

 

The Company will recognize revenue from the sale of products and services in accordance with ASC 605,”Revenue Recognition.” No revenue has been recognized since inception. However, the Company will recognize revenue only when all of the following criteria have been met:

 

	i)	Persuasive evidence for an agreement exists;
	ii)	Service has been provided;
	iii)	The fee is fixed or determinable; and,
	iv)	Collection is reasonably assured.

 

Recent Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

NOTE 3 - GOING CONCERN

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. As of March 31, 2016, the Company has a loss from operations of $6,849, an accumulated deficit of $138,767 and has earned no revenues since inception. The Company intends to start the business of consulting and information release services to gain profit after the proposed purchase of (“AEEGCL”) (see note 8). The Company plans to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending December 31, 2016.

 

The ability of the Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of its business plan. In response to these problems, management intends to raise additional funds through public or private placement offerings.

 

These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

NOTE 4 – EQUITY

 

Preferred Stock

 

The Company has authorized 1,000,000 preferred shares with a par value of $0.001 per share. The Board of Directors are authorized to divide the authorized shares of Preferred Stock into one or more series, each of which shall be so designated as to distinguish the shares thereof from the shares of all other series and classes. As of March 31, 2016, the Company does not have any issued shares of preferred stock and has not designated any shares for issuance.

 

 

Common Stock

 

The Company has authorized 3,000,000,000 common shares with a par value of $0.001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on which action of the stockholders of the corporation is sought.

 

On July 8, 2015, the Board of Directors authorized a ten for one (10:1) forward stock split, which was effectuated upon the filing of our amended Articles of Incorporation. The amended Articles of Incorporation were filed with the state of Nevada on July 22, 2015. Accordingly, the Company’s outstanding number of shares of common stock increased from 14,600,000 to 146,000,000. All relevant information relating to numbers of shares and per share information have been retrospectively adjusted to reflect the forward stock split for all periods presented.

  

As of March 31, 2016 and December 31, 2015, the Company has 1,146,000,000 shares of common stock issued.

  

NOTE 5 - PROVISION FOR 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.

 

The provision for income taxes differs from the amounts, which would be provided by applying the statutory federal income tax rate of 34% to the net loss before provision for income taxes for the following reasons:

 

		March 31, 2016				December 31, 2015
Income tax expense at statutory rate		$	(2,329	)		$	(2,606	)
Valuation allowance			2,329				2,606
Income tax expense per books		$	-			$	-

 

 

Net deferred tax assets consist of the following components as of:

 

		March 31, 2016				December 31, 2015
NOL Carryover		$	45,504			$	43,175
Valuation allowance			(45,504	)			(43,175	)
Net deferred tax asset		$	–			$	–

 

The Company has approximately $138,767 of Federal net operating loss carry-forwards, which will begin to expire in 2033. Their utilization is limited to future taxable earnings of the Company and may be subject to severe limitations if the Company undergoes an ownership change pursuant to Internal Revenue Code Section 382.

 

The Company has not taken any uncertain tax positions, however, it has open tax years subject to audit by the Internal Revenue Services, for the years ended 2013 through 2016.

 

NOTE 6 - RELATED PARTY TRANSACTIONS

 

During the period ended March 31 2016, the CEO and CFO advanced the Company $5,984 for operating expenses. These advances have been formalized by non-interest bearing demand notes. As of March 31,2016, and December 31, 2015, the balance due to a related party was $20,392 and $14,408, respectively.

 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

The Company has no known commitments or contingencies as of March 31,2016. From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company’s financial position or results of operations.

 

NOTE 8 - SUBSEQUENT EVENTS

 

On November 30, 2015, the Company, executed a Sale and Purchase Agreement (“the Agreement”) to acquire 100% of the shares and assets of Asian Equity Exchange Group Co., Ltd. “AEEGCL”, a company incorporated under the laws of Samoa. Pursuant to the Agreement, the Company agreed to issue one billion (1,000,000,000) restricted common shares of the Company to the owners of AEEGCL. Execution of this agreement is the first stage of the planned acquisition. Closing was planned to take place on or before January 31, 2016. However, closing is contingent upon an audit of the shares and assets of AEEGCL. Closing was contingent upon an audit of the shares and assets of AEEGCL and other due diligence. As of April 12,2016 the parties have satisfied at the closing conditions and the Company completed the terms of the Agreement. As a result of the closing, the Company has terminated its previous business plan, and we are now pursuing the historical business of AEEGCL. AEEGCL is and international equity service platform designed to provide equity investment financing information services to enterprises in the countries and regions of Asia. This disclosure should be read in conjunction with our 8-k, as filed with the Securities and Exchange Commission, on April 14,2016, The one billion shares released to the original shareholders of AEEGCL on the same day mentioned above.

 

 

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

 

Results of Operations for the Quarter Ended March 31, 2016

 

Forward-Looking Statements

 

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve risks and uncertainties, including, among other things, statements regarding our business strategy, future revenues and anticipated costs and expenses. Such forward-looking statements include, among others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed herein as well as in the “Description of Business – Risk Factors” section in our Annual Report on Form 10-K/A, as filed on January 15, 2016. You should carefully review the risks described in our Annual Report and in other documents we file from time to time with the Securities and Exchange Commission. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or circumstances after the date of this document.

 

Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from such forward-looking statements.

 

Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

 

Overview

 

The Company was incorporated in the State of Nevada on July 15, 2013, under the name I In The Sky Inc. Our name was changed as of July 22, 2015. The Company is working to establish and build an equity information service platform designed to provide equity investment financing information to all enterprises in the countries and regions of Asia.

 

We have had limited operations and have been issued a “going concern” opinion by our auditor, based upon our reliance on the sale of our common stock and loans from an officer, as the sole source of funds for our future operations.

 

 

Plan of Operation

 

In 2016, we expect to enrol more than 200 qualified businesses in Mainland China, and in 10 other countries in Asia. We will cooperate with the authorized institutions in various commercial roadshows to expand our influence in China and abroad, and will work to establish contacts with governments at all levels to get their support and assistance. Our ultimate aim in 2016 is to enroll 800 companies to be listed on our website www.asiaotcmarkets.com for equity financing.

 

Our auditors have issued a going concern opinion on our audited financial statements for the year ended September 30, 2015. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we launch our business platform. There is no assurance we will ever reach this point. Accordingly, we must raise cash from other sources. Our only other source for cash at this time is investments by others or loans from our shareholders or officers. We have no assurances that such loans will become available upon acceptable terms when the funds are required for our operations. We must raise cash to implement our project and stay in business. As of March 31,2016, the Company had $nil in cash on hand.

 

Limited Operating History; Need for Additional Capital

 

There is no historical financial information about us upon which to base an evaluation of our performance. We are in our early development and we have not generated any revenues from operations, and may be unable to fund ongoing activates. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in developing our hardware and software, and possible cost increases due to disruptions in from hardware manufacturers.

 

To become profitable and competitive, we must launch our platform. We do not believe we have sufficient funds to operate our business for the next 12 months.

 

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

 

If we are unable to complete any phase of our development program or fail to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan or we may be forced to cease operations.

 

 

Results of Operations

 

We have generated no revenues and have incurred $138,767 in expenses since inception (July 15, 2013) through March 31,2016.

 

		As of				As of
		March 31, 2016				December 31, 2015
Cash		$	-			$	-
Total Assets		$	4,163			$	5,833
Total Liabilities		$	20,643			$	15,464
Stockholders’ Deficit		$	16,480			$	9,631

 

Liquidity and Capital Resources

 

Working Capital

 

		As of				As of
		March 31, 2016				December 31, 2015
Current Assets		$	4,163			$	5,833
Current Liabilities		$	20,643			$	15,464
Working Capital Deficiency		$	16,480			$	9,631

 

Cash Flows

 

		Three months ended				Three months ended
		March 31,2016				March 31, 2015
Cash Flows used in Operating Activities		$	_			$	(2,462	)
Net change in Cash During the Period		$	_			$	(2,462	)

 

 

As at March 31, 2016 and December 31, 2015, the Company’s cash balances were $nil, our total assets at March 31, 2016 and December 31, 2015 were $4,163 and $5,833 respectively.

 

As at March 31, 2016, the Company had total liabilities of $20,643 compared with total liabilities of $15,464 as at December 31, 2015. The increase in total liabilities was primarily attributed to the expense being paid by a shareholder during the three months ended March 31, 2016.

 

As at March 31, 2016, the Company had a working capital deficiency of $16,480 compared with working capital deficiency of $9,631 as at December 31, 2015. The decrease in working capital was primarily attributed to the increase in current liabilities from the professional fees incurred during the three months ended March 31, 2016.

 

Cash Flow from Operating Activities

 

During the three months ended March 31, 2016, the Company used no cash in operating activities compared to cash used in operating activities of $2,462 during the three months ended March 31, 2015. During the three months ended March 31, 2015, the Company had a loss from operations cash used in operating activities was $2,462.

 

Cash Flow from Investing Activities

 

During the three months ended March 31, 2016 and 2015, the Company used no cash in investing activities.

 

Cash Flow from Financing Activities

 

During the three months ended March 31, 2016 and 2015, the Company used no cash in financing activities.

 

From inception until the date of this filing, we have had limited operating activities.

 

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.

 

Critical Accounting Policies

 

Basis of Presentation

 

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

 

 

In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K/A, for the year ended September 30, 2015, as filed with the SEC on January 15, 2016.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable.

 

Item 4. Controls and Procedures

 

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2016 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the Evaluation Date as a result of the material weaknesses in internal control over financial reporting discussed below.

 

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

 

Notwithstanding the assessment that our internal control over financial reporting was not effective and that there were material weaknesses as identified in this report, we believe that our consolidated financial statements contained in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 fairly present our financial condition, results of operations and cash flows in all material respects.

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

 

 

Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

 

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

 

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

Based on its evaluation under this framework, management concluded that our internal control over financial reporting was not effective as of the Evaluation Date.

 

Management assessed the effectiveness of the Company’s internal control over financial reporting as of Evaluation Date and identified the following material weaknesses:

 

	1.	Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.
	2.	Insufficient Written Policies & Procedures: We have insufficient written policies and procedures for accounting and financial reporting.
	3.	Inadequate Financial Statement Closing Process: We have an inadequate financial statement closing process.
	4.	Lack of Audit Committee: The lack of a functioning audit committee and lack of a majority of outside directors on the Company’s Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures.

 

Management is committed to improving its internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) prepare and implement sufficient written policies and checklists for financial reporting and closing processes and (4) may consider appointing outside directors and audit committee members in the future.

 

 

Management, including our Chief Executive Officer and the Chief Financial Officer, has discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.

 

Our management, including our Chief Executive Officer and the Chief Financial Officer, do not expect that the our controls and procedures will prevent all potential errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

 

Changes in internal control over financial reporting

 

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2016 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

We are not presently a party to any legal proceedings and, to our knowledge, no such proceedings are threatened or pending.

 

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

 

No stock was sold during the three-month period ended March 31, 2016.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Submission of Matters to a Vote of Security Holders

 

No matters were submitted to our security holders for a vote during the three-month period ended March 31, 2016.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

31.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

32.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

 

	ASIA EQUITY EXCHANGE GROUP, INC.
	(Registrant)
Dated: May 12th, 2016	/s/ Liu Jun
	Liu Jun
	President, Chief Executive Officer, Secretary and Director.
	Chief Financial Officer,
	(Principal Executive, Officer) Principal Financial Officer

 

Pursuant to the requirements of 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.

 

Dated: May 12th, 2016	/s/ Peng Tao
	Peng Tao
	Treasurer and Director