REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

To the Board of Directors and Shareholders of
Alpha Network Alliance Ventures Inc.

 

We have audited the accompanying balance sheets of Alpha Network Alliance Ventures Inc. (the “Company”) as of December 31, 2017 and 2016, and the related statements of operations, changes in stockholders’ deficits and statements of cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (Untied States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Alpha Network Alliance Ventures Inc. as of December 31, 2017 and 2016, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note #2 to the financial statements, although the Company has limited operations it has yet to attain profitability. This raises substantial doubt about its ability to continue as a going concern. Management’s plan in regard to these matters is also described in Note #2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

  

 

/s/ Yu Certified Public Accountant PC

New York, New York

April 15, 2018

 

Certified Public Accountants

149 Madison Avenue, Suite 1128, New York NY 10016

Tel: 347-618-9237, 718-813-2130

Email: Info@ywlcpa.com

 

	ALPHA NETWORK ALLIANCE VENTURES, INC.
	A Development Stage Company
	Table of Contents
Balance Sheets:
December 31, 2017 and 2016	F-1
Statements of Operations:
For the years ended December 31, 2017 and 2016	F-2
Statements of Cash Flows:
For the years ended December 31, 2017 and 2016	F-3
Statement of Shareholders' Deficit	F-4
Notes to Financial Statements:
December 31, 2017 and 2016	F-5

 

	ALPHA NETWORK ALLIANCE VENTURES, INC.
	A Development Stage Company
	Balance Sheets
	Audited

 

		December  31,				December  31,
		2017				2016
ASSETS
Current assets:
Cash		$	2,068			$	10,833
Accounts receivable			41,557				61,836
Total current assets			43,625				72,669
Property and equipment, net			10,089				16,381
Total assets		$	53,714			$	89,050
LIABILITIES
Current liabilities:
Related Party:
Advances from related party		$	857,421			$	746,212
Accounts payable			37,559				—
Accrued compensation			1,250,000				625,000
Total current liabilities			2,144,980				1,371,212
Total liabilities			2,144,980				1,371,212
STOCKHOLDERS' DEFICIT
Common stock, $.0001 par value, 8,000,000,000 shares authorized,113,405,751 and 113,405,751 shares issued and outstanding, respectively			11,341				11,341
Capital in excess of par value			903,664				903,664
Deficit accumulated during the development stage			(3,006,271	)			(2,197,167	)
Total stockholders' deficit			(2,091,266	)			(1,282,162	)
Total liabilities and stockholders' deficit		$	53,714			$	89,050

 

	ALPHA NETWORK ALLIANCE VENTURES, INC.
	A Development Stage Company
	Statements of Operations
	Audited

 

		Year ended				Year ended
		December 31,				December 31,
		2017				2016
Revenue		$	84,070			$	59,463
Cost of revenue			59,900				38,175
Gross profit			24,170				21,288
General and Administrative expneses:
Marketing expenses			314				244
Wages			656,495				301,500
Rent			1,365				1,593
Travel			40,092				25,289
Professional			68,454				27,376
Office supplies			431				456
Computer and internet			17,229				15,879
Other general and administrative expenses			48,894				24,735
Total operating expenses			833,274				397,072
Net loss			(809,104	)			(375,784	)
Other comprehensive income/(loss)			—				—
Comprehensice income/(loss)		$	(809,104	)		$	(375,784	)
Basic earnings/(loss) per common share		$	(0.01	)		$	(0.00	)
Weighted average number of shares outstanding			113,405,751				113,405,751

 

 

	ALPHA NETWORK ALLIANCE VENTURES, INC.
	A Development Stage Company
	Statements of Cash Flows
	Audited

 

		Year ended				Year ended
		December 31,				December 31,
		2017				2016
Cash flows from operating activities:
Net loss		$	(809,104	)		$	(375,784	)
Adjustments to reconcile net (loss) to cash provided (used) by developmental stage activities:
Shares issued for services
Depreciation			6,292				6,292
Change in current assets and liabilities:
Accounts receivable			20,279				(26,919	)
Accounts Payable			37,559				—
Accrued compensation			625,000				300,000
Inventory			—				3,765
Net cash used from operating activities			(119,974	)			(92,646	)
Cash flows from investing activities:
Net cash flows provided in investing activities			—				—
Cash flows from financing activities:
Loan from related party			111,209				98,973
Net cash flows provided by financing activities			111,209				98,973
Net increase (decrease) in cash flows			(8,765	)			6,326
Cash and equivalents, beginning of period			10,833				4,507
Cash and equivalents, end of period		$	2,068			$	10,833
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS FOR:
Interest		$	—			$	—
Income taxes		$	—			$	—

 

 

	ALPHA NETWORK ALLIANCE VENTURES, INC.
	(A Development Stage Enterprise)
	Statement of Shareholders' Deficits
	Audited

 

																		(Deficit)
																		Accumulated
										Additional								During the
		Common stock								Paid-in				Stock				Development
		Shares				Amount				Capital				Subscription				Stage				Totals
Balance, March 24, 2011 (Inception)			75,000,000			$	7,500			$	3,139			$	—			$	—			$	10,639
Reverse recapitalization			31,390,000				3,139				(3,139	)							—				—
Net (loss) for the period			—				—				—								(171,567	)			(171,567	)
Balance, December 31, 2011			106,390,000				10,639				—				—				(171,567	)			(160,928	)
Issuance of common stock to new shareholders			158,500				16				18,734												18,750
Net (loss) for the period																			(76,137	)			(76,137	)
Balance, December 31, 2012			106,548,500				10,655				18,734				—				(247,704	)			(218,315	)
Common stock issued			205,868				21				30,859												30,880
Stock Subscription															41,605								41,605
Net (loss) for the period																			(211,996	)			(211,996	)
Balance, December 31, 2013			106,754,368				10,676				49,593				41,605				(459,700	)			(357,826	)
Common stock issued for cash			514,317				51				78,281												78,332
Common stock issued for Services			5,322,000				532				632,666												633,198
Shares issued for subscription			277,366				28				41,577				(41,605	)							—
Net (loss) for the period																			(834,590	)			(834,590	)
Balance, December 31, 2014			112,868,051			$	11,287			$	802,117			$	—			$	(1,294,290	)		$	(480,886	)
Common stock issued for Services			537,700				54				101,547												101,601
Net (loss) for the period																			(527,093	)			(527,093	)
Balance, December 31, 2015			113,405,751			$	11,341			$	903,664			$	—			$	(1,821,383	)		$	(906,378	)
Net (loss) for the period																			(375,784	)			(375,784	)
Balance, December 31, 2016			113,405,751			$	11,341			$	903,664			$	—			$	(2,197,167	)		$	(1,282,162	)
Net (loss) for the period																			(809,104	)			(809,104	)
Balance, December 31, 2017			113,405,751			$	11,341			$	903,664			$	—			$	(3,006,271	)		$	(2,091,266	)

ALPHA NETWORK ALLIANCE VENTRUES, INC.

 (A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

AUDITED

 

December 31, 2017

 

Note 1 - Summary of Significant Accounting Policies:

 

The Company was originally organized in the State of Delaware on March 24, 2011 as Daedalus Ventures, Inc.

 

In December 2011 the Company completed a merger with Alpha Network Alliance Ventures Inc. Immediately upon the completion of the merger, the Company changed its name to Alpha Network Alliance Ventures Inc.

 

The Company is focused on building and operating a social networking software application and other internet driven applications. The Company builds Social Network Marketing tools that enable buyers, sellers, users to connect, share, discover and communicate with each other. The software application also allows its users to post reviews and share shopping and fashion tips and opinions or to integrate their 3^rd party websites or shopping store sites. It also offers products that enable companies, advertisers and marketers to engage with its users using a Social Network Marketing campaign and Social Medial Marketing campaign platform to boost the sales and membership for every affiliate who wants to participate.

 

The Company’s market is mostly Overseas Contract Workers (OCW) and majority is from the Philippines. The Company decided that it’s appropriate to sell our KababayanKo.com Premium Packages membership with products included to be more attractive and lucrative to every affiliate who buys and upgrades to Premium Packages Membership, and as a result of the promotion they can also purchase the products inside Kababayanko.com Market Place if they want it more.

 

During 2014, The Company also moved its primary operations to the Philippines.  The purpose of this move was to better centrally locate to its primary market.  Additionally, the Company plans to recognize lower costs and better distribution.

 

Recognizing the efficiency and cost effectivity of its operations in the Philippines, the company appointed an independent distributor that will primarily handle the distribution of its product in the Philippines. As a result of this, during 2015, the company has moved its primary operations back in the California, United States.

 

The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding to operationalize the Company’s market penetration before another company develops a similar product.

 

The Company is in the development stage as defined under Statement on Financial Accounting Standards Accounting Standards Codification FASB ASC 915-205 "Development-Stage Entities.” The Company has adopted the new provision of FASB ASC 915-275 and is not reporting inception to date activities as previously required.

 

Basis of presentation

The accompanying financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments, consisting of normal recurring adjustments, which management believes are necessary to fairly present the financial position, results of operations and cash flows of the Company for the years ended December 31, 2017 and December 31, 2016.

 

ALPHA NETWORK ALLIANCE VENTRUES, INC.

 (A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

AUDITED

 

December 31, 2017

 

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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

Cash and cash equivalents

The Company maintains a cash balance in a non-interest-bearing account that currently does not exceed federally insured limits. For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. There were no cash equivalents as of December 31, 2017 and December 31, 2016.

 

Fair value of financial instruments and derivative financial instruments

The Company’s financial instruments include cash, accounts payable, and notes payable. All instruments are accounted for on a historical cost basis, which, due to the short maturity of these financial instruments, approximates fair value at December 31, 2017 and December 31, 2016. The Company did not engage in any transaction involving derivative instruments.

 

Inventory

Inventory is recorded at the lower of cost or market and is computed on a first-in first-out basis. The inventory consists of weight loss products, energy and performance solutions products and healthy aging solution products.

 

Property and Equipment 

Property and equipment are stated at cost. Major repairs and betterments are capitalized and normal maintenance and repairs are charged to expense as incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the related assets. Office and general equipment are depreciated over useful lives of 10 years and leasehold improvements are depreciated shorter of term lease and useful life of 20 years. Upon retirement or sale of an asset, the cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operations.

 

Federal income taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted Accounting Standards Codification 740.10.05 “Accounting for Income Taxes” as of its inception. Pursuant to Accounting Standards Codification 740.10.05, the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward to future years. The U. S. Tax Act known as Tax Cuts and Jobs Act (the “2017 Act”) signed on December 22, 2017 may have changed the consequences to U. S. shareholders that own, or are considered to own, as a result of the attribution rules, 10% or more of the voting power or value of a non-U. S. corporation ( a “10% U.S. shareholder) under the U.S. Federal income tax law applicable to owners of U.S. controlled foreign corporations (“CFCs”). We did not believe any of our shareholders, or our subsidiaries were CFCs, and there will be no such impact for 2017 Act for the year ended December 31, 2017.

 

 

ALPHA NETWORK ALLIANCE VENTRUES, INC.

 (A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

AUDITED

 

December 31, 2017

 

Net income per share of common stock

Net loss per share is provided in accordance with FASB ASC 260-10, “Earnings per Share”. Basic net loss per common share ("EPS") is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is computed by dividing net income by the weighted average shares outstanding, assuming all dilutive potential common shares were issued, unless doing so is anti-dilutive.

 

Common Stock Registration Expenses

The Company considers incremental costs and expenses related to the registration of equity securities with the SEC, whether by contractual arrangement as of a certain date or by demand, to be unrelated to original issuance transactions.  As such, subsequent registration costs and expenses are reflected in the accompanying financial statements as general and administrative expenses, and are expensed as incurred.

 

Research and Development

Costs for research and development, including predevelopment efforts prior to establishing technological feasibility of software expected to be marketed, are expensed as incurred. Development costs are capitalized when technological feasibility has been established and anticipated future revenues support the recoverability of the capitalized amounts. Capitalization stops when the product is available for general release to customers. The Company has not capitalized any software development, and has expensed these costs as incurred. These costs are included in research and development expense.

 

Revenue Recognition:

The company recognizes revenues when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those good or services. The company generates wholesale revenues primarily from sale of products to retailers or distributors who are mostly Overseas Contract Workers (OCW) and majority is from the Philippines. The company typically extend credit terms to its wholesale customers based on their creditworthiness and generally do not receive advance payments. As such, we record accounts receivable at the time of shipment, when our right to the consideration becomes unconditional. Accounts receivable from our wholesale customers are typically due within 30 to 60 days of invoicing. An allowance for doubtful accounts is provided based on a periodic analysis of individual accounts balances, including an evaluation of days outstanding, payment history, recent payment trends, and the company’s assessment of its customers’ creditworthiness, As of December 31, 2017 and 2016, no allowance for doubtful accounts has been provided.

 

Recently Issued Accounting Pronouncements:

For the year ended December 31, 2017 and the year ended December 31, 2016, the Company does not expect any of the recently issued accounting pronouncements to have a material impact on its financial condition or results of operations.

 

Note 2 - Uncertainty, going concern:

 

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs to allow it to continue as a going concern. As of December 31, 2017, the Company had an accumulated deficit of $3,006,271. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

ALPHA NETWORK ALLIANCE VENTRUES, INC.

 (A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

AUDITED

 

December 31, 2017

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is contemplating conducting an offering of its debt or equity securities to obtain additional operating capital. The Company is dependent upon its ability, and will continue to attempt, to secure equity and/or debt financing. There are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to continue as a going concern.

 

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. 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.

Note 3 – Property and Equipment, net

 

Property and equipment at year-end consisted of:

 

		December 31,				December 31,
		2017				2016
Transportation Equipment		$	44,132			$	44,132
Less: Accumulated Depreciation			34,043				27,751
Property and equipment, net		$	10,089			$	16.381

 

The Company recorded depreciation expense of $6,292 and $6,292 for the year ended December 31, 2017 and 2016, respectively.

 

Note 4 - Related Party Transactions:

 

Due to related parties included in the balance sheets as of December 31, 2017 and December 31, 2016 were loans from the Company’s director and CEO, Mr. Eleazar Rivera. He has lent the Company noninterest bearing amounts of $857,421 as of December 31, 2017 and $746,212 as of December 31, 2016. Of this amount, $557,421 is designated as advances from stockholders, while $300,000 is designated as deposit for future share subscriptions. No subscribed shares are outstanding that cannot be legally issued until paid for. These advances are unsecured and there are no terms for repayment.

 

Note 5 - Common Stock:

 

Since inception, the Company has issued 108,531,251shares of stock for $169,567 cash.

 

During the year ended December 31, 2012, the Company issued for cash 158,500 shares of stock for $18,750

 

During the year ended December 31, 2013, the Company issued for cash 205,868 shares of stock for $30,800. Additionally, the Company received $43,887 cash for 277,366 unissued shares of common stock. These shares were issued in the first quarter 2014.

 

 

ALPHA NETWORK ALLIANCE VENTRUES, INC.

 (A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

AUDITED

 

December 31, 2017

 

The Company had the following stock transactions for the year ended December 31, 2014:

 

The Company issued 277,366 shares of stock for the funds received and recorded as a stock subscription for the period ending December 31, 2013.

 

The Company issued 514,317 shares of stock for 78,332 cash.

 

The company had no new shares issued for the years 2017, 2016 and 2015.

 

Note 6 – Employment Contract

 

On November 24, 2014, the Company entered into an employment agreement with its Chief Executive Officer and majority shareholder for a (5) five year employment agreement. The employment agreement calls for an annual salary of $300,000 plus a monthly bonus of 2% of all sales paid on a monthly basis. The agreement also includes a 10% increase every December 1^st. This contract renews on an annual basis following the (5) year term and can be canceled by the Company or the employee.

 

On December 1, 2017, another employment agreement, with the same terms and conditions, was entered into by the company with its Chairman of the board.

 

The balance of this accrued compensation as of December 31, 2017 was $1,250,000. The balance at December 31, 2016 was $625,000.

 

Note 7 - Subsequent Events

 

Alpha’s management has evaluated events occurring between December 31, 2017 and April 15, 2018, which is the date of the financial statements were available to be issued, and has recognized in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at April 15, 2018, including the estimates inherent in the processing of the financial statements.

 

On April 4, 2018, the company filed with the Securities and Exchange Commission a registration statement (Form S-1) under the Securities Act of 1933 to register securities for initial public offering of 100,000,000 shares of common stock at a fixed price $0.45 per share and 10,000,000 shares of common stock offered by selling stockholders at an initial price of $0.45 and may eventually be offered at prevailing market prices or privately negotiated prices. The offering is being conducted on a self-underwritten, best effort basis, which means that management, will attempt to sell the shares. The common stock offered by the selling stockholders will not be sold until the company sells all of the 100,000,000 sales in its offering.

 

 

ALPHA NETWORK ALLIANCE VENTRUES, INC.

 (A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

AUDITED

 

December 31, 2017

 

Any funds that will be raised from the offering of 100,000,000 common shares shall be immediately available for use as follows:

 

	Product Development			10%			Expansion to 10 countries			20%
	Infrastructure			10%			Inventory for 6 months allocations			25%
	Executive salaries			10%			Legal and accounting			2%
	Staff salaries			20%			Transfer agent, contingencies
							And other expenses			3%
	Total									100%

 

The offering price of the 100,000,000 shares being offered has been determined arbitrarily by the management. The price does not bear any relationship to the company’s assets, book value, earnings, or other established criteria for valuing a privately held company. In determining the number of shares to be offered and the offering price, the company took into consideration its cash on hand and the amount of money that would need to implement its business plan. Accordingly, the offering price should not be considered an indication of the actual value of the securities. The will not receive any of the proceeds from the sale of the 10,000,000 common shares being offered for sale by the selling stockholders, which 10,000,000 shares of our common stock may be offered and sold from time to time by the selling stockholders. The selling shareholders will sell our shares at prevailing market prices or privately negotiated prices.

 

The common shares being offered for resale by the 2 selling stockholders consist 5,000,000 of our common stock, $0.0001 par value. The following table sets forth the shares beneficially owned, as of the date of the prospectus, by the selling stockholders prior to the offering by existing stockholders contemplated by this prospectus, the number of shares each selling stockholder is offering by this prospectus and the number of shares which each would own beneficially if all such offered shares are sold.

Beneficial ownership is determined in accordance with Securities and Exchange Commission rules. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.

 

The percentages below are calculated based on 113,405,751 shares of our common stock issued and outstanding as of the date of the prospectus. The company does not have any outstanding options, warrants or other securities exercisable for or convertible into shares of our common stock. None of the selling stockholders is a broker-dealer or an affiliate of a broker-dealer.

 

ALPHA NETWORK ALLIANCE VENTRUES, INC.

 (A DEVELOPMENT STAGE ENTERPRISE)

NOTES TO FINANCIAL STATEMENTS

AUDITED

 

December 31, 2017

 

Name of Selling Shareholder		Shares Owned Before the Offering				Total Number of Shares to be Offered for the Security Holder’s Account				Total Shares Owned After the Offering is complete				Percentage of Shares Owned After the Offering is complete
Eleazar Rivera (1)			50,543,020				5,000,000				45,543,020				21.34%
Ronie Tan (2)			51,418,000				5,000,000				46,418,000				21.75%
Totals			101,961,020				10,000,000				91,961,020				43.09%