UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2014
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to ____
Commission File No. 000-54126
ALPHA NETWORK ALLIANCE VENTURES INC.
(Exact name of registrant as specified in its charter)
| Delaware | 45-1649826 |
| (State or other jurisdiction of | (I.R.S. Employer |
| incorporation or organization) | Identification No.) |
11801 Pierce St., 2nd Floor
Riverside, California 92505
(Address of principal executive offices, zip code)
(888) 770-5084
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 ☒ 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 ☐ 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. (check one):
| Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer ☐ | Smaller reporting company ☒ |
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
APPLICABLE ONLY TO CORPORATE ISSUERS
As of August 14, 2014, there were 107,710,251 shares of common stock, $0.0001 par value per share, outstanding.
ALPHA NETWORK ALLIANCE VENTURES INC.
(A Development Stage Company)
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED JUNE 30, 2014
INDEX
| Index | Page | |||
| Part I. | Financial Information | |||
| Item 1. | Financial Statements | |||
| Balance Sheets as of June 30, 2014 (Unaudited) and December 31, 2013. | 1 | |||
| Statements of Operations (Unaudited) for the three and six months and ended June 30, 2014 and 2013, and for the cumulative period from inception (March 24, 2011) through June 30, 2014. | 2 | |||
| Statements of Cash Flows (Unaudited) for the six months and ended June 30, 2014 and 2013, and for the cumulative period from inception (March 24, 2011) through June 30, 2014. | 3 | |||
| Notes to Financial Statements (Unaudited). | 4 | |||
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 9 | ||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 12 | ||
| Item 4. | Controls and Procedures. | 13 | ||
| Part II. | Other Information | |||
| Item 1. | Legal Proceedings. | 13 | ||
| Item 1A. | Risk Factors. | 13 | ||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 13 | ||
| Item 3. | Defaults Upon Senior Securities. | 13 | ||
| Item 4. | Mine Safety Disclosures. | 13 | ||
| Item 5. | Other Information. | 13 | ||
| Item 6. | Exhibits. | 14 | ||
| Signatures | 14 | |||
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of Alpha Network Alliance Ventures Inc., a Delaware corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: the volatility of housing prices, the possibility that we will not receive sufficient customers to grow our business, the Company’s need for and ability to obtain additional financing, the exercise of the approximately 69.9% control the Company’s sole officer and director holds of the Company’s voting securities, other factors over which we have little or no control; and other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).
Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
ALPHA NETWORK ALLIANCE VENTURES, INC.
(A Development Stage Enterprise)
Balance Sheets
| Unaudited | Audited | |||||||
| June 30, | December 31, | |||||||
| 2014 | 2013 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 1,238 | $ | 15,465 | ||||
| Inventory | 35,942 | 11,214 | ||||||
| Total current assets | 37,180 | 26,679 | ||||||
| Property and equipment, net | 52,429 | 33,134 | ||||||
| Other assets: | ||||||||
| Held for investment property | 351,715 | 351,715 | ||||||
| Total other assets | 351,715 | 351,715 | ||||||
| Total assets | $ | 441,324 | $ | 411,528 | ||||
| LIABILITIES | ||||||||
| Current liabilities: | ||||||||
| Account payable | $ | 4,100 | $ | — | ||||
| Checks in excess of deposits | 1,655 | |||||||
| Advances from related party | 833,965 | 769,354 | ||||||
| Total current liabilities | 839,720 | 769,354 | ||||||
| Total liabilities | 839,720 | 769,354 | ||||||
| STOCKHOLDERS' DEFICIT | ||||||||
| Common stock, $.0001 par value, 8,000,000,000 shares authorized,107,710,251 and 106,754,368 shares issued and outstanding | 10,771 | 10,676 | ||||||
| Capital in excess of par value | 188,762 | 49,593 | ||||||
| Stock subscription | 1,297 | 41,605 | ||||||
| Deficit accumulated during the development stage | (599,226 | ) | (459,700 | ) | ||||
| Total stockholders' equity | (398,396 | ) | (357,826 | ) | ||||
| Total liabilities and stockholders' deficit | $ | 441,324 | $ | 411,528 | ||||
| 1 |
ALPHA NETWORK ALLIANCE VENTURES, INC.
(A Development Stage Enterprise)
Statement of Operations
Unaudited
| Cumulative, | ||||||||||||||||||||
| Inception, | ||||||||||||||||||||
| March 24, | ||||||||||||||||||||
| Three months ended | Six months ended | 2011 through | ||||||||||||||||||
| June 30, | June 30, | June 30, | June 30, | June 30, | ||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | 2014 | ||||||||||||||||
| Revenue | $ | — | $ | — | $ | — | $ | — | $ | 3,000 | ||||||||||
| Operating expenses | ||||||||||||||||||||
| Marketing expenses | 21,291 | 1,926 | 27,309 | 5,808 | 50,398 | |||||||||||||||
| General and administrative | 38,615 | 29,868 | 112,217 | 80,324 | 496,649 | |||||||||||||||
| Research and development | — | — | 12,336 | |||||||||||||||||
| Total operating expenses | 59,906 | 31,794 | 139,526 | 86,132 | 559,383 | |||||||||||||||
| (Loss) from operations | (59,906 | ) | (31,794 | ) | (139,526 | ) | (86,132 | ) | (556,383 | ) | ||||||||||
| Other income/(loss): | ||||||||||||||||||||
| Loss on abandonment | — | — | (42,843 | ) | ||||||||||||||||
| (Loss) after other expenses | (59,906 | ) | (31,794 | ) | (139,526 | ) | (86,132 | ) | (599,226 | ) | ||||||||||
| Provision/(credit) for taxes on income | — | — | — | — | — | |||||||||||||||
| Net Income/(loss) | $ | (59,906 | ) | $ | (31,794 | ) | $ | (139,526 | ) | $ | (86,132 | ) | $ | (599,226 | ) | |||||
| Basic earnings/(loss) per common share | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | ||||||||
| Weighted average number of shares outstanding | 107,333,734 | 106,948,367 | 107,333,734 | 106,948,367 | ||||||||||||||||
| 2 |
ALPHA NETWORK ALLIANCE VENTURES, INC.
(A Development Stage Enterprise)
Statement of Cash Flows
Unaudited
| Cumulative, | ||||||||||||
| Inception, | ||||||||||||
| March 24, | ||||||||||||
| Six months ended | 2010 through | |||||||||||
| June 30, | June 30, | June 30, | ||||||||||
| 2014 | 2013 | 2014 | ||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income (loss) | $ | (139,526 | ) | $ | (86,132 | ) | $ | (599,226 | ) | |||
| Adjustments to reconcile net (loss) to cash provided (used) by developmental stage activities: | ||||||||||||
| Shares issued for services | 20,625 | 20,625 | ||||||||||
| Depreciation | 2,709 | 12,340 | 13,707 | |||||||||
| Change in current assets and liabilities: | ||||||||||||
| Accounts payable | 4,100 | 4,100 | ||||||||||
| Inventory | (24,728 | ) | (1,517 | ) | (35,942 | ) | ||||||
| Loss on abandonment | ||||||||||||
| Net cash flows from operating activities | (136,820 | ) | (75,309 | ) | (596,736 | ) | ||||||
| Cash flows from investing activities: | ||||||||||||
| Purchase of fixed assets | (22,005 | ) | (66,137 | ) | ||||||||
| Recapitalization investment | 10,639 | |||||||||||
| Held for investment property | — | (351,715 | ) | |||||||||
| Net cash flows from investing activities | (22,005 | ) | — | (407,213 | ) | |||||||
| Cash flows from financing activities: | ||||||||||||
| Checks in excess of deposits | 1,655 | 1,655 | ||||||||||
| Proceeds from sale of common stock | 78,332 | 59,830 | 169,567 | |||||||||
| Related party transaction | 64,611 | 13,700 | 833,965 | |||||||||
| Net cash flows from financing activities | 144,598 | 73,530 | 1,005,187 | |||||||||
| Net cash flows | (14,227 | ) | (1,779 | ) | 1,238 | |||||||
| Cash and equivalents, beginning of period | 15,465 | 5,308 | — | |||||||||
| Cash and equivalents, end of period | $ | 1,238 | $ | 3,529 | $ | 1,238 | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOWS FOR: | ||||||||||||
| Interest | $ | — | $ | — | $ | — | ||||||
| Income taxes | $ | — | $ | — | $ | — | ||||||
| 3 |
ALPHA NETWORK ALLIANCE VENTRUES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
June 30, 2014
Note 1 - Summary of Significant Accounting Policies:
Daedalus Ventures, Inc. (the “Company”) was originally organized in the State of Delaware as on March 24, 2011.
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 tools that enable users to connect, share, discover, and communicate with each other. The software application would also allow its users to post reviews and share shopping and fashion tips and opinions or to integrate their websites. It also offers products that enable advertisers and marketers to engage with its users.
Development Stage Company
The Company is considered to be in the development stage as defined in FASB-ASC 260-10S, “Accounting and Reporting by Development Stage Enterprises”. The Company has devoted substantially all of its efforts to business planning, and development. Additionally, the Company has allocated a substantial portion of their time and investment in bringing their product to the market, and the raising of capital.
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 year ended December 31, 2013 and for the three and six months ended June 30, 2014 and 2013 and for the period March 24, 2011 (inception) through June 30, 2014.
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 and for the period ending June 30, 2014 and December 31, 2013.
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 June 30, 2014 and December 31, 2013. 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. 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.
| 5 |
ALPHA NETWORK ALLIANCE VENTRUES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
June 30, 2014
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.
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.
Recently Issued Accounting Pronouncements:
For the year ending June 30, 2014 and December 31, 2013, 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 June 30, 2014, the Company had an accumulated deficit of $599,226. 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.
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.
| 6 |
ALPHA NETWORK ALLIANCE VENTRUES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
June 30, 2014
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:
| June 30, | December 31, | |||||||
| 2014 | 2013 | |||||||
| Furniture & Equipment | $ | 7,034 | $ | 0 | ||||
| Building/Leasehold Improvements | 14,971 | 0 | ||||||
| Transportation Equipment | 44,132 | 44,132 | ||||||
| Subtotal | 66,137 | 44,132 | ||||||
| Less: Accumulated Depreciation | 13,708 | 10,998 | ||||||
| Property and equipment, net | $ | 52,429 | $ | 33,134 | ||||
The Company recorded depreciation expense of $2,709 and $12,340 for the period ending June 30, 2014 and 2013, respectively.
In 2013, the Company had a change in use on the building, improvements and land. The Company changed these assets from fixed in nature to held for investment. The balance of this held for investment property at June 30, 2014 and December 31, 2013 was $351,715.
Note 4 - Related Party Transactions:
Due to related parties included in the balance sheets as of December 31, 2013 and 2012 were loans from the Company’s director and CEO, Mr. Eleazar Rivera. He has lent the Company noninterest bearing amounts of $833,965 as of June 30, 2014 and $769,354 as of December 31, 2013. Of this amount, $533,965 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 107,710,251 shares of stock for $169,567.
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.
During the period ending March 31, 2014, the Company issued for cash 505,533 shares of stock for $75,830.
During the three month period ending June 30, 2014, the Company issued 2,000 shares for $300 cash. Additionally, the Company issued 6,667 shares for cash received in a prior period and recorded as stock subscription of $1,000.
| 7 |
ALPHA NETWORK ALLIANCE VENTRUES, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
UNAUDITED
June 30, 2014
The Company as part of a marketing campaign issued 165,000 shares of common stock to key individuals. The Company recognized an expense of $20,625 as advertising and marketing.
Note 6 - Income Taxes:
The provision (benefit) for income taxes for the years ended December 31, 2013 and 2012 were as follows:
| Year Ended December 31, | ||||||||
| 2013 | 2012 | |||||||
| Current Tax Provision: | ||||||||
| Federal- | ||||||||
| Net profit/(loss) | $ | — | $ | — | ||||
| Total current tax provision | $ | — | $ | — | ||||
| Deferred Tax Provision: | ||||||||
| Federal- | ||||||||
| Loss carryforwards | $ | 72,079 | $ | 27,698 | ||||
| Change in valuation allowance | (72,079 | ) | (27,698 | ) | ||||
| Total deferred tax provision | $ | — | $ | — | ||||
The Company had deferred income tax assets as of December 31, 2013 and 2012 were as follows:
| December 31, | ||||||||
| 2013 | 2012 | |||||||
| Loss carryforwards | $ | 156,298 | $ | 84,219 | ||||
| Less - Valuation allowance | (156,298 | ) | (84,219 | ) | ||||
| Total net deferred tax assets | $ | — | $ | — | ||||
The Company provided a valuation allowance equal to the deferred income tax assets for the years ended December 31, 2013 and 2012 because it is not presently known whether future taxable income will be sufficient to utilize the loss carryforwards.
As of December 31, 2013 and 2012, the Company had approximately $459,700 and $247,704, respectively, in tax loss carryforwards that can be utilized in future periods to reduce taxable income, and will begin to expire in the year 2037.
Note 7 – Subsequent Events
In accordance with SFAS 165 (ASC 855-10) management has reviewed events between June 30, 2014 and August 14, 2014 (the date the financials were available to be issued) and has determined that it does not have any material subsequent events to disclose in these financial statements.
| 8 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following information should be read in conjunction with (i) the consolidated financial statements of Alpha Network Alliance Ventures Inc., a Delaware corporation and development stage company, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the December 31, 2013 audited financial statements and related notes included in the Company’s most recent Annual Report on Form 10-K (File No. 000-54126), as filed with the SEC on April 15, 2014. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements.
OVERVIEW
Alpha Network Alliance Ventures Inc. is a development stage company. We were incorporated under the laws of the state of Delaware on August 12, 2010, and are engaged in the development of a social networking website, www.kababayanko.com, for overseas workers from the Philippines and others who share or are interested in their lifestyle. Our fiscal year end is December 31, and we have no subsidiaries. Our social networking website aims to provide overseas workers from the Philippines with a platform to share their overseas working and living experiences, and interact with a community of Filipino overseas workers from around the world.
Our business offices are currently located at 11801 Pierce St., 2nd Floor, Riverside, California 92505. We have a website located at www.kababayanko.com; however, the information contained on our website does not form a part of this Form 10-Q.
Going Concern
To date the Company has little operations and little revenues and consequently has incurred recurring losses from operations. No revenues are anticipated until we complete the financing described in our Registration Statement on Form S-1, as amended (File No. 333-182596), declared effective by the SEC on March 18, 2014, and implement our initial business plan. The ability of the Company to continue as a going concern is dependent on raising capital to fund our business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.
Our activities have been financed primarily from cash loans in the principal amount of $833,965 from our sole director and officer. Of this amount, $533,965 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.
| 9 |
CRITICAL ACCOUNTING POLICIES
The discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the policies below as critical to our business operations and to the understanding of our financial results:
Development Stage Company
The Company is considered to be in the development stage as defined in Statement of Financial Accounting Standards (SFAS) No. 7, “Accounting and Reporting by Development Stage Enterprises”. The Company has devoted substantially all of its efforts to business planning, and development. Additionally, the Company has allocated a substantial portion of their time and investment in bringing their product to the market, and the raising of capital.
Use of Estimates
The Company prepares financial statements in conformity with generally accepted accounting principles that require management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, they may ultimately differ from actual results.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with maturities of one year or less to be cash equivalents.
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. 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.
Fair Value of Financial Instruments
The fair value of cash and cash equivalents and accounts receivable and accounts payable approximates their carrying amount.
| 10 |
PLAN OF OPERATION
Our plan of operations over the 12 month period following successful completion of our offering (the “Offering”) registered the Form S-1, as amended, and as declared effective by the SEC on March 18, 2014, is as follows, assuming the sale of 25%, 50%, 75% and 100%, respectively, of the securities offered for sale by the Company in the Form S-1:
| If 25% of Shares Sold |
If 50% of Shares Sold |
If 75% of Shares Sold |
If 100% of Shares Sold | |
| Gross proceeds from this offering | ($)937,500 | ( $)1,875,000 | ($)2,812,500 | ($)3,750,000 |
| Product Development | ||||
| OCW (Overseas Contract Workers) Social Networking Site | 75,000 | 150,000 | 225,000 | 300,000 |
| Global Karaoke Social Networking Sites | 75,000 | 150,000 | 225,000 | 300,000 |
| EBID services | 50,000 | 100,000 | 150,000 | 200,000 |
| PC/MAC and Mobile VOIP Provider (All Mobiles Systems) |
100,000 | 200,000 | 300,000 | 400,000 |
| Global Social Market Place Platform | 25,000 | 50,000 | 75,000 | 100,000 |
| Healthy Aging Social Channel | 75,000 | 150,000 | 225,000 | 300,000 |
| Web/graphic design | 60,000 | 120,000 | 180,000 | 240,000 |
| Equipment/servers | 35,000 | 70,000 | 105,000 | 140,000 |
| VoIP connectivity fees | 25,000 | 50,000 | 75,000 | 100,000 |
| Sales/marketing Assistant | 75,000 | 150,000 | 225,000 | 300,000 |
| Marketing & Company collateral | 125,000 | 250,000 | 375,000 | 500,000 |
| Media Advertising | 50,000 | 100,000 | 150,000 | 200,000 |
| Office Lease | 20,000 | 40,000 | 60,000 | 80,000 |
| Office Equipment | 15,000 | 30,000 | 45,000 | 60,000 |
| Offices Expenses | 42,500 | 85,000 | 127,500 | 170,000 |
| Telephone | 7,500 | 15,000 | 22,500 | 30,000 |
| Miscellaneous/contingency | 37,500 | 75,000 | 112,500 | 150,000 |
| Legal and Accounting | 37,500 | 75,000 | 112,500 | 150,000 |
| Transfer Agent | 1,500 | 2,000 | 2,500 | 3,000 |
| Contingency | 6,000 | 13,000 | 20,000 | 27,000 |
| TOTALS | $937,500 | $1,875,000 | $2,812,500 | $3,750,000 |
We currently do not have any arrangements regarding the Offering or following this Offering for further financing and we may not be able to obtain financing when required. Our future is dependent upon our ability to obtain further financing, the successful development of our planned business consulting services, a successful marketing and promotion program, and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There are no assurances that we will be able to obtain further funds required for our continued operations. Even if additional financing is available, it may not be available on terms we find favorable. At this time, there are no anticipated sources of additional funds in place. Failure to secure the needed additional financing will have an adverse effect on our ability to remain in business.
| 11 |
Results of Operations
Three and Six Months Ended June 30, 2014 and 2013
We recorded no revenues for the three months June 30, 2014 and 2013. From the period of March 24, 2011 (inception) to June 30, 2014, we recorded $3,000 in revenues. Future revenue generation is dependent on the successful execution of our plan of operation and the financing described in our Form S-1, as amended.
For the three months ended June 30, 2014 we incurred total operating expenses and losses of $59,906, consisting of $38,615 of general and administrative expenses and $21,291 of marketing expenses. By contrast, for the three months ended June 30, 2013, we incurred total operating expenses and losses of $31,794, consisting of general and administrative expenses of $29,868 and marketing expenses of $1,926.
For the six months ended June 30, 2013 we incurred total operating expenses and losses of $139,526, consisting of $112,217 of general and administrative expenses and $27,309 of marketing expenses. By contrast, for the six months ended June 30, 2013, we incurred total operating expenses and losses of $86,132, consisting of general and administrative expenses of $80,324 and marketing expenses of $5,808.
From the period of March 24, 2011 (inception) to June 30, 2014, we incurred operating expenses of $559,383, and a net loss of $599,226.
Liquidity and Capital Resources
At June 30, 2014, we had a cash balance of $1,238. We do not have sufficient cash on hand to commence our 12-month plan of operation or to fund our ongoing operational expenses. We will need to raise funds to commence our 12-month plan of operation and fund our ongoing operational expenses. Additional funding will likely come from equity financing from the sale of our common stock. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our 12-month plan of operation and ongoing operational expenses. In the absence of such financing, our business will likely fail. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our 12-month plan of operation and our business will fail.
Subsequent Events
None through date of this filing.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.
| 12 |
ITEM 4. CONTROLS AND PROCEDURES.
DISCLOSURE CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, our principal executive officer and our principal financial officer are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective as of June 30, 2014.
There were no changes in the Company’s internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.
ITEM 1A. RISK FACTORS
As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
None.
ITEM 5. OTHER INFORMATION.
None.
| 13 |
ITEM 6. EXHIBITS.
(a) Exhibits required by Item 601 of Regulation SK.
| Exhibit | Description | |
| 2.1 | Agreement and Plan of Merger dated June 1, 2011 by and between Registrant and Alpha Network Alliance Ventures Inc. (1) | |
| 3.1.1 | Certificate of Incorporation of Registrant (2) | |
| 3.1.2 | Certificate of Merger (3) | |
| 3.1.3 | Certificate of Amendment to Articles of Incorporation (3) | |
| 3.1.3 | Form of Certificate of Change (2) | |
| 3.2 | Bylaws (2) | |
| 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2 | Certification of 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 Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS * | XBRL Instance Document | |
| 101.SCH * | XBRL Taxonomy Extension Schema Document | |
| 101.CAL * | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF * | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB * | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE * | XBRL Taxonomy Extension Presentation Linkbase Document |
| * | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
| (1) | Incorporated by reference to the Registrant’s Form 8-K (File No. 000-54126) filed with the Commission on June 13, 2011. |
| (2) | Incorporated by reference to the Registrant’s Form 10 (File No. 000-54126) filed with the Commission on September 23, 2010. |
| (3) | Incorporated by reference to the Registrant’s Form S-1 (File No 333-182596) filed with the Commission on July 10, 2012. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ALPHA NETWORK ALLIANCE VENTURES INC. | |||
| (Name of Registrant) | |||
| Date: August 19, 2014 | By: | /s/ Eleazar Rivera | |
| Name: Eleazar Rivera | |||
| Title: President, Secretary and Treasurer (principal executive officer, principal financial officer, and principal accounting officer) | |||
| 14 |
EXHIBIT INDEX
| Exhibit | Description | |
| 2.1 | Agreement and Plan of Merger dated June 1, 2011 by and between Registrant and Alpha Network Alliance Ventures Inc. (1) | |
| 3.1.1 | Certificate of Incorporation of Registrant (2) | |
| 3.1.2 | Certificate of Merger (3) | |
| 3.1.3 | Certificate of Amendment to Articles of Incorporation (3) | |
| 3.1.3 | Form of Certificate of Change (2) | |
| 3.2 | Bylaws (2) | |
| 31.1 | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2 | Certification of 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 Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS * | XBRL Instance Document | |
| 101.SCH * | XBRL Taxonomy Extension Schema Document | |
| 101.CAL * | XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF * | XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB * | XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE * | XBRL Taxonomy Extension Presentation Linkbase Document |
| * | XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections. |
| (1) | Incorporated by reference to the Registrant’s Form 8-K (File No. 000-54126) filed with the Commission on June 13, 2011. |
| (2) | Incorporated by reference to the Registrant’s Form 10 (File No. 000-54126) filed with the Commission on September 23, 2010. |
| (3) | Incorporated by reference to the Registrant’s Form S-1 (File No 333-182596) filed with the Commission on July 10, 2012. |
| 15 |
EXHIBIT 31.1
SECTION 302 CERTIFICATION OF
PRINCIPAL EXECUTIVE OFFICER OF ALPHA NETWORK ALLIANCE VENTURES INC.
I, Eleazar Rivera, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Alpha Network Alliance Ventures Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: August 19, 2014 | /s/ Eleazar Rivera |
| Eleazar Rivera | |
| President, Secretary and Treasurer | |
| (principal executive officer, principal financial officer, and principal accounting officer) |
EXHIBIT 31.2
SECTION 302 CERTIFICATION OF
PRINCIPAL FINANCIAL OFFICER OF ALPHA NETWORK ALLIANCE VENTURES INC.
I, Eleazar Rivera, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Alpha Network Alliance Ventures Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a–15(e) and 15d–15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: August 19, 2014 | /s/ Eleazar Rivera |
| Eleazar Rivera | |
| President, Secretary and Treasurer | |
| (principal executive officer, principal financial officer, and principal accounting officer) |
EXHIBIT 32.1
SECTION 906 CERTIFICATION OF PRINCIPAL
EXECUTIVE OFFICER AND
PRINCIPAL FINANCIAL OFFICER OF ALPHA NETWORK ALLIANCE VENTURES INC.
In connection with the accompanying Quarterly Report on Form 10-Q of Alpha Network Alliance Ventures Inc. for the quarter ended June 30, 2014, the undersigned, Eleazar Rivera, President of Alpha Network Alliance Ventures Inc., does hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) such Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in such Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 fairly presents, in all material respects, the financial condition and results of operations of Alpha Network Alliance Ventures Inc.
| Date: August 19, 2014 | /s/ Eleazar Rivera |
| Eleazar Rivera | |
| President, Secretary and Treasurer | |
| (principal executive officer, principal financial officer, and principal accounting officer) |
|
Related Party Transaction
|
6 Months Ended |
|---|---|
|
Jun. 30, 2014
|
|
| Related Party Transactions [Abstract] | |
| Related Party Transaction | Note 4 - Related Party Transactions:
Due to related parties included in the balance sheets as of December 31, 2013 and 2012 were loans from the Company’s director and CEO, Mr. Eleazar Rivera. He has lent the Company noninterest bearing amounts of $833,965 as of June 30, 2014 and $769,354 as of December 31, 2013. Of this amount, $533,965 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. |