Notes
to the Financial Statements
For
the Three Months ended March 31, 2016 (Unaudited)
1.
Organization, Development Stage and Going Concern
Asia
Properties, Inc. (the “Company”) was incorporated in Nevada, the United States of America on April 6, 1998. Our management
intends to seek opportunities to invest in real estate. The Company currently does not hold any material property interests.
These
financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and settlement
of liabilities in the normal course of business. The Company is in the development stage and has not yet realized profitable operations
and has relied on non-operational sources to fund operations. The Company has suffered recurring losses and additional future
loses are anticipated as the Company has not yet been able to generate revenue. In addition, as of December 31, 2015, the Company
has a working capital deficiency of $277,861 (2014 -$1,333,539) and an accumulated deficit of $6,013,689 (2014 -$5,049,367). The
Company’s ability to continue, as a going concern is dependent on successfully executing its business plan, which includes
the raising of additional funds. The Company will continue to seek additional forms of debt or equity financing, but it cannot
provide assurances that it will be successful in doing so. These circumstances raise substantial doubt as to the ability of the
Company to meet its obligations as they come due and accordingly, the appropriateness of the use of accounting principles applicable
to a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern. Such adjustment could be material.
2.
Summary of Significant Accounting Policies
Basis
of Presentation
The
financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United
States of America (“US GAAP”) and are expressed in United States dollars (“USD”).
The
financial statements include the accounts of the Company and its wholly-owned subsidiary, Asia Properties (HK) Limited. Significant
intercompany accounts and transactions have been eliminated.
On
January 2, 2015, the Company disposed of all its shares of Asia Properties (HK) Limited at $nil. As the subsidiary was inactive
and did not have any net assets on the date of disposal, this transaction did not have any financial impact.
Use
of Estimates
In
preparing the financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements
and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
The significant areas requiring the use of management estimates are related to the accrued liabilities. Although these estimates
are based on management’s knowledge of current events and actions management may undertake in the future, actual results
may ultimately differ materially from those estimates.
Cash
and Cash Equivalents
The
Company considers all highly liquid investments purchases with original maturities of three months or less to be cash equivalents.
At March 31, 2016 and December 31, 2015, the Company had $903 and $842 in cash respectively. The Company did not have any cash
equivalents as of March 31, 2016 and December 31, 2015.
Asia
Properties, Inc.
Notes
to the Financial Statements
For
the Three Months ended March 31, 2016 (Unaudited)
(Stated
in US Dollars)
2.
Summary of Significant Accounting Policies (continued)
Income
Taxes
The
Company accounts for income taxes in accordance with ASC 740. The Company provides for federal and provincial income taxes payable,
as well as for those deferred because of the timing differences between reporting income and expenses for financial statement
purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for
income tax purposes. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recoverable or settled. The effect of a change in
tax rates is recognized as income or expense in the period of the change. A valuation allowance is established, when necessary,
to reduce deferred income tax assets to the amount that is more likely than not to be realized.
Asia
Properties, Inc.
Notes
to the Financial Statements
For
the Three Months ended March 31, 2016 (Unaudited)
(Stated
in US Dollars)
2.
Summary of Significant Accounting Policies (continued)
Fair
Value of Financial Instruments
ASC
820 defines fair value, establishes a framework for measuring fair value and expands required disclosure about fair value measurements
of assets and liabilities. ASC 820-10 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 820-10 also establishes a fair value hierarchy, which requires an entity
to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes
three levels of inputs that may be used to measure fair value:
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Level
1 – Valuation based on quoted market prices in active markets for identical assets or liabilities.
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Level
2 – Valuation based on quoted market prices for similar assets and liabilities in active markets.
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Level
3 – Valuation based on unobservable inputs that are supported by little or no market activity, therefore requiring management’s
best estimate of what market participants would use as fair value.
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In
instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy,
the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input
that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular
input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
Fair
value estimates discussed herein are based upon certain market assumptions and pertinent information available to management.
The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term
nature of these instruments or interest rates that are comparable to market rates. These financial instruments include cash, and
accounts payable and accrued liabilities. The Company’s cash, which is carried at fair value, is classified as a Level 1.
The Company’s bank accounts are maintained with financial institutions of reputable credit, therefore, bear minimal credit
risk
Earnings
(Loss) Per Share
The
Company has adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”)
Topic 260-10 which provides for calculation of “basic” and “diluted” earnings per share. Basic earnings
per share includes no dilution and is computed by dividing net income or loss available to common stockholders by the weighted
average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities
that could share in the earnings of an entity. Diluted earnings per share exclude all potentially dilutive shares if their effect
is anti-dilutive. There were no potentially dilutive shares outstanding as at March 31, 2016 and December 31, 2015.
Foreign
Currency Translation
The
functional currency of the Company is the U.S. dollar. Certain monetary assets and liabilities of the Company denominated in Canadian
dollars are remeasured into U.S. dollars at exchange rates in effect at the balance sheet dates. Non-monetary assets and liabilities
are remeasured at historical exchange rates, unless such items are carried at market, in which case they are translated at the
exchange rates in effect on the balance sheet date. Revenues and expenses are remeasured at rates approximating the exchange rates
in effect at the time of the transaction. During the periods ended March 31, 2016 and December 31, 2015, substantially all cash
expenses were transacted in U.S. dollars.
Asia
Properties, Inc.
Notes
to the Financial Statements
For
the Three Months ended March 31, 2016 (Unaudited)
(Stated
in US Dollars)
2.
Summary of Significant Accounting Policies (continued)
Share-Based
Payments
The
Company accounts for share-based payments in accordance with the provision of ASC 718, which requires that all share-based payments
issued to acquire goods or services, including grants of employee stock options, be recognized in the statement of operations
based on their fair values, net of estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and
revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Compensation expense related to
share-based awards is recognized over the requisite service period, which is generally the vesting period.
The
Company accounts for stock based compensation awards issued to non-employees for services, as prescribed by ASC 718-10, at either
the fair value of the services rendered or the instruments issued in exchange for such services, whichever is more readily determinable,
using the guidelines in ASC 505-50. The Company issues compensatory shares for services including, but not limited to, executive,
management, accounting, operations, corporate communication, financial and administrative consulting services.
Comprehensive
(Loss)
ASC
220 “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components
and accumulated balances. The net loss is equivalent to the comprehensive loss for the periods presented.
Asia
Properties, Inc.
Notes
to the Financial Statements
For
the Three Months ended March 31, 2016
Recent
Accounting Pronouncements
The
Company adopted the accounting pronouncement issued by the FASB to update guidance on how companies account for certain aspects
of share-based payments to employees. This pronouncement is effective for fiscal years beginning after December 15, 2016, and
interim periods within those years, with early adoption permitted. This guidance requires all income tax effects of awards to
be recognized in the income statement when the awards vest or are settled and changes the presentation of excess tax benefits
on the statement of cash flows. The Company adopted these provisions on a prospective basis. In addition, this pronouncement changes
guidance on: (a) accounting for forfeitures of share-based awards and (b) employers’ accounting for an employee’s
use of shares to satisfy the employer’s statutory income tax withholding obligation. The adoption of this pronouncement
did not have a material impact on the Company’s financial position and/or results of operations.
In
February 2016, an accounting pronouncement was issued by the FASB to replace existing lease accounting guidance. This pronouncement
is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding
lease liabilities on the balance sheet for most leases. Expenses associated with leases will continue to be recognized in a manner
similar to current accounting guidance. This pronouncement is effective for annual and interim periods beginning after December
15, 2018, with early adoption permitted. The adoption is required to be applied on a modified retrospective basis for each prior
reporting period presented. The Company has not yet determined the effect that the adoption of this pronouncement may have on
financial position and/or results of operations.
On
January 1, 2016, the Company adopted the accounting pronouncement issued by the FASB which eliminates the requirement that an
acquirer in a business combination account for measurement-period adjustments retrospectively. Instead, an acquirer will recognize
a measurement-period adjustment during the period in which it determines the amount of the adjustment. The adoption of this pronouncement
did not have a material impact on the financial position and/or results of operations.
On
January 1, 2016, the Company adopted the accounting pronouncement issued by the FASB to update the guidance related to the presentation
of debt issuance costs. This guidance requires debt issuance costs, related to a recognized debt liability, be presented in the
balance sheet as a direct deduction from the carrying amount of the related debt liability rather than being presented as an asset.
The Company adopted this pronouncement on a retrospective basis, and the adoption did not have a material impact on the financial
position and/or results of operations.
In
November 2015, an accounting pronouncement was issued by the FASB to simplify the presentation of deferred income taxes within
the balance sheet. This pronouncement eliminates the requirement that deferred tax assets and liabilities are presented as current
or noncurrent based on the nature of the underlying assets and liabilities. Instead, the pronouncement requires all deferred tax
assets and liabilities, including valuation allowances, be classified as noncurrent. This pronouncement is effective for fiscal
years beginning after December 15, 2016, with early adoption permitted. The Company intends to adopt this pronouncement on January
1, 2017, and the adoption will not have a material impact on the financial position and/or results of operations.
3.
Line of Credit
The
Company has a revolving credit facility with Wells Fargo for a maximum business line amount of $62,500. Interest is charged at
12.75% annually. As at March 31, 2016, the balance amounted to $52,252 (December 31, 2015 - $50,310). The line of credit is secured
personally by a shareholder of the Company.
4.
Common Stock
The
following table summarizes common stock issuances for the years ended as of December 31, 2015 and 2014:
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Number
of Shares
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Common
Stock
Amount
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Balance
as of December 31, 2014
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43,199,362
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43,199
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Shares issued
for debt settlement at $0.07-$0.12 per share
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a
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24,000,000
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24,000
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Shares issued
for investment and held in escrow
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b
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-
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-
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Balance as of
December 31, 2015
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67,199,362
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67,199
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a)
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On
January 1, 2015 and January 2, 2015, the Company issued 6,800,000 and 17,200,000 shares of common stock at $0.12 and $0.07
per share respectively (which was the market value of the shares of the Company on transaction date) to settle a debt of $1,257,801
owed to a former director of the Company. Accordingly, the Company recorded a loss of $762,199 on conversion of debt.
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b)
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On
January 19, 2015, the Company issued 950,000,000 shares of restricted common stock for the purchase of 100% shares of Asia
Innovation Technology Limited and its assets. The acquisition has not yet closed on the date of this filing and the shares
are held in escrow as disclosed in Note 3.
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The
Company’s authorized capital consists of 2,000,000,000 shares of common stock. At December 31, 2015, there were 1,017,199,362
shares of common stock issued and outstanding (December 31, 2014 - 43,199,362 shares) comprising of 982,186,650 restricted shares,
including 950,000,000 shares of restricted common stock for the purchase of 100% shares of Asia Innovation Technology Limited
and its assets, as disclosed above and 35,012,712 non-restricted shares (2014: 3,609,650 restricted shares and 39,589,712 non-restricted
shares). These restricted shares will be available for sale under Rule 144 of the Securities Act of 1933, as amended, when the
conditions of Rule 144 have been met.
5.
Pending Transaction
On
January 6, 2015, the Company signed a Sale and Purchase Agreement (the “Agreement”) to acquire 100% of the shares
of Asia Innovation Technology Limited, a Hong Kong corporation (“AITL”), registered in the British Virgin Islands.
Pursuant to the Agreement, the Company agreed to issue 950 million restricted common shares of the Company to the shareholders
of AITL in exchange of 100% of the shares of AITL and all of its assets.
As
per clause 6.4 of the Agreement, shares issued shall be held in escrow and shall be deemed to be in full control of the Company
until the closing of transaction which is outstanding, pending completion of certain conditions relating to the valuation of assets
to be acquired and audit of the financial position.
The
Company issued 950,000,000 shares, which are held in escrow. The transaction has not yet been closed, pending completion of the
above closing conditions. Upon closing, the transaction will be recorded in accordance with the guidance provided under ASC Topic
805 - Business Combination.
6.
Subsequent Events
Effective
April 14, 2017, the Company has executed a Sale and Purchase Agreement (the “Agreement”) to acquire 100% of the shares
and assets Sino King Management Limited, (“SKML”) a company incorporated under the laws of British Virgin Islands.
Pursuant to the Agreement, Asia Properties, Inc. has agreed to issue 600 million restricted common shares of the Company to acquire
100% of the shares and assets of SKML.
Additionally,
at the Closing, ASPZ shall deliver to SKML, Stock certificate(s) representing six hundred million shares issued in the name or
names designated by SKML. It is understood that the stock certificates so delivered will display the required restrictive legend
pursuant to Rule 144 of the United States Securities and Exchange Act.
The
Agreement further states that both Parties agree that all shares issued, pursuant to the terms and conditions of the agreement,
shall be held in escrow and shall be deemed to be in the full control of Asia Properties, Inc. until the Closing.
