See accompanying notes to these unaudited consolidated financial statements.
See accompanying notes to these unaudited consolidated financial statements.
See accompanying notes to these unaudited consolidated financial statements.
Notes to Consolidated Financial Statements
(Unaudited)
Note 1 - Nature of Business and Significant Accounting Policies
Nature of Business
Asteriko Corp. was incorporated on April 17, 2014 under the laws of the state of Nevada. The Company provides customers with unique and innovative solutions for their decorative needs. The Company’s initial product is lattice panels designed for suspended ceiling.
On November 25, 2016, pursuant to a stock purchase agreement reached by and between Ilia Tomski, the Company's President and CEO, and Kido Inter Co. Limited (“Kido”) which is wholly owned by Ms. Somporn Phatchan, Kido acquired 5,000,000 shares of common stock of the Company for cash consideration of $246,000. Kido's total share ownership is equivalent to 70.62% ownership of the Company, constituting control. In connection with the stock purchase transaction, the Company distributed cash of $3,266 and property and equipment of $2,040 to Ilia Tomski. On November 25, 2016, Ilia Tomski resigned his official position as President and CEO of the Corporation, and on the same day the shareholders of the Corporation voted Ms. Somporn Phatchan as Director and CEO of the Company, and Eng Wah Kung as Chief Financial Officer and Director; and Yun Chen Zou as Chief Operating Officer and Director.
On December 17, 2016, the Company acquired 100% equity interest in Astral Investments Limited (“Astral”), a British Virgin Islands (BVI) company incorporated and owned by Ms. Somporn, with a consideration of $50,000. Since the Company and Astral are under common control of Ms. Somporn Phatchan, the acquisition was recorded as a transaction between entities under common control. Astral had no assets, liabilities, or any operations since its establishment on October 4, 2016. The consideration is of the same amount as Astral's registered capital, neither of which was paid as of the filing date.
On December 17, 2016, Ms. Somporn Phatchan, on behalf of Astral, paid MOP 25,000 (appropriately $3,205) to owners of Star Alliance Macau Ltd. (“SA Macau”) to take over its ownership. SA Macau was incorporated on December 18, 2015 and had no assets, liabilities, or any operations since its establishment and prior to the takeover. The amount paid was recorded as compensation cost. The Company intends to build SA Macau as its cost center in the future.
On February 2, 2017, Astral acquired 100% equity interest in Star Alliance Inter Co., Limited (“SA Thailand”), a Thailand company incorporated and owned by Ms. Somporn, with a consideration of THB10,000,000 (appropriately $285,489). Since Astral and SA Thailand are under common control of Ms. Somporn Phatchan, the acquisition was recorded as a transaction between entities under common control. SA Thailand had no assets, liabilities, or any operations since its establishment on July 22, 2016 and prior to the acquisition.
The Company intends to provide travel and adventure packages to MICE (Meeting, Incentive, Convention, Events) tourists primarily in the Asia region. Services and products to be provided by SA Thailand will initially include pre-arranged tours, customized packages according to clients’ specifications, travel consultation, and as time progresses making reservations for lodging amongst other related services.
The Company owned the following subsidiaries on December 31, 2016. The following table depicts the identity of our 100% owned subsidiaries:
Name of Subsidiary
|
|
Place of Incorporation
|
Astral Investments Limited (“Astral”)
|
|
BVI
|
Star Alliance Macau Ltd. (“SA Macau”)
|
|
Macau
|
Note 2 - Significant and Critical Accounting Policies and Practices
Basis of Presentation
The consolidated financial statements are prepared in accordance with generally accepted accounting principles used in the United States of America. The accompanying unaudited interim financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the audited financial statements and notes thereto contained in the Company's latest Annual Report on Form 10-K filed with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of operations for the interim periods presented have been reflected herein. The results of operations for such interim periods are not necessarily indicative of operations for the full year. Notes to the financial statements which would substantially duplicate the disclosure contained in the audited financial statements for the most recent fiscal year, as reported in the Form 10-K for the fiscal year ended June 30, 2016, have been omitted.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries of which are under common control and ownership. The consolidated financial statements herein contain the operations of the wholly-owned subsidiaries listed above. All significant inter-company transactions have been eliminated in the preparation of these financial statements.
Asteriko Corp.
Notes to Consolidated Financial Statements
(Unaudited)
Use of Estimates
The preparation of consolidated financial statements that conform with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Management makes these estimates using the best information available at the time, however, actual results could differ materially from those estimates.
Property, Plant and Equipment
Property, plant and equipment are recorded at the lower of cost or estimated net recoverable amount, and is depreciated using the straight-line method over the estimated useful lives of 5 years of the related assets.
Maintenance and repairs will be charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of property, plant and equipment, the cost and accumulated depreciation will be removed from the accounts and any resulting gain or loss will be reflected in operations.
The Company will assess the recoverability of property, plant and equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.
Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for significant deferred tax assets when it is more likely than not, that such asset will not be recovered through future operations.
Fair Value of Financial Instruments
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
Asteriko Corp.
Notes to Consolidated Financial Statements
(Unaudited)
Authoritative literature provides a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement as follows:
Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 - Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
Level 3 - Unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability.
The Company's financial instruments consist principally of cash and accounts payables. The carrying amounts of such financial instruments in the accompanying balance sheets approximate their fair values due to their relatively short-term nature.
Transactions involving related parties cannot be presumed to be carried out on an arm's-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm's-length transactions unless such representations can be substantiated.
It is not, however, practical to determine the fair value of amounts due to related parties due to their related party nature.
Foreign Currency Translation
The accompanying consolidated financial statements are presented in United States dollars (USD). The functional currency of the Company’s operating business is Hong Kong Dollars (HKD). The consolidated financial statements are translated into USD from HKD at period-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.
The Hong Kong Monetary Authority ("HKMA"), Hong Kong's central bank, maintains a Linked Exchange Rate System since 1983. The HKMA operates Convertibility Undertakings on both the strong side and the weak side of the Linked Rate of US$1: HK$7.8. Thus, the consistent exchange rate used has been 7.80 HKD per each USD.
Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. All of our revenue transactions are transacted in the functional currency. We have not entered into any material transactions that are either originated, or to be settled, in currencies other than the HKD or USD. Accordingly, transaction gains or losses have not had, and are not expected to have a material effect on our results of operations.
Basic and Diluted Loss per Common Share
The basic net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing the net loss adjusted on an “as if converted” basis, by the weighted average number of common shares outstanding plus potential dilutive securities. For the periods presented, there were no outstanding potential common stock equivalents and therefore basic and diluted earnings per share result in the same figure.
Asteriko Corp.
Notes to Consolidated Financial Statements
(Unaudited)
Recently Issued Accounting Pronouncements
In January 2017, the FASB issued ASU 2017-01, “
Business Combinations (Topic 805): Clarifying the Definition of a Business
”. These amendments clarify the definition of a business. The amendments affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this ASU are effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted under certain circumstances. The amendments should be applied prospectively as of the beginning of the period of adoption. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.
Note 3 - Going Concern
The accompanying financial statements have been prepared assuming that the Company continues as a going concern. The Company has a history of operating losses. As shown in the accompanying financial statements, the Company has accumulated deficit of $158,695 and negative working capital of $136,474 as of December 31, 2016, and net loss of $115,841 and negative cash flows in operating activities of $3,932 for the six months ended December 31, 2016. Due to these conditions, it raises substantial doubt about its ability to continue as a going concern.
However, after the takeover by new management on November 25, 2016, the Company, through its 100% indirectly owned subsidiary SA Thailand, which was acquired on February 2, 2017, is principally engaged in providing pre-arrange tours, customized packages according to clients’ specifications and travel consultation services. We believed after the new business implemented, we will able to generate sufficient revenue to cover the expenses and report profits in year 2017.
The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that may result should the Company be unable to continue as a going concern.
Asteriko Corp.
Notes to Consolidated Financial Statements
(Unaudited)
Note 4 - Related Party Transactions
Advances and loans from related parties
The Company's officers, directors and related parties, from time to time, provided advances and loans to the Company for working capital purpose. These advances are short-term in nature, non-interest bearing and unsecured and payable on demand. The due to related parties amounts on December 31, 2016 and June 30, 2016 were as follows:
Name of related parties
|
|
Relationship with the Company
|
|
Category
|
|
December 31,
2016
|
|
|
June 30,
2016
|
|
Somporn Phatchan
|
|
Current controlling shareholder and director
|
|
Advance
|
|
$
|
4,218
|
|
|
$
|
-
|
|
Ilia Tomski
|
|
Former controlling shareholder and CEO
|
|
Related party loans
|
|
$
|
30
|
|
|
$
|
1,199
|
|
Ilia Tomski
|
|
Former controlling shareholder and CEO
|
|
Note payable
|
|
$
|
25,000
|
|
|
$
|
18,000
|
|
SA Thailand
|
|
Entity under common control of Somporn Phatchan
|
|
Advance
|
|
$
|
107,140
|
|
|
$
|
-
|
|
Acquisition of subsidiaries from Related Party
On December 17, 2016, the Company acquired 100% equity interest in Astral with a consideration of $50,000. The Company and Astral are under common control of Ms. Somporn Phatchan and the acquisition was accounted for as a transaction between entities under common control.
On February 2, 2017, Astral acquired 100% equity interest in SA Thailand with a consideration of THB10,000,000 (appropriately $285,489). Astral and SA Thailand are under common control of Ms. Somporn Phatchan and the acquisition was accounted for as a transaction between entities under common control.
Also refer to Note 1 for details.
Note 5 - Subsequent Events
On January 6, 2017, the Company filed with Secretary of State of Nevada to change its name to Star Alliance International Corp. and conduct a forward split of the Company’s common stock at the rate of 5:1. The Company is still waiting for the Financial Industry Regulatory Authority’s approval for the changes to be effective as of the filing date.