The following discussion should be read in conjunction with our audited
financial statements and the related notes that appear elsewhere in this annual
report. The following discussion contains forward-looking statements based upon
current expectations that involve risks and uncertainties, such as our plans,
objectives, expectations and intentions. Actual results and the timing of events
could differ materially from those anticipated in these forward-looking
statements as a result of a number of factors, including those set forth under
the Item 1A. Risk Factors, Cautionary Notice Regarding Forward-Looking
Statements and Business sections in this Form 10-K. We use words such as
"anticipate," "estimate," "plan," "project," "continuing," "ongoing," "expect,"
"believe," "intend," "may," "will," "should," "could," and similar expressions
to identify forward-looking statements.
Our audited financial statements are stated in United States Dollars and are
prepared in accordance with Generally Accepted Accounting Principles of the
United States of America (the U.S. GAAP).
Overview
We are currently a "shell company" with no meaningful assets or operations other
than our efforts to identify and merge with an operating company.
The Company was incorporated on June 15, 2006 under the laws of the State of
Nevada as Jupiter Resources, Inc. 75,000,000 shares of stock was authorized all
as Common par value $0.001, and no other classes of stock were authorized. On
March 27, 2007, we entered into an agreement with Ms. Helen Louise Robinson of
Vernon, British Columbia, whereby she agreed to sell to us one mineral claim
located approximately 30 kilometers northwest of Vernon, British Columbia in an
area having the potential to contain silver or copper mineralization or
deposits. In order to acquire a 100% interest in this claim, we paid $7,500 to
Ms. Robinson. However, we were unable to keep the mineral claim in good standing
due to lack of funding and our interest in it has lapsed.
10
On March 25, 2009, the articles were amended to authorize an addition of 10
million preferred shares making a total of 85,000,000 shares authorized (75M
common, 10 preferred).
On April 30, 2009 the company filed an amendment to change the name of the
corporation to Rineon Group, Inc. On March 30, 2009, Jupiter Resources, Inc.
(the "Company") entered into a binding letter of intent (the "Letter of Intent")
with NatProv Holdings, Inc., a British Virgin Islands corporation ("Natprov").
Pursuant to the terms of the Letter of Intent, Natprov and the Company will
commence the negotiation and preparation of a definitive share exchange
agreement which shall contain customary representations, warranties and
indemnities as agreed upon by Natprov, the Company and the shareholders of
Natprov, whereby the Company, Natprov and the shareholders of Natprov will
complete a share exchange transaction (the "Transaction") on or before May 26,
2009, subject to certain conditions precedent to the closing of the Transaction.
On May 01, 2009 the Company filed a Certificate of Designation to designate
36,000 shares of Series A Convertible Preferred Stock, out of the 10 million
preferred stock. These shares have no votes for matters brought before the
common shareholders, only with matters regarding the Series A shares where they
will be the only voters. They can convert into common but cannot at anytime
convert to hold more than 4.95% of the issued and outstanding common shares.
On May 14, 2009 the Company entered into a preferred stock purchase agreement
dated as of April 30, 2009 (the "Preferred Stock Purchase Agreement") under
which the Company sold an aggregate of 36,000 shares of its Series A convertible
preferred stock (the "Series A Preferred Stock") to Intigy Absolute Return Ltd.,
a British Virgin Islands corporation ("Intigy"), for a purchase price of
$36,000,000, or $1,000 per share of Series A $.001 Par Value Preferred Stock. In
addition, pursuant to the terms of a stock purchase agreement dated as of May
14, 2009, Rineon agreed to acquire 1,985,834 shares of Amalphis from NatProv
Holdings Inc ("NatProv") for a total consideration of $36,000,000. Of the
2,437,500 shares of Amalphis held by NatProv, 1,985,834 were converted into
Class A Preferred non-voting shares, which were then assigned by NatProv to
Rineon. As a result, NatProv now owns 451,666 Common Shares of Amalphis,
representing 100% of the voting shares of Amalphis, and Rineon owns 1,985,834 of
Amalphis' Class A Preferred Shares which have the same rights and privileges as
the common shares except that they have a liquidation preference and no voting
rights. Amalphis' Class A Preferred Shares are not convertible into Common
Shares.
The transactions consummated as set forth above resulted in a change of control
of the Company. In connection with such change in control, on May 14, 2009, the
board of directors of the Company authorized a change in the fiscal year end of
the Company from May 31 to December 31.
Amalphis Group, Inc., ("Amalphis") was formed in July 2008 as a British Virgin
Islands (BVI) Business Company. Amalphis, through its wholly owned subsidiary
Allied Provident, Inc. ("API"), offers customized reinsurance products in
markets where traditional reinsurance alternatives are limited. In addition,
Amalphis was formed to directly sell a variety of property and casualty
insurance products to businesses around the world. In September 2008, Amalphis
acquired API, an entity that issues customized reinsurance to a United States
insurance carrier that offers automotive insurance coverage to drivers who are
unable to obtain insurance from standard carriers. API was formed in Barbados on
November 9, 2007 by NatProv Holdings Inc., ("NatProv") a British Virgin Islands
corporation.
There was no business activity between the filing of the Form 15 on November 10,
2010, and prior to August 9, 2018. The Company had Exchange Act disclosure
requirements from January 11, 2008 to November 10, 2010. The Company has no
knowledge or records related to the assets referenced above and therefor there
is some level of uncertainty in the above descriptions.
Prior Company management was unresponsive to shareholders and had refused to
respond to requests to meet statutory requirements to get current with the
secretary of state and with the required filings of the Securities and Exchange
Commission ("SEC").
On August 9, 2018, XTC, Inc. was appointed to serve as the custodian of the
Company in a shareholder filed action with the Eighth Judicial District Court in
Clark County, Nevada and was instructed to revive the Company. XTC, Inc. was a
shareholder of record as shown in the court documents (500 shares) attached as
Exhibit 99.1 to this Current Report. XTC acquired its 500 common shares on June
14, 2018 in the open market at a price of $0.05 per share.
Enclosed as Exhibit 99.1 hereto are the entire court records, from filing to
closing documents.
11
On September 25, 2018, the Company filed a Certificate of Designation whereby
the following preferred shares were designated by the Company and the rights,
privileges and designations of the Series A Convertible PreferredStock were
amended and restated.
· The number of Series A Convertible Preferred Stock was increased from 36,000
to 1,000,000.
· 3,000,000 Series B Preferred Stock were created with no voting rights, and
conversion rights of 1000:1, with the restriction that holders cannot convert
to hold more the 4.95% of issued and outstanding common stock.
· 1,000,000 Series C Preferred Stock were created. (each Series C shall have
100,000 vote per share, with 1:1 conversion rights.
On September 25, 2018, the Company issued 964,000 shares of Series A Convertible
Preferred shares to XRC, LLC at $0.001 per share and 1,000,000 shares of Series
C Convertible Preferred shares at $0.001 per share to XRC, LLC, a company
controlled by Chris Lotito, in exchange for paying the costs to revive the
company with the State of Nevada, giving it voting control.
On September 28, 2018, a shareholders meeting was held wherein the shareholders
gave the board authority to reorganize the Company, including making a possible
name change, and/or engaging in a reverse stock split. In addition, the Series A
shareholders voted to approve a reverse split of 1 preferred share for each
1,000 shares outstanding of the Series A Convertible Preferred and to authorize
a new designation.
On October 1, 2018, the Company made filings with the Nevada Secretary of State
to change our name to "AS Capital, Inc." and to exercise a 10 to 1 reverse stock
split for the Common stock and a 1,000 to 1 reverse of the Series A Convertible
Preferred, with conversion rights of 1 common share for every 12,000 shares of
Series A Convertible Preferred Stock held. As a result, the number of issued and
outstanding Series A Convertible Preferred Stock was reduced to 1,000 shares.
On December 6, 2018, the Court granted an Order discharging the custodian and
approved all actions taken by the custodian.
Change in Control
On June 4, 2019, AS Capital, Inc., a Nevada corporation ("we," "ASIN" or the
"Company"), XRC, LLC, a Colorado limited liability company ("XRC") and Gao Xue
Ran ("Purchaser") entered into a Stock Purchase Agreement (the "SPA"), pursuant
to which Purchaser agreed to purchase from XRC 11,000,000 shares of common stock
of the Company, par value $0.0001, and 964 shares of Series A Convertible
Preferred Stock Preferred Stock of the Company, par value $0.00001
(collectively, the "Shares"), for aggregate consideration of Four Hundred and
Ten Thousand Dollars ($410,000) in accordance with the terms and conditions of
the SPA. XRC is the controlling shareholder of the Company. On June 13, 2019,
and in anticipation of the sales transaction with Ms. Gao, the Company assigned
its line of credit and the current balance due thereunder, including all
outstanding principal and accrued interest, to XRC in consideration of
10,000,000 shares of common stock of the Company. At the time of the transfer,
$48,595 was due under the line of credit. At the same time XRC converted its
1,000,000 shares of Series C Convertible Preferred Stock into 1,000,000 shares
of common stock. Chris Lotito is the managing member of XRC.
The acquisition of the Shares consummated on July 18, 2019, and the Shares were
ultimately purchased by the following three individuals using their own personal
funds:
Percentage of Issued and
Name No. of Shares Outstanding Consideration Paid
Gao Xue Ran 8,581,063 of Common Stock; 76.61% $319,840
964 shares of Series A
Preferred Stock
Zhang Yan Hua 1,935,633 of Common Stock 17.28% $72,146
Cheung Kwok Chiu Kris 483,304 of Common Stock 4.31% $18,014
12
Immediately after the acquisition, Ms. Gao held a controlling interest in the
Company and could unilaterally determine the election of the Board and other
substantive matters requiring approval of the Company's stockholders.
Upon the consummation of the sale of the Shares, Chris Lotito, our Chief
Executive Officer and sole director, and John Karatzaferis, our President,
resigned from all of their positions with the Company, effective July 18, 2019.
Their resignations were not due to any dispute or disagreement with the Company
on any matter relating to the Company's operations, policies or practices.
Concurrently with such resignations, Gao Xue Ran was appointed to serve as the
Chief Executive Officer, Chief Financial Officer, President, Secretary and sole
Director of the Company, until the next annual meeting of stockholders of the
Company and until such director's successor is elected and qualified or until
such director's earlier death, resignation or removal. None of the directors or
executive officers has a direct family relationship with any of the Company's
directors or executive officers, or any person nominated or chosen by the
Company to become a director or executive officer. Ms. Gao will serve in her
positions without compensation.
We are in active discussions with an operating business affiliated with our
executive officers regarding potential acquisition. There is no assurance that
we will be able to successfully acquire such company or any company in the near
future.
Limited Operating History; Need for Additional Capital
We have had limited operations and have been issued a "going concern" opinion by
our auditor, based upon our reliance on the sale of our common stock and loans
from a related party, as the sole source of funds for our future operations.
There is no historical financial information about us upon which to base an
evaluation of our performance. We have not generated any revenues from
operations. We cannot guarantee we will be successful in our business
operations. Our business is subject to risks inherent in the establishment of a
new business enterprise, including limited capital resources, possible delays in
the launching of our games and market or wider economic downturns. We do not
believe we have sufficient funds to operate our business for the next 12 months.
We have no assurance that future financing will be available to us on acceptable
terms, or at all. If financing is not available on satisfactory terms, we may be
unable to continue, develop or expand our operations. Equity financing could
result in additional dilution to existing shareholders. If we are unable to
raise additional capital to maintain our operations in the future, we may be
unable to carry out our full business plan or we may be forced to cease
operations.
Going Concern
Our financial statements have been prepared on a going concern basis which
assumes the Company will be able to realize its assets and discharge its
liabilities in the normal course of business for the foreseeable future. As of
December 31, 2019, the Company had working capital deficiency of $142,659 and
has incurred losses since its inception resulting in an accumulated deficit of
$36,254,706. Further losses are anticipated in the development of the business,
raising substantial doubt about the Company's ability to continue as a going
concern. The financial statements do not include any adjustment that might
result from the outcome of this uncertainty.
The ability to continue as a going concern is dependent upon the Company
generating profitable operations in the future and/or to obtain the necessary
financing to meet its obligations and repay its liabilities arising from normal
business operations when they come due. Management intends to finance operating
costs over the next twelve months with loans from directors and/or private
placements of common stock.
13
Results of Operations
The following tables provide selected financial data about our company as of and
for the years ended December 31, 2019 and 2018.
Balance Sheet Data
December 31, December 31,
2019 2018
Cash $ - $ 65
Total Assets $ - $ 65
Total Liabilities $ 142,659 $ 48,595
Stockholders' Deficit $ (142,659 ) $ (48,530 )Summary Income Statement Data
For the Years Ended December 31,
2019 2018
Net Revenues $ - $ -
Total Operating Expenses 153,516 30,248
Loss Before Income Taxes (153,516 ) (32,562 )
Net Loss $ (153,516 ) $ (32,562 )Revenue. During the fiscal years ended December 31, 2019, and 2018, we did not
generate any revenues.
Operating Expenses. Operating expenses were $153,516 and $30,248 for the years
ended December 31, 2019 and 2018, respectively. Operating expenses mainly
consisted of professional fees and office and miscellaneous expenses. The
increase in operating expenses resulted primarily from the addition of
professional fees, such as, US legal, audit and consulting expenses. We expect
our operating expenses to increase once we identify and consummate the
acquisition of an operating company.
Loss Before Income Taxes. For the years ended December 31, 2019, and 2018, we
incurred a loss before income taxes of $153,516 and $32,562, respectively. The
increase in loss from operations was attributable to the addition of
professional fees.
Net Loss. For the years ended December 31, 2019, and 2018, we incurred a net
loss of $153,516 and $32,562, respectively. The increase in net loss was
primarily attributable to the addition of professional fees.
14
Liquidity and Capital Resources
Working Capital
December 31, December 31,
2019 2018 Change %
Current Assets $ - $ 65 (65 ) (100 %)
Current Liabilities 142,659 48,595 94,064 193.5 %
Working Capital Deficit $ (142,659 ) $ (48,530 ) 94,129 193.9 %
As of December 31, 2019, we had working capital deficit of $142,659 as compared
to working capital deficit of $48,530 as of December 31, 2018. The increase in
working capital deficit was mainly due to increase in general and administrative
expense.
Cash Flows
Year Ended
December 31, Year Ended
2019 December 31, 2018
Net cash used in operating activities $ (131,920 ) $ 65
Net cash provided by investing activities $ - $ -
Net cash provided by financing activities $ 131,855 $ -
Cash Flow from Operating Activities
During the year ended December 31, 2019, net cash used in operating activities
was $131,920, compared to $65 for the year ended December 31, 2018. Net cash
used in operating activities consisted of a net loss of $153,516 offset by an
increase in accrued liabilities of $21,596. The increase in net cash used in
operating activities was mainly due to the increase in accrued liabilities.
During the year ended December 31, 2018, net cash used in operating activities
consisted of a net loss of $32,562 offset by an increase in accrued liabilities
of $24,967 and $7,660 recognized in connection with the issuance of preferred
stock as payment of expenses.
Cash Flow from Investing Activities
During the years ended December 31, 2019, and 2018, we had no cash flow from
investing activities.
Cash Flow from Financing Activities
During the year ended December 31, 2019, financing activities provided net cash
of $131,855, consisting of proceeds from a director of $121,063, Xue Ran Gao and
proceeds from related parties of $19,700, and offset by repayments of $8,908 to
Chris Lotito, the former CEO.
During the year ended December 31, 2018, financing activities did not provide
any net cash.
15
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures, or capital resources that is material to investors.
Critical Accounting Policies
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America ("U.S. GAAP") requires
estimates and assumptions that affect the reported amounts of assets and
liabilities, revenues and expenses, and related disclosures of contingent assets
and liabilities in the financial statements and accompanying notes. The SEC has
defined a company's critical accounting policies as the ones that are most
important to the portrayal of the company's financial condition and results of
operations, and which require the company to make its most difficult and
subjective judgments, often as a result of the need to make estimates of matters
that are inherently uncertain. Based on this definition, we have not identified
any additional critical accounting policies and judgments. We also have other
key accounting policies, which involve the use of estimates, judgments and
assumptions that are significant to understanding our results, which are
described in Note 3 to our financial statements. Although we believe that our
estimates, assumptions and judgments are reasonable, they are based upon
information presently available. Actual results may differ significantly from
these estimates under different assumptions, judgments or conditions.
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