FSTJ First America Resources Corporation (PK)

 

 

 

 

 

 

NOTES TO FINANCIAL STATEMENTS

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NOTE A- BUSINESS DESCRIPTION

First America Resources Corporation formerly known as Golden Oasis New Energy Group, Inc. (the “Company”), incorporated under the laws of Nevada on May 10, 2010 with registered address at 1955 Baring Blvd, Sparks, NV 89434. First America Resources Corporation wholly owned branch located in the State of Illinois and has principal office at 1000 E Armstrong ST Morris IL 60450 .

On February 6, 2013, pursuant to an Agreement between Mr. Keming Li, former   CEO/President and Director of Golden Oasis New Energy Group Inc., a Nevada corporation (the “Issuer”), Ms. Guoling Jin, former Treasury and Director of Golden Oasis New Energy Group Inc, and Ms. Madison Li (the stockholder), of Golden Oasis New Energy Group Inc, and Mr. Jian Li (the “Purchaser”), Mr. Jian Li became the principal stockholder and Chief Executive Officer and Tzongshyan George Sheu the Vice-president and director of the Company.

 

In connection with this change of control, we discontinued our current business. It is anticipated we will acquire First America Metal Corporation of business and what business does, a business owned primarily by Mr. Jian Li, in the next few months depending upon completion of audit of the First America Metal Corporation and preparation of required filing on Form 8-K.

 

Going Concern and Plan of Operation

The Company's financial statements have been presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company is in the development stage and has not earned any profit from operations to date. These conditions raise substantial doubt about its ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect certain amounts reported in the financial statements and disclosures. Accordingly, actual results could differ from those estimates.

 

NOTE B – SIGNIFICANT ACCOUNTING POLICIES

Development Stage Company

The Company is considered to be in the development stage as defined FASB ASC Topic 915, “ Development Stage Entities ”. The Company has devoted substantially all of its efforts to the corporate formation, the raising of capital and attempting to raise sales.

Basis of accounting

The financial statements reflect the assets, revenues and expenditures of the Company on the accrual basis of accounting.

The Company’s fiscal year end is June 30.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of September 30, 2013, there was $ 6,385 cash and cash equivalents.

Property, Plant, and Equipment Depreciation

Property, plant, and equipment are stated at cost. Depreciation is being provided principally by straight line methods over the estimated useful lives of the assets. As of September 30, 2013, there was no fixed asset in the Company’s balance sheets.

Stock-Based Compensation

The Company accounts for stock issued for services using the fair value method. In accordance with FASB ASC Topic 718, “Compensation - Stock Compensation”, the measurement date of shares issued for services is the date at which the counterparty’s performance is complete.

On March 31, 2011, 100,000 shares were issued to Michael Williams for legal services of $10,000 at $0.10 per share.

On June 13, 2012, 50,000 shares were issued to Pivo Associates for services of $5,000 at $0.10 per share.

On July 1, 2013, 120,000 shares were issued to Williams Security Law Firm for legal services of $12,000 at $0.10 per share.

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Comprehensive Income

Basic and Diluted Net Loss per Common Share

The Company computes per share amounts in accordance with FASB ASC Topic 260, “Earnings per Share”. ASC 260 requires presentation of basic and diluted EPS.

Basic EPS is computed by dividing the income (loss) available to Common Shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods.

As of September 30, 2013, the Company only issued one type of shares, i.e., common shares only. There are no other type of securities were issued. Accordingly, the diluted and basic net loss per common share is the same.

Inventory

As of September 30, 2013, the Company had Zero inventory.

 

Revenue Recognition

I n accordance with the FASB Accounting Standards Codification (ASC) 605-15-25 “Revenue Recognition for Sales of Product”, the Company recognizes revenue when it is realized or realizable and earned. The revenue from the product sales transaction shall be recognized at time of sale if the following conditions are met:

 

·	The seller's price to the buyer is substantially fixed or determinable at the date of sale.

 

·	The buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product.

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition (Continued)

 

·	The buyer's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product.

 

·	The buyer acquiring the product for resale has economic substance apart from that provided by the seller.

 

·	The seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer.

 

·	The amount of future returns can be reasonably estimated.

 

In accordance with paragraph 4-14 of FASB ASC 605-45, "Reporting Revenues Gross as a Principal versus Net as an Agent", the Company will recognize revenues on a gross basis. ASC 605-45, paragraph 4-14 discusses whether revenues and cost of goods sold to arrive at gross profit and their corresponding assets and liabilities should be recorded at gross or net. The following indicators of gross revenue recognition will be applicable in the Company:

·

Acts as principal in the transaction, Entity Is the Primary Obligor in the Arrangement. The Company will purchase the products from supplier(s) and will responsible for the acceptability of the products, store the products in our warehouse as inventory. The current leased property is a warehouse with office suite. For whole purchase and selling cycle, the Company acts as principal and primary obligator throughout the whole purchase to selling transaction.

·

Has risk and rewards of ownership, such as general inventory risk, risk of loss for collection, delivery and returns. Based on the signed distribution agreement, the supplier ship the products FOB at shipping point, after shipping, the Company will take care of the products loss, and after receiving the products the Company will store all products in leased warehouse and incur risk of loss inventory. After selling to customers, the Company is also responsible for risk of loss for delivery, return, and collection of receivable.

·

Takes title to the products. The Company will take title to the products before customers order them. The Company will retail its purchased products to general public through e-commerce or online selling. All customer orders and its shipments to customers will be responsible of the Company, not supplier(s).

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition (Continued)

·	Flexibility in pricing. The retail price to customers will be responsible of the Company according to the market competitions.

·	Assumes credit risk. The Company will assume collection and receivable risks.

·

The company can change the products or perform part of the service, and the Company is involved in the determination of products or service specifications based on customer’s needs. At the beginning of the Company’s development stage, the Company will not change the products. After the products purchased by the Company and stored in warehouse, the Company will display our products on our website or through e-bay, the interested customers will click the specific product items to complete purchase orders. After the development stage, the Company will develop its own design and will customize the products according to customers’ request.

Though the Company signed a one-year term distribution agreement with ZHEJIANG UNITED POWER ENERGY CO., LTD, the Company can have alternatives to choose other more competitive suppliers if it is necessary. Accordingly, all gross revenue indicators are positive to support the Company is a gross revenue report entity.

All the indicators of net revenue reporting (ASC 605-45, paragraph 16-23) will not be applicable in the Company.

The Company had total revenue of $ 0.00 and $7,093 for the fiscal quarter ended at September 30, 2013 and 2012 respectively.

Cost of Goods Sold

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cost of Goods Sold (Continued)

For the fiscal quarter ended September 30, 2013 and 2012, a total of $0.00 and $4,423 Cost of Goods Sold was recorded.

Operating Expense

Operating expense consist of selling, general and administrative expenses.

For the fiscal quarter ended September 30, 2013 and 2012, the Company incurred $ 29,957 and $ 21,403 operating expenses respectively, and $ 183,645 of operation expenses incurred for the period of May 10, 2010 date of inception to September 30, 2013.

Detail as showed at Exhibit A at the end of the financial notes.

Professional Fees

Professional fees consist of accounting and auditing fees, legal fees, SEC filling fees, and other professional fees.

For the fiscal quarter ended September 30, 2013 and 2012, the Company incurred $27,150 and $18,738 respectively, and $145,693 of professional fees expense incurred for the period of May 10, 2010 date of inception to September 30, 2013.

Income Tax

Income taxes are provided for tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes. Deferred taxes are recognized for differences between the basis of assets and liabilities for financial statement and income tax purposes. The differences in asset and liability basis relate primarily to organization and start-up costs (use of different methods and periods to calculate deduction). Deferred taxes are also recognized for operating losses and tax credits that are available to offset future income taxes. The deferred tax assets and/or liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. The components of the deferred tax asset and liability are classified as current and concurrent based on their characteristics. Valuation allowances are provided for deferred tax assets based on management’s projection of the sufficiency of future taxable income to realize the assets.

 

 

 

Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.

 

 

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Operating Leases

 

After February 6, 2013, the Company moved to the new address located at 1000 E. Armstrong St., Morris, IL 60450. There was no lease signed between the Company and the property owner, Jian Li, who is also the majority shareholder of the Company.

 

NOTE C – RELATED PARTY TRANSACTIONS

Loans to Officer/Shareholder

From the period of July 1, 2011 to March 2012, the company’s formerly officer Keming Li loaned $ 67,159 to First America Resources formerly known as Golden Oasis New Energy Group Inc without interest without written agreement. The payment term is on demand.

From the period of April 1, 2012 to June 30, 2012, the company’s formerly officer Keming Li additionally loaned $ 24,213 to First America Resources formerly known as Golden Oasis New Energy Group Inc without interest without written agreement. The payment term is on demand.

On June 13, 2012, the Company exchanged $ 67,159 in debt owed to Keming Li for 671,590 shares of common stock at fair market value of $ 0.10 per share.

From the period of July 1, 2012 to December 31, 2012, the company’s formerly officer Keming Li additionally loaned $15,104 to First America Resources formerly known as Golden Oasis New Energy Group Inc without interest without written agreement. The payment term is on demand.

On February 6, 2013, Mr. Keming Li sold his shares to Mr. Jian Li, and Mr. Jian Li became the loan holder for all the prior loans advanced by formerly officer Mr. Keming Li. As of June 30, 2013, the total loans from shareholder or officer was $30,787.

For the period of July to September 2013, the officer and shareholder Jian Li additionally loaned $ 22,000 to the Company for continually operating of the business.

Therefore, there’s total of $ 52,787 outstanding loan from officer and director, Jian Li as of September 30, 2013.

 

NOTE C – RELATED PARTY TRANSACTIONS (CONTINUED)

Common Shares Issued to Executive and Non-Executive Officers and Directors

As of September 30, 2013 total 5,388,010 shares were issued to officers and directors. Please see the Table below for details:

Name	Title	Share QTY	Date	% of Common Share
Jian Li	CEO & President	5,388,010	2/6/2013	81.47%
Total		5,388,010		81.47%

*The percentage of common shares was based on the total outstanding shares of 6,613,090 as of September 30, 2013.

 

NOTE D – SHAREHOLDERS’ EQUITY

Common Stock

Under the Company’s Articles of Incorporation dated May 10, 2010, the Company is authorized to issue 500,000,000 shares of capital stock with a par value of $0.001.

On May 10, 2010, the Company was incorporated in the State of Nevada.

On May 10, 2010, three founders of the Company, Keming Li, Guoling Jin, and Madison Li purchased 5,000,000 shares at $0.005 per share. The proceeds of $ 25,000 were received.

On December 23, 2010, additional 611,500 common shares were issued at $0.01 per share to 31 shareholders. The proceeds of $6,115.00 were received.

On March 31, 2011, 100,000 shares were issued to Michael Williams for legal services at 0.10 per share.

 

On September 8, 2011, 60,000 common shares were issued at $0.10 per share to six non-affiliated shareholders. The proceeds of $ 6,000.00 were received.

 

 

NOTE D – SHAREHOLDERS’ EQUITY (CONTINUED)

Common Stock (Continued)

On June 13, 2012, the Company exchanged $ 67,159 in debt owed to Keming Li for 671,590 shares of common stock at fair market value of $ 0.10 per share.

On June 13, 2012, 50,000 shares were issued to Pivo Associates for services at 0.10 per share.

On February 6, 2013, Mr. Keming Li, Ms. Guolin Jin, Ms Madison Li together sold total 5,388,010 shares to Mr. Jian Li.

On July 1, 2013, 120,000 shares were issued to Williams Securities Law Firm for legal services at 0.10 per share.

Therefore, as of September 30, 2013, the total 6,613,090 shares were issued and outstanding.

 

NOTE E– GOING CONCERN

The Company is currently in the development stage and their activities consist solely of corporate formation, raising capital, and attempting to sell products to generate revenues.

There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations and carry out its business plan. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments relating to the carrying amounts of recorded assets or the carrying amounts and classification of recorded liabilities that may be required should the Company be unable to continue as a going concern.

As of September 30, 2013 the cash and cash equivalent balance was $ 6,385 and there is cumulative loss of $179,635 for the cumulative period from May 10, 2010 (Date of Inception) to September 30, 2013.

The Company’s lack of operating history and financial resources raise substantial doubt about its ability to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty and if the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operations.