Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 31, 2017 | Dec. 13, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Australian Formulated Corp | |
Entity Central Index Key | 1,697,021 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 61,030,000 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Oct. 31, 2017 | Jan. 31, 2017 |
CURRENT ASSETS | ||
Inventory on hand | $ 87,233 | $ 23,905 |
Inventory on consignment | 15,273 | 4,795 |
Trade receivables | 782 | 150 |
Deposits paid, prepayments and other receivables | 213,857 | |
Cash and cash equivalents | 11,649 | 63,431 |
TOTAL ASSETS | 328,794 | 92,281 |
CURRENT LIABILITIES | ||
Amount due to related companies | 10,315 | 5,161 |
Accrued expenses and other payables | 9,935 | 9,106 |
Amount due to a director | 1,097 | 1,097 |
TOTAL CURRENT LIABILITIES | 21,347 | 15,364 |
NON-CURRENT LIABILITIES | ||
Convertible notes payable | 352,945 | |
TOTAL LIABILITIES | 374,292 | 15,364 |
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock - Par value $0.0001; Authorized: 200,000,000 None issued and outstanding | ||
Common stock - Par value $ 0.0001; Authorized: 600,000,000 Issued and outstanding: 61,030,000 shares as of October 31, 2017 and January 31, 2017 | 6,103 | 6,103 |
Additional paid-in capital | 102,897 | 102,897 |
Accumulated deficit | (154,498) | (32,083) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (45,498) | 76,917 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 328,794 | $ 92,281 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Oct. 31, 2017 | Jan. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 61,030,000 | 61,030,000 |
Common stock, shares outstanding | 61,030,000 | 61,030,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Income Statement [Abstract] | ||||
REVENUE | $ 3,821 | $ 9,006 | ||
COST OF REVENUE | (2,406) | (4,821) | ||
GROSS PROFIT | 1,415 | 4,185 | ||
SELLING AND DISTRIBUTION EXPENSES | (8,175) | (22,049) | ||
GENERAL AND ADMINISTRATIVE EXPENSES | (45,474) | (104,553) | ||
LOSS FROM OPERATIONS | (52,234) | (122,417) | ||
INTEREST INCOME | 1 | 2 | ||
LOSS BEFORE INCOME TAX | (52,233) | (122,415) | ||
INCOME TAX PROVISION | ||||
NET LOSS | $ (52,233) | $ (122,415) | ||
Net loss per share- Basic and diluted | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average number of common shares outstanding - Basic and diluted | 61,030,000 | 61,030,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (122,415) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (632) | |
Accrued liabilities, other payables and deposits received | 829 | |
Amount due to related companies | 5,154 | |
Inventories on hand | (63,328) | |
Inventories on consignment | (10,478) | |
Prepayment, deposits and other receivables | (213,857) | |
Net cash used in operating activities | (404,727) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of shares | 10 | |
Proceeds from issuance of convertible notes | 352,945 | |
Net cash provided from financing activities | 352,945 | 10 |
Effect of exchange rate changes on cash and cash equivalent | ||
Net (decrease)/increase in cash and cash equivalents | (51,782) | 10 |
Cash and cash equivalents, beginning of period | 63,431 | |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 11,649 | 10 |
SUPPLEMENTAL CASH FLOWS INFORMATION | ||
Income taxes paid | ||
Interest paid |
Organization and Business Backg
Organization and Business Background | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Business Background | 1. ORGANIZATION AND BUSINESS BACKGROUND Australian Formulated Corporation was incorporated on August 4, 2016 under the laws of the state of Nevada. The Company, through its subsidiaries, mainly engages in retail of baby formula and elderly formula to consumers and wholesalers. Company name Place/date of incorporation Principal activities 1. AFC ANS Baby Holdings Limited Seychelles / January 6, 2017 Investment Holding 2. Australian Formulated Limited Hong Kong / November 2, 2016 Wholesale of baby formula and elderly formula We are a development-stage company with a fiscal year end of January 31. At this moment, we operate exclusively through our wholly owned subsidiaries AFC ANS Baby Holdings Limited and Australian Formulated Limited, and share the same business plan of our subsidiaries which is the sale of baby formula and elderly formula. Australian Formulated Corporation and its subsidiaries are hereinafter referred to as the “Company”. AFC ANS Baby Holdings Limited, incorporated in Seychelles, is an investment holding company with 100% equity interest in Australian Formulated Limited, a company incorporated in Hong Kong. On January 16, 2017, Australian Formulated Corporation was organized to be the holding company parent to, and succeed to the operations of AFC ANS Baby Holdings Limited. The former unit holder of AFC ANS Baby Holdings Limited became the unit holder of Australian Formulated Corporation and AFC ANS Baby Holdings Limited became a wholly-owned subsidiary of Australian Formulated Corporation. This transaction was accounted for as a transaction among entities under common control and the assets, liabilities, revenues and expenses of AFC ANS Baby Holdings Limited were carried over to and combined with Australian Formulated Corporation at historical cost, and as if the transfer occurred at the beginning of the period. We have presented our financials on a combined basis from inception, August 4, 2016, because we, and our current subsidiaries, were and remain entities under common control of Mr. Lashan, director of Australian Formulated Corporation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying unaudited condensed consolidated financial statements for Australian Formulated Corporation and its subsidiaries for the period from February 1, 2017 to October 31, 2017 are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Intercompany accounts and transactions have been eliminated in consolidation. The Company has adopted January 31 as its fiscal year end. The method used to present a common-control transaction that results in a change in the reporting entity. The assets and liabilities and operations of the two businesses were combined at their historical carrying amounts, and all historical periods were adjusted as if the businesses had always been combined. In a common-control transaction, the receiving entity retrospectively adjusts its financial statements to include the transferred net assets and any related operations for all periods for which the entities or net assets were under common control. If the entities were not under common control for the entire period being reported on, the receiving entity’s financial statements are adjusted only retrospectively to the date on which the entities became under common control. The receiving entity recognizes the transferred net assets at their historical carrying amounts in the parent’s consolidated financial statements. No new goodwill is recognized. The carrying values of the transferred net assets are added to the carrying values of the receiving entity’s net assets. If the receiving entity and transferring entity applied different accounting principles and the transferred assets or liabilities are adjusted to reflect the method of accounting applied by the receiving entity, the change in accounting principle should be applied retroactively for all periods presented. Also, ASC 805-50-45-2 states that the financial statements of the receiving entity should report results of operations for the period in which the transfer occurs as though the transfer of net assets or exchange of equity interests had occurred at the beginning of the period. ASC 805-50-45-5 states, that the financial statements and financial information presented for prior years shall be retrospectively adjusted for periods during which the entities were under common control. We believe this applies in whole when the date of common control begins in a prior year; however, in the present case, the date of common control fell within the current period. Therefore, we believe that “prior year” is to be interpreted as prior to the date of common control and as such, only the financial information from and after the date of common control should be combined in any financial statements. Use of estimates Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates. Revenue recognition In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” Revenue from supplies of baby formula and elderly formula is recognized when title and risk of loss are transferred and there are no continuing obligations to the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the products are collected by the customer at the Company’s office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments that are based upon management’s best estimates and historical experience and are provided for in the same period as the related revenues are recorded. Based on limited operating history, management estimates that there were no sales return for the nine months ended October 31, 2017. Cost of revenue Cost of revenue includes the purchase cost of manufactured goods for sale to customers. It excludes purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs and other costs of distribution network in cost of revenues. Rent and storage Rent and storage associated with office room, storage and inbound and outbound delivery is expensed as incurred and included in general and administrative expenses. As stipulated in the license agreement on November 2, 2016, the monthly rent and storage is $5,161. The rent and storage that was expensed as incurred for the nine months ended October 31, 2017 was $46,451. General and administrative expenses General and administrative expenses are primarily comprised of rent and storage, sales promotion, companies’ incorporation fee and bank charges. Cash and cash equivalents Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. Inventories Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve will be recorded to write down the cost of inventory to the estimated market value in case of slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. The Company retains full ownership of all consigned inventory until sold to third-party. Accounts receivable Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which are due on demand. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Income taxes Income taxes are determined in accordance with the provisions of ASC Topic 740, “ Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company conducts major businesses in Hong Kong. The Company is subject to tax in Hong Kong jurisdictions. As a result of its business activities, the Company will file tax returns that are subject to examination by the Hong Kong tax authority. Net income/(loss) per share The Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations. The reporting currency of the Company is United States Dollars (“US$”). The Company’s subsidiary in Seychelles and Hong Kong maintains its books and record in United States Dollars (“US$”) and Hong Kong Dollars (“HK$”) respectively, and Hong Kong Dollars is functional currency as being the primary currency of the economic environment in which the entity operates. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement Translation of amounts from HK$ into US$1 has been made at the following exchange rates for the respective periods: As of and for the nine months ended As of and for the periods ended Year-end / average HK$ : US$1 exchange rate 7.75 7.75 Related parties Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Fair value of financial instruments: The carrying value of the Company’s financial instruments: cash and cash equivalents, prepayment, deposits, accounts payable and accrued liabilities and amount due to a director approximate at their fair values because of the short-term nature of these financial instruments. The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: Level 1 Level 2 Level 3: Recent accounting pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. |
Inventories
Inventories | 9 Months Ended |
Oct. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. INVENTORIES Our current inventory consists of baby formula and elderly formula. Baby formula is classified into three stages for different life stages. Stage 1 is Infant Formula. Stage 2 is Follow On Formula. Stage 3 is Growing Up Formula. In October, 2017, we had a new elderly formula product line 50 Plus, which specifically caters to the needs of elderlies older than 50 years old. Inventory balance as of October 31, 2017: Stage 1 Stage 2 Stage 3 50 Plus Total $ $ $ $ $ Inventories held on hand 28,511 28,969 28,332 1,421 87,233 Inventories held on consignment 5,017 4,781 4,879 596 15,273 33,528 33,750 33,211 2,017 102,506 The inventories held on hand and consignment as of October 31, 2017 was $87,233 and $15,273 respectively. Inventory balance as of January 31, 2017: Stage 1 Stage 2 Stage 3 Total $ $ $ $ Inventories held on hand 4,340 9,807 9,758 23,905 Inventories held on consignment 1,659 1,582 1,554 4,795 5,999 11,389 11,312 28,700 The inventories held on hand and consignment as of January 31, 2017 was $23,905 and $4,795 respectively. |
Accrued Expenses and Other Paya
Accrued Expenses and Other Payables | 9 Months Ended |
Oct. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Payables | 4. ACCRUED EXPENSES AND OTHER PAYABLES As of October 31, 2017 As of January 31, 2017 Accrued audit fees $ 3,100 $ 4,500 Accrued other expenses 6,835 4,606 Accrued expenses and other payables $ 9,935 $ 9,106 |
Amount Due to a Director
Amount Due to a Director | 9 Months Ended |
Oct. 31, 2017 | |
Related Party Transactions [Abstract] | |
Amount Due to a Director | 5. AMOUNT DUE TO A DIRECTOR As of October 31, 2017, one of the directors of the Company advanced $1,097 to the Company, which is unsecured, interest-free and is payable upon demand, for working capital purpose. Imputed interest is considered insignificant. |
Amount Due to Related Companies
Amount Due to Related Companies | 9 Months Ended |
Oct. 31, 2017 | |
Related Party Transactions [Abstract] | |
Amount Due to Related Companies | 6. AMOUNT DUE TO RELATED COMPANIES As of October 31, 2017 As of January 31, 2017 Party A- Professional Fee $ 4,000 $ - Party B- Rent and Storage 4,778 5,161 Party C- Salary and Wages Expense 1,537 - $ 10,315 $ 5,161 Directors of related party A are the investment managers of Greenpro Asia Strategic SPC- Greenpro Asia Strategic Fund SP, one of the shareholders of the Company. The Chief Executive Officer (CEO) of related party B and C is the CEO and the director of the Company. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Oct. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 7. RELATED PARTY TRANSACTIONS Nine months ended October 31, 2017 Nine months ended October 31, 2016 Purchase of Inventory: - Related Party A $ 32,470 $ - - Related Party B 91,000 - $ 123,470 $ - Rent and Storage: - Related Party C $ 46,451 $ - Professional Fee -Related Party D $ 4,000 $ - The Chief Executive Officer (CEO) of related party A, B and C is the CEO and the director of the Company. Directors of related party D are the investment managers of Greenpro Asia Strategic SPC- Greenpro Asia Strategic Fund SP, one of the shareholders of the Company. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. INCOME TAXES For the nine months ended October 31, the local (United States) and foreign components of income/(loss) before income taxes were comprised of the following: Nine months ended October 31, 2017 Nine months ended October 31, 2016 Tax jurisdictions from: - Local $ 16,824 $ - - Foreign, representing Seychelles - - Hong Kong 105,591 - Loss before income tax $ 122,415 $ - The provision for income taxes consisted of the following: Nine months ended October 31, 2017 Nine months ended October 31, 2016 Current: - Local $ - $ - - Foreign - - Deferred: - Local - - - Foreign - - Income tax expense $ - $ - The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States, Seychelles and Hong Kong that are subject to taxes in the jurisdictions in which they operate, as follows: United States of America The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of October 31, 2017, the operations in the United States of America incurred $25,637 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2037, if unutilized. The Company has provided for a full valuation allowance of $8,973 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future. Seychelles Under the current laws of the Seychelles, AFC ANS Baby Holdings Limited is registered as an international business company which governs by the International Business Companies Act of Seychelles. A company is subject to Seychelles income tax if it does business in Seychelles. A company that incorporated in Seychelles, but does not do business in Seychelles, is not subject to income tax there. AFC ANS Baby Holdings Limited did not do business in Seychelles from inception to October 31, 2017, and it does not intend to do business in Seychelles in the future. Hong Kong Australian Formulated Limited is subject to Hong Kong Profits Tax, which is charged at the statutory income rate of 16.5% on its assessable income. For the nine months ended October 31, 2017, Australian Formulated Limited suffered from an operating loss of $105,591 for income tax purposes which can be carried forward to offset future taxable income at no expiration. The Company has provided for a full valuation allowance against the deferred tax assets of $21 ,262 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future. The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of October 31, 2017 and January 31, 2017: As of October 31, 2017 As of January 31, 2017 (unaudited) (audited) Deferred tax assets: Net operating loss carryforwards -United States of America $ 8,973 $ 3,085 -Hong Kong 21,262 3,840 30,235 6,925 Less: valuation allowance (30,235 ) (6,925 ) Deferred tax assets - - Management believes that it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company provided for a full valuation allowance against its deferred tax assets of $30,235 as of October 31, 2017. During the nine months ended October 31, 2017, the valuation allowance increased by $23,310, primarily relating to net operating loss carryforwards from the various tax regime. |
Convertible Notes
Convertible Notes | 9 Months Ended |
Oct. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Notes | 9. CONVERTIBLE NOTES For the nine months ended October 31, 2017, the Company received a total of $50,000 convertible promissory notes from accredited investors in Hong Kong, Malaysia and Australia. The conversion price of the convertible notes is $0.10 per share. In additional, the Company received a total of $302,945 of convertible promissory notes from accredited investors who resides in Hong Kong and Malaysia. The conversion price of the convertible notes is $0.20 per share. The Convertible Notes bear no interest with a maturity of two years. |
Concentrations of Risk
Concentrations of Risk | 9 Months Ended |
Oct. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Risk | 10 CONCENTRATIONS OF RISK The Company is exposed to the following concentrations of risk: (a) Major customers For the nine months ended October 31, 2017, there were two customers who accounted for 10% or more of the Company’s revenues. The customer who accounted for 10% or more of the Company’s revenues and its outstanding receivable balance at period-end are presented as follows: Nine months ended October 31, 2017 Revenue Percentage of Revenue Accounts receivable Customer A $ 1,831 20 % $ - Customer B 916 10 % - $ 2,747 30 % $ - For the three months ended October 31, 2017, there was one customer who accounted for 10% or more of the Company’s revenues. The customer who accounted for 10% or more of the Company’s revenues and its outstanding receivable balance at period-end are presented as follows: Three months ended October 31, 2017 Revenue Percentage of Revenue Accounts receivable Customer A $ 525 14 % $ - (b) Major vendors For the nine months ended October 31, 2017, there were two vendors who accounted for 10% or more of the Company’s cost of revenues with no accounts payable balance at period-end. Nine months ended October 31, 2017 Cost of Revenue Percentage of Cost of Revenue Accounts payable Vendor A $ 3,452 72 % $ - Vendor B 1,369 28 % - $ 4,821 100 % $ - For the three months ended October 31, 2017, there were two vendors who accounted for 10% or more of the Company’s cost of revenues with no accounts payable balance at period-end. Three months ended October 31, 2017 Cost of Revenue Percentage of Cost of Revenue Accounts payable Vendor A $ 1,037 43 % $ - Vendor B 1,369 57 % - $ 2,406 100 % $ - |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Oct. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. COMMITMENTS AND CONTINGENCIES On November 2, 2016, the Company was granted a license from a related company in Hong Kong to use the office room, facilities and storage and delivery services for the operations of the Company. The license agreement will expire in December 2017, with an aggregate fixed monthly rent and storage of $5,161. For nine months ended October 31, 2017, the total rent and storage was $46,451 respectively. On November 30, 2017, the Company has renewed the license agreement. The license period of the renewed agreement commences from January 1, 2018 to December 31, 2018, with an aggregate fixed monthly rent and storage of $5,161. As of October 31, 2017, the Company has future minimum rental and storage payment of $72,257 due in the next eighteen months. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Oct. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. SUBSEQUENT EVENTS In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after October 31, 2017 up through the date the Company presented these unaudited condensed financial statements. On November 30, 2017, the Company has renewed the license agreement. The license period of the renewed agreement commences from January 1, 2018 to December 31, 2018, with an aggregate fixed monthly rent and storage of $5,161. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying unaudited condensed consolidated financial statements for Australian Formulated Corporation and its subsidiaries for the period from February 1, 2017 to October 31, 2017 are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Intercompany accounts and transactions have been eliminated in consolidation. The Company has adopted January 31 as its fiscal year end. The method used to present a common-control transaction that results in a change in the reporting entity. The assets and liabilities and operations of the two businesses were combined at their historical carrying amounts, and all historical periods were adjusted as if the businesses had always been combined. In a common-control transaction, the receiving entity retrospectively adjusts its financial statements to include the transferred net assets and any related operations for all periods for which the entities or net assets were under common control. If the entities were not under common control for the entire period being reported on, the receiving entity’s financial statements are adjusted only retrospectively to the date on which the entities became under common control. The receiving entity recognizes the transferred net assets at their historical carrying amounts in the parent’s consolidated financial statements. No new goodwill is recognized. The carrying values of the transferred net assets are added to the carrying values of the receiving entity’s net assets. If the receiving entity and transferring entity applied different accounting principles and the transferred assets or liabilities are adjusted to reflect the method of accounting applied by the receiving entity, the change in accounting principle should be applied retroactively for all periods presented. Also, ASC 805-50-45-2 states that the financial statements of the receiving entity should report results of operations for the period in which the transfer occurs as though the transfer of net assets or exchange of equity interests had occurred at the beginning of the period. ASC 805-50-45-5 states, that the financial statements and financial information presented for prior years shall be retrospectively adjusted for periods during which the entities were under common control. We believe this applies in whole when the date of common control begins in a prior year; however, in the present case, the date of common control fell within the current period. Therefore, we believe that “prior year” is to be interpreted as prior to the date of common control and as such, only the financial information from and after the date of common control should be combined in any financial statements. |
Use of Estimates | Use of estimates Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheets, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates. |
Revenue Recognition | Revenue recognition In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” Revenue from supplies of baby formula and elderly formula is recognized when title and risk of loss are transferred and there are no continuing obligations to the customer. Title and the risks and rewards of ownership transfer to and accepted by the customer when the products are collected by the customer at the Company’s office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments that are based upon management’s best estimates and historical experience and are provided for in the same period as the related revenues are recorded. Based on limited operating history, management estimates that there were no sales return for the nine months ended October 31, 2017. |
Cost of Revenue | Cost of revenue Cost of revenue includes the purchase cost of manufactured goods for sale to customers. It excludes purchasing and receiving costs, inspection costs, warehousing costs, internal transfer costs and other costs of distribution network in cost of revenues. |
Rent and Storage | Rent and storage Rent and storage associated with office room, storage and inbound and outbound delivery is expensed as incurred and included in general and administrative expenses. As stipulated in the license agreement on November 2, 2016, the monthly rent and storage is $5,161. The rent and storage that was expensed as incurred for the nine months ended October 31, 2017 was $46,451. |
General and Administrative Expenses | General and administrative expenses General and administrative expenses are primarily comprised of rent and storage, sales promotion, companies’ incorporation fee and bank charges. |
Cash and Cash Equivalents | Cash and cash equivalents Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. |
Inventories | Inventories Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve will be recorded to write down the cost of inventory to the estimated market value in case of slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. The Company retains full ownership of all consigned inventory until sold to third-party. |
Accounts Receivable | Accounts receivable Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which are due on demand. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. |
Income Taxes | Income taxes Income taxes are determined in accordance with the provisions of ASC Topic 740, “ Income Taxes ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company conducts major businesses in Hong Kong. The Company is subject to tax in Hong Kong jurisdictions. As a result of its business activities, the Company will file tax returns that are subject to examination by the Hong Kong tax authority. |
Net Income/(Loss) Per Share | Net income/(loss) per share The Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” |
Foreign Currencies Translation | Foreign currencies translation Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations. The reporting currency of the Company is United States Dollars (“US$”). The Company’s subsidiary in Seychelles and Hong Kong maintains its books and record in United States Dollars (“US$”) and Hong Kong Dollars (“HK$”) respectively, and Hong Kong Dollars is functional currency as being the primary currency of the economic environment in which the entity operates. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not the US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement Translation of amounts from HK$ into US$1 has been made at the following exchange rates for the respective periods: As of and for the nine months ended As of and for the periods ended Year-end / average HK$ : US$1 exchange rate 7.75 7.75 |
Related Parties | Related parties Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. |
Fair Value of Financial Instruments | Fair value of financial instruments: The carrying value of the Company’s financial instruments: cash and cash equivalents, prepayment, deposits, accounts payable and accrued liabilities and amount due to a director approximate at their fair values because of the short-term nature of these financial instruments. The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows: Level 1 Level 2 Level 3: |
Recent Accounting Pronouncements | Recent accounting pronouncements The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Foreign Exchange Rate | Translation of amounts from HK$ into US$1 has been made at the following exchange rates for the respective periods: As of and for the nine months ended As of and for the periods ended Year-end / average HK$ : US$1 exchange rate 7.75 7.75 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory balance as of October 31, 2017: Stage 1 Stage 2 Stage 3 50 Plus Total $ $ $ $ $ Inventories held on hand 28,511 28,969 28,332 1,421 87,233 Inventories held on consignment 5,017 4,781 4,879 596 15,273 33,528 33,750 33,211 2,017 102,506 Inventory balance as of January 31, 2017: Stage 1 Stage 2 Stage 3 Total $ $ $ $ Inventories held on hand 4,340 9,807 9,758 23,905 Inventories held on consignment 1,659 1,582 1,554 4,795 5,999 11,389 11,312 28,700 |
Accrued Expenses and Other Pa21
Accrued Expenses and Other Payables (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Payables | As of October 31, 2017 As of January 31, 2017 Accrued audit fees $ 3,100 $ 4,500 Accrued other expenses 6,835 4,606 Accrued expenses and other payables $ 9,935 $ 9,106 |
Amount Due to Related Compani22
Amount Due to Related Companies (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Amount Due to Related Companies | As of October 31, 2017 As of January 31, 2017 Party A- Professional Fee $ 4,000 $ - Party B- Rent and Storage 4,778 5,161 Party C- Salary and Wages Expense 1,537 - $ 10,315 $ 5,161 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Nine months ended October 31, 2017 Nine months ended October 31, 2016 Purchase of Inventory: - Related Party A $ 32,470 $ - - Related Party B 91,000 - $ 123,470 $ - Rent and Storage: - Related Party C $ 46,451 $ - Professional Fee -Related Party D $ 4,000 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Foreign and Domestic Income/(Loss) Before Income Taxes | For the nine months ended October 31, the local (United States) and foreign components of income/(loss) before income taxes were comprised of the following: Nine months ended October 31, 2017 Nine months ended October 31, 2016 Tax jurisdictions from: - Local $ 16,824 $ - - Foreign, representing Seychelles - - Hong Kong 105,591 - Loss before income tax $ 122,415 $ - |
Schedule of Provision for Income Taxes | The provision for income taxes consisted of the following: Nine months ended October 31, 2017 Nine months ended October 31, 2016 Current: - Local $ - $ - - Foreign - - Deferred: - Local - - - Foreign - - Income tax expense $ - $ - |
Schedule of Deferred Tax Assets | The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of October 31, 2017 and January 31, 2017: As of October 31, 2017 As of January 31, 2017 (unaudited) (audited) Deferred tax assets: Net operating loss carryforwards -United States of America $ 8,973 $ 3,085 -Hong Kong 21,262 3,840 30,235 6,925 Less: valuation allowance (30,235 ) (6,925 ) Deferred tax assets - - |
Concentration of Risk (Tables)
Concentration of Risk (Tables) | 9 Months Ended |
Oct. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
Schedule of Concentration Risk | For the nine months ended October 31, 2017, there were two customers who accounted for 10% or more of the Company’s revenues. The customer who accounted for 10% or more of the Company’s revenues and its outstanding receivable balance at period-end are presented as follows: Nine months ended October 31, 2017 Revenue Percentage of Revenue Accounts receivable Customer A $ 1,831 20 % $ - Customer B 916 10 % - $ 2,747 30 % $ - For the three months ended October 31, 2017, there was one customer who accounted for 10% or more of the Company’s revenues. The customer who accounted for 10% or more of the Company’s revenues and its outstanding receivable balance at period-end are presented as follows: Three months ended October 31, 2017 Revenue Percentage of Revenue Accounts receivable Customer A $ 525 14 % $ - For the nine months ended October 31, 2017, there were two vendors who accounted for 10% or more of the Company’s cost of revenues with no accounts payable balance at period-end. Nine months ended October 31, 2017 Cost of Revenue Percentage of Cost of Revenue Accounts payable Vendor A $ 3,452 72 % $ - Vendor B 1,369 28 % - $ 4,821 100 % $ - For the three months ended October 31, 2017, there were two vendors who accounted for 10% or more of the Company’s cost of revenues with no accounts payable balance at period-end. Three months ended October 31, 2017 Cost of Revenue Percentage of Cost of Revenue Accounts payable Vendor A $ 1,037 43 % $ - Vendor B 1,369 57 % - $ 2,406 100 % $ - |
Organization and Business Bac26
Organization and Business Background (Details Narrative) | Oct. 31, 2017 |
AFC ANS Baby Holdings Limited [Member] | |
Ownership percentage | 100.00% |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 9 Months Ended | |
Oct. 31, 2017 | Nov. 02, 2016 | |
Accounting Policies [Abstract] | ||
Monthly rent and storage expenses | $ 5,161 | |
Payments for rent and storage expenses | $ 46,451 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Schedule of Exchange Rates (Details) | Oct. 31, 2017 | Jan. 31, 2017 |
Accounting Policies [Abstract] | ||
Year-end / average HK$ : US$1 exchange rate | 7.75 | 7.75 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) | Oct. 31, 2017 | Jan. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Inventories held on hand | $ 87,233 | $ 23,905 |
Inventories held on consignment | $ 15,273 | $ 4,795 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory (Details) - USD ($) | Oct. 31, 2017 | Jan. 31, 2017 |
Inventories held on hand | $ 87,233 | $ 23,905 |
Inventories held on consignment | 15,273 | 4,795 |
Inventory, Total | 102,506 | 28,700 |
Stage 1 [Member] | ||
Inventories held on hand | 28,511 | 4,340 |
Inventories held on consignment | 5,017 | 1,659 |
Inventory, Total | 33,528 | 5,999 |
Stage 2 [Member] | ||
Inventories held on hand | 28,969 | 9,807 |
Inventories held on consignment | 4,781 | 1,582 |
Inventory, Total | 33,750 | 11,389 |
Stage 3 [Member] | ||
Inventories held on hand | 28,332 | 9,758 |
Inventories held on consignment | 4,879 | 1,554 |
Inventory, Total | 33,211 | $ 11,312 |
50 Plus [Member] | ||
Inventories held on hand | 1,421 | |
Inventories held on consignment | 596 | |
Inventory, Total | $ 2,017 |
Accrued Expenses and Other Pa31
Accrued Expenses and Other Payables - Schedule of Accrued Expenses and Other Payables (Details) - USD ($) | Oct. 31, 2017 | Jan. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued audit fees | $ 3,100 | $ 4,500 |
Accrued other expenses | 6,835 | 4,606 |
Accrued expenses and other payables | $ 9,935 | $ 9,106 |
Amount Due to a Director (Detai
Amount Due to a Director (Details Narrative) - USD ($) | Oct. 31, 2017 | Jan. 31, 2017 |
Related Party Transactions [Abstract] | ||
Amount due to director | $ 1,097 | $ 1,097 |
Amount Due to Related Compani33
Amount Due to Related Companies - Schedule of Amount Due to Related Companies (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Oct. 31, 2017 | Jan. 31, 2017 | |
Related Party Transactions [Abstract] | ||
Party A- Professional Fee | $ 4,000 | |
Party B- Rent and Storage | 4,778 | 5,161 |
Party C- Salary and Wages Expense | 1,537 | |
Amount due to related companies | $ 10,315 | $ 5,161 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | Jan. 31, 2017 | |
Purchase of Inventory | $ 123,470 | ||
Rent and Storage | 46,451 | ||
Professional Fee | 4,000 | ||
Related Party A [Member] | |||
Purchase of Inventory | 32,470 | ||
Related Party B [Member] | |||
Purchase of Inventory | 91,000 | ||
Related Party C [Member] | |||
Rent and Storage | 46,451 | ||
Related Party D [Member] | |||
Professional Fee | $ 4,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 9 Months Ended |
Oct. 31, 2017USD ($) | |
Valuation allowance for deferred tax assets | $ 30,235 |
Increased valuation allowances | 23,310 |
United States of America [Member] | |
Cumulative net operating losses | $ 25,637 |
Net operating loss carryforward expiration year | 2,037 |
Valuation allowance for deferred tax assets | $ 8,973 |
Hong Kong [Member] | |
Cumulative net operating losses | 105,591 |
Valuation allowance for deferred tax assets | $ 21,262 |
Statutory income rate | 16.50% |
Income Taxes - Schedule of Fore
Income Taxes - Schedule of Foreign and Domestic Income/(Loss) Before Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Tax jurisdictions from Local | $ 16,824 | |||
Loss before income tax | $ (52,233) | (122,415) | ||
Seychelles [Member] | ||||
Tax jurisdictions from Foreign | ||||
Hong Kong [Member] | ||||
Tax jurisdictions from Foreign | $ 105,591 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2017 | Oct. 31, 2016 | Oct. 31, 2017 | Oct. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Local income tax provision, current | ||||
Foreign income tax provision, current | ||||
Local income tax provision, deferred | ||||
Foreign income tax provision, deferred | ||||
Income tax expense |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Oct. 31, 2017 | Jan. 31, 2017 |
Deferred tax assets, gross | $ 30,235 | $ 6,925 |
Less: valuation allowance | (30,235) | (6,925) |
Deferred tax assets, net | ||
United States of America [Member] | ||
Net operating loss carryforwards | 8,973 | 3,085 |
Hong Kong [Member] | ||
Net operating loss carryforwards | $ 21,262 | $ 3,840 |
Convertible Notes (Details Narr
Convertible Notes (Details Narrative) - USD ($) | 9 Months Ended | |
Oct. 31, 2017 | Oct. 31, 2016 | |
Convertible promissory notes | $ 352,945 | |
Convertible Notes [Member] | ||
Convertible debt maturity term | 2 years | |
Accredited Investors [Member] | Hong Kong, Malaysia and Australia [Member] | ||
Convertible promissory notes | $ 50,000 | |
Conversion of convertible debt price per share | $ 0.10 | |
Accredited Investors [Member] | Hong Kong and Malaysia [Member] | ||
Convertible promissory notes | $ 302,945 | |
Conversion of convertible debt price per share | $ 0.20 |
Concentration of Risk (Details
Concentration of Risk (Details Narrative) | 3 Months Ended | 9 Months Ended |
Oct. 31, 2017 | Oct. 31, 2017 | |
Two Customer [Member] | ||
Percentage of Revenue | 30.00% | |
Cost of Revenues [Member] | Two Vendors [Member] | ||
Percentage of Revenue | 100.00% | 100.00% |
Cost of Revenues [Member] | Two Customer [Member] | ||
Percentage of Revenue | 100.00% | |
Cost of Revenues [Member] | One Customer [Member] | ||
Percentage of Revenue | 100.00% |
Concentration of Risk - Schedul
Concentration of Risk - Schedule of Concentration Risk of Customers (Details) | 3 Months Ended | 9 Months Ended |
Oct. 31, 2017USD ($) | Oct. 31, 2017USD ($) | |
Vendor A [Member] | ||
Revenue | $ 1,037 | $ 3,452 |
Percentage of Revenue | 43.00% | 72.00% |
Accounts payable | ||
Vendor B [Member] | ||
Revenue | $ 1,369 | $ 1,369 |
Percentage of Revenue | 57.00% | 28.00% |
Accounts payable | ||
Two Vendors [Member] | ||
Revenue | $ 2,406 | $ 4,821 |
Percentage of Revenue | 100.00% | 100.00% |
Accounts payable | ||
Customer A [Member] | ||
Revenue | $ 525 | $ 1,831 |
Percentage of Revenue | 14.00% | 20.00% |
Accounts receivable | ||
Customer B [Member] | ||
Revenue | $ 916 | |
Percentage of Revenue | 10.00% | |
Accounts receivable | ||
Two Customer [Member] | ||
Revenue | $ 2,747 | |
Percentage of Revenue | 30.00% | |
Accounts receivable |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 9 Months Ended | |
Oct. 31, 2017 | Nov. 02, 2016 | |
Lease license agreement expiration date | Dec. 31, 2017 | |
Monthly rent and storage expenses | $ 5,161 | |
Rent and storage expenses | $ 46,451 | |
Future minimum rental and storage payment | 72,257 | |
License Agreement [Member] | November 30, 2017 [Member] | ||
Monthly rent and storage expenses | $ 5,161 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Nov. 30, 2017 | Nov. 02, 2016 |
Monthly rent and storage expenses | $ 5,161 | |
Subsequent Event [Member] | License Agreement [Member] | ||
Monthly rent and storage expenses | $ 5,161 |