NOTES
TO THE AUDITED FINANCIAL STATEMENTS
FOR
THE TWELVE MONTHS ENDED JANUARY 31, 2014, THE PERIOD FROM FEBRUARY 9, 2012
(INCEPTION) TO JANUARY 31, 2013 AND THE PERIOD FEBRUARY 9, 2012 (INCEPTION)
TO JANUARY 31, 2014
NOTE
1 – ORGANIZATION AND BUSINESS OPERATIONS
Organization
and Description of Business
ALPHALA
CORP. (the “Company”) was incorporated under the laws of the State of Nevada on February 9, 2012 (Inception) and plans
to commence operation in the distribution of teeth whitening products. The Company is in the development stage as defined under
Financial Accounting Standards Board Accounting Standards Codification (“ASC”) 915-205 "
Development-Stage
Entities
”. For the period from Inception on February 9, 2012 through January 31, 2014 the Company has accumulated losses
of $28,884.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
These
financial statements have been prepared in accordance with generally accepted accounting principles as promulgated in the United
States of America (“U.S. GAAP”).
Cash
and Cash Equivalents
For
purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with an original maturity
of three months or less to be cash equivalents.
The
Company’s bank accounts are deposited in insured institutions. The funds are insured up to $250,000. At January 31, 2014
and 2013, the Company’s bank deposits did not exceed the insured amounts.
Basic
and Diluted Income (Loss) Per Share
The
Company computes loss per share in accordance with ASC 260, “
Earnings per Share
”, which requires presentation
of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing
net loss available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted
loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes
all potential common shares if their effect is anti-dilutive. No potentially dilutive debt or equity instruments were issued of
outstanding during the twelve months ended January 31, 2014 or the period from February 9, 2012 (Inception) to January 31, 2013.
Income
Taxes
The
Company accounts for income taxes pursuant to ASC 740, “
Income Taxes
”. Under ASC 740, deferred income taxes
are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating
loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will
not be realized. The provision for income taxes represents the tax expense for the period, if any, and the change during the period
in deferred tax assets and liabilities. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
ASC
740 also provides criteria for the recognition, measurement, presentation and disclosure of uncertain tax positions. Under ASC
740, the impact of an uncertain tax position on the income tax return may only be recognized at the largest amount that is more-likely-than-not
to be sustained upon audit by the relevant taxing authority. At January 31, 2014 and 2013, there were no unrecognized tax benefits.
ALPHALA
CORP.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE AUDITED FINANCIAL STATEMENTS
FOR
THE TWELVE MONTHS ENDED JANUARY 31, 2014, THE PERIOD FROM FEBRUARY 9, 2012
(INCEPTION) TO JANUARY 31, 2013 AND THE PERIOD FEBRUARY 9, 2012 (INCEPTION)
TO JANUARY 31, 2014
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue
Recognition
The
Company recognizes revenue in accordance with ASC 605, “
Revenue Recognition
”. ASC 605 requires that four basic
criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred;
(3) the selling price is fixed and determinable; and (4) collectibility is reasonably assured. Determination of criteria (3) and
(4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the
collectibility of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other
adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the
product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that
the product has been delivered or no refund will be required.
Advertising
Costs
The
Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expense
of $0 during the twelve months ended January 31, 2014 and the period from February 9, 2012 (Inception) to January 31, 2013.
Recent
Accounting Pronouncements
Management
does not believe that any recently issued, but not yet effective, accounting standards, if adopted, will have a material effect
on the Company’s financial statements.
Fair
Value of Financial Instruments
ASC
820, “
Fair Value Measurements and Disclosures
”, establishes a three-tier fair value hierarchy, which prioritizes
the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs
used in measuring fair value are observable in the market.
These
tiers include:
Level
1: defined as observable inputs such as quoted prices in active markets;
Level
2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and
Level
3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
The
carrying amounts of financial assets and liabilities, such as cash, prepaid expenses, income taxes receivable and payable and
loan from shareholder approximate their fair values because of the short maturity of these instruments.
Use
of Estimates
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements
and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.
ALPHALA
CORP.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE AUDITED FINANCIAL STATEMENTS
FOR
THE TWELVE MONTHS ENDED JANUARY 31, 2014, THE PERIOD FROM FEBRUARY 9, 2012
(INCEPTION) TO JANUARY 31, 2013 AND THE PERIOD FEBRUARY 9, 2012 (INCEPTION)
TO JANUARY 31, 2014
NOTE
3 – GOING CONCERN
These
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. The Company has incurred a loss since
Inception (February 9, 2012) resulting in an accumulated deficit of $28,884 as of January 31, 2014 and further losses are anticipated
in the development of its business. Accordingly, there is substantial doubt about the Company’s ability to continue as a
going concern.
The
ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or obtaining
the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come
due.
NOTE
4 – COMMON STOCK
Common
Stock
The
Company has 750,000,000 shares of common stock authorized with a par value of $0.001 per share.
On
October 22, 2012, the Company issued 180,000,000 shares of its common stock for total proceeds of $6,000.
During
the period from October 29, 2012 to December 4, 2012, the Company issued 70,800,000 shares of its common stock for total proceeds
of $23,600.
As
at January 31, 2014 and 2013, 250,800,000 shares of common stock were issued and outstanding.
Additional
paid in Capital
From
February 9, 2009 (Inception) through January 31, 2014, the Company’s former sole director and principal shareholder loaned
the Company a total of $5,800 to pay for incorporation costs and operating expenses. The loan was non-interest bearing, due upon
demand and unsecured. Effective January 31, 2014, the Company’s former sole director and principal shareholder forgave repayment
of the $5,800 outstanding loan balance which was credited to additional paid in capital at that time.
NOTE
5 – RELATED PARTY TRANSACTIONS
In
support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that
the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing.
There is no formal written commitment for continued support by shareholders. Amounts represent advances or amounts paid in satisfaction
of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.
From
February 9, 2009 (Inception) through January 31, 2014, the Company’s former sole director and principal shareholder loaned
the Company a total of $5,800 to pay for incorporation costs and operating expenses. The loan was non-interest bearing, due upon
demand and unsecured. Effective January 31, 2014, the Company’s former sole director and principal shareholder forgave repayment
of the $5,800 outstanding loan balance which was credited to additional paid in capital at that time.
ALPHALA
CORP.
(A
DEVELOPMENT STAGE COMPANY)
NOTES
TO THE AUDITED FINANCIAL STATEMENTS
FOR
THE TWELVE MONTHS ENDED JANUARY 31, 2014, THE PERIOD FROM FEBRUARY 9, 2012
(INCEPTION) TO JANUARY 31, 2013 AND THE PERIOD FEBRUARY 9, 2012 (INCEPTION)
TO JANUARY 31, 2014
NOTE
6 – INCOME TAXES
During
the period from February 9, 2009 (Inception) through January 31, 2013, the Company recognized a taxable profit of $1,760, accrued
a tax liability of $352 and paid $264 tax in respect of this liability during the twelve months ended January 31, 2014.
During
the twelve months ended January 31, 2014, the Company incurred taxable losses of $30,644. $1,760 of these losses can be carried
back to offset the $1,760 taxable profits arising in the period from February 9, 2009 (Inception) through January 31, 2013 and
accordingly the Company is entitled to a refund of the $264 of tax paid in respect of this period and to recognize a full credit
for the $352 tax liability provided for in the prior period. The remaining balance of $28,884 unrelieved tax losses are potentially
available to offset taxable profits the Company may generate in the future. The net operating loss carry forward will expire between
203 and 2034. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.
When
it is more likely than not that a tax asset cannot be realized through future income, the Company must record an allowance against
any future potential future tax benefit. The Company provided a full valuation allowance against the net deferred tax asset, consisting
of net operating loss carry forwards, because management has determined that it is more likely than not that it will not earn
income sufficient to realize the deferred tax assets during the carry forward periods.
The
Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the years
ended January 31, 2014 and or the period from February 9, 2009 (Inception) through January 31, 2013 as defined under ASC 740,
“
Accounting for Income Taxes
”. The Company did not recognize any adjustment to the liability for uncertain
ta position and therefore did not record any adjustment to the beginning balance of the accumulated deficit on the balance sheet.
NOTE
7 – SUBSEQUENT EVENTS
On
April 11, 2014, the holders of a majority of the Company’s issued and outstanding common stock approved an increase in its
authorized capital from 75,000,000 shares of common stock, par value $0.001, to 750,000,000 shares of common stock, par value
$0.001 (the “Authorized Capital Increase”). The purpose of the Authorized Capital Increase was to reorganize
the Company’s capital structure in connection with the stock dividend described below. The Company formally effected the
Authorized Capital Increase on April 11, 2014 by filing a Certificate of Amendment with the Nevada Secretary of State.
On
April 14, 2014, the Company’s sole director approved a stock dividend of 29 authorized but unissued shares of common stock
on each one (1) pre-dividend issued and outstanding share of the Company’s common stock. On May 1, 2014, the Company received
approval from the Financial Industry Regulatory Authority (FINRA) to effect the stock dividend by way of a forward split, and
on the same date, the Company’s shareholders of record on April 25, 2014 received the dividend. As a result of the stock
dividend, the Company’s issued and outstanding common stock increased from 8,360,000 (pre-dividend) shares to 250,800,000
(post-dividend) shares. All references to common stock have been reflected retroactively.
The
Company has evaluated all other subsequent events through the date of issuance of these financial statements on May 15, 2014 and
other than as disclosed above, the Company did not have any material recognizable subsequent events.