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Item 2. Management’s Discussion and Analysis

2020-11-12 compared with 2020-08-14 · 76 added, 45 removed, 29 unchanged (81% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following information should be read in conjunction with (i) the financial statements of New Momentum Corporation (formerly Eason Education Kingdom Holdings, Inc.), a Nevada corporation (the “disclosed in the Company's Current Report on Form 8-K (File No.

000-52273), filed with the Securities and Exchange Commission on July 8, 2020,”), and development-stage company, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information disclosed in the Company's Current Report on Form 8-K (File No.

000-52273), filed with the Securities and Exchange Commission on July 8, 2020, and the December 31, 2019 audited financial statements and related notes included in the Company’s Form 10-K (File No.

The following information should be read in conjunction with (i) the financial statements of New Momentum Corporation, a Nevada corporation (the “Company”), and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the December 31, 2019 audited financial statements and related notes included in the Company’s Form 10-K (File No.

the “Form 10-K”), as filed with the Securities and Exchange Commission on March 30, 2020.

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The Company was incorporated in the State of Nevada on July 1, 1999, and established a fiscal year end of December 31.

On July 6, 2020, the Company entered into a Share Exchange Agreement (the “Share Exchange Agreement”), by and among the Company, Nemo Holding Company Limited, a British Virgin Islands corporation (“Nemo Holding”), and the holders of common shares of Nemo Holding.

The holders of the common stock of Nemo Holding consisted of 29 stockholders.

Under the terms and conditions of the Share Exchange Agreement, the Company offered, sold and issued 10,000,000 shares of common stock in consideration for all the issued and outstanding shares in Nemo Holding.

Leung Tin Lung David, the Company’s sole officer and director, is the beneficial holder of 6,000,000 common shares, or 60%, of the issued and outstanding shares of Nemo Holding.

The effect of the issuance of the 10,000,000 shares issued under the Share Exchange Agreement represents 10.8% of the issued and outstanding shares of common stock of the Company.

Immediately prior to the closing of the transactions under the Share Exchange Agreement, Mr.

Leung was the holder of 233,813,213 shares of common stock, or 75.2%, of the issued and outstanding shares of common stock of the Company.

Giving effect to the closing of the transactions under the Share Exchange Agreement, Mr.

Leung acquired 6,000,000 shares of common stock of the Company, by virtue of his 60% beneficial ownership of Nemo Holding.

The remaining 28 common shareholders of Nemo Holding acquired 4,000,000 shares of common stock under the Share Exchange Agreement, by virtue of their aggregate of 40% beneficial ownership of Nemo Holding.

Giving effect to the transactions under the Share Exchange Agreement, Mr.

Leung is now the beneficial holder of 239,813, 213 shares of common stock, or 74.7%, of the issued and outstanding shares of common stock of Nemo Holding.

As a result of the share exchange, Nemo Holding is now a wholly-owned subsidiary of the Company.

Going Concern

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Accordingly, these factors raise substantial doubt as to the Company’s ability to continue as a going concern.

Our activities have been financed from related-party loans and the proceeds of share subscriptions.

During October 2015, the Company raised a total of $300,500 in cash from offerings of our common stock.

We have no outstanding loans.

The Company plans to raise additional funds through debt or equity offerings.

There is no guarantee that the Company will be able to raise any capital through this or any other offerings.

PLAN OF OPERATION

We are an early stage corporation and have generated revenues of $5,872 from our business during the nine months ended September 30, 2020.

We have developed and operate an online ticketing platform named Gagfare.com, which provides a ticketing system for individuals and agencies to search, book and issue flight tickets and other services.

During the 12 months following the date of filing of this Quarterly Report on Form 10-Q, will be focused on attempting to raise $750,000 of funds to expand our business.

We have no assurance that future financing will materialize.

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However, additional equity financing may not be available to us on acceptable terms or at all, and thus we could fail to satisfy our future cash requirements.

If we are unsuccessful in raising the additional proceeds through a private placement offering we will then have to seek additional funds through debt financing, which would be highly difficult for a new development stage company to secure.

Therefore, the Company is highly dependent upon the success of the anticipated private placement offering and failure thereof would result in the Company having to seek capital from other sources such as debt financing, which may not even be available to the Company.

However, if such financing were available, because we are a development stage company with no operations to date, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate.

However, if such financing were available, because we are an early stage company, it would likely have to pay additional costs associated with high risk loans and be subject to an above market interest rate.

At such time these funds are required, management would evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage the debt load.

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As a result, investors in our common stock would lose all of their investment.

PLAN OF OPERATION

We are a development stage corporation and have not yet generated or realized any revenues from our business.

In the next 12 months, we plan to increase our revenues by garnering more customers.

With new customers, the Company intends to develop a travel services businesses, which includes an online ticketing platform Gagfare, which provides to travelers a “Book Now, Pay Later” business model, for travelers to secure the best fares and reserve flights well ahead of time.

The Company intends to also become the driving force behind a bold new hospitality concept that takes nature lovers and intrepid travelers to exciting new and established destinations.

The Company intends to curate a collection of boutique properties, each with a focus on diving, sustainability, conservation, and cultural authenticity, offering a thoroughly contemporary travel experience that is intrinsically linked to the destination, its heritage and its culture.

With new investors joining, the Company will develop a travel services businesses, which includes an online ticketing platform Gagfare, which provides to travelers a “Book Now, Pay Later” business model, for travelers to secure the best fares and reserve flights well ahead of time.

The Company will also become the driving force behind a bold new hospitality concept that takes nature lovers and intrepid travelers to exciting new and established destinations.

The curated collection of boutique properties, each with a focus on diving, sustainability, conservation, and cultural authenticity, offers a thoroughly contemporary travel experience that is intrinsically linked to the destination, its heritage and its culture.

RESULTS OF OPERATIONS

Three-Month Periods Ended June 30, 2020 and 2019

We did not earn revenues for the three-month periods ended June 30, 2020 and 2019.

For the three-month period ended June 30, 2020, we incurred total operating expenses of $63,029, consisting solely of general and administrative expenses.

By comparison, for the three-month period ended June 30, 2019, we incurred total operating expenses of $11,493, consisting solely of general and administrative expenses.

For the three-month period ended June 30, 2020, we had a net loss of $63,029.

For the three-month period ended June 30, 2019, we had a net loss of $11,493.

Six-Month Periods Ended June 30, 2020 and 2019

We did not earn revenues for the six-month periods ended June 30, 2020 and 2019.

For the six-month period ended June 30, 2020, we incurred total operating expenses of $71,612, consisting solely of general and administrative expenses.

By comparison, for the six-month period ended June 30, 2019, we incurred total operating expenses of $18,554, consisting solely of general and administrative expenses.

For the six-month period ended June 30, 2020, we had a net loss of $71,612.

For the six-month period ended June 30, 2019, we had a net loss of $18,554.

Comparison of the three months ended September 30, 2020 and 2019

As of September 30, 2020, we suffered from a working capital deficit of $108,530.

As a result, our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders or other capital sources.

Management believes that the continuing financial support from the existing shareholders and external financing will provide the additional cash to meet our obligations as they become due.

Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

The following table sets forth certain operational data for the three months ended September 30, 2020 and 2019:

Three Months Ended September 30,

Cost of revenue

Total operating expenses

Loss before Income Taxes

Income tax expense

We generated revenues of $5,872 and $44 for the three months ended September 30, 2020 and 2019.

The significant increase is due to the increase in business volume in booking services.

Cost of Revenue .

Cost of revenue for the three months ended September 30, 2020, was $5,214.

Cost of revenue increased primarily as a result of the increase in our business volume.

Gross Profit .

We achieved a gross profit of $658 and $44 for the three months ended September 30, 2020 and 2019, respectively.

The increase in gross profit is primarily attributable to the increase in our business volume.

General and Administrative Expenses ( “ G&A ” ) .

We incurred G&A expenses of $13,414 and $4,347 for the three months ended September 30, 2020 and 2019, respectively.

The increase in G&A is primarily attributable to the increase in our business volume.

Income Tax Expense .

Our income tax expenses for the quarters ended September 30, 2020 and 2019 were $0.

During the three months ended September 30, 2020, we incurred a net loss of $12,755, as compared to $4,302 for the same period ended September 30, 2019.

Comparison of the nine months ended September 30, 2020 and 2019

The following table sets forth certain operational data for the nine months ended September 30, 2020 and 2019:

Nine Months Ended September 30,

Cost of revenue

Total operating expenses

Loss before Income Taxes

Income tax expense

We generated revenues of $16,202 and $315 for the nine months ended September 30, 2020 and 2019.

Cost of Revenue .

Cost of revenue for the nine months ended September 30, 2020, was $5,214.

Cost of revenue increased primarily as a result of the increase in our business volume.

Gross Profit .

We achieved a gross profit of $10,988 and $315 for the nine months ended September 30, 2020 and 2019, respectively.

The increase in gross profit is primarily attributable to the increase in our business volume.

General and Administrative Expenses ( “ G&A ” ) .

We incurred G&A expenses of $16,131 and $20,889 for the nine months ended September 30, 2020, and 2019, respectively.

The increase in G&A is primarily attributable to the increase in our business volume.

Income Tax Expense .

Our income tax expenses for the nine months ended September 30, 2020 and 2019 were $0.

During the nine months ended September 30, 2020, we incurred a net loss of $22,782, as compared to $20,570 for the same period ended September 30, 2019.

Liquidity and Capital Resources

At June 30, 2020, we had a cash balance of $0 and an escrow accounts hold by attorney of $5,092, total current assets of $5,092, total current liabilities of approximately $67,000, and working deficit and stockholders’ deficit of approximately $61,908.

We will need to raise funds to commence our plan of operation and fund our ongoing operational expenses.

Additional funding will likely come from equity financing from the sale of our common stock or debt securities.

If we are successful in completing an equity or debt financing, existing shareholders will experience dilution of their interest in our Company.

We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock or debt securities to fund our planned activities and ongoing operational expenses.

In the absence of such financing, our business will likely fail.

There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing.

If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our operations and our business will fail.

As of September 30, 2020, we had cash and cash equivalents of $34,067, accounts receivable of $6,163, deposits, prepayments and other receivables of $11,778.

We believe that our current cash and other sources of liquidity discussed below are adequate to support general operations for at least the next 12 months.

Nine Months Ended September 30,

Net cash provided used in operating activities

Net cash provided by (used in) investing activities

Net cash provided by financing activities

Net Cash Used In Operating Activities.

For the nine months ended September 30, 2020, net cash used in operating activities was $20,171, which consisted primarily of a net loss of $22,782, offset by an decrease in accounts receivables of $5,660, a decrease in deposits, prepayments and other receivables of $307 and an increase in accrued expenses and other payables of $8,578.

For the nine months ended September 30, 2019, net cash used in operating activities was $14,803, which consisted primarily of a net loss of $20,570, non-cash items, offset by an increase in accounts receivables of $4,238, an increase in deposits, prepayments and other receivables of $7,447 and a decrease in accrued expenses and other payable of $5,916.

We expect to continue to rely on cash generated through financing from our existing shareholders and private placements of our securities, however, to finance our operations and future acquisitions.

Net Cash Provided By Investing Activities.

For the nine months ended September 30, 2020, there is no net cash provided by investing activities.

For the nine months ended September 30, 2019, there is no net cash provided by investing activities.

Net Cash Provided By Financing Activities.

For the nine months ended September 30, 2020, net cash provided by financing activities was $45,061 consisting primarily of $22,840 repayment to related companies of the Company and offset by $67,901 advances from a director.

For the nine months ended September 30, 2019, net cash provided by financing activities was $15,443, consisting primarily of $38,589 repayment to related companies of the Company and offset by $54,032 advances from the Company’s related parties.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements for the six months ended June 30, 2020.

We had no off-balance sheet arrangements for the nine months ended September 30, 2020.

Subsequent Events

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis