New Momentum Corp. 10-K

ITEM 8. FINANCIAL STATEMENTS New Momentum Corporation TABLE OF CONTENTS Report of Independent Registered Public Accounting Firm – Total Asia Associates PLT F-1 Consolidated Balance Sheets as of December 31, 2020 and 2019 F-2 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2020 and 2019 F-3 Consolidated Statements of Cash Flows for the years ended December 31, 2020 and 2019 F-5 Consolidated Statements of Shareholders’ Deficit for the years ended December 31, 2020 and 2019 F-6 Notes to Consolidated Financial Statements F-7 17 Table of Contents TOTAL ASIA ASSOCIATES PLT (AF002128 & LLP0016837-LCA) A Firm registered with US PCAOB and Malaysian MIA Block C-3-1, Megan Avenue 1, 189, Off Jalan Tun Razak, 50400, Kuala Lumpur, Malaysia Tel: (603) 2733 9989 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Director and Shareholders of NEW MOMENTUM CORPORATION Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of New Momentum Corporation and its subsidiaries (the ‘Company’) as of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ deficit and cash flows for the years ended December 31, 2020 and 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for the years ended December 31, 2020 and 2019, in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in note 2 to the consolidated financial statements, the Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. These factors create an uncertainty as to the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ TOTAL ASIA ASSOCIATES PLT TOTAL ASIA ASSOCIATES PLT March 26, 2021 We have served as the Company’s auditor since 2020. Kuala Lumpur, Malaysia F-1 Table of Contents NEW MOMENTUM CORPORATION CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2020 AND 2019 (Currency expressed in United States Dollars (“US$”), except for number of shares) As of December 31, 2020 2019 ASSETS Current assets: Cash and cash equivalents $ 64,496 $ 9,343 Accounts receivable 374 503 Deposits, prepayments and other receivables 19,953 11,471 Total current assets 84,823 21,317 TOTAL ASSETS $ 84,823 $ 21,317 LIABILTIES AND SHAREHOLDERS’ DEFICIT Current liabilities: Accrued liabilities and other payables $ 12,290 $ 682 Amount due to a related company - 22,840 Amounts due to directors 199,949 83,377 Convertible promissory note 33,444 - Total current liabilities 245,683 106,899 TOTAL LIABILITIES 245,683 106,899 Commitments and contingencies - - SHAREHOLDERS’ DEFICIT Preferred stock, Class A, $0.001 par value; 175,000,000 shares authorized; no share issued and outstanding as at December 31, 2020 and 2019 - - Common stock, $0.001 par value; 500,000,000 shares authorized; 340,268,500 and 10,000,000 shares issued and outstanding as at December 31, 2020 and 2019, respectively 340,269 10,000 Additional paid in capital 4,054,600 - Accumulated other comprehensive losses (884 ) (553 ) Accumulated losses (4,554,845 ) (95,029 ) Shareholders’ deficit (160,860 ) (85,582 ) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT $ 84,823 $ 21,317 See accompanying notes to consolidated financial statements. F-2 Table of Contents NEW MOMENTUM CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (Currency expressed in United States Dollars (“US$”)) Years ended December 31, 2020 2019 Revenue, net $ 237,980 $ 183 Cost of revenue (233,757 ) - Gross profit 4,223 183 Operating expenses: General and administrative expenses (4,111,983 ) (23,066 ) Legal and professional fee (64,013 ) - Total operating expenses (4,175,996 ) (23,066 ) Loss from operations (4,171,773 ) (22,883 ) Other income (expense): Government subsidy 23,853 3,367 Interest income 1 5 Interest expense (1,028 ) - Total other income 22,826 3,372 LOSS BEFORE INCOME TAXES (4,148,947 ) (19,511 ) Income tax expense - - NET LOSS (4,148,947 ) (19,511 ) Other comprehensive loss : Foreign currency translation loss (331 ) (182 ) COMPREHENSIVE LOSS $ (4,149,278 ) $ (19,693 ) Net loss per share Basic and diluted $ (0.03 ) $ (0.00 ) Weighted average shares outstanding Basic and diluted 165,747,163 10,000,000 See accompanying notes to consolidated financial statements. F-3 Table of Contents NEW MOMENTUM CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (Currency expressed in United States Dollars (“US$”)) Years ended December 31, 2020 2019 Cash flow from operating activities: Net loss $ (4,148,947 ) $ (19,511 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation for services 4,074,000 - Amortization of convertible note discount 444 - Change in operating assets and liabilities: Accounts receivable 129 7,672 Deposits, prepayments and other receivables (8,482 ) 7,357 Accrued liabilities and other payables 11,608 (7,975 ) Net cash used in operating activities (71,248 ) (12,457 ) Cash flow from financing activities: Advance from a director 116,572 54,263 Proceed from issuance of convertible bonds 33,000 - Repayment to related companies (22,840 ) (37,392 ) Net cash generated from financing activities 126,732 16,871 Effect on exchange rate change on cash and cash equivalents (331 ) (182 ) Net change in cash and cash equivalents 55,153 4,232 BEGINNING OF YEAR 9,343 5,111 END OF YEAR $ 64,496 $ 9,343 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for tax $ - $ - Cash paid for interest $ - $ - See accompanying notes to consolidated financial statements. F-4 Table of Contents NEW MOMENTUM CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (Currency expressed in United States Dollars (“US$”), except for number of shares) Common stock Additional paid in Accumulated other comprehensive Accumulated Total shareholders’ No. of Shares Amount capital losses losses deficit Balance as at January 1, 2019 (restated) 10,000,000 $ 10,000 $ - $ (371 ) $ (75,518 ) $ (65,889 ) Foreign currency translation adjustment - - - (182 ) - (182 ) Net loss for the year - - - - (19,511 ) (19,511 ) Balance as at December 31, 2019 10,000,000 $ 10,000 $ - $ (553 ) $ (95,029 ) $ (85,582 ) Shares issued for acquisition of legal acquirer 310,868,500 310,869 - - (310,869 ) - Issuance of shares for service rendered 19,400,000 19,400 4,054,600 - - 4,074,000 Foreign currency translation adjustment - - - (331 ) - (331 ) Net loss for the year - - - - (4,148,947 ) (4,148,947 ) Balance as at December 31, 2020 340,268,500 $ 340,269 $ 4,054,600 $ (884 ) $ (4,554,845 ) $ (160,860 ) See accompanying notes to consolidated financial statements. F-5 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (Currency expressed in United States Dollars (“US$”), except for number of shares) 1. DESCRIPTION OF BUSINESS AND ORGANIZATION New Momentum Corporation (formerly known as Eason Education Kingdom Holdings, Inc.) (the “Company”) was incorporated under the law of the State of Nevada on July 1, 1999. The Company through its subsidiaries, mainly operates a smartphone application to provide the online platform with “Book Now, Pay Later” flight booking service for travelers among over 500 airlines worldwide to search and secured their tickets. With a simple, user-friendly interface, the Company enables customers to arrange and book the multiple-stop itineraries, and to check their bookings through official airline websites using the Gagfare booking reference number. 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 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. Both the Company and Nemo Holding are controlled by the same management team. Upon completion of the Share Exchange Transaction, Nemo Holding became a 100% owned subsidiary of the Company. Because the Company is a shell company, Nemo Holding will comprise the ongoing operations of the combined entity and its senior management will serve as the senior management of the combined entity, Nemo Holding is deemed to be the accounting acquirer for accounting purposes. The transaction will be treated as a recapitalization of the Company. Accordingly, the consolidated assets, liabilities and results of operations of the Company will become the historical financial statements of Nemo Holding, and the Company’s assets, liabilities and results of operations will be consolidated with Nemo Holding beginning on the acquisition date. Nemo Holding was the legal acquiree but deemed to be the accounting acquirer. The Company was the legal acquirer but deemed to be the accounting acquiree in the reverse merger. The historical financial statements prior to the acquisition are those of the accounting acquirer (Nemo Holding). After completion of the Share Exchange Transaction, the Company’s consolidated financial statements include the assets and liabilities, the operations and cash flow of the accounting acquirer. During the year ended December 31, 2020, the Company established two subsidiaries namely New Momentum Asia Pte. Ltd, a Singapore corporation and JPOPCOIN Limited, a Hong Kong corporation, respectively, for business expansion. Description of subsidiaries Name Place of incorporation and kind of legal entity Principal activities Particulars of registered/ paid up share capital Effective interest held NEMO Holding Company Limited British Virgin Islands Investment holding 10,000 ordinary shares at par value of US$1 100% Gagfare Limited Hong Kong Travel agency 500,000 ordinary shares for HK$500,000 100% Beyond Blue Limited Hong Kong Event organizer 1 ordinary share for HK$1 100% New Momentum Asia Pte. Ltd. Singapore Investment holding 1 ordinary share for SGD 1 100% JPOPCOIN Limited Hong Kong Administrative service 5 ordinary shares for HK$5 100% The Company and its subsidiaries are hereinafter referred to as (the “Company”). 2. GOING CONCERN UNCERTAINTIES The accompanying consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered from continuous loss from its inception and shareholders’ deficit of $160,860 and net current liabilities of $160,860 at December 31, 2020. In addition, with respect to the ongoing and evolving coronavirus (COVID-19) outbreak, which was designated as a pandemic by the World Health Organization on March 11, 2020, the outbreak has caused substantial disruption in international economies and global trades and if repercussions of the outbreak are prolonged, could have a significant adverse impact on the Company’s business. F-6 Table of Contents The continuation of the Company as a going concern through December 31, 2021 is dependent upon the continued financial support from its shareholders. Management believes the Company is currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations. These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated 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. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes. · Basis of presentation These accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). · Use of estimates and assumptions In preparing these consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the years reported. Actual results may differ from these estimates. · Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation. · 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. · Accounts receivable Accounts receivable are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms, generally 30 to 90 days from completion of service. Credit is extended based on evaluation of a customer's financial condition, the customer credit-worthiness and their payment history. Accounts receivable outstanding longer than the contractual payment terms are considered past due. Past due balances over 90 days and over a specified amount are reviewed individually for collectibility. At the end of fiscal year, the Company specifically evaluates individual customer’s financial condition, credit history, and the current economic conditions to monitor the progress of the collection of accounts receivables. The Company will consider the allowance for doubtful accounts for any estimated losses resulting from the inability of its customers to make required payments. For the receivables that are past due or not being paid according to payment terms, the appropriate actions are taken to exhaust all means of collection, including seeking legal resolution in a court of law. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers. As of December 31, 2020 and 2019, there was no allowance for doubtful accounts. · Revenue recognition The Company adopted Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers” (“ASC 606”) as of January 1, 2019 using the modified retrospective method. This method allows the Company to apply ASC 606 to new contracts entered into after January 1, 2019, and to its existing contracts for which revenue earned through December 31, 2018 has been recognized under the guidance in effect prior to the effective date of ASC 606. The revenue recognition processes the Company applied prior to adoption of ASC 606 align with the recognition and measurement guidance of the new standard, therefore adoption of ASC 606 did not require a cumulative adjustment to opening equity. F-7 Table of Contents Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: • identify the contract with a customer; • identify the performance obligations in the contract; • determine the transaction price; • allocate the transaction price to performance obligations in the contract; and • recognize revenue as the performance obligation is satisfied. The Company records its revenue from booking income upon the ticket booking service is rendered to travelers. The Company also records its revenue from the sale of air tickets upon the confirmation and issuance of tickets to the travelers. • Income taxes The Company adopted the ASC 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13. The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary. · Uncertain tax positions The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the years ended December 31, 2020 and 2019. · 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 consolidated statement of operations. The reporting currency of the Company is United States Dollar ("US$") and the accompanying consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong and Singapore and maintain its books and record in its local currency, Hong Kong Dollars (“HKD”) and Singapore Dollars (“SGD”), which are a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement ”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in shareholders’ equity. Translation of amounts from HKD and SGD into US$ have been made at the following exchange rates for the years ended December 31, 2020 and 2019: December 31, 2020 December 31, 2019 Year-end HKD:US$ exchange rate 0.12899 0.12842 Average HKD:US$ exchange rate 0.12894 0.12764 Year-end SGD:US$ exchange rate 0.75645 - Average SGD:US$ exchange rate 0.74365 - F-8 Table of Contents · Net loss per share The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive. · Comprehensive income ASC Topic 220, “ Comprehensive Income ”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying consolidated statements of changes in shareholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit. · Leases The Company adopted Topic 842, Leases (“ASC 842”), using the modified retrospective approach through a cumulative-effect adjustment and utilizing the effective date of January 1, 2019 as its date of initial application, with prior periods unchanged and presented in accordance with the previous guidance in Topic 840, Leases (“ASC 840”). At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Leases with a term greater than one year are recognized on the balance sheet as right-of-use (“ROU”) assets, lease liabilities and long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected remaining lease term. However, certain adjustments to the right-of-use asset may be required for items such as prepaid or accrued lease payments. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rates, which are the rates incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. In accordance with the guidance in ASC 842, components of a lease should be split into three categories: lease components (e.g. land, building, etc.), non-lease components (e.g. common area maintenance, consumables, etc.), and non-components (e.g. property taxes, insurance, etc.). Subsequently, the fixed and in-substance fixed contract consideration (including any related to non-components) must be allocated based on the respective relative fair values to the lease components and non-lease components. Lease expense is recognized on a straight-line basis over the lease terms. Lease expense includes amortization of the ROU assets and accretion of the lease liabilities. Amortization of ROU assets is calculated as the periodic lease cost less accretion of the lease liability. The amortized period for ROU assets is limited to the expected lease term. The Company has elected a practical expedient to combine the lease and non-lease components into a single lease component. The Company also elected the short-term lease measurement and recognition exemption and does not establish ROU assets or lease liabilities for operating leases with terms of 12 months or less. · Retirement plan costs Contributions to retirement plans (which are defined contribution plans) are charged to general and administrative expenses in the accompanying statements of operation as the related employee service is provided. · Share-based compensation The Company follows ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all share-based payment awards, including restricted stock units, based on estimated grant date fair values. Restricted stock units are valued using the market price of the Company’s common shares on the date of grant. The Company records compensation expense, net of estimated forfeitures, over the requisite service period. · Related parties The Company follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions. Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. F-9 Table of Contents The consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. · Commitments and contingencies The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. · Fair value of financial instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below: Level 1 Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3 Pricing inputs that are generally observable inputs and not corroborated by market data. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, accounts receivable, deposits, prepayment and other receivables, amount due from a director and operating lease right-of-use assets, approximate their fair values because of the short maturity of these instruments. F-10 Table of Contents · Recent accounting pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Standards In June 2016, the FASB issued guidance that affects loans, trade receivables and any other financial assets that have the contractual right to receive cash. Under the new guidance, an entity is required to recognize expected credit losses rather than incurred losses for financial assets. The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. The Company adopted the new guidance effective January 1, 2020, with no material impact to the Company’s consolidated financial position, results of operations or cash flows. In August 2018, the FASB issued guidance which modifies certain disclosure requirements over fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, including all interim periods within that fiscal year. The Company adopted the new guidance effective January 1, 2020. The Company does not currently classify any of its derivative contracts or restoration plan assets as Level 3 assets or liabilities, nor did the Company have any transfers amongst fair value levels during the year ended December 31, 2020. As a result, the guidance did not have an impact on Company’s the fair value measurement disclosures upon adoption. In January 2017, the FASB issued guidance which eliminates the second step from the traditional two-step goodwill impairment test. Under current guidance, an entity performed the first step of the goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount; if an impairment loss was indicated, the entity computed the implied fair value of goodwill to determine whether an impairment loss existed, and if so, the amount to recognize. Under the new guidance, an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value (the Step 1 test), with no further testing required. Any impairment loss recognized is limited to the amount of goodwill allocated to the reporting unit. The new guidance is effective for public companies that are Securities and Exchange Commission (“SEC”) registrants for fiscal years beginning after December 15, 2019. The Company adopted the new guidance on January 1, 2020, and applied the guidance prospectively to its goodwill impairment tests. Accounting Standards Not Yet Adopted as of December 31, 2020 In December 2019, the FASB issued new guidance to simplify the accounting for income taxes by removing certain exceptions to the general principles and also simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The new guidance is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. In March 2020, the FASB issued guidance to address certain accounting consequences from the anticipated transition from the use of the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. The new guidance contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and may be elected over time as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based on matches the index of the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. F-11 Table of Contents 4. AMOUNTS DUE TO A RELATED COMPANY AND DIRECTORS As of December 31, 2020 and 2019, the Company owed to its directors in the amount of $199,949 and $83,377, respectively. The amounts are unsecured, non-interest bearing and have no fixed terms of repayment. Imputed interest from related party loans is not significant. As of December 31, 2020 and 2019, the Company owed to the related company which is controlled by the Company’s directors in the amount of $0 and $22,840, respectively. The amounts are unsecured, non-interest bearing and have no fixed terms of repayment. Imputed interest from related party loans is not significant. 5. CONVERTIBLE PROMISSORY NOTE On October 27, 2020, the Company and EMA Financial, LLC, (“EMA”) entered into a Securities Purchase Agreement, whereby the Company issued a note to EMA (the “EMA Note”) in the original principal amount of $35,000. The EMA Note contains an original issue discount of $2,000 which will be reflected as a debt discount and amortized over the nine months Note term. The EMA Note is convertible into shares of the common stock of the Company at a price equal to 55% of the lowest trading price of the Company’s common stock for the twenty (20) consecutive trading days immediately preceding to the conversion date. The EMA Note bears interest at 10% per annum and is due on July 27, 2021. As of December 31, 2020 and 2019, accrued interest amounted to $584 and $0, respectively. For the year ended December 31, 2020 and 2019, the amortization of discount was $444 and $0, respectively. 6. SHAREHOLDERS’ DEFICIT Preferred Stock Authorized shares The Company was authorized to issue 175,000,000 shares of Class A preferred stock at par value of $0.001. Any class of preferred stock may have preferential voting rights, liquidation rights or other rights with respect to the class of common stock. These preferential rights may have anti-takeover effects and may also result in the dilution of the common stockholders; equity interest and earnings per share. Issued and outstanding shares As of December 31, 2020 and 2019, no Class A preferred stock was issued and outstanding. Common Stock Authorized shares The Company was authorized to issue 500,000,000 shares of common stock at par value of $0.001. Issued and outstanding shares On October 23, 2020, the Company issued 19,400,000 shares of common stock at $0.21 per share under the Plan to compensate certain consultants and service providers in rendering the services to the Company in the amount of $4,074,000 and charged to the operations. As of December 31, 2020, 340,268,500 common shares issued and outstanding. Stock Option Plan On October 19, 2020, the Company approved the 2020 Stock Incentive Plan (the “Plan”) and authorized the director to issue the maximum shares of common stock of 20,000,000 shares at a price of $0.21 per share under the Plan. On October 23, 2020, the Company issued 19,400,000 shares of common stock at $0.21 per share under the Plan to compensate certain consultants and service providers in rendering the services to the Company. As of December 31, 2020, 600,000 shares are not issued under the Plan. F-12 Table of Contents 7. INCOME TAX Income (loss) before income taxes within or outside the United States are shown below: Years ended December 31, 2020 2019 Domestic $ (4,139,578 ) $ - Foreign (9,369 ) (19,511 ) Total $ (4,148,947 ) $ (19,511 ) The provision (benefit) for income taxes as shown in the accompanying consolidated statements of income consists of the following: Years ended December 31, 2020 2019 Current: $ - $ - Domestic - - Foreign - - Deferred: Domestic - - Foreign - - Provision for income taxes $ - $ - The effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company operates in various countries: United States of America and Hong Kong that are subject to taxes in the jurisdictions in which they operate, as follows: United States of America NNAX is registered in the State of Nevada and is subject to US federal corporate income tax. The U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018. The Company’s policy is to recognize accrued interest and penalties related to unrecognized tax benefits in its income tax provision. The Company has not accrued or paid interest or penalties which were not material to its results of operations for the periods presented. Deferred tax asset is not provided for as the tax losses may not be able to carry forward after a change in substantial ownership of the Company in July 2020. As of December 31, 2020, the operations in the United States of America incurred $4,924,704 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2040, if unutilized. The Company has provided for a full valuation allowance against the deferred tax assets of $1,034,188 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. ASC 740, Accounting for Income Taxes , which requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction by jurisdiction basis. The Company’s history of cumulative losses, along with expected future U.S. losses required that a full valuation allowance be recorded against all net deferred tax assets. The Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance. BVI Under the current BVI law, the Company is not subject to tax on income. Singapore The Company’s operating subsidiary is registered in Republic of Singapore and is subject to the Singapore corporate income tax at a standard income tax rate of 17% on the assessable income arising in Singapore during its tax year. No assessable income was generated in Singapore during the year ended December 31, 2020 and there was no provision for income tax. F-13 Table of Contents Hong Kong The Company’s subsidiaries operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the years ended December 31, 2020 and 2019 is as follows: Years ended December 31, 2020 2019 Loss before income taxes $ (5,687 ) $ (19,511 ) Statutory income tax rate 16.5 % 16.5 % Income tax expense at statutory rate (938 ) (3,219 ) Tax effect of non-taxable items (3,936 ) (555 ) Net operating loss 4,874 3,774 Income tax expense $ - $ - The following table sets forth the significant components of the deferred tax assets of the Company as of December 31, 2020 and 2019: As of December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards - United States $ 1,034,188 $ - - Hong Kong 21,108 16,234 - Singapore 82 - 1,055,378 16,234 Less: valuation allowance (1,055,378 ) (16,234 ) Deferred tax assets, net $ - $ - 8. NET LOSS PER SHARE Basic net loss per share is computed using the weighted average number of common shares outstanding during the year. The dilutive effect of potential common shares outstanding is included in diluted net loss per share. The following table sets forth the computation of basic and diluted net loss per share for the years ended December 31, 2020 and 2019: Years ended December 31, 2020 2019 Net loss attributable to common shareholders $ (4,148,947 ) $ (19,511 ) Weighted average common shares outstanding – Basic and diluted 165,747,163 10,000,000 Net loss per share – Basic and diluted $ (0.03 ) $ (0.00 ) 9. PENSION COSTS The Company is required to make contribution to their employees under a government-mandated defined contribution pension scheme for its eligible full-times employees in Hong Kong. The Company is required to contribute a specified percentage of the participants’ relevant income based on their ages and wages level. During the years ended December 31, 2020 and 2019, $280 and $0 contributions were made accordingly. F-14 Table of Contents 10. RELATED PARTY TRANSACTIONS From time to time, the directors of the Company advanced funds to the Company for working capital purpose. Those advances are unsecured, non-interest bearing and had no fixed terms of repayment. During the years ended December 31, 2020 and 2019, the Company has been provided free office space by its shareholder. The management determined that such cost is nominal and did not recognize the rent expense in its consolidated financial statements. Since February 1, 2016, the Company was granted with the right of use to the website and mobile application platforms by JJ Explorer Tours Limited (“JJ Explorer”), which was also controlled by the directors of the Company. Also, the Company formed a cooperation partnership with JJ Explorer whereas JJ Explorer invested to develop and maintained the operations of the Gagfare web and mobile application platforms in a term of 5 years, to be expired on January 31, 2021. On January 31, 2021, JJ Explorer agreed to extend the term of additional 5 years, up January 31, 2026. In return, JJ Explorer would share 50% of the net earnings generated by the Company in the use of its web and mobile application platforms during the cooperation period. For the years ended December 31, 2020 and 2019, the Company did not record the service charges and paid to JJ Explorer. Apart from the transactions and balances detailed elsewhere in these accompanying consolidated financial statements, the Company has no other significant or material related party transactions during the years presented. 11. CONCENTRATIONS OF RISK The Company is exposed to the following concentrations of risk: (a) Major customers For the years ended December 31, 2020 and 2019, there was no single customer exceeding 10% of the Company’s revenue. (b) Economic and political risk The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations. (c) Exchange rate risk The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD and SGD converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice. 12. COMMITMENTS AND CONTINGENCIES As of December 31, 2020 and 2019, the Company has no material commitments or contingencies. 13. 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 consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after December 31, 2020, up through March 26, 2021, the Company issued the audited consolidated financial statements. The Company determined that there are no further events to disclose. On March 11, 2021, the Company filed the Certificate of Designation to create and authorize Series A Preferred Stock. F-15 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE None.