New Momentum Corp. 10-Q

ITEM 1. FINANCIAL STATEMENTS. NEW MOMENTUM CORPORATION INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Page Condensed Consolidated Balance Sheets F-1 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) F-2 Condensed Consolidated Statements of Cash Flows F-3 Condensed Consolidated Statements of Changes in Shareholders’ Deficit F-4 Notes to Condensed Consolidated Financial Statements F-5 – F-16 4 Table of Contents NEW MOMENTUM CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (Currency expressed in United States Dollars (“US$”), except for number of shares) March 31, 2021 December 31, 2020 (Unaudited) (Audited) ASSETS Non-current asset: Right-of-use asset $ 45,241 $ - Current assets: Cash and cash equivalents $ 42,512 $ 64,496 Accounts receivable 487 374 Deposits, prepayments and other receivables 19,897 19,953 Total current assets 62,896 84,823 TOTAL ASSETS $ 108,137 $ 84,823 LIABILTIES AND SHAREHOLDERS’ DEFICIT Current liabilities: Accrued liabilities and other payables $ 11,008 $ 12,290 Amount due to directors 218,840 199,949 Convertible promissory note 34,111 33,444 Lease liabilities 24,827 - Total current liabilities 288,786 245,683 Non-current liability Lease liabilities $ 19,310 $ - TOTAL LIABILITIES 308,096 245,683 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 March 31, 2021 and December 31, 2020 - - Common stock, $0.0001 par value; 500,000,000 shares authorized; 340,268,500 shares issued and outstanding as at March 31, 2021 and December 31, 2020 340,269 340,269 Additional paid in capital 4,054,600 4,054,600 Accumulated other comprehensive losses (575 ) (884 ) Accumulated losses (4,594,253 ) (4,554,845 ) Shareholders’ deficit (199,959 ) (160,860 ) TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT $ 108,137 $ 84,823 See accompanying notes to condensed consolidated financial statements. F-1 Table of Contents NEW MOMENTUM CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Currency expressed in United States Dollars (“US$”)) (Unaudited) Three Months ended March 31, 2021 2020 Revenue, net $ 338,949 $ 20 Cost of revenue (337,826 ) - Gross profit 1,123 20 Operating expenses: General and administrative expenses (18,475 ) (3,538 ) Legal and professional fee (19,884 ) - Total operating expenses (38,359 ) (3,538 ) Other (expense) income Interest expense (2,172 ) - Government subsidy - 10,295 Total other (expense) income (2,172 ) 10,295 (LOSS) INCOME BEFORE INCOME TAXES (39,408 ) 6,777 Income tax expense - - NET (LOSS) INCOME (39,408 ) 6,777 Other comprehensive income (loss): Foreign currency translation gain (loss) 309 (123 ) COMPREHENSIVE (LOSS) INCOME $ (39,099 ) $ 6,654 Basic and diluted weighted average shares outstanding 340,268,500 10,000,000 Basic and diluted net loss per share $ (0.00 ) $ 0.00 See accompanying notes to condensed consolidated financial statements. F-2 Table of Contents NEW MOMENTUM CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Currency expressed in United States Dollars (“US$”)) (Unaudited) Three months ended March 31, 2021 2020 Cash flow from operating activities: Net (loss) income $ (39,408 ) $ 6,777 Adjustment to reconcile net (loss) income to net cash used in operating activities: Amortization of convertible note discount 667 - Depreciation of right-of-use asset 5,038 - Change in operating assets and liabilities: Accounts receivable (113 ) (21 ) Accrued liabilities and other payables (1,282 ) 285 Lease liabilities 632 - Net cash used in operating activities (34,466 ) 7,041 Cash flow from financing activities: Advances from (repayment to) a director 18,891 (2,564 ) Advance from related companies - 2,784 Payment of lease liabilities (6,774 ) - Net cash generated from financing activities 12,117 220 Effect on exchange rate change on cash and cash equivalents 365 (175 ) Net change in cash and cash equivalents (21,984 ) 7,086 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 64,496 9,343 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 42,512 $ 16,429 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for tax $ - $ - Cash paid for interest $ - $ - See accompanying notes to condensed consolidated financial statements. F-3 Table of Contents NEW MOMENTUM CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) For the three months ended March 31, 2021 and 2020 Accumulated Additional other Total Common stock paid-in comprehensive Accumulated shareholders’ No. of shares Amount capital losses losses deficit Balance as at January 1, 2020 (restated) 10,000,000 $ 10,000 $ (553 ) $ (95,029 ) $ (85,582 ) Foreign currency translation adjustment - - (123 ) - (123 ) Net loss for the period - - - 6,777 6,777 Balance as at March 31, 2020 10,000,000 $ 10,000 $ (676 ) $ (88,252 ) $ (78,928 ) Balance as at January 1, 2021 (audited) 340,268,500 $ 340,269 $ 4,054,600 $ (884 ) $ (4,554,845 ) $ (160,860 ) Foreign currency translation adjustment - - - 309 - 309 Net loss for the period - - - - (39,408 ) (39,408 ) Balance as at March 31, 2021 320,868,500 $ 320,869 $ 4,054,600 $ (575 ) $ (4,594,253 ) $ (199,959 ) See accompanying notes to condensed consolidated financial statements. F-4 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) 1. DESCRIPTION OF BUSINESS AND ORGANIZATION New Momentum Corporation (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 http://presscentre.asia/gagfare.html. Description of subsidiar ies 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 share of HK$500,000 100% Beyond Blue Limited Hong Kong Event organizer 1 ordinary share of HK$1 100% New Momentum Asia Pte. Ltd. Singapore Investment holding 1 ordinary share of SGD 1 100% JPOPCOIN Limited Hong Kong Administrative service 5 ordinary share of HK$5 100% The Company and its subsidiaries are hereinafter referred to as (the “Company”). 2. GOING CONCERN UNCERTAINTIES The accompanying condensed 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 shareholders’ deficit of $199,959 and net current liabilities of $180,649 at March 31, 2021. In addition, with respect to the ongoing and evolving coronavirus (COVID-19) outbreak, which was designated as a pandemic by the World Health Organization on March 11, 2020, the outbreak has caused substantial disruption in international economies and global trades and if repercussions of the outbreak are prolonged, could have a significant adverse impact on the Company’s business. F-5 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) The continuation of the Company as a going concern through March 31, 2021 is dependent upon the continued financial support from its stockholders. 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 condensed 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 condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes. · Basis of presentation These accompanying condensed consolidated financial statements have been prepared in U.S. Dollars in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included. Operating results for the interim period ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis, and the financial statements and notes thereto included in the Company’s Form 10-K, as filed with the SEC on March 25, 2021. · Use of estimates and assumptions In preparing these condensed 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 condensed consolidated financial statements include the financial statements of the Company and its subsidiary. 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. F-6 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) · 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 March 31, 2020 and December 31, 2020, 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. 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 revene from the sale of air tickets upon the confirmation and issuance of tickets to the travelers. F-7 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) · 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 condensed 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 condensed 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 three months ended March 31, 2021 and 2020. · 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 condensed consolidated statement of operations. The reporting currency of the Company is United States Dollar (“US$”) and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong and maintain its books and record in its local currency, Hong Kong Dollars (“HKD”), which is 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$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement ”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholder’s equity. F-8 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) Translation of amounts from HKD into US$ has been made at the following exchange rates for the nine months ended March 31, 2021 and 2020: March 31, 2021 March 31, 2020 Period-end HKD:US$ exchange rate 0.12863 0.12899 Period average HKD:US$ exchange rate 0.12892 0.12869 Period-end SGD:US$ exchange rate 0.74331 - Period average SGD:US$ exchange rate 0.75071 - · 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 condensed consolidated statements of changes in stockholders’ 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. F-9 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) · 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. The condensed 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 condensed 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 condensed 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. F-10 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) · 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. · 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. F-11 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) Simplifying the Accounting for Debt with Conversion and Other Options. In June 2020, the FASB issued ASU 2020-06 to simplify the accounting in ASC 470, “ Debt with Conversion and Other Options” and ASC 815, “ Contracts in Equity’s Own Entity” . The guidance simplifies the current guidance for convertible instruments and the derivatives scope exception for contracts in an entity’s own equity. Additionally, the amendments affect the diluted EPS calculation for instruments that may be settled in cash or shares and for convertible instruments. This ASU will be effective beginning in the first quarter of the Company’s fiscal year 2022. Early adoption is permitted. The amendments in this update must be applied on either full retrospective basis or modified retrospective basis through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. The Company is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements and related disclosures, as well as the timing of adoption. Financial Instruments In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which modifies the measurement of expected credit losses of certain financial instruments. In February 2020, the FASB issued ASU 2020-02 and delayed the effective date of ASU 2016-13 until fiscal year beginning after December 15, 2022. The Company is currently evaluating the impact of adopting ASU 2016-13 on its consolidated financial statements. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12 to simplify the accounting in ASC 740, “ Income Taxes .” This guidance removes certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. This guidance also clarifies and simplifies other areas of ASC 740. This ASU will be effective beginning in the first quarter of the Company’s fiscal year 2021. Early adoption is permitted. Certain amendments in this update must be applied on a prospective basis, certain amendments must be applied on a retrospective basis, and certain amendments must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. The adoption of ASU 2019-12 does not have a significant impact on the Company’s consolidated financial statements as of and for the three-month period ended March 31, 2021. Earnings Per Share In April 2021, the FASB issued ASU 2021-04, which included Topic 260 “ Earnings Per Share ”. This guidance clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options due to a lack of explicit guidance in the FASB Codification. The ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2021-04 on its consolidated financial statements. The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do 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. F-12 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) 4 . LEASE The Company leased office under various non-cancelable operating leases expiring at the term of 2 years, through December 31, 2022. Right of use assets and lease liability – right of use are as follows: March 31 2021 December 31, 2020 (Audited) Right-of-use assets $ 45,241 $ - The lease liability – right of use is as follows: March 31 2021 December 31, 2020 (Audited) Current portion $ 24,827 $ - Non-current portion 19,310 - Total lease liabilities 44,137 - As of March 31, 2021, the operating lease payment of $27,034 will become matured in the next 12 months. 5 . AMOUNT DUE TO DIRECTORS The amount represented temporary advances to the Company by its directors, which was unsecured, interest-free and had no fixed terms of repayments. 6. 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 March 31, 2021 and December 31, 2020, accrued interest amounted to $1,458 and $584, respectively. For the three months ended March 31, 2021 and 2020, the amortization of discount was $874 and $0, respectively. 7. SHAREHOLDERS’ DEFICIT Authorized shares As of March 31, 2021 and December 31, 2020, the Company authorized two classes of stock; 500,000,000 shares of common stock at par value of $0.001 and 175,000,000 shares of Class A preferred stock at par value of $0.001. Issued and outstanding shares There are 340,268,500 common shares issued and outstanding as of March 31, 2021 and December 2020. F-13 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) 8. INCOME TAX The Company mainly operates in Hong Kong that is subject to taxes in the governing jurisdictions in which it operates. The effective tax rate in the period presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate, 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. 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 three months ended March 31, 2021 and there was no provision for income tax. Hong Kong The Company’s subsidiary 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 three months ended March 31, 2021 and 2020 is as follows: Three months ended March 31, 2021 2020 (Loss) income before income taxes $ (17,805 ) $ 6,777 Statutory income tax rate 16.5 % 16.5 % Income tax expense at statutory rate (2,938 ) 1,118 Tax loss ultilized - (1,118 ) Net operating loss 2,938 - Income tax expense $ - $ - As of March 31, 2021 and December 31, 2020, the operation in Hong Kong incurred $145,733 and $127,927 of cumulative net operating losses which can be carried forward to offset future taxable income at no expiry. The Company has provided for a full valuation allowance against the deferred tax assets of $24,046 and $21,108 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future. F-14 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) 9. 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 three months ended March 31, 2021 and 2020, 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 condensed 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. 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 three months ended March 31, 2021 and 2020, the Company did not record the service charges and paid to JJ Explorer. As of March 31, 2021 and December 31, 2020, the Company owed to directors $218,840 and $199,949, respectively. The amounts due to the related parties are unsecured, non-interest bearing and have no fixed terms of repayment. Apart from the transactions and balances detailed elsewhere in these accompanying condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented. 10. CONCENTRATIONS OF RISK The Company is exposed to the following concentrations of risk: (a) Major customers For the three and nine months ended March 31, 2021 and 2020, there was no single customer exceeding 10% of the Company’s revenue. (b) Economic and political risk The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations. F-15 Table of Contents NEW MOMENTUM CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (Currency expressed in United States Dollars (“US$”), except for number of shares) (Unaudited) (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 converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice. 11. COMMITMENTS AND CONTINGENCIES As of March 31, 2021, the Company has no material commitments or contingencies. 12. SUBSEQUENT EVENTS On April 13, 2021, the Company entered into a Stock Purchase Agreement with Leung Tin Lung David, the Company’s sole director, President and Chief Executive Officer, and majority stockholder, pursuant to which the Company sold to Mr. Leung one share of Series A Preferred Stock in exchange for 169,000,000 shares of common stock of the Company. The Company subsequently canceled and returned to its authorized capital stock the 169,000,000 shares of common stock purchased from Mr. Leung. 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 condensed consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31, 2021, up through the date the Company presented the unaudited condensed consolidated financial statements. The Company determined that there are no further events to disclose. F-16 Table of Contents