What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-04-18 compared with 2021-03-26 · 82 added, 65 removed, 178 unchanged (45% of the section changed)

12 unchanged sentences

PLAN OF OPERATION

We are an early stage corporation and have generated revenues of $237,980 from our business during the years ended December 31, 2020.

We are an early stage corporation and have generated revenues of $1,292,479 from our business during the year ended December 31, 2021.

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

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RESULTS OF OPERATIONS

We are not required to obtain permission from the Chinese authorities to operate or to issue securities to foreign investors.

We are at a development stage company and reported a net loss of $287,763 and $4,148,947 for the years ended December 31, 2021 and 2020, respectively.

We had current assets of $51,090 and current liabilities of $384,249 as of December 31, 2021.

As of December 31, 2020, our current assets and current liabilities were $84,823 and $245,683, respectively.

Our financial statements for the years ended December 31, 2021 and 2020 have been prepared assuming that we will continue as a going concern.

Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our shareholders.

Our sources of capital in the past have included the sale of equity securities, which include common stock sold in private transactions and public offerings, capital leases and short-term and long-term debts.

Comparison of the Years ended December 31, 2021 and 2020

As of December 31, 2021, we suffered from a working capital deficit of $333,159.

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

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

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

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Total operating expenses

Other income, net

Loss before Income Taxes

Income tax expense

We generated revenues of $237,980 and $183 for the years ended December 31, 2020 and 2019.

We generated revenues of $1,292,479 and $237,980 for the years ended December 31, 2021 and 2020, due to the increased transactions in ticket booking during 2021.

Cost of Revenue .

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We achieved a gross profit of $5,395 and $4,223 for the years ended December 31, 2021 and 2020, respectively.

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

The increase in gross profit is primarily attributable to the increase in our business volume, net of reduced margins with increased costs and competitiveness experienced during the pandemic.

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

We incurred G&A expenses of $295,409 and $4,175,996 for the years ended December 31, 2021 and 2020, respectively.

The increase in G&A is primarily attributable to the stock-based compensation.

The decrease in G&A is primarily attributable to fewer stock-based compensation transactions during 2021, as compared to 2020.

Income Tax Expense .

Our income tax expenses for the years ended December 31, 2020 and 2019 were $0.

During the year ended December 31, 2020, we incurred a net loss of $4,148,947, as compared to $19,511 for the same period ended December 31, 2019.

Our income tax expenses for the years ended December 31, 2021 and 2020 were $0 and $0.

As a result of the above, during the year ended December 31, 2021, we incurred a net loss of $287,763, as compared to $4,148,947 for the same period ended December 31, 2020.

Liquidity and Capital Resources

As of December 31, 2021, we had cash and cash equivalents of $15,609, accounts receivable of $15,773, deposits, prepayments and other receivables of $19,708.

As of December 31, 2020, we had cash and cash equivalents of $64,496, accounts receivable of $374, deposits, prepayments and other receivables of $19,953.

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

Years Ended December 31,

Net cash provided used in operating activities

Net cash used in operating activities

Net cash provided by investing activities

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Net Cash Used In Operating Activities.

For the year ended December 31, 2020, net cash used in operating activities was $71,248, which consisted primarily of a net loss of $4,148,947, offset by a stock-based compensation of $4,074,000, amortization of convertible note discount, a decrease in accounts receivables of $129, an increase in deposits, prepayments and other receivables of $8,482 and an increase in accrued expenses and other payables of $11,608.

For the year ended December 31, 2019, net cash used in operating activities was $12,457, which consisted primarily of a net loss of $19,511, offset by a decrease in accounts receivables of $7,672, a decrease in deposits, prepayments and other receivables of $7,357 and an increase in accrued expenses and other payable of $7,975.

For the year ended December 31, 2021, net cash used in operating activities was $108,892, which is directly attributable to a net loss of $287,763, with an decrease in deposits, prepayments and other receivables of $245 and an increase in accounts payable of $15,696, accrued expenses and other payable of $44,848, offset by a increase in accounts receivables of $15,399 and non-cash items consisting of amortization and depreciation of $26,643, stock-based compensation of $101,715, non-cash convertible note expense of $2,614 and non-cash lease expense of $2,509.

For the year ended December 31, 2020, net cash used in operating activities was $71,248, which consisted primarily of a net loss of $4,148,947, offset by a stock-based compensation of $4,074,000, amortization of convertible note discount of $444, a decrease in accounts receivables of $129, an increase in deposits, prepayments and other receivables of $8,482 and an increase in accrued expenses and other payables of $11,608.

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

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Net Cash Provided By Financing Activities.

For the year ended December 31, 2020, net cash provided by financing activities was $126,732 consisting primarily of $22,840 repayment to related companies of the Company, offset by $116,572 advances from a director and proceed from issuance of convertible bonds of $33,000.

For the year ended December 31, 2019, net cash provided by financing activities was $16,871, consisting primarily of $37,392 repayment to related companies of the Company and offset by $54,263 advances from a director.

For the year ended December 31, 2021, net cash provided by financing activities was $59,395, being advances received from a director of $86,378 and repayment of lease liabilities of 26,983.

For the year ended December 31, 2020, net cash provided by financing activities was $126,732, arose from advances received from a director of $116,572 and proceeds from issuance of convertible bonds of $33,000, net of repayment of lease liabilities of $22,840.

Working Capital

As of December 31, 2021, we had cash and cash equivalents of $15,609, accounts receivable of $15,773, deposits, prepayments and other receivables of $19,708.

As of December 31, 2020, we had cash and cash equivalents of $64,496, accounts receivable of $374, deposits, prepayments and other receivables of $19,953.

We expect to incur significantly greater expenses in the near future as we expand our business or enter into strategic partnerships.

We also expect our technology and development, sales and marketing expenses to increase as we enhance our e-commerce platform and spend more efforts in building up customers and community and incur additional costs in investors and partnerships relationship for long-term corporate development.

During the year, we did not pay dividends on our Common Stock.

Our present policy is to apply cash to investments in business development, acquisitions or expansion;

consequently, we do not expect to pay dividends on Common Stock in the foreseeable future.

Going Concern

Our continuation as a going concern is dependent upon improving our profitability and the continuing financial support from our stockholders.

Our sources of capital may include the sale of equity securities, which include common stock sold in private transactions, capital leases and short-term and long-term debts.

While we believe that we will obtain external financing and the existing shareholders will continue to provide the additional cash to meet our obligations as they become due, there can be no assurance that we will be able to raise such additional capital resources on satisfactory terms.

We require additional funding to meet our ongoing obligations and to fund anticipated operating losses.

Our auditor has expressed substantial doubt about our ability to continue as a going concern.

Our ability to continue as a going concern is dependent on raising capital to fund its initial business plan and ultimately to attain profitable operations.

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.

We expect to incur marketing and professional and administrative expenses as well expenses associated with maintaining our filings with the Commission.

We will require additional funds during this time and will seek to raise the necessary additional capital.

If we are unable to obtain additional financing, we may be required to reduce the scope of our business development activities, which could harm our business plans, financial condition and operating results.

Additional funding may not be available on favorable terms, if at all.

We intend to continue to fund its business by way of equity or debt financing and advances from related parties.

Any inability to raise capital as needed would have a material adverse effect on our business, financial condition and results of operations.

If we cannot raise additional funds, we will have to cease business operations.

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

Material Cash Requirements

We have not achieved profitability since our inception and we expect to continue to incur net losses for the foreseeable future.

We expect net cash expended in 2022 to be significantly higher than 2021.

As of December 31, 2021, we had an accumulated deficit of $4,842,608.

Our material cash requirements are highly dependent upon the additional financial support from our major shareholders in the next 12 - 18 months.

We had the following contractual obligations and commercial commitments as of December 31, 2021:

Contractual Obligations

Amount due to director

Lease liabilities

Commercial commitments

Bank loan repayment

Total obligations

Off-Balance Sheet Arrangements

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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.

The Company recognizes revenue from its contracts with customers in accordance with ASC 606 – Revenue from Contracts with Customers.

The Company recognizes revenues when satisfying the performance obligation of the associated contract that reflects the consideration expected to be received based on the terms of the contract.

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.

22 unchanged sentences

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 maintains 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 addition, the Company operates in Hong Kong and Singapore via its subsidiaries who maintain their books and records in their local currencies, Hong Kong Dollars (“HKD”) and Singapore Dollars (“SGD”), which are their functional currencies respectively, 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.

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This comprehensive income is not included in the computation of income tax expense or benefit.

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.

The Company adopts the FASB Accounting Standards Update (“ASU”) 2016-02 “Leases (Topic 842).” for all periods presented.

This standard requires lessees to recognize lease assets (“right of use”) and related lease obligations (“lease liabilities”) on the balance sheet for leases with terms in excess of 12 months.

The Company determines if an arrangement is a lease at inception.

Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets.

Finance leases are included in finance lease ROU assets and finance lease liabilities in the consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

Operating lease and finance lease ROU assets and liabilities are recognized at January 1, 2019 based on the present value of lease payments over the lease term discounted using the rate implicit in the lease.

In cases where the implicit rate is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

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

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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.

The Company believes that other recent accounting pronouncement will not have a material effect on the Company’s consolidated financial position, results of operations and cash flows.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) , (“ASU 2021-04”).

This ASU reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.

This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic.

It specifically addresses:

(1) how an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange;

(2) how an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange;

and (3) how an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange.

This ASU will be effective for all entities for fiscal years beginning after December 15, 2021.

An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments.

Early adoption is permitted, including adoption in an interim period.

The adoption of ASU 2021-04 on January 1, 2022 will not have a material impact on the Company’s financial statements or disclosures.

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

Subsequent Events

3 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis