What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-04-18 compared with 2022-04-18 · 49 added, 49 removed, 211 unchanged (32% of the section changed)

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To date the Company has little operations or revenues and consequently has incurred recurring losses from operations.

No revenues are anticipated until we complete the financing we endeavor to obtain, as described in the Form 10-K, and implement our initial business plan.

Minimal revenues are anticipated until we complete the financing we endeavor to obtain, as described in the Form 10-K, and implement our expanded business plan.

The ability of the Company to continue as a going concern is dependent on raising capital to fund our business plan and ultimately to attain profitable operations.

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

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

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

We have no outstanding loans.

Our activities have been financed from related-party loans, proceeds of share subscriptions and issuance of promissory note.

During the year ended December 31, 2022, the Company issued promissory note of principal $215,000.

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

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PLAN OF OPERATION

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 are an early stage corporation and have generated revenues of $931,936 from our business during the years ended December 31, 2022.

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

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

During the 12 months following the date of filing of this Annual Report on Form 10-K, will be focuse on attempting to raise $10,000,000 of funds to expand our business.

We have no assurance that future financing will materialize.

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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 are a development stage company and reported a net loss of $188,853 and $287,763 for the years ended December 31, 2022 and 2021, respectively.

We had current assets of $115,109 and current liabilities of $599,557 as of December 31, 2022.

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Our financial statements for the years ended December 31, 2022 and 2021 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.

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

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, issuance of promissory notes and short-term and long-term debts.

Comparison of the Years ended December 31, 2022 and 2021

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Income tax expense

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.

We generated revenues of $931,936 and $1,292,479 for the years ended December 31, 2022 and 2021 respectively, due to the decreased transactions in ticket booking during 2022.

Cost of Revenue .

Cost of revenue for the years ended December 31, 2022 and 2021, was $924,286 and $1,287,084, respectively.

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

Cost of revenue decreased primarily as a result of the decrease in our business volume.

Gross Profit .

We achieved a gross profit of $7,650 and $5,395 for the years ended December 31, 2022 and 2021, respectively.

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.

Increase in gross profit was due to Hong Kong’s lifting of its travelling restrictions.

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

We incurred G&A expenses of $197,126 and $295,409 for the years ended December 31, 2022 and 2021, respectively.

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

The decrease in G&A is primarily attributable to no stock-based compensation transactions during 2022, as compared to 2021.

Income Tax Expense .

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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.

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,

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Net Cash Used In Operating Activities.

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.

For the year ended December 31, 2022, net cash used in operating activities was $144,178, which consisted primarily of net loss of $188,853, an increase in accounts receivables of $8,432, an increase in deposits, prepayments and other receivables of $11,949, offset by amortization of convertible note discount of $6,652, depreciation of right-of-use asset of $24,954, non-cash expense related to lease liabilities of $1,278, non-cash financing cost of $7,314, an increase in accounts payable of $1,495 and an increase in accrued liabilities and other payables of $23,363.

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 increase 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 an 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 lease expense of $2,509.

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, 2022, net cash provided by financing activities was $187,315 consisting primarily of $26,840 payment of lease liabilities, $845 repayment to director, offset by $215,000 proceeds from issuance of convertible notes.

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.

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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.

We require additional funding to meet its 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.

Our ability to continue as a going concern is dependent on raising capital to fund its business plans 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.

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Contractual Obligations

Amount due to director

Lease liabilities

Commercial commitments

Bank loan repayment

Amounts due to director

Convertible promissory note

Total obligations

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Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Global Economic Climate

We continue to monitor the global tensions being presently experienced resulting in rising cost, shortage of fuel and potentially the global economic depression which could have a significant negative effect on our financial position and results of our operations, the specific impact of which is not readily determinable as of the date of this filing.

Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies and Estimates

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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.

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The Company also records its revenue from the sale of air tickets upon the confirmation and issuance of tickets to the travelers.

The Company follows the guidance provided in ASC 606, Revenue from Contracts with Customers, for determining whether the Company is the principal or an agent in arrangements with customers that involve another party that contributes to the provision of goods to a customer.

In these instances, the Company determines whether it has promised to provide the goods itself (as principal) or to arrange for the specified goods to be provided by another party (as an agent).

This determination is a matter of judgment that depends on the facts and circumstances of each arrangement.

The Company recognizes revenue from the sale of its air tickets on a gross basis as the Company is responsible for the fulfillment, controls the delivery of the promised goods, and has full discretion in establishing prices and therefore is the principal in the arrangement.

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.

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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 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 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 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 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.

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 are 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.

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.

Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated financial statements.

Subsequent Events

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

What changed 10-K

Item 7. Management’s Discussion and Analysis