New Momentum Corp. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The Company was incorporated in the State of Nevada on July 1, 1999, and established a fiscal year end of December 31. Going Concern To date the Company has little operations or revenues and consequently has incurred recurring losses from operations. The ability of the Company to continue as a going concern is dependent on director’s support and 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. The Company plans to raise additional funds through debt or equity offerings. There is no guarantee that the Company will be able to raise any capital through this or any other offerings. 22 Table of Contents PLAN OF OPERATION We generated revenues of $6 and $182,452 from our business for the year ended December 31, 2024 and 2023, respectively. We 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. Platform is undergoing upgrade and estimated to be done by end of 2025 The Company is operating a travel services business, which includes an online ticketing platform Gagfare, which provides to travelers a “Book Now, Pay Later” business model, for travelers to secure the best fares and reserve flights well ahead of time. RESULTS OF OPERATIONS We are not required to obtain permission from the Chinese authorities to operate or to issue securities to foreign investors. We reported a net loss of $142,880 and $403,933 for the years ended December 31, 2024 and 2023, respectively. We had current assets of $11,701 and current liabilities of $733,680 as of December 31, 2024. As of December 31, 2023, our current assets and current liabilities were $37,598 and $721,874 respectively. Our financial statements for the years ended December 31, 2024 and 2023 have been prepared assuming that we will continue as a going concern. Our continuation as a going concern is dependent upon improving our profitability, the continuing financial support from our shareholders and external financing. 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. 23 Table of Contents Comparison of the Years ended December 31, 2024 and 2023 As of December 31, 2024, we suffered from a working capital deficit of $721,979. 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. Our financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern. The following table sets forth certain operational data for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Revenues $ 6 $ 182,452 Cost of revenue - (179,720 ) Gross profit 6 2,732 Total operating expenses (157,199 ) (304,309 ) Other income (expense), net 14,313 (102,356 ) Loss before income taxes (142,880 ) (403,933 ) Income tax expense - - Net loss (142,880 ) (403,933 ) Revenue . We generated revenues of $6 and $182,452 for the years ended December 31, 2024 and 2023 respectively, as the Company has ceased ticket sales from September 2023. The nominal income earned in the year ended December 31, 2024 represented booking fees. Cost of Revenue . Cost of revenue for the years ended December 31, 2024 and 2023, was $0 and $179,720, respectively. Cost of revenue decreased primarily as a result of the decrease in our revenue as mentioned above. Gross Profit . We achieved a gross profit of $6 and $2,732 for the years ended December 31, 2024 and 2023, respectively. Cost of revenue decreased primarily as a result of the decrease in our revenue as mentioned above. Other Income (Expense) . We incurred other income (expense) of $14,313 and $(102,356) for the years ended December 31, 2024 and 2023, respectively. The increase in other income is primarily attributable to the waiver of interest on convertible notes of $8,612 and nil for the year ended December 2024 and 2023 respectively, and reduction in interest expense in 2024 of $1,084 incurred compared to $104,352 arising from the conversion of convertible notes substantially in 2023. The other income for the year ended December 31, 2024 also comprised incentives from government for the operation of certain approved tour packages of $17,520, whereas for the year ended December 31, 2023, was $1,424. Besides, impairment of deposit of $11,191 was recognized for the year ended December 2024. Total Operating Expenses (“ TOE ”) . We incurred TOE expenses of $157,199 and $304,309 for the years ended December 31, 2024 and 2023, respectively. The decrease in TOE is primarily attributable to non-engaging of certain legal and professional consultants relating to business development during the current period, as compared to 2023. Income Tax Expense . Our income tax expenses for the years ended December 31, 2024 and 2023 were $0 and $0. Net Loss . As a result of the above, during the year ended December 31, 2024, we incurred a net loss of $142,880, as compared to $403,933 for the same period ended December 31, 2023. 24 Table of Contents Liquidity and Capital Resources As of December 31, 2024, we had cash and cash equivalents of $7,812, deposits, prepayments and other receivables of $3,889. As of December 31, 2023, we had cash and cash equivalents of $16,776, accounts receivable of $906, deposits, prepayments and other receivables of $19,916. Years Ended December 31, 2024 2023 Net cash used in operating activities $ (96,257 ) $ (175,607 ) Net cash provided by investing activities - - Net cash provided by financing activities 91,223 133,712 Net Cash Used In Operating Activities. For the year ended December 31, 2024, net cash used in operating activities was $96,257, which consisted primarily of net loss of $142,880, waiver of interest on convertible note of $8,612, a decrease in accounts payable of $3,743, offset by an increase in accrued liabilities and other payables of $13,413, a decrease in accounts receivables of $906, a decrease in deposits, prepayments and other receivables of $4,836, depreciation of right-of-use asset of $26,798, impairment of deposit of $11,191, non-cash expense related to lease liabilities of $750 and non-cash financing cost of $1,084. For the year ended December 31, 2023, net cash used in operating activities was $175,607, which consisted primarily of net loss of $403,933, and a decrease in accounts payable of $5,233, offset by a decrease in accounts receivables of $23,299, a decrease in deposits, prepayments and other receivables of $11,741, amortization of convertible note discount of $9,848, depreciation of right-of-use asset of $26,710, non-cash expense related to lease liabilities of $2,079, non-cash financing cost of $94,504, and an increase in accrued liabilities and other payables of $65,378. We expect to continue to rely on cash generated through financing from our existing shareholders and private placements of our securities to finance our operations and future acquisitions. Net Cash Provided By Investing Activities. For the year ended December 31, 2024, there is no net cash provided by investing activities. For the year ended December 31, 2023, there is no net cash provided by investing activities. Net Cash Provided By Financing Activities. For the year ended December 31, 2024, net cash provided by financing activities was $91,223 consisting primarily of $113,883 advance from director and $5,556 advance from a shareholder, offset by $28,216 payment of lease liabilities. 25 Table of Contents For the year ended December 31, 2023, net cash provided by financing activities was $133,712 consisting primarily of $156,469 advance from director and $5,366 advance from a shareholder, offset by $28,123 payment of lease liabilities. Working Capital 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 also 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 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. 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 2025 to be significantly higher than 2024. As of December 31, 2024, we had an accumulated deficit of $5,578,274. Our material cash requirements are highly dependent upon the additional financial support from our major shareholders in the next 12 - 18 months. 26 Table of Contents Off-Balance Sheet Arrangements We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our own shares and classified as shareholders’ equity, or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us. 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 · Use of estimates and assumptions In preparing these unaudited 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 periods reported. Actual results may differ from these estimates. · Revenue recognition The Company adopted Accounting Standards Codification (“ASC ”) 606 – Revenue from Contracts with Customers ” (“ASC 606”). 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 transaction price is included in the website and the customers bookings are deemed to be acceptance of the contract. The transaction price is fixed, and there is no variable consideration. The management has assessed its performance obligations as a single performance obligation and revenue is recorded upon transfer of control of the services to the customer. 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 upon 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 and services 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. Subsequent Events None through date of this filing. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act, we are not required to provide the information called for by this Item. 27 Table of Contents