The following information should be read in conjunction with (i) the financial
statements of New Momentum Corporation, a Nevada corporation (the "Company"),
and the notes thereto appearing elsewhere in this Form 10-Q together with (ii)
the more detailed business information and the December 31, 2021 audited
financial statements and related notes included in the Company's Form 10-K (File
No. 000-52273; the "Form 10-K"), as filed with the Securities and Exchange
Commission on March 26, 2020. Statements in this section and elsewhere in this
Form 10-Q that are not statements of historical or current fact constitute
"forward-looking" statements.
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. 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. 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. Further, advances have been
received from the Directors throughout the years as required, and in May and
September 2022, proceeds of $165,000 were received from the issuance of
convertible promissory notes.
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.
PLAN OF OPERATION
We are an early stage corporation and have generated revenues of $630,462 and
$968,271 from our business for the nine months ended September 30, 2022 and
2021, 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. During the 12 months following the
date of filing of this Form 10-Q, we will be focused on attempting to raise
$10,000,000 of funds to expand our business. We have no assurance that future
financing will materialize. If that financing is not available, we may be unable
to continue. However, if such public financing is not available, we could fail
to satisfy our future cash requirements. We have no assurance that future
financing will materialize. If that financing is not available, we may be unable
to continue. Management believes that if subsequent private placements are
successful, we will be able to generate sales revenue within the following
twelve months thereof. However, additional equity financing may not be available
to us on acceptable terms or at all, and thus we could fail to satisfy our
future cash requirements.
If we are unsuccessful in raising the additional proceeds through a private
placement offering we will then have to seek additional funds through debt
financing, which would be highly difficult for an early-stage company to secure.
Therefore, the Company is highly dependent upon the success of the anticipated
private placement offering and failure thereof would result in the Company
having to seek capital from other sources such as debt financing, which may not
even be available to the Company. However, if such financing were available,
because we are an early stage company, it would likely have to pay additional
costs associated with high risk loans and be subject to an above market interest
rate. At such time these funds are required, management would evaluate the terms
of such debt financing and determine whether the business could sustain
operations and growth and manage the debt load. If we cannot raise additional
proceeds via a private placement of its common stock or secure debt financing it
would be required to cease business operations. As a result, investors in our
common stock would lose all of their investment.
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With new investors joining, the Company is operating a travel services
businesses, 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. The Company will also become
the driving force behind a bold new hospitality concept that takes nature lovers
and intrepid travelers to exciting new and established destinations. The curated
collection of boutique properties, each with a focus on diving, sustainability,
conservation, and cultural authenticity, offers a thoroughly contemporary travel
experience that is intrinsically linked to the destination, its heritage and its
culture.
RESULTS OF OPERATIONS
Comparison of the Three Months ended September 30, 2022 and 2021
The following table sets forth certain operational data for the three months
ended September 30, 2022 and 2021:
Three Months Ended September 30,
2022 2021
Revenues $ 331,392 $ 300,497
Cost of revenue (330,121 ) (299,107 )
Gross profit 1,271 1,390
General and administrative expenses (62,401 ) (26,295 )
Other expense (4,320 ) (1,143 )
Loss before income taxes (65,450 ) (26,048 )
Income tax expense - -
Net loss (65,450 ) (26,048 )
Revenue. We generated revenues of $331,392 and $300,497 for the three months
ended September 30, 2022 and 2021, as the global demand for air tickets have
increased slightly with the Omicron outbreak being brought under control in
April 2022.
Cost of Revenue. Cost of revenue for the three months ended September 30, 2022
and 2021, was $330,121 and $299,107, respectively. Cost of revenue increased
primarily as a result of the increase in our business volume.
Gross Profit. We achieved a gross profit of $1,271 and $1,390 for the three
months ended September 30, 2022 and 2021, respectively. Gross margins have
remained fairly consistent for the periods mentioned.
General and Administrative Expenses ("G&A"). We incurred G&A expenses of $62,401
and $26,295 for the three months ended September 30, 2022 and 2021,
respectively. The increase in G&A is primarily attributable increase in overseas
travelling expenses during the three months ended September 30, 2022.
Income Tax Expense. Our income tax expenses for the three months ended September
30, 2022 and 2021 were $0.
Net Loss. During the three months ended September 30, 2022, we incurred a net
loss of $65,450, as compared to $26,048 for the three months ended September 30,
2021.
Comparison of the Nine Months ended September 30, 2022 and 2021
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The following table sets forth certain operational data for the nine months
ended September 30, 2022 and 2021:
Nine Months Ended September 30,
2022 2021
Revenues $ 630,462 $ 968,271
Cost of revenue (628,012 ) (964,540 )
Gross profit 2,450 3,731
General and administrative expenses (125,246 ) (160,096 )
Other income (expense) 8,623 (5,485 )
Loss before income taxes (114,173 ) (161,850 )
Income tax expense - -
Net loss (114,173 ) (161,850 )
Revenue. We generated revenues of $630,462 and $968,271 for the nine months
ended September 30, 2022 and 2021, with the reduction being due to the
significant reduction of air ticket demand from the unexpected Omicron outbreak,
starting from December 2021 up to March 2022, globally and in Hong Kong. No
revenue was generated from January to March in 2022. The global demand for air
tickets have largely decreased and we experienced many flight cancellations or
rescheduling. This situation has since recovered when the outbreak was brought
under control in April 2022. We will continue to operate the business and expect
the market turnaround in the upcoming holiday season.
Cost of Revenue. Cost of revenue for the nine months ended September 30, 2022
and 2021, was $628,012 and $964,540, respectively. Cost of revenue decreased
primarily as a result of the decrease in our business volume.
Gross Profit. We achieved a gross profit of $2,450 and $3,731 for the nine
months ended September 30, 2022 and 2021, respectively. The decrease in gross
profit is primarily attributable to the decrease in our business volume. Gross
margins have remained fairly consistent for the periods mentioned.
General and Administrative Expenses ("G&A"). We incurred G&A expenses of
$125,246 and $160,096 for the nine months ended September 30, 2022 and 2021,
respectively. The decrease in G&A is primarily attributable to decrease in
professional fee and no stock base compensation was issued during the nine
months ended September 30,2022 compared to $41,715 recognized during the nine
months ended September 30,2021.
Income Tax Expense. Our income tax expenses for the nine months ended September
30, 2022 and 2021 were $0.
Net Loss. During the nine months ended September 30, 2022, we incurred a net
loss of $114,173, as compared to $161,850 for the nine months ended September
30, 2021.
Liquidity and Capital Resources
As of September 30, 2022, we had cash and cash equivalents of $126,039, accounts
receivable of $6,447, deposits, prepayments and other receivables of $30,241.
The continuation of the Company as a going concern through the next twelve
months is dependent upon the continued financial support from its shareholders.
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.
Nine Months Ended September 30,
2022 2021
Net cash used in operating activities $ (36,762 ) $ (92,923 )
Net cash provided by investing activities
- -
Net cash provided by financing activities 145,816 56,761
Net Cash Used In Operating Activities.
For the nine months ended September 30, 2022, net cash used in operating
activities was $36,762, which consisted primarily of a net loss of $114,173,
offset by amortization of convertible note discount of $2,377, depreciation of
right-of-use asset of $18,709, non-cash expense related to lease liabilities of
$958, non-cash financing cost of $3,045, a decrease in accounts receivables of
$9,326, an increase in accounts payable of $33,403, an increase in accrued
liabilities and other payables of $16,902 and an increase in deposits,
prepayments and other receivables of $10,533.
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For the nine months ended September 30, 2021, net cash used in operating
activities was $92,923, which consisted primarily of a net loss of $161,850,
offset by a depreciation of right-of-use asset of $18,869, amortization of
convertible note discount of $1,556, non-cash expenses related to lease
liabilities of $1,887, stock-based compensation of $41,715, an increase in
accounts receivables of $379 a decrease in deposits, prepayments and other
receivables of $218 and an increase in accrued liabilities and other payables of
$5,061.
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.
Net Cash Provided By Investing Activities.
For the nine months ended September 30, 2022 and 2021, there are no net cash
provided by investing activities.
Net Cash Provided By Financing Activities.
For the nine months ended September 30, 2022, net cash provided by financing
activities was $145,816 consisting primarily of $20,254 payment of lease
liabilities, offset by $1,070 advances from directors, and $165,000 proceeds
from issuance of convertible note.
For the nine months ended September 30, 2021, net cash provided by financing
activities was $56,761 consisting primarily of $20,297 payment of lease
liabilities, offset by $77,058 advances from directors.
COVID-19
We continue to evaluate the impact of the COVID-19 pandemic on the industry and
our Company and have concluded that while it is reasonably possible that the
virus could have a negative effect on our financial position and results of our
operations, the specific impact 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.
Off-Balance Sheet Arrangements
We had no off-balance sheet arrangements as of September 30, 2022.
Subsequent Events
None through date of this filing.
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