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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2019

 

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to _________________________

 

Commission File Number 000-55410

 

NEW ASIA HOLDINGS, INC.

(Exact Name of Registrant as specified in its charter)

 

Nevada (NV)

45-0460095

(State or other jurisdiction of incorporation or organization

(IRS Employer Identification Number)

 

11 Beach Road #06-01, Singapore

  189675

(Address of principal executive offices)

(Zip code)

 

+65-6820-8885

(Registrant's telephone number, including area code)

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

N/A

 

N/A

 

N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days .       Yes  No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).          Yes   No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and emerging growth company in Rule 12b-2 of the Exchange Act.

 

Large Accelerated filer          

Accelerated filer          

Non-accelerated Filer             

Smaller reporting company  

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes No

As of November 19, 2019, the Registrant had 72,288,667 shares of common stock issued and outstanding

.


1


 

 

FORM 10-Q

NEW ASIA HOLDINGS, INC.

 

TABLE OF CONTENTS

 

PART I FINANCIAL INFORMATION

Page

 

 

Item 1. Financial Statements

 

 

Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018 (Unaudited)

3

 

Unaudited Consolidated Statements of Operations and Other Comprehensive Income for the Three and Nine Months Ended September 30, 2019 and 2018

4

 

Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018

5

 

Consolidated Statements of Changes in Deficit for the Nine Months Ended September 30, 2019 and 2018 (Unaudited)

6

 

Notes to Unaudited Consolidated Financial Statements

7

 

 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

10

Item 3. Quantitative and Qualitative Disclosures About Market Risk

13

Item 4. Controls and Procedures

13

 

 

PART II OTHER INFORMATION

 

 

 

Item 1. Legal Proceedings

13

Item 1A. Risk Factors

14

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

14

Item 3. Defaults Upon Senior Securities

14

Item 4. Mine Safety Disclosures

14

Item 5. Other Information

14

Item 6. Exhibits

15

 

 

Signatures

16


2



PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS:

NEW ASIA HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

 

September 30, 2019

 

December 31, 2018

ASSETS

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

Cash  

 

 

 

 

 

$ 31,876   

 

$ 28,617   

 

Prepaid Expense

 

 

 

 

 

2,022   

 

13,225   

Total Current Assets

 

 

 

 

 

33,898   

 

41,842   

 

 

 

 

 

 

 

 

 

 

Other Assets

 

 

 

 

 

 

 

 

Deposit

 

 

 

 

195   

 

195   

Total Other Assets

 

 

 

 

 

 

195   

 

195   

TOTAL ASSETS

 

 

 

 

$ 34,093   

 

$ 42,037   

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts Payable

 

 

 

 

 

$ 68,944   

 

$ 17,297   

 

Accrued Expenses

 

 

 

 

 

-   

 

26,402   

 

Advances From Shareholder

 

 

 

 

 

816,452   

 

711,539   

Total Current Liabilities

 

 

 

 

 

885,396   

 

755,238   

 

 

 

 

 

 

 

 

 

 

Total Liabilities

 

 

 

 

$ 885,396   

 

$ 755,238   

 

 

 

 

 

 

 

 

 

 

Stockholders' Deficit

 

 

 

 

 

 

 

 

Preferred Stock, $0.001 par value, 30,000,000 shares authorized, 0 shares issued and outstanding

 

-   

 

-   

 

Common Stock, $0.001 par value, 400,000,000 shares authorized; 72,288,667 shares issued and outstanding at September 30, 2019 and December 31, 2018

 

72,289   

 

72,289   

 

 

 

 

 

 

 

 

Additional Paid in Capital

 

 

 

$ 11,182,713   

 

11,182,713   

 

Accumulated Deficit

 

 

 

 

(12,105,997)  

 

(11,968,027)  

 

Accumulated Other Comprehensive Loss

 

 

(308)  

 

(176)  

Total Stockholders' Deficit

 

 

 

(851,303)  

 

(713,201)  

TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT

 

 

$ 34,093   

 

$ 42,037   

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.


3



NEW ASIA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS

(Unaudited)

 

 

 

 

 

 

 

For the Three Months Ended

For the Nine Months Ended

 

 

 

 

 

September 30,

2019

September 30,

2018

September 30,

2019

September 30,

2018

Revenues

 

 

 

 

 

 

 

 

Service Income from related party

 

 

-   

-   

-   

$ 76   

Total revenues

 

 

-   

-   

-   

76   

Operating expenses

 

 

 

 

 

 

 

Professional Fees

 

 

11,841   

14,148   

43,680   

40,378   

 

Outside Service

 

 

8,400   

8,400   

25,200   

25,200   

 

General & Administrative Expenses

 

 

17,181   

17,903   

69,090   

57,846   

Total operating expense

 

 

37,422   

40,451   

137,970   

123,424   

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(37,422)  

(40,451)  

(137,970)  

(123,348)  

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(37,422)  

(40,451)  

(137,970)  

(123,348)  

Provision for income taxes

 

 

-   

-   

-   

-   

Net Loss

 

 

 

$ (37,422)  

$ (40,451)  

$ (137,970)  

$ (123,348)  

Foreign Currency translation loss

 

 

(36)  

(59)  

(132)  

(827)  

Total Other Comprehensive loss

 

 

$(37,458)  

$(40,510)  

$(138,102)  

$(124,175)  

 

 

 

 

 

 

 

 

 

Net Loss per common share-basic and fully diluted

 

$ (0.00)  

$ (0.00)  

$ (0.00)  

$ (0.00)  

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding-basic and diluted

 

72,288,667   

72,288,667   

72,288,667   

72,288,667   

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.


4



NEW ASIA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

For the Nine Months Ended

For the Nine Months Ended

 

 

 

 

September 30, 2019

September 30, 2018

Cash flows from operating activities

 

 

 

Net Loss

 

 

$ (137,970)  

$ (123,348)  

Adjustment to reconcile net loss to net cash used by operating activities:

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

Prepaid expenses

 

11,203   

10,412   

 

Security Deposit

 

-   

920   

 

Accounts payable

 

51,647   

8,925   

 

Accrued expenses

 

(26,402)  

18,822   

 

Net cash used by operating activities

 

(101,522)  

(84,269)  

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

Advance from Shareholder

 

104,913   

78,989   

 

 

 

 

 

 

Net cash provided by financing activities

 

104,913   

78,989   

Effect of exchange rate on cash

 

(132)  

(827)  

Net increase in cash

 

3,259   

(6,107)  

 

 

 

 

 

 

Cash at beginning of period

 

28,617   

58,263   

Cash at end of period

 

$ 31,876   

$ 52,156   

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

Interest paid

 

$ -   

$ -   

 

Taxes paid

 

$ 800   

$ -   

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.


5



NEW ASIA HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019 AND SEPTEMBER 30, 2018

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

Shares

Amount

Additional Paid In Capital

Accumulated Deficit

Accumulated Other Comprehensive Income

Total

Balance, December 31, 2017

 

72,288,667   

$ 72,289   

$ 11,182,713   

$ (11,822,279)  

$ 637   

$ (566,640)  

Other comprehensive income:

 

 

 

 

 

 

 

Foreign currency translation income

 

--   

--   

--   

--   

51  

51  

Net loss

 

--   

--   

--   

(42,932)  

--   

(42,932)  

Balance, March 31, 2018

 

72,288,667   

$ 72,289   

$ 11,182,713   

$ (11,865,211)  

$ 688  

$ (609,521)  

Other comprehensive income:

 

 

 

 

 

 

 

Foreign currency translation loss

 

--   

--   

--   

--   

(819)  

(819)  

Net loss

 

--   

--   

--   

(39,965)  

--   

(39,965)

Balance, June 30, 2018

 

72,288,667   

$ 72,289   

$ 11,182,713   

$ (11,905,176)  

$ (131)  

$ (650,305)  

Other comprehensive income:

 

 

 

 

 

 

 

Foreign currency translation loss

 

--   

--   

--   

--   

(59)  

(59)  

Net loss

 

--   

--   

--   

(40,451)  

--   

(40,451)  

Balance, September 30, 2018

 

72,288,667   

$ 72,289   

$ 11,182,713   

$ (11,945,627)  

$ (190)  

$ (690,815)  

 

 

 

 

 

 

 

 

 

 

 

 

Nine-Month Period Ended September 30, 2019

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

 

 

 

 

Shares

Amount

Additional Paid In Capital

Accumulated Deficit

Accumulated Other Comprehensive Income

Total

Balance, December 31, 2018

 

72,288,667   

$ 72,289   

$ 11,182,713   

$(11,968,027)  

$(176)  

$(713,201)  

Other comprehensive income:

 

 

 

 

 

 

 

Foreign currency translation loss

 

--   

--   

--   

--   

(33)  

(33)

Net Loss

 

--   

--   

--   

(58,101)  

--   

(58,101)  

Balance, March 31, 2019

 

72,288,667

$72,289

$11,182,713

$(12,064,128)

$(209)

$(771,335)

Other comprehensive income:

 

 

 

 

 

 

 

Foreign currency translation loss

 

--   

--   

--   

--   

(63)  

(63)

Net Loss

 

--   

--   

--   

(42,447)  

--   

(42,447)  

Balance, June 30, 2019

 

72,288,667   

$ 72,289   

$ 11,182,713   

$ (12,068,575)  

$ (272)  

$ (813,845)  

Other comprehensive income:

 

 

 

 

 

 

 

Foreign currency translation loss

 

--   

--   

--   

--   

(36)  

(36)  

Net loss

 

--   

--   

--   

(37,422)  

--   

(37,422)  

Balance, September 30, 2019

 

72,288,667   

$ 72,289   

$ 11,182,713   

$ (12,105,997)  

$ (308)  

$ (851,303)  

 

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.


6



NEW ASIA HOLDINGS, INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2019

 

Note 1: Organization and Summary of Significant Accounting Policies

 

Organization

 

New Asia Holdings, Inc. (previously known as DM Products, Inc., Midwest E.S.W.T. Corp, and Effective Sport Nutrition Corporation) (the "Company," “we” or “our”) was incorporated in the State of Nevada on March 1, 2001. In December 2014, the Company underwent a change in control as a result of approximately 90% of the issued and outstanding shares of common stock of the Company being acquired by New Asia Holdings, Ltd. (wholly owned by Lin Kok Peng, Ph.D., the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board) (“NAHL”).

 

We offer trading software solutions to clients on the basis of a "Software as a Service (SaaS)" licensing and delivery model with licensed users availing themselves of service-based contractual arrangements. In addition, and consistent with the requirements of the United States federal securities laws, we may utilize our in-house proprietary neural trading models to trade our own funds, thus providing added value to our shareholders.

 

Algorithms were placed into commercial operation in November 2015 upon the execution of a Software Licensing Agreement for the deployment of the proprietary trainable, trading algorithms of Magdallan Quant Pte. Ltd. (“MQL”) with New Asia Momentum Limited (“NAML”), a company owned and controlled by NAHD’s Chairman and CEO, Dr. Lin Kok Peng. Under the terms of the Software License Agreement, NAML agreed to pay MQL a license fee and certain other fixed and time and materials fees. In 2019, Momentum assets under management (“AUM”) were returned to its investors. The license agreement between MQL and Momentum still remains in place.

 

The Company's focus has been to capitalize on the large volume of the 24-hour Forex markets to achieve capital appreciation over the medium- to long-term, combined with the usage of a good wealth vehicle in order to control risk, profit from both bull or bear markets, and maximize liquidity and economic resilience.

 

Basis of Presentation

 

The unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim consolidated financial information and with the instructions to Securities and Exchange Commission ("SEC") Form 10-Q and Article 8 of SEC Regulation S-X.  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 of a normal recurring nature and considered necessary for a fair presentation of its financial condition and results of operations for the interim periods presented in this Quarterly Report on Form 10-Q have been included.  Operating results for the interim periods are not necessarily indicative of financial results for the full year.  These unaudited interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.  In preparing these financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.

 

Use of estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Related Parties

 

The Company follows the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. See Note 4.

 

Leases  

 


7



In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, "Leases (Topic 842)," which requires lessees to recognize right-of use assets and lease liability, initially measured at present value of the lease payments, on its balance sheet for leases with terms longer than 12 months and classified as either financing or operating leases. ASU 2016-02 requires a modified retrospective transition approach for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, and provides certain practical expedients that companies may elect including those contained in ASU 2018-01, "Leases (Topic 842): Lease Easement Practical Expedient for Transition to Topic 842". This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted.  The Company has adopted ASC 842, “Leases” as of January 1, 2019.

Note 2: Going Concern

 

The accompanying unaudited interim consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has sustained substantial losses has a working capital deficit and is in need of additional capital to grow its operations so that it can become profitable. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

 

In view of these matters, the ability of the Company to continue as a going concern is dependent upon growth of revenues and the ability of the Company to raise additional capital. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Note 3: Common Stock

 

The Company has authorized 430,000,000 shares of capital stock, consisting of 400,000,000 shares, par value $0.001 per share, of common stock, and 30,000,000 shares, par value $0.001 per share, of “blank check” preferred stock. The Company had 72,288,667 shares of common stock and no shares of preferred stock issued and outstanding as of September 30, 2019 and December 31, 2018.

 

As of September 30, 2019, NAHL, the Company’s principal shareholder, had not yet exercised its option to convert advances made by NAHL to the Company into shares of common stock. Accordingly, as of September 30, 2019, the advances remain as an interest-free loan to the Company. See Note 4.

 

Note 4: Convertible Advances from Shareholder and Other Related Party Transactions

 

During the nine-month period ended September 30, 2019, NAHL, our principal shareholder, advanced an aggregate of $104,913 to the Company. Dr. Lin Kok Peng, our Chief Executive Officer, Chief Financial Officer and Chairman, has voting and dispositive control over the shares of Company common stock held by NAHL. The total advances due to NAHL are $816,452 and $711,539 as of September 30, 2019 and December 31, 2018, respectively. As of September 30, 2019 $465,594 of the advances constitute unsecured interest-free loans to the Company. The advances were supposed to have been repaid by the close of business on October 31, 2016. In 2016, however, the Company and NAHL agreed that if the Company was unable to repay these advances by such date, NAHL, at its sole discretion, would have the option to extend the repayment deadline or convert all or a portion of the advances into common stock of the Company at a conversion price of $0.02 per share. As of September 30, 2019, NAHL had not exercised its option to convert the advances into shares of common stock. Accordingly, the total of $816,452 in advances remained as an unsecured interest-free loan to the Company as of September 30, 2019. The $104,913 borrowed during the nine-month period ended September 30, 2019, is non-interest bearing, unsecured, and due on demand.

 

The Company has incurred fees due to Jose Capote for consulting fees for acting as the Company’s Secretary and Vice President in the amount of $13,500 and $13,500 during the nine-months ended September 30, 2019 and September 30, 2018, respectively. The balance due to Jose Capote as of September 30, 2019 was $13,500.

 

The Company pays New Asia Momentum Pte Ltd (NAMPL), a Singapore private company owned and controlled by Dr. Lin Kok Peng, the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board, fees for the rental of office space and for administrative services in its Singapore headquarters. Dr. Lin Kok Peng also has voting and dispositive control over the shares of Company common stock held by NAHL, the Company’s principal stockholder. The Company has incurred fees of $46,603 and $35,513 due to NAMPL during the nine-months ended September 30, 2019 and September 30, 2018, respectively. As of September 30, 2019, the Company has $45,497 due to NAMPL recorded in Accounts Payable.

 

In November 2015, Magdallen Quant Pte Ltd. (“MQL”), the Company's wholly owned subsidiary, entered into a Software License Agreement with Momentum, a company owned and controlled by Dr. Lin Kok Peng, the Company’s chief Executive Officer, Chief Financial Officer and Chairman of the Board. Dr. Lin Kok Peng also has voting and dispositive control over the shares of Company common stock held by NAHL, the Company’s principal stockholder. In consideration of MQL's performance, Momentum agreed to pay MQL in accordance with the following provisions:


8



 

(i) License fees and other fixed price fees as set forth below:

• License fees shall be based on profits from the End Users' accounts. The license fee shall be calculated as follows:  

o Where the AUM from all End Users is less than $10 million, fifteen percent (15%) only of the profits from the End Users' accounts;  

oIf the AUM from all End Users exceed $10 million, MQL's fees shall be separately agreed on between MQL and Momentum, and if MQL and Momentum are unable to agree on such apportionment, MQL shall still be entitled to fifteen percent (15%) only of the profits from the End Users' accounts;  

oOn every anniversary date of the MQL Agreement, parties will review the performance of the Licensed Software and may by mutual agreement between MQL and Momentum vary the license fee.   

 

(ii) Time and materials fees: The charges for performance of any time and materials due to work orders will be billed monthly for charges incurred in the previous monthly period and are due and payable within thirty (30) days of the date of the invoice. Expenses may include, but are not limited to, reasonable charges for materials, office and travel expenses, graphics, documentation, research materials, computer laboratory and data processing, and out-of-pocket expenses reasonably required for performance. Expenses for travel and travel-related expenses and individual expenses in excess of $500 require Momentum’s prior approval.

 

Momentum paid MQL a total of $0 and $76 in related party service revenue during the nine-months ended September 30, 2019 and September 30, 2018, respectively.

 

Note 5: Commitments and Contingencies  

 

The Company entered into an Office Service Agreement on September 12, 2017 with Premier Business Centers (“PBC”). Under the terms of the agreement, PBC granted the Company a license to use the facilities and services of PBC at 15615 Alton Parkway Suite 450, Irvine, CA 92618. The basic term of this agreement is month to month commencing August 1, 2017 with monthly fixed fees of $950. This contract ended July 24, 2018.

 

The Company entered into another agreement with PBC on July 31, 2018. Under the terms of the agreement, PBC granted the Company a license to use the facilities and services of PBC at 15615 Alton Parkway Suite 450, Irvine, CA 92618. The basic term of this agreement is month to month commencing August 1, 2018 with monthly fixed fees of $195.

 

The Company pays Momentum, a Singapore private company owned and controlled by Dr. Lin Kok Peng, the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board, fees for the rental of office space and for administrative services in its Singapore headquarters. The Company has incurred fees of $46,603 and $35,513 due to NAMPL during the nine-months ended September 30, 2019 and September 30, 2018, respectively. As of September 30, 2019, the Company has $45,497 due to NAMPL recorded in Accounts Payable.

 


9



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the consolidated unaudited financial statements and notes thereto included in Item 1 of this Quarterly Report on Form 10-Q.

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain forward-looking statements. Such forward-looking statements are based on current expectations, estimates, and projections about our industry, management beliefs, and certain assumptions made by our management. Words such as "anticipates,” "expects,” "intends,” "plans,” "believes,” "seeks,” "estimates,” variations of such words, and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the risk factors set forth in other reports and documents that we file from time to time with the United States Securities and Exchange Commission (the “SEC”), particularly the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K.

 

Executive Overview

 

We focus on developing highly advanced, proprietary, neural trading models for the financial community. It has been our belief that our state-of-the-art, trainable, algorithms in our models would emulate aspects of the human brain, providing our algorithms with a self-training ability to formalize unclassified information and thus develop an enhanced ability to make forecasts based on the historical information and other data available at their disposal. Our neural networks do not make forecasts. Instead, they analyze price data and uncover opportunities. Using our proprietary neural network, trade decisions are made based on thoroughly analyzed data (which is not generally possible when using traditional technical analysis methods).

 

On August 28, 2015, the Company completed the acquisition of Magdallen Quant Pte Ltd. (“MQL”). The acquisition was accomplished through a share exchange with Mr. Anthony Ng Zi Qin of 7,422,000 new restricted shares ("Consideration Shares") of common stock of the Company, at a market value of $0.41 per share, with an aggregate fair value of $3,043,020 in exchange for 100% of the issued and outstanding capital of MQL, held by Mr. Qin, consisting of 8,000,100 shares of stock issued at par value of SGD$1.00 per share, or $0.714, on the acquisition date. On December 12, 2017, consistent with an addendum to the original Share Purchase Agreement (“SPA”) signed on November 10, 2017, the Company issued an additional 3,339,900 shares of the Company’s common stock to Mr. Qin in full satisfaction of the contingent liability as had been set forth in the original SPA, as amended.

 

We offer trading software solutions to clients on the basis of a "Software as a Service (SaaS)" licensing and delivery models with licensed users availing themselves of service-based contractual arrangements. Our proprietary trading models have been developed by a team of professional engineers in communications, electronic circuitry design and financial engineering. Our systems were designed to take intelligent positions as the market moves/changes. It was our expectation that the proprietary algorithmic trading systems would generate superior, risk adjustable, returns for our clients.

 

Algorithms were placed into commercial operation in November 2015 upon the execution of a Software Licensing Agreement for the deployment of the proprietary trainable, trading algorithms of Magdallan Quant Pte. Ltd. (“MQL”) with New Asia Momentum Limited (“NAML”), a company owned and controlled by NAHD’s Chairman and CEO, Dr. Lin Kok Peng. Under the terms of the Software License Agreement, NAML agreed to pay MQL a license fee and certain other fixed and time and materials fees. In 2019, Momentum assets under management (“AUM”) were returned to its investors. The license agreement between MQL and Momentum still remains in place.


10



The Company continues to improve its products and has been working to create new products. The Company is doing its best to provide the basis for improved performance in the coming quarters, however, there is no guarantee that such new products and product improvements will translate to improved financial performance. The Company and Momentum is pursuing partnerships agreements with regulated funds for the use of our proprietary trainable trading algorithms; however, as of September 30, 2019, no partnerships had been finalized.

 

Results of Operations

 

Three Months Ended September 30, 2019 Compared to the Three Months Ended September 30, 2018

 

Revenues

 

We had no revenue during for the three months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, due to market conditions that impacted trading frequencies and volumes, the Company’s exclusive licensee, Momentum, liquidated the Feuris Fund A and returned the AUM to the investors. The License Agreement between MQL and Momentum still remains in place.

 

Operating Expenses

 

Operating expenses were $37,422 for the three months ended September 30, 2019, consisting of $17,181 of general and administrative expenses, $8,400 of outside service expenses, and $11,841 of professional fees. This compares to operating expenses for the three months ended September 30, 2018 of $40,451, consisting of $17,903 of general and administrative expenses, $8,400 of outside service expenses, and $14,148 of professional fees. The operating expenses for the three-month period ended September 30, 2019 were slightly lower than the operating expenses for the corresponding period in 2018 because professional fees were slightly lower.

 

Net Loss

 

As a result of the foregoing, we had a net loss of $37,422 for the three months ended September 30, 2019 compared to $40,451 for the three months ended September 30, 2018.

 

We expect to incur net losses through the balance of this year because we expect to continue to incur expenses, but do not expect to generate significant, or any, revenues. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover our expenses. We expect to cover such shortfall in operating margins through advances from our principal shareholder and other fundraising measures, as the Company deems appropriate. 

 

Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018

 

Revenues

 

We had revenues of $0 and $76 for the nine months ended September 30, 2019 and 2018, respectively. Such revenues were comprised of related party revenues, as they resulted from fees received from the Company's exclusive licensee, Momentum. Momentum is a Singapore private company owned and controlled by Dr. Lin Kok Peng, the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board. Dr. Lin Kok Peng also has voting and dispositive control over the shares of Company common stock held by NAHL, the Company’s principal stockholder. As of September 30, 2019, due to market conditions that impacted trading frequencies and volumes, the Company’s exclusive licensee, Momentum, liquidated the Feuris Fund A and returned the AUM to the investors.  The License Agreement between MQL and Momentum still remains in place.

Operating Expenses

 

Operating expenses were $137,970 for the nine months ended September 30, 2019, consisting of $69,090 of general and administrative expenses, $25,200 of outside service expenses, and $43,680 of professional fees. This compares to operating expenses for the nine months ended September 30, 2018 of $123,424, consisting of $57,846 of general and administrative expenses, $25,200 of outside service expenses, and $40,378 of professional fees. The operating expenses for the nine-month period ended September 30, 2019 were higher than the for the corresponding period in 2018 because general and administrative expenses and professional fees were higher in the nine months ended September 30, 2019.

 

Net Loss


11



As a result of the foregoing, we had a net loss of $137,970 for the nine months ended September 30, 2019, compared to a net loss of $123,348 for the nine months ended September 30, 2018.

 

We expect to incur net losses through the balance of this year because we expect to continue to incur expenses, but do not expect to generate significant, or any, revenues. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover our expenses. We expect to cover such shortfall in operating margins through advances from our principal shareholder and other fundraising measures, as the Company deems appropriate. 

 

Liquidity and Capital Resources

 

We had cash in the amount of $31,876 and $28,617 at September 30, 2019 and December 31, 2018, respectively.  To date, we have funded our operations from advances from our principal shareholder, NAHL. Dr. Lin Kok Peng also has voting and dispositive control over the shares of Company common stock held by NAHL.

 

We do not have sufficient capital to sustain our operations for the next 12 months. We expect to continue to rely on advances from NAHL, as well as from other sources of financing, including private placements of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of equity securities or that we will be able to arrange for debt or other financing to fund our operations and other activities.  We do not have any oral or written agreements with NAHL which would require NAHL to fund our operations.  

 

During the nine-month period ended September 30, 2019, NAHL advanced an aggregate of $104,913 to the Company. The total advances due to NAHL are $816,452 and $711,539 as of September 30, 2019 and December 31, 2018, respectively. As of September 30, 2019, $465,594 of the advances constitute unsecured interest-free loans to the Company. The advances were supposed to have been repaid by the close of business on October 31, 2016. In 2016, however, the Company and NAHL agreed that if the Company was unable to repay these advances by such date, NAHL, at its sole discretion, would have the option to extend the repayment deadline or convert all or a portion of the above advances into common stock of the Company at a conversion price of $0.02 per share. As of September 30, 2019, NAHL had not exercised its option to convert the advances into shares of common stock, thus the total of $816,452 in advances presently remain as an unsecured interest-free loan to the Company. The $104,913 borrowed during the nine-month period ended September 30, 2019 is non-interest bearing unsecured, and due on demand.  

 

We expect to incur losses and negative operating cash flows for the foreseeable future and we may never become profitable. We also expect to continue to incur significant operating and capital expenditures for the next several years and anticipate that our expenses will increase substantially in the foreseeable future. We also expect to experience negative cash flow for the foreseeable future as we fund our operating losses and capital expenditures.

 

As a result, we will need to generate significant revenues in order to achieve and maintain profitability. We may not be able to generate these revenues or achieve profitability in the future. Our failure to achieve or maintain profitability could negatively impact the value of our common stock.

 

We have no agreements to obtain funds through bank loans, lines of credit or any other traditional sources. Since we have no financing committed, our inability to realize financing to maintain operations and grow our business would materially restrict our business operations. Future financing may not be available upon acceptable terms, or at all. Should we be successful in securing future financing, new issuances of equity or convertible debt (i) would dilute our current shareholders, possibly significantly, (ii) might require a significant increase to our authorized stock, and (iii) might have rights, preferences, or privileges senior to our common or preferred stock. If financing is not available to us on favorable terms, such severe limitation might cause us to consider another consolidation of existing common equity at any time as a means to attract financing and maintain our business.

 

Due to the uncertainty of our ability to meet our current operating and capital expenses and the fact that we have suffered recurring losses from operations and have a net capital deficiency, in their report on our audited annual financial statements as of and for the years ended December 31, 2018 and 2017, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Recurring losses from operations raise substantial doubt about our ability to continue as a going concern. The presence of the going concern explanatory paragraph may have an adverse impact on the relationships we are developing and plan to develop with third parties as we continue the commercialization of our products and could make it challenging and difficult for us to raise additional financing, all of which could have a material adverse impact on our business and prospects and result in a significant or complete loss of your investment

 

Cash and Cash Equivalents


12



 

The following table summarizes the sources and uses of cash for the periods stated. The Company held no cash equivalents for any of the periods presented.

 

 

 

For the Nine Months Ended

 

 

September 30, 2019

 

September 30, 2018

Cash, beginning of period

 

$

28,617

 

 

$

58,263

 

Net cash used in operating activities

 

 

(101,522

)

 

 

(84,269

)

Net cash provided by investing activities

 

 

-

 

 

 

-

 

Net cash provided by financing activities

 

 

104,913

 

 

 

78,989

 

Effect of exchange rate on cash

 

 

(132)

 

 

 

(827)

 

Cash, end of period

 

$

31,876

 

 

$

52,156

 

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

 

Critical Accounting Policies

 

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

  

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are not required to provide the information under this item.

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

 

Our management conducted an evaluation as of September 30, 2019, with the participation of Mr. Lin Kok Peng, who is our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2019, our disclosure controls and procedures were not effective due to the size and nature of the existing business operations. Given the size of our current operations and existing personnel, the opportunity to implement internal control procedures that segregate accounting duties and responsibilities is limited. Until the organization can increase in size to warrant an increase in personnel, formal internal control procedures will not be implemented until they can be effectively executed and monitored. As a result of the size of the current organization, there will not be significant levels of supervision, review, independent directors nor a formal audit committee.

 

Changes in Internal Control over Financial Reporting


13



 

There have been no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which our director, officer or any affiliates, or any registered or beneficial shareholder of more than 5% of our outstanding common stock, is an adverse party or has a material interest averse to our interest.

 

ITEM 1A. RISK FACTORS

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES.

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None.

 

 


14



ITEM 6. EXHIBITS

 

Exhibit Number

Description

Filing

 

 

 

31.1

Certification of CEO pursuant to Sec. 302

Filed herewith.

 

 

 

31.2

Certification of CFO pursuant to Sec. 302

Filed herewith.

 

 

 

32.1

Certification of CEO and CFO pursuant to Sec. 906

Filed herewith.

 

 

 

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith.

 

 

 

101.INS

XBRL Instance Document

Filed herewith.

 

 

 

101.SCH

XBRL Taxonomy Extension Schema Document

Filed herewith.

 

 

 

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith.

 

 

 

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

Filed herewith.

 

 

 

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

 

 

 

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

Filed herewith.


15



SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


 

 

NEW ASIA HOLDINGS, INC.

 

 

 

 

Date: November 19, 2019

By:

/s/ Lin Kok Peng

 

 

Lin Kok Peng

 

 

Chief Executive Officer and Chief Financial Officer

 

 

(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)


16

 

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