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NEW ASIA HOLDINGS, INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
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 where approximately 90% of the issued and
outstanding shares of common stock of the Company were 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”). As a result, Lin Kok Peng is the
effective principal stockholder of the Company.
We
have been offering trading software solutions to clients based on a
“Software as a Service (SaaS)” licensing and delivery model with
licensed users availing themselves of service-based contractual
arrangements, however, please see the Management Discussion and
Analysis regarding these activities and current efforts by the
Company to develop new opportunities. 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
Magdallen 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 by NAML. The
license agreement between MQL and NAML still remains in place.
As
a result of poor performance by the Company’s algorithms, over the
last several years the Company has been focusing on developing new
business opportunities, including exploring potential new
technology solutions and/or acquisition.
Basis of Presentation
The accompanying unaudited interim financial statements of the
Company have been prepared in accordance with accounting principles
generally accepted in the United States of America (“GAAP”) and the
rules of the Securities and Exchange Commission (the “SEC”), and
should be read in conjunction with the audited financial statements
and notes thereto contained in the Company’s most recent Annual
Report on Form 10-K as filed with the SEC. In the opinion of
management, all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of financial
position and the results of operations for the interim period
presented have been reflected herein. The results of operations for
the interim period are not necessarily indicative of the results to
be expected for the full year. Notes to the financial statements
which would substantially duplicate the disclosures contained in
the audited financial statements for the most recent fiscal period,
as reported in the Annual Report on Form 10-K for the most recent
fiscal year, as filed with the SEC on April 18, 2022, have been
omitted.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. The extent to
which the COVID-19 pandemic may directly or indirectly impact our
business, financial condition, and results of operations is highly
uncertain and subject to change. We considered the potential impact
of the COVID-19 pandemic on our estimates and assumptions and there
was not a material impact to our unaudited consolidated financial
statements as of and for the three and nine months ended September
30, 2022; however, actual results could differ from those estimates
and there may be changes to our estimates in future periods.
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 unaudited interim
consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
6
NEW ASIA HOLDINGS, INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
Note 3: Common Stock
On
July 8, 2020, the Company filed a Certificate of Amendment (the
“Amendment”) to the Company’s articles of incorporation, as
amended, with the Secretary of State of the State of Nevada. The
Amendment had the effect of increasing the number of authorized
shares of the Company’s common stock from 400,000,000 to
4,000,000,000 and the number of authorized shares of the Company’s
preferred stock from 30,000,000 to 400,000,000. As of December 31,
2020, the Company has authorized 4,400,000,000 shares of capital
stock, consisting of 4,000,000,000 shares, par value $0.001 per
share, of common stock, and 400,000,000 shares, par value $0.001
per share, of “blank check” preferred stock. The Company had
75,288,667 shares of common stock and no shares of preferred stock
issued and outstanding as of September 30, 2022 and December 31,
2021.
On
September 16, 2020, the Company entered into an Equity Purchase
Agreement (the “Global Crypto Equity Purchase Agreement”) with
Global Crypto Offering Exchange Ltd. (“Global Crypto”). Pursuant to
the terms of the Global Crypto Equity Purchase Agreement, the
Company agreed to sell to Global Crypto, and Global Crypto agreed
to purchase, an aggregate of 50,000,000 restricted shares of the
Company’s common stock at purchase price of $0.01 per share, for an
aggregate purchase price of $500,000 (the “Share Purchase”). The
Global Crypto Equity Purchase Agreement provides that the Share
Purchase would have been implemented in 10 separate blocks (each, a
“Block” and collectively, “Blocks”), with the first Block closing
on September 18, 2020. In the first Block, Global Crypto purchased
2,000,000 shares for an aggregate purchase price of $20,000. The
parties to the Global Crypto Equity Purchase Agreement agreed that
each of the remaining nine Blocks would close within 12 months of
September 18, 2020.
The Global Crypto Equity Purchase Agreement would have terminated
(i) upon the completion of the full Share Purchase, or (ii) on
September 18, 2021. Since the completion of the full Share Purchase
by Global Crypto was not completed by September 18, 2021, no
additional shares could have been purchased under the Global Crypto
Share Purchase Agreement and thus the Global Crypto Equity Purchase
Agreement was terminated on September 18, 2021, pursuant to its
terms. No additional shares may be purchased under the Global
Crypto Share Purchase Agreement.
On
September 21, 2020, the Company entered into an Equity Purchase
Agreement (the “ENJU Equity Purchase Agreement”) with ENJU Planning
Pte Ltd. (“ENJU”). Pursuant to the terms of the Equity Purchase
Agreement, the Company agreed to sell to the ENJU, and the ENJU
agreed to purchase, 1,000,000 restricted shares of the Company’s
common stock at purchase price of $0.20 per share, for an aggregate
purchase price of $200,000. The total proceeds were received by the
Company in October 2020.
As of September 30,
2022, Lin Kok Peng, the Company’s principal shareholder, had not
yet acted to exercise its option to convert advances from him to
shares of common stock. Accordingly, as of September 30, 2022, and
December 31, 2021, the advances remain as an interest-free loan to
the Company. See Note 4.
7
NEW ASIA HOLDINGS, INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
Note 4: Convertible Advances from Shareholder and Other Related
Party Transactions
During the nine months ended September 30, 2022 and 2021, Lin Kok
Peng, the Company’s principal shareholder, was repaid $3,248 and
$38,697 for payments made to vendors on the Company’s behalf,
respectively. During the nine months ended September 30, 2022 and
2021, Lin Kok Peng advanced an aggregate of $8,000 and nil to the
Company, respectively. The total advances due to Lin Kok Peng
amounted to $921,204 and $916,452 as of September 30, 2022 and
December 31, 2021, respectively. As of September 30, 2022 and
December 31, 2021, the advances constitute unsecured interest-free
loans to the Company.
On
August 14, 2020, the Company signed an Agreement with NAHL.
Pursuant to the terms of the Agreement, all funds advanced to the
Company by NAHL up to August 14, 2020 (the “Prior Advances”) will
continue to constitute an interest-free loan to the Company, which
was due and payable by the Company to NAHL on or before September
15, 2020 (the “Prior Advance Repayment Date”, which may be extended
as set forth below). If the Company does not repay the Prior
Advances by the Prior Advance Repayment Date, NAHL, at its sole
discretion, will have the option to extend the Prior Advance
Repayment Date or convert all or a portion of the Prior Advances
into Common Stock at a conversion price of $0.003 per share (the
“Prior Advance Conversion Price”), subject to adjustment as set
forth in the Agreement. NAHL’s election to extend the Prior Advance
Repayment Date or to convert the Prior Advances into Common Stock
shall be made on the first business day following the Prior Advance
Repayment Date. The Parties acknowledge and agree that the Prior
Advances shall not be convertible into common stock prior to the
Prior Advance Repayment Date.
Following August 14, 2020, NAHL will endeavor, on a best efforts’
basis, to continue to advance operating funds to the Company as may
be required and requested by the Company for its operations, for a
period of at least through December 31, 2020 (such additional
advances, as funded, the “Additional Advances” and, together with
the Prior Advances, the “Advances”). Any such Additional Advances
were due and payable by the Company to NAHL on or before January
31, 2021 (the “Additional Advance Repayment Date”, which may be
extended as set forth below). In the event that any Additional
Advances are made and are not repaid by the Additional Advance
Repayment Date, NAHL, at its sole discretion, will have the option
to extend the Additional Advance Repayment Date or convert all or a
portion of the Additional Advances into Common Stock at a
conversion price of $0.003 per share (the “Additional Advance
Conversion Price”), subject to adjustment as set forth in the
Agreement. NAHL’s election to extend the Additional Advance
Repayment Date or to convert the Additional Advances into Common
Stock shall be made on the first business day following the
Additional Advance Repayment Date. The Parties acknowledge and
agree that any Additional Advances shall not be convertible into
common stock prior to the Additional Advance Repayment Date.
On
January 5, 2021, the shares of the Company’s common stock under the
name of NAHL were changed to Lin Kok Peng, as an individual, at the
request of the owner of NAHD, Lin Kok Peng and NAHL was closed.
As
of September 30, 2022, the Company repaid $3,248 to Lin Kok Peng,
and Mr. Lin had not exercised his option to convert the Advances
into shares of common stock. Accordingly, the total of $921,204 in
advances remained as an unsecured interest-free loan to the Company
as of September 30, 2022. Although Lin Kok Peng is expected to
continue to advance operating funds to the Company in the future,
there can be no assurance that he will continue to do so.
On
September 7, 2015, Mr. Jose A. Capote ("Mr. Capote") was appointed
to serve as the Company's Secretary and Vice President. There is no
family relationship between Mr. Capote and any of the Company's
directors or officers. Mr. Capote is currently a shareholder of the
Company. The Company has incurred fees due to Mr. Capote for
consulting services 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, 2022 and September 30, 2021,
respectively. The balance due to Mr. Capote as of September 30,
2022 and December 31, 2021, was $27,750 and $15,000, respectively,
and was included in accounts payable and accrued liabilities.
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 and Chairman of the Board and
principal shareholder, fees for the rental of office space and for
administrative services in its Singapore Headquarters. The Company
has incurred fees of $34,565 and $35,624 due to NAMPL during the
nine-month period ended September 30, 2022, and September 30, 2021,
respectively. As of September 30, 2022, and December 31, 2021, the
Company had $185,304 and $150,739 due to NAMPL recorded in accounts
payable and accrued liabilities, respectively.
8
NEW ASIA HOLDINGS, INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
Note 5: Commitments and Contingencies
The Company entered into an agreement with Premier Business Centers
(“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. This is a
month-to-month lease, with monthly fixed fees of $195.
The Company pays 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. This is a month-to-month lease, with
monthly fixed fees of approximately $3,900.
9
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements
This Quarterly Report on Form 10-Q contains 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, as the same may be amended from time to time.
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 unaudited consolidated financial statements
and notes thereto included in Item 1 of this Quarterly Report on
Form 10-Q.
Overview
Since December 24, 2014, New Asia Holdings, Inc. (the “Company”)
has been developing and deploying its proprietary, neural trading
models for the financial community. 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.
The Company's products capitalize the large volume of the 24-hour
Forex markets to achieve capital appreciation over a medium- to
long-term basis, combined with the usage of a good wealth vehicle
designed to control risk, profit from both bull or bear markets,
and maximize liquidity and economic resilience.
Our proprietary trading models were developed by a team of
professional engineers in communications, electronic circuitry
design and financial engineering. This diverse team is the key
factor in our successful development of non-traditional and
innovative trading models. Our systems were designed to take
intelligent positions as the market moves/changes and, upon
development, our systems were to bring a rigorously tested
track-record.
The Company’s systems were designed to adapt themselves and to take
intelligent positions as the market moves/changes. The models were
subjected to rigorous testing akin to the volatile trading
environment of major financial events/crises that have happened in
recent history. These models were also programmed to have the
ability to learn and adapt new manners of trading, effectively
translating the human behavioral of trading into a predictive
science. The Company’s quantitative strategies and proprietary
algorithmic trading system were developed to generate risk
adjustable returns for its licensees and their clients.
Since 2016, the Company's focus has been to license its algorithm
to licensees, regulated funds and banks to capitalize on the large
volume of the 24-hour Forex markets to achieve capital appreciation
over a medium- to long- term basis, combined with the usage of a
good wealth vehicle designed to control risk, profit from both bull
or bear markets, and maximize liquidity and economic
resilience.
On
August 25, 2015, the Company entered into a Sale and Purchase
Agreement (the “Purchase Agreement”) with Anthony Ng Zi Qin,
pursuant to which the Company acquired Magdallen Quant Pte Ltd
(“MQL”). The MQL acquisition was accomplished through a share
exchange with Anthony Ng Zi Qin of 7,422,000 restricted shares of
common stock of the Company ("Consideration Shares"), with a value
of $0.41 per share, and an aggregate fair value of $3,043,020, in
exchange for the entire issued and outstanding capital of MQL held
by Mr. Anthony Ng Zi 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
August 19, 2016, the Company and Anthony Ng Zi Qin entered into an
Addendum (the “First MQL Addendum”) to the Purchase Agreement to
extend the August 25, 2016, anniversary date for the adjustment of
issued shares for an additional period of 12 months. On November
10, 2017, the Company and Anthony Ng Zi Qin signed an Addendum (the
“Second MQL Addendum”) to the Purchase Agreement, as amended,
pursuant to which the Company agreed to issue an aggregate of
3,339,900 shares of common stock, in satisfaction of the shortfall
in the value of the shares issued. These shares were issued on
December 12, 2017 in full satisfaction of the aforementioned
contingent liability. The Purchase Agreement, as amended, is
referred to herein as the “MQL Acquisition Agreement.”
10
The algorithms were placed into commercial operation in November
2015 upon the execution of a Software Licensing Agreement (the “MQL
License Agreement”) between and New Asia Momentum Limited (“NAML”),
a company owned and controlled by Dr. Lin Kok Peng, the Company’s
Chief Executive Officer, Chief Financial Officer and Chairman of
the Board. Under the terms of the MQL License Agreement, MQL agreed
to license its proprietary trainable, trading algorithms to NAML in
exchange for payment of a license fee and certain other fixed and
time and materials fees. Pursuant to the terms of the MQL License
Agreement, MQL licensed its proprietary trainable, trading
algorithms. NAML, in turn, offered these proprietary, trainable,
algorithm trading software solutions to broker-dealers, banks,
funds and other clients based on a SaaS licensing and delivery
model, with sub-licensed users availing themselves of service-based
contractual arrangements. NAML was required to pay MQL royalty fees
equal to 20% of the trading profits achieved by the SaaS contract
agreements that NAML executed with its clients. The targeted
geographic market was Asia, with an initial emphasis on Singapore,
Hong Kong, Indonesia, and Australia. From 2015 to 2017, NAML grew
its retail assets under management (“AUM”) from zero to
approximately $2.5 million.
In
conjunction with the expansion into the regulated fund and bank
model, NAML decided to ask its clients to redeem the AUM and as of
September 30, 2017, trading on the AUM was terminated.
The Company initiated its focus on the regulated bank and fund
model in 2017 with the launch of the Feuris Fund A with AUM of
approximately $6.67 million. Because the risk profiles required by
these regulated funds and banks reflect a lower level of risk,
there was a significantly reduced frequency of trading activities.
As of September 30, 2019, due to market conditions that impacted
trading frequencies and volumes, NAML liquidated the Feuris Fund A
and returned the AUM to the investors.
The MQL License Agreement currently remains in place.
While the Company continues to improve its algorithm products,
there are no guarantees that such product improvements will
translate to improved financial performance. The Company, in its
efforts to expand its business, is currently considering several
new business opportunities, including the following:
·The Company may integrate a
business solution to not rely on using an application that relies
on our algorithms for actual trading, but instead to provide a
platform where users can use the algorithms as a tool to obtain
information that can assist users in making potential investment
decisions.
·NAHD executed a Memorandum of
Understanding, dated June 14, 2022, regarding the acquisition of a
40% of the issued and outstanding shares of Asian Fuels Energy Inc
(AFEI) and the rights to secure, through a subsequent investment of
a majority equity stake in the individual Special Project
Corporations (SPC) involved in the production of Renewable Napier
Grass fuel in Batangas (first Priority Project) and future projects
in Tarlac. NAHD is undertaking a technical, legal, and financial
evaluation of Asian Fuels Energy Inc (the “Company”) and its sister
Company, Hacienda Asia Plantations Inc. (HAPI). AFEI is a
Philippine-based Company, incorporated on June 19, 2009, is a
subsidiary company to HAPI of which was incorporated in August 2,
2007, owned by Alfred Joseph S. Araneta with super majority of the
both companies. The details are described in an 8K filing
made by the Company on June 21, 2022. Currently this potential
transaction is under evaluation by the Company and the acquisition
has not closed and there is currently no expected date for the
closing of this transaction.
·The
Company is also evaluating other potential acquisition(s) that may
be further detailed in upcoming filings, no information on these
potential transactions is currently available.
As
of September 30, 2022, the Company has not yet determined which, if
any, of the above business opportunities it will implement and is
also considering other additional opportunities. There can be no
assurance that any of these business opportunities will come to
fruition and, if initiated, will be successful. 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 did not generate any revenue during the nine months
ended September 30, 2022 and 2021.
As
described above, the commercial business associated with the
licensing of the algorithm products has not materialized and the
Company is pursuing new applications of the products that would not
involve trading and other new business activities.
COVID-19
In
December 2019, a novel strain of coronavirus (COVID-19) emerged in
Wuhan, Hubei Province, China. While initially the outbreak was
largely concentrated in China and caused significant disruptions to
its economy, it has now spread to most countries around the world
and infections have been reported globally. The spread of COVID-19
has had a material adverse effect on segments of the global
economy.
11
Because COVID-19 infections continue to be reported worldwide,
certain national, state and local governmental authorities have
issued stay-at-home orders, proclamations and/or directives aimed
at minimizing the spread of COVID-19. Additional, more restrictive
proclamations and/or directives may be issued in the future. As a
result, certain Company internal operations communications and
accounting operations have been disrupted by these “stay at home”
orders, which have affected the timing of certain new business
development activities (the Company had previously liquidated the
Feuris Fund A AUM during the third quarter of 2019).
The ultimate impact of the COVID-19 pandemic on the Company’s
operations is unknown and will depend on future developments, which
are highly uncertain and cannot be predicted with confidence,
including the duration of the COVID-19 outbreak, new information
which may emerge concerning the severity of the COVID-19 pandemic,
and any additional preventative and protective actions that
governments, or the Company, may direct, which may result in an
extended period of continued business disruption and reduced
operations. Any resulting financial impact cannot be reasonably
estimated at this time but could be anticipated to have a material
adverse impact on our business, financial condition and results of
operations.
The measures taken to date will impact the Company’s business for
the first nine months of 2022 and potentially beyond. Management
expects that all of its business segments, across all of its
geographies, will be impacted to some degree, but the significance
of the impact of the COVID-19 outbreak on the Company’s business
and the duration for which it may have an impact cannot be
determined at this time.
Results of Operations
Three Months Ended September 30, 2022 Compared to the Three
Months Ended September 30, 2021
Revenues
We
had no revenue during the three months ended September 30, 2022 and
2021, respectively. The MQL License Agreement between MQL and
NAML still remains in place and the Company is focusing on the
development of expanded new business solutions as described
above.
Operating Expenses
Operating expenses were $32,769 for the three months ended
September 30, 2022, consisting of $16,500 of general and
administrative expenses, $9,700 of outside service expenses, and
$6,569 of professional fees. This compares to operating expenses
for the three months ended September 30, 2021, of $33,788,
consisting of $16,304 of general and administrative expenses,
$8,545 of outside service expenses, and $8,939 of professional
fees. The operating expenses for the three-month period ended
September 30, 2022 were slightly lower than the operating expenses
for the corresponding period in 2021 because expenses associated
with professional fees were lower.
Net Loss
As
a result of the foregoing, we had a net loss of $32,769 for the
three months ended September 30, 2022, compared to a net loss of
$33,788 for the three months ended September 30, 2021.
We
expect to incur net losses through 2022 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, some of which have been conducted,
as the Company deems appropriate. There is no assurance that
our principal shareholder will continue to advance funds to us or
that we will be successful in any other fundraising measures.
Nine Months Ended September 30, 2022 Compared to the Nine
Months Ended September 30, 2021
Revenues
We
had no revenue during the nine months ended September 30, 2022 and
2021, respectively. The MQL License Agreement between MQL and
NAML still remains in place and the Company is focusing on the
development of expanded new business solutions as described
above.
Operating Expenses
Operating expenses were $121,174 for the nine months ended
September 30, 2022, consisting of $54,735 of general and
administrative expenses, $26,500 of outside service expenses, and
$39,939 of professional fees. This compares to operating expenses
for the nine months ended September 30, 2021, of $120,105,
consisting of $52,759 of general and administrative expenses,
$26,688 of outside service expenses, and $40,658 of professional
fees. The operating expenses for the nine-month period ended
September 30, 2022, were
12
slightly higher than the operating expenses for the corresponding
period in 2021 because general and administrative expenses were
higher.
Net Loss
As
a result of the foregoing, we had a net loss of $121,174 for the
nine months ended September 30, 2022, compared to a net loss of
$120,105 for the nine months ended September 30, 2021.
We
expect to incur net losses through 2022 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, some of which have been conducted,
as the Company deems appropriate. There is no assurance that
our principal shareholder will continue to advance funds to us or
that we will be successful in any other fundraising measures.
Liquidity and
Capital Resources
We
had cash in the amount of $15,608 and $88,000 at September 30, 2022
and September 30, 2021, respectively. To date, we have funded our
operations from private placements concluded in the third and
fourth quarter of 2020 and from advances from our principal
shareholder, Lin Kok Peng. Dr. Lin Kok Peng, our Chief Executive
Officer, Chief Financial Officer, and Chairman of the Board, also
has voting and dispositive control over the shares of the Company’s
common stock, and we just recently completed two Private Placements
as described in herein.
We
do not have sufficient capital to sustain our operations for the
next 12 months. We expect to continue to rely on advances from our
principal shareholder, as well as from other sources of financing,
including additional 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
Lin Kok Peng which would require Lin Kok Peng to fund our
operations.
During the nine-month period ended September 30, 2022, Lin Kok Peng
advanced the Company $8,000 and was repaid $3,248 for a net advance
of $4,752. The total advances due to Lin Kok Peng are $921,204 and
$916,452 as of September 30, 2022 and December 31, 2021,
respectively. As of September 30, 2022, the advances constitute
unsecured interest-free loans to the Company.
On
August 14, 2020, the Company signed an Agreement with NAHL.
Pursuant to the terms of the Agreement, all funds advanced to the
Company by NAHL up to August 14, 2020 (the “Prior Advances”) will
continue to constitute an interest-free loan to the Company, which
was due and payable by the Company to NAHL on or before September
15, 2020 (the “Prior Advance Repayment Date”, which may be extended
as set forth below). If the Company does not repay the Prior
Advances by the Prior Advance Repayment Date, NAHL, at its sole
discretion, will have the option to extend the Prior Advance
Repayment Date or convert all or a portion of the Prior Advances
into Common Stock at a conversion price of $0.003 per share (the
“Prior Advance Conversion Price”), subject to adjustment as set
forth in the Agreement. NAHL’s election to extend the Prior Advance
Repayment Date or to convert the Prior Advances into Common Stock
shall be made on the first business day following the Prior Advance
Repayment Date. The Parties acknowledge and agree that the Prior
Advances shall not be convertible into Common Stock prior to the
Prior Advance Repayment Date.
Following the Effective Date, NAHL was to endeavor, on a best
efforts’ basis, to continue to advance operating funds to the
Company as may be required and requested by the Company for its
operations, for a period of at least through December 31, 2020
(such additional advances, as funded, the “Additional Advances”
and, together with the Prior Advances, the “Advances”). Any such
Additional Advances were to be due and payable by the Company to
NAHL on or before January 31, 2021 (as the same may be extended as
set forth below, the “Additional Advance Repayment Date”). In the
event that any Additional Advances were made and were not repaid by
the Additional Advance Repayment Date, NAHL, at its sole
discretion, would have the option to extend the Additional Advance
Repayment Date or convert all or a portion of the Additional
Advances into Common Stock at a conversion price of $0.003 per
share (the “Additional Advance Conversion Price”), subject to
adjustment as set forth in the Agreement. NAHL’s election to extend
the Additional Advance Repayment Date or to convert the Additional
Advances into Common Stock shall be made on the first business day
following the Additional Advance Repayment Date. The Parties
acknowledge and agree that any Additional Advances shall not be
convertible into Common Stock prior to the Additional Advance
Repayment Date.
On
January 5, 2021, the shares of the Company’s stock under the name
of NAHL were changed to Lin Kok Peng, as an individual, at the
request of the owner of NAHD, Lin Kok Peng and NAHL was closed.
As
of September 30, 2022, Dr. Lin Kok Peng had not exercised its
option to convert the advances into shares of common stock.
Accordingly, the total of $921,204 in advances remained as an
unsecured interest-free loan to the Company as of September 30,
2022.
13
Through September 30, 2022, Lin Kok Peng has continued to advance
operating funds to the Company totaling $921,204 and may be
expected to continue to advance such operating funds in the future.
In August 2020, NAHL informed the Company that the previous terms
of the prior agreement had not reflected the level of risk that
NAHL has taken in effecting these advances over the years.
Therefore, on August 14, 2020, the Company and NAHL entered into an
Agreement on Advances (the “Agreement”) wherein the Company and
NAHL agreed as follows. On January 5, 2021, Lin Kok Peng decided to
change his ownership of the Company from NAHL to his own Name (Lin
Kok Peng) and thus all prior agreements executed between the
Company and NAHL remain fully in effect:
·All funds that have been
advanced to the Company by NAHL up to August 14, 2020 (the “Prior
Advances”) will continue to constitute an interest-free loan to the
Company, which will be due and payable by the Company to NAHL on or
before September 15, 2020. If the Company does not repay the Prior
Advances by that date NAHL will have the right to extend that date
for repayment or to convert all or a portion of the Prior Advances
into Common Stock at a conversion price of $0.003 per
share.
·Following August 14,
2020, NAHL will endeavor, on a best efforts’ basis, to continue to
advance operating funds to the Company as may be required and
requested by the Company for its operations, for a period of at
least through December 31, 2020 (such additional advances, as
funded, the “Additional Advances”). Any such Additional Advances
were due and payable by the Company to NAHL on or before January
31, 2021. In the event that any Additional Advances are made and
are not repaid by such date, NAHL will have the right to extend
that date for repayment or convert all or a portion of the
Additional Advances into Common Stock at a conversion price of
$0.003 per share.
·In the event that NAHL
determines not to fund any Additional Advances, then conversion
price for any Prior Advances made prior to January 1, 2020, will
remain $0.003 per share but the conversion price with respect to
any Prior Advances made after January 1, 2020 will be $0.01 per
share.
·The conversion prices as
set forth above are subject to customary adjustments for stock
splits, stock dividends, recapitalizations and other customary
events which occur following August 14, 2020.
·On January 5, 2021, the shares
of the Company’s stock under the name of NAHL were changed to Lin
Kok Peng, as an individual, at the request of the owner of NAHD,
Lin Kok Peng and NAHL was closed.
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 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 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, 2021, and 2020, 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.
14
Cash and Cash
Equivalents
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, 2022
|
|
September 30, 2021
|
|
Cash,
beginning of period
|
|
$57,888
|
|
$200,378
|
|
Net
cash used in operating activities
|
|
(46,757)
|
|
(73,264)
|
|
Net
cash provided by investing activities
|
|
-
|
|
-
|
|
Net
cash provided by (used in) financing activities
|
|
4,752
|
|
(38,697)
|
|
Effect of exchange rate on cash
|
|
(275)
|
|
(417)
|
|
Cash,
end of period
|
|
$15,608
|
|
$88,000
|
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 (“U.S. GAAP”). U.S. 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,
risks and financial condition. We believe our use of estimates and
underlying accounting assumptions adhere to U.S. 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.
Our significant accounting policies are summarized in Note 1 in the
Annual Report on Form 10-K for the most recent fiscal year, as
filed with the SEC. While all these significant accounting policies
impact our financial condition and results of operations, we view
certain of these policies as critical. Policies determined to be
critical are those policies that have the most significant impact
on our financial statements and require management to use a greater
degree of judgment and estimates. Actual results may differ from
those estimates. Our management believes that given current facts
and circumstances, it is unlikely that applying any other
reasonable judgments or estimate methodologies would cause effect
on our results of operations, financial position or liquidity for
the periods presented in this report.
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.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in
the financial statements and accompanying notes. The extent to
which the COVID-19 pandemic may directly or indirectly impact our
business, financial condition, and results of operations is highly
uncertain and subject to change. We considered the potential impact
of the COVID-19 pandemic on our estimates and assumptions and there
was not a material impact to our consolidated financial statements
as of and for the nine months ended September 30, 2022; however,
actual results could differ from those estimates and there may be
changes to our estimates in future periods.
15
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 the 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, 2022,
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, 2022, 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
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 last fiscal quarter ended September 30, 2022 that have
materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
16
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
As
a smaller reporting company, the Company is not required to
disclose material changes to the risk factors that were contained
in the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2021.
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.
17
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
|
Furnished herewith.
|
|
|
|
|
|
101.INS
|
XBRL Instance Document-the instance document does not appear in the
Interactive Data File because its XBRL tags are embedded within the
Inline XBRL document.
|
Filed herewith.
|
|
|
|
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema
|
Filed herewith.
|
|
|
|
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase
|
Filed herewith.
|
|
|
|
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase
|
Filed herewith.
|
|
|
|
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase
|
Filed herewith.
|
|
|
|
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase
|
Filed herewith.
|
|
|
|
|
|
104
|
Cover Page Interactive Data File––the cover page interactive data
file does not appear in the Interactive Data File because its XBRL
tags are embedded within the Inline XBRL document.
|
Filed herewith.
|
18
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.
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|
|
|
|
|
Date: December 8,
2022
|
By:
|
/s/ Lin Kok Peng
|
|
|
|
Lin
Kok Peng
|
|
|
|
Chief Executive Officer and Chief Financial Officer
|
|
|
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(Principal executive officer, principal financial officer and
principal accounting officer)
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19