UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended:
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to _____________
Commission File No.
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Securities registered pursuant to Section 12(b) of the Act:
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N/A | N/A | N/A |
Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value
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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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ¨
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State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. As of June 30, 2022, the aggregate market value was $
The number of shares outstanding of each of the issuer's classes of common stock, as of May 15, 2023, is as follows:
Classes of Common Stock |
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Common Stock, $0.001 par value |
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DOCUMENTS INCORPORATED BY REFERENCE
None.
New Asia Holdings, Inc.
Annual Report on Form 10-K
For the Fiscal Year Ended December 31, 2022
TABLE OF CONTENTS
PART I
Item 1. | 1 | |
Item 1A. | 9 | |
Item 1B. | 23 | |
Item 2. | 23 | |
Item 3. | 23 | |
Item 4. | 23 | |
PART II | ||
Item 5. | 24 | |
Item 6. | 25 | |
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 26 |
Item 7A. | 32 | |
Item 8. | 32 | |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 32 |
Item 9A. | 32 | |
Item 9B. | 33 | |
Item 9C. | Disclosures Regarding Foreign Jurisdictions that Prevent Inspections | 33 |
PART III | ||
Item 10. | 34 | |
Item 11. | 36 | |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 38 |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 38 |
Item 14. | 40 | |
PART IV | ||
Item 15. | 41 | |
Item 16. | 39 | |
Special Note Regarding Forward-Looking Statements
Certain statements contained in this Annual Report on Form 10-K, including, without limitation, statements containing the words "believes", "anticipates", "expects" and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the registrant, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the registrant to sustain, manage or forecast its growth; the ability of the registrant to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Annual Report on Form 10-K and investors are cautioned not to place undue reliance on such forward-looking statements. The registrant disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
PART I
ITEM 1. | BUSINESS.
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Overview
Since December 24, 2014, New Asia Holdings, Inc., a Nevada corporation (the "Company" or "NAHD"), has been developing and deploying its proprietary, neural trading models for the financial community. We offered trading software solutions to clients based on a software-as-a-service (“SaaS”) licensing and delivery models with licensed users availing themselves of service-based contractual arrangements. As a result of poor performance by the Company’s Algorithms, over the last several quarters the Company has been focusing on developing new business opportunities, including exploring potential new acquisition. The Algorithm assets were housed under NAHD’s wholly-owned subsidiary, Magdallen Quant Pte Ltd (MQL) and as a result of long-standing poor performance and consistent with the emphasis on developing new business opportunities, the Company decided to officially dissolve MQL, effective February 2, 2023.
The Company's products in 2022 were aimed to 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 vehicle designed to control risk, profit from both bull or bear markets, and maximize liquidity and economic resilience.
The 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 NAHD 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 NAHD 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 was 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 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.”
The algorithms were placed into commercial operation in November 2015 upon the execution of a Software License Agreement (the “MQL License Agreement”) between and 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 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,
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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. Specifically, and to support NAML’s decision to expand into the regulated fund and bank model, the Series Z (Multi-Asset Currency and Gold) were redeveloped into the following products:
•7.42.31
•7.43.315
•7.43.325
The three primary competitive advantages associated with the above trading algorithms are rates of return, efficiency and safety.
Fund | MQ X1 | MQ Y1 | MQ Z1 @ 2% |
Number of Trades | 272 | 112 | 376 |
Sharpe Ratio | 3.3 | 2.9 | 2.44 |
Profit Factor | 2.5 | 3.46 | 1.99 |
Return/DD | 26.09 | 16.69 | 16.71 |
Winning (%) | 59.93% | 64.29% | 75% |
Drawdown (%) | 29.34% | 62.99% | 2.57% |
The backend programming associated with the MQ X1 and the MQ Y1 are driven by mean reversion whereas the backend of the MQ Z1 is driven by momentum and trend following. All the algorithms incorporate currency flows and are designed to reduce positions when trends become adverse.
In January 2017, NAML, the Company’s exclusive licensee, entered into an agreement with Ferrell Asset Management Pte Ltd (“FAMPL”), a wholly owned subsidiary of Ferrell Financial Group. Ferrell Financial Group, which started as an exempt fund manager in 2004, holds a Capital Markets Services License issued by the Monetary Authority of Singapore (the “MAS”) for the provision of fund management services to individuals who are accredited investors (“Accredited Investors”) as defined in Section 4A(1)(a)(i) of the Securities and Futures Act (Chapter 289) of Singapore. Ferrell Financial Group is an Asia-focused financial services group dedicated to serving the investment and wealth management needs of family offices and private individuals globally. As an independent, privately held group, Ferrell Financial Group forms strategic partnerships with financial institutions and other relevant organizations to provide customized portfolio solutions for its clients.
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.
As of the Fourth Quarter 2022, operations of MQL were effectively terminated and in February 2023, the Company officially dissolved MQL. The Company, in its efforts to expand its business, is currently involved in the development of new business opportunities, including the following:
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·The Company is in active discussions on the potential acquisition of a company involved in a manufacturing utilizing additive technologies to deliver parts on-demand made to clients’ blueprints and expectations. Once parts are designed and validated, they are available for on-demand manufacturing at any point in the future.
·NAHD issued an 8K in June, 2022 to undertake a technical, legal and financial evaluation of Asian Fuels Energy Inc (the “Company”) and its sister Company, Hacienda Asia Plantations Inc. (HAPI). The Company 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. Based on information shared with NAHD, HAPI is focused in engaging in the agriculture business in the Philippines to develop world class plantation and production systems for Oil Palm, Natural Rubber and Agroforestry crops and AFEI is focused on the development of Napier Grass plantations to produce renewable energy fuel and power generation facilities involving biomass and solar farms. HAPI maintains a Napier Grass plantation and nursery in its 6,652-hectare (HA) plantation site in Candoni, Negros Occidental and a nursery in Rosario, Batangas. These plantations and nurseries are a ready source of planting materials to support its ongoing expansion activities. Napier Grass assets in Negros and Batangas will be transferred to AFEI as part of the proposed transaction described herein. NAHD executed a Memorandum of Understanding, dated June 14th, 2022, regarding the acquisition of a 40% of the issued and outstanding shares of the Company 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. The Batangas Project has secured a multi-year off-take agreement for the purchase of the Napier Grass product from a major manufacturing corporation. The acquisition would have also granted NAHD the rights of First Refusal to undertake the development of Napier Grass Renewable Fuel Supply Projects, as the principal and majority owner/investor for North America. To date, this opportunity is still under evaluation, however, decisions to proceed with execution of the deal has been put on hold pending the potential finalization of the acquisition of the advanced on-demand manufacturing company.
The Company will provide an update on these potential activities, if and when they materialize.
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 generated no revenues during the years ended December 31, 2022 and 2021.
Given the effective dissolution of MQL, effectively the following sections provide a very limited description of the Company’s products as they were configured, however, 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.
Algorithm Trading Generally
In accordance with studies published in Advances in Intelligent Systems and Computing in October 2018 ("Optimizing Automated Trading Systems"), 80% of trading in the FOREX market was performed by trading algorithms rather than humans. Algorithmic trading relies on sophisticated computer programs and models to make automated decisions regarding the market, without human input. Such models are especially popular in strategies such as managed futures, where trend following is prevalent.
There are three general types of algorithmic trading:
·Systematic trading: Systematic trading refers to any trading strategy that is a "rule-based" systematic/repetitive approach to execution trading behaviors. This is often achieved through utilization of an expert system that replicates previously captured actions of real traders.
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·High-frequency trading (“HFT”): HFT is a type of algorithmic trading in which execution of computerized trading strategies is characterized by extremely short position-holding periods in excess of a few seconds or milliseconds.
·Ultra-high-frequency trading: Sometimes also known as low-latency trading, ultra-high-frequency trading refers to HFT execution of trades in sub-millisecond times through co-location of servers and stripped-down strategies, direct market access, or individual data feeds offered by exchanges and others to minimize network and other types of latencies.
The programming associated with the MQ X1 and MQ Y1 algorithms are driven by mean reversion, whereas the programming of the MQ Z1 algorithm is driven by momentum and trend following. All of the algorithms incorporate currency flows and are designed to reduce positions when trends become adverse. These algorithms are considered easy for us to deploy and operate via the SaaS model. The combination of this business model and the composition of the algorithms render the trading of currencies and gold nearly effortless: no traders are needed, thereby eliminating compensation-related expenses. In addition to the returns and safety characteristics associated with the subject algorithms, these algorithms are favorable to account holders in that they neither lend themselves to HFT nor to high commissions.
The following are common trading strategies used in algorithmic trading:
Trend Following Strategies: The most common algorithmic trading strategies follow trends in moving averages, channel breakouts, price level movements and related technical indicators. These are the easiest and simplest strategies to implement through algorithmic trading because these strategies do not involve making any predictions or price forecasts. Trades are initiated based on the occurrence of desirable trends, which are easy and straightforward to implement through algorithms without getting into the complexity of predictive analysis.
Arbitrage Opportunities: This strategy involves buying a dual-listed stock at a lower price in one market and simultaneously selling it at a higher price in another market, offering the price differential as risk-free profit or arbitrage. The same operation can be replicated for stocks versus futures instruments, as price differentials do exist from time to time. Implementing an algorithm to identify such price differentials and placing the orders allows profitable opportunities in efficient manner.
Index Fund Rebalancing: Index funds have defined periods of rebalancing to bring their holdings to par with their respective benchmark indices. This creates profitable opportunities for algorithmic traders, who capitalize on expected trades that offer 20-80 basis points profits, depending upon the number of stocks in the index fund, just prior to index fund rebalancing. Such trades are initiated via algorithmic trading systems for timely execution and best prices.
Mathematical Model Based Strategies: A lot of proven mathematical models, which allow trading on a combination of options and their respective underlying securities, where trades are placed to offset positive and negative deltas so that the portfolio delta is maintained at zero.
Trading Range (Mean Reversion): Mean reversion strategy is based on the idea that the high and low prices of an asset are a temporary phenomenon that revert to their mean value periodically. Identifying and defining a price range and implementing an algorithm based on that allows trades to be placed automatically when the price of an asset breaks in and out of its defined range.
Volume Weighted Average Price (“VWAP”): VWAP strategy breaks up a large order and releases dynamically determined smaller chunks of the order to the market using stock-specific historical volume profiles. The aim is to execute the order close to the VWAP, thereby benefiting on average price.
Time Weighted Average Price (“TWAP”): TWAP strategy breaks up a large order and releases dynamically determined smaller chunks of the order to the market using evenly divided time slots between a start and end time. The aim is to execute the order close to the average price between the start and end times, thereby minimizing market impact.
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Percentage of Volume: Until the trade order is fully filled, this algorithm continues sending partial orders, according to the defined participation ratio and according to the volume traded in the markets. The related "steps strategy" sends orders at a user-defined percentage of market volumes and increases or decreases this participation rate when the stock price reaches user-defined levels.
Implementation Shortfall: The implementation shortfall strategy aims at minimizing the execution cost of an order by trading off the real-time market, thereby saving on the cost of the order and benefiting from the opportunity cost of delayed execution. The strategy will increase the targeted participation rate when the stock price moves favorably and decrease it when the stock price moves adversely.
Beyond the Usual Trading Algorithms: There are a few special classes of algorithms that attempt to identify "happenings" on the other side. These "sniffing algorithms," used, for example, by a sell side market maker have a built-in intelligence to identify the existence of any algorithms on the buy side of a large order. Such detection through algorithms will help the market maker identify large order opportunities and enable the market maker to benefit by filling the orders at a higher price. This is sometimes identified as high-tech front running.
NAHD's Design Philosophy
Price is simply a reflection and emotional perception of value. Mechanical systems have no emotions when it comes to the interpretation of prices. Nothing is actually too high or too low; it’s all technically relative.
NAHD uses a multitude of modern tools and technology to making trading simpler, adaptive and intelligent:
Some of the tools we apply include:
·Principal Component Analysis (“PCA”)
·Neural Networks
·Removing Linear Trends from Data
·Detecting Anomaly Activities
·Market Behavioral Pattern Neural Analysis
·Co-relational Modeling
·Multi-Time Frame Signal Analysis
PCA is a tool in exploratory data analysis to discover the important variables (or a combination of them) that explain the cause of variance in the data and thus enhances the efficiency when there is a large volume of data to be analyzed.
Factor analysis is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors. Factor analysis searches for such joint variations in response to unobserved latent variables. The observed variables are modeled as linear combinations of the potential factors, plus "error" terms. The information gained about the interdependencies between observed variables can be used later to reduce the set of variables in a dataset and thus helps us to reduce complex multi-dimensional modeling data into 2-dimensional outcome for easier analysis.
Factor analysis is related to PCA, but the two are not identical. Latent variable models, including factor analysis, use regression modeling techniques to test hypotheses producing error terms, while PCA is a descriptive statistical technique.
The artificial neural networks are one of the areas in artificial intelligence research that is based on the attempts to simulate the human nervous system in its ability to learn and adapt. It strives to allow us to build a rough simulation of the human brain in operation. When it comes to trading, it is generally a matter of whether to buy, sell or hold and position sizing. In other words, algorithm trading strategies (ATS) significantly simplify decision making as opposed to what would otherwise be possible if human beings were doing the trading.
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The Company has strived to develop systems which are adaptive and where no two trades are the same. This is because the market is changing all the time (every hour, minute and second). Thus, it is imperative to achieve an acceptable level of machine learning adaptability within the confines of the boundaries of trading. This enables our clients to stay in the highly challenging game of trading under most, if not all, market conditions. Our systems employ the following strategies:
·Momentum: A trend-following trading strategy that aims to capitalize on the continuance of existing trends in the market. The algorithm assumes large increases in the price of a security will be followed by additional gains and vice versa for declining values.
·Mean Reversion: A trading strategy assuming prices and returns eventually move back toward the mean or average. A popular strategy is mean reversion (pairs trading) where two historically correlated securities that have diverged are assumed to converge in the future. Statistical Arbitrage ("stat arb") is an equity trading strategy that employs time series methods to identify relative mispricing between stocks. It bets on the convergence of the prices of similar financial instruments whose prices have diverged.
The Software as a Service (SaaS) Public Market Performance
SaaS is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. It is sometimes referred to as "on-demand software". SaaS is typically accessed by users using a thin client via a web browser. SaaS has become a common delivery model for many business applications, including financial services, office and messaging software, payroll processing software, DBMS software, management software, CAD software, development software, gamification, virtualization, accounting, collaboration, customer relationship management (CRM), management information systems (MIS), enterprise resource planning (ERP), invoicing, human resource management (HRM), talent acquisition, content management (CM), antivirus software, and service desk management. SaaS has been incorporated into the strategy of all leading enterprise software companies.
The acceleration in SaaS adoption can be explained by providers delivering nearly all application functional extensions and add-ons as a service. This appeals to users because SaaS solutions are engineered to be more purpose-built and are delivering better business outcomes than traditional software.
Public SaaS companies have historically enjoyed trading multiples at least twice that of their on-premises peers. According to the above publicly available SEG report, a premium market valuation multiple can be largely justified by comparing the relative lifetime value of a SaaS customer versus an on-premises licensee. A SaaS company with a mission critical hosted app and strong customer retention will garner significantly greater cash over time from its average customer than will its on-premises counterpart. In the meantime, according to the SEG Software Industry report, investors are placing their bets on the next wave of SaaS category leaders that are positioned to displace incumbent on-premises providers across multiple product categories.
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NAHD and Business Structure
Corporate History
We were incorporated on March 1, 2001 under the laws of the state of Nevada under the name Effective Sports Nutrition Corporation. On April 11, 2005, we changed our name from Effective Sports Nutrition Corporation to Midwest E.S.W.T. Corp.
On July 18, 2005, we entered into a share exchange agreement (the "Share Exchange Agreement") with Direct Success, Inc. As a result of the share exchange contemplated by the Share Exchange Agreement (the “Share Exchange”), we issued shares of common stock to the shareholders of Direct Success, Inc. in exchange for all of the issued and outstanding common stock in Direct Success, Inc. On December 14, 2005, we changed our name from Midwest E.S.W.T. Corp. to DM Products, Inc. As a result of the Share Exchange, Direct Success, Inc. became our wholly owned subsidiary. At the time of the Share Exchange, Direct Success, Inc. had an accumulated loss of $6,195,881. The Company dissolved Direct Success, Inc. on April 23, 2013 and April 5, 2013.
On December 24, 2014, the board of directors authorized the Company to enter into a Stock Purchase Agreement (the "Agreement") with four accredited investors, pursuant to which the Company issued an aggregate of 58,904,964 shares of common stock, or approximately 97% of the issued and outstanding common stock of the Company, at an aggregate purchase price of $350,000 resulting in a change of control. The stock was issued as follows: 54,957,724 shares of common stock to New Asia Holdings Limited for $326,546, 1,821,803 shares of common stock to Wong Kai Fatt for $10,825, 1,518,169 shares of common stock to Earth Heat Ltd. for $9,021, and 607,268 shares of common stock to Kline Law Group PC for $3,608. Since we effected a change of control on December 24, 2014, we have focused on the development and licensing of advanced, proprietary, neural trading models for the financial community.
On January 23, 2015, we changed the Company’s name from DM Products, Inc. to New Asia Holdings, Inc.
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On August 19, 2015, the Board of Directors of the Company approved a resolution acknowledging that New Asia Holdings Ltd, the principal controlling shareholder of the Company, (i) had been advancing funds in the amount of $220,000 to the Company since December 24, 2014, to pay for operating expenses of the Company and (ii) would be required to advance an additional $80,000 to the Company to fund further operating expenses of the Company. The Board further resolved that these advances would constitute an interest-free loan to the Company to be repaid by the close of business on October 31, 2015. However, if the Company was unable to repay these advances by such date, New Asia Holdings Ltd, 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. Through 2022 the Company had received a total of $945,704 in the form of an interest-free loan from its principal shareholder. As of December 31, 2022, New Asia Holdings Ltd, had not yet acted to exercise its option to convert the Advances to shares of common stock, thus the Advances remained as an interest-free loan to the Company.
On August 28, 2015, the Company completed the acquisition of MQL. In November 2015, MQL entered into the MQL License Agreement with NAML, a Company owned and controlled by NAHD's Chairman and CEO, Dr. Lin Kok Peng. As described above, the Company moved to dissolve MQL as of February 2, 2023.
Employees
The Company currently has no employees. Management of the Company expects to use consultants, attorneys and accountants as necessary, and expects to hire full-time staff as the business further develops and expands.
Smaller Reporting Company Status
We qualify as a "smaller reporting company" under Rule 12b-2 of the Exchange Act, which is defined as a company with a public equity float of less than $75 million. To the extent that we remain a smaller reporting company at such time as are no longer an emerging growth company, we will still have reduced disclosure requirements for our public filings, some of which are similar to those of an emerging growth company, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
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ITEM 1A. | RISK FACTORS.
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Certain factors may have a material adverse effect on our business, financial condition and results of operations. Investors should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K and other reports we file with the Securities and Exchange Commission (the “SEC”) pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including our historical and financial statements and related notes. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business. If any of the following risks or uncertainties actually occurs, our business, financial condition, results of operations, liquidity, cash flows and prospects could be materially and adversely affected. As a result, the price of our common stock could decline significantly, and an investor could lose all or part of its investment in our common stock. The risks discussed below include forward-looking statements, and our actual results may differ substantially from those discussed in these forward-looking statements.
Risk Related to Our Business and Our Industry
Public health epidemics or outbreaks, such as COVID-19, could materially and adversely impact our business.
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 several other countries and infections have been reported globally.
Because COVID-19 infections continue to be reported worldwide, particularly in Corporate Headquarters in Asia, certain national, state and local governmental authorities issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. While the USA and many countries have adopted more relaxed restrictions after the most recent Omicron Variant surge in early 2022, it could be that additional, more restrictive proclamations and directives may be issued in the future. In 2021, the Company’s internal operations communications and accounting operations were disrupted by these restrictions imposed at different times of the year, which 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 have impacted the Company’s business during the year of 2021 and will impact the Company’s business for the fiscal first and second quarter of 2022 and potentially beyond. The significance of the impact of the COVID-19 outbreak on the Company’s business and duration for which it may have an impact cannot be determined at this time.
The COVID-19 outbreak is a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could materially impact our operating results.
General Risks
The use of the Company's software ("Software") were subjected to different degrees of economic, political, foreign exchange, interest rates, liquidity, repatriation, volatility default and regulatory risks, depending on each relevant model. NAHD's proprietary trainable trading algorithm software signals generated were based on factual inputs and information from the market and are not deemed as financial advice. Past results are not necessarily indicative of future results. Notwithstanding the use of our Proprietary Trainable Trading Algorithms ("Series of Algorithms"), the value of investments may fall as well as rise and a holder may not recoup its capital. There can be no assurance that
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the performance of a Series of Algorithms will be profitable. On establishment, a Series of Algorithms did not have any operating history upon which stockholders may base an evaluation of performance.
Change in Strategies
The strategies, approaches and techniques discussed herein may evolve over time due to, among other things, market developments and trends, the emergence of new or enhanced products, changing industry practice and/or technological innovation. As a result, these strategies, approaches and techniques may not reflect the strategies, approaches and techniques actually employed by NAHD or its Software. Nevertheless, the strategies employed in the Software will be consistent with the NAHD's objective.
Fundamental Strategies
Fundamental analysis, which posits that markets are imperfect and that mispricings can be identified between prevailing market prices and those indicated by underlying fundamental data, is subject to the risk of inaccurate or incomplete market information, as well as the difficulty of predicting prices based on such information. Furthermore, even if an analyst is able to successfully identify mispricings on the basis of fundamental factors, there is the additional uncertainty of predicting the duration or degree of such mispricings and, accordingly, when or whether to enter so as to profit from them. Positions made based on fundamental analysis are subject to significant losses when market sentiment leads to the market price of the Software being materially discounted from the level indicated by Software fundamental analysis or technical factors, such as price momentum or option expirations, dominate the market.
Model and Data Risk
NAHD relies heavily on quantitative models ("Models") and information and data ("Data"). Models and Data are used to construct sets of transactions, to evaluate potential opportunities, to provide risk management insights and to assist in hedging the Software's trades. Models and Data are known to have errors, omissions, imperfections and malfunctions (collectively, "System Events"). System Events in third-party Models are generally entirely outside of the control of NAHD.
NAHD sought to reduce the incidence and impact of System Events through a certain degree of internal testing and real-time monitoring, and the use of independent safeguards in the overall portfolio management system and often, with respect to proprietary models, in the software code itself. Despite such testing, monitoring and independent safeguards, System Events will result in, among other things, the execution of unanticipated trades, the failure to execute anticipated trades, delays in the execution of anticipated trades, the failure to properly allocate trades, the failure to properly gather and organize available data, the failure to take certain hedging or risk reducing actions and/or the taking of actions which increase certain risk(s)—all of which may have materially negative effects on the Software and/or its returns.
The strategies of the Software are highly reliant on the gathering, cleaning, culling and analysis of large amounts of Data. Accordingly, Models rely heavily on appropriate Data inputs. However, it is not possible or practicable to factor all relevant, available Data into forecasts and/or trading decisions of the Models. NAHD uses its discretion to determine what Data to gather with respect to each Strategy and what subset of that Data the Models take into account to produce forecasts which may have an impact on ultimate trading decisions. In addition, due to the automated nature of Data gathering, the volume and depth of Data available, the complexity and often manual nature of Data cleaning, and the fact that the substantial majority of Data comes from third-party sources, it is inevitable that not all desired and/or relevant Data will be available to, or processed by, NAHD (the "Manager") at all times. If incorrect Data is fed into even a well-founded Model, it may lead to a System Event subjecting the Software to loss. Further, even if Data is input correctly, "model prices" anticipated by the Data through the Models may differ substantially from market prices.
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Where incorrect or incomplete Data is available, NAHD may, and often will, continue to generate forecasts and make trading decisions based on the Data available to it. Additionally, it may determine that certain available Data, while potentially useful in generating forecasts and/or making trade decisions, is not cost effective to gather due to either the technology costs or third-party vendor costs and, in such cases, the Manager will not utilize such Data. There is no guarantee that any specific Data or type of Data will be utilized in generating forecasts or making trading decisions with respect to the Models, nor is there any guarantee that the Data actually utilized in generating forecasts or making trading decisions underlying the Models will be the most accurate data available. It is assumed that the Data set used in connection with the Models is limited and should understand that the foregoing risks associated with gathering, cleaning, culling and analysis of large amounts of Data are an inherent part of the development with a process-driven, systematic adviser such as the Manager.
When Models and Data prove to be incorrect, misleading or incomplete, any decisions made in reliance thereon expose the Software to potential losses. For example, by relying on Models and Data, the system may be induced to trade at positions that are too high, to sell at positions that are too low, or to miss favorable opportunities altogether. In addition, Models may incorrectly forecast future behavior, leading to potential losses and/or a mark-to-market basis. Furthermore, in unforeseen or certain low-probability scenarios (often involving a market disruption of some kind), Models may produce unexpected results which may or may not be System Events.
Errors in Models and Data are often extremely difficult to detect, and, in the case of proprietary models and third-party models, the difficulty of detecting System Events may be exacerbated by the lack of design documents or specifications. Regardless of how difficult their detection appears in retrospect; some System Events will go undetected for long periods of time and some may never be detected. The degradation or impact caused by these System Events can compound over time. Finally, NAHD will detect certain System Events that it chooses, in its sole discretion, not to address or fix, and the third-party software will lead to System Events known to the Manager that it chooses, in its sole discretion, not to address or fix.
The Company believes that the testing and monitoring performed on its models and third-party models will enable it to identify and address those System Events that a prudent person managing a process-driven, systematic and computerized software program would identify and address by correcting the underlying issue(s) giving rise to the System Events or limiting the use of proprietary and third party models, generally or in a particular application. Holders should assume that System Events and their ensuing risks and impact are an inherent part of development with a process-driven, systematic investment manager such as NAHD, as the Manager. Accordingly, NAHD does not expect to disclose discovered System Events to the Software or to Holders.
The Software will bear the risks associated with the reliance on Models and Data including that the Software will bear all losses related to System Events other than in relation to losses arising from the Manager's willful default, fraud or gross negligence.
Involuntary Disclosure Risk
The ability of the system to achieve its goals for the Software is dependent in large part on its ability to develop and protect its models and proprietary research. The models and proprietary research and the Models and Data are largely protected by NAHD through the use of policies, procedures, agreements, and similar measures designed to create and enforce robust confidentiality, non-disclosure, and similar safeguards. However, aggressive position-level public disclosure obligations (or disclosure obligations to exchanges or regulators with insufficient privacy safeguards) could lead to opportunities for competitors to reverse-engineer the Manager's models, and thereby impair the relative or absolute performance of the Software.
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Specific Risks
Liquidity Risk
Liquidity represents the volume of Forex transactions that can be executed for a certain currency pair at a certain time. The liquidity depends on the number of Forex market participants and the size of the market participants' offers. The major currencies which are the most traded usually offer a better liquidity than any other currencies. The liquidity is subject to sharp fluctuations depending on the currency, the economic or political events and news such as financial crisis, or to any other events which are beyond the control of NAHD.
A market with low liquidity would increase the risk associated with Forex trading significantly. In a case of low liquidity, the Holder may not be able to buy or sell orders or may need to liquidate all or parts of its positions at high losses.
Volatility Risk
As Forex market is subject to high degree of volatility, the currency prices would also be subjected to extensive fluctuations in response to numerous factors which are often beyond the control of NAHD. The market can move acutely in favor or against the Holder's positions. A drop in market liquidity, any unanticipated changes in economic or political conditions, a financial crisis or any other event can (though it may not) accelerate the market conditions in which currency price could move sharply and unexpectedly higher or lower in a volatile pattern.
Market and Price Risks
The Software's strategy is subject to some dimension of market risk: directional price movements, deviations from historical pricing relationships, changes in the regulatory environment, changes in market volatility, "flights to quality", "credit squeezes", etc. The NAHD style of alternative trading may be no less speculative than traditional strategies. On the contrary, due in part to the degree of leverage embedded in software in which the Software may invest, the Software may from time to time incur sudden and dramatic losses.
The particular or general types of market conditions in which the Software may incur losses or experience unexpected performance volatility cannot be predicted, and the Software may materially under-perform. The Holder's position on various transactions may be liquidated at a loss where the Holder will then be liable for any resulting deficit. Under certain circumstances, it may be difficult to liquidate an existing position, assess the value, determine a fair price or assess its exposure to risk.
Foreign Exchange Risk
Transactions involving currencies would incur risks including, but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a currency. Foreign exchange speculation may also be susceptible to sharp rises and falls as the relevant market values fluctuate.
Leverage Risk
The Software makes use of leverage on relatively small margin deposits. Trading on margin and leverage means that the Holder can buy and sell assets that represent more value than the capital in the Holder's account. A leverage of 50 times means the Holder can buy or sell up to $1,000,000 worth with only a capital of $20,000. High leverage or low margin can result in significant losses as a relatively small price movement may cause a proportionately larger impact on participating placements. The leveraged nature of the Software means that the Holder would increase his exposure risk the volatility of the market and a change in the market would result in greater change in the position taken by the Holder ("leverage effect"). Holders may get back less than placed and, in the case of higher risk strategies, Holders may lose the entirety of their placement.
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Currency Risk
Currency trading presents unique risks. The interbank market consists of a direct dealing market, in which a participant trades directly with a participating bank or dealer, and a brokers' market. The brokers' market differs from the direct dealing market in that the banks or financial institutions serve as intermediaries rather than principals to the transaction. In the brokers' market, brokers may add a commission to the prices they communicate to their customers, or they may incorporate a fee into the quotation of price.
Arbitrage and Spread Trading Risks
Arbitrage and spread strategies attempt to take advantage of perceived price discrepancies of identical or similar financial instruments, on different markets or in different forms. To the extent the price relationships between such positions remain constant, no gain or loss on the positions will occur. If the requisite elements of an arbitrage strategy are not properly analyzed, or unexpected events or price movements intervene, losses can occur which can be magnified to the extent the Software is employing leverage. Arbitrage strategies often depend upon identifying favorable "spreads" which can also be identified, reduced or eliminated by other market participants. In periods of trendless, stagnant markets and/or deflation, many alternative strategies have materially diminished prospects for profitability.
Quantitative Trading
Quantitative trading strategies are highly complex, and, for their successful application, require relatively sophisticated mathematical calculations and relatively complex computer programs. These trading strategies are dependent upon various computer and telecommunications technologies and upon adequate liquidity in the markets traded. The successful execution of these strategies could be severely compromised by, among other things, a diminution in the liquidity of the markets traded, telecommunications failures, power loss and software-related "system crashes." There are also periods when even an otherwise highly successful system incurs major losses due to external factors dominating the market, such as natural catastrophes and political interventions. Transaction costs incurred by quantitative trading strategies may be significant. In addition, the difference between the expected price of a trade and the price at which a trade is executed, or "slippage," may be significant and may result in losses.
Due to the nature of their trading, quantitative trading firms may suffer devastating losses in a very short period of time. For example, in August 2012 Knight Capital accidentally deployed test software code to a production environment, causing a major disruption in the stock prices of over 100 listed companies which in turn resulted in the collapse of Knight Capital's stock price. A similar trading software mistake by the Manager could result in material or even total losses to the Software and NAHD.
Reliance on Technology and Electronic Trading
NAHD relies heavily on computer hardware and software, online services and other computer-related or electronic technology and equipment to facilitate the Software's activities. Specifically, the Software may trade financial instruments through electronic trading or order routing systems, which differ from traditional open outcry pit trading and manual order routing methods. Such electronic trading exposes the Software to risks associated with system or component failure, which could render NAHD unable to enter new orders, execute existing orders or modify or cancel previously entered orders. System or component failure may also result in loss of orders or order priority. Should events beyond NAHD's control cause a disruption in the operation of any technology or equipment, the Software's program may be severely impaired, causing it to experience substantial losses or other adverse effects.
A disaster or a disruption in the infrastructure that supports NAHD's business, including a disruption involving electronic communications or other services used by it or third parties with whom it conducts business, or directly affecting one of its offices or facilities, may have a material adverse effect on its ability to continue to operate the business without interruption. Although the Manager and its affiliates have back-up facilities for their information systems as well as technology and business continuity programs in place, there can be no assurance that these will be sufficient to mitigate the harm that may result from such a disaster or infrastructure disruption. In addition, insurance and other safeguards might only partially mitigate the effects of such a disaster or disruption.
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Systems Security
Despite the implementation of operating controls for detecting unauthorized intrusion, security breach and security attack, NAHD will be unable to prevent all forms of unauthorized access to the systems it operates and the systems it uses which are provided by third-party service providers. NAHD will not be held liable for any trading or personal data leakage and any consequences and will not reimburse the Software for any loss caused by the unauthorized intrusion to its systems which is out of the Manager's control.
Technical Analysis and Trading Systems
NAHD employs technical analysis and/or technical trading systems. Technical strategies rely on information intrinsic to the market itself to determine trades, such as prices, price patterns, momentum, volume and volatility. As discussed above, these strategies can incur major losses when factors exogenous to the markets themselves, including political events, natural catastrophes, acts of war or terrorism, dominate the markets.
Failure of Algorithms
NAHD utilized computerized models to automatically determine and execute trade entry and exit conditions and manage risk, consistent with the risk requirements of its clients. NAHD makes efforts to test management and software releases to ensure that these algorithms operate correctly. However, it is possible that a defect in algorithm design or implementation or risk management could unexpectedly manifest and cause sustained long-term or virtually instantaneous catastrophic losses for the Software.
Possible Effects of Technical Trading Systems
There has been, in recent years, a substantial increase in interest in technical futures trading systems, like NAHD's systems. As the capital under the management of such trading systems based on the same general principles increases, an increasing number of traders may attempt to initiate or liquidate substantial positions at or about the same time as the Software, or otherwise alter historical trading patterns or affect the execution of trades, to the significant detriment of the Software.
Cybersecurity Risk
NAHD's hardware and software systems are subject to threats from hackers and others, such as a malicious attack, malware or other event that leads to unanticipated interruption or malfunction of such systems. Any interruption of NAHD's hardware or software functionality could lead to material or even complete losses to the Software. Hackers could also theoretically access and steal the Manager's research, models, trading programs or other software or data and implement such programs or software on their own behalf. This could lead to increased competition for, or elimination of, the opportunities sought by the Software or otherwise render the models developed by NAHD obsolete, possibly resulting in material or complete losses to the Software.
Failure of Connectivity
NAHD's models may trade frequently and may depend on low latency to be profitable. As a result, the success of the Manager's models depends on network connectivity. Any disruption or failure of the Manager's network connectivity, or even a delay in transmission speed, could result in substantial or total losses to the Software.
Computer Hardware and Software
Many components of the Manager's critical computer hardware and software may have flaws, may not be redundant, may be leased rather than owned, or may be provided in whole or in part by another party. Should these components fail or be inaccessible, there is no certainty that the Manager will be able to recover promptly and the Software may suffer material or total losses as a result.
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Risks of Ineffective Risk Management Systems
NAHD continuously reviews and refines its risk management techniques, strategies and assessment methods. However, such risk management techniques and strategies may not fully mitigate the risk exposure of the Software in all economic or market environments, or against all types of risk, including risks that the Manager might fail to identify or anticipate. Any failures in the Manager's risk management techniques and strategies to accurately quantify such risk exposure could limit its ability to manage risks in the Software or to seek adequate risk-adjusted returns.
Accidental, Erroneous and Fraudulent Trades; Slippage
The transactions the Software executes are intended to be based on the bid and ask prices presented to the traders of NAHD by each counterparty. It is anticipated that the prices may be displayed on a computer monitor and that contracts may be executed electronically. The Software has no assurance that the prices displayed will be accurate. Various flaws in communications systems, such as data entry errors and transmission errors, can result in corrupted or inaccurate data. Moreover, the Software has no assurance that a continuous display of electronic connectivity between the Software and its counterparties can be maintained. Communication failures such as electrical outages, computer failures and hard drive failures can result in an inability of the systems to initiate or complete a transaction. There can be no assurance that errors in communication would not lead to erroneously executed transactions or a failure to execute transactions that would have been intended to hedge the Software's positions. The performance of the Software can be affected by data transmissions that are delayed. This phenomenon is sometimes also called latency. The Software has no assurance that performance will not be adversely affected by latency. The Software's counterparties have not made any representation to the Software that any particular level of latency will be maintained, nor that the counterparty would not deliberately degrade latency. Execution of a contract at an erroneous price can therefore affect the performance of the Software.
Impacts of Recent Geopolitical Events
COVID-19, volatility of commodity prices, the current state of the US and global economies and other actions and heightened measures in response to these threats, and the potential for instability in the markets may cause disruptions to commerce, reduced economic activity and continued volatility in markets throughout the world. Such systemic risks may have an adverse impact on some of the assets in the Software's portfolio in the event that such risks result in a decline in the securities markets and economic activity. NAHD cannot predict at this time the extent and timing of any decreased commercial and economic activity resulting from the above factors, or how any such decrease might affect the value of the Software. The aforementioned factors could also result in incidents or circumstances that would disrupt the normal operations of the Manager and the Partners, which could also have negative effects on the performance of the Software.
Disclosure of System Portfolio
The statements of the Software will not include a detailed listing of positions held by the Software. Such confidentiality is maintained to prevent third parties from using information concerning the Managers or the Software's positions to its detriment. Examples of ways in which such information could be used adversely to the Software include: (a) to "front run" the Software on sales, or additional purchases, of such positions; (b) to make it more difficult for the Software to protect its positions by withholding, or causing others to withhold, prospective trades; (c) to make it difficult to acquire or borrow securities; or (d) otherwise to interfere with the Software's objectives. For this reason, NAHD believes it is important to take extra precautions to maintain the confidentiality of the positions in the Software's portfolio. However, NAHD, in its sole discretion, may permit such disclosure on a selective basis to certain Holders, if it determines that there are sufficient confidentiality agreements and procedures in place.
Disaster Recovery
NAHD has only limited disaster recovery plans for our operations, and we rely on outside parties, including the Partners, for some key accounting and operational functions, that in turn may also have limited disaster recovery plans. There is no assurance that any of these disaster recovery plans will work, which could result in significant losses to the Software.
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Risk Management and Compliance Control
Risk management is about the selection and sizing of exposures, to maximize returns for a given level of risk. The function of risk management in the system process is to determine whether it is more prudent to eliminate or limit the size of each kind of risk exposure and to provide the input into the portfolio construction model.
Reducing risk almost always comes with the cost of reducing return. Risk management activities is focused on reducing or eliminating exposure to unnecessary risks but also taking on risks that offer expected attractive payoffs. The Managers uses a risk model in order to controls and deals with the size of unnecessary risk exposures.
Each Series of Algorithms and its models were tested to be resilient during major financial events as they were backtested for a minimum of 3 years. Risks from past major financial event/crisis were also applied to test the resilience of these Models. Back-testing is a specific type of historical testing that determines the performance of the Model if it had been employed during past periods and market conditions. While back-testing does not allow one to predict how a Model will perform under future conditions, its primary benefit lay in understanding the vulnerabilities of a Model through a simulated encounter with real-world conditions of the past. This enables the Managers to "learn from history" without having to make them with actual money.
The Forex markets can move fast, with gains turning into losses in a matter of minutes therefore making it critical for the NAHD Team to properly manage Holder's capital. NAHD makes use of the following methods to control the risk and protect Holders' profits.
Capping Losses
Risk must be predetermined. It is the best way to make sure one's losses are controlled and the most rational time to consider risk is during the design of the model. It is acceptable to sustain a drawdown of 10% if it was the result of five consecutive losing trades that were stopped out at 2% loss each. However, it is inexcusable to lose 10% on one trade.
High Probability Profit Targets
The NAHD Team aims that each Series of Algorithms has a winning percentage of above 50%. It means that there would be at least 50% worth of profit trades in total.
High Probability Set Up
The Manager ensures that each Series of Algorithms has a set up percentage of above 70%. It means that there would be at least 70% probability of each Series of Algorithms achieving its objective.
Tight Money Management
Half of trading is about strategy; the other half is about money management. In order to manage the risk and profits, the Manager needs to ensure that a maximum of 2% of the capital is used per trade.
Other Risks
We will need additional capital to sustain our operations and will likely need to seek further financing to accelerate our growth, which we may not be able to obtain on acceptable terms or at all. If we are unable to raise additional capital, as needed, the future growth of our business and operations would be severely limited.
A factor limiting our growth, including our ability to enter our proposed markets, attract customers, and deliver our proprietary trading software to the financial community, is our limited capitalization overall and as compared to other companies in the industry.
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We will need additional capital to bring our operations to a sustainable level over the next twelve months. In 2022, we raised approximately $32,500 from advances from our principal shareholder. We believe that, in addition to the capital raised thus far, we will require up to an additional $200,000 for the next 12 months to satisfy our operating cash needs for the current business, however, additional capital may be required for the implementation of the expanded new business opportunities (as described above). However, given the status of current business operations within the next 12 months, we will need to seek additional financing.
We may also seek additional financing to accelerate our growth. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of the Company held by existing shareholders will be reduced and our shareholders may experience significant dilution. In addition, new securities may contain rights, preferences or privileges that are senior to those of our common stock. If we raise additional capital by incurring debt, this will result in increased interest expense. There can be no assurance that acceptable financing necessary to further implement our plan of operation can be obtained on suitable terms, if at all. Our ability to develop our business could suffer if we are unable to raise additional funds on acceptable terms, which would have the effect of limiting our ability to generate and increase our revenues, develop our products, attain profitable operations, or even may result in our business filing for bankruptcy protection or otherwise ending our operations which could result in a significant or complete loss of your investment.
We have incurred significant losses in prior periods, and losses in the future could cause the trading price of our stock to decline or have a material adverse effect on our financial condition, our ability to pay our debts as they become due and on our cash flows.
We have incurred significant losses in prior periods. Our accumulated deficit at December 31, 2022 was $12,646,034. We incurred a net loss in 2022 of $154,070 and a net loss in 2021 of $153,781. If we are not able to attain profitability in the near future and long-term future, the trading price of our stock could decline and our financial condition could deteriorate as we could, among other things, deplete our cash, incur additional indebtedness and issue additional equity that could cause significant dilution, 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.
We have unsecured loans that are overdue, and we will likely need to raise capital to repay the loan or will need to convert the loan to our common stock at the discretion of our principal shareholder.
During 2015, we received interest free loans from Lin Kok Peng, our principal shareholder, in the aggregate principal amount of $316,533 to pay for operating expenses and investments of the Company that were due to be repaid on October 31, 2015. However, if the Company was unable to repay these loans by such date, New Asia Holdings Ltd, 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 at a conversion price of $0.02 per share.
There were advances of $32,500 and nil from Lin Kok Peng, the Company’s principal shareholder, during the twelve-month period ended December 31, 2022 and 2021, respectively. The total advances due are $945,704 and $916,452 from our principal shareholder as of December 31, 2022 and December 31, 2021, respectively. As of December 31, 2022, and 2021, the advances constitute unsecured interest-free loans to the Company.
On August 14, 2020, the Company signed an Agreement with NAHL, a British Virgin Island Corporation (“NAHL”), which is solely owned and controlled by the Company’s Chairman and Chief Executive Officer, Dr. Lin Kok Peng and is thus considered a related party to the Company. All funds advanced to the Company by NAHL up to the Effective Date (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 (as the same was to be extended as set forth below, the “Prior Advance Repayment Date”). 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.
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Following August 14, 2020, Lin Kok Peng 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 could be extended as set forth below). Any Additional Advances that have and will be 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, Dr. Lin Kok Peng, the owner of the Company’s principal shareholder NAHL, decided to convert the name of all his Company shares from NAHL to his name directly. Consequently, and consistent with a Board Resolution executed on December 28, 2020, all advances made to the Company by NAHL are due and owing directly to Dr. Lin Kok Peng.
As of December 31, 2022, Dr. Lin Kok Peng had not exercised its option to convert the advances into shares of common stock. Accordingly, the total of $945,704 in advances remained as an unsecured interest-free loan to the Company as of December 31, 2022.
Through December 31, 2022, NAHL has continued to advance operating funds to the Company totaling $945,704 and is expected to continue to advance such operating funds in the future. In August, 2020, Dr. Lin Kok Peng, the owner of 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:
·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 will be 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 US $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.
As per the change in the name of the shares owned by NAHL to the name of Dr. Lin Kok Peng, that occurred on January 5, 2021, all the agreements signed on August 14, 2020 with NAHL will revert to agreements between the Company and Dr. Lin Kok Peng.
If New Asia Holdings Ltd coverts the loan and/or we raise additional funds through the issuance of equity or convertible debt securities to pay off the loan, the percentage ownership of the Company held by existing shareholders will be reduced and our shareholders may experience significant dilution. In addition, new securities may contain rights, preferences or privileges that are senior to those of our common stock. If we raise additional capital by incurring debt, this will result in increased interest expense. There can be no assurance that acceptable financing necessary to
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further implement our plan of operation can be obtained on suitable terms, if at all. Our ability to develop our business could suffer if we are unable to raise additional funds on acceptable terms, which would have the effect of limiting our ability to increase our revenues, develop our products, attain profitable operations, or even may result in our business filing for bankruptcy protection or otherwise ending our operations which could result in a significant or complete loss of your investment.
We have a limited operating history, which may make it difficult for investors to predict future performance based on current operations.
We have limited operating history upon which investors may base an evaluation of our potential future performance. As a result, there can be no assurance that we will be able to develop consistent revenue sources, or that our operations will be profitable. Our prospects must be considered considering the risks, expenses, and difficulties frequently encountered by companies in early stage of development.
Any forecasts we make about our operations, including, without limitation, sales and plans for raising capital, may prove to be inaccurate. We must, among other things, determine appropriate risks, rewards, and level of investment in each project, respond to economic and market variables outside of our control, respond to competitive developments and continue to attract, retain and motivate qualified employees. There can be no assurance that we will be successful in meeting these challenges and addressing such risks and the failure to do so could have a materially adverse effect on our business, results of operations and financial condition. As a result, the value of your investment could be significantly reduced or completely lost.
Our independent auditors’ report for the fiscal years ended December 31, 2022 and 2021 is qualified as to our ability to continue as a going concern.
Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited annual financial statements as of and for the years ended December 31, 2022 and 2021, 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.
Our actual operating results may differ significantly from any guidance or estimates we may provide.
From time to time, we may release guidance estimates in our quarterly and annual earnings releases, quarterly and annual earnings conference calls, or otherwise, regarding our future performance that represents our management's estimates as of the date of release. Although we believe that any such guidance or estimates would provide investors and analysts with a better understanding of management's expectations for the future and could be useful to our stockholders and potential stockholders, such guidance or estimates would consist of forward-looking statements subject to the risks and uncertainties described in this report and in our other public filings and public statements. Guidance and estimates are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the guidance or estimates may not materialize or may vary significantly from actual results. Our actual results may not always be in line with or exceed any guidance or estimates we may provide, especially in times of economic uncertainty. If our financial results for a particular period do not meet our guidance or estimates or the expectations of investors or research analysts, or if we reduce our guidance or estimates for future periods, the market price of our common stock may decline. In light of the foregoing, investors are urged not to unduly rely upon any guidance or estimates in making an investment decision regarding our common stock.
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We face competition for customers from other providers of technology solutions to participants in the financial services community. If prospective customers are reluctant to switch from their existing service providers and adopt our products and services, our sales will not grow or may decline, we could be materially and adversely affected, and our stock price could decline significantly.
Potential customers that use legacy products and services for their trading needs may believe that these products and services sufficiently achieve their purpose. In addition, an organization's existing vendors or new vendors with broad product and service offerings may be able to offer concessions to our potential customers that we are not able to match. Accordingly, organizations may continue allocating their resources and information technology budgets for legacy products and services and may not switch to our products and services. If our products and services do not find widespread marketplace acceptance, then our sales may not grow or may decline, which could materially and adversely affect us and cause our stock price to decline significantly.
We face significant competition for the types of products and services that we offer and may be unable to compete effectively for market share.
Our success depends significantly upon our ability to increase our market share, to increase our revenues from new customers and to sell additional products and product enhancements to new customers. The market for the types of products and services that we offer is intensely competitive. Our competitors may develop products that are superior to our proprietary trading software in terms of quality, ease of use, security, reliability or cost or may achieve greater market acceptance. Our competitors or potential competitors may have significantly greater financial, technical and marketing resources and access to capital than we do. As a result, they may be able to respond more quickly to new or emerging technologies and to changes in customer demands, or to devote greater resources to the development, promotion and sale of their products and services than we can. We may be unable to compete successfully against current or future competitors, which could materially and adversely affect us and cause our stock price to decline significantly.
We depend on our senior management team and the loss of one or more key members of our management team, the failure of new executive officers to integrate with our management team or our failure to attract and retain other highly qualified personnel in the future, could have a negative impact on our business.
Our success depends largely on the efforts and abilities of the key members of our senior management team, including Lin Kok Peng, PhD, who serves as the Company's Chief Executive Officer, Chief Financial Officer, and Chairman of the Board as well as a director, Jose Capote, who serves as the Company's Vice President and Secretary, and Allister Lim Wee Sing, who served as a director of the Company, but who resigned as a Director in March 3, 2023 and was replaced as Director by Jose Capote. Because each member of our senior management team has a different area of specialization, the departure of any one of these individuals could create a deficiency in one of the core aspects of our business. Any failure of our management team to successfully integrate could also have a negative impact on our business. We are also dependent on the efforts of our team of technology professionals, and on our ability to recruit and retain highly skilled and often specialized personnel, particularly in light of the rapid pace of technological advances. The level of competition in the technology industry for individuals with this level of experience or these skills is intense. Significant losses of key personnel, particularly to competitors, could make it difficult for us to compete successfully. In addition, we may be unable to attract and retain qualified management and personnel in the future, including in relation to any diversification of our product and service offerings into new asset classes and/or new geographic locations.
We may not be able to effectively manage our growth or improve our operational, financial and management information systems, which would impair our results of operations.
If we are successful in executing our business plan, we will experience growth in our business that could place a significant strain on our business operations, finances, management and other resources. Our ability to manage our growth will require us to improve our operational, financial and management information systems, and to motivate and effectively manage our employees. We cannot provide assurance that our systems, procedures and controls or financial resources will be adequate, or that our management will keep pace with this growth. We cannot provide assurance that our management will be able to manage this growth effectively, which could have a material adverse effect on our financial condition or business.
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Our ability to sell our products will be dependent in part on the quality of our technical support services, and our inability to offer high quality technical support services could adversely affect our customers' satisfaction with our products and services and could materially and adversely affect us and cause our stock price to decline significantly.
Our customers will depend on our technical support services to resolve issues relating to our service offerings. If we do not effectively onboard our customers, succeed in helping our customers quickly resolve post-onboarding issues and provide effective ongoing support, our ability to sell additional products and services to existing customers would be adversely affected and our reputation with potential new customers could be damaged. If we fail to meet the requirements of our customers, it may be more difficult to execute on our strategy to retain these customers. Our failure to maintain quality technical support services could materially and adversely affect us and cause our stock price to decline significantly.
RISK FACTORS CONCERNING INVESTMENT IN OUR COMPANY
There is currently a limited public market for our shares, and if an active market does not develop, investors may have difficulty selling their shares.
Our common stock is currently traded on the over the counter (OTC) market on the OTCQB tier of the OTC Markets, and there is currently only a limited public trading market for our common stock. We cannot predict the extent to which investor interest in the Company and our common stock will lead to the development or continuance of an active trading market or how liquid that trading market for our common stock might become. If an active trading market for our common stock does not develop or is not sustained, it may be difficult for investors to sell shares, particularly large quantities, of our common stock at a price that is attractive or at all. As a result, an investment in our common stock may be illiquid and investors may not be able to liquidate their investment readily or at all when they desire to sell.
Regulation of penny stocks.
The SEC has adopted a number of rules to regulate "penny stocks." Because the securities of the Company may constitute "penny stocks" within the meaning of the rules (as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, other than a security registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in that security are provided by the exchange or system), the rules would apply to the Company and to its securities. The SEC has adopted Rule 15g-9 which established sales practice requirements for certain low-price securities. Unless the transaction is exempt, it shall be unlawful for a broker or dealer to sell a penny stock to, or to effect the purchase of a penny stock by, any person unless prior to the transaction: (i) the broker or dealer has approved the person's account for transactions in penny stock pursuant to this rule and (ii) the broker or dealer has received from the person a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stock, the broker or dealer must: (a) obtain from the person information concerning the person's financial situation, investment experience, and investment objectives; (b) reasonably determine that transactions in penny stock are suitable for that person, and that the person has sufficient knowledge and experience in financial matters that the person reasonably may be expected to be capable of evaluating the risks of transactions in penny stock; (c) deliver to the person a written statement setting forth the basis on which the broker or dealer made the determination (i) stating in a highlighted format that it is unlawful for the broker or dealer to affect a transaction in penny stock unless the broker or dealer has received, prior to the transaction, a written agreement to the transaction from the person; and (ii) stating in a highlighted format immediately preceding the customer signature line that (A) the broker or dealer is required to provide the person with the written statement and (B) the person should not sign and return the written statement to the broker or dealer if it does not accurately reflect the person's financial situation, investment experience, and investment objectives; and (d) receive from the person a manually signed and dated copy of the written statement.
It is also required that disclosure be made as to the risks of investing in penny stock and the commissions payable to the broker-dealer, as well as current price quotations and the remedies and rights available in cases of fraud in penny stock transactions. Statements, on a monthly basis, must be sent to the investor listing recent prices for the "penny stock" and information on the limited market. Shareholders should be aware that, according to SEC Release No. 34-
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29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include: (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid ask differential and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequent investor losses. The Company's management is aware of the abuses that have occurred historically in the penny stock market. Although the Company does not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to the Company's securities.
There is limited liquidity in our common stock, which may adversely affect your ability to sell your shares of common stock.
The market price of our common stock may fluctuate significantly in response to a number of factors, some of which are beyond our control. These factors include, but are not limited to:
●the announcement of new products or product enhancements by us or our competitors;
●developments concerning intellectual property rights and regulatory approvals relating to us;
●quarterly variations in our results or the results of our competitors;
●the ability or inability of us to generate sales;
●developments in our industry and target markets;
●the number of market makers who are willing to continue to make a market in our stock and the market or exchange on which they decide to make a market in our stock, which may, among other things, result in our stock being traded on the exchanges that may be unattractive to investors such as "pink sheets"; and
●general market conditions and other factors, including factors unrelated to our own operating performance.
In recent years, the stock market in general has experienced extreme price and volume fluctuations. Continued market fluctuations could result in extreme volatility in the price of shares of our common stock, which could cause a decline in the value of our shares. Price volatility may be accentuated if trading volume of our common stock is low. The volatility in our stock may be combined with low trading volume. Any or all of these above factors could adversely affect your ability to sell your shares or, if you are able to sell your shares, to sell your shares at a price that you determine to be fair or favorable.
Dependence upon outside advisors.
To supplement the business experience of its officers and directors, the Company may be required to employ accountants, technical experts, appraisers, attorneys, or other consultants or advisors. The selection of any such advisors will be made by the Company's officers, without any input by shareholders. Furthermore, it is anticipated that such persons may be engaged on an as needed basis without a continuing fiduciary or other obligation to the Company. In the event the officers of the Company consider it necessary to hire outside advisors, he may elect to hire persons who are affiliates, if those affiliates are able to provide the required services.
We may issue additional shares of common stock or preferred stock in the future, which could cause significant dilution to all shareholders.
We have a large amount of authorized but unissued common stock and preferred stock which our Board of Directors may issue without shareholder approval. We will need additional capital to bring our operations to a sustainable level over the next twelve months and may seek this capital in the form of equity financing. We may also seek to raise additional equity capital in the future to fund business alliances, develop new prototypes, and grow our services, manufacturing and sales capabilities organically or otherwise.
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In addition to additional issuances of our common stock or preferred stock in private placements or public offerings, we may issue shares as part or all of the consideration in any merger, acquisition, joint venture or other strategic alliance that we enter.
Any issuance of additional shares of our common stock or preferred stock will dilute the percentage ownership interest of all shareholders and may dilute the book value per share of our common stock and may negatively impact the market price of our common stock.
We have not in the past and we do not currently intend to pay cash dividends on our common stock.
We have never declared or paid cash dividends on our common stock. We currently intend on retaining any future earnings to fund our operations and growth and do not expect to pay cash dividends in the foreseeable future of the common stock. Future dividends, if any, will be determined by our board of directors, based upon our earnings, financial condition, capital resources, capital requirements, charter restrictions, contractual restrictions, and such other factors as our board of directors deem relevant.
ITEM 1B. | UNRESOLVED STAFF COMMENTS. |
Not Applicable.
ITEM 2. | PROPERTIES. |
The Company currently maintains a mailing address at 80 Tras Street #01-03, Singapore and a U.S. office at 15615 Alton Parkway, Suite 450, Irvine CA 92618. The Company pays a monthly lease payment of approximately $3,900 per month for the Singapore office and services and $195 per month for the U.S. office.
ITEM 3. | LEGAL PROCEEDINGS. |
The Company is not a party to any pending legal proceedings, and no such proceedings are known to be contemplated.
ITEM 4. | MINE SAFETY DISCLOSURES. |
Not applicable.
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PART II
ITEM 5. | MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
Market Information
Our common stock is quoted on the OTCQB tier of the OTC Markets. The OTC Market is a network of security dealers who buy and sell stock. The dealers are connected by a computer network that provides information on current "bids" and "asks", as well as volume information. Our common stock is quoted on the OTCQB under the symbol, “NAHD.”
The following table sets forth the high and low closing bid prices for the periods indicated for the Company's common stock.
|
| Closing Bid Prices(1) |
| |||
|
| High |
|
| Low |
|
Year Ending December 31, 2023 |
|
|
|
|
|
|
Quarter Ended March 31, 2023 |
| $0.3184 |
|
| $0.3184 |
|
Year Ending December 31, 2022 |
|
|
|
|
|
|
Quarter Ended December 31, 2022 |
| 0.3398 |
|
| 0.2900 |
|
Quarter Ended September 30, 2022 |
| 0.0615 |
|
| 0.0615 |
|
Quarter Ended June 30, 2022 |
| 0.0610 |
|
| 0.0610 |
|
Quarter Ended March 31, 2022 |
| $0.065 |
|
| $0.065 |
|
|
|
|
|
|
|
|
Year Ending December 31, 2021 |
|
|
|
|
|
|
Quarter Ended December 31, 2021 |
| 0.0864 |
|
| 0.0864 |
|
Quarter Ended September 30, 2021 |
| 0.0330 |
|
| 0.0330 |
|
Quarter Ending June 30, 2021 |
| $0.04 |
|
| $0.04 |
|
Quarter Ended March 31, 2021 |
| 0.0287 |
|
| 0.0287 |
|
(1)Bids represent inter−dealer prices, without retail mark-up, markdown or commissions, and may not represent actual transactions. Accordingly, these quotations may or may not necessarily represent actual transactions.
On May 5, 2023, the closing price for our common stock on the OTCQB was $0.3184 per share. Because there were few shares traded on May 5, 2023, and generally, the volume of shares quoted on the OTC Markets is insignificant, the closing price quoted does not represent a reliable indication of the fair market value of these shares.
Approximate Number of Holders of Our Common Stock
As of May 5, 2023, there were approximately 304 holders of record of our common stock. The number of record holders does not include beneficial owners of common stock whose shares are held in the names of banks, brokers, nominees or other fiduciaries.
Common Stock
The Company's Articles of Incorporation authorize the issuance of 4,000,000,000 shares of common stock, par value of $0.001 per share ("Common Stock"). Each record holder of Common Stock is entitled to one vote for each share held on all matters properly submitted to the stockholders for their vote. The Company's Articles of Incorporation do not permit for cumulative voting for the election of directors. As of December 31, 2022, we had 75,288,667 shares of our Common Stock issued and outstanding.
Holders of outstanding shares of Common Stock are entitled to such dividends as may be declared from time to time by the Board of Directors out of legally available funds; and, in the event of liquidation, dissolution or winding up of the affairs of the Company, holders are entitled to receive, ratably, the net assets of the Company available to
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stockholders after distribution is made to the preferred stockholders, if any, who are given preferred rights upon liquidation. Holders of outstanding shares of Common Stock have no preemptive, conversion or redemptive rights. All of the issued and outstanding shares of Common Stock are, and all unissued shares when offered and sold will be, duly authorized, validly issued, fully paid, and non-assessable. To the extent that additional shares of the Company's Common Stock are issued, the relative interests of then existing stockholders may be diluted.
Preferred Stock
The Company's Articles of Incorporation allow for the issuance of up to 400,000,000 shares of preferred stock, par value of $0.001 per share ("Preferred Stock"). As of the date of this filing, there are no shares of Preferred Stock issued and outstanding.
Recent Issuances of Unregistered Securities
On September 18, 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 provided that the Share Purchase would be effected 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. Based on the fact that the parties to the Global Crypto Equity Purchase Agreement agreed that each of the remaining nine Blocks will close within 12 months of September 18, 2020 and no additional blocks were completed, thus the sale of the additional blocks, amounting to a total of 48,000,000 shares was terminated.
The parties to the Global Crypto Equity Purchase Agreement do not intend to effect a change in control as a result of entering into the Global Crypto Equity Purchase Agreement.
The Global Crypto Equity Purchase Agreement terminated on September 18, 2021 since no additional shares were 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. (the “Subscriber”). Pursuant to the terms of the Equity Purchase Agreement, the Company agreed to sell to the Subscriber, and the Subscriber 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 “Share Purchase”). The purchase price was received by the Company on October 8, 2020.
Transfer Agent
Our independent stock transfer agent is Pacific Stock Transfer. The transfer agent’s address is 6725 Via Austi Pkwy #300, Las Vegas, NV 89119, United States. The transfer agent’s telephone number is (800) 785-7782, and its fax number is (702) 433-1979. Pacific Stock Transfer’s website is located at www.pacificstocktransfer.com.
ITEM 6. | RESERVED |
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ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
Forward-Looking Statements
This Management's Discussion and Analysis contains forward-looking statements that involve future events, our future performance and our expected future operations and actions. In some cases, you can identify forward-looking statements by the use of words such as "may", "will", "should", "anticipate", "believe", "expect", "plan", "future", "intend", "could", "estimate", "predict", "hope", "potential", "continue", or the negative of these terms or other similar expressions. These forward-looking statements are only our predictions and involve numerous assumptions, risks and uncertainties. Our actual results or actions may differ materially from these forward-looking statements for many reasons, including, but not limited to, the matters discussed in this report under the caption "Risk Factors". We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included in this annual report on Form 10-K.
Overview
Since December 24, 2014, New Asia Holdings, Inc., a Nevada corporation (the "Company" or "NAHD"), has been developing and deploying its proprietary, neural trading models for the financial community. We offered trading software solutions to clients based on a software-as-a-service (“SaaS”) licensing and delivery models with licensed users availing themselves of service-based contractual arrangements. As a result of poor performance by the Company’s Algorithms, over the last several quarters the Company has been focusing on developing new business opportunities, including exploring potential new acquisition. The Algorithm assets were housed under NAHD’s wholly-owned subsidiary, Magdallen Quant Pte Ltd (MQL) and as a result of long-standing poor performance and consistent with the emphasis on developing new business opportunities, the Company decided to officially dissolve MQL, effective February 2, 2023.
The Company's products capitalized 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 had 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.
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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.”
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 on the basis of 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 remained in place till the termination of all MQL business activities, effectively in the Fourth Quarter of 2022 and completely terminated upon the dissolution of MQL in February 2023.
As of the Fourth Quarter 2022, operations of MQL were effectively terminated and in February 2023, the Company officially dissolved MQL. The Company, in its efforts to expand its business, is currently involved in the development of new business opportunities, including the following:
·The Company is in active discussions on the potential acquisition of a company involved in a manufacturing utilizing additive technologies to deliver parts on-demand made to clients’ blueprints and expectations. Once parts are designed and validated, they are available for on-demand manufacturing at any point in the future.
·NAHD issued an 8K in June, 2022 to undertake a technical, legal and financial evaluation of Asian Fuels Energy Inc (the “Company”) and its sister Company, Hacienda Asia Plantations Inc. (HAPI). The Company 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. Based on information shared with NAHD, HAPI is focused in engaging in the agriculture business in the Philippines to develop world class plantation and production systems for Oil Palm, Natural Rubber and Agroforestry crops and AFEI is focused on the development of Napier Grass plantations to produce renewable energy fuel and power generation facilities involving
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biomass and solar farms. HAPI maintains a Napier Grass plantation and nursery in its 6,652-hectare (HA) plantation site in Candoni, Negros Occidental and a nursery in Rosario, Batangas. These plantations and nurseries are a ready source of planting materials to support its ongoing expansion activities. Napier Grass assets in Negros and Batangas will be transferred to AFEI as part of the proposed transaction described herein. NAHD executed a Memorandum of Understanding, dated June 14th, 2022, regarding the acquisition of a 40% of the issued and outstanding shares of the Company 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 (priority Project) and future projects in Tarlac. The Batangas Project has secured a multi-year off-take agreement for the purchase of the Napier Grass product from a major manufacturing corporation. The acquisition would have also granted NAHD the rights of First Refusal to undertake the development of Napier Grass Renewable Fuel Supply Projects, as the principal and majority owner/investor for North America. To date, this opportunity is still under evaluation, however, decisions to proceed with execution of the deal has been put on hold pending the potential finalization of the acquisition of the advanced on-demand manufacturing company.
The Company will provide an update on these potential activities, if and when they materialize.
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 generated no revenues during the years ended December 31, 2022, and 2021.
On July 8, 2020, the Company increased 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. The Amendment was approved by the Company’s Board of Directors on March 26, 2020, and by the holders of a majority of the voting power of the Company’s issued and outstanding capital stock on May 22, 2020.
On September 18, 2020, the Company entered into that certain Equity Purchase Agreement (the “Global Crypto Equity Purchase Agreement”) between the Company and 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 a per share purchase price of $0.01, for an aggregate purchase price of $500,000 (the “Share Purchase”). The Global Crypto Equity Purchase Agreement provides that the Share Purchase will be effected 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 will close within 12 months of September 18, 2020.
The Global Crypto Equity Purchase Agreement terminated on September 18, 2021 since no additional shares were be purchased under the Global Crypto Equity Purchase Agreement.
On September 21, 2020, the Company entered into an Equity Purchase Agreement (the “ENJU Equity Purchase Agreement”) with ENJU Planning Pte Ltd. (the “Subscriber”). Pursuant to the terms of the Equity Purchase Agreement, the Company agreed to sell to the Subscriber, and the Subscriber 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 “Share Purchase”). The purchase price was received by the Company on October 8, 2020.
The measures taken to date will impact the Company’s business for the fiscal first and second quarters 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.
28
Results of Operations.
The following table provides selected financial data about us for the fiscal years ended December 31, 2022 and December 31, 2021. For detailed financial information, see the audited Financial Statements included in this annual report on Form 10-K.
|
| December 31, 2022 |
| December 31, 2021 |
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash |
| $9,833 |
| $57,888 |
Prepaid expense |
| 13,035 |
| 14,133 |
Total Current Assets |
| 22,868 |
| 72,021 |
Other Assets |
|
|
|
|
Deposit |
| 195 |
| 195 |
Total Other Assets |
| 195 |
| 195 |
TOTAL ASSETS |
| 23,063 |
| 72,216 |
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
Current Liabilities |
|
|
|
|
Accounts payable and accrued liabilities |
| $248,797 |
| $172,955 |
Advance from shareholder |
| 945,704 |
| 916,452 |
Total Current Liabilities |
| 1,194,501 |
| 1,089,407 |
Total Liabilities |
| 1,194,501 |
| 1,089,407 |
|
|
|
|
|
Stockholders' Deficit |
|
|
|
|
Preferred stock, $0.001 par value, 400,000,000 shares authorized, 0 shares issued and outstanding |
| - |
| - |
Common stock, $0.001 par value, 4,000,000,000 shares authorized, 75,288,667 shares issued and outstanding at December 31, 2022 and December 31, 2021 |
| 75,289 |
| 75,289 |
|
|
|
|
|
Additional paid in capital |
| 11,399,713 |
| 11,399,713 |
Accumulated deficit |
| (12,646,034) |
| (12,491,964) |
Accumulated other comprehensive loss |
| (406) |
| (229) |
Total Stockholders' Deficit |
| (1,171,438) |
| (1,017,191) |
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT |
| $23,063 |
| $72,216 |
During fiscal years 2022 and 2021, we generated no revenues. In addition, we have a history of losses. The lack of revenues in fiscal 2022 and 2021 revenues resulted from the inability of the Company’s licensee, New Asia Momentum, to secure new sub-licensees for the Company’s products after the return of the AUM associated with the Feuris Fund A activities in 2019, which resulted due to the risk profiles required by these regulated funds and banks reflects a lower level of risk, which resulted in significantly reduced frequency of trading activities which then led to the closure of the Feuris Fund A by Momentum as of September 30, 2019 and the return of the $ 6.67 million AUM to clients. The Company also effectively terminated all activities related to the licensing of its Algorithm products in the Fourth Quarter of 2022 and dissolved MQL in February 2023. The Company is currently in discussions on the development of new business initiatives as described previously.
As of December 31, 2022 and December 31, 2021, our accountants have expressed substantial doubt about our ability to continue as a going concern as a result of our history of net losses. Our ability to achieve and maintain profitability and positive cash flow is dependent upon our ability to successfully develop and market our software and our ability to generate revenues.
Operating expenses were $154,070 for the year ended December 31, 2022, and $153,781 for the year ended December 31, 2021, and consisted primarily of general and administrative expenses and professional fees and outside services. The nominal decrease in such expenses in the year ended December 31, 2022, was related to decreased professional fees and outside services.
As a result of the foregoing, we had net loss of $154,070 for the year ended December 31, 2022. This compares with a net loss for the year ended December 31, 2021 of $153,781.
29
We expect that we will need to raise additional funds to support our business (focused on the implementation of new business solutions as described above) including, working capital and for the acquisition of new businesses and technologies, or if we must respond to unanticipated events that require us to make additional investments. We cannot assure that additional financing will be available when needed on favorable terms, or at all.
We had begun to generate nominal revenues since the second quarter of 2016, however, due to the change in strategy to focus on the regulated bank and fund model, the Company’s licensee decided to terminate all activities with retail clients and the retail AUM was returned to retail clients. The focus on the regulated bank and fund model was initiated in 2017 with the launch of the Feuris Fund A with AUM of approximately $6.67 million. However, since the adoption of the regulated fund and bank models, the risk profiles required by these regulated funds and banks reflects a lower level of risk, which has resulted in significantly reduced frequency of trading activities over the last several quarters and the Company’s licensee, Momentum decided, as of September 30, 2019, to liquidate the Feuris Fund A and return the AUM to the investors. The License Agreement between MQL and Momentum remained in place till the dissolution of MQL in February, 2023. The Company is currently pursuing the development of new business opportunities, as described above. We expect to incur operating losses through the balance of 2023 because we will be incurring expenses and not generating sufficient revenues. We cannot guarantee that we will be successful in generating sufficient revenues or other funds in the future to cover these operating costs. We expect to cover such shortfall in operating margins through advances from our principal shareholder and other fund-raising measures that the Company deems appropriate.
Liquidity and Capital Resources
As of December 31, 2022, we had cash of $9,833, compared to $57,888 at December 31, 2021. The decrease in cash is the result of the funding of company operations.
We had net cash used in operating activities of $(77,130) for the year ended December 31, 2022 and $(103,429) of net cash used in operating activities for the year ended December 31, 2021.
We had cash flows from financing activities of $29,252 resulting from $32,500 in advances from our principal shareholder and $(3,248) repayment to principal shareholder, compared to December 31, 2021 wherein, we had net cash flows used in financing activities of $(38,697), associated with the payment of some advances to our principal shareholder, Lin Kok Peng.
We had no cash flows from investing activities during the years ended December 31, 2022 and 2021.
The Company's ultimate continued existence is dependent upon its ability to generate sufficient cash flows from operations to support its daily operations as well as provide sufficient resources to retire existing liabilities and obligations on a timely basis.
The Company currently has no current plans, proposals, arrangements, or understandings with respect to the sale or issuance of additional securities prior to the location of a merger or acquisition candidate. Accordingly, there can be no assurance that enough funds will be available to the Company to allow it to cover the expenses related to such activities.
The Company's Articles of Incorporation authorize the issuance of up to 400,000,000 shares of preferred stock and 4,000,000,000 shares of common stock. The Company's ability to issue preferred stock may limit the Company's ability to obtain debt or equity financing as well as impede potential takeover of the Company, which takeover may be in the best interest of stockholders. The Company's ability to issue these authorized but unissued securities may also negatively impact our ability to raise additional capital through the sale of our debt or equity securities.
30
The Company anticipates future sales of equity securities to facilitate either the consummation of a business combination transaction or to raise working capital to support and preserve the integrity of the corporate entity. However, there is no assurance that the Company will be able to obtain additional funding through the sales of additional equity securities or, that such funding, if available, will be obtained on terms favorable to or affordable by the Company.
It is the belief of management and significant stockholders that they will provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Further, the Company is at the mercy of future economic trends and business operations for the Company's majority stockholder to have the resources available to support the Company. Should this pledge fail to provide financing, the Company has not identified any alternative sources.
If no additional operating capital is received during the next twelve months, the Company will be forced to rely on existing cash in the bank and upon additional funds loaned by management and/or significant stockholders to preserve the integrity of the corporate entity at this time. In the event, the Company is unable to acquire advances from management and/or significant stockholders, the Company's ongoing operations would be negatively impacted.
While the Company is of the opinion that good faith estimates of the Company's ability to secure additional capital in the future to reach our goals have been made, there is no guarantee that the Company will receive sufficient funding to sustain operations or implement any future business plan steps.
In such a restricted cash flow scenario, the Company would be unable to complete its business plan steps, and would, instead, delay all cash intensive activities. Without necessary cash flow, the Company may become dormant during the next twelve months, or until such time as necessary funds could be raised in the equity securities market.
Regardless of whether the Company's cash assets prove to be inadequate to meet the Company's operational needs, the Company might seek to compensate providers of services by issuances of stock in lieu of cash.
Off-Balance Sheet Arrangements
We have no significant 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.
Future Financings
We will continue to rely on advances from our principal shareholder 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 the equity securities or arrange for debt or other financing to fund our operations and other activities.
Critical Accounting Policies and Estimates
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.
31
Our significant accounting policies are summarized in Note 1 in the Annual Report on Form 10-K for the most recent fiscal year. 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.
ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
Not Applicable.
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. |
The full text of our audited financial statements as of December 31, 2022 and 2021 begins on page F-1 of this annual report on Form 10-K.
ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. |
None.
ITEM 9A. | CONTROLS AND PROCEDURES. |
|
|
Evaluation of Disclosure Controls and Procedures
Our management conducted an evaluation, 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 annual report on Form 10-K. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as a result of the material weakness in our internal control over financial reporting described below, our disclosure controls and procedures were not effective as of December 31, 2022.
Management’s Annual Report on Internal Control over Financial Reporting
Management is responsible for the preparation of our consolidated financial statements and related information. Management uses its best judgment to ensure that the consolidated financial statements present fairly, in material respects, our financial position and results of operations in conformity with generally accepted accounting principles.
Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in the Exchange Act. These internal controls are designed to provide reasonable assurance that the reported financial information is presented fairly, that disclosures are adequate and that the judgments inherent in the preparation of financial statements are reasonable. There are inherent limitations in the effectiveness of any system of internal controls including the possibility of human error and overriding of controls. Consequently, an ineffective internal control system can only provide reasonable, not absolute, assurance with respect to reporting financial information.
Our internal control over financial reporting includes policies and procedures that: (i) pertain to maintaining records that, in reasonable detail, accurately and fairly reflect our transactions; (ii) provide reasonable assurance that transactions are recorded as necessary for preparation of our financial statements in accordance with generally accepted accounting principles and that the receipts and expenditures of company assets are made in accordance with our management and directors authorization; and (iii) provide reasonable assurance regarding the prevention of or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
32
As of December 31, 2022, under the supervision of our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework Internal Control—Integrated Framework (2013) as outlined by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and guidance prepared by the Commission specifically for smaller public companies. Based on that evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2022. We have identified the following material weaknesses as of December 31, 2022:
·Lack of sufficient written documentation of internal controls.
·Lack of proper segregation of duties over financial transactions and processes
Given the size of our current operation and existing personnel, the opportunity to implement internal control procedures that segregate accounting duties and responsibilities are limited. Until the organization can increase in size to warrant an increase in personnel, formal internal control procedure 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 formal audit committee.
This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to an exemption for smaller reporting companies.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the fourth quarter of our fiscal year ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
33
PART III
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
|
Directors and Executive Officers
The following sets forth the name and position of each of our current executive officers and directors.
NAME |
| AGE |
| POSITION |
Lin Kok Peng
|
| 50 |
| Chief Executive Officer, Chief Financial Officer, Chairman of the Board, and Director |
Allister Lim Wee Sing |
| 49 |
| Director, resigned as Director on March 3, 2023 |
Jose A. Capote |
| 62 |
| Vice President and Secretary, appointed as Director on March 3, 2023. |
Lin Kok Peng
Since 2005, Dr. Lin has been an entrepreneur and a managing director of several property investment and construction interior consultancy firms. He leads over 10 companies and has over 10 years of experience in property, construction and investments. Dr. Lin brings strategic focus, vision and excellent judgment to his companies. With more than 10 years of experience across a wide variety of industries, he is able to make a significant impact on the profitability and growth of his companies. Dr. Lin lead his first start up business (Free Space Intent) from a small construction interior consultancy firm to currently one of the largest construction interior consultancy firms in Singapore. Since 2014, Dr. Lin has served as Managing Director of Rock Capital Limited. Since 2012, he has served as Director of Goldin Shipping Pte Ltd and Managing Director of Klin Capital Resources Pte Ltd.
Dr. Lin holds a Master degree in Business Administration from De Lasalle University, and a Ph.D. from Camden University in Kuala Lumpur.
Dr. Lin has received the Entrepreneur of the Year Award (EYA), the oldest Award in Singapore that salutes and honors local entrepreneurs who have shown outstanding performance as business owners, be it emerging or established enterprises, in their chosen field of entrepreneurship, several times since 2010.
Allister Lim Wee Sing
Mr. Lim serves as a director of our Company. Since 2005, Mr. Lim has been the Principal Partner of the law firm of Allister Lim & Thrumurgan, Singapore. From 2004 to 2005, he was a Senior Associate Director with the law firm of PK Wong & Associates LLC, Singapore. From 2003 to 2004, he was a Legal Associate with the law firm of PK Wong & Advani, Singapore. From 1999 to 2003, Mr. Lim was a Legal Assistant with the law firm of Harry Elias Partnership, Singapore.
Mr. Lim graduated with a Bachelor of Laws (Honors) LL.B. (Hons) from The National University of Singapore in 1998, was admitted as an Advocate and Solicitor of the Supreme Court of The Republic of Singapore in 1999 and passed the New York Bar Examinations in 2001.
Jose A. Capote
Mr. Capote has over 30 years of experience in project engineering, project development, and business development within the energy and environmental management, waste to energy, renewable/alternative energy, nuclear energy, and industrial/infrastructure markets.
Since 2001, Mr. Capote has been responsible for the implementation and management of large-scale waste to energy projects in Southeast Asia (Malaysia, Thailand), including MSW waste to energy, medical waste to energy, palm oil waste to energy and natural fibers. In 2001, he was the founding member of PEAT International Inc, a company specializing in the development and deployment of thermal plasma technology for the conversion of a wide range of industrial, municipal and hazardous wastes into useful resources and energy. in this company, he led technology
34
transfer efforts with local specialty contractors in India and Taiwan and led the implementation of several waste to energy projects in India and Taiwan. From 1994 through approximately 2000, Mr. Capote was Senior Vice President for IDM Environmental Inc, a mid-sized U.S. public company, where he led in the development of the company’s business in the areas of hazardous and nuclear contaminated facility cleanups and decommissioning (including establishing as a leading provider of hands-on remediation/decommissioning services to the U.S. Department Of Energy and plant relocation services. Previously, Mr. Capote held several senior positions at Burns and Roe Inc, a large, multi-national, engineering and construction firm specializing in the design and construction of nuclear, conventional and waste to energy power plants. Mr. Capote received Engineering Science Degrees in Nuclear and Mechanical Engineering from Columbia University.
Directors are elected until their successors are duly elected and qualified.
During 2022, no salary, consulting fee, finder's fee or other compensation was paid to any of the Company's directors or executive officers, or to any other affiliate of the Company, except as described under Executive Compensation below. It is not anticipated that any director will receive compensation for his or her services as a director in the near future.
Involvement on Certain Material Legal Proceedings During the Past Five Years
No director, officer, significant employee or consultant has been convicted in a criminal proceeding, exclusive of traffic violations or is subject to any pending criminal proceeding. No bankruptcy petitions have been filed by or against any business or property of any director, officer, significant employee or consultant of the Company nor has any bankruptcy petition been filed against a partnership or business association where these persons were general partners or executive officers. No director, officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities. No director, officer or significant employee has been convicted of violating a federal or state securities or commodities law.
Independent Directors; Committees of our Board of Directors
Our securities are not quoted or listed on an exchange that requires that a majority of our Board members be independent, and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include "independent" directors, nor are we required to establish or maintain an Audit Committee or other committee of our Board of Directors.
We have not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, any committee performing a similar function.
The functions of those committees are being undertaken by Board of Directors as a whole. Because we have only two directors, none of whom are independent, we believe that the establishment of these committees would be more form over substance.
We do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors. Given our relative size and lack of directors and officers insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our Board.
35
None of our directors is an "audit committee financial expert" within the meaning of Item 401(e) of Regulation S-K. In general, an "audit committee financial expert" is an individual member of the audit committee or Board of Directors who:
·understands generally U.S. GAAP and financial statements,
·is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,
·has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements,
·understands internal controls over financial reporting, and
·understands audit committee functions.
Communications with the Board
Individuals may communicate with the Company's Board of Directors or individual directors by writing to the Company's Secretary at 80 Tras Street #01-03, Singapore 07919. The Secretary will review all such correspondence and forward to the Board of Directors a summary of all such correspondence and copies of all correspondence that, in the opinion of the Secretary, relates to the functions of the Board or committees thereof or that he otherwise determines requires their attention. Directors may review a log of all such correspondence received by the Company and request copies. Concerns relating to accounting, internal control over financial reporting or auditing matters will be immediately brought to the attention of the Board of Directors and handled in accordance with its procedures established with respect to such matters.
Director Compensation
In 2022, we only had one non-employee director: Mr. Lim. No director, including Mr. Lim, received any compensation for his services as a director. Mr. Lim resigned as a Director on March 3, 2023 and was replaced by Mr. Jose A Capote as a Director.
Code of Ethics
The Company's Board of Directors has adopted a Code of Ethics which applies to its principal executive officer and principal financial officer. A copy of the Code of Ethics is available in print without charge to any person who sends a request to the office of the Secretary of the Company at 80 Tras Street #01-03, Singapore, 079019.
ITEM 11. | EXECUTIVE COMPENSATION |
Management of the Company requires approximately four (4) hours per calendar week. Accordingly, no officer or director has received any compensation from the Company, except for Mr. Capote who was to receive $18,000 in each of the years ended December 31, 2022 and 2021. Until the Company secures additional SaaS contracts, implements expected new business solutions as described above, and begins to accrue revenues, it is not anticipated that any officer, other than Mr. Capote, or any director will receive compensation from the Company other than reimbursement for out-of-pocket expenses incurred on behalf of the Company. See Certain Relationships and Related Transactions.
The Company has no stock option, retirement, pension, or profit-sharing programs for the benefit of directors, officers or other employees, but the Board of Directors may recommend adoption of one or more such programs in the future.
36
2022 SUMMARY COMPENSATION TABLE
Name & Principal Position |
| Year | Salary |
| Bonus |
| Stock |
| Option |
| Non-Equity |
| Change in |
| All Other |
| Total |
|
Lin Kok Peng, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer and Chief Financial Officer |
| 2022 | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- |
|
|
| 2021 | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- |
|
Jose A. Capote |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President and Secretary |
| 2022 | 18,000 | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | 18,000 |
|
|
| 2021 | 18,000 | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | -0- | $ | 18,000 |
|
The Company has no other Executive Compensation issues which would require the inclusion of other mandated table disclosures.
37
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
|
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of May 15, 2023, the number of shares of Common Stock owned of record and beneficially by executive officers, directors and persons who hold 5% or more of the outstanding Common Stock of the Company. Also included are the shares held by all executive officers and directors as a group.
Name and Address of Beneficial Owner |
| Amount and Nature of Beneficial Ownership (1) |
| Percent of Class (2) |
Named Executive Officers and Directors: |
|
|
|
|
Lin Kok Peng |
| 41,945,908 |
| 55.71% |
Jose A. Capote |
| 759,084 |
| 1.01% |
Allister Lim Wee Sing |
| — |
| 0.0% |
All officers and directors as a group (3 persons) |
| 42,704,992 |
| 56.72% |
|
|
|
|
|
Other 5% Stockholders: |
|
|
|
|
Anthony Ng Zi Qin |
| 10,716,900 |
| 14.29% |
*Less than 1%
(1)On May 15, 2023, there were 75,288,667 shares of our common stock outstanding and no shares of Preferred Stock issued and outstanding. In determining the percent of common stock owned by a person on May 15, 2023: (a) the numerator is the number of shares of common stock beneficially owned by the person, including shares the beneficial ownership of which may be acquired within 60 days upon the exercise of options or warrants or conversion of convertible securities, and (b) the denominator is the total of (i) the 75,288,667 shares of common stock outstanding on May 15, 2023, and (ii) any shares of common stock which the person has the right to acquire within 60 days upon the exercise of options or warrants or conversion of convertible securities. Neither the numerator nor the denominator includes shares which may be issued upon the exercise of any other options or warrants or the conversion of any other convertible securities. As of May 15, 2023, we have no outstanding stock warrants or outstanding stock options.
(2)Under applicable SEC rules, a person is deemed the "beneficial owner" of a security with regard to which the person directly or indirectly, has or shares (a) the voting power, which includes the power to vote or direct the voting of the security, or (b) the investment power, which includes the power to dispose, or direct the disposition, of the security, in each case irrespective of the person's economic interest in the security. Under SEC rules, a person is deemed to beneficially own securities which the person has the right to acquire within 60 days through the exercise of any option or warrant or through the conversion of another security.
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
|
The Board has written policies and procedures for the review, approval, or ratification of any transactions between the Company and any related persons that are required to be disclosed pursuant to Item 404 of Regulation S-K, and reviews and approves all such transactions. “Related person” and “transaction” shall have the meanings given to such terms in Item 404 of Regulation S-K, as amended from time to time. No director will participate in any discussion or approval of such a transaction for which he or she is a related party, except that the director shall provide all material information concerning the transaction to the Board. In determining whether to approve or ratify a particular transaction, the Board will review all material facts of such transactions.
The Company pays Mr. Capote, the Company’s Secretary and Vice President, consulting fees for acting in such capacities. The Company incurred such expenses in the amount of $18,000 and $18,000 for the years ended December 31, 2022 and December 31, 2021, respectively.
38
The Company pays Momentum, a Singapore private company owned and controlled by Dr. Lin Kok Peng, Chairman and CEO of the Company, fees for the rental of office space and for administrative services in its Singapore headquarters. The Company incurred such expense in the amount of $44,847 and $47,342 for the years ended December 31, 2022 and 2021, respectively.
In November 2015, MQL entered into a Software License Agreement with NAML, a company owned and controlled by NAHD's Chairman and CEO, Dr. Lin Kok Peng. In consideration of MQL's performance, NAML agreed to pay MQL in accordance with the following provisions:
License 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: -
oWhere the AUM from all end users is less than $10 million, 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 client, and if MQL and the client are unable to agree on such apportionment, MQL shall still be entitled to 15% only of the profits from the end users' accounts;
oOn every anniversary date of the Software License Agreement, parties will review the performance of the licensed software and may by mutual agreement between MQL and the client vary the license fee.
(ii)Time & Material Fees: The charges for performance of any T&M tasks due to work orders will be billed monthly for charges incurred in the previous monthly period and are due and payable within 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 the prior approval of client.
MQL had an accounts receivable balance with NAML of $0, and $0 as of December 31, 2022 and 2021, respectively.
Pursuant to the MQL Agreement, and the First MQL Addendum, relating to the Company's acquisition of issued and outstanding shares of MQL in exchange for new restricted shares of common stock of the Company, if the average trading price of the Company's shares based on the 7 days closing price over the period immediately before the second anniversary date (August 25, 2017) of this Agreement and the 7th day falling on the first anniversary date of the agreement is below $1.00, the Company shall issue additional shares to Anthony Ng Zi Qin to make up the difference between the value of the Consideration Shares based on such 7 days closing history and the sum of SGD 10,000,000. The difference between the fair value of the assets acquired and the value of the shares swapped ($4,099,837) as well as the negative change in the common stock share price ($2,894,580) for the year ended December 31, 2016 created a contingent liability in amount of $6,994,417 as of December 31, 2016. The negative change in common share price occurred because the stock price decreased as of December 31, 2016. The Company recorded a loss in change in fair value of $1,335,960 for the year ended December 31, 2016.
On November 10, 2017, the Company and Anthony Ng Zi Qin entered into the Second MQL Addendum, pursuant to which the parties agreed that the Company would issue an aggregate of 3,339,900 shares in satisfaction of the shortfall in the value of the shares issued pursuant to the MQL Agreement, as amended. On December 12, 2017, the common stocks restricted shares were issued. As a result of this transaction, Anthony Ng Qin became a 14.89% shareholder. Thereby he is deemed a related party with significant influence. Also, this transaction created a cancellation of contingency of $5,158,387 that was recorded as a capital transaction for the year ended December 31, 2017. On December 12, 2017, there was positive change in the common share price occurred because of the stock price increase as of December 12, 2017. The Company recorded a gain in change of fair value $1,220,919.
39
The Company has two directors, including Lin Kok Peng, who is the Chief Executive Officer and controlling shareholder of the Company, and Jose A Capote, as of March 3, 2023 upon the resignation of Allister Lim Wee Sing. Mr. Lim was the only director that qualifies as an independent director, as defined in Rule 5605(a)(2) of the NASDAQ Listing Rules.
ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES. |
Independent Registered Public Accounting Firm's Fees
Aggregate fees for professional services rendered for the Company by MaloneBailey, LLP, the Company’s independent registered public accounting firm, for the fiscal years ended December 31, 2022 and 2021 were as follows:
|
| December 31, 2022 |
|
| December 31, 2021 |
| ||
Audit Fees |
| $ | 31,500 |
|
| $ | 28,500 |
|
Audit Related Fees |
|
| - |
|
|
| - |
|
Tax Fees |
|
| - |
|
|
| - |
|
All Other Fees |
|
| - |
|
|
| - |
|
TOTAL |
| $ | 31,500 |
|
| $ | 28,500 |
|
Audit Fees. Audit fees consisted of the fees billed for professional services rendered for the audit of our annual financial statements and the reviews of the financial statements included in our Quarterly Reports on Form 10-Q.
Audit-related Fees. During the 2022 and 2021 fiscal years, our independent registered public accountants did not provide any assurance and related services that are reasonably related to the performance of the audit or review of our financial statements that are not reported under the caption “Audit Fees” above. Therefore, there were no audit-related fees billed or paid during the 2022 and 2021 fiscal years.
Tax Fees. Tax fees consists of fees billed for professional services rendered for tax compliance, tax advice and tax planning. Included in such tax fees were fees for preparation of our tax returns and consultancy and advice on other tax planning matters. As our independent registered public accountants did not provide any services to us for tax compliance, tax advice and tax planning during the fiscal years ended December 31, 2022 and 2021, no tax fees were billed or paid during those fiscal years.
All Other Fees. Our independent registered public accountants did not provide any products and services not disclosed in the table above during the 2022 and 2021 fiscal years. As a result, there were no other fees billed or paid during those fiscal years.
Audit Committee Pre-approval Policies and Procedures
The Company has not designated a formal audit committee. However, the entire Board of Directors, in the absence of a formally appointed audit committee, acts as the Company's audit committee. Our Board of Directors has considered whether the provision of any non-audit services is compatible with maintaining auditor independence and determined that such services are appropriate. Before auditors are engaged to provide us audit or non-audit services, such engagement is approved by Board of Directors.
The Company's principal accountant did not engage any other persons or firms other than the principal accountant's full-time, permanent employees.
40
PART IV
ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES. |
(a)The following documents are filed as part of this Annual Report on Form 10-K:
1.Financial statements
See index to financial statements and supporting schedules on page F-1 of this Annual Report on Form 10-K.
2.Financial statement schedules
Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.
3.Exhibits
The following exhibits are filed as part of this Annual Report on Form 10-K or are incorporated by reference:
Exhibit No. |
| Description |
2.1 |
| |
2.2 |
| |
2.3 |
| Addendum to Magdallen Quant Pte Ltd Share and Purchase Agreement, dated November 10th, 2017 between New Asia Holdings Inc and Anthony Ng Zi Qin (3) |
3.1 |
| |
3.2 |
| |
3.3 |
| |
3.4 |
| |
3.5 |
| |
3.6 |
| |
3.7 |
| |
10.1 |
| |
10.2 |
| |
10.3 |
| |
21.1* |
| |
31.1* |
| Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
31.2* |
| Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
32.1** |
|
41
|
|
|
101.INS* |
| Inline XBRL Instance Document |
101.SCH* |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL* |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104* |
| Cover page interactive data file (formatted as inline XBRL and contained in Exhibit 101). |
_____________
(1)Incorporated by reference to Exhibit 2.1 to the registrant’s current report on Form 8-K filed with the Securities and Exchange Commission on September 1, 2015.
(2)Incorporated by reference to Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 21, 2016.
(3)Incorporated by reference to Exhibit 10.1 to the registrant’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on November 20, 2017.
(4)Incorporated by reference to the relevant exhibit to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on April 8, 2010.
(5)Incorporated by reference to the relevant exhibit to Form 8-K filed with the Securities and Exchange Commission on December 14, 2011.
(6)Incorporated by reference to the relevant exhibit to Form 8-K filed with the Securities and Exchange Commission on December 14, 2011.
(7)Incorporated by reference to the relevant exhibit to Form 8-K filed with the Securities and Exchange Commission on February 17, 2015.
(8)Incorporated by reference to Exhibit 3.1 to the registrant’s current report on Form 8-K filed with the Securities and Exchange Commission on July 13, 2020.
(9)Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed with the Securities and Exchange Commission on August 19, 2020.
(10)Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed with the Securities and Exchange Commission on October 5, 2020.
(11)Incorporated by reference to Exhibit 10.1 to the registrant’s current report on Form 8-K filed with the Securities and Exchange Commission on October 16, 2020.
*Filed herewith.
**Furnished herewith.
(b) The exhibits filed with this Annual Report on Form 10-K are listed under Item 15(a)(3), immediately above.
(c) None.
ITEM 16. FORM 10-K SUMMARY
None.
42
SIGNATURES
In accordance with section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 15, 2023
| New Asia Holdings, Inc. | |
|
|
|
| By: | /s/ Lin Kok Peng |
|
| Lin Kok Peng |
|
| Chief Executive Officer and Chief Financial Officer
|
In accordance with the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature |
| Title | Date |
/s/ Lin Kok Peng |
| Chief Executive Officer, Chief Financial Officer, Chairman of the Board and Director (principal executive officer, principal financial officer and principal accounting officer) | May 15, 2023 |
Lin Kok Peng |
|
|
|
|
|
|
|
/s/ Jose A. Capote |
| Vice President, Corporate Secretary and Director | May 15, 2023 |
Jose A. Capote |
|
|
|
43
NEW ASIA HOLDINGS, INC.
Contents |
| Page |
|
|
|
Report of Registered Independent Certified Public Accounting Firm (PCAOB ID |
| F-2 |
|
|
|
Consolidated Financial Statements |
|
|
Consolidated Balance Sheets as of December 31, 2022 and 2021 |
| F-3 |
| F-4 | |
| F-5 | |
Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 |
| F-6 |
| F-7 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
New Asia Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of New Asia Holdings, Inc. and its subsidiary (collectively, the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Matter
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ MaloneBailey, LLP
We have served as the Company's auditor since 2016.
May 15, 2023
F-2
NEW ASIA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
| December 31, 2022 |
| December 31, 2021 | |
ASSETS |
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Current Assets |
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Cash |
| $ |
| $ |
Prepaid expense |
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Total Current Assets |
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Other Assets |
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Deposit |
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| ||
Total Other Assets |
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TOTAL ASSETS |
| $ |
| $ |
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LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
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Current Liabilities |
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Accounts payable and accrued liabilities |
| $ |
| $ |
Advance from shareholder |
|
| ||
Total Current Liabilities |
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Total Liabilities |
| $ |
| $ |
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Stockholders' Deficit |
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Preferred stock, $ |
| $ |
| $ |
Common stock, $ |
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Additional paid in capital |
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Accumulated deficit |
| ( |
| ( |
Accumulated other comprehensive loss |
| ( |
| ( |
Total Stockholders' Deficit |
| $( |
| $( |
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT |
| $ |
| $ |
The accompanying notes are an integral part of these consolidated financial statements.
F-3
NEW ASIA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
| For the Year Ended |
| For the Year Ended |
| December 31, 2022 |
| December 31, 2021 | |
Operating expenses |
|
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Professional fees |
| $ |
| $ |
Outside service |
|
| ||
General & Administrative expenses |
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Total operating expense |
| $ |
| $ |
Loss from operations |
| $( |
| $( |
Loss before income taxes |
| ( |
| ( |
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Provision for income taxes |
|
| ||
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Net loss |
| $( |
| $( |
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Foreign currency translation loss |
| ( |
| ( |
Total comprehensive loss |
| ( |
| ( |
Net loss per common share-basic and fully diluted |
| $( |
| $( |
|
|
|
|
|
Weighted average common shares outstanding-basic and diluted |
| $ |
| $ |
The accompanying notes are an integral part of these consolidated financial statements.
F-4
NEW ASIA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021
| Common Stock |
|
|
|
| |
Shares | Amount | Additional Paid in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | Total | |
Balance, December 31, 2020 | ( | ( | ||||
Foreign currency translation adjustment |
|
|
|
| ( | ( |
Net loss for the year ended December 31, 2021 |
|
|
| ( |
| ( |
Balance, December 31, 2021 | ( | ( | ( | |||
Foreign currency translation adjustment |
|
|
|
| ( | ( |
Net loss for the year ended December 31, 2022 |
|
|
| ( |
| ( |
Balance, December 31, 2022 | ( | ( | ( | |||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
NEW ASIA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
| For the Year Ended |
| For the Year Ended |
| December 31, 2022 |
| December 31, 2021 | |
Cash flows from operating activities |
|
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Net loss |
| $( |
| $( |
Changes in operating assets and liabilities: |
|
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Prepaid expenses |
|
| ( | |
Accounts payable and accrued liabilities |
|
| ||
Net cash used by operating activities |
| ( |
| ( |
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Cash flows from financing activities |
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Advance from shareholder |
|
| ||
Repayment to shareholder |
| ( |
| ( |
Net cash provided by (used in) financing activities |
|
| ( | |
Effect of exchange rate on cash |
| ( |
| ( |
Net decrease in cash |
| ( |
| ( |
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Cash at beginning of year |
|
| ||
Cash at end of year |
| $ |
| $ |
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Supplemental disclosure of cash flow information: |
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Interest paid |
| $ |
| $ |
Taxes paid |
| $ |
| $ |
The accompanying notes are an integral part of these consolidated financial statements.
F-6
NEW ASIA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2022, and 2021
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 because of approximately
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 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 quarters the Company has been focusing on developing new business opportunities, including exploring potential new acquisition. In February 2023, the Company officially dissolved Magdallen Quant Pte Ltd.
The accompanying audited financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).
Basis of Presentation
The Company’s consolidated financial statements are expressed in U.S. Dollars and are presented in accordance with U.S. GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”). The Company’s fiscal year end is December 31.
Principles of Consolidation
The consolidated financial statements as of December 31, 2022 and 2021, and for the years then ended, include the accounts of its wholly owned subsidiary, Magdallen Quant Pte Ltd., which was dissolved in February 2023. All significant intercompany transactions have been eliminated.
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. 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 year ended December 31, 2022; however, actual results could differ from those estimates and there may be changes to our estimates in future periods.
F-7
NEW ASIA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2022, and 2021
Foreign Currency
The functional currency of our foreign subsidiary is their respective local currency. The financial statements of the foreign subsidiary are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, stockholders’ equity at the historical rates of exchange and income and expense amounts at average rates prevailing throughout the period. Translation adjustments resulting from the translation of the subsidiary’ accounts are included in “Accumulated other comprehensive income (loss),” a separate component of stockholders’ equity. The applicable exchange rate on December 31, 2022, closed at $1 = 1.3401 SGD and December 31, 2021 closed at $1 = 1.3484 SGD.
Cash
All highly liquid investments with maturities of three months or less are considered to be cash equivalents. At December 31, 2022 and December 31, 2021, the Company had no cash equivalents.
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash, prepaid expense, deposit, accounts payable and accrued liabilities, and advances from shareholder. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates, unless otherwise disclosed in these financial statements.
Income Taxes
Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax, assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of December 31, 2022 and 2021, there have been no interest or penalties incurred on income taxes.
Basic Income (Loss) Per Share
Basic income (loss) per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of December 31, 2022 and 2021.
Related Parties
The Company follows the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions. See note 5.
Recent Accounting Pronouncements
The Company does not expect any recent accounting pronouncements to have a material impact to its financial position or result of operations.
F-8
NEW ASIA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2022, and 2021
Note 2: Going Concern
The accompanying 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: Income Taxes
As of December 31, 2022, the Company had net operating loss carry forwards of approximately $
The 2017 Act reduces the corporate tax rate from
The 2020 CARES Act provides for a carryback of any NOLs arising in a taxable year beginning after December 31, 2017, and before January 1, 2021, to each of the five taxable years preceding the taxable year in which the loss arises (carryback period). As a result of that amendment, taxpayers take into account such NOLs in the earliest taxable year in the carryback period, carrying forward unused amounts to each succeeding taxable year. The CARES Act does not have a material impact to the Company’s financial position or result of operations.
The provision for federal income tax consists of the following for the twelve months ended:
| December 31, 2022 |
|
| December 31, 2021 |
| ||
Federal income tax benefit attributable to: |
|
|
|
|
|
| |
Current operations |
| $ |
|
| $ |
| |
Less: valuation allowance |
| ( |
|
| ( |
| |
|
|
|
| ||||
The cumulative tax effect at the expected rate of 21% of significant items comprising our net deferred tax amount is as follows:
| December 31, 2022 |
|
| December 31, 2021 |
| |
Deferred tax asset attributable to: |
|
|
|
|
|
|
Net operating loss carryover |
| $ |
|
| $ |
|
Less: valuation allowance |
| ( |
|
| ( |
|
Net deferred tax asset |
| $ |
|
| $ |
|
F-9
NEW ASIA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2022, and 2021
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $12.5 million for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, the net operating loss carry forwards may be limited to use in future years.
As of December 31, 2022, in accordance with the Internal Revenue Service (“IRS”) Assessment Statute of Limitations, the IRS has the ability to audit or assess the Company’s tax returns on the basis of the following schedule:
Year | End of IRS Assessment |
2019 | |
2020 | |
2021 | |
2022 |
Note 4: 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 July 8, 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 December 31, 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 will be effected 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
The Global Crypto Equity Purchase Agreement will terminate (i) upon the completion of the full Share Purchase, or (ii) on September 18, 2021. If the Global Crypto Equity Purchase Agreement terminates on September 18, 2021, prior to completion of the full Share Purchase, no additional shares may be purchased under the Global Crypto Share Purchase Agreement.
Global Crypto did not complete the full Share Purchase as of September 18, 2021, and as a result 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 December 31, 2022 and 2021, 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 December 31, 2022 and 2021, the advances remain as an interest-free loan to the Company. See Note 5.
F-10
NEW ASIA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2022, and 2021
Note 5: Convertible Advances from Shareholder and other Related Party Transactions
During the year ended December 31, 2022, the Company repaid $
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 $
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 shall be 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 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 December 31, 2022, Lin Kok Peng had not exercised its option to convert the Advances into shares of common stock. Accordingly, the total of $
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 service for acting as the Company’s Secretary and Vice President in the amount of $
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NEW ASIA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2022, and 2021
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, fees for the rental of office space and for administrative services in its Singapore Headquarters. The Company has incurred fees of $
Note 6: 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 $
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 $
Note 7: Subsequent Event
In April 2023, the Company signed a Letter of Intent related to a potential acquisition of a company involved in a manufacturing utilizing additive technologies to deliver parts on-demand.
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