Form 10-Q X Metaverse Inc. For: Jun 30
Tweet
Share
E-mail
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the Quarterly Period ended
For the transition period from __________________ to __________________
Commission File Number:
(Name of Small Business Issuer in its Charter)
|
(State or Other Jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices)
(Issuer’s Telephone Number)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| N/A | N/A | N/A |
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Smaller Reporting Company | |
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).
Number of shares outstanding of each of the issuer’s classes of common equity, as of August 15, 2022: shares of Common Stock, par value US $0.001.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
The discussion contained in this 10-Q under the Securities Exchange Act of 1934, as amended, contains forward-looking statements that involve risks and uncertainties. The issuer’s actual results could differ significantly from those discussed herein. These include statements about our expectations, beliefs, intentions or strategies for the future, which we indicate by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “we believe,” “the Company believes,” “management believes” and similar language, including those set forth in the discussions under “Notes to Financial Statements” and “Management’s Discussion and Analysis or Plan of Operation” as well as those discussed elsewhere in this Form 10-Q. We base our forward-looking statements on information currently available to us, and we assume no obligation to update them. Statements contained in this Form 10-Q that are not historical facts are forward-looking statements that are subject to the “safe harbor” created by the Private Securities Litigation Reform Act of 1995.
| 2 |
TABLE OF CONTENTS
| 3 |
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
X Metaverse Inc.
Condensed Balance Sheets
As of June 30, 2022 (unaudited) and December 31, 2021 (audited)
(Stated in US Dollars)
| At June 30, | At December 31, | |||||||
| 2022 | 2021 | |||||||
| $ | $ | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | ||||||||
| Prepaid expenses | ||||||||
| Total Current Assets | ||||||||
| TOTAL ASSETS | ||||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| LIABILITIES | ||||||||
| Current Liabilities: | ||||||||
| Accrued expenses | ||||||||
| Amounts due to related parties | ||||||||
| Total Current Liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Common stock Par value: US$ Authorized: 2020 – shares - Issued and outstanding: June 30, 2022 and December 31, 2021 – shares | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
See accompanying notes to condensed financial statements.
| 4 |
X Metaverse Inc.
Condensed Statements of Operations
For the Six and Three Months Periods Ended June 30, 2022 and 2021
(Stated in US Dollars)
(Unaudited)
| For the Three months ended June 30, | For the Six months ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| $ | $ | $ | $ | |||||||||||||
| Net sales | ||||||||||||||||
| Cost of sales | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Professional fees | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Net loss and comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss per share of common stock - Basic | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss per share of common stock - Diluted | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Weighted average shares of common stock - Basic | ||||||||||||||||
| Weighted average shares of common stock -Diluted | ||||||||||||||||
See accompanying notes to condensed financial statements.
| 5 |
X Metaverse Inc.
Condensed Statements of Cash Flows
For the Six and Three Months Periods Ended June 30, 2022 and 2021
(Stated in US Dollars)
(Unaudited)
| For the Six Months Periods Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| $ | $ | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Adjustments to reconcile Net Income | ||||||||
| Debt conversion to equity | ||||||||
| Changes in current assets and liabilities | ||||||||
| Increase/(decrease) in amount due to related parties | ( | ) | ||||||
| (Increase)/decrease in prepaid expenses | ||||||||
| Increase in accrued expenses and other payables | ||||||||
| Net cash (used in)/provided by operating activities | ||||||||
| Net (decrease)/increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Cash and cash equivalents at end of the period | ||||||||
| Supplementary disclosures of cash flow information: | ||||||||
| Cash paid for interest | ||||||||
| Cash paid for income taxes | ||||||||
See accompanying notes to condensed financial statements.
| 6 |
X Metaverse Inc.
Condensed Statements of Change in Stockholders’ Deficit
(Stated in US Dollars)
(Unaudited)
| Common Stock | Additional Paid-In | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||
| Balance, December 31, 2021 | ( | ) | ( | ) | ||||||||||||||||
| Net loss and comprehensive loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance, June 30, 2022 | ( | ) | ( | ) | ||||||||||||||||
| Balance, April 1, 2022 | ( | ) | ( | ) | ||||||||||||||||
| Net loss and comprehensive loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance, June 30, 2022 | ( | ) | ( | ) | ||||||||||||||||
| Balance, December 31, 2020 | ( | ) | ( | ) | ||||||||||||||||
| Net loss and comprehensive loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance, June 30, 2021 | ( | ) | ( | ) | ||||||||||||||||
| Balance, April 1, 2021 | ( | ) | ( | ) | ||||||||||||||||
| Net loss and comprehensive loss | – | ( | ) | ( | ) | |||||||||||||||
| Balance, June 30, 2021 | ( | ) | ( | ) |
See accompanying notes to condensed financial statements.
| 7 |
X METAVERSE INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2022
(Unaudited)
1. Basis of presentation
The accompanying unaudited condensed financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
In the opinion of management, the balance sheet as of December 31, 2021, which has been derived from audited financial statements, and these unaudited condensed financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended June 30, 2022 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2022 or for any future period.
These unaudited condensed financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2021.
2. Organization and business background
X Metaverse Inc. (the “Company”), formerly known as Mi1 Global Telco., Inc., was organized under the laws of the State of Nevada on January 23, 2006.
The Company was principally engaged in advertisements on websites and applications. The Company’s original goal was to become a major network on travel, food, entertainment, activities and city life. The Company launched the website www.drinkeat.com, which provides reviews of restaurants in Hong Kong. Due to the drop in readership and advertising, the Company decided to terminate its website operation in May 2018. The Company is actively looking for new investment opportunities and new source of revenue.
On May 1, 2017, the Company filed with the Nevada Secretary of State a certificate of amendment (the “Amendment”) to the Company’s Articles of Incorporation. The Amendment, previously approved by the Company’s board of directors on August 31, 2016 and stockholders on November 4, 2016, changed (a) the name of the Company from “Domain Extremes Inc.” to “Mi1 Global Telco., Inc.” and (b) the authorized shares of common stock, par value $0.001, from 200,000,000 shares to 1,200,000,000 shares. The Amendment became effective upon its filing. The name change will become effective with FINRA on July 19, 2017.
On October 24, 2017, the Company effectuated a reverse split of the Company’s issued and outstanding common stock on a 1 for 10,000 (1:10,000) basis, pursuant to which the authorized shares of common stock remained 1,200,000,000 shares and the par value remained $0.001. All share and earnings per share information have been retroactively adjusted to reflect the stock split in the financial statements.
On March 24, 2020, Mr. Kok Seng Yeap purchased 100% of the shares of Mi1 Global Limited, which owns 9,156 shares of the common stock of the Company. As a result, Kok Seng Yeap became the beneficial owner of 9,156 shares of the common stock of the Company. On March 24, 2020, Mr. Lim Kock Chiang resigned as the Chief Executive Officer, Chief Financial Officer, Secretary and Director of the Company, and the Board of Directors of the Company appointed Mr. Kok Seng Yeap to serve as its Director, Chief Executive Officer, Chief Financial Officer, and Secretary.
| 8 |
On June 3, 2020, the Company filed a Certificate of Amendment to its Articles of Incorporation with the State of Nevada to reflect its corporate name change to “X Metaverse Inc.”. The name change was effective as of the filing of the Certificate of Amendment with the State of Nevada. The Company is awaiting the approval of FINRA for the market effectiveness of the name change.
On June 23, 2020, Mr. Kok Seng Yeap resigned as the Chief Financial Officer the Company, and the Board of Directors of the Company appointed Mr. Lau Chew Chye to serve as its Chief Financial Officer and Director.
On December 21, 2021, the Company filed a Certificate of Amendment to its Articles of Incorporation with the State of Nevada to reflect its corporate name change from "AFF Holding Group Inc.” to “X Metaverse Inc.” The name change was effective as of the filing of the Certificate of Amendment with the State of Nevada. The Company is awaiting the approval from FINRA for the market effectiveness of the name change.
3. Going concern uncertainties
The accompanying condensed financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
As of June 30, 2022, the Company experienced an
accumulated deficit of $
These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These condensed financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.
4. Summary of significant accounting policies
The accompanying condensed financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed financial statements and notes.
Basis of Presentation
The condensed financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and are presented in US dollars.
Fiscal Year-End
The Company’s fiscal year is December 31.
| 9 |
Use of estimates
The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
The Company considers all short-term highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less to be cash equivalents.
Income taxes
Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.
Comprehensive income
ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statement of stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.
Foreign currencies translation
The functional currency of the Company is Hong Kong dollars (“HK$”). The Company maintains its financial statements in the functional currency. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.
| 10 |
For financial reporting purposes, the financial statements of the Company which are prepared using the functional currency have been translated into United States dollars. Assets and liabilities are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.
Fair value of financial instruments
The carrying value of the Company’s financial instruments (excluding short-term bank borrowing): cash and cash equivalents, accounts and retention receivable, prepayments and other receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.
Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of its obligation under finance lease and short-term bank borrowing approximate the carrying amount.
The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:
· Level 1: Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;
· Level 2: Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and
· Level 3: Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.
Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.
Revenue recognition
In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all existing revenue recognition requirements, including most industry specific guidance. This new standard requires a company to recognize revenues when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services.
The new revenue standards became effective for the Company on January 1, 2018, and were adopted using the modified retrospective method. The adoption of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the Company did not have any revenue to be recognized.
Under the new revenue standards, the revenues are recognized when its customer obtains control of promised goods or services, in an amount that reflects the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.
| 11 |
The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.
Recently issued accounting pronouncements
In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company’s financial statements and related disclosures.
In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. The Company is currently evaluating the impact that ASU 2020-06 may have on its financial statements and related disclosures when adopted.
In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes which amends ASC 740 Income Taxes (ASC 740). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company’s consolidated financial statements and related disclosures.
Management believes that other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission do not have a material impact on the Company’s present or near future financial statements.
| 12 |
5. Stockholders’ deficit
On March 7, 2017, the Company issued shares
of common stock to Azari Bin A Ghani, Mazlan Bin Muhammad, Syed Mokhtar Bin Syed Agil and Tengku Faikah Binti Tengku Ismail (10 shares
each) for a consideration of $
On April 13, 2017, the Company issued shares
of common stock to Romli Bin Che Noh, Suhaila Binti Md Arsid Arshad, Yu Ming Ngee, Ritha Tumiar Situmorang, Norizan Binti A Latif, Mohammad
Zamri Bin Wan Chik and Adicandra Manurung (10 shares each) for a consideration of $
On June 30, 2017, the Company issued shares
of common stock to Mohd Afidi Bin Abdullah, Den Wijaya, Ching Yang Det and Mohd Zaki Bin Ahmadl (10 shares each) and Johanes Abednego
(20 shares) for a consideration of $
On August 7, 2017, the Company filed a certificate of change with the Secretary of State of Nevada to effectuate a reverse stock split (the “Stock Split”) of its issued and outstanding shares of common stock on a 1-for-10,000 basis. The number of its authorized shares of common stock will remain at 1,200,000,000 shares, par value $0.001. The Stock Split became effective with FINRA on October 24, 2017 (the “Effective Date”). As of that date, every 10,000 shares of issued and outstanding common stock were converted into one share of common stock. No fractional shares were issued in connection with the Stock Split. Instead, any fractional shares were rounded up to the next whole share and a holder of record of old common stock on the Effective Date who would otherwise be entitled to a fraction of a share were, in lieu thereof, issued one whole share. All share and earnings per share information have been retroactively adjusted to reflect the Stock Split in the financial statements.
During the year ended December 31, 2017, the Company
has received the proceeds of $
On December 18, 2019, the investor withdrew his
subscription and the Company paid $
The Company has no stock option plan, warrants or other dilutive securities.
April 10, 2020, Mi1 Global Limited, the major
shareholder, converted certain debt of the Company in the amount of $
The Company has the authority to issue shares of common stock, $ par value. The total number of shares of the Company’s common stock outstanding as of June 30, 2022 and December 31, 2021 was , respectively.
6. Accrued expenses and other payables
Accrued expenses and other payables as of June 30, 2022 and December 31, 2021 are summarized as follows:
| Schedule of accrued expenses | At June 30, | At December 31, | ||||||
| 2022 | 2021 | |||||||
| $ | $ | |||||||
| Accrued professional fees | ||||||||
| 13 |
7. Related party transactions
During the six and three months ended June 30,
2022 the major shareholder, advanced $ and $ to pay operating expenses for the Company, respectively. During the six and three
months ended June 30, 2021 the major shareholder, advanced $
As of June 30, 2022 and December 31, 2021, the
balances were $
The amounts due to related parties as of June 30, 2022 and December 31, 2021 represent temporary advances from the Company’s major shareholder. The amounts are interest free, unsecured and no fixed repayment term.
8. Commitments and contingencies
From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there are no current matters that would have a material effect on the Company's financial position or results of operations.
9. Subsequent Events
In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred from July 1, 2022, up through the date the Company issued the interim financial statements and identified no reportable events.
| 14 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
The following discussion should be read in conjunction with the Company’s unaudited consolidated financial statements and notes thereto included in Item 1 of this report and is qualified in its entirety by the foregoing.
Forward Looking Statements
Certain statements in this report, including statements of our expectations, intentions, plans and beliefs, including those contained in or implied by “Management's Discussion and Analysis of Financial Condition and Results of Operations” and the Notes to Consolidated Financial Statements, are “forward-looking statements”, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are subject to certain events, risks and uncertainties that may be outside our control. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”, “will”, and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements. These forward-looking statements include statements of management's plans and objectives for our future operations and statements of future economic performance, information regarding our expansion and possible results from expansion, our expected growth, our capital budget and future capital requirements, the availability of funds and our ability to meet future capital needs, and the assumptions described in this report underlying such forward-looking statements. Actual results and developments could differ materially from those expressed in or implied by such statements due to a number of factors, including, without limitation, those described in the context of such forward-looking statements, our expansion and acquisition strategy, our ability to achieve operating efficiencies, our ability to successfully develop and market new websites in the greater Asian markets, the strength and financial resources of our competitors, our ability to raise sufficient capital in order to effectuate our business plan, our ability to find and retain skilled personnel and key executives, the political and economic climate in which we conduct operations and the risk factors described from time to time in our other documents and reports filed with the Securities and Exchange Commission (the “Commission”).
Overview
X Metaverse Inc. (the “Company”), formerly known as Mi1 Global Telco., Inc., was incorporated in the State of Nevada in January 2006 and is a development stage company. Our business was to develop and operate Internet websites and applications on mobile platforms. We earned revenues through advertisements on these websites and applications. Our original goal was to become a major network of consumer-based websites and applications targeting viewers in the Hong Kong and Greater China with contents on travel, food, entertainment, activities and city life. We launched the website www.drinkeat.com, which provides reviews of restaurants in Hong Kong.
We are a controlled corporation with the substantial majority of our shares held by Mi1 Global Limited (“Mi1”), a company registered in the Republic of Vanuatu. Mi1 acquired a 51% stake in our company in February 2016. As a result, there can be no assurance that our business and/or our strategy will not change over time as a result of Mi1’s interest.
| 15 |
On May 1, 2017, the Company filed a certificate of amendment to its articles of incorporation with the Secretary of State of the State of Nevada changing the Company’s name from Domain Extremes Inc. to Mi1 Global Telco., Inc. and the authorized shares of common stock, par value $0.001, from 200,000,000 shares to 1,200,000,000 shares. The name change became effective with FINRA on July 19, 2017.
Beginning on July 19, 2017, the Company’s shares of common stock began trading on the OTC Pink Marketplace under the symbol “MIGT” to reflect the Company’s new name.
On August 7, 2017, the Company filed a certificate of change with the Secretary of State of Nevada to effectuate a reverse stock split (the “Stock Split”) of its issued and outstanding shares of common stock on a 1-for-10,000 basis. The number of its authorized shares of common stock will remain at 1,200,000,000 shares, par value $0.001. The Stock Split became effective with FINRA on October 24, 2017 (the “Effective Date”). As of that date, every 10,000 shares of issued and outstanding common stock were converted into one share of common stock. No fractional shares were issued in connection with the Stock Split. Instead, any fractional shares were rounded up to the next whole share and a holder of record of old common stock on the Effective Date who would otherwise be entitled to a fraction of a share were, in lieu thereof, issued one whole share.
The Company ceased and discontinued the operations by terminating its website (www.drinkeat.com) and is exploring other business opportunities in Asia. Our goal is to become a major network of consumer-based websites and applications targeting viewers in the Hong Kong and Greater China with contents on travel, food, entertainment, activities and city life.
On March 24, 2020, Mr. Kok Seng Yeap purchased 100% of the shares of Mi1 Global Limited, which owns 9,156 shares of the common stock of the Company. As a result, Kok Seng Yeap became the beneficial owner of 9,156 shares of the common stock of the Company. Effective as of March 24, 2020, Mr. Lim Kock Chiang resigned as the Chief Executive Officer, Chief Financial Officer, Secretary and Director of the Company, and the Board of Directors of the Company appointed Mr. Kok Seng Yeap to serve as its Director, Chief Executive Officer, Chief Financial Officer, and Secretary.
On June 3, 2020, the Company filed a Certificate of Amendment to its Articles of Incorporation with the State of Nevada to reflect its corporate name change to "AFF Holding Group, Inc." .
On June 23, 2020, Mr. Kok Seng Yeap resigned as the Chief Financial Officer the Company, and the Board of Directors of the Company appointed Mr. Lau Chew Chye to serve as its Chief Financial Officer and Director.
On December 21, 2021, the Company filed a Certificate of Amendment to its Articles of Incorporation with the State of Nevada to reflect its corporate name change from "AFF Holding Group Inc.” to “X Metaverse Inc.” The name change was effective as of the filing of the Certificate of Amendment with the State of Nevada. The Company is awaiting the approval from FINRA for the market effectiveness of the name change.
| 16 |
Results of Operations for the Three Months Ended June 30, 2021 and 2020
Net Sales
We generated revenues of $nil for the six and three months ended June 30, 2022 and 2021. The reason for no revenue was mainly due to the lack of advertisers. Our principal source of revenues had been from advertising banners on our websites. As stated above, the Company terminated its website on May 25, 2018. The Company is actively looking for new investment opportunities and new source of revenue.
Net Loss
We have incurred a net loss of $28,631 and $9,329 for the six and three months ended June 30, 2022, respectively, and a net loss of $18,277 and $7,749 for the six and three months ended June 30, 2021. The increase in loss was due to less legal expenses incurred.
We incurred general, administrative and operating expenses of $28,631 for the six months ended June 30, 2022 and $18,277 for the six months ended June 30, 2021. Of these amounts, a substantial portion of our expenses for the six months ended June 30, 2022 and 2021 related to professional fees such as legal and accounting service fees, audit service fees, etc. The professional fees incurred for the six months ended June 30, 2022 and 2021 were $25,831, and $17,062, respectively.
We incurred general, administrative and operating expenses of $9,329 for the three months ended June 30, 2022 and $7,749 for the three months ended June 30, 2021. Of these amounts, a substantial portion of our expenses for the three months ended June 30, 2022 and 2021 related to professional fees such as legal and accounting service fees, audit service fees, etc. The professional fees incurred for the three months ended June 30, 2022 and 2021 were $6,529 and $6,534, respectively.
Liquidity and Capital Resources
As shown in the accompanying financial statements, the Company had an accumulated loss of $738,569 as of June 30, 2022 compared to the accumulated loss of $709,937 as of December 31, 2021. There was a working capital deficit of $391,407 on June 30, 2022 and $362,775 as of December 31, 2021. The increase of $28,632 was mainly due to the operating loss for the six months ended June 30, 2022.
At June 30, 2022 and December 31, 2021, we had cash and cash equivalents of $0. The Company does not have a bank account. The major shareholder funds the Company’s operations.
We have limited operating capital. We expect that our current capital and our other existing resources will be sufficient only to provide a limited amount of working capital, and the revenues, if any, generated from our business operations alone may not be sufficient to fund our operations or planned growth. We will likely require additional capital to continue to operate our business, and to further expand our business.
The Company is working to reduce the expenses and so we expect our cash flow needs over the next 12 months through June 2023 to be approximately $60,000. However, this amount may be materially increased if market conditions are favorable for a more rapid expansion of our business model or if we adjust our model to exploit strategic acquisition opportunities. In addition, we may require additional cash flow to support our public company reporting requirements in the United States. Although our average monthly expenditures to date have averaged around $5,000, we expect this amount to increase exponentially as our business expands. To date, we have been financed principally by our directors; however, we expect to secure third party financing or bank loans as necessary until we secure sufficient revenues, principally from advertisers on our websites, to sustain our ongoing operations.
Sources of additional capital through various financing transactions or arrangements with third parties may include equity or debt financing, bank loans or revolving credit facilities. We may not be successful in locating suitable financing transactions in the time period required or at all, and we may not obtain the capital we require by other means. Our inability to raise additional funds when required may have a negative impact on our operations, business development and financial results.
| 17 |
Off-Balance Sheet Arrangements
As of June 30, 2022, we did not have any off-balance sheet arrangements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information to be reported under this Item is not required of smaller reporting companies.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Exchange Act is recorded, processed, summarized and reported within the specified time periods. Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) (collectively, the “Certifying Officers”) are responsible for maintaining our disclosure controls and procedures. The controls and procedures established by us are designed to provide reasonable assurance that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms.
During the second quarter of 2022, our Certifying Officers evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation, the Certifying Officers concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that it is accumulated and communicated to our management, including the Certifying Officers, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. We are aware that any system of controls, however well designed and operated, can only provide reasonable, and not absolute, assurance that the objectives of the system are met, and that maintenance of disclosure controls and procedures is an ongoing process that may change over time.
| 18 |
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 1A. RISK FACTORS
The information to be reported under this Item is not required for smaller reporting companies.
ITEM 2. UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
| (1) | Exhibits: Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits following the signature page of this Form 10-Q, which is incorporated herein by reference. |
| 19 |
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| X METAVERSE INC. | ||
|
|
||
| Dated: August 15, 2022 | By: | /s/ Kok Seng Yeap |
| Kok Seng Yeap | ||
| Director, Chief Executive Officer | ||
| 20 |
INDEX TO EXHIBITS
| Exhibit No. | Description | |
| 31.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101 | The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, formatted in XBRL (eXtensible Business Reporting Language); (i) Balance Sheets at June 30, 2022 and December 31, 2021, (ii) Statement of Operations for the three months period ended June 30, 2022 and 2021, (iii) Statement of Cash Flows for the three months period ended June 30, 2022 and 2021, (iv) Statement of Stockholders’ Deficit for the period ended June 30, 2022 and (v) Notes to Financial Statements. |
| 21 |
EXHIBIT 31.1
RULE 13a-14(a)/ 15d-14(a) CERTIFICATION
For Form 10-Q for the Period Ended June 30, 2022
I, Kok Seng Yeap, certify that:
| 1 | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2022 of X Metaverse Inc. (the “registrant”); |
| 2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4 | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5 | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 15, 2022
/s/ Kok Seng Yeap
Kok Seng Yeap
Chief Executive Officer (Principal Executive Officer)
EXHIBIT 31.2
RULE 13a-14(a)/ 15d-14(a) CERTIFICATION
For Form 10-Q for the Period Ended June 30, 2022
I, Lau Chew Chye, certify that:
| 1 | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2022 of X Metaverse Inc. (the “registrant”); |
| 2 | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3 | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4 | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5 | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: August 15, 2022
/s/ Lau Chew Chye
Lau Chew Chye
Chief Financial Officer (Principal Financial Officer)
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of X Metaverse Inc. (the “Company”) for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kok Seng Yeap, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 15, 2022
| /s/ Kok Seng Yeap Kok Seng Yeap |
| Chief Executive Officer (Principal Executive Officer) |
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of X Metaverse Inc. (the “Company”) for the quarter ended June 30, 2022, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lau Chew Chye, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: August 15, 2022
| /s/ Lau Chew Chye Lau Chew Chye |
| Chief Financial Officer (Principal Financial Officer) |
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- JA Solar Joins United Nations Global Compact's "Forward Faster" Initiative
- Faraday Future Announces Werner Wilhelm as Executive Launch Director
- i3 Energy PLC Announces Notice of 2024 AGM
Create E-mail Alert Related Categories
SEC FilingsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
