GENERAL
The Company was initially incorporated as Kendrex Systems, Inc in Nevada. on
February 23, 1987. Kendrex Systems, Inc. changed to HLHKWorld Group, Inc. on
November 18, 1996. HLHK World Group, Inc. changed to Trimfast Group,
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Inc. in Nevada on September 4, 1998. On December 21, 1998, the Company completed
a 1 for 10 reverse stock split. In 2001 the Company filed for protection under
Chapter 7 of the United States Bankruptcy Code and ceased all activities. On
October 21, 2002, the Company completed a 1 for 200 reverse stock split. During
the period 2002 thru 2006, the Company was known as TrimFast Group, Inc. On
November 9, 2004, the Company completed a 1 for 9 reverse stock split. On
November 21, 2006, in conjunction with a one for 30 share reverse split of it's
common stock, the Company changed its' name to EDollars, Inc. On September 18,
2007 the Company changed its' name to Forex, Inc. and completed a one for 20
reverse stock split. On March 26, 2008, the Company changed its' name to
Petrogulf, Inc. On April23, 2012, the Company acquired 100% of Neeksom, Inc., a
Nevada Corporation. On November 26, 2013 the Company changed its name to
Novagant, Inc. During 2014, the Company exited its business products business
and returned the Neeksom, Inc. subsidiary to its prior owners. The Company
previously elected to pursue selling financial products. Trimfast Group, Inc.
changed to Edollars, Inc. in Nevada on November, 2006. Edollars, Inc. changed to
Forex, Inc. in June, 2007. Forex, Inc. changed to Petrogulf Corp. on March26,
2008. Petrogulf Inc. changed to Novagant, Inc. on November 26, 2013. On January
1, 2014, the Company changed its symbol from PTRF to NVGT.
In 2015, the Company ceased operations and reporting. On December 9, 2019, in
Case No. A-19-804454-B, Eight Judicial DistrictCourt, Clark County, Nevada,
GrassRoots Advisory, LLC ("GrassRoots") was granted custodianship of the
Company. On January 8, 2020, GrassRoots sold the controlling interest in the
Company to Alexander M. Woods-Leo.
On January 8, 2020, GrassRoots agreed to assist Alexander M. Woods-Leo in
acquiring control block of a custodian PubCo OTC: NVGT (Novagant Corp). Doug
DiSanti Agrees to give 500,000 Preferred B. Shares to Alexander M Woods-Leo in
exchange for the amount of $15,000 which was paid. The Preferred B shares will
be Non-convertible and equal to 1,000 common votes per 1 Preferred share. A
total of 500,000,000 common votes will be given to Alexander M. Woods-Leo.
GrassRoots sold the controlling interest in the Company to Alexander M.
Woods-Leo.
As of April 21, 2021, Pacific Corporate Advisory Services Limited who
represents, Mr. WeiQun Chen, purchased the Preferred B Control block from Mr.
Alexander M. Woods-Leo. As per escrow agreement, Mr. Alexander M. Woods- Leo had
submitted the proper stock power with respect to the change of control to
escrow. On May 6, 2021, Mr. Alexander M. Woods-Leo resigned as an officer and
director and appointed Mr. WeiQun Chen as Chairman, CEO and Director, Mr.
HongZhen Xu as Secretary, Treasurer and Director, and Haiyan Zeng as a Director.
On September 21, 2021, the Company entered into a Share Exchange Agreement (the
"Exchange Agreement") with Ever Full Logistics Limited ("EFLL"), registered and
incorporated as a private limited liability company in Hong Kong, and WeiQun
Chen ("Chen"), the sole shareholder of EFLL. Upon the closing of the share
exchange transaction contemplated under the Exchange Agreement, Chen transferred
all of his share capital in EFLL to the Company in exchange for 300,000,000
shares of common stock of the Company, thus causing EFLL to become a direct
wholly-owned subsidiary of the Company. The Company now operates all of its
business through EFLL in Hong Kong only. Our corporate organizational chart is
shown as below.
[[Image Removed: Picture]]
Business Overview
EFLL is a one-stop logistics service provider in Hong Kong, offering logistics
services to meet the needs of our customers' supply chains, which include
transportation only. We are particularly specialized in Fast Moving Consumer
Goods (FMCG) and Health Care Products. The scope of logistics services that we
provide to each customer varies as different customers often require different
kinds of services. The Company's management believes that technology input and
service quality are always our core competence to success in the future. EFLL
has continued to enhance its IT system to improve its operating efficiency and
effectiveness. In the last quarter of 2020, EFLL upgraded its transportation
management system ("TMS") by adding a track and trace function. This TMS
provides transparency of our logistic services. The customers can timely track
and trace the status and records of the delivery of their goods. This is a chart
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that shows our corporate structure of EFLL, which is a direct wholly-owned
subsidiary of the Company Novagant Corp. and it also shows all directors and
employees relates to the structure of EFLL.
Novagant Corp. 100% > Ever Full Logistics Limited
Directors
operation clerk account clerk 10 freelance sales representatives
CRITICAL ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES
Our discussion and analysis of our financial condition and results of operations
is based upon our consolidated financial statements, which have been prepared in
accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The
preparation of these consolidated financial statements requires us to make
estimates, judgments and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, and the related disclosure of contingent
assets and liabilities. We base our estimates on historical experience and on
various other assumptions that we believe are reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.
An accounting policy is considered to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used, or changes in the accounting estimate that are reasonably
likely to occur, could materially impact the consolidated financial statements.
We believe that the following critical accounting policies reflect the more
significant estimates and assumptions used in the preparation of the
consolidated financial statements.
Revenue recognition
ASU No. 2014-09, Revenue from Contracts with Customers ("Topic 606"), became
effective for the Company on April 1, 2018 and were adopted using the modified
retrospective method. The adoption of the new revenue standards as of April 1,
2018 did not change the Company's revenue recognition as there were no revenues
during the period.
Under the new revenue standards, the Company recognizes revenues 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.
The Company's revenue is derived from provision of air or ocean freight services
to the customers located in Hong Kong, and are recognized when the services are
performed in accordance with the agreed terms.
Accounts receivable
The Group reviews accounts receivable periodically for collectability and
establishes an allowance for doubtful accounts and records bad debt expense when
deemed necessary. The allowance for doubtful accounts is maintained to provide
for losses arising from customers' inability to make required payments. If there
is deterioration of our customers' credit worthiness and/or there is an increase
in the length of time that the receivables are past due greater than the
historical assumptions used, additional allowances may be required. The
management of the Company considered as of December 31, 2022, and March 31,
2022, no allowance for doubtful accounts is necessary.
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RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Business Acquired
On September 21, 2021, the Company entered into a Share Exchange Agreement (the
"Exchange Agreement") with Ever Full Logistics Limited ("EFLL") and WeiQun Chen
("Chen"), the sole shareholder of EFLL. Upon the closing of the share exchange
transaction contemplated under the Exchange Agreement, Chen transferred all of
his share capital in EFLL to the Company, thus causing EFLL to become a direct
wholly-owned subsidiary of the Company. The Company now operates all of its
business through EFLL. EFLL is engaged in provision of logistic services.
Results of Operations during the Nine months ended December 31, 2022 Compared to
the Nine months ended December 31, 2021
Revenue
During the nine months ended December 31, 2022, we have revenue of $140,256,
compare to $77,595 during the nine months ended December 31, 2021, increased of
$62,661 or 81% due to increase in demand for services.
Operating Expenses
During the nine months ended December 31, 2022, we have operating expenses of
$66,654, compare to $39,906 during the nine months ended December 31, 2021,
increased of $26,748 or 67%. The increase mainly due to increase in
telecommunication and IT expenses of $1,262, salaries and wages of $8,560 and
professional fee of $17,051, and set off with decrease in medical expenses of
$149 and staff welfare of $1,164.
Net Loss
During the nine months ended December 31, 2022, we incurred a net loss of
$13,896, compare to a net loss of $19,488 during the nine months ended December
31, 2021, decreased of $5,592. The decrease is mainly due to declining in
revenue.
Results of Operations during the Nine months ended December 31, 2022 Compared to
the Nine months ended December 31, 2021
Revenue
For the nine months ended December 31, 2022 and 2021, our total revenue amounted
to $140,256 and $77,595. The increase was because of more orders in
transportation. The following table sets out the breakdown of our revenue by the
type of logistics service during the nine months ended December 31, 2022 and
2021:
Nine months ended December 31, Nine months ended December
2022 31, 2021
USD % USD %
Transportation - Air 29,254 21 10,863 14
Freight
Transportation - Ocean 111,002 79 66,732 86
Freight
140,256 100 77,595 100
We provide logistics services for Hong Kong customers and arrange the goods to
be sent out from Hong Kong, Korea, Taiwan to Intra-Asia region, Europe and The
US. During the nine months ended December 31, 2022, our air freight revenue in
transportation has increased to $29,254 comparing from $10,863 for the nine
months ended December 31, 2021. The increases in revenue were mainly due to more
demand for Air Freight services from our customers. In addition, during the nine
months ended December 31, 2022, our ocean freight revenue in transportation has
increased to $111,002
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comparing from $66,732 for the nine months ended December 31, 2021. The
increases in revenue were due to the EFLL's local customers has more demand for
the ocean freight logistics services.
Air Freight
For air freight, we will send the booking details and draft airway bill to the
customers for confirmation. Then we will arrange pick of the goods and measure
the correct kilograms for customers confirmation. At last, we will arrange the
goods to the airline for upload to the cargo plane at the airport.
Ocean Freight
Customers will first provide us a booking form and information of the bill of
lading, which includes the shipping details, like details of the products,
destination, carrier and details of the consignee. We will then arrange a pick
up of the goods at the customers' warehouse by a third party local
transportation provider. We will store the goods at the public warehouse where
we will measure the accurate cubic metres ("CBM") for final determination of the
correct ocean freight. Upon receipt of the confirmation of the final CBM with
the customers, we will arrange upload of goods to the container at the port and
make sure the shipment arrive the destination port on time. This for Loose
Cargo Load service ("LCL").
For Full Container Load service, it is more or less the same as LCL, the only
different procedure is that we will arrange the container directly to the
customers' warehouse for the upload of the goods. We need not measure the CBM as
the customers pay the fee of using the whole container.
Cost of services
Our direct cost of services was mainly in the air/ocean freight service
provision, it has increased from $57,076 for the nine months ended December 31,
2021 to $87,331 for the nine months ended December 31, 2022. The increase was in
line with the increase in revenue.
Expenses
For the nine months ended December 31, 2022, the Company incurred $66,821 of
operating expenses which consisted of general and administrative expenses of
$66,654 and finance costs of $167. For the nine months ended December 31, 2021,
we incurred operating expenses in the amount of $40,007 which consisted of
general and administrative expenses of $39,906 and finance costs of $101. The
increase is due to the increase in activity. Novagant, the public entity, had no
operations from April 2022 through December 31, 2022. All business activity
occurred within EFLL, which was acquired on September 21, 2021.
Net Loss
For the nine months ended December 31, 2022 we had a net loss of $13,896. We had
net loss of $19,488 for the nine months ended December 31, 2021. The decrease in
loss is due to the increase in revenue during the period.
Liquidity
As of December 31, 2022, we had $48,490 in deposits, accounts receivable and
cash and cash equivalents, and current liabilities of $294,587. As of December
31, 2021, we had $52,872 in deposits, accounts receivables and cash and cash
equivalents, and current liabilities of $247,344.
To the extent that our capital resources are insufficient to meet planned
operating requirements, we will seek additional funds through equity or debt
financing, collaborative or other arrangements with corporate partners,
licensees or others, and from other sources, which may have the effect of
diluting the holdings of existing shareholders. The Company has no current
arrangements with respect to, or sources of, such additional financing and we do
not anticipate that existing shareholders will provide any portion of our future
financing requirements.
No assurance can be given that additional financing will be available when
needed or that such financing will be available on terms acceptable to the
Company. If adequate funds are not available, we may be required to delay or
terminate expenditures for certain of its programs that it would otherwise seek
to develop and commercialize. This would have a material adverse effect on the
Company.
Off-Balance Sheet Arrangements
As of December 31, 2022 and March 31, 2022, we did not have any off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K
promulgated under the Securities Act of 1934.
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We do not have any interest in any unconsolidated entity that provides
financing, liquidity, market risk or credit support to us or engages in leasing
or hedging or research and development or other services with us.
Critical Accounting Policies
Our significant accounting policies are described in the notes to our financial
statements for the nine months ended December 31, 2022 and 2021, and are
included elsewhere in our registration statement.
GOING CONCERN
The accompanying financial statements have been prepared assuming that the Group
will continue as a going concern. As shown in the accompanying financial
statements, we have a net deficit of $236,817 as of December 31, 2022, which
raise substantial doubt about the Group's ability to continue as a going
concern.
Management believes the Group will improve the operation and generated positive
cash inflows from operating activities for the foreseeable future. Management
plans to seek additional debt and/or equity financing for the Group but cannot
assure that such financing will be available on acceptable terms. The Group's
continuation as a going concern is dependent upon its ability to ultimately
attain profitable operations, generate sufficient cash flow to meet its
obligations, and obtain additional financing as may be required.
The accompanying consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty. There can be
no assurance that management will be successful in implementing its business
plan or that the successful implementation of such business plan will actually
improve our operating results.
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NOVAGANT CORP. 
