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U.S. SECURITIES AND EXCHANGE COMMISSION




Washington, D.C. 20549




FORM

10-Q/A






(Amendment)








Mark One






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






For the quarterly period ended

December 31, 2021









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.




0-26675










NOVAGANT CORP.







(Exact name of registrant as specified in its charter)

























Nevada









33-0038621









19801







(State or Other Jurisdiction of





IRS Employer





Primary Standard Industrial





Incorporation or Organization)





Identification Number





Classification Code Number







NOVAGANT CORP.





Flat D, 32/F, The Masterpiece

,

18 Hanoi Road

,

Kowloon

,





Hong Kong





Tel.

852

-

93383077




(Address and telephone number of principal executive offices)





Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes



x


No


¨






Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.



















Large accelerated filer


¨





Accelerated filer


¨






Non-accelerated filer



¨





Smaller reporting company






Emerging growth company












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





Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes



No


x






Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

















Class







Outstanding as of June 22, 2022






Common Stock, $0.001






493,639,025







1










































































































PART I






FINANCIAL INFORMATION





3




ITEM 1






FINANCIAL STATEMENTS





3









CONDENSED CONSOLIDATED BALANCE SHEETS





3









CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS





4









CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY





5









CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS





6









NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





7




ITEM 2






MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





19




ITEM 3






QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





24




ITEM 4






CONTROLS AND PROCEDURES





24













PART II






OTHER INFORMATION








ITEM 1






LEGAL PROCEEDINGS





24




ITEM 2






UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





24




ITEM 3






DEFAULTS UPON SENIOR SECURITIES





24




ITEM 4






MINE SAFETY DISCLOSURES





24




ITEM 5






OTHER INFORMATION





24




ITEM 6






EXHIBITS





25









SIGNATURE





26







2












PART I. FINANCIAL INFORMATION





This Quarterly Report includes forward-looking statements within the meaning of the Securities Exchange Act of 1934 (the “Exchange Act”). These statements are based on management’s beliefs and assumptions, and on information currently available to management. Forward-looking statements include the information concerning our possible or assumed future results of operations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements also include statements in which words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “consider” or similar expressions are used.








ITEM 1.



FINANCIAL STATEMENTS









Condensed Consolidated Balance Sheets





























































































































































































December 31, 2021




March 31,




2021







US$





US$








(unaudited)





(audited)















ASSETS






















Non-Current Assets












Plant and equipment







2,928









-







Right-of-use assets







2,654









7,432








Total Non-Current Assets








5,582









7,432

















Current Assets












Deposits







1,341









1,341







Accounts receivables







13,766









-







Cash and cash equivalents







37,765









36,100








Total Current Assets








52,872









37,441

















TOTAL ASSETS








58,454









44,873

















LIABILITIES AND SHAREHOLDERS’ EQUITY






















Current Liabilities












Creditors, other payables and accrual







244,636









50,133







Lease liabilities







2,708









7,511








Total Current Liabilities








247,344









57,644

















Shareholders’ Equity











Preferred stock,


20,000,000


shares authorized










Series A Preferred stock, $


0.001


par value,


200,000


shares and


Nil


issued respectively






200







-






Series B Preferred stock, $


0.0001


par value,


500,000


shares and


Nil


issued respectively







50









-







Common stock, $


0.001


par value,

1,000,000,000

and

1,000,000,000

shares authorized, respectively,


349,989,704


and


300,000,000


shares issued, respectively







349,990









300,000







Additional paid-in capital






(

506,870

)







(

299,999

)






Accumulated deficit






(

32,260

)







(

12,772

)







Total Shareholders’ Equity







(

188,890

)







(

12,771

)
















TOTAL LIABILITIES AND SHAREHOLDER’S EQUITY








58,454









44,873






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






3












Consolidated Statements of Operations




(unaudited)


























































































































































Three months





Nine months








Ended December 31,





Ended December 31,






2021





2020





2021





2020







$




$




$





$





















Revenue – air/ocean freight service income








41,021









46,985









77,595









81,582








Cost of services – air/ocean freight service direct cost







(

31,188

)







(

27,828

)







(

57,076

)







(

45,363

)
























9,833









19,157









20,519









36,219























Operating expenses:


















General and administrative expenses







14,362









16,508









39,906









49,118







Finance costs







23









64









101









163























Total expenses








14,385









16,572









40,007









49,281























(Loss) profit before provision for income taxes







(

4,552

)








2,585








(

19,488

)







(

13,062

)





















Provision for income taxes







-









-









-









-























Net (loss) profit for the period







(

4,552

)








2,585








(

19,488

)







(

13,062

)








4












Consolidated Statements of Changes in Stockholders' Equity




(unaudited)

































































































































































































































Series A Preferred stock:




Series B Preferred stock:




Common stock:




Additional


paid-in




Accumulated








Shares




Amount




Shares




Amount




Shares




Amount




Capital




Deficit




Total










$







$







$




$




$




$


































Balances at March 31, 2020






-







-







-







-







300,000,000







300,000






(

299,999

)





(

17,956

)





(

17,955

)


































Net loss for the period






-







-







-







-







-







-







-






(

13,062

)





(

13,062

)


































Balances at December 31, 2020






-







-







-







-







300,000,000







300,000






(

299,999

)





(

31,018

)





(

31,017

)
































































Balances at March 31, 2021






-







-







-







-







300,000,000







300,000






(

299,999

)





(

12,772

)





(

12,771

)


































Effect of reverse merger






200,000







200







500,000







50







49,989,704







49,990






(

206,871

)






-






(

156,631

)


































Net loss for the period






-







-







-







-







-







-







-






(

19,488

)





(

19,488

)


































Balances at December 31, 2021






200,000







200







500,000







50







349,989,704







349,990






(

506,870

)





(

32,260

)





(

188,890

)






5
















Consolidated Statements of Cash Flows




(Unaudited)





























































































































































Nine months ended December 31,






2021





2020







$






$
















Cashflow from Operating Activities












Loss for the period





(

19,488

)





(

13,062

)














Adjustments for:











Finance costs






101







163






Depreciation






4,778







3,717







Operating cash flows before working capital change







(14,609)







(9,182)
















Changes in Working Capital:












Accounts receivables





(

13,766

)





(

15,919

)





Creditors, Accruals and Other Payables






34,944







22,341







Total







21,178







6,422















Cash generated from (used in) Operating Activities






6,569






(

2,760

)















Cashflow from Financing Activities












Repayment of lease liabilities





(

4,803

)





(

3,651

)





Interest paid





(

101

)





(

163

)






Total






(

4,904

)






(

3,814

)















Net change in cash and cash equivalents






1,665






(

6,574

)














Cash & Cash equivalents at the beginning of the period






36,100







27,823
















Cash & Cash equivalents at the end of the period







37,765








21,429








6












Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020







Note 1 - Nature of Operations and Basis of Presentation






Legal Status and Nature of Operations





This summary of significant accounting policies of Novagant Inc. (the “Company”) and Ever Full Logistics Limited (“EFLL”) (together with the Company collectively referred to as the “Group”) is presented to assist in understanding the Group’s unaudited consolidated financial statements for the nine months ended December 31, 2021. The consolidated financial statements and notes are representations of the Company's management who is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.





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, 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 200reverse 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 itsname 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 a

greed 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


Alexnader 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 anddirector and appointed Mr. WeiQun Chen as Chairman, CEO and Director, Mr. HongZhen Xu as Secretary, Treasurer and Director, and Haiyan Zeng as a Director.





EFLL is a limited company incorporated in Hong Kong.  The address of its registered office and principal place of business are Unit A, Room V28, 5/F., Victory Industrial Building, 151-157 Wo Yi Hop Road, Kwai Chung, New Territories.   The principal activity of the Company during the year was provision of logistics services.





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.  The Company received 100% of the issued and outstanding shares of EFLL in exchange for newly issued 300,000,000 shares of common stock of the Company, thus causing EFLL to become a direct wholly-owned subsidiary of the Company.  This transaction resulted in the owner of EFLL obtaining a majority voting interest in the Company.  The merger of EFLL into the Company results in EFLL having control of the combined entity.







7











Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020






Note 1 - Nature of Operations and Basis of Presentation – continued





For financial reporting purposes, the transaction represents a "reverse merger" rather than a business combination and the Company is deemed to be the accounting acquiree in the transaction. The transaction is being accounted for as a reverse merger and recapitalization.  The Company is the legal acquirer but accounting acquiree for financial reporting purposes and EFLL is the acquired company but accounting acquirer. Consequently, the assets and liabilities and the operations that will be reflected in the historical financial statements prior to the transaction will be those of EFLL and will be recorded at the historical cost basis of EFLL, and no goodwill will be recognized in this transaction. The consolidated financial statements after completion of the transaction will include the assets and liabilities of EFLL and the Company, and the historical operations of the Company and the combined operations of EFLL from the initial closing date of the transaction.






Basis of Presentation





The consolidated financial statements include all of the assets, liabilities, revenues, expenses and cash flows of entities in which the Company has a controlling interest (“subsidiaries”). Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation.





Consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (accounting acquiree) but as a continuation of the financial statements of the legal subsidiary (accounting acquirer), with one adjustment, which is to retroactively adjust the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree. That adjustment is required to reflect the capital of the legal parent (the accounting acquiree). Therefore the consolidated financial statements are those of EFLL as of and for the nine months period ended December 31, 2020 and 2021. On the other hand, the comparative information on shareholders’ equity presented in those consolidated financial statements is retroactively adjusted to reflect the legal capital of the legal parent (accounting acquiree).





The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), and include the financial statements of the Company and EFLL. All material intercompany transactions and balances have been eliminated in the consolidation.





These consolidated financial statements have been prepared under the historical cost convention and all transactions have been accounted for on accrual basis.






Going concern





As at December 31, 2021, the Company and EFLL (collectively referred to as the “Group”) had net current liabilities and net liabilities of $194,472 and $188,890, respectively. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the Group’s ability to continue as a going concern. Therefore, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business.





These consolidated financial statements have been prepared on a going concern basis, the validity of which depends upon the financial support from the shareholders at a level sufficient to finance the working capital requirements of the Group. The shareholders have agreed to provide adequate funds for the Group to meet its liabilities as they fall due for the foreseeable future.  The directors of the Company is therefore of the opinion that it is appropriate to prepare the consolidated financial statements on a going concern basis. Should the Group be unable to continue as going concern, adjustments would have to be made to the consolidated financial statements to adjust the value of the Group’s assets to their recoverable amounts, to reclassify non-current assets as current assets and to provide for any further liabilities which might arise. The effect of these adjustments has not been reflected in the consolidated financial statements.







8










Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020







Note 2 - Summary of Significant Accounting and Reporting Policy







Use of judgment and estimates





The preparation of the consolidated financial statements is in conformity with approved accounting standards which requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and related assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. The estimates and related assumptions are reviewed on an ongoing basis. Accounting estimates are revised in the period in which such revisions are made and in any future periods affected.





Significant management estimates in these consolidated financial statements relate to the useful life of plant and equipment, provisions and doubtful receivables. However, the management believes that the change in outcome of estimates would not have a material effect on the amounts disclosed in the consolidated financial statements.





Judgment made by management in the application of approved standards that have significant effect on the consolidated financial statements and estimates with a risk of material adjustment in subsequent year are as follows:






Depreciation method, rates and useful lives of property, plant and equipment





The management of the Company reassesses useful lives, depreciation method, and rates for each item of plan and equipment annual by considering expected pattern of economic benefits that the Group expects to derive from those items.






Provisions





Provisions are based on best estimate of the expenditure required to settle the present obligation at the reporting date, that is, the amount that the Group would rationally pay to settle the obligation at the reporting date or to transfer it to a third party.






Impairment





The carrying amounts of the Group's assets are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. If any such indication exists, recoverable amount is estimated in order to determine the extent of the impairment loss, if any. Impairment loss is recorded on judgmental basis, for which provision may differ in the future years based on the actual expense.







Basis of consolidation





The consolidated financial statements include the accounts of the Company and EFLL. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.







Cash and cash equivalents





The Group considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents.








9











Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020






Note 2 - Summary of Significant Accounting and Reporting Policy - continued







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 Group’s revenue recognition as there were no revenues during the period.





Under the new revenue standards, the Group 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 Group’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, 2021, and March 31, 2021, no allowance for doubtful accounts is necessary.








Foreign currency translation





The functional currency of the Company is United States Dollars (“US$”).  The functional currency of EFLL is Hong Kong dollars (“HK$”).  The Group maintains its consolidated financial statements in US$.  Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing at the balance sheet dates.  Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchanges rates prevailing at the dates of the transaction. During the nine months ended December 31, 2021, the exchange rate being use to translate amount in HK$ is fixed at 7.8 to US$1 for the purpose of preparing the consolidated financial statements which is derived from October 17, 1983 monetary policy from Hong Kong Monetary Authority where the Hong Kong dollar was pegged at a rate of 7.8 HK$ = 1 US$, through the currency board system with a limited floating range from 7.85 to 7.75.  Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods.





For financial reporting purposes, the financial statements of the Group which are prepared using the functional currency have been translated into US$.  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.








Income taxes





The Group provides for income taxes under Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. SFAS No. 109 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.








10












Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020






Note 2 - Summary of Significant Accounting and Reporting Policy – continued





The provision for income taxes includes income taxes currently payable and those deferred as a result of temporary differences between the financial statements and the income tax basis of assets and liabilities. Deferred income 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. The effect of a change in income tax rates on deferred income tax assets and liabilities is recognized in income or loss in the period that includes the enactment date. A valuation allowance is provided to reduce deferred tax assets to the amount of future tax benefit when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Projected future taxable income and ongoing tax planning strategies are considered and evaluated when assessing the need for a valuation allowance. Any increase or decrease in a valuation allowance could have a material adverse or beneficial impact on the Group’s income tax provision and net income or loss in the period the determination is made.





The Company has approximately $

32,533,000

in net operating loss carryovers as of December 31, 2020, which begin to expire in 2026. Due to changes in the majority ownership of the Company, the benefit of net operating loss carry forwards for federal income tax reporting purposes are significantly limited.








Fair Value Measurements





ASC 820,

Fair Value Measurement and Disclosures

, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value:





Level 1: Observable inputs such as quoted prices (unadjusted) in an active market for identical assets or liabilities.





Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.





Level 3: Unobservable inputs that are supported by little or no market activity; therefore, the inputs are developed by the Group using estimates and assumptions that the Group expects a market participant would use, including pricing models, discounted cash flow methodologies, or similar techniques.





The carrying value of the Group’s financial instruments, including cash and cash equivalents, loan receivables, loan interest receivables, deposit paid, accounts payable and accrued expenses and due to a related party approximate to their fair value because of the short-term maturity of these financial instruments.








Pension Plans





During the nine months ended December 31, 2021, the Group participates in a defined contribution pension scheme under the Mandatory Provident Fund Schemes Ordinance (“MPF Scheme”) for all its eligible employees in Hong Kong.





The MPF Scheme is available to all employees aged 18 to 64 with at least 60 days of service in the employment in Hong Kong.  Contributions are made by the Group’s subsidiary operating in Hong Kong at 5% of the participants’ relevant income with a ceiling of HK$30,000.  The participants are entitled to 100% of the Group’s contributions together with accrued returns irrespective of their length of service with the Group, but the benefits are required by law to be preserved until the retirement age of 65.  The only obligation of the Group with respect to MPF Scheme is to make the required contributions under the plan.








11











Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020






Note 2 - Summary of Significant Accounting and Reporting Policy - continued







Leases






Definition of a lease





A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.





For contracts entered into or modified on or after the date of initial application, the Group assesses whether a contract is or contains a lease based on the definition under GAAP ASC 842 at inception or modification date. Such contract will not be reassessed unless the terms and conditions of the contract are subsequently changed.






The Group as a lessee






Allocation of consideration to components of a contract





For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.





The Group also applies practical expedient not to separate non-lease components from lease component, and instead account for the lease component and any associated non-lease components as a single lease component.






Short-term leases and leases of low-value assets





The Group applies the short-term lease recognition exemption to leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option. It also applies the recognition exemption for lease of low-value assets. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis or another systematic basis over the lease term.






Right-of-use assets





The cost of right-of-use asset includes:








·



the amount of the initial measurement of the lease liability;






·



any lease payments made at or before the commencement date, less any lease incentives received; and






·



any initial direct costs incurred by the Group.





Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.





Right-of-use assets in which the Group is reasonably certain to obtain ownership of the underlying leased assets at the end of the lease term are depreciated from commencement date to the end of the useful life. Otherwise, right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term.





The Group presents right-of-use assets that do not meet the definition of investment property as a separate line item on the statement of financial position.








12












Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020






Note 2 - Summary of Significant Accounting and Reporting Policy - continued






Lease liabilities





At the commencement date of a lease, the Group recognises and measures the lease liability at the present value of lease payments that are unpaid at that date. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable.





The lease payments include:







·


fixed payments less any lease incentives receivable;





·


variable lease payments that depend on an index or a rate; and





·


amounts expected to be payable by the Group under residual value guarantees;





After the commencement date, lease liabilities are adjusted by interest accretion and lease payments.





The Group remeasures lease liabilities (and makes a corresponding adjustment to the related right-of-use assets) whenever:







·


the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the related lease liability is remeasured by discounting the revised lease payments using a revised discount rate at the date of reassessment.





·


the lease payments change due to changes in expected payment under a guaranteed residual value, in which cases the related lease liability is remeasured by discounting the revised lease payments using the initial discount rate.






Lease modifications





The Group accounts for a lease modification as a separate lease if:







·


the modification increases the scope of the lease by adding the right to use one or more underlying assets; and





·


the consideration for the leases increases by an amount commensurate with the stand-alone price for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.





For a lease modification that is not accounted for as a separate lease, the Group remeasures the lease liability based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.





The Group accounts for the remeasurement of lease liabilities and lease incentives from lessor by making corresponding adjustments to the relevant right-of-use asset. When the modified contract contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the modified contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.








Recent Accounting Pronouncements






Accounting pronouncement adopted





In July 2017, the FASB issued ASU No. 2017-11,

Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception

(“ASU 2017-11”). ASU 2017-11 is intended to simplify the accounting for financial instruments with characteristics of liabilities and equity. Among the issues addressed are: (i) determining whether an instrument (or embedded feature) is indexed to an entity’s own stock; (ii) distinguishing liabilities from equity for mandatorily redeemable financial instruments of certain nonpublic entities; and (iii) identifying mandatorily redeemable non-controlling interests. The Group adopted ASU 2017-11 on April 1, 2019 and determined that this ASU does not have a material impact on the financial statements.








13












Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020






Note 2 - Summary of Significant Accounting and Reporting Policy - continued





In August 2018, the FASB issued ASU 2018-13,

Fair Value Measurement (Topic 820): Disclosure Framework: Changes to the Disclosure Requirements for Fair Value Measurement

(“ASU 2018-13”). ASU 2018-13 is intended to improve the effectiveness of fair value measurement disclosures. ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Group determined that ASU 2018-13 did not have a material impact on its financial statements.





In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law in March 2020. The CARES Act lifts certain deduction limitations originally imposed by the Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”). Corporate taxpayers may carryback net operating losses (NOLs) originating between 2018 and 2020 for up to five years, which was not previously allowed under the 2017 Tax Act. The CARES Act also eliminates the 80% of taxable income limitations by allowing corporate entities to fully utilize NOL carryforwards to offset taxable income in 2018, 2019 or 2020. Taxpayers may generally deduct interest up to the sum of 50% of adjusted taxable income plus business interest income (30% limit under the 2017 Tax Act) for 2019 and 2020. The CARES Act allows taxpayers with alternative minimum tax credits to claim a refund in 2020 for the entire amount of the credits instead of recovering the credits through refunds over a period of years, as originally enacted by the 2017 Tax Act.





In addition, the CARES Act raises the corporate charitable deduction limit to 25% of taxable income and makes qualified improvement property generally eligible for 15-year cost-recovery and 100% bonus depreciation. The enactment of the CARES Act did not result in any material adjustments to our income tax provision for the year ended December 31, 2020.





In June 2016, the FASB issued ASU 2016-13,

Financial Instruments–Credit Losses (Topic 326)

, which modifies the measurement of expected credit losses of certain financial instruments. The Group will adopt this ASU on April 1, 2023. Management is currently evaluating this ASU to determine its impact to the Group's financial statements.





In December 2019, The FASB issued ASU 2019-12,

Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

. The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For non-public companies, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. The Group is currently evaluating the impact of ASU 2020-04 on its future financial statements.





In March 2020, the FASB issued ASU 2020-04,

Reference Rate Reform (Topic 848): Facilitation of Reference Rate Reform on Financial Reporting

. The amendments in this Update provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The Group’s line of credit agreement provides procedures for determining a replacement or alternative rate in the event that LIBOR is unavailable. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. The Group is currently evaluating the impact of ASU 2020-04 on its future financial statements.





The Group has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.








Provisions





Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.





The amount recognised as a provision, is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material).








14











Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020






Note 2 - Summary of Significant Accounting and Reporting Policy – continued







Segment Reporting





The Group uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Group’s reportable segments. Management, including the chief operating decision maker, reviews operating results solely by monthly revenue from air/ocean freight services (but not by sub-services/product type or geographic area) and operating results of the Group and, as such, the Group has determined that the Group has one operating segment as defined by ASC Topic 280 “Segment Reporting”.









Note 3 – Revenue


























2020








$











Air/ocean freight services income






81,582











Note 4 – General and Administrative Expenses


























































































































Nine months ended




December 31,








2021






2020








$





$














Courier







362








739






Depreciation







4,778








3,717






Electricity and water







260








890






Entertainment







1,362








4,939






Insurance







247








282






Medical







762








145






MPF contributions







1,115








1,308






Professional fee







3,846








1,731






Printing & stationery







-








385






Repair and maintenance







-








577






Rental expenses







-








883






Salaries and wages







23,077








26,923






Staff welfare







1,782








1,324






Telecommunication and IT







1,005








1,573






Sundry expenses







359








2,090






Transportation expenses







951








1,612


















39,906








49,118










15










Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020







Note 5 – Right-of-use Assets






































December, 31






March 31,









2021






2021








$





$















Leased property








2,654








7,432








The Group lease an office property for its operations. Lease contract is entered into for fixed term of within 2 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. In determining the lease term and assessing the length of the non-cancellable period, the Group applies the definition of a contract and determines the period for which the contract is enforceable.








Note 6 – Creditors, accruals and other payables




































































December, 31






March 31,







2021






2021








$





$














Creditors







9,741








4,256






Accruals







9,227








5,928






Notes payable







82,676








-






Due to a related party







66,109








39,949






Shareholders’ loan payable







76,883








-


















244,636








50,133











Note 7 – Stockholders’ equity






Preferred Stock



The Company has


20,000,000


shares of Preferred Stock authorized at $


0.001


par value or below, and


700,000


shares were outstanding in December 31, 2021 and March 31, 2021. This stock may be voting or have other rights and preferences as determined from time to time by the Board of Directors.






Series A Preferred Shares



As of December 31, 2021, we have issued

200,000

shares of Series A preferred stock, with a $

0.001

par value per share.





The following is a description of the material rights of our Series A Preferred Stock: the Series A Preferred Stock shall have a par value of $0.001 per share. Each share of Series A Preferred Stock has 1,000 votes entitled to be voted on all matters submitted to a vote of the shareholders together with the Common Stock holders with each one share of Series A Preferred Stock..





In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the price per share actually paid to the Corporation upon the initial issuance of the Series B Preferred Stock (each, the “the Original Issue Price”) for each share of Series B Preferred Stock then held by them, plus declared but unpaid dividends.






Dividends





Dividends, if any, will be contingent upon our revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of our board of directors. We intend to retain earnings, if any, for use in our business operations and accordingly, the board of directors does not anticipate declaring any dividends prior to an acquisition transaction, nor can there be any assurance that any dividends will be paid following any acquisition.







16









Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020






Note 7 – Stockholders’ equity – continued






Series B Preferred Shares





As of December  31, 2021, we have issued

500,000

shares of Series B Preferred Shares, with a $

0.0001

par value per share.





The following is a description of the material rights of our Series B Convertible Preferred Stock: the Series B Convertible Preferred Stock shall have a par value of $0.0001 per share. The Series B Convertible Preferred Stock represents ninety-nine percent (99%) of all votes (including the votes of common shares of the Company entitled to be voted at any annual or special meeting of shareholders of the Corporation or action by written consent of shareholders). Each outstanding share of the Series B Convertible Preferred Stock shall represent its proportionate share of the 99% which is allocated to the outstanding shares of Series B Convertible Preferred Stock. In addition, the Certificate of Designation of Series B is the most current version and we use it to vote for any board resolution. We have also attached the Certificate of Designation for Series B at Exhibit 3.4(b), which indicates that the Series B class would always have a majority of the votes on any matter on which common shareholders are entitled to vote, and that each share will otherwise have 1,000 votes.





In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, subject to the rights of any existing series of Preferred Stock or to the rights of any series of Preferred Stock which may from time to time hereafter come into existence, the holders of the Series B Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to the price per share actually paid to the Corporation upon the initial issuance of the Series B Preferred Stock (each, the “the Original Issue Price”) for each share of Series B Preferred Stock then held by them, plus declared but unpaid dividends. Unless the Corporation can establish a different Original Issue Price in connection with a particular sale of Series B Preferred Stock, the Original issue price shall be $0.0001 per share for the Series B Preferred Stock. If, upon the occurrence of any liquidation, dissolution or winding up of the Corporation, the assets and funds thus






Dividends






Dividends, if any, will be contingent upon our revenues and earnings, if any, capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of our board of directors. We intend to retain earnings, if any, for use in our business operations and accordingly, the board of directors does not anticipate declaring any dividends prior to an acquisition transaction, nor can there be any assurance that any dividends will be paid following any acquisition. The holder of shares of Series B Convertible Preferred Stock shall be entitled to receive dividends at the discretion of the board of directors.






Redemption






The shares of the Series B Convertible Preferred Stock are redeemable for common shares 1 year after issuance. Series preferred B shares have conversion rights of 1 series B share to 1,000 common shares. The holder of the Series B Convertible Preferred Stock will be entitled to have 500,000,000


common votes.




Common Stock



The Company has

1,000,000,000

authorised shares of Common Stock with a par value of $

0.001

with


349,989,704


shares issued and outstanding.





During 2014, the Company received

2,000,000

shares of common stock in return for transferring its subsidiary Neeksom, Inc back to its original shareholders.





During the year ended December 31, 2013, the Company issued

17,422,000

shares of common stock for services with a value of $

31,955

,

18,600,000

common shares for notes payable with a value of $

5,033

,

3,000,000

for officer compensation with a value of $

5,502

, and

25,000,000

common shares with a value of $

45,854

for settlement of a prior debt. There were 16,600,000 shares returned to treasury prior to 2019 bringing the total common outstanding shares from 73,871,562 to 61,271,562. During the second quarter of 2021, there were 22,081,858 shares being canceled. The latest total common outstanding shares is 349,989,704.





On September 21, 2021, there were

300,000,000

shares issued to acquire the 100% equity interest of Ever Full Logistic Limited.







17








Notes to the Financial Statements




For the nine months ended December 31, 2021 and 2020







Note 8 – Reverse Merger





On September 21, 2021, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with EFLL, the Company received 100% of the issued and outstanding shares of EFLL in exchange for newly issued 300,000,000 shares of common stock of the Company, thus causing EFLL to become a direct wholly-owned subsidiary of the Company.  This transaction resulted in the owner of EFLL obtaining a majority voting interest in the Company.  The merger of EFLL into the Company results in EFLL having control of the combined entity.





For financial reporting purposes, the transaction represents a "reverse merger" rather than a business combination and the Company is deemed to be the accounting acquiree in the transaction. The transaction is being accounted for as a reverse merger and recapitalization.  The Company is the legal acquirer but accounting acquiree for financial reporting purposes and EFLL is the acquired company but accounting acquirer. Consequently, the assets and liabilities and the operations that will be reflected in the historical financial statements prior to the transaction will be those of EFLL and will be recorded at the historical cost basis of EFLL, and no goodwill will be recognized in this transaction. The consolidated financial statements after completion of the transaction will include the assets and liabilities of EFLL and the Company, and the historical operations of the Company and the combined operations of EFLL from the initial closing date of the transaction.





Details of assets and liabilities of the Company on the reverse merger were as follows:












































$











Plant and equipment






2,928






Creditors, other payables and accrual





(

159,559

)





Series A Preferred stock: $0.001 par value, 200,000 shares authorized and issues





(

200

)





Series B Preferred stock: $0.0001 par value, 500,000 shares authorized and issues





(

50

)





Common stock: $0.001 par value, 1,000,000,000 shares authorized, 49,989,704 shares issued





(

49,990

)





Additional paid-in capital







206,871









FORWARD LOOKING STATEMENTS





Statements made in this Form 10-Q/A that are not historical or current facts are "forward-looking statements" made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act") and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.







18












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





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, 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 200reverse 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 itsname 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 a

greed 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


Alexnader 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 anddirector 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 FullLogistics 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.





Picture






19










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 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.






20









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, 2021, and March 31, 2021, no allowance for doubtful accounts is necessary.






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 Three Months Ended December 31, 2021 Compared to the Three Months Ended December 31, 2020








Revenue






During the three months ended December 31, 2021, we have revenue of $41,201, compare to $46,895 during the three months ended December 31, 2020, decreased of $5,964 or 13% due to less demand for services.







Operating Expenses






During the three months ended December 31, 2021, we have operating expenses of $14,362, compare to $16,508 during the three months ended December 31, 2020, decreased of $2,146 or 13%.  The decrease mainly due to decrease in entertainment expenses of $1,466.







Net Income (Loss)






During the three months ended December 31, 2021, we incurred a net loss of $4,552, compare to a net profit of $2,585 during the three months ended December 31, 2020, decreased of $7,173.  The decrease mainly due to increase in direct costs.






21











Results Of Operations During The Nine Months Ended December 31, 2021 As Compared To The Nine Months Ended December 31, 2020






Revenue





For the nine months ended December 31, 2021 and 2020, our total revenue amounted to $77,595 and $81,582. During the nine months ended December 31, 2021 and 2020, our revenue in transportation has decreased to $77,595 from $81,582. The decrease was because of less 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, 2021 and 2020:

































































Nine months ended




December 31 2021








Nine months ended




December 31 2020








USD




%








USD




%





Transportation - Air Freight





14,353





18








0





0























Transportation - Ocean Freight





63,242





82








81,582





100


























77,595





100








81,582





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, 2021, our air freight revenue in transportation has increased to $14,353 comparing from $0 for the nine months ended December 31, 2020. 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, 2021, our ocean freight revenue in transportation has slightly declined to $63,242 comparing from $81,582 for the nine months ended December 31, 2020. The decreases in revenue were due to the outbreak of the COVID-19, where orders from EFLL’s local customers has been decreased by the result of the less demand for the 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 $45,363 for the nine months ended December 31, 2020 to $57,076 for the nine months ended December 31, 2021. The increase was due to higher services fee charged by the air and ocean freight service providers due to the outbreak of the COVID-19.






22









Expenses





For the nine months ended December 31, 2021, the Company incurred $40,007 of operating expenses which consisted of general and administrative expenses of $39,906 and finance costs of $101. For the nine months ended December 31, 2020, we incurred operating expenses in the amount of $49,281 which consisted of general and administrative expenses of $49,118 and finance costs of $163. The decrease is due to the decrease in activity. Novagant, the public entity, had no operations from April 2021 through December 31, 2021. All business activity occurred within EFLL, which was acquired on September 21, 2021.





Net Loss





For the nine months ended December 31, 2021 we had a net loss of $19,488. We had net loss of $13,062 for the nine months ended December 31, 2020. The increase is due to the decrease in business activity during the period.





Liquidity





As of December 31, 2021, we had $52,872 in deposits, accounts receivable and cash and cash equivalents, and current liabilities of $247,344. As of December 31, 2020, we had $37,168 in deposits, accounts receivables and cash and cash equivalents, and current liabilities of $77,210.





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, 2021 and 2020, 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.





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, 2021 and 2020, 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 incurred net losses of $19,488 and $13,062 for the nine months ended December 31, 2021 and 2020, respectively, and have a net deficit of $188,890 as of December 31, 2021, 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.






23










ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.





As a "smaller  reporting  company" as defined by Item 10 of Regulation  S-K, the Company is not required to provide information required by this Item.








ITEM 4. CONTROLS AND PROCEDURES





Disclosure Controls and Procedures





Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Our principal executive officer and principal financial and accounting officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13(a)-15(e) and 15(d)-15(e)) within the end of the period covered by this Quarterly Report on Form 10-Q/A and have concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.





Changes in Internal Controls over Financial Reporting





There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.








PART II. OTHER INFORMATION








ITEM 1. LEGAL PROCEEDINGS





Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.








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





None








ITEM 3. DEFAULTS UPON SENIOR SECURITIES





None








ITEM 4. MINE SAFETY DISCLOSURES





Not applicable to our Company.








ITEM 5. OTHER INFORMATION





None.






24












ITEM 6. EXHIBITS





Exhibits:







































31.1






Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a)





32.1






Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002





101.INS




XBRLInstance Document




101.SCH




XBRL Taxonomy Extension Schema Document




101.CAL




XBRL Taxonomy Extension Calculation Linkbase Document




101.DEF




XBRL Taxonomy Extension Definition Document




101.LAB




XBRL Taxonomy Extension Label Linkbase Document




101.PRE




XBRL Taxonomy Extension Presentation Linkbase Document







25












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.











































Novagant Corp


.











Dated: July 1, 2022




By:





/s/ WeiQun Chen











WeiQun Chen, Director and




Authorized Signatory







26



The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Annual report [Section 13 and 15(d), not S-K Item 405] - Sept. 2, 2022

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