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 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 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.
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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.
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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 September 30, 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 September 30, 2021 Compared
to the Three Months Ended September 30, 2020
Revenue
During the three months ended September 30, 2021, we have revenue of $11,433,
compare to $23,140 during the three months ended September 30, 2020, decreased
of $11,707 or 51% due to less demand for services.
Operating Expenses
During the three months ended September 30, 2021, we have operating expenses of
$13,742, compare to $15,182 during the three months ended September 30, 2020,
decreased of $1,440 or 9%. The decrease mainly due to decrease in salary and
wages of $1,923, set off with increase of staff welfare of $561.
Net Loss
During the three months ended September 30, 2021, we incurred a net loss of
$9,600, compare to $3,885 during the three months ended September 30, 2020,
increased of $5,715. The increase mainly due to decrease in revenue.
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Results Of Operations During The Six months ended September 30, 2021 As Compared
To The Six months ended September 30, 2020
Revenue
For the six months ended September 30, 2021 and 2020, our total revenue amounted
to $36,574 and $34,597. During the six months ended September 30, 2021 and 2020,
our revenue in transportation has increased to $36,574 from $34,597. 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 six
months ended September 30, 2021 and 2020:
Six months ended Six months ended
September 30 2021 September 30 2020
USD % USD %
Transportation - Air Freight 6,949 19 0 0
Transportation - Ocean Freight 29,625 81 34,597 100
36,574 100 34,597 100
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 six months ended September 30, 2021, our air freight revenue in
transportation has increased to $6,949 comparing from $0 for the six months
ended September 30, 2020. The increases in revenue were mainly due to more
demand for Air Freight services from our customers. In addition, during the six
months ended September 30, 2021, our ocean freight revenue in transportation has
decreased to $29,625 comparing from $34,597 for the six months ended September
30, 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 $17,535 for the six months ended September 30,
2020 to $25,888 for the six months ended September 30, 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.
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Expenses
For the six months ended September 30, 2021, the Company incurred $25,622 of
operating expenses which consisted of general and administrative expenses of
$25,544 and finance costs of $78. For the six months ended September 30, 2020,
we incurred operating expenses in the amount of $32,709 which consisted of
general and administrative expenses of $32,610 and finance costs of $99. The
decrease is due to the decrease in activity. Novagant, the public entity, had no
operations from April 2021 through September 30, 2021. All business activity
occurred within EFLL, which was acquired on September 21, 2021.
Net Loss
For the six months ended September 30, 2021 we had a net loss of $14,936. We had
net loss of $15,647 for the six months ended September 30, 2020. The decrease is
due to the decrease in operating expenses during the period.
Liquidity
As of September 30, 2021, we had $45,962 in deposits, accounts receivable and
cash and cash equivalents, and current liabilities of $237,475. As of September
30, 2020, we had $25,540 in deposits, accounts receivables and cash and cash
equivalents, and current liabilities of $44,220.
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 September 30, 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 six months ended September 30, 2021 and 2020.
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 $14,936 and $15,647 for the six
months ended September 30, 2021 and 2020, respectively, and have a net deficit
of $184,338 as of September 30, 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.
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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. 
