See accompanying notes to condensed financial statements.
See accompanying notes to condensed financial statements.
See accompanying notes to condensed financial statements.
See accompanying notes to condensed financial statements.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MARCH 31, 2022
(Unaudited)
1. Basis of presentation
The accompanying unaudited condensed financial statements
have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”),
and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited
financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those
rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.
In the opinion of management, the balance sheet as
of December 31, 2022, which has been derived from audited financial statements, and these unaudited condensed financial statements reflect
all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period
ended March 31, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2023
or for any future period.
These unaudited condensed financial statements and
notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto
included in the Annual Report on Form 10-K for the year ended December 31, 2022.
2. Organization and business background
X Metaverse Inc. (the “Company”), formerly
known as Domain Extremes Inc., was organized under the laws of the State of Nevada on January 23, 2006.
The Company was principally engaged in advertisements
on websites and applications. The Company’s original goal was to become a major network on travel, food, entertainment, activities
and city life. The Company launched the website www.drinkeat.com, which provides reviews of restaurants in Hong Kong. Due to the
drop in readership and advertising, the Company decided to terminate its website operation in May 2018. The Company is actively
looking for new investment opportunities and new source of revenue.
On May 1, 2017, the Company filed with the Nevada
Secretary of State a certificate of amendment (the “Amendment”) to the Company’s Articles of Incorporation. The Amendment,
previously approved by the Company’s board of directors on August 31, 2016 and stockholders on November 4, 2016, changed (a) the
name of the Company from “Domain Extremes Inc.” to “Mi1 Global TelCo., Inc.” and (b) the authorized shares of
common stock, par value $0.001, from 200,000,000 shares to 1,200,000,000 shares. The Amendment became effective upon its filing. The name
change will become effective with FINRA on July 19, 2017.
On October 24, 2017, the Company effectuated a
reverse split of the Company’s issued and outstanding common stock on a 1 for 10,000 (1:10,000) basis, pursuant to which the
authorized shares of common stock remained 1,200,000,000 shares and the par value remained $0.001. All share and earnings per share
information have been retroactively adjusted to reflect the stock split in the financial statements.
On March 24, 2020, Mr. Kok Seng Yeap purchased 100%
of the shares of Mi1 Global Limited, which owns 9,156 shares of the common stock of the Company. As a result, Kok Seng Yeap became the
beneficial owner of 9,156 shares of the common stock of the Company. On March 24, 2020, Mr. Lim Kock Chiang resigned as the Chief Executive
Officer, Chief Financial Officer, Secretary and Director of the Company, and the Board of Directors of the Company appointed Mr. Kok Seng
Yeap to serve as its Director, Chief Executive Officer, Chief Financial Officer, and Secretary.
On September 3, 2020, the Company filed a Certificate
of Amendment to its Articles of Incorporation with the State of Nevada to reflect its corporate name change to “AFF Holding Group
Inc.”. The name change was effective as of the filing of the Certificate of Amendment with the State of Nevada. The Company is awaiting
the approval of FINRA for the market effectiveness of the name change.
On June 23, 2020, Mr. Kok Seng Yeap resigned as the
Chief Financial Officer the Company, and the Board of Directors of the Company appointed Mr. Lau Chew Chye to serve as its Chief Financial
Officer and Director.
On December 21, 2021, the Company filed a Certificate of Amendment to its Articles of Incorporation with the State of Nevada to reflect
its corporate name change from "AFF Holding Group Inc.” to “X Metaverse Inc.” The name change was effective as
of the filing of the Certificate of Amendment with the State of Nevada. The Company is awaiting the approval of FINRA for the market effectiveness
of the name change.
3. Going concern uncertainties
The accompanying condensed financial statements have
been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business.
As of March 31, 2023, the Company experienced an accumulated
deficit of $763,555 and net loss of $7,021 for the three months ended March 31, 2023. The continuation of the Company as a going concern
through December 31, 2023 is dependent upon the continued financial support from its stockholders. Management believes the Company is
currently pursuing additional financing for its operations. However, there is no assurance that the Company will be successful in securing
sufficient funds to sustain the operations.
These and other factors raise substantial doubt about
the Company’s ability to continue as a going concern. These condensed financial statements do not include any adjustments to reflect
the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being
able to continue as a going concern.
4. Summary of significant accounting
policies
The accompanying condensed financial statements reflect
the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed financial
statements and notes.
Basis of Presentation
The condensed financial statements of the Company
have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”)
and are presented in US dollars.
Fiscal Year-End
The Company’s fiscal year is December 31.
Use of estimates
The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and cash equivalents
The Company considers all short-term highly liquid
investments that are readily convertible to known amounts of cash and have original maturities of three months or less to be cash equivalents.
Income taxes
Income taxes are determined in accordance with the
provisions of ASC Topic 740, “Income Taxes” (“ASC 740”). Under this method, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect
on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
ASC 740 prescribes a comprehensive model for how companies
should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on
a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the
position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as
the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority
assuming full knowledge of the position and relevant facts.
Comprehensive income
ASC Topic 220, “Comprehensive Income”,
establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income
as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented
in the accompanying statement of stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation.
This comprehensive income is not included in the computation of income tax expense or benefit.
Foreign currencies translation
The functional currency of the Company is Hong Kong
dollars (“HK$”). The Company maintains its financial statements in the functional currency. Monetary assets and liabilities
denominated in currencies other than the functional currency are translated into the functional currency at rates of exchange prevailing
at the balance sheet dates. Transactions denominated in currencies other than the functional currency are translated into the functional
currency at the exchanges rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions
are included in the determination of net income for the respective periods.
For financial reporting purposes, the financial statements
of the Company which are prepared using the functional currency have been translated into United States dollars. Assets and liabilities
are translated at the exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates
and stockholders’ equity is translated at historical exchange rates. Any translation adjustments resulting are not included in determining
net income but are included in foreign exchange adjustment to other comprehensive income, a component of stockholders’ equity.
Fair value of financial instruments
The carrying value of the Company’s financial
instruments (excluding short-term bank borrowing): cash and cash equivalents, accounts and retention receivable, prepayments and other
receivables, accounts payable, income tax payable, amount due to a related party, other payables and accrued liabilities approximate at
their fair values because of the short-term nature of these financial instruments.
Management believes, based on the current market prices
or interest rates for similar debt instruments, the fair value of its obligation under finance lease and short-term bank borrowing approximate
the carrying amount.
The Company also follows the guidance of the ASC Topic 820-10,
“Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that
are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair
value as follows:
· Level 1:
Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;
· Level 2:
Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets
that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are
observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable
inputs; and
· Level 3:
Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use
in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models
and discounted cash flow models.
Fair value estimates are made at a specific point
in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties
and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect
the estimates.
Revenue recognition
In May 2014
the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes all
existing revenue recognition requirements, including most industry specific guidance. This new standard requires a company to recognize
revenues when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive
for those goods or services.
The new revenue
standards became effective for the Company on January 1, 2018, and were adopted using the modified retrospective method. The adoption
of the new revenue standards as of January 1, 2018 did not change the Company’s revenue recognition as the Company did not have
any revenue to be recognized.
Under the new
revenue standards, the revenues are recognized when its customer obtains control of promised goods or services, in an amount that reflects
the consideration which it expects to receive in exchange for those goods. The Company recognizes revenues following the five step model
prescribed under ASU No. 2014-09: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract;
(iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize
revenues when (or as) we satisfy the performance obligation.
Net loss per share
The Company calculates net loss per share in accordance
with ASC Topic 260, “Earnings per Share.” Basic income per share is computed by dividing the net income by the weighted-average
number of common shares outstanding during the period. Diluted income per share is computed similar to basic income per share except that
the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common
stock equivalents had been issued and if the additional common shares were dilutive.
Recently issued accounting pronouncements
In December 2019, the FASB issued ASU 2019-12,
Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC
740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities. The
guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years,
with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods
presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings
as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this update will have on its financial statements.
August
2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and
Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s
Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of
liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing
the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial
conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises
the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both
indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity
classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per
share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes
of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies,
ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early
adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective
for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Entities should adopt the guidance
as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. The Company is
currently evaluating the impact that ASU 2020-06 may have on its financial statements and related disclosures when adopted.
In May 2021, the FASB issued ASU 2021-04, Earnings
Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives
and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), (“ASU 2021-04”). This ASU reduces diversity in an
issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants)
that remain equity classified after modification or exchange. This ASU provides guidance for a modification or an exchange of a freestanding
equity-classified written call option that is not within the scope of another Topic. It specifically addresses: (1) how an entity should
treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity
classified after modification or exchange; (2) how an entity should measure the effect of a modification or an exchange of a freestanding
equity-classified written call option that remains equity classified after modification or exchange; and (3) how an entity should recognize
the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after
modification or exchange. This ASU is effective for all entities for fiscal years beginning after December 15, 2021. An entity should
apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. Early adoption
is permitted, including adoption in an interim period. The adoption of ASU 2021-04 on January 1, 2022 did not have a material impact on
the Company’s condensed financial statements or disclosures.
Management believes that other recent accounting
pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and
the Securities and Exchange Commission do not have a material impact on the Company’s present or near future financial statements.
5. Stockholders’
deficit
On March 7, 2017, the Company issued 40 shares of
common stock to Azari Bin A Ghani, Mazlan Bin Muhammad, Syed Mokhtar Bin Syed Agil and Tengku Faikah Binti Tengku Ismail (10 shares each)
for a consideration of $400.
On April 13, 2017, the Company issued 70 shares of
common stock to Romli Bin Che Noh, Suhaila Binti Md Arsid Arshad, Yu Ming Ngee, Ritha Tumiar Situmorang, Norizan Binti A Latif, Mohammad
Zamri Bin Wan Chik and Adicandra Manurung (10 shares each) for a consideration of $700.
On June 30, 2017, the Company issued 60 shares of
common stock to Mohd Afidi Bin Abdullah, Den Wijaya, Ching Yang Det and Mohd Zaki Bin Ahmadl (10 shares each) and Johanes Abednego (20
shares) for a consideration of $600.
On August 7, 2017, the Company filed a certificate
of change with the Secretary of State of Nevada to effectuate a reverse stock split (the “Stock Split”) of its issued and
outstanding shares of common stock on a 1-for-10,000 basis. The number of its authorized shares of common stock will remain at 1,200,000,000
shares, par value $0.001. The Stock Split became effective with FINRA on October 24, 2017 (the “Effective Date”). As of that
date, every 10,000 shares of issued and outstanding common stock were converted into one share of common stock. No fractional shares
were issued in connection with the Stock Split. Instead, any fractional shares were rounded up to the next whole share and a holder of
record of old common stock on the Effective Date who would otherwise be entitled to a fraction of a share were, in lieu thereof, issued
one whole share. All share and earnings per share information have been retroactively adjusted to reflect the Stock Split in the financial
statements.
During the year ended December 31, 2017, the Company
has received the proceeds of $87 for subscription of common stock and no common stock was issued.
On December 18, 2019, the investor withdrew his subscription
and the Company paid $87 back to him.
In April 2020, the Company, requested by the major
shareholder, converted certain debt of the Company in the amount of $90 at a price per share of $0.001 into shares of common stock of
the Company. As consideration for the conversion, the Company issued 90,000 shares of common stock of the Company to Mi1 Global Limited.
As a result of the conversion, Mi1 Global Limited increased its ownership to 90% of the issued and outstanding shares of common stock
of the Company.
The Company has no stock option plan, warrants or
other dilutive securities.
The Company has the authority to issue 1,200,000,000
shares of common stock, $0.001 par value. The total number of shares of the Company’s common stock outstanding as of March 31, 2023
and December 31, 2022 was 110,000.
6. Accrued expenses and other payables
Accrued expenses and other payables as
of March 31, 2023 and December 31, 2022 are summarized as follows:
Schedule of accrued expenses and other payables | |
At March 31, | | |
At December 31, | |
| |
2023 | | |
2022 | |
| |
$ | | |
$ | |
Accrued professional fees | |
| 35,215 | | |
| 28,194 | |
7. Related party
transactions
During the three months ended March 31, 2023 and
2022, the major shareholder, advanced $0 and $6,000 to pay operating expenses
for the Company, respectively.
As of March 31, 2023 and December 31, 2022, the balances
were $381,178 and $381,178, respectively.
The amounts due to related parties as of March 31,
2023 and December 31, 2022 represent temporary advances from the Company’s major shareholder. The amounts are interest free, unsecured
and no fixed repayment term.
8. Commitments and contingencies
From time to time the Company may become a party to
litigation matters involving claims against the Company. Management believes that it is adequately insured for its operations and there
are no current matters that would have a material effect on the Company's financial position or results of operations.
9. Subsequent Events
In accordance with ASC Topic 855, “Subsequent
Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31, 2023, up
through the date the Company issued the audited financial statements. During the period, the Company did not have any material reportable
subsequent events.