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MGOM Migom Global

Filed: 3 May 21, 3:32pm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended September 30, 2020

 

☐ 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. 333-216086

 

MIGOM GLOBAL CORP.

(Exact name of registrant as specified in its charter)

 

NEVADA 6199 61-1787148

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Number)

 

(IRS Employer

Identification Number)

 

Georgi Parrik

Chief Executive Officer

1185 6th Ave, 3rd Floor

New-York, NY, 10036, USA

Phone: 212-257-6711

(Address and telephone number of principal executive offices)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Securities registered pursuant to Section 12(g) of the Act: None

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
None    

 

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant as required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes ☐ No ☒

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
  Emerging growth company

 

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

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ☐ No ☒

 

There was no trading market value of the registrant’s common stock, par value $0.001 per share, as of the last business day of the registrant’s most recently completed second fiscal quarter.

 

As of April 27, 2021, the registrant had 7,489,000 shares of common stock issued and outstanding. 

 

 

 

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Migom Global Corp.

 

For the Nine Months Ended September 30, 2020

 

Index to the Unaudited Condensed Consolidated Financial Statements

 

Contents Page(s)
   
Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 (unaudited) 2
   
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2020 and 2019 (unaudited) 3
   
Condensed Consolidated Statement of Changes in Equity as of September 30, 2020 and 2019 (unaudited) 4
   
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019 (unaudited) 5
   
Notes to the Condensed Consolidated Financial Statements (unaudited) 6

 

1

 

 

MIGOM GLOBAL CORP.

(f/k/a Alfacourse Inc.)

Condensed Consolidated Balance Sheets

(unaudited)

 

  September 30,
2020
  December 31,
2019
 
       
ASSETS      
ASSETS:      
Cash and due from banks $10,730,311  $1,152,082 
Intangible assets, net  253,929   - 
Prepaid rent  -   1,111 
Total assets $10,984,240  $1,153,193 
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Liabilities:        
Deposits $8,857,306  $- 
Accounts payable and accrued expenses  18,710   5,173 
Notes payable to related party  -   41,814 
Payable to related party  121,294   8,691 
Total liabilities  8,997,310   56,678 
         
Shareholders’ equity        
Preferred stock ($0.001 par value, 650,000 shares authorized, 650,000 and zero shares issued and outstanding at September 30, 2020 and December 31, 2019)  650   - 
Common stock ($0.001 par value, 75,000,000 shares authorized, 7,489,000 and 7,459,000 shares issued and outstanding at September 30, 2020 and December 31, 2019)  7,489   7,459 
Additional paid in capital  1,542,294   1,263,930 
Accumulated earnings (deficit)  446,849   (164,477)
Other comprehensive income  (10,352)  (10,397)
Total shareholders’ equity  1,986,930   1,096,515 
         
Total liabilities and shareholders’ equity $10,984,240  $1,153,193 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

2

 

 

MIGOM GLOBAL CORP.

(f/k/a Alfacourse Inc.)

Condensed Consolidated Statement of Operations

(unaudited)

 

 

  Three months ended
September 30,
2020
  Nine months ended
September 30,
2020
  Three months ended
September 30,
2019
  Nine months ended
September 30,
2019
 
             
Non-Interest Income            

Service fees

 $1,349,135  $1,349,135  $-  $- 
                 
Non-Interest Expenses                

Processing cost

  15,182   15,182   -   - 
Professional fees  33,437   57,200   3,153   12,106 
Salary expense  16,200   48,600   -   - 
Rent expense  6,798   20,190   -   - 
Marketing fee  325,397   546,418   -   - 
Other general and administrative expenses  39,325   45,754   52   1,841 

Total non-interest expenses

  421,157   718,162   3,205   13,947 
                 
Total operating income (loss)  912,796   615,791   (3,205)  (13,947)
                 

Other expenses

                
Other expense  (3,269)  (4,465)  -   - 
Total other expense  (3,269)  (4,465)  -   - 
                 
Net Income (loss)  909,527   611,326   (3,205)  (13,947)
                 
Foreign currency translation gain (loss)  7   45   -   - 
                 
Total comprehensive income (loss) $909,534  $611,371  $(3,205) $(13,947)
                 
Loss per share - basic and diluted $0.12  $0.08  $0.00  $0.00 
                 
Weighted average shares outstanding - basic and diluted  7,489,000   7,489,000   7,315,000   7,315,000 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

3

 

 

MIGOM GLOBAL CORP.

(f/k/a Alfacourse Inc.)

Condensed Consolidated Statement of Shareholders’ Equity

September 30, 2020

(unaudited)

 

  Ordinary Shares  Preferred Stock  Additional
Paid-in
  Accumulated
earnings
  Accumulated
other
Comprehensive
    
  Shares  Amount  Shares  Amount  capital  

(deficit)
  Income  Total 
     $     $  $  $  $  $ 
                         
For the three and nine months ended September 30, 2019         
Balance at December 31, 2018  7,332,778   7,333           20,817   (28,245)  1   (94)
Net Loss                      (10,740)      (10,740)
Capital contribution                  13,817           13,817 
Foreign Currency Translation Adjustment                          47   47 
Balance at June 30, 2019  7,332,778   7,333   -   -   34,634   (38,985)  48   3,030 
Net Loss                      (3,205)      (3,205)
Foreign Currency Translation Adjustment                          -   - 
Balance at September 30, 2019  7,332,778   7,333   -   -   34,634   (42,190)  48   (175)
                                 
For the three and nine months ended September 30, 2020 
Balance at December 31, 2019  7,459,000   7,459           1,263,930   (164,477)  (10,397)  1,096,515 
Net Loss                      (298,201)      (298,201)
Issuance of common stock for acquisition of assets  30,000   30           269,970           270,000 
Issuance of preferred stock for conversion of debt          650,000   650   79,593           80,243 
Foreign Currency Translation Adjustment                          38   38 
Balance at June 30, 2020  7,489,000   7,489   650,000   650   1,613,493   (462,678)  (10,359)  

1,148,595 

 

Reversed of Capital contributed to related party payable

                  

(71,199

)         (71,199)

Net Income 

                  

909,527

           

909,527

 
Foreign Currency Translation Adjustment                          7   7 
Balance at September 30, 2020  7,489,000   7,489   650,000   650   1,542,294   446,849   (10,352)  1,986,930 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

4

 

  

MIGOM GLOBAL CORP.

(f/k/a Alfacourse Inc.)

Condensed Consolidated Statement of Cash Flows

(unaudited)

 

  For the nine
months ended
September 30,
2020
  For the nine
months ended
September 30,
2019
 
Operating Activities      
Net income (loss) $611,326  $(14,377)
Adjustments to reconcile net income to net cash provided by operating activities        
Amortization  16,071   1,240 
Interest expenses converted to Preferred stock  942   - 
Changes in operating assets and liabilities:        
Prepayment  1,111   - 
Deposit  8,857,306   - 
Accounts payable and accrued liabilities  13,522   (2,250)
Net cash provided by (used in) operating activities  9,500,278   (15,387)
Financing Activities        
Proceeds from notes payables Related Party  36,487   1,400 
Proceeds from related party payable  41,404   - 
Net cash provided by financing activities  77,891   1,400 
         
Effect of exchange rate changes on cash  60   - 
Change in cash and due from banks  9,578,229   (1,387)
Cash and due from banks at beginning of period  1,152,082   6,139 
Cash and due from banks at end of period $10,730,311  $4,752 
         
Supplemental Cash Flow Disclosures        
      
Cash paid for interest  16,123   - 
         
Non-cash investing and financing activities:        
Issuance of common stock for acquisition of Central Rich Trading Ltd.  

160,002

   - 
Issuance of common stock for acquisition of Migom Bank Limited  

1,135,998

   - 
Intangible assets acquired without cash  270,000   - 
Related party debt converted to Preferred Stock  79,501   - 
Reversal of capital contribution to related party payable  

71,199

   - 

 

See accompanying notes to unaudited condensed consolidated financial statements.

 

5

 

 

MIGOM GLOBAL CORP.

(f/k/a Alfacourse Inc.)

and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

September 30, 2020

(unaudited)

 

NOTE 1 – ORGANIZATION AND OPERATIONS

 

Migom Global Corp. (the “Company” or “Migom Global”) was incorporated as Alfacourse Inc. in the State of Nevada on February 29, 2016. On November 1, 2019, the Company amended its articles of incorporation and changed its name to Migom Global Corp. The change was made in anticipation of entering a new line of business operations which is a new company building synergistic ventures in international banking, securities brokerage, electronic money distribution as well as digital assets origination and market making.

 

On October 8, 2019, Heritage Equity Fund LP (“Heritage Equity Fund,” 80% owned by Thomas A. Schaetti (“Mr. Schaetti”)), entered into a Stock Purchase Agreement to acquire 5,000,000 shares, par value $0.001, of Migom Global and thereafter Heritage Equity Fund became 68.48% Controlling shareholder of Migom Global, Mr. Schaetti is 54.78% indirect owner of Migom Global Corp.

 

On November 1, 2019, the Company, amended its articles of incorporation change its name from Alfacourse Inc. to Migom Global Corp. The change was made in anticipation of entering into a new line of business operations. The Company changed its symbol from ALFC to MGOM on November 11, 2019.

 

On January 23, 2020, HRH Prince Maximillian Habsburg was appointed as Chairman of the Board of Directors of Migom Global Corp, (the “Company”). Also, on January 23, 2020, Mr. Thomas Schaetti and Mr. Stefan Lenhart were appointed as members of the Board of Directors of the Company. HRH Prince Maximillian Habsburg, Thomas Schaetti, and Stefan Lenhart accepted such appointments on January 23, 2020. Each appointee is independent using the definition of independence under NASDAQ Listing Rule 5605(a)(2) and the standards established by the Securities and Exchange Commission.

 

On March 31, 2020, the Securities and Exchange Commission granted the request of Migom Global Corp (the “Company”) to change its Standard Industrial Code (SIC) to 6199. Such SIC reflects the current operations of the Company, which is now Finance Services.

 

On April 8, 2020, the Company filed with State of Nevada, a Certificate of Amendment for increasing its authorized shares by 650,000 so that they consisted of 75,000,000 common stocks and 650,000 preferred stocks. The Board of Directors of the Company and the majority of the shareholders of the Company voted in favor of the rights on April 7, 2020. On April 13, 2020, the “Company, filed with the State of Nevada, a Certificate of Designation for its Series A preferred stock (the “Certificate”). The Certificate was effective on April 13, 2020. The Certificate establishes all of the rights of the holders of the Series A Preferred Stock (the “Series A”), as related to the Series A, including, but not limited to the lack of Series A conversion rights, its voting rights, and the liquidation preference.

 

The Company entered into a Securities Exchange and Settlement Agreement (the “Agreement”) with its controlling shareholder, Heritage Equity Fund LP (“Heritage”), dated April 16, 2020, pursuant to which the Company agreed to issue Heritage 650,000 shares of its Series A Preferred Stock in exchange for $80,242.81 in accrued and unpaid debt principle and interest, under three convertible debentures held by Heritage. Also, on April 16, 2020, the Company issued 650,000 shares of its Series A Preferred Stock, par value $.001 per share, to Heritage, as described above. The shares of Series A Preferred Stock were issued pursuant to Section 3(a)(9) of the Securities Act of 1933. as it was exchange for existing securities of the Company.

 

On April 15, 2020, HRH Prince Maximillian Habsburg tendered his resignation from the Board of Directors to the Company. Also, on April 15, 2020, the remaining members of the Board of Directors of the Company accepted HRH Prince Maximillian Habsburg’s resignation.

 

6

 

 

The Assets are source code, all the backups therefor, supporting documentation, manuals, schematics, computer graphics and the underlying custom images, copyrights therefor, URL domain names, as well as all the software technology and knowhow and any and all other worldwide intellectual property rights in full force and effect currently in perpetuity from the date hereof and all the associated intangible assets related to as well as involved in the design, reproduction, deployment on servers and in the cloud and exploitation of the following items:

 

 1.Mathematical formulas, technical, programming in any and all programming coding languages and other designs, work papers and any and all developed and implemented and/or under development intellectual property involving core banking and client-facing front end software and back end administrative user interface software, banking and trading cloud-based and server software used under the brand name Migom Bank (www.migom.com).

 

 2.Mathematical formulas, technical, programming in any and all programming coding languages and other designs, work papers and any and all developed and implemented and/or under development intellectual property involving mobile application in Android operating systems deployed in Google Play under the name of Migom Bank.

 

 3.Mathematical formulas, technical, programming in any and all programming coding languages and other designs, work papers and any and all developed and implemented and/or under development intellectual property involving mobile application in iOS operating system deployed in Apple App Store under the name of Migom Bank.

 

Also on April 21, 2020, the Company licensed the use of the Assets to Migom Bank Ltd. (the “Bank”), pursuant to a license agreement, by and between the Company and the Bank, dated April 21, 2020 (the “License Agreement”). Pursuant to the License Agreement, the Bank shall pay the Company $5,200 per month for the use of the Assets and $800 per month as a maintenance reserve fee.

 

The completion of the Asset Agreement caused the Company to definitively cease being a “shell company” (as such term is defined in Rule 12b-2 under the Exchange Act).

 

On April 21, 2020, Heritage Equity Fund (the “Seller”) and Migom Global (the “Purchaser”) entered into an Asset Purchase Agreement where Migom Global acquired certain intellectual property involving core banking front end and back end user interface software, banking and trading cloud-based and server software, etc. from Heritage Equity Fund. Migom Global issued 30,000 shares of its common stock for total consideration of $270,000 for the acquisition.

 

On May 12, 2020, the Company entered into an acquisition agreement with Migom Bank Ltd. and Mr. Schaetti (the “Migom Agreement”).  Migom Bank Ltd. (“Migom Bank”) was incorporated on August 7, 2019 in Dominica. Pursuant to the Migom Agreement, the Company acquired all of the outstanding equity of Migom Bank. Migom Bank is a regulated full-service international bank, licensed by the Financial Services Unit of the Ministry of Finance of Commonwealth of Dominica, specializing in providing retail banking services to individuals and companies worldwide. In addition to the traditional services of a deposit institution Migom Bank offers lending, leasing, and investment services, provides money transmittal services, is authorized to issue and administer means of payment such as credit and debit cards, travelers cheques, bankers’ drafts and electronic money. Migom Bank is also authorized by its regulators to provide custody of securities, issue guarantees and commitments, provide credit reference services, safe custody of valuables, offer all forms of electronic banking and foreign exchange and precious metal dealing services. Migom Bank is also authorized by its regulators to perform a variety of investment banking and corporate finance services. In exchange for the equity Migom Bank, the Company issued Mr. Schaetti 126,222 shares of common stock of the Company, at a price per share of $9.00. Migom Bank will operate under a separate business plan than the Company and Central Rich Trading Ltd. See Note 3.

 

On May 12, 2020, the Company, entered into an acquisition agreement with Central Rich Trading Ltd. and Mr. Schaetti (the “Central Agreement”).  Central Rich Trading Ltd. (“Central”) was incorporated on November 16, 2019 in Hong Kong. Pursuant to the Central Agreement, the Company acquired all of the outstanding equity of Central. Central is a money service business that is licensed by the Hong Kong Customs and Excise Department to provide all forms of permitted money services, electronic money and payment services in the respective territories. In exchange for the equity of Central, the Company issued Mr. Schaetti 17,778 shares of common stock of the Company, at a price per share of $9.00. Central will operate under a separate business plan than the Company and Migom Bank. See Note 3.

 

On May 14, 2020, Mr. Thomas A. Schaetti was appointed as President of the Company and Georgi Parrik assumed the title of Chief Executive Officer.

 

The Company, Migom Bank and Central, each were primarily owned and controlled by Mr. Schaetti. Mr. Schaetti serves as chief executive officer for each company.

 

For financial reporting purposes, the acquisitions of Migom Bank and Central and the entities controlled by Mr. Schaetti represented a transaction between entities under common control resulted in a change in reporting entity and required retrospective combination of entities for all periods presented, as if the combination had been in effect since the inception of common control. Accordingly, the condensed consolidated financial statements of Migom Global Corp. reflect the accounting of the combined acquired subsidiaries at historical carrying values, except that equity reflects the equity of Migom Global Corp.

 

7

 

 

Migom Global Corp. primarily develops and holds rights to essential software products and other intellectual property vital for operations of the companies, which it owns. Such intellectual property will be licensed to other companies in the financial industry either under Migom brand or white-labeled. As a stand-alone company, Migom Global Corp. intends to manage and operate as the proprietor of the closed-loop payment and global money transfer system, which will operate both on the rails of Migom Bank and licensed to other financial institutions. Additionally, Migom Global Corp. intends to provide advisory services to government institutions and large private companies in the fields of innovative fintech and blockchain technologies and application of the same to various industries.

  

Migom Bank is a regulated full-service international bank, licensed by the Financial Services Unit of the Ministry of Finance of Commonwealth of Dominica, specializing in providing retail banking services to individuals and companies worldwide. In addition to the traditional services of a deposit institution Migom Bank offers lending, leasing, and investment services, provides money transmittal services, is authorized to issue and administer means of payment such as credit and debit cards, travelers cheques, bankers’ drafts and electronic money. Migom Bank is also authorized by its regulators to provide custody of securities, issue guarantees and commitments, provide credit reference services, safe custody of valuables, offer all forms of electronic banking and foreign exchange and precious metal dealing services. Migom Bank is also authorized by its regulators to perform a variety of investment banking and corporate finance services.

 

Central is a money service business that is licensed by the Hong Kong Customs and Excise Department to provide all forms of permitted money services, electronic money and payment services in the respective territories.

 

The Company has been affected negatively by COVID-19 directly and adversely affected the development this year as follows: (a) administrative lockdowns impeded the Company’s ability to scout, interview and recruit both key management staff and clerical and support employees as opening new offices and training of new employees has been impeded. Furthermore, due to travel restrictions and closures of administrative and regulatory offices in various target markets internationally, new development plans have been put on hold. Attracting capital investment has become more challenging due to travel and social interaction restrictions, which prevented the Company from being able to make in-person presentations and roadshows to investors. Interaction with the acquisition targets, regulators, banks and other vendors of requisite services in Dominica and Hong Kong has been made very difficult due to travel restrictions to the respective areas and has been mainly put on hold. Key personnel of the Company has been directly affected by COVID-19, in particular, which certain employees and vital outsourced contractors had contracted and suffered through active COVID-19 infections.

 

NOTE 2 – SIGNIFICANT AND CRITICAL ACCOUNTING POLICIES AND PRACTICES

 

Basis of Presentation

 

The Company’s consolidated financial statements have been prepared in accordance with US GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the financial statements for the year ended December 31, 2019 and notes thereto and other pertinent information contained in our Form 10-K the Company has filed with the Securities and Exchange Commission (the “SEC”) on September 30, 2020. The results of operations for the nine months ended September 30, 2020, are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2020.

 

8

 

 

Common Control

 

The transactions between the Company and Migom Bank and Central, which all three are under common control, resulted in a change in reporting entity and required retrospective combination of the entities for all periods presented, as if the combination had been in effect since the inception of common control. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiaries at historical carrying values, except that equity reflects the equity of Migom Global.

 

Principles of Consolidation

 

The accompanying unaudited consolidated financial statements include all of the accounts of Migom Global Corp. and its wholly owned subsidiaries, Migom Bank and Central. All significant intercompany transactions and balances have been eliminated in consolidation.

 

Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date(s) of the financial statements and the reported amounts of revenues and expenses during the reporting period(s).

  

Critical accounting estimates are estimates for which (a) the nature of the estimate is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change and (b) the impact of the estimate on financial condition or operating performance is material. The Company’s critical accounting estimate(s) and assumption(s) affecting the financial statements was (were):

 

(i)Assumption as a going concern: Management assumes that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

(ii)Valuation allowance for deferred tax assets: Management assumes that the realization of the Company’s net deferred tax assets resulting from its net operating loss (“NOL”) carry–forwards for Federal income tax purposes that may be offset against future taxable income was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance. Management made this assumption based on (a) the Company has incurred recurring losses, (b) general economic conditions, and (c) its ability to raise additional funds to support its daily operations by way of a public or private offering, among other factors.

 

These significant accounting estimates or assumptions bear the risk of change due to the fact that there are uncertainties attached to these estimates or assumptions, and certain estimates or assumptions are difficult to measure or value.

 

9

 

 

Management bases its estimates on historical experience and on various assumptions that are believed to be reasonable in relation to the financial statements taken as a whole 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.

 

Management regularly evaluates the key factors and assumptions used to develop the estimates utilizing currently available information, changes in facts and circumstances, historical experience and reasonable assumptions. After such evaluations, if deemed appropriate, those estimates are adjusted accordingly.

 

Actual results could differ from those estimates.

 

Fair Value Measurements

 

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

 

ASC 820 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. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

 

Level 1 — quoted prices in active markets for identical assets or liabilities

 

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

 

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

 

The carrying amounts of the Company’s financial assets and liabilities, such as cash, accrued expenses, related party payables and notes payable approximate their fair values because of the short maturity of these instruments.

 

Cash and Due from banks

 

The Company considers all highly liquid investments in banks with maturities of three months or less at the time of purchase to be due from banks, or cash equivalents.  The cash held by related party is not insured. The Company has not experienced losses in such accounts.

 

10

 

 

Loans

 

The Company’s accounting methods for loans differ depending on whether the loans are originated or purchased, and for purchased loans, whether the loans were acquired at a discount related to evidence of credit deterioration since date of origination.

 

Originated loans held for investment. Loans the Company originates as held for investment are reported at the principal amount outstanding, net of unearned interest income and deferred fee and costs, and any direct principal charge-offs. Interest income is accrued on the unpaid principal balances as earned. Loan and commitment fees and certain direct loan origination cost are deferred and recognized over the line of the loan and/or commitment period as yield adjustments.

 

Purchased Loans. All purchased loans, including no-impaired and impaired, acquired are initially measured at fair value as of the acquisition date in accordance with applicable authoritative accounting guidance. Credit discounts are included in the determination of fair value. An allowance for credit losses is not recorded at the acquisition date.

 

Allowance for Credit Losses. The allowance for credit losses is established for probable and estimable losses incurred in the Company’s loan portfolio, including unfunded credit commitments. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for incurred losses on a quarterly basis.

 

Intangible Assets

 

Costs incurred to acquire intangibles are capitalized when the Company believes that there is a high likelihood that the software will be utilized and there will be future economic benefit associated with the software. These costs will be amortized on a straight-line basis over a 7 years life from the date of acquisition.

 

In accordance with the provisions of the applicable authoritative guidance, the Company’s long-lived assets and amortizable intangible assets are tested for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable. The Company assesses the recoverability of such assets by determining whether their carrying value can be recovered through undiscounted future operating cash flows, including its estimates of revenue driven by assumed market segment share and estimated costs. If impairment is indicated, the Company measures the amount of such impairment by comparing the fair value to the carrying value. The amortization of the trademark was not significant for the period ended September 30, 2020.

 

Related Parties

 

The Company follows subtopic 850-10 of the FASB Accounting Standards Codification for the identification of related parties and disclosure of related party transactions.

 

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Pursuant to Section 850-10-20 the related parties include (a) affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d) principal owners of the Company; (e) management of the Company; (f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

 

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include:  (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

 

Leases

 

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities - current, and operating lease liabilities - noncurrent on the balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets. The initial lease liability is equal to the future fixed minimum lease payments discounted using the Company’s incremental borrowing rate, on a secured basis. The initial measurement of the right-of-use asset is equal to the initial lease liability plus any initial direct costs and prepayments, less any lease incentives.

 

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

 

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Impairment of Long-lived Assets

 

The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

 

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

 

The Company determined that there were no impairments of long-lived assets at December 31, 2019 and September 30, 2020.

 

Revenue Recognition

 

In 2014, the FASB issued guidance on revenue recognition (“ASC 606”), with final amendments issued in 2016. The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. The Company has concluded that the new guidance did not require any significant change to its revenue recognition processes.

 

The Company is working on setting up a network of affiliated businesses in several countries, which may provide a seamless integration between the traditional regulated banking and financial services and the innovative emerging fintech solutions, benefiting consumers and businesses worldwide.

 

The Company generates revenue from account opening fees of 1,349,135 and service fees for transfers of funds by depositors of $256,299 for the nine months ended September 30, 2020.

 

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Income Taxes

 

Income taxes are provided in accordance with ASC No. 740, Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.

 

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

  

Net Income (Loss) per Common Share

 

The Company computes basic and diluted income (loss) per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic loss per share is computed by dividing net loss available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share is computed by dividing net loss available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

 

The dilutive effect of outstanding convertible securities and preferred stock is reflected in diluted earnings per share by application of the if-converted method.

 

Foreign Currency Translation and Transactions

 

The Hong Kong Dollar (“HKD”) is the functional currency of Central whereas the financial statements are reported in United States Dollar (“USD,” “$”). Assets and liabilities are translated based on the exchange rates at the balance sheet date, while revenue and expense accounts are translated at the average exchange rates prevailing during the period. Equity accounts are translated at historical exchange rates. The resulting translation gain and loss adjustments are accumulated as a component of stockholders’ equity and other comprehensive loss.

 

Comprehensive Income/Loss

 

The Company reports comprehensive loss and its components in its financial statements. Comprehensive loss consists of net loss on foreign currency translation adjustments affecting stockholders’ equity that, under U.S. GAAP, are excluded from net loss.

 

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Cash Flows Reporting

 

The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.  The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.

 

Subsequent Events

 

The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued.  Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.

 

Recently Issued Accounting Pronouncements

 

In December 2019, the FASB issued ASU 2019-12 - Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU provides an exception to the general methodology for calculating income taxes in an interim period when a year-to-date loss exceeds the anticipated loss for the year. This update also (1) requires an entity to recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax, (2) requires an entity to evaluate when a step-up in the tax basis of goodwill should be considered part of the business combination in which goodwill was originally recognized for accounting purposes and when it should be considered a separate transaction, and (3) requires that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. The standard is effective for the Company for fiscal years beginning after December 15, 2020, with early adoption permitted. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements.

 

In February 2020, the FASB issued ASU 2020-02, “Financial Instruments – Credit Losses (Topic 326) and Leases (topic 842) Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (topic 842)”. This ASU provides guidance regarding methodologies, documentation, and internal controls related to expected credit losses. This ASU is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements.

 

Management does not believe that any recently issued, but not yet effective accounting pronouncements, when adopted, will have a material effect on the accompanying financial statements.

 

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NOTE 3 – ACQUISITIONS

 

Acquisition of Migom Bank Ltd.

 

On May 12, 2020, the Company entered into an acquisition agreement with Migom Bank Ltd. and Thomas A. Schaetti (“Mr. Schaetti”) (the “Migom Agreement”). Pursuant to the Migom Agreement, the Company acquired all of the outstanding equity of Migom Bank Ltd. (“Migom Bank”). Migom Bank is a regulated full-service international bank, licensed by the Financial Services Unit of the Ministry of Finance of Commonwealth of Dominica, specializing in providing retail banking services to individuals and companies worldwide. In addition to the traditional services of a deposit institution Migom Bank offers lending, leasing, and investment services, provides money transmittal services, is authorized to issue and administer means of payment such as credit and debit cards, travelers cheques, bankers’ drafts and electronic money. Migom Bank is also authorized by its regulators to provide custody of securities, issue guarantees and commitments, provide credit reference services, safe custody of valuables, offer all forms of electronic banking and foreign exchange and precious metal dealing services. Migom Bank is also authorized by its regulators to perform a variety of investment banking and corporate finance services. In exchange for the equity Migom Bank, the Company issued Mr. Schaetti 126,222 shares of common stock of the Company, at a price per share of $9.00 for total consideration of $1,136,000.

 

Acquisition of Central Rich Trading Limited

 

On May 12, 2020, the Company, entered into an acquisition agreement with Central Rich Trading Ltd. (“Central”) and Mr. Schaetti (the “Central Agreement”). Pursuant to the Central Agreement, the Company acquired all of the outstanding equity of Central. Central is a money service business that is licensed by the Hong Kong Customs and Excise Department to provide all forms of permitted money services, electronic money and payment services in the respective territories. In exchange for the equity of Central, the Company issued Mr. Schaetti 17,778 shares of common stock of the Company, at a price per share of $9.00 for total consideration of $160,000.

 

Common Control

 

The transactions between the Company and Migom Bank and Central, which all three are under common control, resulted in a change in reporting entity and required retrospective combination of the entities for all periods presented, as if the combination had been in effect since the inception of common control. Accordingly, the consolidated financial statements of the Company reflect the accounting of the combined acquired subsidiaries at historical carrying values, except that equity reflects the equity of Migom Global.

 

NOTE 4 – GOING CONCERN

 

The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the financial statements, the Company had accumulated earnings of $446,849 since inception with limited operations with reported net income of $611,326 for the nine months ended September 30, 2020. However, this is the first quarter for the Company to generate revenue, the Company cannot assure it will generate profit in the coming years. And it still raises doubt about the Company’s ability to continue as a going concern currently.

 

Although the Company has recognized some nominal amount of revenues since inception, the Company is devoting substantially all of its efforts on establishing the business and its planned principal operations have not commenced.  The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect.  The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.

 

The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

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NOTE 5 – RESTRICTIONS ON CASH AND DUE FROM BANKS

 

The Dominica Republic banking regulators do not require bank subsidiaries to maintain minimum average reserve balances, either in the form of vault cash or reserve balances held with central banks or other financial institutes; the only requirement is to have one million dollars in equity capital of the bank.

 

NOTE 6 – INTANGIBLE ASSETS

 

Intangible assets schedule as follows:

 

  September 30,
2020
  December 31,
2019
 
       
Intellectual property $270,000  $     - 
Less: accumulated amortization  (16,071)  - 
Net $253,929  $- 

 

Amortization expense was $16,071 for the nine months ended September 30, 2020.

 

NOTE 7 – NOTES PAYABLE TO RELATED PARTY

 

On October 9, 2019, the Company entered into a convertible note agreement with Heritage Equity Fund, for $20,000 and $22,814, with interest rate of 8% and maturity date of July 9, 2020.

 

On April 14, 2020, the Company entered into a convertible note agreement with Heritage Equity Fund, for $35,697, maturity date of July 1, 2021, the note bears interest of 12% per annum and has a conversion price of $0.0025 per share. Heritage Equity Fund is a related party as it is controlled by Thomas A. Schaetti, director and majority shareholder of the Company.  

 

Interest expense were $942 and $46 for the nine months ended September 30, 2020 and 2019, respectively.

 

On April 16, 2020, the notes payable related party and interest payable has been settled by issuance of Preferred Stock Series A through a settlement agreement.

 

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NOTE 8 – DEPOSIT

 

Deposits consists of funds place into banking institution by the bank accounts holders for safekeeping. The account holder has the right to withdraw deposited funds accordingly.

 

The composition of deposits was as follows:

 

  September 30,
2020
  December 31,
2019
 
Non interest-bearing deposits $8,857,306  $        0 
Total deposits $8,857,306  $0 

 

NOTE 9 – SHAREHOLDERS’ EQUITY

 

Shares Authorized

 

Upon formation the total number of shares of all classes of stock which the Company is authorized to issue is seventy-five million (75,000,000) shares of which seventy-five million (75,000,000) shares shall be common stock, par value $0.001 per share.

 

On April 8, 2020, the Company filed a Certificate of Amendment with the State of Nevada increasing its authorized shares by 650,000 so that they consisted of 75,000,000 shares of common stock and 650,000 shares of preferred stock. The Board of Directors of the Company and the majority of the shareholders of the Company voted in favor of the rights on April 7, 2020. On April 13, 2020, the “Company, filed with the State of Nevada, a Certificate of Designation for its Series A preferred stock (the “Certificate”). The Certificate was effective on April 13, 2020. The Certificate establishes all of the rights of the holders of the Series A Preferred Stock (the “Series A”), as related to the Series A, including, but not limited to the lack of Series A conversion rights, its voting rights, and the liquidation preference (collectively, the “Rights”).

 

Common Stock

 

As of September 30, 2020, there were 7,489,000 total shares issued and outstanding.

 

On April 21, 2020, the Company entered into an asset purchase agreement with Heritage Equity Fund (the “Asset Agreement”). Pursuant to the Asset Agreement, the Company acquired all of the intellectual property of Heritage Equity Fund related to core banking front end and back-end user interface software, banking and trading cloud-based and server software, and mobile applications (collectively, the “Assets”). In exchange for the Assets, the Company issued Heritage Equity Fund 30,000 shares of common stock of the Company, at a price per share of $9.00 for total consideration of $270,000.

 

On May 12, 2020, the Company entered into an acquisition agreement with Migom Bank (see Note 3). The Company issued Mr. Schaetti 126,222 shares of common stock of the Company, at a price per share of $9.00.

 

On May 12, 2020, the Company entered into an acquisition agreement with Central (see Note 3). The Company issued Mr. Schaetti 17,778 shares of common stock of the Company, at a price per share of $9.00.

 

Preferred Stock

 

As of September 30, 2020, there were 650,000 total shares issued and outstanding.

 

The Company entered into a Securities Exchange and Settlement Agreement with its controlling shareholder, Heritage Equity Fund, dated April 16, 2020, pursuant to which the Company agreed to issue Heritage Equity Fund 650,000 shares of its Series A Preferred Stock in exchange for $80,243 in accrued and unpaid debt principal and interest, under three convertible debentures held by Heritage Equity Fund.

 

On July 1, 2020, the Company reversed the additional paid-in capital contributed by Thomas A. Schaetti in the amount of $71,199 to related party debt because Mr. Schaetti is no longer a shareholder of Migom Bank Ltd.

 

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NOTE 10 – RELATED PARTY TRANSACTIONS

 

Free Office Space

 

The Company has been provided office space by its President at no cost. Management determined that such cost is nominal and did not recognize the rent expense in its financial statement.

 

Acquisition of intellectual property

 

On April 21, 2020, the Company entered into an asset purchase agreement with Heritage Equity Fund, who was 80% owned by Thomas A. Schaetti, (the “Asset Agreement”). Pursuant to the Asset Agreement, the Company acquired all of the intellectual property of Heritage Equity Fund related to core banking front end and back end user interface software, banking and trading cloud-based and server software, and mobile applications (collectively, the “Assets”). In exchange for the Assets, the Company issued Heritage Equity Fund 30,000 shares of common stock of the Company, at a price per share of $9.00 for total consideration for $270,000.

 

Marketing fees

 

The Company engaged Migom AG, a related party of the Company, for marketing service to refer customers to open bank accounts at Migom Bank. The marketing fees are recorded as cost of revenue as it is directly related to account opening service revenues. For the nine months ended September 30, 2020 and 2019, the Company incurred marketing expenses of $546,418 and $0 respectively.

 

Cash held in Trust 

 

Cash was held in trust by Migom Investment SA as operating funds for disbursements and receipts. The Company has full control and access over the cash held in trust.

 

Advances from Related Parties

 

From time to time, Georgi Parrik, the President and Director of the Company, and Thomas Shaetti, another Director of the Company, would advance funds to the Company for working capital purposes. These advances are unsecured, non-interest bearing and due on demand. The outstanding balance was $54,294 and $8,691 as of September 30, 2020 and December 31, 2019 respectively.

 

The Company received advance of $67,000 from Heritage Equity Fund LP for the nine months ended September 30, 2020. As of September 30, 2020 and December 31, 2019, the balance advanced from Heritage Equity Fund LP was $67,000 and $0 respectively.

 

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NOTE 11 – INCOME TAXES 

 

The Company is subject to federal taxes in the United States (tax rate of 21%), state taxes in Nevada, foreign taxes for Migom Bank in Dominica (tax rate of 27%), and foreign taxes for Central in Hong Kong (tax rate of 8.25%).

 

USA

 

The Company did not recognize any deferred tax assets or liabilities as of September 30, 2020 and December 31, 2019.

  

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

 

  Nine months ended September 30,
2020
 
    
Federal statutory income tax rate  21.0%
Increase (reduction) in income tax provision resulting from:    
Preferential taxation  (21.0)%
Effective income tax rate  0.0%

 

Hongkong

 

Central was incorporated under the Hong Kong tax laws. The statutory income tax rate is 8.25%. Subsidiaries in Hong Kong are exempted from income tax on their foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.

 

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NOTE 12 – COMMITMENTS AND CONTINGENCIES

 

The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.  The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.  In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

 

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

 

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.  Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

 

The Company did not have any commitments or contingencies as of September 30, 2020

 

Legal Matters

 

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of April 30, 2021, there were no pending or threatened lawsuits.

 

Lease and expenses

 

The original lease agreement was less than 12 months and subsequently became month to month after expiration.

 

The Company has elected to not recognize lease assets and liabilities for leases with a term less than twelve months.

 

The lease expense was $20,190 and $0 for the nine months ended September 30, 2020 and 2019.

 

NOTE 13 – SUBSEQUENT EVENTS

 

The Company has evaluated all events that occur after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there were reportable subsequent event(s) to be disclosed.

 

The Company has been affected negatively by COVID-19 directly and adversely affected the development this year as follows: (a) administrative lockdowns impeded the Company’s ability to scout, interview and recruit both key management staff and clerical and support employees as opening new offices and training of new employees has been impeded. Furthermore, due to travel restrictions and closures of administrative and regulatory offices in various target markets internationally, new development plans have been put on hold. Attracting capital investment has become more challenging due to travel and social interaction restrictions, which prevented the Company from being able to make in-person presentations and roadshows to investors. Interaction with the acquisition targets, regulators, banks and other vendors of requisite services in Dominica and Hong Kong has been made very difficult due to travel restrictions to the respective areas and has been mainly put on hold. Key personnel of the Company has been directly affected by COVID-19, in particular, which certain employees and vital outsourced contractors had contracted and suffered through active COVID-19 infections.

 

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

General

 

Migom Global Corp. (the “Company”) was incorporated as Alfacourse Inc. in the State of Nevada on February 29, 2016. On October 9, 2019, as a result of a private transactions, 5,000,000 shares of common stock (the “Shares”) of the Company, were transferred from Oleg Jitov to Heritage Equity Fund LP (the “Purchaser”).  As a result, the Purchaser became a 68.35% holder of the voting rights of the issued and outstanding share capital of the Company on a fully-diluted basis of the Company, and became the controlling shareholder. In connection with the transaction, Oleg Jitov released the Company from all debts owed to him. On October 8, 2019, the existing director and officer resigned. Accordingly, Oleg Jitov, serving as a director and an officer, ceased to be the Company’s Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary and a Director. At the effective date of the transfer, Georgi Parrik consented to act as the new President, CEO, CFO, Treasurer, Secretary and Chairman of the Board of Directors of the Company. On November 1, 2019, the Company amended its articles of incorporation change its name to Migom Global Corp. The change was made in anticipation of entering into a new line of business operations which is a new company building synergistic ventures in international banking, securities brokerage, electronic money distribution as well as digital assets origination and market making. Our offices are located at 1185 Avenue of the Americas, 3rd Floor, New York, NY 10036.

 

On January 23, 2020, HRH Prince Maximillian Habsburg was appointed as Chairman of the Board of Directors of the Company. Also, on January 23, 2020, Mr. Thomas Schaetti and Mr. Stefan Lenhart were appointed as members of the Board of Directors of the Company. HRH Prince Maximillian Habsburg, Thomas Schaetti, and Stefan Lenhart accepted such appointments on January 23, 2020. Each appointee is independent using the definition of independence under NASDAQ Listing Rule 5605(a)(2) and the standards established by the Securities and Exchange Commission.

 

On May 12, 2020, the Company entered into an acquisition agreement with Migom Bank Ltd. and Thomas A. Schaetti (the “Migom Agreement”). Pursuant to the Migom Agreement, the Company acquired all of the outstanding equity of Migom Bank Ltd. (“Migom Bank”). Migom Bank is a regulated full-service international bank, licensed by the Financial Services Unit of the Ministry of Finance of Commonwealth of Dominica, specializing in providing retail banking services to individuals and companies worldwide. In addition to the traditional services of a deposit institution Migom Bank offers lending, leasing, and investment services, provides money transmittal services, is authorized to issue and administer means of payment such as credit and debit cards, travelers cheques, bankers’ drafts and electronic money. Migom Bank is also authorized by its regulators to provide custody of securities, issue guarantees and commitments, provide credit reference services, safe custody of valuables, offer all forms of electronic banking and foreign exchange and precious metal dealing services. Migom Bank is also authorized by its regulators to perform a variety of investment banking and corporate finance services. In exchange for the equity Migom Bank, the Company issued Mr. Schaetti 126,222 shares of common stock of the Company, at a price per share of $9.00.

 

On May 12, 2020, the Company, entered into an acquisition agreement with Central Rich Trading Ltd. and Thomas A. Schaetti (the “Central Agreement”). Pursuant to the Central Agreement, the Company acquired all of the outstanding equity of Central Rich Trading Ltd. (“Central”). Central is a money service business that is licensed by the Hong Kong Customs and Excise Department to provide all forms of permitted money services, electronic money and payment services in the respective territories. In exchange for the equity of Central, the Company issued Mr. Schaetti 17,778 shares of common stock of the Company, at a price per share of $9.00.

 

On May 14, 2020, Mr. Thomas A. Schaetti was appointed as President of the Company and Georgi Parrik assumed the title of Chief Executive Officer. 

 

The Company, through Migom Bank, provides a full set of general and private banking services, with strict but reasonable compliance policies. Migom Bank is multi-currency IBAN’s, both SEPA and SWIFT-enabled and has universally accepted prepaid debit cards. We provide fast global money transfers, superb account security and data protection, a full suite of e-banking tools online and in-app, and a seamless link to crypto assets.

 

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Migom Bank offers personal accounts, which can be applied for and opened online. Our general banking accounts offer everything to simplify and streamline daily financial life. You can see the Company’s services at migom.com. Migom Bank also provides international e-commerce, with multiple currencies, support locations in key parts of the world, a network of reliable correspondent banks and an expert IT team. Migom Bank is managed by the group of Swiss and international financial services professionals. Migom Bank offers personal accounts, which can be applied for and opened online. Migom Bank also has an app that can be found at the App Store or Google Play.

 

Migom Bank offers an e-wallet that can be linked to existing credit/debit cards, bank accounts and connects to various money transfer systems turning it into a hub of personal finances. The e-wallet accepts BTC or other blockchain-based coins where it bridges crypto asset holdings with the fiat currency world via seamless instant transfers between your accounts.

 

Migom Bank provides its Private Bank portfolio-holders with personal advice and individually-crafted trading strategies in most of the relevant securities markets. Our global industry affiliations ensure safe custody of funds and securities, efficient order execution and access to the most difficult products such as US OTC Markets stocks and Eastern European stock exchanges. Our general banking clients are offered low-cost online trading on major stock and commodities exchanges. Migom Bank also offers Visa and MasterCard credit cards.

 

We assist international clients with capital formation needed for business expansion. We work with the established investment banks in the most liquid capital markets of the world we arrange and manage various public offerings and private placements of capital. The network of our business affiliates used for these services includes major law and accounting firms, US FINRA-member b/d’s, UK FCA-licensed companies, EU-passported brokerages and other regulated entities. We also offer turn-key STO and other asset-tokenization services via our own regulated securities token exchange. EMI License (London, Lithuania, Malta, Hong Kong). Migom Bank has correspondent bank accounts in United States, Canada, Italy, Portugal, France, Great Britain, Luxembourg, Latvia, and Hong Kong.

 

Migom Bank is actively involved in the blockchain revolution. Our clients get preferred access to our own proprietary crypto currency trading system, which uses artificial intelligence to work simultaneously on dozens of the most liquid crypto-exchanges. Our system ensures stealth execution of the most voluminous trading orders at the best available prices in the shortest possible time. The speed of our crypto-trading execution combined with the ability of Migom Bank to safely custody and instantly move fiat funds are one of a kind.

 

In addition, we acquired all of the outstanding Central Rich Trading Ltd.on May 12, 2020 form Mr. Schaetti. Central Rich Trading Ltd. is a money service business that is licensed by the Hong Kong Customs and Excise Department to provide all forms of permitted money services, electronic money and payment services in the respective territories.

 

Patent, Trademark, License & Franchise Restrictions and Contractual Obligations & Concessions

 

Migom Global uses a group of Intellectual Property Practice lawyers assist internationally and locally in transactions where intellectual property plays an important role, such as non-disclosure and confidentiality agreements, franchise agreements, license agreements and transfer agreements. It is carried out in accordance with local and international law.

 

Governmental and Industry Regulations

 

We will be subject to federal and state laws and regulations that relate directly or indirectly to our operations including federal securities laws. We will also be subject to common business and tax rules and regulations pertaining to the normal business operations.

 

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Research and Development Activities and Costs

 

Support will be provided for activities targeting among others: regional marketing, trade and investment promotion, SME development, the development of local and regional labor markets, the development of an information society, new technologies, improvement of cooperation between research and business institutions, the socio-economic and environmental rehabilitation of technologically transformed and contaminated areas.

 

Compliance with Environmental Laws

 

Our operations are not subject to any environmental laws.

 

Results of Operations for the Three Months Ended September 30, 2020 and 2019

 

We completed our operation organization structure in May 2020, and started banking operations during the three months ended September 30, 2020, and we did not have any operations for the three months ended September 30, 2019.

 

Revenues

 

For the three months ended September 30, 2020, we began to generate revenue in the amount of $1,349,135. 

 

Expenses

 

For the three months ended September 30, 2020, our expenses related to our banking operations were $421,157 comprised of marketing fee of $325,397, salary expense of $16,200, rent expense of $6,798, professional fees of $33,437, and general and administrative expenses of $39,325.  The Company has paid marketing expenses for bank accounts opening services.

 

Net Income

 

For the three months ended September 30, 2020, our net income was $909,527.

 

Results of Operations for the Nine Months Ended September 30, 2020

 

Revenues

 

For the nine months ended September 30, 2020, we began to generate revenue in the amount of $1,349,135.

 

Operating Expenses

 

For the nine months ended September 30, 2020, our operating expenses were $718,162 comprised of marketing fess of $546,418, salary expense of $48,600, rent expense of $20,190, professional fees of $57,200, and general and administrative expenses of $45,754.

 

Net Income

 

For the nine months ended September 30, 2020, our net income was $611,326.

 

Liquidity and Capital Resources

 

Liquidity and Capital Resources during the nine months ended September 30, 2020.

 

As of September 30, 2020, the Company reported the cash and due from bank balance of $10,730,311 and liabilities of $8,997,310.

 

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For the nine months ended September 30, 2020, we have cash flows provided by operating activities of $9,500,278 The activities were comprised of net income of $611,326, amortization expenses of $16,071, increase in deposit of $8,857,306, and increase in accounts payable and accrued liabilities of $13,522.

 

For the nine months ended September 30, 2019, we have cash flows used in operating activities of $15,387. The activities were comprised of net loss of $14,377, amortization expenses of $1,240, and decrease in accounts payable and accrued liabilities of $2,250.

 

We had no investing activity for the nine months ended September 30, 2020 and 2019.

 

For the nine months ended September 30, 2020 and 2019, net cash provided by financing activities were $77,891 and $1,400, respectively; which represents the proceeds from related parties.

 

Critical Accounting Policies

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

 

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 1, “Summary of Significant Accounting Policies” in our audited financial statements for the year ended December 31, 2019, included in our Annual Report on Form 10-K as filed on March 31, 2020, for a discussion of our critical accounting policies and estimates.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

A smaller reporting company, as defined by Item 10 of Regulation S-K, is not required to provide the information required by this item.

  

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to the chief executive and interim chief financial officer to allow timely decisions regarding disclosure.

 

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As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are not effective as of such date. The Chief Executive Officer and Chief Financial Officer have determined that the Company continues to have the following deficiencies which represent a material weakness:

 

 1.The Company’s lack of independent directors, the Company intends to appoint additional independent directors;
   
 2.Lack of in-house personnel with the technical knowledge to identify and address some of the reporting issues surrounding certain complex or non-routine transactions. With material, complex and non-routine transactions, management has and will continue to seek guidance from third-party experts and/or consultants to gain a thorough understanding of these transactions;
   
 3.Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting;
   
 4.Insufficient written policies and procedures over accounting transaction processing and period end financial disclosure and reporting processes.

  

To remediate our internal control weaknesses, management intends to implement the following measures:

 

 The Company will add sufficient number of independent directors to the board and appoint additional member(s) to the Audit Committee.
   
 The Company will add sufficient accounting personnel to properly segregate duties and to effect a timely, accurate preparation of the financial statements.
   
 The Company will hire staff technically proficient at applying U.S. GAAP to financial transactions and reporting.
   
 Upon the hiring of additional accounting personnel, the Company will develop and maintain adequate written accounting policies and procedures.

 

The additional hiring is contingent upon The Company’s efforts to obtain additional funding through equity or debt and the results of its operations. Management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

 

Changes in Internal Control Over Financial Reporting

 

There are no changes in our internal controls over financial reporting other than as described elsewhere herein.

 

Limitations on the Effectiveness of Controls

 

The Company’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

 

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PART II – OTHER INFORMATION

 

Item 1. Legal Proceeding

 

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 1a. Risk Factors

 

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

On April 21, 2020, the Company entered into an asset purchase agreement with Heritage Equity Fund LP (the “Asset Agreement”). Pursuant to the Asset Agreement, the Company acquired all of the intellectual property of Heritage Equity Fund LP (“Heritage”) related to core banking front end and back end user interface software, banking and trading cloud-based and server software, and mobile applications (collectively, the “Assets”). In exchange for the Assets, the Company issued Heritage 30,000 shares of common stock of the Company, at a price per share of $9.00.    

 

On May 12, 2020, the Company entered into an acquisition agreement with Migom Bank Ltd. The Company issued Mr. Schaetti 126,222 shares of common stock of the Company, at a price per share of $9.00.

 

On May 12, 2020, the Company entered into an acquisition agreement with Central Rich Trading Limited. The Company issued Mr. Schaetti 17,778 shares of common stock of the Company, at a price per share of $9.00.

 

Item 3. Default Upon Senior Securities

 

No report required.

 

Item 4. Mine Safety Disclosures

 

No report required.

 

Item 5. Other Information

 

No report required.

 

Item 6. Exhibits

 

31 Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive and financial officer
   
32  Section 1350 Certification of principal executive officer, principal financial officer and principal accounting officer
   
101. INS   XBRL Instance Document    
   
101. SCH XBRL Taxonomy Extension Schema Document  
   
101. CAL   XBRL Taxonomy Extension Calculation Linkbase Document  
   
101. DEF XBRL Taxonomy Extension Definition Linkbase Document  
   
101. LAB XBRL Taxonomy Extension Label Linkbase Document
   
101. PRE XBRL Taxonomy Extension Presentation Linkbase Document

 

*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

 

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SIGNATURES

 

The undersigned, Georgi Parrik, President and Chief Executive Officer, and Chief Financial Officer and Secretary of Migom Global Corp. (the “Registrant”) certifies, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Annual Report on Form 10-K of the Registrant for the year ended December 31, 2019 (the “Report”):

 

 (1)fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

   

 (2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

 

Dated: May 3, 2021

 

 By:/s/ Georgi Parrik
  Georgi Parrik
  President and Chief Executive Officer
(principal executive officer), and
Chief Financial Officer and
Secretary (principal financial officer)

 

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

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