UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from ___________ to ___________
Commission File No.
(Exact name of registrant as specified in its charter)
| 6199 | ||||
| (State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Number) | (IRS Employer Identification Number) |
Georgi Parrik
Chief Executive Officer
Phone:
(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.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted 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 such files).
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-Q or any amendment to this Form 10-Q. 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 filer | ☐ | Accelerated filer | ☐ |
| ☐ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by 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 $0.001 per share, as of the last business day of the registrant’s most recently completed second fiscal quarter.
As of September 30, 2021, the registrant had
Migom Global Corp.
(Formerly Alfacourse Inc.)
Consolidated Balance Sheets
As of September 30, 2021, and December 31, 2020
| Sept 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and due from banks | ||||||||
| Investment activities | ||||||||
| Accounts receivable - related party | ||||||||
| Accounts receivable | ||||||||
| Security Deposit | ||||||||
| Prepaid Expenses | ||||||||
| Total current assets | ||||||||
| Non-current Assets | ||||||||
| Intangible assets, net | ||||||||
| Total non-current assets | ||||||||
| Total assets | ||||||||
| Liabilities and shareholders’ equity | ||||||||
| Liabilities: | ||||||||
| Deposits | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Accrued interest - related party | ||||||||
| Accounts payable related party | ||||||||
| Notes payable to related party | ||||||||
| Income tax payable | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ equity | ||||||||
| Common stock ($ | ||||||||
| Additional paid in capital | ||||||||
| Accumulated income (deficit) | ||||||||
| Statutory reserves | ||||||||
| Other comprehensive income | ||||||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | ||||||||
The accompanying notes are an integral part of these financial statements.
F-1
Migom Global Corp.
(formerly Alfacourse Inc.)
Consolidated Statements of Operations and Comprehensive Income (Loss)
For the Nine Months Ended September 30, 2021, and 2020 and the Three Months Ended September 30, 2021, and 2020
| For the Three Months ended | For the Nine Months ended | For the Three Months ended | For the Nine Months ended | |||||||||||||
| Sept 30, | Sept 30, | Sept 30, | Sept 30, | |||||||||||||
| 2021 | 2021 | 2020 | 2020 | |||||||||||||
| Non-interest income | ||||||||||||||||
| Service fees from clients’ accounts services | ||||||||||||||||
| Related party income | ||||||||||||||||
| Total non-interest income | ||||||||||||||||
| Non-interest expenses | ||||||||||||||||
| Banking partners -fees & commissions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other financial institutions - fees & commissions | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Transaction fees paid to related party | ||||||||||||||||
| Selling & marketing expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expenses from operation | ||||||||||||||||
| Other income (expenses) | ( | ) | ( | ) | ||||||||||||
| Total non-interest expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense | ||||||||||||||||
| Interest on deposits | ( | ) | ( | ) | ||||||||||||
| Interest on money market fund | ( | ) | ||||||||||||||
| Total interest expense | ( | ) | ( | ) | ||||||||||||
| Impairment loss of investment | ( | ) | ( | ) | ||||||||||||
| Other Income | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income (loss) before income taxes | ||||||||||||||||
| Income tax expenses | ||||||||||||||||
| Net income (Loss) | ||||||||||||||||
| 0 | % | 0 | % | |||||||||||||
| Comprehensive Income | ( | ) | ||||||||||||||
| Other Comprehensive Income | ||||||||||||||||
| Total Comprehensive Income | ||||||||||||||||
| Basic and diluted income per common share | ||||||||||||||||
| Weighted average number of common shares outstanding - basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these financial statements.
F-2
Migom Global Corp.
(formerly Alfacourse Inc.)
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2021, and 2020
| For the Nine Months ended | For the Nine Months ended | |||||||
| Sept 30, | Sept 30, | |||||||
| 2021 | 2020 | |||||||
| Cash Flows from Operating activities | ||||||||
| Net income (loss) | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | ||||||||
| Depreciation and amortization expenses | ||||||||
| Shares issued for expenses | ||||||||
| Other adjusments | ( | ) | ||||||
| Interest expense converted to Preferred Stock | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable - related party | ( | ) | ||||||
| Security Deposit | ( | ) | ||||||
| Prepayment | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Accrued interest - related party | ||||||||
| Accounts payable - related party | ||||||||
| Notes payable to related party | ||||||||
| Income tax payable | ||||||||
| Net cash provided by (used in) operating activities | ||||||||
| Cash Flows from Investing activities | ||||||||
| Acquisition for software development | ( | ) | ||||||
| Impairment loss of investment | ||||||||
| Net cash used Investing activities | ( | ) | ||||||
| Cash Flows from Financing activities | ||||||||
| Capital Contribution | ||||||||
| Proceeds from Related Party | ||||||||
| Increase in clients’ deposits | ( | ) | ||||||
| Proceeds from notes payable | ||||||||
| Net cash provided by financing activities | ( | ) | ||||||
| Effect of exchange rate changes on cash | ||||||||
| Change in cash and due from banks | ||||||||
| Cash and due from banks at beginning of period | ||||||||
| Cash and due from banks at end of period | ||||||||
| Supplemental disclosure of cash flow information | ||||||||
| - | - | |||||||
| Cash paid for interest | ||||||||
| Non-cash investing and financing activities: | ||||||||
| Intangible assets acquired by issuance of common stock | ||||||||
| Related party debt converted to Preferred Stock | ||||||||
| Reversal of capital contribution to related party payable | ||||||||
| Forgiveness of Debt | ||||||||
F-3
Migom Global Corp.
(formerly Alfacourse Inc.)
Consolidated Statements of Shareholders’ Deficit
For the Nine Months Ended September 30, 2021 and 2020 and Three Months Ended September 30, 2021 and 2020
| Common Stock | Preferred Stock | Additional | Accumulated other | |||||||||||||||||||||||||||||||||
| Number of | Number of | Paid-in | Accumulated | Statutory | Comprehensive | |||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Reserve | Income | Total | ||||||||||||||||||||||||||||
| Balance at December 31, 2019 | ( | ) | ||||||||||||||||||||||||||||||||||
| Capital Contribution | ||||||||||||||||||||||||||||||||||||
| Forgiveness of debt | ||||||||||||||||||||||||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Foreign Currency Translation Adjustment | ||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2020 | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for acquisition of assets | ||||||||||||||||||||||||||||||||||||
| Issuance of preferred stock for conversion of debt | ||||||||||||||||||||||||||||||||||||
| Reversal of capital contributed by related party | ||||||||||||||||||||||||||||||||||||
| Net Profit | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Foreign Currency Translation Adjustment | ||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2020 | ( | ) | ||||||||||||||||||||||||||||||||||
| Issuance of common stock for acquisition of assets | ||||||||||||||||||||||||||||||||||||
| Issuance of preferred stock for conversion of debt | ||||||||||||||||||||||||||||||||||||
| Reversal of capital contributed by related party | ||||||||||||||||||||||||||||||||||||
| Net Profit | ||||||||||||||||||||||||||||||||||||
| Foreign Currency Translation Adjustment | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Balance at Sept 30, 2020 | ||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2020 | ||||||||||||||||||||||||||||||||||||
| Shares issued for expenses | ||||||||||||||||||||||||||||||||||||
| Forgiveness of debt | ||||||||||||||||||||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||||||||||||||||||
| Foreign Currency Translation Adjustment | ||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2021 | ||||||||||||||||||||||||||||||||||||
| Capital Contribution | ||||||||||||||||||||||||||||||||||||
| Forgiveness of debt | ||||||||||||||||||||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||||||||||||||||||
| Foreign Currency Translation Adjustment | ||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2021 | ||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2021 | ||||||||||||||||||||||||||||||||||||
| Capital Contribution | ||||||||||||||||||||||||||||||||||||
| Impairment loss of investment | ||||||||||||||||||||||||||||||||||||
| Forgiveness of debt | ||||||||||||||||||||||||||||||||||||
| Net income (loss) | ||||||||||||||||||||||||||||||||||||
| Foreign Currency Translation Adjustment | ||||||||||||||||||||||||||||||||||||
| Balance at Sept 30, 2021 | ||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
F-4
Migom Global Corp.
(formerly Alfacourse Inc.)
As of and for the Three months and Nine months ended September 30, 2021 and 2020
Notes to the Consolidated Financial Statements
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,”
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,
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.
F-5
On April 21, 2020, the Company licensed the use of certain assets to Migom Bank Ltd. (the “Bank”), pursuant to a license agreement, by and between the Company and the Bank (the “License Agreement”).
The completion of the acquisition of the transaction 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.
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.
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, 2017 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
F-6
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.
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.
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.
On the 19th of January 2021,
Heritage Equity Fund LP and Migom Verwaltungs GMBH entered into a restricted shares acquisition transaction; on which Migom Verwaltungs
GMBH acquired
On the 28th of April 2021
Heritage Equity Fund LP and Migom Verwaltungs GMBH entered into a restricted class A shares acquisition transaction; on which Migom Verwaltungs
GMBH acquired
On 28th of June 2021, Mr. Ricardo Salcedo Sanchez was appointed Chief Financial Officer of Migom Global Corp.
On 27th of September
2021, Migom Global Corp sold a majority stake of Central Rich Trading Limited (
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.
F-7
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 of the financial statements and the reported amounts of revenues and expenses during the reporting period.
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.
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.
F-8
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.
The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
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 and cash equivalents, accounts payable, due to related party and note payable approximate their fair values because of the short maturity of these instruments.
Cash, Due from Banks and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The cash and cash equivalents consist of cash deposits of bank accounts holders and the Company’s operating cash.
The Common Wealth of Dominica 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.
Negative interest rate
The European Central Bank and the central banks of Denmark, Japan, Sweden, and Switzerland have implemented negative interest rates policy to stimulate their countries’ economies which essentially making banks pay to park their excess cash at the central bank. The Company is subject to negative interest rate for its cash deposits in a Switzerland bank account.
Negative interest rate expenses were $
F-9
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
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 intangible assets consists of 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. |
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.
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.
F-10
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.
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.
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 generates revenue from service fees such as opening of bank account, currency exchange fee and banking services fee. The banking service fee is transactional based on deposit and withdrawals and FX conversions. Service fees charged to banking clients are based on standard rates established by the Company for each category of clients. The Company can also charge customized rates to specific client based on negotiated terms or other preferences such as volume of transactions, account balances, etc.
F-11
Cost of Revenue
Cost of revenue is comprised of commissions paid to banking partners, and commissions paid to other financial institutions, such as EMI’s (Electronic Money Institutions), both partners operating in Europe; and interest on deposits due to negative interest rate paid to our banking partners.
Segment Information
The Company adopted ASC-280, Disclosures
about Segments of an Enterprise and Related Information, which requires certain financial and supplementary information to be disclosed
on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates in
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 carry-forwards. 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 Rich LTD 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.
F-12
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
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 June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL), the revised effective date is January 2023.
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.
Note 3 – 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 generated revenues of $
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 4 – 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
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
Majority disposal of Central Rich Trading Limited
On 27th of September 2021, Migom Global Corp sold a majority
stake of Central Rich Trading Limited (
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 5 – Regulatory Matters
The Company is subject to following regulatory requirements established by the Common Wealth of Dominica banking regulators:
| ● | Provide adequate provisions against loan defaulters, devaluation of currency, and deposit and investment losses |
| ● | Maintain permanent capital
of at least |
| ● | Maintain a reserve fund and shall, out of its net profits each year and before dividend is declared, transfer to that fund |
| ● | Comply with anti-money laundering /counter financing of terrorism requirements. |
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Note 6 – Property and equipment
| September 30, 2021 | December 31, 2020 | |||||||
| Computer Equipment | $ | $ | ||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Net | $ | $ | ||||||
Depreciation expense was $ and $ for the Nine months ended September 30, 2021 and 2020, respectively.
Note 7 – Intangible assets
Intangible assets schedule as follows:
| September 30, 2021 | December 31, 2020 | |||||||
| Intellectual property | $ | $ | ||||||
| Less: accumulated depreciation | ( | ) | ( | |||||
| Net | $ | $ | ||||||
Amortization expense
was $
Note 8 – Deposits
Deposits consists of funds placed 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, 2021 | December 31, 2020 | |||||||
| Non-interest-bearing deposits | $ | $ | ||||||
| Total deposits | $ | $ | ||||||
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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 (
Common Stock
As of September 30, 2021, there were
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
On May 12, 2020, the
Company entered into an acquisition agreement with Migom Bank (see Note 4). The Company issued Mr. Schaetti
On May 12, 2020, the
Company entered into an acquisition agreement with Central (see Note 4). The Company issued Mr. Schaetti
On February 20, 2021,
the Company issued
Preferred Stock
As of December 31, 2020,
there were
On July 1, 2020, the
Company reversed the additional paid-in capital contributed by Thomas A. Schaetti in the amount of $
Note 10 – Notes payable to related party
On October 9, 2019, the
Company entered into a convertible note agreement with Heritage Equity Fund, for $
On April 14, 2020, the
Company entered into a convertible note agreement with Heritage Equity Fund, for $
On April 16, 2020, the notes payable to related party and interest payable indicated above have been settled by issuance of Preferred Stock Series A through a settlement agreement. (Refer to Note 9)
Heritage Equity Fund is a related party as it is controlled by Thomas A. Schaetti, director and majority shareholder of the Company. (Refer to Note 11)
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Note 11 – Related party transactions
As of September 30, 2021, related parties of the Company consist of the following:
| Name of Related Party | Nature of Relationship | |
| Georgi Parrik | ||
| Thomas Schaetti | ||
| Heritage Equity Fund LP | ||
| Migom Investments S.A. | ||
| Migom Verwaltungs Gmbh |
Rental fees
The Company rent office space occasionally from Migom Verwaltung for client meetings in Vienna.
Acquisition of intellectual property
On April 21, 2020, the
Company entered into an asset purchase agreement with Heritage Equity Fund, who was
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.
Cash held in Trust
Cash was held in trust by Migom Investment S.A. as operating funds for disbursements and receipts. The Company has full control and access over the cash held in trust.
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Note 12 – Income taxes
USA
The Company is subject
to federal taxes in the United States (tax rate of
Deferred Tax Assets
As of December 31, 2020, the Company had net operating
loss (“NOL”) carry forwards for Federal income tax purposes of $- that may be offset against future taxable income indefinitely
limited to
Components of deferred tax assets are as follows:
| September 30, 2021 |
December 31, 2020 |
|||||||
| Net deferred tax assets: | ||||||||
| Net operating income (loss) carry forward | $ | $ | ||||||
| Income tax benefit from NOL carry-forwards | ||||||||
| Less: valuation allowance | ( |
) | ||||||
| Deferred tax asset, net of valuation allowance | $ | $ | ||||||
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:
| For the Nine months ended September 30, 2021 | For the year ended December 31, 2020 | |||||||
| Statutory income tax rate | | % | % | |||||
| Change in income tax valuation allowance | ( | )% | ( | )% | ||||
| Effective income tax rate | % | % | ||||||
Hong Kong
Central was incorporated
under the Hong Kong tax laws. The statutory income tax rate is
Dominica
Migom Bank was incorporated
under the Dominica tax law. The Statutory corporate tax rate is
| Tax Computation | For the Nine months ended September 30, 2021 | For year ended December 31, 2020 | ||||||
| Profit (loss) before income taxes | ||||||||
| Tax Rate | % | % | ||||||
| Income Tax expenses | ||||||||
F-18
Note 13 – 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.
Covid-19
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 have been directly affected by COVID-19, in particular, which certain employees and vital outsourced contractors had contracted and suffered through active COVID-19 infections.
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 September 30, 2021, there were no pending or threatened lawsuits.
Leases
The original lease agreement was less than 12 months and subsequently it is expensed out on a monthly basis. The Company has elected not to recognize lease assets and liabilities for lease with a term less than twelve months.
F-19
Note 14 – Concentrations, uncertainties, and risks
Concentration by Geographic Location
The Company operation is located in Dominica with clients primarily from European countries.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk are cash and cash equivalents, transaction monetary assets held for clients, mark to market assets for open trading positions arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions to minimize the interest rate and credit risk of cash. The Company routinely assesses the financial strength of the financial institution, based upon factors surrounding the credit risk of the financial institutions. Credit risk of cash and cash equivalents is managed by depositing cash at renowned financial institutions where certain government regulations are in place to protect clients’ cash balances.
Regulatory risks
The Company operates in the financial service industry that requires a license to be provided by the Dominica Financial Service Unit. The Company therefore is subject to abide to the regulations set by the governing bodies. Any change in regulations or legislation may affect the Company or the industry which may cause a negative impact to the Company or across the industry. Such change in regulations may increase the costs of the Company’s operations, introduce legal and administrative hurdles, and sometimes may even restrict the Company from continuing its business. In addition, the Company’s failure to abide to the regulations may result in revocation of its license which may significantly disrupt its operations and business.
Note 15 – 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.
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 is no reportable subsequent event to be disclosed.
F-20
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.
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.
1
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.
In September 2021, we sold 99% of share capital of Central Rich Trading Ltd. to an outside party.
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.
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 quarter and Nine months ended September 30, 2021
Revenues
For the Nine months ended September 30, 2021, our expenses related to our banking operations were $5,054,066 comprised of marketing fee of $583, banking partners fees & commissions of $427,644, other financial institutions fees $3,193,371, general, and administrative expenses $1,424,246, interest expenses of $83,372, and other loss of $192,174 as compared to the Company $737,764 expenses paid for our banking operations for the Nine months ended September 30, 2020.
2
For the Nine months ended September 30, 2021 our operating expenses (excluding marketing fees) were $1,424,246 comprised of wages & salaries $160,341, payroll related taxes $14,545, rent $11,743, audit fees $8,123, data processing services $29,709, accounting fees $10,806, legal fees $6,000, other consultants $626,757, office admin expenses $180,383, stock transfer fee $1,523, bank charges of $0, gains from revaluation of foreign exchange of $290,444 and amortization expenses of $83,843.
The substantial increase in operating expenses was primarily due to the marketing activities and payment of salaries, as the group continues to grow in new markets, pursue new product launches and increase its customer base.
For the Nine months ended September 30, 2021, our expenses related to our banking operations were $2,368,554 comprised of marketing fee of $583, banking partners fees & commissions of $107,016, other financial institutions fees $1,559,081, general, and administrative expenses $699,346, interest expenses of $6,140, and other loss of $192,174 as compared to the Company $439,601 expenses paid for our banking operations for the Three months ended September 30, 2020.
For the Nine months ended September 30, 2021 our operating expenses (excluding marketing fees) were $699,346 comprised of wages & salaries $91,818, payroll related taxes $9,879, rent $2,360, audit fees $nil, data processing services $8,088, accounting fees $3,306, legal fees $nil, other consultants $242,764, office admin expenses $88,282, stock transfer fee $856, bank charges of $0, gains from revaluation of foreign exchange of $220,911 and amortization expenses of $31,084.
Liquidity and Capital Resources
As of September 30, 2021, the Company had $25,560,691 in cash together with total assets $26,979,740 and liabilities of $15,886,556, as compared with $18,454,981 of cash and $16,325,774 of liabilities as of December 31, 2020. The net operating capital of the Company is sufficient for the Company to remain operational in the short and medium term.
For the Nine months ended September 30, 2021, we have cash flows used in operating activities of $8,335,128 as compared to $9,500,278 for the same period in 2020.
We had cash outflow for financing activities of $(999,141) and $77,891 for the Nine months ended September 30, 2021 and 2020 respectively.
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.
3
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.
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:
The Company’s lack of independent directors, the Company intends to appoint additional independent directors;
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;
Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting;
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 affect a timely, accurate preparation of the financial statements. |
4
| ● | 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.
5
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 | Inline XBRL Instance Document | |
| 101. SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101. CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101. DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101. LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101. PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
6
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 Quarterly Report on Form 10-Q of the Registrant for the Nine months ended September 30, 2021 (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: April 8, 2022
| By: | /s/ Georgi Parrik | |
| Georgi Parrik | ||
| President and Chief Executive Officer | ||
| (principal executive officer), and | ||
| By: | /s/ Ricardo Salcedo | |
| Ricardo Salcedo | ||
| Chief Financial Officer | ||
| (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.
7
Exhibit 31
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
AND PRINCIPAL ACCOUNTING OFFICER
REQUIRED BY RULE 13A-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 AS AMENDED,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Georgi Parrik, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Migom Global Corp.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the consolidated financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: April 8, 2022
| By: | /s/ Georgi Parrik | |
|
Georgi Parrik Chief Executive Officer (principal executive officer), and | ||
| By: | /s/ Ricardo Salcedo | |
| Ricardo Salcedo Chief Financial Officer (principal financial officer) |
Exhibit 32
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
AND PRINCIPAL ACCOUNTING OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Georgi Parrik, Chief Executive Officer and Chief Financial Officer of Migom Global Corp. (the “Company”), certify, pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | the Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2021 (the “Report”) 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 Company. |
Date: April 8, 2022
| By: | /s/ Georgi Parrik | |
|
Georgi Parrik Chief Executive Officer (principal executive officer), and | ||
| By: | /s/ Ricardo Salcedo | |
| Ricardo Salcedo Chief Financial Officer (principal financial officer) |
Consolidated Balance Sheets (Parentheticals) - $ / shares |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
| Preferred stock, shares authorized | 650,000 | 650,000 |
| Preferred stock, shares issued | 650,000 | 0 |
| Preferred stock, shares outstanding | 650,000 | 0 |
| Common stock, shares par value (in Dollars per share) | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 7,500,000 | 7,500,000 |
| Common stock, shares issued | 7,539,000 | 7,489,000 |
| Common stock, shares outstanding | 7,539,000 | 7,489,000 |
Organization and Operations |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Organization and Operations [Abstract] | |
| Organization and Operations | 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 holder of the series A preferred stock shall have no conversion right. Each share of series A preferred stock shall have the right to one vote for each share of common stock and is entitled to received dividend.
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 $80,243 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.
On April 21, 2020, the Company licensed the use of certain assets to Migom Bank Ltd. (the “Bank”), pursuant to a license agreement, by and between the Company and the Bank (the “License Agreement”).
The completion of the acquisition of the transaction 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.
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.
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, 2017 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.
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.
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.
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.
On the 19th of January 2021, Heritage Equity Fund LP and Migom Verwaltungs GMBH entered into a restricted shares acquisition transaction; on which Migom Verwaltungs GMBH acquired 5,030,000 restricted shares. The transaction was treated as a transfer of shares, given that Mr. Thomas Schätti is the sole shareholder of both legal entities.
On the 28th of April 2021 Heritage Equity Fund LP and Migom Verwaltungs GMBH entered into a restricted class A shares acquisition transaction; on which Migom Verwaltungs GMBH acquired 650,000 restricted class A shares. The transaction was treated as a transfer of shares, given that Mr. Thomas Schätti is the sole shareholder of both legal entities.
On 28th of June 2021, Mr. Ricardo Salcedo Sanchez was appointed Chief Financial Officer of Migom Global Corp.
On 27th of September 2021, Migom Global Corp sold a majority stake of Central Rich Trading Limited (99% of share capital) to Mr. Chin Sin Kwok for HKD 79,768 or USD 10,252 (at closing exchange rate of 27th of September 2021). |
Significant and Critical Accounting Policies and Practices |
9 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||
| Significant and Critical Accounting Policies and Practices [Abstract] | ||||||||||
| Significant and Critical Accounting Policies and Practices | 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.
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 of the financial statements and the reported amounts of revenues and expenses during the reporting period.
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.
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.
The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
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 and cash equivalents, accounts payable, due to related party and note payable approximate their fair values because of the short maturity of these instruments.
Cash, Due from Banks and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The cash and cash equivalents consist of cash deposits of bank accounts holders and the Company’s operating cash.
The Common Wealth of Dominica 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.
Negative interest rate
The European Central Bank and the central banks of Denmark, Japan, Sweden, and Switzerland have implemented negative interest rates policy to stimulate their countries’ economies which essentially making banks pay to park their excess cash at the central bank. The Company is subject to negative interest rate for its cash deposits in a Switzerland bank account.
Negative interest rate expenses were $83,372 for the Nine months ended 2021 and $0 for the Nine Months ended 2020.
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 10 years and 7 years life from the date of acquisition for Migom Bank and Migom Corp, respectively.
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 intangible assets consists of 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:
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.
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.
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.
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 generates revenue from service fees such as opening of bank account, currency exchange fee and banking services fee. The banking service fee is transactional based on deposit and withdrawals and FX conversions. Service fees charged to banking clients are based on standard rates established by the Company for each category of clients. The Company can also charge customized rates to specific client based on negotiated terms or other preferences such as volume of transactions, account balances, etc.
Cost of Revenue
Cost of revenue is comprised of commissions paid to banking partners, and commissions paid to other financial institutions, such as EMI’s (Electronic Money Institutions), both partners operating in Europe; and interest on deposits due to negative interest rate paid to our banking partners.
Segment Information
The Company adopted ASC-280, Disclosures about Segments of an Enterprise and Related Information, which requires certain financial and supplementary information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates in one business segment which is banking services, and in one geographical segment in Dominica as all of the Company’s current operations are conducted in Dominica.
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 carry-forwards. 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 Rich LTD 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.
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
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 June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL), the revised effective date is January 2023.
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. |
Going Concern |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Organization and Operations [Abstract] | |
| Going Concern | Note 3 – 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 generated revenues of $13,260,144 and net income of $7,930,533 for the Nine months ended September 30, 2021, and revenues of $1,349,135 and net income of $611,371 for the Nine months ended September 30, 2020.
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. |
Acquisitions |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Acquisitions [Abstract] | |
| Acquisitions | Note 4 – 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.
Majority disposal of Central Rich Trading Limited
On 27th of September 2021, Migom Global Corp sold a majority stake of Central Rich Trading Limited (99% of share capital) to Mr. Chin Sin Kwok for HKD 79,768 or USD 10,252 (at closing exchange rate of 27th of September 2021). The transaction was approved on 2nd June 2021 board resolution.
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. |
Regulatory Matters |
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| Regulatory Matters [Abstract] | |||||||||||||
| Regulatory Matters | Note 5 – Regulatory Matters
The Company is subject to following regulatory requirements established by the Common Wealth of Dominica banking regulators:
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Property and Equipment |
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| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||
| Property and equipment | Note 6 – Property and equipment
Depreciation expense was $ and $ for the Nine months ended September 30, 2021 and 2020, respectively. |
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Intangible assets |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| Intangible assets | Note 7 – Intangible assets
Intangible assets schedule as follows:
Amortization expense was $83,843 and $16,071 for the Nine months ended September 30, 2021 and 2020, respectively. |
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Deposits |
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| Deposits [Abstract] | ||||||||||||||||||||||||||||
| Deposits | Note 8 – Deposits
Deposits consists of funds placed 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:
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Shareholders' Equity |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Stockholders' Equity Note [Abstract] | |
| Shareholders’ Equity | 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 series A preferred stock. The holder of the series A preferred stock shall have no conversion right. Each share of series A preferred stock shall have the right to one vote for each share of common stock and is entitled to received dividend
Common Stock
As of September 30, 2021, there were 7,539,000 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 4). 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 4). The Company issued Mr. Schaetti 17,778 shares of common stock of the Company, at a price per share of $9.00.
On February 20, 2021, the Company issued 50,000 common stock at a par value of $0.001
Preferred Stock
As of December 31, 2020, there were 650,000 total shares issued and outstanding. The holder of each series A preferred stock has no conversion rights. Each stock has right to one vote. The holders of these shares shall be entitled to receive dividends. No dividends have been paid to these shareholders.
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. (Refer to Note 10)
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. |
Notes payable to related party |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Debt Disclosure [Abstract] | |
| Notes payable to related party | Note 10 – 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 maturity date of July 9, 2020. The note bears interest rate of 8% and is convertible into shares of common stock at $0.0025 per share.
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 8% per annum and is convertible into shares of the common stock at $0.0025 per share.
On April 16, 2020, the notes payable to related party and interest payable indicated above have been settled by issuance of Preferred Stock Series A through a settlement agreement. (Refer to Note 9)
Heritage Equity Fund is a related party as it is controlled by Thomas A. Schaetti, director and majority shareholder of the Company. (Refer to Note 11) |
Related party transactions |
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| Related Party Transactions [Abstract] | |||||||||||||||||||
| Related party transactions | Note 11 – Related party transactions
As of September 30, 2021, related parties of the Company consist of the following:
Rental fees
The Company rent office space occasionally from Migom Verwaltung for client meetings in Vienna.
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.
Cash held in Trust
Cash was held in trust by Migom Investment S.A. as operating funds for disbursements and receipts. The Company has full control and access over the cash held in trust. |
Income Taxes |
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| Income taxes | Note 12 – Income taxes
USA
The Company is subject to federal taxes in the United States (tax rate of 21%), state taxes in Nevada. The Company did not recognize any deferred tax assets or liabilities as of September 30, 2021 and December 31, 2020.
Deferred Tax Assets
As of December 31, 2020, the Company had net operating loss (“NOL”) carry forwards for Federal income tax purposes of $- that may be offset against future taxable income indefinitely limited to 80% of taxable income. No tax benefit has been recorded with respect to these net operating loss carry-forwards in the accompanying financial statements as the management of the Company believes that the realization of the Company’s net deferred tax assets of approximately $- was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by the full valuation allowance.
Components of deferred tax assets are as follows:
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:
Hong Kong
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. The Company did not generate any income for the Nine months ended September 30, 2021 and for the year ended December 31, 2020, respectively.
Dominica
Migom Bank was incorporated under the Dominica tax law. The Statutory corporate tax rate is 25% of the profit of the company financial year. If the Company’s directors or shareholders withdraw any monies as salaries, directors’ allowances or dividend, there is a 15% withholding tax to be paid to the Tax Authorities by the Company.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2021 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and contingencies | Note 13 – 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.
Covid-19
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 have been directly affected by COVID-19, in particular, which certain employees and vital outsourced contractors had contracted and suffered through active COVID-19 infections.
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 September 30, 2021, there were no pending or threatened lawsuits.
Leases
The original lease agreement was less than 12 months and subsequently it is expensed out on a monthly basis. The Company has elected not to recognize lease assets and liabilities for lease with a term less than twelve months. |
Concentrations, Uncertainties, and Risks |
9 Months Ended |
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Sep. 30, 2021 | |
| Risks and Uncertainties [Abstract] | |
| Concentrations, uncertainties, and risks | Note 14 – Concentrations, uncertainties, and risks
Concentration by Geographic Location
The Company operation is located in Dominica with clients primarily from European countries.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk are cash and cash equivalents, transaction monetary assets held for clients, mark to market assets for open trading positions arising from its normal business activities. The Company places its cash in what it believes to be credit-worthy financial institutions to minimize the interest rate and credit risk of cash. The Company routinely assesses the financial strength of the financial institution, based upon factors surrounding the credit risk of the financial institutions. Credit risk of cash and cash equivalents is managed by depositing cash at renowned financial institutions where certain government regulations are in place to protect clients’ cash balances.
Regulatory risks
The Company operates in the financial service industry that requires a license to be provided by the Dominica Financial Service Unit. The Company therefore is subject to abide to the regulations set by the governing bodies. Any change in regulations or legislation may affect the Company or the industry which may cause a negative impact to the Company or across the industry. Such change in regulations may increase the costs of the Company’s operations, introduce legal and administrative hurdles, and sometimes may even restrict the Company from continuing its business. In addition, the Company’s failure to abide to the regulations may result in revocation of its license which may significantly disrupt its operations and business. |
Subsequent Events |
9 Months Ended |
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Sep. 30, 2021 | |
| Subsequent Events [Abstract] | |
| Subsequent events | Note 15 – 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.
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 is no reportable subsequent event to be disclosed. |
Accounting Policies, by Policy (Policies) |
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| Significant and Critical Accounting Policies and Practices [Abstract] | ||||||||||
| Basis of Presentation | Basis of Presentation
The Company’s consolidated financial statements have been prepared in accordance with US GAAP.
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| Common Control | 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.
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| Principles of Consolidation | 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.
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| Use of Estimates and Assumptions and Critical Accounting Estimates and Assumptions | 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 of the financial statements and the reported amounts of revenues and expenses during the reporting period.
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.
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.
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| Fair Value Measurements | 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.
The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
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 and cash equivalents, accounts payable, due to related party and note payable approximate their fair values because of the short maturity of these instruments.
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| Cash, Due from Banks and Cash Equivalents | Cash, Due from Banks and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. The cash and cash equivalents consist of cash deposits of bank accounts holders and the Company’s operating cash.
The Common Wealth of Dominica 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.
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| Negative interest rate | Negative interest rate
The European Central Bank and the central banks of Denmark, Japan, Sweden, and Switzerland have implemented negative interest rates policy to stimulate their countries’ economies which essentially making banks pay to park their excess cash at the central bank. The Company is subject to negative interest rate for its cash deposits in a Switzerland bank account.
Negative interest rate expenses were $83,372 for the Nine months ended 2021 and $0 for the Nine Months ended 2020.
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| Intangible Assets | 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 10 years and 7 years life from the date of acquisition for Migom Bank and Migom Corp, respectively.
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 intangible assets consists of 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:
|
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| Related Parties | 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.
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 | 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 | 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.
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|||||||||
| Revenue Recognition | 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 generates revenue from service fees such as opening of bank account, currency exchange fee and banking services fee. The banking service fee is transactional based on deposit and withdrawals and FX conversions. Service fees charged to banking clients are based on standard rates established by the Company for each category of clients. The Company can also charge customized rates to specific client based on negotiated terms or other preferences such as volume of transactions, account balances, etc.
|
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| Cost of revenue | Cost of Revenue
Cost of revenue is comprised of commissions paid to banking partners, and commissions paid to other financial institutions, such as EMI’s (Electronic Money Institutions), both partners operating in Europe; and interest on deposits due to negative interest rate paid to our banking partners.
|
|||||||||
| Segment Information | Segment Information
The Company adopted ASC-280, Disclosures about Segments of an Enterprise and Related Information, which requires certain financial and supplementary information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates in one business segment which is banking services, and in one geographical segment in Dominica as all of the Company’s current operations are conducted in Dominica.
|
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| Income Taxes | 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 carry-forwards. 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 | 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.
|
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| Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions
The Hong Kong Dollar (“HKD”) is the functional currency of Central Rich LTD 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 | 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 | 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
|
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| Recently Issued Accounting Pronouncements | 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 June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL), the revised effective date is January 2023.
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. |
Property and Equipment (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of property and equipment |
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Intangible assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of intangible assets |
|
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Deposits (Tables) |
9 Months Ended | |||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | ||||||||||||||||||||||||||||
| Deposits [Abstract] | ||||||||||||||||||||||||||||
| Schedule of composition of deposits |
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Related party transactions (Tables) |
9 Months Ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||
| Schedule of related parties |
|
Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of deferred tax assets |
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| Schedule of reconciliation of federal statutory income tax rate and the effective income tax rate |
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| Schedule of tax computation |
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Organization and Operations (Details) |
1 Months Ended | 9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
|
Jan. 19, 2021
shares
|
May 12, 2020
$ / shares
shares
|
Apr. 08, 2020 |
Oct. 08, 2019
$ / shares
shares
|
Sep. 27, 2021
USD ($)
|
Sep. 27, 2021
HKD ($)
|
Apr. 28, 2021
shares
|
Sep. 30, 2021 |
|
| Organization and Operations (Details) [Line Items] | ||||||||
| Stock purchase agreement to acquire | 5,000,000 | |||||||
| Stock purchase agreement to acquire, per shares | $ / shares | $ 0.001 | |||||||
| Amendment description | 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 holder of the series A preferred stock shall have no conversion right. Each share of series A preferred stock shall have the right to one vote for each share of common stock and is entitled to received dividend. | |||||||
| Securities exchange and settlement agreement, description | 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 $80,243 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. | |||||||
| Migom Verwaltungs GMBH [Member] | ||||||||
| Organization and Operations (Details) [Line Items] | ||||||||
| Restricted shares | 5,030,000 | 650,000 | ||||||
| Mr. Schaetti [Member] | ||||||||
| Organization and Operations (Details) [Line Items] | ||||||||
| Direct ownership percentage | 80.00% | |||||||
| Issued of common stock | 17,778 | |||||||
| Issued of common stock, per shares | $ / shares | $ 9 | |||||||
| Migom Global [Member] | ||||||||
| Organization and Operations (Details) [Line Items] | ||||||||
| Direct ownership percentage | 68.48% | |||||||
| Migom Global Corp. [Member] | ||||||||
| Organization and Operations (Details) [Line Items] | ||||||||
| Indirect ownership percentage | 54.78% | |||||||
| Central Rich Trading Limited [Member] | ||||||||
| Organization and Operations (Details) [Line Items] | ||||||||
| Percentage of share capital | 99.00% | 99.00% | ||||||
| Central Rich Trading Limited [Member] | Mr. Chin Sin Kwok [Member] | ||||||||
| Organization and Operations (Details) [Line Items] | ||||||||
| Value of share capital | $ 10,252 | $ 79,768 | ||||||
Significant and Critical Accounting Policies and Practices (Details) |
9 Months Ended | |
|---|---|---|
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2020
USD ($)
|
|
| Significant and Critical Accounting Policies and Practices (Details) [Line Items] | ||
| Negative interest rate expenses | $ 83,372 | $ 0 |
| Business segment | 1 | |
| Geographical segment | 1 | |
| Maximum [Member] | ||
| Significant and Critical Accounting Policies and Practices (Details) [Line Items] | ||
| Finite-lived intangible asset, useful life | 10 years | |
| Minimum [Member] | ||
| Significant and Critical Accounting Policies and Practices (Details) [Line Items] | ||
| Finite-lived intangible asset, useful life | 7 years | |
Going Concern (Details) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Organization and Operations [Abstract] | ||
| Revenues | $ 13,260,144 | $ 1,349,135 |
| Net income | $ 7,930,533 | $ 611,371 |
Acquisitions (Details) |
1 Months Ended | |||
|---|---|---|---|---|
|
May 12, 2020
USD ($)
$ / shares
shares
|
Sep. 27, 2021
USD ($)
|
Sep. 27, 2021
HKD ($)
|
Feb. 20, 2021
shares
|
|
| Acquisitions (Details) [Line Items] | ||||
| Shares issued (in Shares) | 50,000 | |||
| Acquisition of Migom Bank Ltd [Member] | ||||
| Acquisitions (Details) [Line Items] | ||||
| Shares issued (in Shares) | 126,222 | |||
| Price per share (in Dollars per share) | $ / shares | $ 9 | |||
| Business combination, consideration transferred | $ | $ 1,136,000 | |||
| Acquisition of Central Rich Trading Limited [Member] | ||||
| Acquisitions (Details) [Line Items] | ||||
| Shares issued (in Shares) | 17,778 | |||
| Price per share (in Dollars per share) | $ / shares | $ 9 | |||
| Business combination, consideration transferred | $ | $ 160,000 | |||
| Central Rich Trading Limited [Member] | ||||
| Acquisitions (Details) [Line Items] | ||||
| Percentage of share capital | 99.00% | 99.00% | ||
| Central Rich Trading Limited [Member] | Mr. Chin Sin Kwok [Member] | ||||
| Acquisitions (Details) [Line Items] | ||||
| Value of share capital | $ 10,252 | $ 79,768 | ||
Regulatory Matters (Details) $ in Millions |
9 Months Ended |
|---|---|
|
Sep. 30, 2021
USD ($)
| |
| Regulatory Matters [Abstract] | |
| Permanent capital | $ 1 |
| Net profit percentage | 25.00% |
Property and Equipment (Details) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation expense | ||
Property and Equipment (Details) - Schedule of property and equipment - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Schedule of property and equipment [Abstract] | ||
| Computer Equipment | $ 3,240 | $ 3,240 |
| Less: accumulated depreciation | (3,240) | (3,240) |
| Net |
Intangible assets (Details) - USD ($) |
9 Months Ended | |
|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||
| Amortization expense | $ 83,843 | $ 16,071 |
Intangible assets (Details) - Schedule of intangible assets - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Schedule of intangible assets [Abstract] | ||
| Intellectual property | $ 1,226,780 | $ 838,102 |
| Less: accumulated depreciation | (111,818) | 27,975 |
| Net | $ 1,114,962 | $ 810,127 |
Deposits (Details) - Schedule of composition of deposits - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Schedule of composition of deposits [Abstract] | ||
| Non-interest-bearing deposits | $ 14,562,595 | $ 15,599,401 |
| Total deposits | $ 14.562595 | $ 15,599,401 |
Shareholders' Equity (Details) - USD ($) |
9 Months Ended | |||||
|---|---|---|---|---|---|---|
Apr. 08, 2020 |
Sep. 30, 2021 |
Feb. 20, 2021 |
Dec. 31, 2020 |
Jul. 01, 2020 |
May 12, 2020 |
|
| Shareholders' Equity (Details) [Line Items] | ||||||
| Shares shall be common stock | (75,000,000) | |||||
| Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||
| Increasing authorized shares description | 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 series A preferred stock. | |||||
| Common stock voting rights | the right to one vote for each share of common stock | |||||
| Common stock, shares outstanding | 7,539,000 | 7,489,000 | ||||
| Common stock, shares issued | 7,539,000 | 7,489,000 | ||||
| Shares issued | 50,000 | |||||
| Preferred stock, shares issued | 650,000 | |||||
| Preferred stock, shares outstanding | 650,000 | |||||
| Preferred stock voting rights | Each stock has right to one vote. | |||||
| Securities exchange and settlement agreement, description | 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. | |||||
| Thomas A Schaetti [Member] | ||||||
| Shareholders' Equity (Details) [Line Items] | ||||||
| Additional paid in capital (in Dollars) | $ 71,199 | |||||
| Common Stock [Member] | ||||||
| Shareholders' Equity (Details) [Line Items] | ||||||
| Shares authorized | 75,000,000 | |||||
| Asset Agreement [Member] | ||||||
| Shareholders' Equity (Details) [Line Items] | ||||||
| Shares issued | 30,000 | |||||
| Price per share (in Dollars per share) | $ 9 | |||||
| Total consideration (in Dollars) | $ 270,000 | |||||
| Migom Bank [Member] | ||||||
| Shareholders' Equity (Details) [Line Items] | ||||||
| Price per share (in Dollars per share) | $ 9 | |||||
| Shares issued | 126,222 | |||||
| Central [Member] | ||||||
| Shareholders' Equity (Details) [Line Items] | ||||||
| Price per share (in Dollars per share) | $ 9 | |||||
| Shares issued | 17,778 |
Notes payable to related party (Details) - USD ($) |
Apr. 14, 2020 |
Oct. 09, 2019 |
|---|---|---|
| Notes payable to related party (Details) [Line Items] | ||
| Convertible note agreement amount | $ 20,000 | |
| Maturity date | Jul. 09, 2020 | |
| Bears interest rate | 8.00% | |
| Conversion price per share (in Dollars per share) | $ 0.0025 | |
| Heritage Equity Fund [Member] | ||
| Notes payable to related party (Details) [Line Items] | ||
| Convertible note agreement amount | $ 35,697 | $ 22,814 |
| Maturity date | Jul. 01, 2021 | |
| Bears interest rate | 8.00% | |
| Conversion price per share (in Dollars per share) | $ 0.0025 |
Related party transactions (Details) |
1 Months Ended |
|---|---|
|
Apr. 21, 2020
USD ($)
$ / shares
shares
| |
| Thomas A. Schaetti [Member] | |
| Related party transactions (Details) [Line Items] | |
| Percentage of ownership | 80.00% |
| Asset Purchase Agreement [Member] | |
| Related party transactions (Details) [Line Items] | |
| Shares of common stock | shares | 30,000 |
| Price per share | $ / shares | $ 9 |
| Business consideration | $ | $ 270,000 |
Related party transactions (Details) - Schedule of related parties |
9 Months Ended |
|---|---|
Sep. 30, 2021 | |
| Georgi Parrik [Member] | |
| Related Party Transaction [Line Items] | |
| Nature of Relationship | Chairman, Chief Executive Officer (“CEO”) and Director |
| Thomas Schaetti [Member] | |
| Related Party Transaction [Line Items] | |
| Nature of Relationship | President and Director |
| Heritage Equity Fund LP [Member] | |
| Related Party Transaction [Line Items] | |
| Nature of Relationship | Majority shareholder of the Company; related to Thomas Shaetti, President and Director of the Company, where he is the controlling party of the entity |
| Migom Investments S.A. [Member] | |
| Related Party Transaction [Line Items] | |
| Nature of Relationship | Related to Thomas Shaetti, President and Director of the Company |
| Migom Verwaltungs Gmbh [Member] | |
| Related Party Transaction [Line Items] | |
| Nature of Relationship | Shareholder of the Company; related to Thomas Shaetti, President and Director of the Company, where he is the controlling party of the entity |
Income Taxes (Details) |
9 Months Ended | 12 Months Ended |
|---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
| Income Taxes (Details) [Line Items] | ||
| Taxable income percentage | 80.00% | |
| Statutory income tax rate | 8.25% | |
| Statutory corporate tax rate | 25.00% | |
| Withholding tax percentage | 15.00% | |
| Nevada [Member] | ||
| Income Taxes (Details) [Line Items] | ||
| Tax rate | 21.00% |
Income Taxes (Details) - Schedule of deferred tax assets - USD ($) |
Sep. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Net deferred tax assets: | ||
| Net operating income (loss) carry forward | $ 239,673 | |
| Income tax benefit from NOL carry-forwards | 50,331 | |
| Less: valuation allowance | (50,331) | |
| Deferred tax asset, net of valuation allowance |
Income Taxes (Details) - Schedule of reconciliation of federal statutory income tax rate and the effective income tax rate |
9 Months Ended | 12 Months Ended |
|---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
| Schedule of reconciliation of federal statutory income tax rate and the effective income tax rate [Abstract] | ||
| Statutory income tax rate | 21.00% | 21.00% |
| Change in income tax valuation allowance | (21.00%) | (21.00%) |
| Effective income tax rate | 0.00% | 0.00% |
Income Taxes (Details) - Schedule of tax computation |
9 Months Ended | 12 Months Ended |
|---|---|---|
Sep. 30, 2021 |
Dec. 31, 2020 |
|
| Profit (loss) before income taxes | ||
| Tax Rate | 25.00% | 25.00% |
| Income Tax expenses |
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