10-Q 1 f10q0221_temircorp.htm QUARTERLY REPORT

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

FORM 10-Q

 

Mark One

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

 

For the quarterly period ended February 28, 2021

 

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

 

For the transition period from ______ to _______

 

Commission File No. 333-213996

 

TEMIR CORP.

(Exact name of registrant as specified in its charter)

 

Nevada

(State or Other Jurisdiction of Incorporation or Organization)

 

98-1321204   7999
IRS Employer
Identification Number
  Primary Standard Industrial
Classification Code Number

 

Temir Corp.

Suite 1802-03, 18/F, Strand 50, 50 Bonham Strand, Sheung Wan, Hong Kong

Tel. 852-28527388

Email: rchan@jtifs.com.hk

(Address and telephone number of principal executive offices)

 

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

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common Stock   TMRR   OTC Markets

 

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

 

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).   Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated fi ler,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
    Emerging growth company

 

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

 

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

 

Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years.

 

Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court.  Yes ☐ No ☐

 

Applicable Only to Corporate Issuers:

 

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

 

As of April 16, 2021, the registrant had 6,692,182 shares of common stock issued and outstanding. No market value has been computed based upon the fact that no active trading market has been established as of April 16, 2021.

 

 

 

 

 

TEMIR CORP.

FORM 10-Q

February 28, 2021

 

TABLE OF CONTENTS

 

Part I FINANCIAL INFORMATION 1
Item 1 Financial Statements 1
Item 2 Management’s Discussion And Analysis Of Financial Condition And Results Of Operations 18
Item 3 Quantitative And Qualitative Disclosures About Market Risk 23
Item 4 Controls And Procedures 23
     
Part II OTHER INFORMATION 25
Item 1 Legal Proceedings 25
Item 1A Risk Factors 25
Item 2 Unregistered Sales Of Equity Securities And Use Of Proceeds 25
Item 3 Defaults Upon Senior Securities 25
Item 4 Mine Safety Disclosures 25
Item 5 Other Information 25
Item 6 Exhibits 25
  Signatures 26

 

i

 

 

FORWARD LOOKING STATEMENTS

 

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

 

ii

 

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

TEMIR CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF FEBRUARY 28, 2021 AND AUGUST 31, 2020 (Unaudited)
(In U.S. dollars except for number of shares)

 

   February 28,
2021
   August 31,
2020
 
         
CURRENT ASSETS        
Cash  $2,036   $2,580 
Accounts receivable   16,152    - 
Tax recoverable   2,574    - 
Prepaid expenses, deposits and other current assets   302    302 
           
TOTAL ASSETS  $21,064   $2,882 
           
CURRENT LIABILITIES          
Accounts payable, other payables and accrued liabilities  $34,363   $16,573 
Tax payable   -    382 
Amount due to a related company   91,195    56,317 
Amount due to a shareholder   238,658    173,796 
           
Total liabilities   364,216    247,068 
           
COMMITMENTS AND CONTINGENCIES          
           
STOCKHOLDERS’ DEFICIT          
Common stock, $0.001 par value 75,000,000 shares authorized; 6,692,182 shares issued and outstanding as of February 28, 2021 and August 31, 2020   6,692    6,692 
Additional paid-in capital   444,590    444,590 
Accumulated deficit   (794,434)   (695,468)
TOTAL STOCKHOLDERS’ DEFICIT   (343,152)   (244,186)
           
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT  $21,064   $2,882 

 

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

 

1

 

 

TEMIR CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)
(In U.S. dollars except for number of shares)

 

   Three months ended   Six months ended 
   February 28,
2021
   February 29,
2020
   February 28,
2021
   February 29,
2020
 
                 
REVENUE  $71,402   $-   $83,784   $10,096 
                     
Cost of revenue   (68,991)   -    (80,754)   - 
                     
GROSS PROFIT   2,411    -    3,030    10,096 
                     
General and administrative expenses   (39,668)   (126,610)   (102,559)   (127,991)
                     
LOSS FROM OPERATIONS   (37,257)   (126,610)   (99,529)   (117,895)
                     
Other income   965    6,795    965    13,590 
                     
LOSS BEFORE INCOME TAX   (36,292)   (119,815)   (98,564)   (104,305)
                     
Income tax expense   (314)   -    (402)   - 
                     
NET LOSS AND TOTAL COMPREHENSIVE LOSS  $(36,606)  $(119,815)  $(98,966)  $(104,305)
                     
Loss per common share:                    
Basic and diluted  $(0.01)  $(0.02)  $(0.01)  $(0.02)
                     
Weighted Average Number of Common Shares Outstanding:                    
Basic and diluted   6,692,182    6,692,182    6,692,182    6,692,182 

  

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

 

2

 

 

TEMIR CORP.
CONDENSED CONSOLDIATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020
(Unaudited)
(In U.S. dollars except for number of shares)

 

   Number of
Common
shares
   Amount   Additional
Paid-in
Capital
   Accumulated
Deficit
   Total
Stockholders’
Equity
(Deficit)
 
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2020                         
Balance as of September 1, 2019   6,692,182   $6,692   $444,590   $(430,375)  $20,907 
Net loss for the period   -    -    -    (104,305)   (104,305)
Balance as of February 29, 2020   6,692,182   $6,692   $444,590   $(534,680)  $(83,398)
                          
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2021                         
Balance as of September 1, 2020   6,692,182   $6,692   $444,590   $(695,468)  $(244,186)
Net loss for the period   -    -    -    (98,966)   (98,966)
Balance as of February 28, 2021   6,692,182   $6,692   $444,590   $(794,434)  $(343,152)
                          
FOR THE THREE MONTHS ENDED FEBRUARY 29, 2020                         
Balance as of December 1, 2019   6,692,182   $6,692   $444,590   $(414,865)  $36,417 
Net loss for the period   -    -    -    (119,815)   (119,815)
Balance as of February 29, 2020   6,692,182   $6,692   $444,590   $(534,680)  $(83,398)
                          
FOR THE THREE MONTHS ENDED FEBRUARY 28, 2021                         
Balance as of December 1, 2020   6,692,182   $6,692   $444,590   $(757,828)  $(306,546)
Net loss for the period   -    -    -    (36,606)   (36,606)
Balance as of February 28, 2021   6,692,182   $6,692   $444,590   $(794,434)  $(343,152)

 

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

  

3

 

 

TEMIR CORP.
CONDENSED CONSOLDIATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020
(Unaudited)
(In U.S. dollars except for number of shares)

 

   Six months ended 
   February 28,
2021
   February 29,
2020
 
         
CASH FLOWS FROM OPERATING ACTIVITIES        
Net loss  $(98,966)  $(104,305)
Change in operating assets and liabilities          
Loans receivable   -    958 
Accounts receivable   (16,152)   3,298 
Prepaid expenses, deposits and other current assets   -    12,307 
Accounts payable, other payables and accrued liabilities   17,790    (7,564)
Tax payable   (382)   - 
Tax recoverable   (2,574)   - 
Amount due to a related company   41,032    - 
Net cash used in operating activities   (59,252)   (95,306)
           
CASH FLOWS FROM FINANCING ACITIVITIES          
Advances from a shareholder   315,873    230,798 
Repayment to a shareholder   (251,011)   (142,244)
Repayment to a related company   (6,154)   - 
Net cash generated from financing activities   58,708    88,554 
           
Net decrease in cash and cash equivalents   (544)   (6,752)
Cash and cash equivalents, beginning of period   2,580    10,252 
CASH AND CASH EQUIVALENTS, END OF PERIOD  $2,036   $3,500 
           
SUPPLEMENTAL CASH FLOWS INFORMATION          
Interest paid  $-   $- 
Income tax paid  $3,359   $- 

 

The accompanying notes are an integral part of these financial statements

 

4

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

1.TITLE, ORGANIZATION AND REORGANIZATION

 

TEMIR CORP. (“Temir” or the “Company”) is a corporation established under the corporation laws in the State of Nevada on May 19, 2016. The Company commenced operations in tourism. Temir Corp. was a travel agency that organized individual and group tours in Kyrgyzstan, such as cultural, recreational, sport, business, ecotours and other travel tours. The company’s principal executive offices are located at 54 Frukovaya Street, Bishkek, Kyrgyzstan 720027. On July 15, 2019, the Company’s principal office relocated to Room 1204-06, 12/F, 69 Jervois Street, Sheung Wan, Hong Kong. On January 15, 2020, the Company’s principal office has been relocated to Suite 1802-03, 18/F, Strand 50, 50 Bonham Strand, Sheung Wan, Hong Kong. The management of Temir Corp. is planning to restructure the Company’s business from a travel agency to a Fintech Company with major business focusing on financials services and using the internet, mobile devices, software technology or cloud services to perform or connect with financial services.

 

On April 2, 2020, the Company as purchaser and Ace Vantage Investments Limited (“Ace Vantage”) (equally held by Mr. Roy Kong Hoi Chan (an executive director and president of the Company, “Mr. Roy Chan”) and his father) as vendor (the “Vendor”) entered into a sale and purchase agreement (the “Agreement”) with respect to the acquisition (the “Transaction”) of the entire issued share capital of JTI Financial Services Group Limited (“JTI”) for a consideration of $4,686,272, which would be satisfied by the allotment and issue of the shares of the Company.

 

Under the terms and conditions of the Agreement, the Company offered, sold and issued 1,874,508 shares of common stock of the Company as consideration shares (the “Consideration Shares”) at the issue price of $2.5 per Consideration Share for the acquisition of all the issued share capital of JTI.

 

On June 30, 2020, pursuant to the amendment to the Agreement, the parties agreed to adjust (i) the consideration of the Transaction from $4,686,272 to $10,295,455; and (ii) the number of Consideration Shares from 1,874,508 shares to 4,118,182 shares. The effect of the issuance is that the Vendor will hold approximately 61.54% of the issued and outstanding shares of common stock of the Company.

 

Mr. Roy Chan, the founder of JTI, an executive director and president of the Company, is the holder of 629,350 shares of common stock of the Company prior to the Transaction.

 

After the issue of 4,118,182 shares of Temir, Ace Vantage holds 61.54% shareholding of Temir and Mr. Roy Chan and Mr. Chan Hip Fong (father of Mr Roy Chan) together hold 70.94% shareholding of Temir.

 

Upon completion of the Transactions on July 6, 2020, Temir became interested in the entire equity interest in JTI, and as such, JTI became a wholly-owned subsidiary of Temir. For financial accounting purposes, the share exchange was accounted for as a reverse acquisition by JTI, and resulted in a recapitalization, with JTI being the accounting acquirer and Temir as the acquired entity.

 

JTI was incorporated in Hong Kong, China on February 8, 2019.

 

The Company through its subsidiaries provide diversified financial services. JTI has four operating subsidiaries, namely, JTI Finance Limited (“JF”), Concept We Mortgage Broker Limited (“CW”), JTI Property Agency Limited (“JP”) and JTI Asset Management Limited (“JA”).

 

5

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

Company name   Place/date of incorporation   Principal activities
           
1. JTI Finance Limited   Hong Kong, China/ December 29, 2011   Money lending
           
2. Concept We Mortgage Broker Limited   Hong Kong, China / December 18, 2013   Mortgage broker providing mortgage related consultancy services
           
3. JTI Property Agency Limited   Hong Kong, China/ December 21, 2011   Property agency
           
4. JTI Asset Management Limited   Hong Kong, China/ May 2, 2017   General consulting services

  

The formation of JTI Financial Services Group Limited was completed in March 2019. Upon incorporation, JTI issued 1 ordinary share at HK$1 to Mr. Roy Chan. On March 20, 2019, JTI issued 9,999,999 shares of the Company to Ace Vantage at a total cash consideration of HK$3,509,999.65 ($450,000), resulting a total share capital of 10,000,000 shares at HK$3,510,000.65 ($450,000). Ace Vantage was 50% owned by Mr. Roy Chan and 50% owned by Mr. Chan Hip Fong, father of Mr. Roy Chan. The Company is owned and controlled by the same control group as JF, CW, JP and JA. On March 29, 2019, the beneficial shareholders of JF, CW, JP and JA exchanged 100% of their shareholding of JF, CW, JP and JA for the shares of the Company (the “Share Exchange”). The Share Exchange has been accounted for as a common control transaction. Other than its 100% ownership of JF, CW, JP and JA, JTI has no significant assets and no other business operations.

 

JF was incorporated in Hong Kong, China on December 29, 2011 as a company with limited liability. Upon incorporation, JF issued 1 ordinary share to Ace Vantage at HK$1. On March 29, 2019, Ace Vantage transferred 100% of their shareholding of JF to JTI.

 

CW was incorporated in Hong Kong, China on December 18, 2013 as a company with limited liability. Upon incorporation, CW issued 10,000 ordinary shares to Century Crown Investment Limited at HK$1 each. Century Crown Investment Limited was incorporated in Hong Kong, China and 100% held by Ace Vantage. On March 29, 2019, Century Crown Investment Limited transferred 100% of their shareholding of CW to JTI.

 

JP was incorporated in Hong Kong, China on December 21, 2011 as a company with limited liability. Upon incorporation, JP issued 1 ordinary share to Ace Vantage at HK$1. On March 29, 2019, Ace Vantage transferred 100% of their shareholding of JP to JTI.

 

JA was incorporated in Hong Kong, China on May 2, 2017 as a company with limited liability. Upon incorporation, JA issued 1 ordinary share to Ace Vantage at HK$1. On March 29, 2019, Ace Vantage transferred 100% of their shareholding of JA to JTI

 

The acquisition of JF, CW, JP and JA by JTI has been accounted for as common control transactions in a manner similar to a pooling of interests and there was no recognition of any goodwill or excess of the acquirers’ interest in the net fair value of the acquirees’ identifiable assets, liabilities and contingent liabilities over cost at the time of the common control combinations. Therefore, these transactions were recorded at historical cost with a reclassification of equity from retained profits to additional paid in capital to reflect the deemed value of consideration given in the local jurisdiction and the capital structure of JF, CW, JP and JA. The consolidated financial statements of the Company include all of the accounts of the Company and its subsidiaries, JF, CW, JP and JA for all periods presented. All material intercompany transactions and balances have been eliminated in the consolidation.

 

6

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

The interim condensed financial information as of February 28, 2021 and for the three and six months ended February 28, 2021 and February 29, 2020 have been prepared by the Company without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures, which are normally included in the financial statements prepared in accordance with U.S. GAAP have not been included. The interim condensed financial statements are not necessarily indicative of the results of operations for the full year. These interim condensed financial statements and related footnotes should be read in conjunction with the financial statements and footnotes thereto included in the Company’s Annual Report on Form 10K for the year ended August 31, 2020, filed with the Securities and Exchange Commission.

 

In the opinion of management, all adjustments (which include all significant normal and recurring adjustments) necessary to present a fair statement of the Company’s interim condensed consolidated financial position as of February 28, 2021, its interim condensed consolidated results of operations and cash flows for the three and six months ended February 28, 2021 and February 29, 2020, as applicable, have been made.

 

Going concern

 

The accompanying condensed consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

As of February 28, 2021, the Company has suffered recurring losses from operations, and records an accumulated deficit and a working capital deficit of $794,434 and $343,152, respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The continuation of the Company as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders or other debt or capital sources. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due.

 

No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stock holders, in the case of equity financing.

 

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which continues to spread around the world. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the Hong Kong’s and global economy. While it is difficult to estimate the financial impact of COVID-19 on the Company’s operations, management believes that COVID-19 could have a material impact on its financial results at this time.

 

These condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern.

 

Use of estimates

 

Preparing financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions affecting 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. The more significant areas requiring the use of management’s estimates and assumptions relate to allowance for doubtful accounts, impairment of long-lived assets and valuation allowance for deferred tax assets. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results may differ significantly from these estimates. In addition, different assumptions or circumstances could reasonably be expected to yield different results.

 

7

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

Cash and cash equivalents

 

For purposes of the cash flow statements, the Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. Cash includes cash on hand and demand deposits in accounts maintained with financial institutions within the Hong Kong.

 

Loans receivable

 

Loans receivable primarily represent loan amounts due from customers. Loans receivable are recorded at unpaid principal balances net of provision that reflects the Company’s best estimate of the amounts that will not be collected. The loans receivable portfolio consists of business and personal loans. As of February 28, 2021 and August 31, 2020, the Company has nil loans receivable.

 

Provision for loan losses

 

The provision for loan losses is increased by charges to income and decreased by charge offs (net of recoveries). Recoveries represent subsequent collection of amounts previously charged-off. The increase in provision for loan losses is the netting effect of “reversal” and “provision” for both business and personal loans. If the ending balance of the provision for loan losses after any charge offs (net of recoveries) is less than the beginning balance, it will be recorded as a “reversal”; if it is larger, it will be recorded as a “provision” in the provision for loan loss. The netting amount of the “reversal” and the “provision” is presented in the statements of operations and comprehensive income.

 

The provision consists of specific and general components. The specific component consists of the amount of impairment related to loans that have been evaluated on an individual basis, and the general component consists of the amount of impairment related to loans that have been evaluated on a collective basis. Loans are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts when due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDRs”).

 

The Company recognizes a charge-off when management determines that full repayment of a loan is not probable. The primary factor in making that determination is the potential outcome of a lawsuit against the delinquent debtor. The Company will recognize a charge-off when the Company loses contact with the delinquent borrower for more than nine months or when the court rules against the Company to seize the collateral asset of the delinquent debt from either the guarantor or borrower. In addition, when the recoverability of the delinquent debt is highly unlikely, the senior management team will go through a stringent procedure to approve a charge-off. Management estimates the provision balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the provision may be made for specific loans, but the entire provision is available for any loan that, in management’s judgment, should be charged-off.

 

The provision for loan losses is maintained at a level believed to be reasonable by management to absorb probable losses inherent in the portfolio as of each balance sheet date. The provision is based on factors such as the size and current risk characteristics of the portfolio, an assessment of individual loans and actual loss, delinquency, and/or risk rating record within the portfolio. The Company evaluates its provision for loan losses on a quarterly basis or more often as necessary. 

 

Interest and fee receivables

 

Interest and fee receivables are accrued and credited to income as earned but not received. The Company determines a loan past due status by the number of days that have elapsed since a borrower has failed to make a contractual interest or principal payment. Accrual of interest is generally discontinued when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan interest or principal becomes past due by more than 90 days (The further extension of loan past due status is subject to management final approval and on case by case basis). Additionally, any previously accrued but uncollected interest is reversed. Subsequent recognition of income occurs only to the extent payment is received, subject to management’s assessment of the collectability of the remaining interest and principal. Loans are generally restored to an accrual status when it is no longer delinquent and collectability of interest and principal is no longer in doubt and past due interest is recognized at that time.

 

8

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

Accounts receivable

 

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balance, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. The Company only grants credit terms to established customers who are deemed to be financially responsible. Credit periods to customers are within 90 days after customers received the purchased services. For the three and six months ended February 28, 2021 and February 29, 2020, no allowance for doubtful accounts has been made. As of February 28, 2021 and August 31, 2020, the Company has $16,152 and nil accounts receivable, respectively.

 

Impairment of long-lived assets

 

The Company evaluates long lived assets for impairment at least annually and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Based on the existence of one or more indicators of impairment, the Company measures any impairment of long-lived assets by comparing the asset’s estimated fair value with its carrying value, based on cash flow methodology. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired and an impairment loss equal to an amount by which the carrying value exceeds the fair value of the asset is recognized. As of February 28, 2021 and August 31, 2020, management believes there was no impairment of long-lived assets.

 

Revenue recognition

 

Pursuant to the guidance of ASC Topic 606, revenue is recognized when control of promised goods or services is transferred to the Company’s customers in an amount of consideration to which the Company expects to be entitled to in exchange for those goods or services. The Company follows the five steps approach for revenue recognition under Topic 606: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies a performance obligation.

 

The following table presents the Company’s revenues disaggregated by revenue sources.

 

   Three months ended   Six months ended 
   February 28,
2021
   February 29,
2020
   February 28,
2021
   February 29,
2020
 
   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
Money lending  $-   $     -   $-   $- 
Property agency services   -    -    -    - 
Mortgage referral services   71,402    -    83,784    10,096 
                     
   $71,402   $-   $83,784   $10,096 

 

   Three months ended   Six months ended 
   February 28,
2021
   February 29,
2020
   February 28,
2021
   February 29,
2020
 
   (unaudited)   (unaudited)   (unaudited)   (unaudited) 
Revenue recognized over time  $-   $     -   $-   $- 
Revenue recognized at a point in time   71,402    -    83,784    10,096 
                     
   $71,402   $-   $83,784   $10,096 

 

9

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

Primary sources of the Company’s revenues are as follows:

 

(a)Money lending

 

Interest on loan receivables is accrued monthly in accordance with their contractual terms and recorded in accrued interest receivable. The Company does not charge prepayment penalties. Additionally, any previously accrued but uncollected interest is reversed and accrual is discontinued, when either (i) reasonable doubt exists as to the full, timely collection of interest or principal or (ii) when a loan becomes past due by more than 90 days.

 

  (b) Property agency services

 

The Company’s entitlement to agency fee income includes an element of consideration that is variable or contingent on the outcome of future events. Actual agency fee income to be received is dependent upon, among others, the completion of transaction between buyers and sellers, price concession based on customary industry practice and payment plans chosen by the buyers.

 

The Company is required to estimate the amount of consideration to which it will be entitled from the provision of property agency services. The estimated amount of variable consideration will be included in the transaction price only to the extent that it is highly probable taking into consideration of the risk of fallen through and price concession based on customary industry practice, that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

 

  (c) Mortgage referral services

 

Referral fee is recognized as referral services are provided to the customer.

 

The Company records a contract asset when it has a right to payment from a customer that is conditioned on events other than the passage of time. The Company also records a contract liability when customers prepay but the Company has not yet satisfied its performance obligation. For all the periods presented, the Company did not have any significant incremental costs of obtaining contracts with customers incurred and/or costs incurred in fulfilling contracts with customers within the scope of ASC Topic 606, that shall be recognized as an asset and amortized to expenses in a pattern that matches the timing of the revenue recognition of the related contract. The Company did not have any material unsatisfied performance obligations, contract assets or liabilities as of February 28, 2021 and August 31, 2020. Revenue is recognized when the performance obligation is fulfilled and the payment from customers is not contingent on a future event.

 

During all the periods presented, all of the Company’s revenues are derived in Hong Kong.

 

Leases

 

The Company determines if an arrangement is a lease or contains a lease at inception. Operating lease liabilities are recognized based on the present value of the remaining lease payments, discounted using the discount rate for the lease at the commencement date. As the rate implicit in the lease is not readily determinable for the operating lease, the Company generally uses an incremental borrowing rate based on information available at the commencement date to determine the present value of future lease payments. Operating lease right-of-use (“ROU assets”) assets represent the Company’s right to control the use of an identified asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are generally recognized based on the amount of the initial measurement of the lease liability. Lease expense is recognized on a straight-line basis over the lease term. The Company elected the package of practical expedients permitted under the transition guidance to combine the lease and non-lease components as a single lease component for operating leases associated with the Company’s office space lease, and to keep leases with an initial term of 12 months or less off the balance sheet and recognize the associated lease payments in the consolidated statements of income on a straight-line basis over the lease term.

 

10

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

The operating lease is included in operating lease right-of-use assets, operating lease liabilities-current and operating lease liabilities-non-current on the Company’s consolidated balance sheets.

 

Income taxes

 

The Company accounts for income taxes in accordance with the accounting standard issued by the Financial Accounting Standard Board (“FASB”) for income taxes. Under the asset and liability method as required by this accounting standard, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The charge for taxation is based on the results for the reporting period as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. The effect on deferred income taxes of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all of, a deferred tax asset will not be realized.

 

Foreign currency translation

 

The Company’s reporting currency is the United States dollars (“U.S. dollars”). The financial records of the Company and its subsidiaries in Hong Kong are maintained in Hong Kong dollars (“HKD”), which is the functional currency of these entities.

 

Monetary assets and liabilities denominated in currencies other than the applicable functional currencies are translated into the functional currencies at the prevailing rates of exchange at the balance sheet date. Nonmonetary assets and liabilities are remeasured into the applicable functional currencies at historical exchange rates. Transactions in currencies other than the applicable functional currencies during the year are converted into the functional currencies at the applicable rates of exchange prevailing at the transaction dates. Transaction gains and losses are recognized in the consolidated statements of operations.

 

Assets and liabilities are translated into the reporting currency at the rates of exchange ruling at the balance sheet date. Equity accounts are translated at historical exchange rates. Revenues, expenses, gain and loss are translated using the average rate of exchange in effect during the reporting period. Translation adjustments are reported and shown as a separate component of other comprehensive income in the consolidated statements of changes in equity and the consolidated statements of comprehensive income.

 

During the periods presented, HKD is pegged to the U.S. dollar within a narrow range.

 

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments (excluding non-current bank borrowings and obligation under finance lease): cash, short-term bank borrowings, other loan, balances with a director and holding company and other payables approximate their fair values because of the short-term nature of these financial instruments.

 

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of the Company’s non-current bank borrowings and obligation under finance lease approximates the carrying amount.

 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

  Level 1 Observable inputs such as quoted prices in active markets;
  Level 2 Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
  Level 3 Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

 

11

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

Net loss per share

 

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive. The following table presents a reconciliation of basic and diluted net loss per share:

 

   Three months ended   Six months ended 
   February 28,
2021
   February 29,
2020
   February 28,
2021
   February 29,
2020
 
                 
Net loss  $(36,606)  $(119,815)  $(98,966)  $(104,305)
Weighted average number of common shares outstanding - Basic and diluted   6,692,182    6,692,182    6,692,182    6,692,182 
Net loss per share - Basic and diluted  $(0.01)  $(0.02)  $(0.01)  $(0.02)

 

Related parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

Recent accounting pronouncements

 

Recently Adopted Accounting Standards

 

In August 2018, the FASB issued ASU 2018-13 Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates, adds, and modifies certain disclosure requirements for fair value measurements under ASC 820. This ASU is to be applied on a prospective basis for certain modified or new disclosure requirements, and all other amendments in the standard are to be applied on a retrospective basis. The new standard is effective for interim and annual periods beginning after December 15, 2019, with early adoption permitted. The new standard is effective for the Company on September 1, 2020 and the new standard did not have a material impact on the consolidated financial statements.

 

Accounting Pronouncements Issued But Not Yet Adopted

 

In May 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this ASU address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. ASU 2019-05 is effective for “smaller reporting companies” for fiscal year beginning after December 15, 2022. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and related disclosures.

 

12

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

In December 2019, the FASB issued ASU 2019-12: Simplifying the Accounting for Income Taxes (Topic 740), which removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance but does not expect adoption will have a material impact on the Company’s unaudited consolidated financial statements and related disclosures.

 

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur.

 

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. 

 

For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period.  The Company is currently evaluating the impact that ASU 2020-06 may have on its consolidated financial statements and related disclosures.

 

Except for the above-mentioned pronouncements, there are no new recent issued accounting standards that will have material impact on the consolidated financial position, statements of operations and cash flows.

 

3.PREPAID EXPENSES, DEPOSITS AND OTHER CURRENT ASSETS

 

Prepaid expenses, deposits and other current assets were $302 as of February 28, 2021 and August 31, 2020. The balance represented utility deposits paid.

 

4.ACCOUNTS PAYABLE, OTHER PAYABLES AND ACCRUED LIABILITIES

 

   February 28,
2021
   August 31,
2020
 
         
Accounts payable  $22,589   $2,371 
Accrued expenses   11,774    14,202 
   $34,363   $16,573 

 

Accrued expenses represented payables for professional and consulting fees.

 

13

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

5.INCOME TAXES, DEFERRED TAX ASSETS

 

(a) Income taxes in the consolidated statements of comprehensive income (loss)

 

The Company’s provision for income tax expense consisted of:

 

   Three months ended   Six months ended 
   February 28,
2021
   February 29,
2020
   February 28,
2021
   February 29,
2020
 
                 
Income tax expenses – Hong Kong  $314   $     -   $402   $     - 
Deferred income tax benefit   -    -    -    - 
Income tax expense  $314   $-   $402   $- 

 

United States of Tax

 

The Company is incorporated in the State of Nevada and is subject to the U.S. federal tax and state tax. The Tax Cuts and Jobs Act of (“TCJ Act”) was signed into law in December 2017, and among its many provisions, it imposed a mandatory one-time transition tax on undistributed international earnings and reduced the U.S. corporate income tax rate to 21%, effective January 1, 2018. No provision for income taxes in the United States has been made as the Company had no taxable income for the three and six months ended February 28, 2021 and February 29, 2020.

 

Hong Kong Tax

 

The Company’s subsidiaries in Hong Kong and are subject to Hong Kong taxation at 16.5% on estimated assessable profit derived from their activities conducted in Hong Kong subject to a waiver of 100% of the profits tax under a cap of $1,282 (HK$10,000) for year of assessment 2020/21.

 

A reconciliation of the provision for income taxes determined at the statutory income tax rate to the Company’s income taxes is as follows:

 

   Three months ended   Six months ended 
   February 28,
2021
   February 29,
2020
   February 28,
2021
   February 29,
2020
 
                 
Loss before provision for income taxes  $(36,292)  $(119,815)  $(98,564)  $(104,305)
Statutory income tax rate   21%   21%   21%   21%
Income tax (credit) expense computed at statutory income tax rate   (7,621)   (25,161)   (20,698)   (21,904)
Reconciling items:                    
Rate differential in different tax jurisdictions   740    5,392    1,933    4,694 
Non-deductible expenses   7,232    18,754-    19,204    17,210 
Non-taxable income   (37)   -    (37)   - 
Tax effect of utilization of tax losses   -    1,015    -    - 
Income tax expense  $314   $-   $402   $- 

 

The net tax loss of the subsidiaries in Hong Kong of $596,370 as of February 28, 2021 and August 31, 2020, available for offset against future profits, may be carried forward indefinitely. Management believes it is more likely than not that the Company will not realize these potential tax benefits as these operations will not generate operating profits in the foreseeable future. As a result, a valuation allowance was provided against the full amount of the potential tax benefits.

 

(b) Deferred tax assets

 

   February 28,
2021
   August 31,
2020
 
         
Deferred tax assets          
Tax loss  $98,401   $98,401 
Valuation allowance   (98,401)   (98,401)
   $-   $- 

 

14

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

6.BALANCES WITH RELATED PARTIES

 

   Note  February 28,
2021
   August 31,
2020
 
            
Amount due to a shareholder             
Ace Vantage Investments Limited  (c)  $238,658   $173,796 
              
Amount due to a related company             
Century Crown Investments Limited             
- Other payable      55,195    56,317 
- Rental payable  (b)   36,000    - 
   (a)(c)  $91,195   $56,317 

 

  (a) Mr. Roy Kong Hoi Chan, the Company’s President, is a director of and ultimately holding 50% interest in Century Crown Investments Limited. Century Crown Investments Limited is a wholly-owned subsidiary of Ace Vantage Investments Limited.

 

  (b) On August 20, 2020, the Company has entered into a sub-lease agreement with Century Crown Investments Limited for office space in Hong Kong for the period of one year from September 1, 2020 at $6,000 per month. For the three months ended February 28, 2021 and February 29, 2020, the Company recorded $18,000 and nil rental expenses to Century Crown Investments Limited, respectively. For the six months ended February 28, 2021 and February 29, 2020, the Company recorded $36,000 and nil rental expenses to Century Crown Investments Limited, respectively.

 

  (c) The balances with the shareholder and related company detailed above as of February 28, 2021 and August 31, 2020 are unsecured, non-interest bearing and repayable on demand.

 

For the three and six months ended February 28, 2021, the Company recorded $37,388 (HK$291,626) and $49,151 (HK$383,378) service fees to High Flyers Info Limited, respectively. The executive director of the Company, Mark Ko Chiu Yip, was also a director of High Flyers Info Limited for the period from May 7, 2020 to September 15, 2020.

 

Included in the accounts payable $22,589 and $2,371 as of February 28, 2021 and August 31, 2020, respectively, were payable to High Flyers Info Limited.

 

7.SEGMENT INFORMATION

 

The Company’s segments are business units that offer different products and services and are reviewed separately by the chief operating decision maker (the “CODM”), or the decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM is the Company’s chief executive officer.

 

For the three months ended February 28, 2021 

 

   Money
lending
   Property
agency
services
   Mortgage
referral
services
   Corporate
unallocated
(note)
   Consolidated 
                     
Revenue  $-   $     -   $71,402   $-   $71,402 
Cost of revenue   -    -    (68,991)   -    (68,991)
Gross profit   -    -    2,411    -    2,411 
General and administrative expense   (18,547)   -    (1,234)   (19,887)   (39,668)
Profit (loss) from operations   (18,547)   -    1,177    (19,887)   (37,257)
Other income   -    -    -    965    965 
Profit (loss) before income tax   (18,547)   -    1,177    (18,922)   (36,292)
Income tax   -    -    (314)   -    (314)
Net profit (loss)  $(18,547)  $-   $863   $(18,922)  $(36,606)

 

15

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

For the three months ended February 29, 2020 

 

   Money
lending
   Property
agency
services
   Mortgage
referral
services
   Corporate
unallocated
(note)
   Consolidated 
                     
Revenue  $-   $   -   $-   $-   $- 
Cost of revenue   -    -    -    -    - 
Gross profit   -    -    -    -    - 
General and administrative expense   (62,694)   -    (1,076)   (62,840)   (126,610)
Loss from operations   (62,694)   -    (1,076)   (62,840)   (126,610)
Other income   641    -    -    6,154    6,795 
Loss before income tax   (62,053)   -    (1,076)   (56,686)   (119,815)
Income tax   -    -    -    -    - 
Net loss  $(62,053)  $-   $(1,076)  $(56,686)  $(119,815)

 

For the six months ended February 28, 2021

 

   Money
lending
   Property
agency
services
   Mortgage
referral

services

   Corporate
unallocated
(note)
   Consolidated 
                     
Revenue  $-   $-   $83,784   $-   $83,784 
Cost of revenue   -    -    (80,754)   -    (80,754)
Gross profit   -    -    3,030    -    3,030 
General and administrative expense   (44,400)   -    (2,461)   (55,698)   (102,559)
Profit (loss) from operations   (44,400)   -    569    (55,698)   (99,529)
Other income   -    -    -    965    965 
Profit (loss) before income tax   (44,400)   -    569    (54,733)   (98,564)
Income tax   -    -    (402)   -    (402)
Net profit (loss)  $(44,400)  $-   $167   $(54,733)  $(98,966)
                          
Total assets                         
As of February 28, 2021  $754   $1,214   $19,114   $302   $21,384 
As of August 31, 2020  $55   $2,496   $29   $302   $2,882 

 

For the six months ended February 29, 2020

 

   Money
lending
   Property
agency
services
   Mortgage
referral
services
   Corporate
unallocated
(note)
   Consolidated 
                     
Revenue  $-   $   -   $10,096   $-   $10,096 
Cost of revenue   -    -    -    -    - 
Gross profit   -    -    10,096    -    10,096 
General and administrative expense   (63,335)   -    (1,816)   (62,840)   (127,991)
Loss from operations   (63,335)   -    8,280    (62,840)   (117,895)
Other income   1,282    -    -    12,308    13,590 
Loss before income tax   (62,053)   -    8,280    (50,532)   (104,305)
Income tax   -    -    -    -    - 
Net loss  $(62,053)  $-   $8,280   $(50,532)  $(104,305)

 

16

 

 

TEMIR CORP.

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2021 AND FEBRUARY 29, 2020

(Unaudited)

(In U.S. dollars except for number of shares)

 

8.COMMITMENTS AND CONTINGENCIES

 

Lease Commitments

 

The Company as lessee

 

The Company’s rental expense was $18,000 and nil for the three months ended February 28, 2021 and February 29, 2020, and $36,000 and nil for the six months ended February 28, 2021 and February 29, 2020, respectively.

 

On August 20, 2020, the Company has entered into a sub-lease agreement with Century Crown Investments Limited for office space in Hong Kong for the period of one year from September 1, 2020 at $6,000 per month. For the period ended February 28, 2021, the Company recorded $36,000 rental payable to Century Crown Investments Limited.

 

As of February 28, 2021, the outstanding lease is short-term lease. The total minimum future lease payments are $36,000 payable in the twelve months ending February 28, 2022.

 

9.SIGNIFICANT RISKS

 

Credit risk

 

Credit risk is one of the most significant risks for the Company’s business and arise principally in lending activities.

 

Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. The Company manages credit risk through in-house research and analysis of the economy primarily in Hong Kong and the underlying obligors and transaction structures. To minimize credit risk, the Company requires collateral in the form of rights to cash, securities or property and equipment.

  

The Company conducts credit evaluations of customers and generally does not require collateral or other security from its customers.

 

Liquidity risk

 

The Company is also exposed to liquidity risk which is risk that it is unable to provide sufficient capital resources and liquidity to meet its commitments and business needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, the Company will turn to other financial institutions and the owners to obtain short-term funding to meet the liquidity shortage.

 

Concentration risk

 

For all the periods presented, all of the Company’s assets were located in Hong Kong.

 

Three and nil customers accounted for all (45%, 30% and 25%) of the Company’s income from mortgage referral services for the three months ended February 28, 2021 and February 29, 2020, respectively.

 

Three and one customers accounted for all (38%, 36% and 26%) of the Company’s income from mortgage referral services for the six months ended February 28, 2021 and February 29, 2020, respectively.

 

One customer accounted for 95.2% the accounts receivable as of February 28, 2021. There was no accounts receivable as of August 31, 2020.

 

Two suppliers accounted for all (54% and 46%) the Company’s cost of revenue for the three months ended February 28, 2021. Two suppliers accounted for all (61% and 39%) the Company’s cost of revenue for the six months ended February 28, 2021.

 

10.SUBSEQUENT EVENTS

 

The Company has evaluated subsequent events from February 28, 2021 to the date the financial statements were issued and has determined that there are no items to disclose.

 

17

 

 

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

 

General

 

We were incorporated in the State of Nevada on May 19, 2016. We commenced operations in tourism. We were a travel agency that organized individual and group tours in Kyrgyzstan, such as cultural, recreational, sport, business, ecotours and other travel tours. Services and products provided by our company included custom packages according to the client’s specifications. We developed and offered our own tours in Kyrgyzstan as well as third-party suppliers.

 

On January 15, 2020, our principal office relocated to Suite 1802-03, 18/F, Strand 50, 50 Bonham Strand, Sheung Wan, Hong Kong. Our management is planning to restructure our business from a travel agency to a Fintech Company with major business focusing on financials services and using the internet, mobile devices, software technology or cloud services to perform or connected with financial services.

 

Reverse Acquisition of JTI

 

On April 2, 2020, the Company entered into a Sale and Purchase Agreement, by and among the Company, JTI Financial Services Group Limited (“JTI”), a Hong Kong corporation, and Ace Vantage Investments Limited (equally held by Mr. Roy Kong Hoi Chan (an executive director and president of the Company, “Mr. Roy Chan”) and his father) as vendor (the “Vendor”).

 

Under the terms and conditions of the Agreement (and supplemented by the amendments), the Company offered, sold and issued 4,118,182 shares of common stock in consideration for all the issued and outstanding shares in JTI. The effect of the issuance is that the Vendor now hold approximately 61.54% of the issued and outstanding shares of common stock of the Company.

 

Mr. Roy Chan, the founder of JTI, and Chairman of the board of directors is the holder of 629,350 shares of common stock of the Company prior to the Transaction. The Company’s officers and directors, Mr. Roy Chan, Mr. Mark Ko Chiu Yip and Mr. Brian Hung Ngok Wong therefore, control an aggregate of 4,993,412 or 74.62% of the outstanding common stock of the Company, on a fully diluted basis, after the Transaction.

 

As a result of the agreement, JTI is now a wholly-owned subsidiary of the Company.

 

The transaction with JTI was treated as a reverse acquisition, with JTI as the acquirer and the Company as the acquired party.  As a result of the controlling financial interest of the former stockholders of JTI, for financial statement reporting purposes, the merger between the Company and JTI was treated as a reverse acquisition, with JTI deemed the accounting acquirer and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with the Section 805-10-55 of the FASB Accounting Standards Codification. The reverse acquisition is deemed a capital transaction in substance whereas the assets and liabilities of JTI. (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the combination and the equity structure (the number and type of equity interests issued) of JTI is being retroactively restated using the exchange ratio established in the share purchase agreement to reflect the number of shares of the Company issued to effect the acquisition. The number of common shares issued and outstanding and the amount recognized as issued equity interests in the consolidated financial statements is determined by adding the number of common shares deemed issued and the issued equity interests of JTI immediately prior to the business combination to the unredeemed shares and the fair value of the Company determined in accordance with the guidance in ASC Section 805-40-55 applicable to business combinations, i.e. the equity structure (the number and type of equity interests issued) in the consolidated financial statements immediately post combination reflects the equity structure of the Company, including the equity interests the legal acquirer issued to effect the combination.

 

JTI has four wholly owned operating subsidiaries, namely, JTI Finance Limited, Concept We Mortgage Broker Limited, JTI Property Agency Limited and JTI Asset Management Limited. The principal activities of JTI are provision of diversified financial services through its wholly owned subsidiaries incorporated in Hong Kong.

 

JF is a licensed money lender in Hong Kong, holding a money lender license no. 1403/2020 granted by the licensing court of Hong Kong. JF offers various types of loans including but not limited to personal loan, business loan, credit card consolidation loan and equity pledge loan to its customers in Hong Kong.

 

CW is one of the active mortgage brokers in Hong Kong. Its revenue is mainly derived from the referral fee from the banks and financial institutions for the mortgage referral.

 

JP is a licensed property agent in Hong Kong, holding an estate agent’s license granted by Estate Agents Authority of Hong Kong. Its revenue is mainly derived from the commission provided by the landlord for facilitating the sales or lease of commercial properties.

 

JA is a consultancy services company. After the completion of the Agreement, JA is planning to apply for fund management licenses in Hong Kong or in other jurisdiction, aiming to provide fund management services globally.

 

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Impact of COVID-19

 

The spread of the coronavirus (“COVID-19”) around the world has caused significant business disruption in year 2020. In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which continues to spread around the world. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the Hong Kong’s and global economy. While it is difficult to estimate the financial impact of COVID-19 on the Company’s operations, management believes that COVID-19 could have a material impact on its financial results in year 2021.

 

RESULTS OF OPERATION

 

The accompanying interim condensed financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

As of February 28, 2021, we have suffered recurring losses from operations, and record an accumulated deficit and a working capital deficit of $794,434 and $343,152, respectively. These conditions raise substantial doubt about our ability to continue as a going concern. The continuation of our company as a going concern is dependent upon improving our profitability and the continuing financial support from our shareholders or other debt or capital sources. Management believes the existing shareholders or external financing will provide the additional cash to meet our obligations as they become due.

 

No assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to us. Even if we are able to obtain additional financing, if needed, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stock holders, in the case of equity financing.

 

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which continues to spread around the world. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the Hong Kong’s and global economy. While it is difficult to estimate the financial impact of COVID-19 on our operations, management believes that COVID-19 could have a material impact on our financial results at this time.

 

Our interim condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in our company not being able to continue as a going concern.

 

Results of operations 

 

The following table sets forth key components of our results of operations for the six months ended February 28, 2021 and February 29, 2020:

 

   Six months ended 
   February 28,
2021
  

February 29,
2020

 
         
REVENUE  $83,784   $10,096 
           
Cost of revenue   (80,754)   - 
           
GROSS PROFIT   3,030    10,096 
           
General and administrative expenses   (102,559)   (127,991)
           
LOSS FROM OPERATIONS   (99,529)   (117,895)
           
Other Income   965    13,590 
           
Loss before income tax   (98,564)   (104,305)
Income tax expense   (402)   - 
           
NET LOSS  $(98,966)  $(104,305)

 

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Revenue and cost of revenue

 

During the six months ended February 28, 2021, the Company generated revenue of $83,784 compared to $10,096 for the six months ended February 29, 2020. Cost of revenue was $80,754 for the six months ended February 28, 2021 compared to nil for the six months ended February 29, 2020.

 

General and administrative expenses

 

During the six months period ended February 28, 2021, we incurred $102,559 general and administrative expenses compared to $127,991 during the six months ended February 29, 2020. General and administrative expenses incurred generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting and developmental costs. The decrease was from the reduced personnel costs and office expenses.

 

Net loss

 

As a result of the cumulative effect of the factors described above, our net loss for the six months period ended February 28, 2021 was $98,966 compared to net loss of $104,305 during the six months ended February 29, 2020.

 

The following table sets forth key components of our results of operations for the three months ended February 28, 2021 and February 29, 2020:

 

   Three months ended 
   February 28,
2021
  

February 29,
2020

 
         
REVENUE  $71,402   $- 
           
Cost of revenue   (68,991)   - 
           
GROSS PROFIT   2,411    - 
           
General and administrative expenses   (39,668)   (126,610)
           
LOSS FROM OPERATIONS   (37,257)   (126,610)
           
Other Income   965    6,795 
           
Loss before income tax   (36,292)   (119,815)
Income tax expense   (314)   - 
           
NET LOSS  $(36,606)  $(119,815)

 

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Revenue and cost of revenue

 

During the three months ended February 28, 2021, the Company generated revenue of $71,402 compared to nil for the three months ended February 29, 2020. Cost of revenue was $68,991 for the three months ended February 28, 2021 compared to nil for the three months ended February 29, 2020.

 

General and administrative expenses

 

During the three months period ended February 28, 2021, we incurred $39,668 general and administrative expenses compared to $126,610 during the three months ended February 29, 2020. General and administrative expenses incurred generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting and developmental costs. The decrease was from the reduced personnel costs and office.

 

Net loss

 

As a result of the cumulative effect of the factors described above, our net loss for the three months period ended February 28, 2021 was $36,606 compared to net loss of $119,815 during the three months ended February 29, 2020.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Working Capital

   February 28,
2021
   August 31,
2020
 
Cash and cash equivalents  $2,036   $2,580 
Total current assets   21,064    2,882 
Total assets   21,064    2,882 
Total liabilities   364,216    247,068 
Accumulated deficit   794,434    695,468 
Total deficit  $342,152   $244,186 

 

The following table provides detailed information about our net cash flow for all financial statement periods presented in this report:

 

   Six months ended 
   February 28,
2021
   February 29,
2020
 
         
Net cash used in operating activities  $(59,252)  $(95,306)
Net cash from investing activities   -    - 
Net cash provided by financing activities   58,708    88,554 
           
Net decrease in cash and cash equivalents   (544)   (6,752)
Cash and cash equivalents, beginning of period   2,580    10,252 
CASH AND CASH EQUIVALENTS, END OF PERIOD  $2,036   $3,500 

 

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Cash Flows from Operating Activities

 

For the six months period ended February 28, 2021, net cash flows used in operating activities were $59,252, primarily resulted from the net loss of $98,966 partially offset by $41,032 rental and expenses payable to a related company. For the six months period ended February 29, 2020, net cash flows used in operating activities were $95,306, consisting primarily of net loss of $104,305 and a decrease of other current assets of $16,563, partially offset by a decrease of accrued liabilities of $7,564.

 

Cash Flows from Financing Activities

 

Cash flows provided by financing activities during the six months period ended February 28, 2021 was $58,708, consisting of $315,873 advances from a shareholder, $251,011 repayment to a shareholder and $6,154 repayment to a related company. Cash flows provided by financing activities during the six months period ended February 29, 2020 was $88,554, consisting of $230,798 advances from a shareholder and $142,244 repayment to a shareholder.

 

REQUIREMENT FOR ADDITIONAL CAPITAL

 

We are looking to expand our business in the future. We intend to acquire other companies. We have targeted and located some companies which we believe are suitable and may create synergy through acquisition.

 

We anticipate that additional funding, if required, will be in the form of equity financing from the sale of shares of our common stock. However, we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of shares to fund additional expenditures. We do not currently have any arrangements in place for any future equity financing. Our limited operating history and our lack of significant tangible capital assets makes it unlikely that we will be able to obtain significant debt financing in the near future. If such financing is not available on satisfactory terms, we may be unable to continue or expand our business. Equity financing could result in additional dilution to existing shareholders.

 

OFF-BALANCE SHEET ARRANGEMENTS

 

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

CONTRACTUAL OBLIGATIONS

 

We had the following contractual obligations and commercial commitments as of February 28, 2021.

 

   Payment Due by Period 
   Total   Less than
1 Year
   1-3 Years   3-5 Years   More than
5 Years
 
Amount due to a shareholder  $238,658   $238,658   $    -   $    -   $    - 
Amount due to a related company   91,195    91,195    -    -    - 
Lease payable   36,000    36,000    -    -    - 
Total  $365,853   $365,853   $-   $-   $- 

 

We believe that our current cash and financing from our existing stockholders are adequate to support operations for at least the next 12 months. We may, however, in the future, require additional cash resources due to changed business conditions, implementation of our strategy to expand our business or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.

 

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

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

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

As required by Rule 13a-15 under the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our principal executive officer and principal financial and accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of February 28, 2021. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures.

 

Management conducted its evaluation of disclosure controls and procedures under the supervision of our principal executive officer and principal financial and accounting officer. Based upon, and as of the date of this evaluation, our principal executive officer and principal financial and accounting officer have concluded that our disclosure controls and procedures were not effective as of February 28, 2021 due to the following material weaknesses in our internal control over financial reporting.

 

1.We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is of the utmost importance for entity-level control over the Company’s financial statement. Currently, the Board of Directors acts in the capacity of the Audit Committee.

 

2.We do not have adequate written policies and procedures – Due to lack of adequate written policies and procedures for accounting and financial reporting, we did not establish a formal process to close our books monthly and account for all transactions in a timely manner.

 

3.We did not implement appropriate information technology controls – As of February 28, 2021, the Company was retaining copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of the data in the event of theft, misplacement, or loss due to unmitigated factors.

 

4.We do not have sufficient and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of accounting principles generally accepted in the United States commensurate with our financial reporting requirements.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. 

 

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We plan to take steps to remediate these material weaknesses as soon as practicable by implementing a plan to improve our internal control over financial reporting including, but not limited to:

 

  1. Create a position to segregate duties consistent with control objectives and increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us.
     
  2. Prepare written policies and procedures for accounting and financial reporting to establish a formal process to close our books monthly on an accrual basis and account for all transactions, including equity and debt transactions, in a timely manner.
     
  3. Add staff members to our management team to make sure that information required to be disclosed in our reports filed and submitted under the Exchange Act is recorded, processed, summarized and reported as and when required and the staff members will have segregated responsibilities with regard to these responsibilities.

 

Changes in Internal Controls over Financial Reporting

 

Except for the matters described above, there have been no changes in the Company’s internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

24

 

 

PART II. OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

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

 

ITEM 1A. RISK FACTORS

 

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.

 

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

 

None.

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

None.

 

ITEM 5. OTHER INFORMATION

 

None.

 

ITEM 6. EXHIBITS

 

(a)Exhibits required by Item 601 of Regulation SK.:

 

Number   Description
31.1   Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2   Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1   Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2   Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

  XBRL Instance Document
101.SCH   XBRL Taxonomy Extension Schema Document
101.CAL   XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF   XBRL Taxonomy Extension Definition Linkbase Document
101.LAB   XBRL Taxonomy Extension Label Linkbase Document
101.PRE   XBRL Taxonomy Extension Presentation Linkbase Document

 

25

 

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  TEMIR CORP.
     
Dated: April 19, 2021 By: /s/ Roy Chan
  Name: Roy Chan 
  Title: President (principal executive officer)
     
  By: /s/ Brian Chan
  Name: Brian Chan 
  Title: Chief Financial Officer
    (principal accounting officer and principal financial officer)

 

 

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