UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
For the transition period from ______ to _______
Commission
File No.
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation or Organization)
| IRS Employer Identification Number | Primary Standard Industrial Classification Code Number |
Temir Corp.
Tel.
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 | ||
| 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.
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 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 | ☐ |
| ☐ | 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 ☐
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 January 17, 2022, the registrant had
TEMIR CORP.
FORM 10-Q
November 30, 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 | 19 |
| Item 3 | Quantitative And Qualitative Disclosures About Market Risk | 24 |
| Item 4 | Controls And Procedures | 24 |
| 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 NOVEMBER 30, 2021 AND AUGUST 31, 2021 (Unaudited)
(In U.S. dollars except for number of shares)
| November 30, 2021 | August 31, 2021 | |||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable, net of nil provision for doubtful accounts | ||||||||
| Tax recoverable | ||||||||
| Prepaid expenses, deposits and other current assets | ||||||||
| Total current assets | ||||||||
| NON-CURRENT ASSETS | ||||||||
| Non-marketable equity securities | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable, other payables and accrued liabilities | $ | $ | ||||||
| Amount due to a related company | ||||||||
| Amount due to a shareholder | ||||||||
| Total liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ DEFICIT | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
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 MONTHS ENDED NOVEMBER 30, 2021 and 2020
(Unaudited)
(In U.S. dollars except for number of shares)
| Three months ended November 30, | ||||||||
| 2021 | 2020 | |||||||
| REVENUE | $ | $ | ||||||
| Cost of revenue | ( | ) | ( | ) | ||||
| GROSS PROFIT | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ||||
| Other income | ||||||||
| LOSS BEFORE INCOME TAX | ( | ) | ( | ) | ||||
| Income tax expense | - | ( | ) | |||||
| NET LOSS AND TOTAL COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | ||
| Loss per common share: | ||||||||
| Basic and diluted | $ | ( | )* | $ | ( | ) | ||
| Weighted Average Number of Common Shares Outstanding: | ||||||||
| Basic and diluted | ||||||||
| * |
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 MONTHS ENDED NOVEMBER 30, 2021 and 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) | ||||||||||||||||
| Balance as of September 1, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||
| Balance as of November 30, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Balance as of September 1, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||
| Balance as of November 30, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
The accompanying notes are an integral part of these condensed financial statements.
3
TEMIR
CORP.
CONDENSED CONSOLDIATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 and 2020
(Unaudited)
(In U.S. dollars except for number of shares)
| Three months ended November 30, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Change in operating assets and liabilities | ||||||||
| Accounts receivable | ( | ) | ||||||
| Accounts payable, other payables and accrued liabilities | ( | ) | ||||||
| Tax payable | ||||||||
| Amount due to a related company | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACITIVITIES | ||||||||
| Advances from a shareholder | ||||||||
| Repayment to a shareholder | ( | ) | ||||||
| Advances from a related company | ||||||||
| Repayment to a related company | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net increase in cash and cash equivalents | ||||||||
| Cash and cash equivalents, beginning of period | ||||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||
| Interest paid | $ | $ | ||||||
| Income tax paid | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements
4
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 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 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 (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 $
Under the terms and conditions of the
Agreement, the Company offered, sold and issued
On June 30, 2020, pursuant to the amendment
to the Agreement, the parties agreed to adjust
Mr. Roy Chan, the founder of JTI, an
executive director and president of the Company, is the holder of
After the issue of
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.
5
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020
(Unaudited)
(In U.S. dollars except for number of shares)
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”) and Temir Logistics Industrial Park Limited “Temir Logistics”) as an investment holding company.
On May 20, 2021, the Company, Hainan
Qicheng Asset Management Joint Stock Company (“Hainan”) and Temir Logistics entered into a sale and purchase agreement (“SPA”),
pursuant to which the Company shall issue
Temir Logistics is a wholly owned subsidiary of the Company, which is incorporated in Hong Kong on May 17, 20201, principally engaged in investment holding. It was intended to invest in Bac Giang International Logistics Co., Ltd., which is in turn building and running an international logistics park in Bac Giang Province, Vietnam.
On August 25, 2021, the Company, Hainan
and Temir Logistics entered into a SPA Termination agreement (the “Termination Agreement”) to terminate all of the rights
and obligation of the SPA entered on May 20, 2021 and to cancel the
On May 5, 2021, (i) Direct Assistance
Limited, a wholly owned subsidiary of EFT Solutions Holdings Limited (a company listed on GEM of The Stock Exchange of Hong Kong Limited),
(ii) 2Go Investments Group Limited and (iii) JTI formed eDDA Solutions Limited (“eDDA”), a company incorporated in Hong Kong
with limited liability, which will be principally engaged in the business of sales and maintenance services for the electronic direct
debit authorization (“eDDA platform”). JTI has contributed share capital of $
6
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020
(Unaudited)
(In U.S. dollars except for number of shares)
| Company name | Place/date of incorporation | Principal activities | |||
| 1. | JTI Finance Limited (“JF”) | Hong Kong, China/ December 29, 2011 | Money lending | ||
| 2. | Concept We Mortgage Broker Limited (“CW”) | Hong Kong, China / December 18, 2013 | Mortgage broker providing mortgage related consultancy services | ||
| 3. | JTI Property Agency Limited (“JP”) | Hong Kong, China/ December 21, 2011 | Property agency | ||
| 4. | JTI Asset Management Limited (“JA”) | Hong Kong, China/ May 2, 2017 | General consulting services | ||
| 5. | Temir Logistics Industrial Park Limited | Hong Kong, China/ May 17, 2021 | Investment holding | ||
The formation of JTI Financial Services
Group Limited was completed in March 2019. Upon incorporation, JTI issued
JF was incorporated in Hong Kong, China
on December 29, 2011 as a company with limited liability. Upon incorporation, JF issued
CW was incorporated in Hong Kong, China
on December 18, 2013 as a company with limited liability. Upon incorporation, CW issued
JP was incorporated in Hong Kong, China
on December 21, 2011 as a company with limited liability. Upon incorporation, JP issued
JA was incorporated in Hong Kong, China
on May 2, 2017 as a company with limited liability. Upon incorporation, JA issued
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.
7
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 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 November 30, 2021 and for the three months ended November 30, 2021 and 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, 2021, 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 November 30, 2021, its interim condensed consolidated results of operations and cash flows for the three months ended November 30, 2021 and 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 November 30, 2021, the Company
has suffered recurring losses from operations, and records an accumulated deficit and a working capital deficit of $
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, both current financial year and next financial year.
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.
8
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020
(Unaudited)
(In U.S. dollars except for number of shares)
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.
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 November 30, 2021 and August 31, 2021, 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.
9
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020
(Unaudited)
(In U.S. dollars except for number of shares)
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.
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 months ended November 30, 2021 and 2020, no allowance for doubtful accounts has been made.
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 November 30, 2021 and August 31, 2021, 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 November 30, | ||||||||
| 2021 | 2020 | |||||||
| (unaudited) | (unaudited) | |||||||
| Mortgage referral services | $ | $ | ||||||
| $ | $ | |||||||
| Three months ended November 30, | ||||||||
| 2021 | 2020 | |||||||
| (unaudited) | (unaudited) | |||||||
| Revenue recognized over time | $ | $ | ||||||
| Revenue recognized at a point in time | ||||||||
| $ | $ | |||||||
10
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 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 November 30, 2021 and August 31, 2021. 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.
11
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020
(Unaudited)
(In U.S. dollars except for number of shares)
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 |
12
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020
(Unaudited)
(In U.S. dollars except for number of shares)
Net (loss) profit per share
The Company calculates net profit (loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic profit/(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 profit (loss) per share:
| Three months ended November 30, | ||||||||
| 2021 | 2020 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding - Basic and diluted | ||||||||
| Net loss per share - Basic and diluted | $ | ( | )* | $ | ( | ) | ||
| * | Less than $0.01 |
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 December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions and enhances and simplifies various aspects of the income tax accounting guidance in ASC 740. The Company adopted ASU 2019-12 on September 1, 2021. The adoption of ASU 2019-12 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.
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”). ASU 2020-06 simplifies the accounting for convertible debt by eliminating the beneficial conversion and cash conversion accounting models. Upon adoption of ASU 2020-06, convertible debt proceeds, unless issued with a substantial premium or an embedded conversion feature that is not clearly and closely related to the host contract, will no longer be allocated between debt and equity components. This modification will reduce the issue discount and result in less non-cash interest expense in financial statements. ASU 2020-06 also updates the earnings per share calculation and requires entities to assume share settlement when the convertible debt can be settled in cash or shares. For contracts in an entity’s own equity, the type of contracts primarily affected by ASU 2020-06 are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and only if adopted as of the beginning of such fiscal year. The Company adopted ASU 2020-06 effective September 1, 2021. The adoption of ASU 2020-06 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.
13
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020
(Unaudited)
(In U.S. dollars except for number of shares)
Accounting Pronouncements Issued But Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 is to be adopted on a modified retrospective basis. As a smaller reporting company, ASU 2016-13 will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact that the adoption of ASU 2016-13 will have on its consolidated financial statement presentations and disclosures.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The adoption of ASU 2021-04 is not expected to have any impact on the Company’s consolidated financial statement presentation or 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.
14
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020
(Unaudited)
(In U.S. dollars except for number of shares)
| 3. | PREPAID EXPENSES, DEPOSITS AND OTHER CURRENT ASSETS |
Prepaid expenses, deposits and other
current assets were $
| 4. | ACCOUNTS PAYABLE, OTHER PAYABLES AND ACCRUED LIABILITIES |
| November 30, 2021 | August 31, 2021 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| $ | $ | |||||||
Accrued expenses represented payables for professional and consulting fees.
| 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 November 30, | ||||||||
| 2021 | 2020 | |||||||
| Income tax expenses – Hong Kong | $ | $ | | |||||
| Deferred income tax benefit | ||||||||
| Income tax expense | $ | $ | ||||||
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
Hong Kong Tax
The Company’s subsidiaries in
Hong Kong and are subject to Hong Kong taxation at
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 November 30, | ||||||||
| 2021 | 2020 | |||||||
| Loss before provision for income taxes | $ | ( | ) | $ | ( | ) | ||
| Statutory income tax rate | % | % | ||||||
| Income tax (credit) expense computed at statutory income tax rate | ( | ) | ( | ) | ||||
| Reconciling items: | ||||||||
| Rate differential in different tax jurisdictions | ||||||||
| Non-deductible expenses | ||||||||
| Tax effect of utilization of tax losses | ( | ) | ||||||
| Income tax expenses | $ | $ | ||||||
15
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020
(Unaudited)
(In U.S. dollars except for number of shares)
The net tax loss of the subsidiaries
in Hong Kong of $
(b) Deferred tax assets
| November 30, 2021 | August 31, 2021 | |||||||
| Deferred tax assets | ||||||||
| Tax loss | $ | $ | ||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| $ | $ | |||||||
| 6. | BALANCES WITH RELATED PARTIES |
| Note | November 30, 2021 |
August 31, 2021 |
|||||||
| Amount due to a shareholder | |||||||||
| Ace Vantage Investments Limited | (c) | $ | $ | ||||||
| Amount due to a related company | |||||||||
| Century Crown Investments Limited | (a) | $ | $ | ||||||
| - Other payable | |||||||||
| - Rental payable | (b) | ||||||||
| (a) (c) | $ | $ | |||||||
| (a) | Mr. Roy Kong Hoi Chan, the Company’s President, is a director of and ultimately holding |
| (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
On August 20, 2021, the Company has renewed the sub-lease agreement with Century Crown Investments Limited for office space in Hong Kong for the period of
For the three months ended November 30, 2021 and 2020, the Company recorded $ |
| (c) | The balances with the shareholder and related company detailed above as of November 30, 2021 and August 31, 2021 are unsecured, non-interest bearing and repayable on demand. |
For the three months ended November
30, 2021 and 2020, the Company recorded $
Included in the accounts payable $
16
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020
(Unaudited)
(In U.S. dollars except for number of shares)
| 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 November 30, 2021
| Money lending | Property agency services | Mortgage | Corporate unallocated (note) | Consolidated | ||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||||||||
| Gross profit | ||||||||||||||||||||
| General and administrative expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income | ||||||||||||||||||||
| Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Income tax | ||||||||||||||||||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||
| Total assets | ||||||||||||||||||||
| As of November 30, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
| As of August 31, 2021 | $ | $ | $ | $ | $ | |||||||||||||||
For the three months ended November 30, 2020
| Money lending | Property agency services | Mortgage referral services | Corporate unallocated (note) | Consolidated | ||||||||||||||||
| Revenue | $ | $ | $ | $ | $ | |||||||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||||||||
| Gross profit | ||||||||||||||||||||
| General and administrative expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Other income | ||||||||||||||||||||
| Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Income tax | ( | ) | ( | ) | ||||||||||||||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||
17
TEMIR CORP.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 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 $
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.
On August 20, 2021, the Company renewed the sub-lease agreement with Century Crown Investments Limited for office space in Hong Kong for the period of one year from September 1, 2021 at $6,000 per month.
For the three months ended November
30, 2021 and 2020, the Company recorded $
As of November 30, 2021, the outstanding
lease is short-term lease. The total minimum future lease payments are $
| 9. | SIGNIFICANT RISKS |
Credit risk
Credit risk is
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.
| 10. | SUBSEQUENT EVENTS |
The Company has evaluated subsequent events from November 30, 2021 to the date the financial statements were issued and has determined that there are no items to disclose.
18
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
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.
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 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.
JTI Group
On April 2, 2020, the Company entered into a Sale and Purchase Agreement (the “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 Amendment, the Second Amendment and the Third Amendment), the Company offered, sold and will issue 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 Yip and Mr. Brian 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.
19
JTI has four wholly owned operating subsidiaries, namely, JTI Finance Limited (“JF”), Concept We Mortgage Broker Limited (“CW”), JTI Property Agency Limited (“JP”) and JTI Asset Management Limited (“JA”). On May 17 2021, TEMIR CORP. incorporated Temir Logistics Industrial Park Limited, which is incorporated in Hong Kong and principally engaged in investment holding. 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. 1662/2021 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.
Transaction re Bac Giang International Logistics Co., Ltd.
On May 20, 2021, the Company, Hainan Qicheng Asset Management Joint Stock Company (“Hainan”) and Temir Logistics entered into a sale and purchase agreement (“SPA”), pursuant to which the Company shall issue 930,233 shares of the Company at a price of $21.5 per share, valued at $20,000,000 in exchange of 10% shareholding in Bac Giang International Logistics Co., Ltd. Bac Giang is a company incorporated in the Socialist Republic of Vietnam, the principal business of which is to build and run a modern international logistics park in Bac Giang Province, Vietnam. 930,233 shares of the Company were issued to the nominee of Hainan on June 8, 2021. Based on the SPA, 930,233 shares were issued within one month from the signing date of SPA. The transfer of shares of Bac Giang will be completed within 3 years from the date of SPA.
Temir Logistics is a wholly owned subsidiary of the Company, which is incorporated in Hong Kong on May 17, 2021, principally engaged in investment holding. It was intended to invest in Bac Giang International Logistics Co., Ltd., which is in turn building and running an international logistics park in Bac Giang Province, Vietnam.
On August 25, 2021, the Company, Hainan and Temir Logistics entered into a SPA Termination agreement (the “Termination Agreement”) to terminate all of the rights and obligation of the SPA entered on May 20, 2021 and to cancel the 930,233 shares issued to the nominee. 930,233 shares were cancelled on September 16, 2021.
Transaction re eDDA platform
On May 5, 2021, (i) Direct Assistance Limited, a wholly owned subsidiary of EFT Solutions Holdings Limited (a company listed on GEM of The Stock Exchange of Hong Kong Limited), (ii) 2Go Investments Group Limited and (iii) JTI formed eDDA Solutions Limited (“eDDA”), a company incorporated in Hong Kong with limited liability, which will be principally engaged in the business of sales and maintenance services for the electronic direct debit authorization (“eDDA platform”). JTI has contributed share capital of $1 (HK$10), representing a 10% shareholding of eDDA. eDDA has not commenced operations as of the date of approval of this report.
Impact of COVID-19
The spread of the coronavirus (“COVID-19”) around the world has caused significant business disruption in year 2020 and 2021. In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic, which continues to spread around the world. Our business continues to be impacted by the COVID-19 pandemic. Significant COVID-19 related restrictions, including those in response to the outbreak of the Delta variant and the Omicron variant, have continued and in some instances, have been significantly tightened, in markets in which we operate. 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 years 2021 and 2022.
20
RESULTS OF OPERATIONS
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 November 30, 2021, we have suffered recurring losses from operations, and record an accumulated deficit and a working capital deficit of $994,140 and $542,859, 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 (including the new variants of the virus, such as the Delta and Omicron variants), the travel or quarantine policies implemented, 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 three months ended November 30, 2021 and 2020:
| Three months ended November 30, | ||||||||
| 2021 | 2020 | |||||||
| REVENUE | $ | 69,633 | $ | 12,382 | ||||
| Cost of revenue | (65,977 | ) | (11,763 | ) | ||||
| GROSS PROFIT | 3,656 | 619 | ||||||
| General and administrative expenses | (35,466 | ) | (62,891 | ) | ||||
| LOSS FROM OPERATIONS | (31,810 | ) | (62,272 | ) | ||||
| Loss before income tax | (31,810 | ) | (62,272 | ) | ||||
| Income tax expense | - | (88 | ) | |||||
| NET LOSS | $ | (31,810 | ) | $ | (62,360 | ) | ||
21
Revenue and cost of revenue
During the three months ended November 30, 2021, the Company generated revenue of $69,633 compared to $12,382 for the three months ended November 30, 2020. Cost of revenue was $65,977 for the three months ended November 30, 2021 compared to $11,763 for the three months ended November 30, 2020. The revenue generated and cost of revenue were derived from our mortgage referral fee for both years. The increase of income and cost of revenue benefit from the increasing demand of mortgage.
General and administrative expenses
During the three months period ended November 30, 2021, we incurred $35,466 general and administrative expenses compared to $62,891 during the three months ended November 30, 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 of general and administrative expenses is due to a decrease in professional fees.
Net loss
As a result of the cumulative effect of the factors described above, our net loss for the three months period ended November 30, 2021 was $31,810 compared to net loss of $62,360 during the three months ended November 30, 2020.
LIQUIDITY AND CAPITAL RESOURCES
Working Capital
| November 30, 2021 | August 31, 2021 | |||||||
| Cash and cash equivalents | $ | 29,665 | $ | 9,727 | ||||
| Total current assets | 52,884 | 51,908 | ||||||
| Total assets | 52,885 | 51,909 | ||||||
| Total liabilities | 595,743 | 562,957 | ||||||
| Accumulated deficit | 994,140 | 962,330 | ||||||
| Total deficit | $ | 542,858 | $ | 511,048 | ||||
The following table provides detailed information about our net cash flow for all financial statement periods presented in this report:
| Three months ended November 30, | ||||||||
| 2021 | 2020 | |||||||
| Net cash used in operating activities | $ | (2,010 | ) | $ | (43,985 | ) | ||
| Net cash from investing activities | - | - | ||||||
| Net cash provided by financing activities | 21,948 | 57,117 | ||||||
| Net increase in cash and cash equivalents | 19,938 | 13,132 | ||||||
| Cash and cash equivalents, beginning of period | 9,727 | 2,580 | ||||||
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 29,665 | $ | 15,712 | ||||
Cash Flows from Operating Activities
For the three months period ended November 30, 2021, net cash flows used in operating activities were $2,010, primarily resulted from net loss of $31,810 with decrease of accounts payable of $21,727, partially offset by decrease of accounts receivable of $18,962 and amount due to a related company of $32,565. For the three months period ended November 30, 2020, net cash flows used in operating activities were $43,985, consisting primarily of net loss of $62,360 partially offset by $18,000 rental payable to a related company.
22
Cash Flows from Financing Activities
Cash flows provided by financing activities during the three months period ended November 30, 2021 was $21,948, consisting of $3,610 advances from a shareholder, $25,389 advances from a related company and $7,051 repayment to a related company. Cash flows provided by financing activities during the three months period ended November 30, 2020 was $57,117, consisting of $300,583 advances from a shareholder and $243,466 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 November 30, 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 | $ | 319,730 | $ | 319,730 | $ | - | $ | - | $ | - | ||||||||||
| Amount due to a related company | 214,891 | 214,891 | - | - | - | |||||||||||||||
| Lease | 54,000 | 54,000 | - | - | - | |||||||||||||||
| Total | $ | 588,621 | $ | 588,621 | $ | - | $ | - | $ | - | ||||||||||
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.
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.
23
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 November 30, 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 November 30, 2021 due to the following material weaknesses in our internal control over financial reporting.
| 1. | We do not have an Audit Committee – While we are not obligated to have an audit committee, it is management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial reporting. Currently, our Chief Executive Officer and directors act in the capacity of the audit committee, and do not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities. |
| 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 November 30, 2021, we retained copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of our 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.
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 | 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). |
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: January 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) | |
26
EXHIBIT 31.1
SECTION 302 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF TEMIR CORP.
I, Roy Chan, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Temir Corp.; |
| 2. | Based on my knowledge, this quarterly 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 quarterly report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report; |
| 4. | The registrant’s other certifying officer(s) 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, including its consolidated subsidiaries, 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 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(s) 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: January 19, 2022 | By: | /s/ Roy Chan |
| Roy Chan | ||
| President (principal executive officer) |
EXHIBIT 31.2
SECTION 302 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF TEMIR CORP.
I, Brian Chan, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Temir Corp.; |
| 2. | Based on my knowledge, this quarterly 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 quarterly report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report; |
| 4. | The registrant’s other certifying officer(s) 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, including its consolidated subsidiaries, 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 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(s) 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: January 19, 2022 | By: | /s/ Brian Chan |
| Brian Chan | ||
|
Chief Financial Officer (principal accounting officer and principal financial officer) |
EXHIBIT 32.1
SECTION 906 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF TEMIR CORP.
In connection with the accompanying Quarterly Report on Form 10-Q of Temir Corp. for the quarter ended November 30, 2021, the undersigned, Roy Chan, President of Temir Corp., does hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | such Quarterly Report on Form 10-Q for the quarter ended November 30, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| (2) | the information contained in such Quarterly Report on Form 10-Q for the quarter ended November 30, 2021 fairly presents, in all material respects, the financial condition and results of operations of Temir Corp. |
| Date: January 19, 2022 | By: | /s/ Roy Chan |
| President | ||
| (principal executive officer) |
EXHIBIT 32.2
SECTION 906 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF TEMIR CORP.
In connection with the accompanying Quarterly Report on Form 10-Q of Temir Corp. for the quarter ended November 30, 2021, the undersigned, Brian Chan, Chief Financial Officer of Temir Corp., does hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | such Quarterly Report on Form 10-Q for the quarter ended November 30, 2021 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
| (2) | the information contained in such Quarterly Report on Form 10-Q for the quarter ended November 30, 2021 fairly presents, in all material respects, the financial condition and results of operations of Temir Corp. |
| Date: January 19, 2022 | By: | /s/ Brian Chan |
| Chief Financial Officer | ||
|
(principal accounting officer and principal financial officer) |
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) |
Nov. 30, 2021 |
Aug. 31, 2021 |
|---|---|---|
| CURRENT ASSETS | ||
| Cash | $ 29,665 | $ 9,727 |
| Accounts receivable, net of nil provision for doubtful accounts | 21,936 | 40,898 |
| Tax recoverable | 981 | 981 |
| Prepaid expenses, deposits and other current assets | 302 | 302 |
| Total current assets | 52,884 | 51,908 |
| NON-CURRENT ASSETS | ||
| Non-marketable equity securities | 1 | 1 |
| TOTAL ASSETS | 52,885 | 51,909 |
| CURRENT LIABILITIES | ||
| Accounts payable, other payables and accrued liabilities | 61,122 | 82,849 |
| Amount due to a related company | 214,891 | 163,988 |
| Amount due to a shareholder | 319,730 | 316,120 |
| Total liabilities | 595,743 | 562,957 |
| STOCKHOLDERS’ DEFICIT | ||
| Common stock, $0.001 par value 75,000,000 shares authorized; 6,692,182 shares issued and outstanding as of November 30, 2021 and August 31, 2021 | 6,692 | 6,692 |
| Additional paid-in capital | 444,590 | 444,590 |
| Accumulated deficit | (994,140) | (962,330) |
| TOTAL STOCKHOLDERS’ DEFICIT | (542,858) | (511,048) |
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ 52,885 | $ 51,909 |
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares |
Nov. 30, 2021 |
Aug. 31, 2021 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 75,000,000 | 75,000,000 |
| Common stock, shares issued | 6,692,182 | 6,692,182 |
| Common stock, shares outstanding | 6,692,182 | 6,692,182 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) |
3 Months Ended | ||||
|---|---|---|---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
||||
| Income Statement [Abstract] | |||||
| REVENUE | $ 69,633 | $ 12,382 | |||
| Cost of revenue | (65,977) | (11,763) | |||
| GROSS PROFIT | 3,656 | 619 | |||
| General and administrative expenses | (35,466) | (62,891) | |||
| LOSS FROM OPERATIONS | (31,810) | (62,272) | |||
| Other income | |||||
| LOSS BEFORE INCOME TAX | (31,810) | (62,272) | |||
| Income tax expense | (88) | ||||
| NET LOSS AND TOTAL COMPREHENSIVE LOSS | $ (31,810) | $ (62,360) | |||
| Loss per common share: | |||||
| Basic and diluted (in Dollars per share) | $ 0 | [1] | $ (0.01) | ||
| Weighted Average Number of Common Shares Outstanding: | |||||
| Basic and diluted (in Shares) | 6,692,182 | 6,692,182 | |||
| |||||
Condensed Consoldiated Statements Of Stockholders’ Equity (Deficit) (Unaudited) - USD ($) |
Number of Common shares |
Additional Paid-in Capital |
Accumulated Deficit |
Total |
|---|---|---|---|---|
| Balance at Aug. 31, 2020 | $ 6,692 | $ 444,590 | $ (695,468) | $ (244,186) |
| Balance (in Shares) at Aug. 31, 2020 | 6,692,182 | |||
| Net loss | (62,360) | (62,360) | ||
| Balance at Nov. 30, 2020 | $ 6,692 | 444,590 | (757,828) | (306,546) |
| Balance (in Shares) at Nov. 30, 2020 | 6,692,182 | |||
| Balance at Aug. 31, 2021 | $ 6,692 | 444,590 | (962,330) | (511,048) |
| Balance (in Shares) at Aug. 31, 2021 | 6,692,182 | |||
| Net loss | (31,810) | (31,810) | ||
| Balance at Nov. 30, 2021 | $ 6,692 | $ 444,590 | $ (994,140) | $ (542,858) |
| Balance (in Shares) at Nov. 30, 2021 | 6,692,182 |
Condensed Consoldiated Statements of Cash Flows (Unaudited) - USD ($) |
3 Months Ended | |
|---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
|
| CASH FLOWS FROM OPERATING ACTIVITIES | ||
| Net loss | $ (31,810) | $ (62,360) |
| Change in operating assets and liabilities | ||
| Accounts receivable | 18,962 | (461) |
| Accounts payable, other payables and accrued liabilities | (21,727) | 748 |
| Tax payable | 88 | |
| Amount due to a related company | 32,565 | 18,000 |
| Net cash used in operating activities | (2,010) | (43,985) |
| CASH FLOWS FROM FINANCING ACITIVITIES | ||
| Advances from a shareholder | 3,610 | 300,583 |
| Repayment to a shareholder | (243,466) | |
| Advances from a related company | 25,389 | |
| Repayment to a related company | (7,051) | |
| Net cash provided by financing activities | 21,948 | 57,117 |
| Net increase in cash and cash equivalents | 19,938 | 13,132 |
| Cash and cash equivalents, beginning of period | 9,727 | 2,580 |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | 29,665 | 15,712 |
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||
| Interest paid | ||
| Income tax paid | ||
Title, Organization and Reorganization |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Title, Organization and Reorganization [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 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 (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%.
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”) and Temir Logistics Industrial Park Limited “Temir Logistics”) as an investment holding company.
On May 20, 2021, the Company, Hainan Qicheng Asset Management Joint Stock Company (“Hainan”) and Temir Logistics entered into a sale and purchase agreement (“SPA”), pursuant to which the Company shall issue 930,233 shares of the Company at a price of $21.5 per share, valued at $20,000,000 or in exchange of 10% shareholding in Bac Giang International Logistics Co., Ltd. Bac Giang is a company incorporated in the Socialist Republic of Vietnam, the principal business of which is to build and run a modern international logistics park in Bac Giang Province, Vietnam. 930,233 shares of the Company were issued to the nominee of Hainan on June 8, 2021. Based on the SPA, 930,233 shares were issued within one month from the signing date of SPA. The transfer of shares of Bac Giang will be completed within 3 years from the date of SPA.
Temir Logistics is a wholly owned subsidiary of the Company, which is incorporated in Hong Kong on May 17, 20201, principally engaged in investment holding. It was intended to invest in Bac Giang International Logistics Co., Ltd., which is in turn building and running an international logistics park in Bac Giang Province, Vietnam.
On August 25, 2021, the Company, Hainan and Temir Logistics entered into a SPA Termination agreement (the “Termination Agreement”) to terminate all of the rights and obligation of the SPA entered on May 20, 2021 and to cancel the 930,233 shares issued to the nominee. 930,233 shares were cancelled on September 16, 2021.
On May 5, 2021, (i) Direct Assistance Limited, a wholly owned subsidiary of EFT Solutions Holdings Limited (a company listed on GEM of The Stock Exchange of Hong Kong Limited), (ii) 2Go Investments Group Limited and (iii) JTI formed eDDA Solutions Limited (“eDDA”), a company incorporated in Hong Kong with limited liability, which will be principally engaged in the business of sales and maintenance services for the electronic direct debit authorization (“eDDA platform”). JTI has contributed share capital of $1 (HK$10), representing a 10% shareholding of eDDA. eDDA has not commenced operations as of the date of approval of these financial statements.
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 Kong Hoi Chan. On March 20, 2019, JTI issued 9,999,999 shares of the Company to Ace Vantage Investments Limited (“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 Kong Hoi Chan and 50% owned by Mr. Chan Hip Fong, father of Mr. Roy Kong Hoi 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. |
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Summary of Significant Accounting Policies |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 November 30, 2021 and for the three months ended November 30, 2021 and 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, 2021, 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 November 30, 2021, its interim condensed consolidated results of operations and cash flows for the three months ended November 30, 2021 and 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 November 30, 2021, the Company has suffered recurring losses from operations, and records an accumulated deficit and a working capital deficit of $994,140 and $542,859, 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.
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, both current financial year and next financial year.
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.
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 November 30, 2021 and August 31, 2021, 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.
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 months ended November 30, 2021 and 2020, no allowance for doubtful accounts has been made.
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 November 30, 2021 and August 31, 2021, 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.
Primary sources of the Company’s revenues are as follows:
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.
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.
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 November 30, 2021 and August 31, 2021. 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.
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:
Net (loss) profit per share
The Company calculates net profit (loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic profit/(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 profit (loss) per share:
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 December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions and enhances and simplifies various aspects of the income tax accounting guidance in ASC 740. The Company adopted ASU 2019-12 on September 1, 2021. The adoption of ASU 2019-12 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.
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”). ASU 2020-06 simplifies the accounting for convertible debt by eliminating the beneficial conversion and cash conversion accounting models. Upon adoption of ASU 2020-06, convertible debt proceeds, unless issued with a substantial premium or an embedded conversion feature that is not clearly and closely related to the host contract, will no longer be allocated between debt and equity components. This modification will reduce the issue discount and result in less non-cash interest expense in financial statements. ASU 2020-06 also updates the earnings per share calculation and requires entities to assume share settlement when the convertible debt can be settled in cash or shares. For contracts in an entity’s own equity, the type of contracts primarily affected by ASU 2020-06 are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and only if adopted as of the beginning of such fiscal year. The Company adopted ASU 2020-06 effective September 1, 2021. The adoption of ASU 2020-06 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.
Accounting Pronouncements Issued But Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 is to be adopted on a modified retrospective basis. As a smaller reporting company, ASU 2016-13 will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact that the adoption of ASU 2016-13 will have on its consolidated financial statement presentations and disclosures.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The adoption of ASU 2021-04 is not expected to have any impact on the Company’s consolidated financial statement presentation or 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. |
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Prepaid Expenses, Deposits and Other Current Assets |
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Nov. 30, 2021 | |||
| Prepaid Expenses Deposits And Others Current Assets Disclosure [Abstract] | |||
| PREPAID EXPENSES, DEPOSITS AND OTHER CURRENT ASSETS |
Prepaid expenses, deposits and other current assets were $302 as of November 30, 2021 and August 31, 2021. The balance represented utility deposits paid. |
Accounts Payable, Other Payables and Accrued Liabilities |
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Nov. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
| ACCOUNTS PAYABLE, OTHER PAYABLES AND ACCRUED LIABILITIES |
Accrued expenses represented payables for professional and consulting fees. |
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Income Taxes, Deferred Tax Assets |
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| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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:
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 months ended November 30, 2021 and 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 $2,564 (HK$20,000) 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:
The net tax loss of the subsidiaries in Hong Kong of $666,844 and $667,067 as of November 30, 2021 and August 31, 2021, 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
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Balances with Related Parties |
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| Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| BALANCES WITH RELATED PARTIES |
For the three months ended November 30, 2021 and 2020, the Company recorded $65,977 (HK$514,622) $11,763 (HK$91,755) service fees to High Flyers Info Limited, respectively. The executive director of the Company Mark Ko Chiu Yip was a director of High Flyers Info Limited for the period from May 7, 2020 to September 15, 2020.
Included in the accounts payable $50,923 and $24,747 as of November 30, 2021 and August 31, 2021, respectively, were payable to High Flyers Info Limited. |
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Segment Information |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 November 30, 2021
For the three months ended November 30, 2020
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Commitments and Contingencies |
3 Months Ended | ||
|---|---|---|---|
Nov. 30, 2021 | |||
| Commitments and Contingencies Disclosure [Abstract] | |||
| COMMITMENTS AND CONTINGENCIES |
Lease Commitments
The Company as lessee
The Company’s rental expense was $18,000 and $18,000 for the three months ended November 30, 2021 and 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.
On August 20, 2021, the Company renewed the sub-lease agreement with Century Crown Investments Limited for office space in Hong Kong for the period of one year from September 1, 2021 at $6,000 per month.
For the three months ended November 30, 2021 and 2020, the Company recorded $18,000 and $18,000 rental payable to Century Crown Investments Limited.
As of November 30, 2021, the outstanding lease is short-term lease. The total minimum future lease payments are $54,000 payable in the twelve months ending November 30, 2022. |
Significant Risks |
3 Months Ended | ||
|---|---|---|---|
Nov. 30, 2021 | |||
| Risks and Uncertainties [Abstract] | |||
| 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.
Two customers accounted for 100% (95% and 5%) of the Company’s income from mortgage referral services for the three months ended November 30, 2021. One customer accounted for all of the Company’s income from mortgage referral services for the three months ended November 30, 2020.
One customer accounted for all of the Company’s accounts receivable as of November 30, 2021. Two customers accounted for 100% (57% and 43%) of the Company’s accounts receivable as of August 31, 2021.
One supplier accounted for all of the Company’s cost of revenue for the three months ended November 30, 2021 and 2020.
One supplier accounted for all of the Company’s accounts payable as of November 30, 2021 and two suppliers accounted for 98% (55% and 43%) of the Company’s accounts payable as of August 31, 2021. |
Subsequent Events |
3 Months Ended | ||
|---|---|---|---|
Nov. 30, 2021 | |||
| Subsequent Events [Abstract] | |||
| SUBSEQUENT EVENTS |
The Company has evaluated subsequent events from November 30, 2021 to the date the financial statements were issued and has determined that there are no items to disclose. |
Accounting Policies, by Policy (Policies) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of presentation | 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 November 30, 2021 and for the three months ended November 30, 2021 and 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, 2021, 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 November 30, 2021, its interim condensed consolidated results of operations and cash flows for the three months ended November 30, 2021 and 2020, as applicable, have been made.
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| Going concern | 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 November 30, 2021, the Company has suffered recurring losses from operations, and records an accumulated deficit and a working capital deficit of $994,140 and $542,859, 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.
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, both current financial year and next financial year.
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.
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| Use of estimates | 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.
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| Cash and cash equivalents | 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.
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| Loans receivable | 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 November 30, 2021 and August 31, 2021, the Company has nil loans receivable.
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| Provision for loan losses | 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.
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| Interest and fee receivables | 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.
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| Accounts receivable | 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 months ended November 30, 2021 and 2020, no allowance for doubtful accounts has been made.
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| Impairment of long-lived assets | 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 November 30, 2021 and August 31, 2021, management believes there was no impairment of long-lived assets.
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| Revenue recognition | 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.
Primary sources of the Company’s revenues are as follows:
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.
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.
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 November 30, 2021 and August 31, 2021. 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.
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| Income taxes | 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.
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| Foreign currency translation | 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.
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| Fair value of financial instruments | 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:
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| Net (loss) profit per share | Net (loss) profit per share
The Company calculates net profit (loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic profit/(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 profit (loss) per share:
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| Related parties | 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.
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| Recent accounting pronouncements | Recent accounting pronouncements
Recently Adopted Accounting Standards
In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions and enhances and simplifies various aspects of the income tax accounting guidance in ASC 740. The Company adopted ASU 2019-12 on September 1, 2021. The adoption of ASU 2019-12 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.
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”). ASU 2020-06 simplifies the accounting for convertible debt by eliminating the beneficial conversion and cash conversion accounting models. Upon adoption of ASU 2020-06, convertible debt proceeds, unless issued with a substantial premium or an embedded conversion feature that is not clearly and closely related to the host contract, will no longer be allocated between debt and equity components. This modification will reduce the issue discount and result in less non-cash interest expense in financial statements. ASU 2020-06 also updates the earnings per share calculation and requires entities to assume share settlement when the convertible debt can be settled in cash or shares. For contracts in an entity’s own equity, the type of contracts primarily affected by ASU 2020-06 are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, and only if adopted as of the beginning of such fiscal year. The Company adopted ASU 2020-06 effective September 1, 2021. The adoption of ASU 2020-06 did not have any impact on the Company’s consolidated financial statement presentation or disclosures.
Accounting Pronouncements Issued But Not Yet Adopted
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. ASU 2016-13 replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 is to be adopted on a modified retrospective basis. As a smaller reporting company, ASU 2016-13 will be effective for the Company for interim and annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact that the adoption of ASU 2016-13 will have on its consolidated financial statement presentations and disclosures.
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 is effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. Early adoption is permitted for all entities, including adoption in an interim period. If an entity elects to early adopt ASU 2021-04 in an interim period, the guidance should be applied as of the beginning of the fiscal year that includes that interim period. The adoption of ASU 2021-04 is not expected to have any impact on the Company’s consolidated financial statement presentation or 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. |
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Summary of Significant Accounting Policies (Tables) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Schedule of basic and diluted net profit (loss) per share |
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Accounts Payable, Other Payables and Accrued Liabilities (Tables) |
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| Schedule of accounts payable and accrued expenses |
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Income Taxes, Deferred Tax Assets (Tables) |
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| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of provision for income tax expense |
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| Schedule of income taxes determined at the statutory income tax rate |
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| Schedule of deferred tax assets |
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Balances with Related Parties (Tables) |
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| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of related party transactions |
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Segment Information (Tables) |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of segment reporting information by segment |
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Summary of Significant Accounting Policies (Details) - USD ($) |
Nov. 30, 2021 |
Aug. 31, 2021 |
|---|---|---|
| Accounting Policies [Abstract] | ||
| Accumulated deficit | $ (994,140) | $ (962,330) |
| Working capital deficit | $ 542,859 |
Summary of Significant Accounting Policies (Details) - Schedule of revenues disaggregated by revenue sources - USD ($) |
3 Months Ended | |
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Nov. 30, 2021 |
Nov. 30, 2020 |
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| Schedule of revenues disaggregated by revenue sources [Abstract] | ||
| Mortgage referral services | $ 69,633 | $ 12,382 |
| Total service expenses | 69,633 | 12,382 |
| Revenue recognized over time | ||
| Revenue recognized at a point in time | 69,633 | 12,382 |
| Total revenue recognized | $ 69,633 | $ 12,382 |
Summary of Significant Accounting Policies (Details) - Schedule of basic and diluted net profit (loss) per share - USD ($) |
3 Months Ended | ||||
|---|---|---|---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
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| Schedule of basic and diluted net profit (loss) per share [Abstract] | |||||
| Net loss | $ (31,810) | $ (62,360) | |||
| Weighted average number of common shares outstanding - Basic and diluted | 6,692,182 | 6,692,182 | |||
| Net loss per share - Basic and diluted | $ 0 | [1] | $ (0.01) | ||
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Prepaid Expenses, Deposits and Other Current Assets (Details) - USD ($) |
Nov. 30, 2021 |
Aug. 31, 2021 |
|---|---|---|
| Prepaid Expenses Deposits And Others Current Assets Disclosure [Abstract] | ||
| Prepaid expenses, deposits and other current assets | $ 302 | $ 302 |
Accounts Payable, Other Payables and Accrued Liabilities (Details) - Schedule of accounts payable and accrued expenses - USD ($) |
Nov. 30, 2021 |
Aug. 31, 2021 |
|---|---|---|
| Schedule of accounts payable and accrued expenses [Abstract] | ||
| Accounts payable | $ 50,923 | $ 45,239 |
| Accrued expenses | 10,199 | 37,610 |
| Total | $ 61,122 | $ 82,849 |
Income Taxes, Deferred Tax Assets (Details) |
3 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
Jan. 01, 2018 |
Nov. 30, 2021
USD ($)
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Nov. 30, 2021
HKD ($)
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Aug. 31, 2021
USD ($)
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| United States [Member] | ||||
| Income Taxes, Deferred Tax Assets (Details) [Line Items] | ||||
| Corporate income tax rate | 21.00% | |||
| Hong Kong [Member] | ||||
| Income Taxes, Deferred Tax Assets (Details) [Line Items] | ||||
| Taxation percentage | 16.50% | 16.50% | ||
| Profit tax percentage | 100.00% | 100.00% | ||
| Amount of profits tax | $ 2,564 | $ 20,000 | ||
| Net tax loss of the subsidiaries | $ 666,844 | $ 667,067 | ||
Income Taxes, Deferred Tax Assets (Details) - Schedule of provision for income tax expense - USD ($) |
3 Months Ended | |
|---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
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| Income Taxes, Deferred Tax Assets (Details) - Schedule of provision for income tax expense [Line Items] | ||
| Income tax expenses | $ 88 | |
| Deferred income tax benefit | ||
| Hong Kong [Member] | ||
| Income Taxes, Deferred Tax Assets (Details) - Schedule of provision for income tax expense [Line Items] | ||
| Income tax expenses | $ 88 | |
Income Taxes, Deferred Tax Assets (Details) - Schedule of income taxes determined at the statutory income tax rate - USD ($) |
3 Months Ended | |
|---|---|---|
Nov. 30, 2021 |
Nov. 30, 2020 |
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| Schedule of income taxes determined at the statutory income tax rate [Abstract] | ||
| Loss before provision for income taxes | $ (31,810) | $ (62,272) |
| Statutory income tax rate | 21.00% | 21.00% |
| Income tax (credit) expense computed at statutory income tax rate | $ (6,680) | $ (13,077) |
| Reconciling items: | ||
| Rate differential in different tax jurisdictions | 972 | 1,193 |
| Non-deductible expenses | 5,931 | 11,972 |
| Tax effect of utilization of tax losses | (223) | |
| Income tax expenses | $ 88 | |
Income Taxes, Deferred Tax Assets (Details) - Schedule of deferred tax assets - USD ($) |
Nov. 30, 2021 |
Aug. 31, 2021 |
|---|---|---|
| Deferred tax assets | ||
| Tax loss | $ 109,843 | $ 110,066 |
| Valuation allowance | (109,843) | (110,066) |
| Deferred tax assets |
Balances with Related Parties (Details) |
3 Months Ended | ||||||
|---|---|---|---|---|---|---|---|
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Sep. 01, 2021
USD ($)
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Sep. 01, 2020
USD ($)
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Nov. 30, 2021
USD ($)
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Nov. 30, 2021
HKD ($)
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Nov. 30, 2020
USD ($)
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Nov. 30, 2020
HKD ($)
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Aug. 31, 2021
USD ($)
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| Balances with Related Parties (Details) [Line Items] | |||||||
| Agreement period | 1 year | 1 year | |||||
| Office space lease per month | $ 6,000 | ||||||
| Rental expenses | $ 18,000 | $ 18,000 | |||||
| Accounts payable | 50,923 | $ 24,747 | |||||
| High Flyers Info Limited [Member] | |||||||
| Balances with Related Parties (Details) [Line Items] | |||||||
| Service fees | $ 65,977 | $ 514,622 | $ 11,763 | $ 91,755 | |||
| Century Crown Investments Limited [Member] | |||||||
| Balances with Related Parties (Details) [Line Items] | |||||||
| Ownership percentage | 50.00% | 50.00% | |||||
| Century Crown Investments Limited [Member] | Office Space [Member] | |||||||
| Balances with Related Parties (Details) [Line Items] | |||||||
| Office space lease per month | $ 6,000 | ||||||
Balances with Related Parties (Details) - Schedule of related party transactions - USD ($) |
Nov. 30, 2021 |
Aug. 31, 2021 |
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|---|---|---|---|---|---|---|---|---|
| Related Party Transaction [Line Items] | ||||||||
| - Other payable | $ 124,891 | $ 91,988 | ||||||
| - Rental payable | [1] | 90,000 | 72,000 | |||||
| Total | [2],[3] | 214,891 | 163,988 | |||||
| Ace Vantage Investments Limited [Member] | ||||||||
| Related Party Transaction [Line Items] | ||||||||
| Amount due to a shareholder | [3] | 319,730 | 316,120 | |||||
| Century Crown Investments Limited [Member] | ||||||||
| Related Party Transaction [Line Items] | ||||||||
| Amount due to a related company | [2] | |||||||
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Commitments and Contingencies (Details) - USD ($) |
1 Months Ended | 3 Months Ended | ||
|---|---|---|---|---|
Aug. 20, 2021 |
Aug. 20, 2020 |
Nov. 30, 2021 |
Nov. 30, 2020 |
|
| Commitments and Contingencies (Details) [Line Items] | ||||
| Rental expense | $ 18,000 | $ 18,000 | ||
| Commitments, description | On August 20, 2021, the Company renewed the sub-lease agreement with Century Crown Investments Limited for office space in Hong Kong for the period of one year from September 1, 2021 at $6,000 per month. | 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. | ||
| Total minimum future lease payments | 54,000 | |||
| Century Crown Investments Limited [Member] | ||||
| Commitments and Contingencies (Details) [Line Items] | ||||
| Rental payable | $ 18,000 | $ 18,000 | ||
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