TEMIR CORP.("Temir" or the "Company") is a corporation established under the corporation laws in the State of Nevadaon 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 Corpis 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
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 Yipand Mr. Brian Wongtherefore, 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.
Following the Agreement, JTI is now a wholly owned subsidiary of the Company.
The transaction with JTI was treated as a reverse acquisition, with JTI as the acquirer and the Company as the acquired party. As a result of the controlling financial interest of the former stockholders of JTI, for financial statement reporting purposes, the merger between the Company and JTI was treated as a reverse acquisition, with JTI deemed the accounting acquirer and the Company deemed the accounting acquiree under the acquisition method of accounting in accordance with the Section 805-10-55 of the FASB Accounting Standards Codification. The reverse acquisition is deemed a capital transaction in substance whereas the assets and liabilities of JTI. (the accounting acquirer) are carried forward to the Company (the legal acquirer and the reporting entity) at their carrying value before the combination and the equity structure (the number and type of equity interests issued) of JTI is being retroactively restated using the exchange ratio established in the Share Purchase Agreement to reflect the number of shares of the Company issued to effect the acquisition. The number of common shares issued and outstanding and the amount recognized as issued equity interests in the consolidated financial statements is determined by adding the number of common shares deemed issued and the issued equity interests of JTI immediately prior to the business combination to the unredeemed shares and the fair value of the Company determined in accordance with the guidance in ASC Section 805-40-55 applicable to business combinations, i.e. the equity structure (the number and type of equity interests issued) in the consolidated financial statements immediately post combination reflects the equity structure of the Company, including the equity interests the legal acquirer issued to effect the combination. JTI has four wholly owned operating subsidiaries, namely,
JTI Finance Limited("JF"), Concept We Mortgage Broker Limited("CW"), JTI Property Agency Limited("JP") and JTI Asset Management Limited("JA"). On May 17 2021, the Company incorporated Temir Logistics Industrial Park Limited, which is incorporated in Hong Kongand 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. 18
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 consulting services company. After completion of the agreement, JA plans to apply for fund management licenses in
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 $21.5per share, valued at $20,000,000in exchange of 10% shareholding in Bac Giang International Logistics Co., Ltd. Bac Giangis a company incorporated in the Socialist Republicof 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 Hainanon 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 Kongon May 17, 2021, principally engaged in investment holding. It was intended to invest in Bac Giang International Logistics Co., Ltd.
August 25, 2021, the Company, Hainanand 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, 2021and to cancel the 930,233 shares issued to the nominee. 930,233 shares were cancelled on September 16, 2021. Transaction re eDDA platform
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 Limitedand (iii) JTI formed eDDA Solutions Limited("eDDA"), a company incorporated in Hong Kongwith 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 Organizationdeclared 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'sand 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. 19 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
May 31, 2022, we have suffered recurring losses from operations, and record an accumulated deficit and a working capital deficit of $1,118,226and $666,945, 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 Organizationdeclared 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'sand 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 condensed interim consolidated financial statements do not include any adjustments to reflect possible future effects on the recoverability and classification of assets and liabilities that could prevent our company from continuing as a going concern.
Results of operations
The following table shows the key elements of our operating results for the nine months ended
Nine months ended May 31 2022 2021 REVENUE
$ 206,723 $ 120,260Cost of revenue (195,904 ) (113,867 ) GROSS PROFIT 10,819 6,393
General and administrative expenses (171,971) (146,669)
LOSS FROM OPERATIONS (161,152 ) (140,276 ) Other income 5,256 965 Loss before income tax (155,896 ) (139,311 ) Income tax expense - - NET LOSS
$ (155,896 ) $ (139,311 )20 Revenue and cost of revenue
During the nine months ended
May 31, 2022, the Company generated revenue of $206,723compared to $120,260for the nine months ended May 31, 2021, representing a significant increase of approximately 71.90%. Cost of revenue was $195,904for the nine months ended May 31, 2022compared to $113,867for the nine months ended May 31, 2021, representing a significant increase of approximately 72.05%. The revenue generated and cost of revenue were derived from our mortgage referral fee for both years. The significant increase of income and cost of revenue benefit from the increasing demand of mortgage.
General and administrative expenses
During the nine months period ended
May 31, 2022, we incurred $171,971general and administrative expenses compared to $146,669during the nine months ended May 31, 2021, representing an increase of approximately 17.25%. General and administrative expenses incurred generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting costs. Net loss As a result of the cumulative effect of the factors described above, our net loss for the nine months period ended May 31, 2022was $155,896compared to net loss of $139,311during the nine months ended May 31, 2021.
The following table shows the key elements of our operating results for the three months ended
Three months ended May 31 2022 2021 REVENUE
$ 85,610 $ 36,476Cost of revenue (81,950 ) (33,113 ) GROSS PROFIT 3,660 3,363
General and administrative expenses (51,928 ) (44,110 )
LOSS FROM OPERATIONS (48,268 ) (40,747 ) Other income 128 - Loss before income tax (48,140 ) (40,747 ) Income tax credit - 402 NET LOSS
$ (48,140 ) $ (40,345 )Revenue and cost of revenue During the three months ended May 31, 2022, the Company generated revenue of $85,610compared to $36,476for the three months ended May 31, 2021. Cost of revenue was $81,950for the three months ended May 31, 2022compared to $33,113for the three months ended May 31, 2021. 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. 21
General and administrative expenses
During the three months period ended
May 31, 2022, we incurred $51,928general and administrative expenses compared to $44,110during the three months ended May 31, 2021. General and administrative expenses incurred generally related to corporate overhead, financial and administrative contracted services, such as legal and accounting costs. The increase of general and administrative expenses was due to an increase 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 May 31, 2022was $48,140compared to net loss of $40,345during the three months ended May 31, 2021.
CASH AND CAPITAL RESOURCES
Working Capital May 31, August 31, 2022 2021 Cash and cash equivalents
$ 13,867 $ 9,727Total current assets 57,583 51,908 Total assets 57,584 51,909 Total liabilities 724,528 562,957 Accumulated deficit 1,118,226 962,330 Total deficit 666,945 511,048
The following table provides detailed information about our free cash flow for all financial statement periods presented in this report:
Nine months ended May 31, 2022 2021 Net cash used in operating activities
$ (2,920 ) $ (58,250 )Net cash from investing activities - - Net cash provided by financing activities 7,060 60,381 Net increase in cash and cash equivalents 4,140 2,131
Cash and cash equivalents, beginning of period 9,727 2,580 CASH AND CASH EQUIVALENTS, END OF PERIOD
Cash flow from operating activities
For the nine months period ended
May 31, 2022, net cash flows used in operating activities were $2,920, primarily resulted from net loss of $155,896with a decrease of accounts payable of $10,105and an increase of accounts receivable of $1,535offset by an increase of rental and expenses payable to a related company of $164,616. For the nine months period ended May 31, 2021, net cash flows used in operating activities were $58,250, primarily resulted from the net loss of $139,311partially offset by the rental and expenses payable to a related company of $80,868.
Cash flow from financing activities
Cash flows generated from financing activities during the nine months period ended
May 31, 2022was $7,060, consisting of advances from a shareholder of $19,845, advances from a related company of $8,077and repayment to a related company of $20,862. Cash flows generated from financing activities during the nine months period ended May 31, 2021was $60,381, consisting of advances from a shareholder of $298,638, repayment to a shareholder of $232,103and repayment to a related company of $6,154. 22
ADDITIONAL CAPITAL REQUIREMENT
We are looking to grow our business in the future. We intend to acquire other companies. We have targeted and located certain companies that we believe are suitable and likely to create synergy through acquisitions.
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
May 31, 2022: Payment Due by Period Less than More than Total 1 Year 1-3 Years 3-5 Years 5 Years Amount due to a shareholder $ 335,965 $ 335,965$ - $ - $ -
Amount due to a related company 315,819 315,819 -
- - Lease 18,000 18,000 - - - Total
$ 669,784 $ 669,784$ - $ - $ - We believe that our current cash and financing from our existing stockholders are adequate to support operations for at least the next 12 months. We may, however, in the future, require additional cash resources due to changed business conditions, implementation of our strategy to expand our business or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.
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