The accompanying notes are an integral part of these financial statements.
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QMIS TBS CAPITAL GROUP CORP.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1-ORGANIZATION AND BUSINESS BACKGROUND
QMIS TBS Capital Group Corp. (the “Company”) was incorporated in the state of Delaware on November 21, 2019, under the name TBS Capital Management Group Corp. The name was changed to QMIS TBS Capital Group Corp. on February 10, 2020. The Company plans to engage in the business of providing financial services.
Note 2-CONTROL BY PRINCIPAL OWNERS
The directors and executive officers own, directly or indirectly, beneficially and in the aggregate, the majority of the voting power of the outstanding capital of the Company. Accordingly, directors, executive officers and their affiliates, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including approving significant expenses, increasing the authorized capital and the dissolution, merger, or sale of the Company’s assets.
Note 3-GOING CONCERN
The financial statements have been prepared assuming that the Company will continue as a going concern. The Company incurred net losses of $152,727 and $166,110 for the nine months ended September 30, 2022 and 2021, respectively. In addition, the Company had stockholders’ deficit of $664,267 and $511,540 at September 30, 2022, and December 31, 2021, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management believes that the Company’s capital requirements will depend on many factors including the success of the Company’s development efforts and the Company’s efforts to raise capital. Management also believes the Company needs to raise additional capital for working purposes. There is no assurance that such financing will be available in the future. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 4-SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, these condensed financial statements do not include all of the information and disclosure required by the GAAP for complete financial statements. Interim results are not necessarily indicative of results for a full year. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the financial position and the results of operations and cash flows for the interim periods have been included.
These condensed financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2021, as not all disclosures required by the GAAP for annual financial statements are presented. The interim condensed financial statements follow the same accounting policies and methods of computations as the audited financial statements for the year ended December 31, 2021.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results when ultimately realized could differ from those estimates.
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Concentrations of Credit Risk
Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains its cash and cash equivalents with high-quality institutions. Deposits held with banks may not be insured or exceed the amount of insurance provided on such deposits. Generally, these deposits may be redeemed upon demand and therefore bear minimal risk.
Valuation of Long-Lived assets
“Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.
Revenue Recognition
The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, which requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
Related Parties
The Company adopted FASB ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits in banks with maturities of three months or less, and all highly liquid investments that are unrestricted as to withdrawal or use, and which have original maturities of three months or less.
Property, Plant, and Equipment
Property, plant, and equipment are carried at cost. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized.
When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets without residual value. The percentages or depreciable life applied are:
Office equipment and furniture5 years
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Fair Value of Measurements
The Company adopted FASB ASC 820 “Fair Value Measurements,” which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:
Level 1:Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2:Input other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company.
Level 3:Unobservable inputs. Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability.
An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities, and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities.
As of the balance sheet date, the estimated fair values of the financial instruments approximated their fair values due to the short-term nature of these instruments.
Advertising Costs
The Company expenses advertising costs as incurred or the first time the advertising takes place, whichever is earlier, in accordance with the FASB ASC 720-35, “Advertising Costs.” The advertising costs were immaterial for the nine months ended September 30, 2022 and 2021.
Research and Development Costs
Research and development costs relating to the development of new products and processes, including significant improvements and refinements to existing products, are expensed when incurred in accordance with the FASB ASC 730, “Research and Development.” Research and development costs were immaterial for the nine months ended September 30, 2022 and 2021.
Comprehensive Income
FASB ASC 220, “Comprehensive Income,” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying statements of changes in owners’ equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.
Segment Reporting
FASB ASC 820, “Segments Reporting,” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. The Company currently operates in one principal business segment.
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Earnings (Loss) Per Share
The Company reports earnings per share in accordance with FASB ASC 260, “Earnings Per Share,” which requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings 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 shares had been issued and if the additional common shares were dilutive. There were no potentially dilutive securities outstanding (options and warrants) for the nine months ended September 30, 2022 and 2021.
Income Taxes
The Company accounts for income tax in accordance with FASB ASC 740-10-25, which requires the asset and liability approach for financial accounting and reporting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance related to deferred tax assets is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The Company has accumulated deficit in its operation. Because there is no certainty that the Company will realize taxable income in the future, the Company did not record any deferred tax benefit as a result of these losses.
The Company adopted FASB ASC 740-10-30, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The FASB guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The FASB guidance also provides guidance on de-recognition of tax benefits, classification on the balance sheet, interest and penalties, accounting in interim periods, disclosure, and transition. In accordance with the FASB guidance, the Company performed a self-assessment and concluded that there were no significant uncertain tax positions requiring recognition in its financial statements.
The Company accounts for income taxes in interim periods in accordance with FASB ASC 740-270, “Interim Reporting.” The Company has determined an estimated annual effective tax rate. The rate will be revised, if necessary, as of the end of each successive interim period during the Company’s fiscal year to its best current estimate. The estimated annual effective tax rate is applied to the year-to-date ordinary income (or loss) at the end of the interim period.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position, or cash flow.
Note 5-CAPITAL STOCK
Authorized Capital
On the date of incorporation, the Company is authorized to issue 750,000,000 shares of common stock, par value $0.0001 per share. On October 7, 2020, the Company amended its Certificate of Incorporation to be authorized to issue 760,000,000 shares of stock, consisting of 750,000,000 shares of common stock having a par value of $0.0001 per share, and 10,000,000 shares of preferred stock having a par value of $0.0001 per share.
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Issuance of Common Stock
On February 12, 2020, 300,000,000 shares of common stock were issued at par value $0.0001 per share to three directors as director fees, totaling $30,000.
Capital Stock Issued and Outstanding
As of September 30, 2022 and December 31, 2021, 300,000,000 shares of common stock were issued and outstanding, and no shares of preferred stock were issued and outstanding.
Note 6-ACCRUED EXPENSES
The accrued expenses included mostly the professional service fees related to the Company’s efforts of going public. The professional service fees amounted to $98,700 and $164,610 for the nine months ended September 30, 2022 and 2021, respectively. The accrued expenses were $126,964 and $183,458 as of September 30, 2022, and December 31, 2021, respectively.
Note 7-DUE TO RELATED PARTIES
Due to related parties consists of the following:
| September 30, 2022 (Unaudited) | December 31, 2021 |
Dr. Yung Kong Chin, CEO | $ 560,814 | $351,323 |
Dr. Timo Strattner, director | $1,759 | $1,759 |
| | |
| $562,573 | $353,082 |
Due to related parties represent temporally short-term loans from Dr. Yung Kong Chin, the Company’s CEO, and Dr. Timo Strattner, the Company’s director, to finance the Company’s operation due to lack of cash resources. There are no written loan agreements for these loans. These loans are unsecured, non-interest bearing and have no fixed terms of repayment, and therefore, deemed payable on demand. Cash flows from due to related parties are classified as cash flows from financing activities. The Company borrowed $209,491 from Dr. Chin for the nine months ended September 30, 2022.
Note 8-OFFICE RENTAL EXPENSE
From time to time, the Company’s officers provide office space to the Company for free. However, the Company has not reached a formal lease agreement with any officer as of the date of this filing. The office rental expenses were $0 for the nine months ended September 30, 2022 and 2021.
Note 9-COMMITMENTS AND CONTINGENCIES
The Company adopted ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.
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Note 10-INITIAL DEPOSIT FOR ACQUISITION AGREEMENT
On April 30, 2020, the Company entered into a Broker/Dealer Purchase Agreement (the “Agreement”) with Richfield Orion International, LLC (the “Seller”), a Colorado Limited liability company, the sole owner of Richfield Orion International, Inc. (“Richfield”), a Colorado corporation. Pursuant to the Agreement, the Company acquired 100% equity ownership of Richfield for $75,000. Richfield is engaged in business as a broker-dealer registered with the U.S. Securities and Exchange Commission (“SEC”) and with the Financial Industry Regulatory Authority (“FINRA”) The Company has paid $25,000 as an initial deposit per the Agreement, via loan from Dr. Yung Kong Chin, the Company’s CEO. The balance of the purchase price will be due on the final closing upon the receipt of the acceptance by FINRA of the Amended Member Agreement wherein the Company is acknowledged by FINRA as the sole owner of Richfield. In the event that FINRA should deny the acceptance of the Company as sole owner of Richfield, the Agreement shall immediately lapse. If the Agreement is null and void, funds that may have been previously paid to Seller in payment any interest or work on this Agreement shall default to Seller.
On November 4, 2022, the Company's Board of directors decided to terminate the Agreement between the Company and the Seller relating to the purchase of Richfield, as more fully disclosed in Note 12, Subsequent Events. Accordingly, the initial deposit of $25,000 will be written off to other expenses in November 2022.
Note 11-CONVERTIBLE PROMISSORY NOTE
On October 30, 2020, the Company entered into an agreement to issue a convertible promissory note (the "Note") in the principal amount of one million five hundred thousand dollars ($1,500,000), to the Chairman of the Board and CEO, Dr. Yung Kong Chin. The Company will pay interest from the date of issuance of the Note on the unpaid principal balance at the annual rate of interest equal to eight percentage (8%) per six months, such principal and interest to be payable on demand. The Note is a general unsecured obligation of the Company. At any time, the unpaid principal amount of the Note and any unpaid interest accrued thereon can be converted into the Company's common stock at $1.50 per share. However, the Note has not been issued and no fund has been made to the Company at the date of this report. The Company and Dr. Chin anticipate that the Note will be issued in the fourth quarter of 2022.
Note 12-SUBSEQUENT EVENTS
On November 4, 2022, the Company's Board of directors (the "Board") decided to terminate the Broker/Dealer Purchase Agreement (the “Agreement”) between the Company and Richfield Orion International, LLC (the “Seller”), a Colorado Limited liability company, the sole owner of Richfield Orion International, Inc. (“Richfield”), a Colorado corporation, relating to the purchase of Richfield. The Board also decided to terminate the Management/ Operations Development Consultation Agreement between the Company and Richfield.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
There are statements in this Report that are not historical facts. These “forward-looking statements” can be identified by use of terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions. You should be aware that these forward-looking statements are subject to risks and uncertainties that are beyond our control. For a discussion of these risks, you should read this entire Report carefully, especially the risks discussed under “Risk Factors.” Although management believes that the assumptions underlying the forward-looking statements included in this Report are reasonable, they do not guarantee our future performance, and actual results could differ from those contemplated by these forward-looking statements. The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. In the light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking statements contained in this Report will in fact transpire. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We expressly disclaim any obligation or intention to update or revise any forward-looking statements.
Corporate History and Background
Organization
QMIS TBS Capital Group Corp., a Delaware corporation (the “Company”) was incorporated on November 21, 2019, under the name TBS Capital Management Group Corp. The name was changed to QMIS TBS Capital Group Corp. on February 10, 2020.
The Company is authorized to issue 750,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.
Business Overview
The Company was incorporated by Dr. Timo Strattner, our former Chief Financial Officer. The business plan of the Company at the time of formation initially was two-pronged: first, to raise initial capital to acquire a US-based registered broker dealer firm; and second, to work with foreign businesses to help provide access to the US capital markets, either through business combination transactions, assistance with US-based securities offerings, or other transactions structures. Dr. Strattner has worked in the financial markets as an asset and fund manager, sales trader in equity and derivatives, and as a securities analyst. He also has served in various interim executive roles with international exposure as turnaround and growth specialist. Dr. Strattner brought his connections to markets in the UK and Hong Kong to the Company, as well as his background in equities and derivatives trading.
In early 2020, Dr. Strattner entered into negotiations with Dr. Yung Kong Chin. Dr. Chin is the Managing Director of QMIS Capital Finance. Since 2002, Dr. Chin has devoting most of his time advising Chinese clients on financial restructuring, pre-audit evaluation before going public, pre-IPO investment strategies, and on the process of going public in the United States. Dr. Chin expressed an interest in working with the Parent Company to help provide access to the US capital markets to various international clients and contacts.
In connection with Dr. Chin’s appointment as Chief Executive Officer and Director of the Company, the Company’s name was changed to QMIS TBS Capital Group Corp. on February 10, 2020. The Company operates through its subsidiary in the financial services industry.
As discussed below, the Company has a relationship that the Company intends to develop into a parent-subsidiary relationship: Richfield Orion International, Incorporated.
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Richfield Orion International, Inc.
On April 30, 2020, the Company and Richfield Orion, International, LLC (the “Seller”) entered into a Broker Dealer Purchase Agreement for the purchase by the Company of Richfield Orion International, Incorporated (“Richfield”), a broker-dealer registered with the U.S. Securities and Exchange Commission (the “SEC”) and with the Financial Industry Regulatory Authority (“FINRA”). The Company has paid to the Seller $25,000 as an initial deposit per the Agreement, via loan from Dr. Yung Kong Chin, our CEO. The balance of the purchase price was to be due to the Seller on the final closing, which was to be contingent upon the receipt of the acceptance by FINRA of the Amended Member Agreement wherein the Company is acknowledged by FINRA as the sole owner of Richfield. In the event that FINRA were to deny the acceptance of the Company as sole owner of Richfield, the Agreement was to immediately lapse, and funds that had been previously paid to Seller in payment any interest or work on this Agreement would default to Seller.
Until such FINRA approval had been obtained, the Company and Richfield executed a form of Management/Operations Development Consultation Agreement (the “Management Agreement”). Pursuant to the Management Agreement, Richfield agreed to provide consulting services to the Company, including the following:
- | Participate in the creation of an organizational chart of necessary future administrative positions; |
- | legitimize projected future goals or re-define (as needed) outlined such goals with view to regulatory compliance; |
- | expand and prioritize aspects itemized within the list of the initial setup matrix; |
- | validate or eliminate desired future operational business targets; |
- | scrutinize needed talents to meet desired business targets; |
- | scrutinize and rationalize expected revenue sources; |
- | conduct a detailed cost/benefit analysis of anticipated revenues versus expected costs; and |
- | research salary/benefit/reward-growth package funds needed. |
The Company agreed to work with Richfield to delineate a desired joint operational structure; identify desired joint future business goals; prioritize funding needs of initial joint setup; define targets for anticipated initial entry or expansion of the joint business operations; describe talents/skills needed to adequately pursue defined business targets; and identify and delineate expected business revenue sources for use by the joint business operation.
As noted, the Company and Richfield anticipated that the Management Agreement would govern the relationship of the two entities until such time as the Company received the final approval from FINRA of the change of ownership of Richfield.
In August 2022, and unknown to the Company, FINRA suspended Richfield’s license for failure to pay fees and for failure to meet eligibility or qualification standards. Richfield’s membership with FINRA was suspended as of September 19, 2022, for these failures.
Upon learning of such termination, the Company elected to terminate immediately the Broker Dealer Purchase Agreement and the Management Agreement with Richfield. As of the date of this Report, the Company was exploring its options relating to any potential actions against Richfield.
Prior to the suspension of Richfield’s license and the termination of the agreements as discussed above, the Company and Richfield planned to file for FINRA approval following the effectiveness of a registration statement filed with the Securities and Exchange Commission. Until FINRA approval had been obtained, the Company and Richfield entered into the Management Agreement to describe the relationship between and the operations of the two entities. Management of the Company and of Richfield anticipated that once FINRA approval and acknowledgement of the Company as the sole owner of Richfield was obtained, the Management Agreement would be terminated, and Richfield would operate as a subsidiary of the Company. Because the Company paid the initial purchase amount, the Company considered Richfield to be its subsidiary entity. Despite the transaction’s not having closed, the Company previously has included Richfield’s financial statements pursuant to Rule 8-04 of Regulation S-X, and the pro forma financial information pursuant to the Rule 8-05 of Regulation S-X. Following the termination of the Agreement and
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the Management Agreement, the Company will no longer include Richfield’s financial statements. The Company has been unable to obtain any financial information relating to Richfield for inclusion in this Quarterly Report.
Going Concern
The accompanying financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred losses since inception and had accumulated a deficit of $664,267 as of September 30, 2022. The Company requires capital for its contemplated operational and marketing activities. The Company’s ability to raise additional capital through the future issuances of common stock is unknown. The obtainment of additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to the attainment of profitable operations are necessary for the Company to continue operations. The financial statements of the Company do not include any adjustments that may result from the outcome of these aforementioned uncertainties. Our net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful. Our financial statements contain additional note disclosures describing the management’s assessment of our ability to continue as a going concern.
Results of Operations
Three Months Ended September 30, 2022, compared to the Three Months Ended September 30, 2021
During the three months ended September 30, 2022, the Company generated revenues of $0, the same as during the three months ended September 30, 2021, as the Company had not generated any revenue since its inception on November 21, 2019.
Operating expenses, including management fees, professional fees, and other general and administrative expenses,
during the three months ended September 30, 2022, were $33,964 compared to $59,974 during the three months ended September 30, 2021. The decrease in operating expenses was primarily attributable to a decrease of $41,793 or 69.7% in the professional fees, offset by an increase in management fees of $15,000 paid to the management of Richfield.
During the three months ended September 30, 2022, the Company incurred net loss of $33,964, compared to net loss of $59,974 during the three months ended September 30, 2021. The decrease in the net loss of $26,010 for the three months ended September 30, 2022, was due to the decrease of professional services for the SEC filings, offset by the management fees paid to the management of Richfield.
Nine Months Ended September 30, 2022, compared to the Nine Months Ended September 30, 2021
During the nine months ended September 30, 2022, the Company generated revenues of $0, the same as during the nine months ended September 30, 2021, as the Company had not generated any revenue since its inception on November 21, 2019.
Operating expenses, including management fees, professional fees, and other general and administrative expenses, during the nine months ended September 30, 2022, were $152,727, compared to $166,110 during the nine months ended September 30, 2021. In the nine months ended September 30, 2022, the professional fees decreased $65,910, offset by an increase in management fees of $45,000 paid to the management of Richfield, and other general and administrative expenses increased by $7,527.
During the nine months ended September 30, 2022, the Company incurred net loss of $152,727, compared to net loss of $166,110 during the nine months ended September 30, 2021. The decrease in the net loss of $13,383 for the nine months ended September 30, 2022, was due to the decrease of professional services for the SEC filings, offset by the increase of management fees and other general and administrative expenses.
Liquidity and Capital Resources
As of September 30, 2022, and December 31, 2021, the Company had a cash balance of $0, as the Company does not keep a bank account, and the major shareholder has funded the Company’s operations to date.
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Operating Activities
Net cash used in operating activities was $209,491 during the nine months ended September 30, 2022, compared to $115,915 in the nine months ended September 30, 2021. The increase was primarily attributable to the cash outflow caused by the decrease of accrued expenses.
Investing Activities
The Company neither generated nor used cash in investing activities during the nine months ended September 30, 2022, and 2021.
Financing Activities
Net cash provided by financing activities was $209,491 in the nine months ended September 30, 2022, compared to $115,915 in the nine months ended September 30, 2021. In the current period, we needed more loans from our officer to pay the expenses relating to the SEC filings and management fee.
As of September 30, 2021, we had cash and cash equivalents of $0. We have historically financed our operations primarily through debt and equity investments from shareholders and directors. The Company cannot make any guarantee that it will be successful in obtaining funding from any sources or any additional financing or that the terms will be favorable to the Company.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company incurred net losses of $152,727 and $166,110 for the nine months ended September 30, 2022 and 2021, respectively. In addition, the Company had stockholders’ deficit of $664,267 and $511,540 as of September 30, 2022, and December 31, 2021, respectively. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management believes that the Company’s capital requirements will depend on many factors including the success of the Company’s development efforts and the Company’s efforts to raise capital. Management also believes the Company needs to raise additional capital for working purposes. There is no assurance that such financing will be available in the future. The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
Critical Accounting Policies
The Company’s significant accounting policies are presented in the Company’s notes to financial statements which are contained in this filing. The significant accounting policies that are most critical and aid in fully understanding and evaluating the reported financial results include the following:
The Company prepares its financial statements in conformity with generally accepted accounting principles in the United States of America. These principals require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with the Board of Directors; however, actual results could differ from those estimates.
Recent Accounting Pronouncements
The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.
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Item 3. Qualitative and Qualitative Disclosures About Market Risk.
As a Smaller Reporting Company, the Company is not required to include the disclosure under this Item.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15 under the Securities Exchange Act of 1934, we have carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this quarterly report, September 30, 2022. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure.
Based upon that evaluation, we have concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report due to the following material weaknesses in our internal control over financial reporting, many of which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) inadequate control activities and monitoring processes over financial reporting. Management will continue to work to improve the Company’s disclosure controls and procedures throughout 2022.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2022, that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. The Company is currently not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows.
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Item 6. Exhibits.
*The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.
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.
| QMIS TBS CAPITAL GROUP CORP. |
| | |
Dated: November 14, 2022 | | |
| | |
| By: | /s/ Yung Kong Chin |
| | Yung Kong Chin |
| | Chief Executive Officer |
| | (Principal Executive Officer) |
Dated: November 14, 2022 | | |
| By: | /s/ Ong Kar Yee |
| | Ong Kar Yee |
| | Chief Financial Officer |
| | (Principal Financial Officer) |
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