QMIS TBS CAPITAL GROUP CORP. - Form 10-Q SEC filing

QMIS TBS CAPITAL GROUP CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 - ORGANIZATION

QMIS TBS Capital Group Corp. (the “Company” or "QMIS USA") 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.

On February 13, 2023, the Company entered into a share exchange agreements (the “Share Exchange Agreements”) with the shareholders of all 1,000,100 outstanding shares of common stock of QMIS Securities Capital SDN BHD (“QSC”), which was incorporated by the Companies Commission of Malaysia on January 13, 2015 under the Companies Act 1965 as a private limited company with the name Multi Securities Capital (M) SDN BHD, which was subsequently changed to QMIS Securities Capital (M) SDN BHD on March 19, 2015. The two QSC shareholders were Dr. Chin Yung Kong, the Company’s Chief Executive Officer, and Chin Hua Fung, Dr. Chin’s son.

Pursuant to the Share Exchange Agreements, Dr. Chin exchanged 700,070 shares of QSC common stock for 700,070 shares of the Company’s common stock. Dr. Chin exchanged 300,030 shares of QSC common stock for 300,030 shares of the Company’s common stock. Accordingly, the Company became the sole shareholder of QSC after the share exchanges.

The share exchanges have been accounted for as a recapitalization between entities under common control since the same controlling shareholders controlled these two entities before and after the transaction. The consolidation of the Company and its subsidiary has been accounted for at historical cost and prepared on the basis as if the transaction had become effective as of the beginning of the earliest period presented in the accompanying consolidated financial statements.

On November 16, 2015, QSC acquired 99.9% equity ownership interest of QMIS Capital Venture SDN BHD (“QCV”), which was incorporated by the Companies Commission of Malaysia on January 14, 2015, under the private limited company act with the name Diversified Multi Capital Venture (M) SDN BHD. Subsequently, the name was changed to QMIS Capital Venture SDN BHD on March 19, 2015.

On October 15, 2015, QSC acquired 69.99% equity ownership interest of QMIS World Trade International SDN BHD (“QWT”), and subsequently on November 27, 2015, QSC acquired anther 0.01% equity ownership interest in QWT, which was incorporated by the Companies Commission of Malaysia on 15 October 2014 under the private limited company act with the name of Santubong Business Trading SDN BHD. Subsequently, the name was changed to QMIS World Trade International SDN BHD on August 7, 2015.

On December 31, 2021, QSC acquired 100% equity ownership interest of QMIS TBS Capital Group Corporation Limited (“QTBS”), which was incorporated in Hong Kong on September 9, 2013, under the Companies Ordinance as a limited liability company under the name QMIS Huayin Finance Credit Limited. Subsequently, the name was changed to QMIS Ample Luck Financial Group Limited on July 19, 2018, and finally QMIS TBS Capital Group Corporation Limited on June 16, 2020.

On December 31, 2021, QSC acquired 100% equity ownership interest of QMIS Finance Limited (“QFL”), which was incorporated in Hong Kong on July 20, 2007, under the Companies Ordinance as a limited liability company with the name of Hua Xia Syndicate Financial Credit Limit. Subsequently, the name is changed to QMIS Syndicate Financial Credit Limited on February 21, 2014, and finally to QMIS Finance Limited on March 31, 2016.

On May 27, 2020, QFL, QSC, and QWT acquired 60%, 20%, and 20%, respectively, equity ownership interest in QMIS Green Energy Berhad (“QGE”), which was incorporated by the Companies Commission of Malaysia on May 27, 2020, under the private limited company act with the name of QMIS Waste Management Group Berhad. Subsequently, the name was changed to QMIS Green Energy Berhad on September 13, 2022.

On May 8, 2020, QFL, QSC, and QWT acquired 60%, 20%, and 20%, respectively, equity ownership interest in QMIS Biotech Group Berhad (“QBT”), which was incorporated by the Companies Commission of Malaysia on 8 May 2020 under the private limited company act with the name of QMIS Biotech Group Berhad. Subsequently, the name was changed to QMIS Biotech Group Berhad on May 29, 2020.

On June 22, 2020, QFL incorporated QMIS Investment Bank Limited (“QIB”) by the Labuan Financial Services Authority (LFSA) in Malaysia under the company limited by shares act with the name of QMIS Finance (L) Limited. Subsequently, the name was changed to QMIS Labuan Investment Bank Limited on March 24, 2021, and finally to QMIS Investment Bank Limited on 28 July 2022. QFL owns 100% equity ownership interest in QIB.

On June 21, 2021, QFL and four other shareholders incorporated QMIS Richwood Blacktech Sdn. Bhd. (“QR”) by the Companies Commission of Malaysia under the private limited company act. QFL owns 51% equity ownership interest in QR.

On August 3, 2023, QMIS Investment Bank Limited (“QIB”) and Dr. Chin incorporated a company, QMIS Micropay Berhad, in Kuala Lumpur, Malaysia. QIB and Dr. Chin own 60% and 40% of the ownership equity interests of QMIS Micropay Berhad, respectively. QMIS Micropay Berhad plans to carry on the business of electronic payments and transactions but had not engaged in any business operation as of the date of this Quarterly Report.

The Company’s organizational chart after the share exchanges and other transactions discussed above was as follows:

As of the date of this Report, QMIS USA was a holding company. QSC, QFL, and QTBS work together to provide consultant services. QR is engaged in the business of software development. Beginning from early 2023, QR generates revenue from the usage of an online payment software, QRPay, which is maintained by QR. None of the other subsidiaries were engaged in business operations as of the date of this Report.

Except as set forth in the relevant discussion, QMIS USA, QSC, QFL, QTBS, QR, QIB, QGE, QBT, QWT, and QCV are hereafter referred to collectively as the Company.

Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated.

These unaudited interim consolidated financial statements do not include all of the information and disclosure required by the U.S. 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 nature 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. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2022.

Non-controlling Interest

Non-controlling interest in the consolidated balance sheets represents the portion of the equity in the subsidiaries not attributable, directly or indirectly, to the Company. The portion of the income or loss applicable to the non-controlling interest in subsidiaries is also separately reflected in the consolidated statements of operations and comprehensive income (loss).

Foreign Currency Translation

The accompanying consolidated financial statements are presented in United States Dollar (“US$”), which is the reporting currency of the Company. The functional currency of QSC, QWT, QCV, QGE, QBT, and QR are Malaysian Ringgit (“MYR”). The functional currency of QFL and QTBS are Hong Kong dollar ("HKD"). The functional currency of QMIS USA and QIB is US$.

Each subsidiary of the Company maintains its books and records in its respective functional currency. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. The resulting exchange differences are recorded in the statements of operations.

The reporting currency of QMIS USA is the United States Dollar, and the accompanying consolidated financial statements have been expressed in US$. In accordance with ASC Topic 830-30, “Translation of Financial Statements,” assets and liabilities of the Company whose functional currency is not US$ are translated into US$, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from the translation of financial statements are recorded as a separate component of accumulated other comprehensive gain (loss) within the statements of changes in shareholders’ deficit.

The exchange rates used for foreign currency translation were as follows:

US$1 = HKD

Period Covered	Balance Sheet Date Rates	Average Rates

Six months ended June 30, 2023	7.8363	7.8394
Six months ended June 30, 2022	7.8472	7.8260

US$1 = MYR

Period Covered	Balance Sheet Date Rates	Average Rates

Six months ended June 30, 2023	4.6650	4.4559
Six months ended June 30, 2022	4.4075	4.2710

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and judgments on historical experience and on various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions of future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as operating environment changes. Significant estimates and assumptions by management include, among others, estimated life and impairment of long-lived assets, allowance for doubtful accounts, contingencies, and income taxes including the valuation allowance for deferred tax assets.

While the Company believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual results could differ from those estimates. Estimates and assumptions are periodically reviewed, and the effects of revisions are reflected in the financial statements in the period they are determined to be necessary.

Fair Value of Financial Instruments

The Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820 “Fair Value Measurements,” which defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosures requirements for fair value measures. Current assets and current liabilities qualified as financial instruments and management believes their carrying amounts are a reasonable estimate of fair value because of the short period of time between the origination of such instruments and their expected realization and if applicable, their current interest rate is equivalent to interest rates currently available. The three levels are defined as follow:

Level 1:Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2:Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

Level 3:Inputs to the valuation methodology are unobservable and significant to the fair value.

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. Determining which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates the hierarchy disclosures each year.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and cash in time deposits, certificates of deposit and all other highly liquid instruments with original maturities of three months or less.

Statements of Cash Flows

In accordance with ASC 830-230, “Statement of Cash Flows,” cash flows from the Company’s operations are calculated based upon the functional currency. As a result, amounts related to assets and liabilities reported on the statement of cash flows may not necessarily agree with changes in the corresponding balances on the balance sheet.

Accounts Receivable

Accounts receivable, net represent the amounts that the Company has an unconditional right to consideration, which are stated at the original amount less an allowance for doubtful receivables. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of operations and comprehensive income (loss). Delinquent account balances are written off against the allowance for doubtful accounts after management has determined that the likelihood of collection is remote. In circumstances in which the Company receives payment for accounts receivable that have previously been written off, the Company reverses the allowance and bad debt.

Property, plant and equipment

Property and equipment primarily consist of cultivation equipment, office equipment, furniture, tools and construction in progress. Cultivation equipment, office equipment, furniture and tools are stated at cost less accumulated depreciation less any provision required for impairment in value. Depreciation is computed using the straight-line method based on the estimated useful lives as follows:

Office equipment and furniture			10 years
Computers and printers			2.5 years
Leasehold improvements			5 years (lease term)

Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statement of income.

Impairment of long-lived assets

The Company reviews long-lived assets 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 the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment of long-lived assets was recognized for the six months ended June 30, 2023 and 2022.

Operating lease

The Company’s leases are classified as operating leases in accordance with ASC Topic 842, “Leases.” Under Topic 842, lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. No impairment for right-of-use lease assets incurred in the six months ended June 30, 2023 and 2022.

Concentration of Credit Risk

Financial instruments the Company holds that are subject to concentrations of credit risk are cash and accounts receivable arising from its normal business activities. The Company places its cash and restricted cash in what it believes to be credit-worthy financial institutions. The Company conducts periodic reviews of the financial condition and payment practices of its customers to minimize collection risk on accounts receivable.

For the six months ended June 30, 2023 and 2022, customer A accounted for 95.7% and 86.7%, respectively, of the Company’s total revenues.

For the six months ended June 30, 2023 and 2022, no vendor accounted for more than 10% of the Company’s total purchases.

Revenue Recognition

The Company adopted ASC 606, “Revenue from Contracts with Customers,” upon inception. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (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 entity satisfies a performance obligation.

The Company currently generates its revenue from the following main sources:

Revenue from consultant services

QSC, QFL, and QTBS work together to provide business consultant services to customers. The revenue is recognized at the point in time when the consultant services promised are performed and accepted by the customers, which is generally when the consultant project is delivered to and accepted by the customer.

Revenue from Software Development and maintenance services

QR provides customers with software development and maintenance services pursuant to their specific requirements, which primarily compose of custom application development, supporting, and training. The Company generally recognizes revenue at a point in time when control is transferred to the customers and the Company is entitled to the payment, or when the promised services are delivered and accepted by the customers.

Beginning from early 2023, QR generates revenue from the usage of an online payment software, QRPay, which is maintained by QR. QR recognizes such revenue at a point in time when the related online payment transaction is successfully completed and QR is entitled to the revenue.

Payments for services received in advance in accordance with the contract are recognized as deferred revenues when received.

Cost of Revenues

Cost of revenues primarily consists of salaries and related expenses (e.g., bonuses, employee benefits, statutory pension contribution, and payroll taxes) for personnel directly involved in the delivery of services and products directly to customers.

Comprehensive Income (Loss)

ASC 220, “Comprehensive Income,” established standards for reporting and display of comprehensive income/loss, its components and accumulated balances. Components of comprehensive income/loss include net income/loss and foreign currency translation adjustments. The component of accumulated other comprehensive income (loss) consisted of foreign currency translation adjustments.

Income Taxes

The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. 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 including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

An uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

QSC, QWT, QCV, QGE, QBT, QIB, and QR operate in Malaysia and are subject to the income tax laws of Malaysia. QFL and QTBS operate in Hong Kong and are subject to the income tax law of Hong Kong. As of June 30, 2023, and December 31, 2022, all of the Company’s tax returns remain open for statutory examination by relevant tax authorities.

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.

Service taxes

Service tax is a consumption tax levied by Malaysian tax authorities and is charged on any taxable service income (including digital services) provided in Malaysia by a registered company in carrying on their business. The rate of service tax is 6% ad valorem for all taxable services. A taxable entity is a company that is registered or liable to be registered for service taxes. A company is liable to be registered if the total value of its taxable services for a 12-month period exceeds or is expected to exceed the prescribed registration threshold of MYR500,000 as consultancy, training or coaching services providers and digital and information technology services providers. QSC, QWT, QCV, QGE, QBT, and QR are all subject to these service taxes. Service taxes were recorded with respect to these Malaysian subsidiaries as a deduction against the Company’s gross revenue.

Earnings per share

Basic earnings per ordinary share is computed by dividing net earnings attributable to ordinary shareholders by the weighted-average number of ordinary shares outstanding during the period. Diluted earnings per share is computed by dividing net income attributable to ordinary shareholders by the sum of the weighted average number of ordinary share outstanding and of potential ordinary share (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share. For the six months ended June 30, 2023 and 2022, the Company had no dilutive stocks.

Related Parties Transactions

The Company identifies related parties, and accounts for, discloses related party transactions in accordance with ASC 850, “Related Party Disclosures,” and other relevant ASC standards.

A related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company. A transaction is considered as a related party transaction when there is a transfer of resources or obligations between related parties. Related parties may be individuals or corporate entities.

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts of related party transactions due to their related party nature.

Segment Reporting

ASC 280, “Segment Reporting,” requires use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker organizes segments within the Company for making operating decisions assessing performance and allocating resources. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

Management determined the Company’s operations constitute two reportable segments in accordance with ASC 280, business consultant services and software development and maintenance services.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. The Company is currently evaluating the impact that ASU 2020-06 may have on its consolidated financial statement presentation and related disclosures.

In March 2023, the FASB issued ASU 2023-01, Lease (Topic 842): Common Control Arrangements, which clarifies the accounting for leasehold improvements associated with leases between entities under common control (hereinafter referred to as common control lease). ASU 2023-01 requires entities to amortize leasehold improvements associated with common control lease over the useful life to the common control group (regardless of the lease term) as long as the lessee controls the use of the underlying asset through a lease, and to account for any remaining leasehold improvements as a transfer between entities under common control through an adjustment to equity when the lessee no longer controls the underlying asset. This ASU will be effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. An entity may apply ASU 2023-01 either prospectively or retrospectively. The Company is currently evaluating the impact that the adoption of ASU 2023-01 will have on its consolidated financial statement presentation and disclosures.

Note 3 - GOING CONCERN

The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

The Company incurred a loss of $123,989 and $1,701,359 for the six months ended June 30, 2023 and 2022, respectively. The Company also had working capital deficit of $1,810,863 and $1,725,668 as of June 30, 2023, and December 31, 2022, respectively. In addition, the Company had accumulated deficit of $3,135,389 and $3,013,236 as of June 30, 2023, and December 31, 2022, respectively. These factors among others raise substantial doubt about the ability to continue as a going concern for a reasonable period of time.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources by obtaining capital from directors/shareholders sufficient to meet its minimal operating expenses and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 4 - ACCOUNTS RECEIVABLE

Accounts receivable consists of the following:

		June 30,		December 31,
		2023		2022

Accounts receivable	$	100,039	$	-
Accounts receivable-related parties*		-		2,054
Less: Allowance for doubtful accounts		-		-
Accounts receivable, net	$	100,039	$	2,054

Bad debt expense charged to operations was $0 for the six months ended June 30, 2023 and 2022.

* Refer to Note 9 (1) - Related party transactions.

Note 5 - PROPERTY, PLANT AND EQUIPMENT

The following is a summary of property, plant and equipment:

		June 30,		December 31,
		2023		2022

Office equipment and furniture		5,902		5,017
Computers and printers		11,337		12,019
Leasehold improvements		19,283		20,444
Total		36,522		37,480
Less: Accumulated depreciation		(33,092)		(32,923)
Total property, plant and equipment, net	$	3,430	$	4,557

Depreciation expense charged to operations was $2,133 and $2,367 for the six months ended June 30, 2023 and 2022, respectively.

Note 6 - ACCOUNTS PAYABLE

Accounts payable consist of the following:

		June 30,		December 31,
		2023		2022

Accounts payable	$	-	$	10,840
Accounts payable-related parties*		36,441		22,726
Total	$	36,441	$	33,566

* Refer to Note 9 (4) - Related party transaction.

Note 7 - ACCRUED EXPENSES

Accrued expenses consist of the following:

		June 30,		December 31,
		2023		2022

Accrued pension and employee benefit	$	31,919	$	32,651
Accrued professional fees		211,592		140,001
Accrued office expenses		8,174		8,601
Total	$	251,685	$	181,253

Note 8 - TAXES PAYABLE

Taxes payable consist of the following:

		June 30,		December 31,
		2023		2022

Malaysia income taxes payable	$	76,552	$	115,947
Malaysia services taxes payable		161,004		170,750
Hong Kong income taxes payable		746,440		730,479
Total	$	983,996	$	1,017,176

Note 9 - RELATED PARTY TRANSACTIONS

The Company had transactions with the following related parties:

Name of Related Party			Nature of Relationship

Dr. Yung Kong Chin			CEO and a director of the Company.
Mr. Hua Fung Chin			A director of the Company and son of Mr. Yung Kong Chin.
Mr. Ting Teck Sheng			A director of the Company.
Ms. Tingting Gu			A director of the Company.
Mr. Kar Yee Ong			CFO and a director of the Company.
Richwood Ventures Berhad			A Malaysia company of which Mr. Ting Teck Sheng is a director.
Panpay Holdings SDN BHD			A Malaysia company of which Mr. Ting Teck Sheng is a director.
Pantop Venture Capital SDN BHD			A Malaysia company which owns 40% of QMIS Richwood Blacktech SDN BHD
Pantop Millennium SDN BHD			A Malaysia company which owns 3% of QMIS Richwood Blacktech SDN BHD
QMIS Financial Group Limited			A Hong Kong company of which Mr. Yung Kong Chin is a director.
QMIS Asset Management Limited			A Hong Kong company of which Ms. Tingting Gu is a director.

(1)Software development and maintenance services provided to Richwood Ventures Berhad and Panpay Holdings SDN BHD

QMIS Richwood Blacktech SDN BHD ("QR") provides software development and maintenance services to Richwood Ventures Berhad and Panpay Holdings SDN BHD. In the six months ended June 30, 2023, QR generated revenue of $10,323 and $20,647 from Richwood Ventures Berhad and Panpay Holdings SDN BHD, respectively. In the six months ended March 31, 2022, QR generated revenue of $28,799 and $67,198 from Richwood Ventures Berhad and Panpay Holdings SDN BHD, respectively. As of June 30, 2023, accounts receivable from Richwood Ventures Berhad was $0, and deferred revenue from Panpay Holdings SDN BHD amounted to $0. As of December 31, 2022, accounts receivable from Richwood Ventures Berhad was $2,054, and deferred revenue from Panpay Holdings SDN BHD amounted to $1,500.

(2)Management fees paid to QMIS Financial Group Limited

QMIS Finance Limited ("QFL") and QMIS TBS Capital Group Corp. ("QTBS") paid management fees as needed to QMIS Financial Group Limited for business advice and general and administrative services, such as office space and bookkeeping. The management fees amounted to $385,166 and $820,686 in the six months ended June 30, 2023 and 2022, respectively. There was no outstanding balance for accounts payable to QMIS Finance Group Limited as of June 30, 2023, and December 31, 2022, respectively.

(3)Advisory fees paid to QMIS Asset Management Limited

QFL and QTBS paid advisory fees to QMIS Asset Management Limited for business advice as needed. The advisory fees amounted to $7,205 and $0 in the six months ended June 31, 2023 and 2022, respectively. There was no outstanding balance for accounts payable to QMIS Asset Management Limited as of June 30, 2023, and December 31, 2022, respectively.

(4)Accounts payable to Pantop Millennium SND BHD

Pantop Millennium SND BHD has provided operating support and general and administrative services, such as office space and bookkeeping, to QR since QR’s inception in June 2021. The amount of the services was $20,198 and $14,048 for the six months ended June 31, 2023 and 2022, respectively. The accounts payable to Pantop Millennium SND BHD amounted to $36,441 and $22,726 as of June 30, 2023, and December 31, 2022, respectively.

(5)Due to related parties

Because QR did not have a bank account until November 2022, Pantop Venture Capital SDN BHD has traditionally paid QR's expenses for its operation. These advanced payments are unsecured, non-interest bearing and payable on demand. There are no written agreements for these advances.

Due to lack of cash resources, Dr. Yung Kong Chin has financed the Company's operations. From time to time, Dr. Chin has lent funds to the Company to support its operations. These loans are unsecured, non-interest bearing and payable on demand. There are no written agreements for these advances.

Dr. Yung Kong Chin, Mr. Hua Fung Chin, Mr. Kar Yee Ong, and Ms. Tingting Gu lead the consultant service team which provides consultant services to customers. Their compensation was included in the costs of consultant services, and was accrued if they were not paid as of the balance sheet date.

Due to related parties consists of the following:

		June 30,		December 31,
		2023		2022

Dr. Yung Kong Chin	$	680,186	$	610,557
Pantop Venture Capital SDN BHD		69,434		64,817
Ms. Tingting Gu		6,471		-
Mr. Kar Yee Ong		5,104		-
Total	$	761,195	$	675,374

(6)Compensation paid to directors

As noted above, Dr. Yung Kong Chin, Mr. Hua Fung Chin, Mr. Kar Yee Ong, and Ms. Tingting Gu lead the consultant service team which provides consultant services to customers. Their compensation was included in the costs of consultant services.

Compensation paid to directors consists of the following:

		For the Six Months Ended June 30,
		2023		2022

Dr. Yung Kong Chin	$	253,201	$	417,314
Mr. Hua Fung Chin		35,648		33,327
Ms. Tingting Gu		5,102		-
Mr. Kar Yee Ong		5,102		-
Total	$	299,053	$	450,641

Note 10 - LEASES

The Company has operating leases for corporate offices, employees’ accommodations, and office equipment. These leases have initial lease terms of 12 months to 5 years. The Company has elected not to recognize lease assets and liabilities for leases with an initial term of 12 months or less.

The Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The discount rate used to calculate present value is the incremental borrowing rate or, if available, the rate implicit in the lease. The Company determines the incremental borrowing rates for these leases based primarily on lease terms, which were 8% in Malaysia.

The components of lease costs, lease term and discount rate with respect of operating leases with an initial term of more than 12 months are as follows:

		For the Six Months Ended
		June 30,		June 30,
		2023		2022

Operating lease cost	$	12,361	$	12,497

		June 30,		December 31,
		2023		2022

Weighted Average Remaining Lease Term - Operating leases		1.25 years		0.58 years

Weighted Average Discount Rate - Operating leases		8.00%		8.00%

As of June 30, 2023, future minimum lease payments under the non-cancelable lease agreements are as follows:

		June 30,
		2023

2023	$	887
2024		116
Total lease payments		1,003
Less: imputed interest		(29)
Total lease liabilities		974
Less: current portion		860
Non-current lease liabilities	$	114

Note 11 - INCOME TAXES

United States

QMIS USA is a company registered in the State of Delaware incorporated in November 21, 2019, and is subject to federal income tax at 21% statutory tax rate with respect to the profit generated from the United States.

Malaysia

QMIS Securities Capital (M) SDN BHD (“QSC”); QMIS World Trade International SDN BHD (“QWT”) and QMIS Capital Venture SDN BHD (subsidiaries of QSC); QMIS Green Energy Berhad and QMIS Biotech Group Berhad (jointly owned by QSC, QMIS Finance Limited (“QFL”), and QWT); and QMIS Investment Bank Limited, and QMIS Richwood Blacktech SDN BHD (owned 100% and 51%, respectively, by QFL) were incorporated in Malaysia, and accordingly are governed by the income tax laws of Malaysia. The income tax provision in respect of operations in Malaysia is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations, and practices. Under the Income Tax Act of Malaysia, enterprises incorporated in Malaysia are usually subject to a unified 24% enterprise income tax rate while prefer, tax holidays, and tax exemptions may be granted on a case-by-case basis. The tax rate for small and medium sized companies (generally companies incorporated in Malaysia with paid-in capital of MYR2,500,000 or less, and gross income of not more than MYR50 million) is 17% for the first MYR600,000 (or approximately $150,000) taxable income, with the remaining balance being taxed at the 24% rate.

Hong Kong

QMIS Finance Limited and QMIS TBS Capital Group Corp. were incorporated in Hong Kong, and accordingly are subject to income tax at 8.25% on the first HKD 2,000,000 profit and 16.5% on the remaining profits arising in or derived from Hong Kong.

The components of the income tax provision were as follows:

		For the Six Months ended
		June 30,		June 30,
		2023		2022
Current tax provision:
United States	$	-	$	-
Malaysia		-		-
Hong Kong		19,202		109,994
		19,202		109,994
Deferred tax provision:
United States		-		-
Malaysia		-		-
Hong Kong		-		-
		-		-
	$	19,202	$	109,994

Accounting for Uncertainty in Income Taxes

The local tax authority conducts periodic and ad hoc tax filing reviews on business enterprises after those enterprises complete their relevant tax filings. Therefore, the Company’s tax filings are subject to examination. It is therefore uncertain as to whether the local tax authority may take different views about the Company’s tax filings, which may lead to additional tax liabilities.

Note 12 - SEGMENT REPORTING

Revenue by service categories

			For the Six Months Ended
			June 30,		June 30,
			2023		2022
Revenue
	Consultant services	$	1,096,284	$	630,040
	Software development and maintenance services		49,055		95,997
			1,145,339		726,037
Operating costs
	Consultant services		1,199,119		2,235,400
	Software development and maintenance services		51,815		89,495
			1,250,934		2,324,895
Income (loss) from operations
	Consultant services		(102,835)		(1,605,360)
	Software development and maintenance services		(2,760)		6,502
			(105,595)		(1,598,858)
Other income (expenses)
	Consultant services		808		7,493
	Software development and maintenance services		-		-
			808		7,493
Income (loss) before income tax expense
	Consultant services		(102,027)		(1,597,867)
	Software development and maintenance services		(2,760)		6,502
			(104,787)		(1,591,365)
Income tax expense
	Consultant services		19,202		109,994
	Software development and maintenance services		-		-
			19,202		109,994
Net income (loss)
	Consultant services		(121,229)		(1,707,861)
	Software development and maintenance services		(2,760)		6,502
		$	(123,989)	$	(1,701,359)

Capital expenditure
	Consultant services	$	-	$	363
	Software development and maintenance services		1,224		-
		$	1,224	$	363

			June 30,		December 31,
			2023		2022
Total assets
	Consultant services	$	49,535	$	27,973
	Software development and maintenance services		13,703		6,543
	Other		169,770		180,839
		$	233,008	$	215,355

Note 13 - EQUITY CAPITAL

Authorized Capital

On the date its of incorporation, QMIS USA was 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.

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.

On February 13, 2023, a total of 1,000,100 shares of common stock were issued to Dr. Chin Yung Kong and Mr. Chin Hua Fung for acquisition of QMIS Securities Capital SDN BHD.

Capital Stock Issued and Outstanding

As of June 30, 2023, and December 31, 2022, 301,000,100 shares of common stock were issued and outstanding, respectively, and no shares of preferred stock were issued and outstanding, respectively. The number of shares reflects the retrospective presentation of the share issuance on February 13, 2023 for acquisition of QMIS Securities Capital SDN BHD, due to the recapitalization between entities under common control.

Note 14 - 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 percent (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 2023.

Note 15 - CONTINGENCIES, RISKS AND UNCERTAINTIES

Foreign operation

The Company’s operations are carried out in Malaysia and Hong Kong. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments therein. In addition, the Company’s business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation among other factors.

Liquidity risk

The Company is exposed to liquidity risk which is the risk that the Company 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 shareholders to obtain short-term funding to meet the liquidity shortage.

Other risk

The Company’s business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, such as the COVID-19 outbreak and spread, which could significantly disrupt the Company’s operations.

Note 16 - SUBSEQUENT EVENTS

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 Organization

company act with the name of QMIS Waste Management Group Berhad. Subsequently, the name was changed to QMIS Green Energy Berhad on September 13, 2022.

The Company's organizational chart following the share exchanges and other transactions discussed above is as follows:

As the result of the Share Exchange Agreements (discussed above), the Company, through its wholly owned subsidiary QSC has diversified its business focus from consultancy services to investment banking and payment gateway platform through its 100% owned in QMIS Finance Limited (HK)'s subsidiaries: (i) QIB; and (ii) QR.

As of the date of this Report, QMIS USA was a holding company. QSC, QFL, and QTBS work together to provide consultant services. QR is engaged in the business of software development. Beginning from early 2023, QR generates revenue from the usage of its online payment software which is maintained by QR. None of the other subsidiaries were engaged in business operations as of the date of this Report.

Business Overview

The current structure and operations of the Company, which is comprised of QMIS TBS Capital Group Corp as the holding company, along with its subsidiaries QSC, QFL, QTBS, QR, QIB, QGE, QBT, QWT, and QCV.

QSC, QFL, and QTBS collaborate to provide consultant services, while QR is focused on software development. Starting from early 2023, QR generates revenue from its online payment software. At present, the other companies are not engaged in any business operations.

Henceforth, for the purposes of this statement, QMIS TBS Capital Group Corp, QSC, QFL, QTBS, QR, QIB, QGE, QBT, QWT, and QCV will be referred to as the Company.

QSC is an investment holding company and involved in providing investment banking and other financial services in Hong Kong and Malaysia through its direct and indirect subsidiaries shown below:

-QMIS Securities Capital (M) Sdn. Bhd. (“QSC”),

-QMIS TBS Capital Group Corp. (HK) (“QTBS”),

-QMIS Finance Limited (“QFL”),

-QMIS Investment Bank Limited (“QIB”),

-QMIS Richwood Blacktech Sdn. Bhd. (“QR”).

QMIS Securities Capital (M) Sdn. Bhd. (“QSC”)

QSC is a professional firm geared to support and provide advisory services which includes the incubations of high tech and high growth companies.

QSC owns the following companies:

·100% stake in QMIS TBS Capital Group Corp (HK) ("QTBS").

·100% stake in QMIS Finance Limited ("QFL").

·99.9% stake in QMIS Capital Venture Sdn. Bhd ("QCV").

·70% stake in QMIS World Trade International Sdn. Bhd. ("QWT").

·20% interest in QMIS Biotech Group Berhad ("QBT").

·20% interest in QMIS Green Energy Berhad ("QGE").

QMIS TBS Capital Group Corp. (HK) (“QTBS”)

QTBS is a limited liability company incorporated and domiciled in Hong Kong. QMIS TBS Group perpetually generates ideas to grow and add value to its people, clients, shareholders, and the communities it serves. It aims to excel in dimensions such as client service and support with effective risk management and decision making.

The principal activity of QTBS is the provision of corporate advisory services which includes incubating FinTech and high growth companies. QTBS focuses on the small to middle market companies in China, Malaysia and South East Asia. It has an extensive international, national, and local network of consultants, business advisors, and directors to assist clients with business incubators: raising capital, private equity, due diligence, business valuation, merger and acquisition, accounting and market research services.

QTBS provides a wide range of corporate advisory services to its clients as follow:

•Management and Strategy Consulting

•Corporate Advisory

•Market Research and Survey

•Business Incubation

QMIS Finance Limited (“QFL”)

QFL is an Investment Holding Company and has two subsidiaries as of August 31, 2021:

-QMIS Investment Bank Limited (“QIB”) (100%); and

-QMIS Richwood Blacktech Sdn. Bhd. (“QR”) (51%)

QMIS Investment Bank Limited (“QIB”)

QIB is set to offer a full range of financial products and services covering investment banking, digital banking, private banking and asset management services licensed by Labuan Financial Services Authority (LOFSA), Malaysia.

Furthermore, QIB will also provide conventional investment banking services such as private placement, wealth management, and corporate finance advisory and solutions in working capital management, fund raising, IPO, and merger and acquisition consulting services to its clients.

QMIS Richwood Blacktech Sdn. Bhd. (“QR”)

QR is a new company established in Malaysia involved in the Electronic Payment and Transaction Enabler services with a centralized platform for various payment transactions and value-added services. QR has entered into a partnership with ManagePay Services Sdn. Bhd. (“MPay”) for the issuance of e-wallet and prepaid card services. MPay will act as the underlying technology provider and licensing for QR's payment solutions, while QR acts as a payment system enabler, providing payment infrastructure and card processing for card payment scheme owners. with QR's mobile e-wallet tied up with an international prepaid card as an addition payment option can be used by consumers at merchants for cashless transactions in various retail sectors. QR's goal is to develop comprehensive payment products and services with international payment capability and security compliance to tap into the FinTech market. We are partnering with experienced players in the payment system industry and plan to develop a Super App to upgrade the payment system infrastructure and solutions.

As of the date of this Report, QMIS USA was a holding company. QSC, QFL, and QTBS work together to provide consultant services. QR is engaged in the business of software development. Beginning from early 2023, QR generates revenue from the usage of its online payment software which is maintained by QR. None of the other subsidiaries were engaged in business operations as of the date of this Report.

KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our results of operations have been and will continue to be affected by a number of factors, including those set out below:

Corporate Consultant Services

Corporate consultant professional firms play a critical role in providing strategic, operational and organizational advice to businesses. Their success is influenced by a variety of internal and external factors that can positively or negatively impact their operations.

Market and Competitive Environment

The market and competitive environment are among the most significant drivers of success for a corporate consultant professional firm. Firms must be aware of the current trends in their respective industries and the competitive landscape to remain relevant and competitive. To address this challenge, QSC must continuously innovate their services and develop new, more effective solutions to meet their clients' evolving needs. Additionally, they must maintain strong relationships with clients and establish a reputation as a trusted advisor in their industry.

Talent Management

The quality of talent and the ability to attract, retain, and develop top-performing employees is critical to the success of a corporate consultant professional firm. To address this challenge, firms must have a robust human resource management strategy in place that prioritizes talent management, career development, and diversity and inclusion. QSC must also provide competitive compensation and benefits packages and cultivate a positive, supportive work environment to retain top talent and attract new hires.

Industry Knowledge

Keeping up with the latest industry knowledge is important for staying competitive and meeting the evolving needs of customers and users. Firms must continuously invest in training and professional development programs that support the delivery of effective solutions and services to clients. To address this challenge, QSC must have a clear human resources development strategy in place that aligns with our business goals and supports its operations.

Additionally, firms must invest in training and development programs for their employees to ensure that they have the skills and knowledge necessary to effectively use technology in their work.

Research methodology, Data Analysis and Interpretation

The quality of the research methodology used by a market research firm affects its results. Firms that use rigorous and reliable research methods are more likely to deliver accurate and relevant insights to their clients.

The ability to analyze and interpret data effectively is a key factor in the success of a market research firm. A firm that can turn raw data into meaningful insights and recommendations is more likely to deliver value to its clients. Market research firms that have a deep understanding of specific industries are more likely to deliver relevant and accurate insights. This requires a combination of knowledge and experience in the industry and an understanding of the current market trends and dynamics.

Client relationships

A strong client relationship is essential for the success of a consultant firm. Firms that build strong relationships with our clients are more likely to receive repeat business and positive word-of-mouth referrals.

Electronic Payment Solution

Regulation and compliance:

In Malaysia, the regulation and compliance for operating an e-wallet, a payment gateway business activity is governed by the central bank of Malaysia, Bank Negara Malaysia (“BNM”). BNM oversees and regulates the payment system in Malaysia to ensure its safety, efficiency, and stability. To operate an e-wallet payment gateway business, the service provider needs to obtain an e-money issuer (EMI) license from Malaysia Central Bank (“BNM”). In addition, the operator must comply with Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) regulations set by BNM to prevent illegal activities such as money laundering and terrorism financing. The operator will also need to comply with Personal Data Protection Act (PDPA) to ensure the security and privacy of your customers' personal and financial information.

As of the date of this Report, QR did not hold an e-money issuer (EMI) license, but instead uses the license held by ManagePay Services Sdn. Bhd. (“MPay”). QR operates as a white-label partner of MPay, utilizing MPay's e-money issuer (EMI) license, which is regulated by the Malaysia Central Bank (“BNM”). This partnership enables QR to provide e-wallet services to its customers under its own brand, while ensuring compliance with applicable regulations through MPay's license.

Other General Market Conditions Affecting the Performance of the Company:

·Technical expertise

QR's success in the e-wallet payment solution business is dependent on its technical expertise. QR must have a deep understanding of the technology used in the payment solutions industry, and continually invest in its people and technology to remain at the forefront of the industry.

·Compliance with regulations

The e-wallet payment solution business is subject to strict regulations, and QR must comply with these regulations to operate successfully. QR employed a strong compliance program in place to ensure that its solutions are secure, transparent, and compliant with all relevant regulations.

·User adoption

QR's success in the e-wallet payment solution business is dependent on the adoption of its solutions by users. We are committed to develop payment solutions that are user-friendly, secure, and accessible to a wide range of users.

·Market competition

The e-wallet payment solution market is highly competitive, and QR must be able to compete effectively against other solutions providers. QR must differentiate itself from its competitors through its expertise, quality of service, and pricing strategy.

·Data security

The security of user data is a critical factor in the success of QR's e-wallet payment solution business. We are committed to invest in robust security measures to ensure that user data is protected against cyber threats.

·Market demand

The demand for the services is constantly evolving, and QR must be able to adapt to changing market conditions. QR must be able to respond to changes in technology and the needs of its clients to remain competitive.

·Client satisfaction

QR's success is dependent on the satisfaction of its clients. QR must deliver high-quality software development solutions that meet the needs of its clients and provide ongoing support to ensure their continued success.

·Financial resources

QR's financial stability is a key factor in its success. QR must have the resources to invest in its people and technology, and maintain a healthy balance sheet to support its growth.

·Cost management

QR's ability to manage costs is also important to its success. QR must balance the cost of delivering high-quality software development services with the need to remain profitable.

·Challenges of geographic concentration

QR may only be able to serve a smaller portion of the overall market. Additionally, geographic concentration can also lead to increased competition in a particular area, which can drive down prices and make it more difficult for us to differentiate our services from those of our competitors.

·Marketing and brand awareness

Marketing and brand awareness can greatly impact the success of an e-wallet service provider. Firms that are able to effectively market their services and build a strong brand are more likely to attract and retain users.

QR is committed to continually evaluating these factors and implementing strategies to overcome any risk factors that may affect its success. This may include:

·User experience

A user-friendly interface and seamless transaction process are crucial for attracting and retaining users.

·Security

Ensuring the security of users' funds and personal information is paramount.

·Partnership and integration

Establishing partnerships and integrating with merchants, banks, and other financial institutions is crucial for providing a comprehensive service and increasing adoption.

·Marketing and user acquisition

Effective marketing and user acquisition strategies are important to reach and onboard a large user base.

·Regulation compliance

Ensuring compliance with regulatory requirements and obtaining necessary licenses is critical for operating legally and building trust with users.

·Scalability

The ability to scale the platform and handle increasing transaction volumes is crucial for long-term success.

·Regional market expanding

QR plans to adopt a more diversified approach to its service offerings and consider expanding into new geographic areas. This could include investing in new infrastructure and resources, as well as developing new partnerships and strategic alliances with local businesses and organizations.

·Continuous innovation

Keeping up with the latest technologies and continuously improving the platform is important for staying competitive and meeting the evolving needs of users.

Investment Banking Services

Regulation and compliance

Operating a Labuan FSA-licensed investment bank in Malaysia requires strict adherence to the regulations and guidelines set by the Labuan Financial Services Authority (Labuan FSA) and international regulatory bodies. A strong commitment to compliance and a robust risk management framework are essential for the success and sustainability of the business. The regulatory authority responsible for overseeing and regulating the financial services industry in the Labuan International Business and Financial Centre (IBFC). The Labuan IBFC is a special economic zone in Malaysia established to promote and develop the offshore financial services industry.

As a licensed investment bank in Labuan, Malaysia, QMIS Investment Bank Limited (”QIB”) must comply with the licensing requirements set by the Labuan FSA. This includes submitting an application for a license, providing evidence of financial stability and operational readiness, and demonstrating a strong commitment to compliance with regulatory requirements and ethical standards. In terms of ongoing compliance, QIB must adhere to the regulations and guidelines set by the Labuan FSA, including those related to financial reporting, risk management, and consumer protection. QIB will also be required to conduct periodic internal audits to ensure compliance with regulations and to identify any potential risks or areas for improvement.

Additionally, QIB must comply with international regulations and standards, such as the Basel Accords and the Financial Action Task Force (FATF) recommendations, to prevent money laundering, terrorism financing, and other illegal activities. This includes implementing and maintaining robust Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) policies and procedures, as well as performing customer due diligence and monitoring transactions for suspicious activities.

Other General Market Conditions Affecting the Performance of the Company:

Labuan FSA licensed investment banks operate in a highly competitive and regulated financial services market. The results of these banks are impacted by a variety of factors, including economic conditions, competition, regulatory environment and technology advancements.

Economic conditions

The performance of investment banks is closely tied to the state of the economy. A strong economy generally leads to increased demand for investment banking services, while a weak economy can result in decreased demand. The impact of economic conditions is particularly pronounced in the investment banking industry due to its reliance on capital markets, which are subject to fluctuations based on economic performance.

Competition

The investment banking industry is highly competitive, with many players vying for a share of the market. Competition can impact the results of investment banks in several ways, including pricing pressure, increased marketing and advertising expenses, and the need to invest in technology and other resources to remain competitive. In addition, new entrants into the market can disrupt existing players by offering new products and services.

Regulatory environment

The investment banking industry is heavily regulated, with regulations affecting virtually every aspect of the business. Changes in regulations, particularly in response to economic or market conditions, can have a significant impact on the results of investment banks. For example, increased regulatory requirements may result in increased compliance costs, while changes to existing regulations may impact QIB's ability to generate revenue from certain products and services.

Technology advancements

Technology continues to play an increasingly important role in the investment banking industry, with advances in areas such as automation, artificial intelligence and blockchain having the potential to disrupt existing business models and create new opportunities. Investment banks that fail to keep up with technology advancements may find themselves at a disadvantage compared to their competitors, while those that embrace new technologies may reap significant benefits in terms of efficiency and profitability.

The success of our business operation is impacted by a variety of factors, including economic conditions, competition, regulatory environment and technology advancements. The management strategies that are able to effectively navigate these factors and adapt to changing conditions are likely to be more successful than those that do not. To remain competitive, business model and decision must be proactive in their approach, continuously monitoring changes in the market and adapting their strategies as needed to stay ahead of the competition.

INDUSTRY

The Market Size of E-payment Industry in Southeast Asia.

The e-payment industry in Southeast Asia is growing rapidly, driven by the region's large and growing population, increasing smartphone adoption, and favorable demographic and economic trends. According to a recent report by Google, Temasek, and Bain & Company, the e-payment market in Southeast Asia is expected to reach $300 billion by 2025, representing a significant opportunity for companies operating in this space. Southeast Asia has a young and tech-savvy population, with a large proportion of the population having access to smartphones and internet services. This has led to the growth of online commerce and digital financial services, including e-payments, in the region. According to the same report, e-commerce sales in Southeast Asia are projected to reach $300 billion by 2025, representing a significant portion of the overall e-payment market.

The e-payment industry in Southeast Asia is highly competitive, with several major players vying for market share. Some of the key players in the region include Grab, Gojek, Razer, Sea Limited, and Singtel. These companies offer a range of services, including ride-hailing, food delivery, mobile payments, and digital wallets. In terms of growth, the e-payment market in Southeast Asia is expected to grow at a rapid pace over the next few years, driven by increasing adoption of digital financial services, the expansion of e-commerce, and the growth of the region's young and tech-savvy population.

Overall, the e-payment industry in Southeast Asia presents a significant opportunity for companies looking to enter this market. With a large and growing population, increasing smartphone adoption, and favorable demographic and economic trends, the region is poised for continued growth in the e-payment space.

Impact of the COVID-19 Pandemic on Our Business and Operations

The pandemic has resulted in widespread economic disruption and uncertainty, which has caused many organizations to reduce their budgets and spending on consulting services. Additionally, the shift to remote work and the need to rapidly adapt to changing circumstances has created new challenges and opportunities for consulting and investment banking firms.

The COVID-19 pandemic has had a negative impact on our consulting business segment, primarily due to our main client base and revenue being generated from Malaysia and Hong Kong. The uncertain economic conditions, travel restrictions, and quarantines have impeded our ability to contact clients and build trust, leading to a decrease in demand for our services. The operations of our clients have also been negatively impacted, further exacerbating the situation. Although the full impact of the pandemic is difficult to predict, the prolonged nature of the pandemic and potential mutations of the virus poses significant uncertainties that may materially and adversely affect our business, results of operations, and financial condition.

To mitigate these impacts, we have adapted our operations to a virtual or remote-based model, while also finding ways to help clients address the unique challenges posed by the pandemic. Despite these challenges, the investment banking and consulting industry is likely to remain an important source of support and expertise for organizations as they navigate this crisis and beyond.

The lockdowns, quarantines, and travel restrictions have led to a shift towards digital and online transactions, resulting in increased adoption of e-wallet services as people opt for contactless and cashless payment options. This has created new opportunities for e-wallet providers to grow their market share and attract new users. On the retail side, the pandemic has led to store closures and reduced foot traffic, causing many brick-and-mortar retailers to shift their focus towards online sales and e-commerce. This has put pressure on retailers to enhance their digital capabilities and develop new strategies to reach customers through online channels. However, any resurgence of the pandemic could have a negative impact on consumer spending and lead to further reductions in retail sales and e-wallet transaction volume as well.

Impact of the Russia-Ukraine war on Our Business and Operations

The ongoing Russia-Ukraine war may have some indirect effects on the consultant firm, investment banking, and e-wallet business in Malaysia and the Asia Pacific region. Conflict in the region can lead to geopolitical tensions, economic uncertainty, inflation, rise of interest rate and decreased investor confidence, which could negatively impact the consulting and investment banking industries as clients become more cautious with their spending. In the e-wallet sector, the impact may be limited, as e-wallet services are less dependent on geopolitical stability and more on consumer adoption and usage. However, if the conflict escalates and leads to a broader economic slowdown in the region, it could lead to decreased consumer spending and negatively impact the e-wallet industry. It is important to note that the extent of the impact will depend on the evolution of the conflict and its impact on the global economy.

Financial Overview

For the three months ended June 30, 2023 and 2022, we generated revenues of $337,794 and $3,706, respectively, and reported net losses of $358,265 and net losses of $162,574, respectively. For the six months ended June 30, 2023 and 2022, we generated revenues of $1,145,339 and $726,037, respectively, and reported net losses of $123,989 and net losses of $1,701,359, respectively, and cash out

flow used in operating activities of $165,675 and $1,350,924, respectively. As noted in our unaudited consolidated financial statements, as of June 30, 2023, we had an accumulated deficit of $3,135,389.

Results of Operations

Comparison of Results of Operations for the Three Months ended June 30, 2023 and 2022

The following table summarizes our operating results as reflected in our statements of income during the three months ended June 30, 2023 and 2022, respectively, and provides information regarding the dollar and percentage increase (or decrease) during such periods.

		For the Three Months Ended June 30,
		2023			2022			Variance
		Amount	% of Revenue		Amount	% of Revenue		Amount	%

REVENUE	$	337,794	100%	$	3,706	100%	$	334,088	9015%
COST OF REVENUES		303,377	90%		34,118	921%		269,259	789%
GROSS PROFIT		34,417	10%		(30,412)	-821%		64,829	-213%

Operating Expenses:
General Administrative Expenses		391,367	116%		133,488	3602%		257,879	193%

Total Operating Expenses		391,367	116%		133,488	3602%		257,879	193%

Income (Loss) from Operation		(356,950)	-106%		(163,900)	-4423%		(193,050)	-118%

Total Other Income (Expense)		(1,238)	0%		299	8%		(1,537)	-514%

Profit/(Loss) Before Provision of Income Tax		(358,188)	-106%		163,601)	-4414%		(194,587)	-119%

Provision for Income Tax		77	0%		(1,027)	-28%		1,104	-107%

Net Income (Loss)	$	(358,265)	-106%	$	(162,574)	-4387%	$	(195,691)	120%

Less: Income attributable to non- controlling interests		(2,297)	-1%		(5,746)	-155%		3,449	-60%
Net Income (Loss) attributable to QMIS Securities Capital (M) Sdn. Bhd.		(355,968)	-107%		(156,828)	-4542%		(199,140)	127%

Revenues

Our different revenue sources for the three months ended June 30, 2023 and 2022, were as follows:

		For the Three Months Ended June 30,
		2023			2022			Variance
		Amount	%		Amount	%		Amount	%
Consultant Services	$	319,937	95%	$	(1,638)	-44%	$	321,575	19632%
Software-development and maintenance-related parties		15,243	5%		5,344	144%		9,899	185%
Software-development and maintenance		2,614	1%		-	0%		2,614	100%
Total Revenue	$	337,794	100%	$	3,706	100%	$	334,088	9015%

Our total revenues increased by $334,088, or 9,015%, to $337,794 for the three months ended June 30, 2023 from $3,706 for the three months ended June 30, 2022. The increase in our revenues was attributable to the following reasons:

(i)In the three months ended June 30, 2023, revenue from consultant services amounted to $319,937, constituting 95% of our total revenue. This stands in contrast to a revenue deficit of ($1,638), which was due to the float of foreign currency exchange rate. The surge of $321,575 or a 19,632% increase in revenue in 2023 was primarily driven by the recovery of our consultancy activities.

(ii)Our revenue from software development and maintenance services provided to related parties increased by $9,899, or 185%, to $15,243 for the three months ended June 30, 2023, from $5,344 in the same period of 2022. This growth can be attributed to heightened maintenance service charges in our software-maintenance collaborations with affiliated entities.

(iii)Furthermore, our revenue from software development and maintenance services provided for online payment transactions amounted to $2,614 for the three months ended June 30, 2023, compared to $0 in the same period of 2022. This growth in revenue exemplifies our successful efforts to expand our service offerings, particularly in the realm of maintenance, driven by the usage of an online payment software.

Cost of Revenues

The following table sets forth the breakdown of our total cost of revenue for the three months ended June 30, 2023, and June 30, 2022:

		For the Three Months Ended June 30,
		2023			2022			Variance
		Amount	%		Amount	%		Amount	%
Cost of Consultant Services	$	291,636	96%	$	32,370	95%	$	259,266	801%
Cost of Software development and maintenance		11,741	4%		1,748	5%		9,993	572%
Total Cost of Revenue	$	303,377	100%	$	34,118	100%	$	269,259	789%

Our total costs of revenues increased by $269,259, or 789%, to $303,377 for the three months ended June 30, 2023 from $34,118 for the three months ended June 30, 2022.

The cost associated with consultant services amounted to $291,636, constituting 96% of our total cost of revenue. Comparatively, for the same period in 2022, this cost stood at $32,370, representing 95% of the total cost of sales. The increase of $259,266 or an 801% surge in 2023 was primarily due to increased revenue related to consultant services.

Our software development costs reached $11,741, comprising 4% of total costs for June 30, 2023, contrasting $1,748 (5%) for the same 2022 period. The increase of $9,993 denotes escalated software maintenance expenses in 2023.

Gross Profit

Our gross profit increased by $64,829, or 213% to $34,417 in the three months ended June 30, 2023, from net deficit of $30,412 for the three months ended June 30, 2022, primarily due to the increases of $62,309 in gross profit from consultant services, as a result of recovery of our consultancy activities.

General Administrative Expenses

Our general and administrative expenses primarily consist of professional fees, management fees to related parties, employee salaries and welfare, rental expenses, license renewal fees, office utility, travel and entertainment expenses.

The total operating expenses for the three months ended June 30, 2023, reached $391,367, reflecting a substantial $257,879 or 193% increase from the $133,488 in the three months ended June 30, 2022, primarily attributable to:

(i)Professional fees totaled $191,802, contributing 49% to total expenses. This marks an increased by $147,881 or a 337% increase from the $43,921 in 2022, mainly attributable to our effort to become publicly traded on a national exchange;

(ii)Management fees paid to a replated party experienced an increase of $102,097, or 100%, in the three months ended June 30, 2023, as we needed more assistances to explore the capital market;

(iii)Our travel expense increased by $59,925, 100%, as our management team travelled to the US in connection with our efforts to become publicly traded on a national exchange; and

(iv)Offset by a decrease of $50,000, or 100% in our consultant fees related to the establishment of QIB in Labuan, Maylasia in 2022.

As a percentage of revenues, general and administrative expenses were 116% and 3,602% of our revenues for the three months ended June 30, 2023 and 2022, respectively.

Other Income (Expenses), Net

Our other income (expenses) primarily consists of interest income generated from bank deposits and gains and losses on foreign currency transactions. Net interest income increased by $224 during the three months ended June 30, 2023. No interest income was recorded in the corresponding period of the previous year. Additionally, there were net losses of $1,462 and $1,761 in the three months ended June 30, 2023 and 2022, respectively, in foreign currency transactions due to the fluctuations in foreign currency exchange rates.

Income Tax Expense

In the three months ended June 30, 2023, our income tax expense amounted to $77 due to the translation caused by the float of foreign currency exchange rate, as compared to the income tax benefit of $1,027 in the three months ended June 30, 2022, cause by the net loss.

Net Income (Loss)

As a result of the foregoing, we reported a net loss of $358,265 for the three months ended June 30, 2023, representing a substantial increase of $195,691, or 120%, compared to the net loss of $162,574 recorded in the three months ended June 30, 2022.

Net Loss Attributable to Non-controlling Interest

As referenced in the discussion of our company structure, we have non-controlling interest in our equity, meaning the portion of the equity in the subsidiaries of the Company not attributable, directly or indirectly to the Company. Accordingly, we recorded non-controlling interest income (loss) attributable to the non-controlling interest. In the three months ended June 30, 2023, we recorded net loss attributable to the non-controlling interest of $2,297. This represents a decrease of $3,449 or 60% from the net loss attributable to non-controlling interest of $5,746 recorded in the three months ended June 30, 2022.

Net income (loss) attributable to QMIS TBS Capital Group Corp.

As a result of the foregoing, we reported a net loss attributable to QMIS TBS Capital Group Corp. of $355,968 for the three months ended June 30, 2023, which represented an increase of $199,140 or 127% compared to the net loss of $156,828 reported in the three months ended June 30, 2022.

Comparison of Results of Operations for the Six Months ended June 30, 2023 and 2022

The following table summarizes our operating results as reflected in our unaudited statements of operations during the six months ended June 30, 2023 and 2022, respectively, and provides information regarding the dollar and percentage increase (or decrease) during such periods.

		For the Six Months Ended June 30,
		2023			2022			Variance
		Amount	% of Revenue		Amount	% of Revenue		Amount	%

REVENUE	$	1,145,339	100%	$	726,037	100%	$	419,302	58%
COST OF REVENUES		443,591	39%		1,148,508	158%		(704,917)	-61%
GROSS PROFIT		701,748	61%		(422,471)	-58%		1,124,219	-266%

Operating expenses:
General Administrative Expenses		807,343	70%		1,176,387	162%		(369,044)	-31%
Total operating expenses		807,343	70%		1,176,387	162%		(369,044)	-31%

Income (Loss) from Operation		(105,595)	-9%		(1,598,858)	-220%		1,493,263	-93%

Total Other Income (Expense)		808	0%		7,493	1%		(6,685)	-89%

Loss before Provision of Income Tax		(104,787)	-9%		(1,591,365)	-219%		1,486,578	-93%

Provision for income tax		19,202	2%		109,994	15%		(90,792)	-83%

Net Income (Loss)	$	(123,989)	-11%	$	(1,701,359)	-234%	$	1,577,370	-93%

Less: Income attributable to non-controlling interests		(1,836)	0%		2,633	0%		(4,469)	-170%
Net Income (Loss) attributable to
QMIS Securities Capital (M) Sdn. Bhd.		(122,153)	-11%		(1,703,992)	-235%		1,581,839	-93%

Revenues

Our different revenue sources for the six months ended June 30, 2023 and 2022, were as follows:

		For the Six Months Ended June 30,
		2023			2022			Variance
		Amount	%		Amount	%		Amount	%
Consultant Services	$	1,096,284	96%	$	630,040	87%	$	466,244	74%
Software-development and maintenance-related parties		30,970	3%		95,997	13%		(65,027)	-68%
Software-development and maintenance		18,085	2%		-	0%		18,085	100%
Total Revenue	$	1,145,339	100%	$	726,037	100%	$	419,302	58%

Our total revenues increased by $419,302, or 58%, to $1,145,339 for the six months ended June 30, 2023, from $726,037 for the six months ended June 30, 2022. The increase in our revenues was attributable to the following reasons:

(i)In the six months ended June 30, 2023, revenue from consultant services amounted to $1,096,284, constituting 96% of our total revenue. In comparison, during the same period in 2022, revenue from consultant services was $630,040, representing 87% of the total revenue. The surge of $466,244, a 74% increase in consultant services revenue, was primarily propelled by the recovery of our consultancy activities.

(ii)Our revenue from software development and maintenance services provided to related parties decreased by $65,027, marking a 68% decline to $30,970 for the six months ended June 30, 2023, from the $95,997 recorded in the corresponding period of 2022, primarily due to the decrease in sales of software.

(iii)The revenue generated from software development and maintenance services provided for online payment transactions amounted to $18,085 for the six months ended June 30, 2023, compared to $0 in the same period of 2022. This growth in revenue exemplifies our successful efforts to expand our service offerings, particularly in the realm of maintenance, driven by the usage of an online payment software.

Cost of Revenues

The following table sets forth the breakdown of our total cost of revenue for the six months ended June 30, 2023 and 2022:

		For the Six Months Ended June 30,
		2023			2022			Variance
		Amount	%		Amount	%		Amount	%
Cost of Consultant Services	$	412,453	93%	$	1,083,141	94%	$	(670,688)	-62%
Cost of Software development and maintenance services		31,138	7%		65,367	6%		(34,229)	-52%
Total Cost of Revenue	$	443,591	100%	$	1,148,508	100%	$	(704,917)	-61%

Our total cost of revenues decreased by $704,917, or 61%, to $443,591 for the six months ended June 30, 2023, compared to $1,148,508 for the same period in 2022.

The cost associated with consultant services amounted to $412,453, accounting for 93% of our total cost of revenue. In contrast, during the same period in 2022, this cost totaled $1,083,141, representing 94% of the total cost of revenue. The reduction of $670,688, accounting for a 62% decrease in 2023, was primarily driven by more streamlined costs related to consultant services.

Our software development and maintenance costs recorded $31,138, comprising 7% of the total costs for June 30, 2023, compared to $65,367 (6%) for the same period in 2022. This $34,229 drop highlights a reduction in software development expenses in 2023.

Gross Profit

Our gross profit for the six months ended June 30, 2023, amounted to $701,748, representing an increase of $1,124,219 from a gross deficit of $422,471 in the corresponding period in 2022. This significant positive variance can be attributed primarily to the increase of $1,136,932 in gross profit from consultant services. Our overall gross profit margin increased to 61.3% for the six months ended June 30, 2023, from -58.2% for the six months ended June 30, 2022

General Administrative Expenses

Our general and administrative expenses encompass various components such as professional, management fees to related parties, employee salaries and benefits, rental expenses, license renewal fees, office utilities, travel, and entertainment expenses.

The total operating expenses for the six months ended June 30, 2023, amounted to $807,343, making a significant reduction of $369,044 or 31% compared to the $1,176,387 in the corresponding period of 2022. This reduction was primarily attributed to the following factors:

(i)Management fees paid a related party experienced a significant decrease of $435,520 in the six months ended June 30, 2023, as we needed less business advice and administrative services from the related party in the current period.

(ii)Consultation fees related to QIB’s establishment and development decreased by $137,000, compared to the prior period.

(iii)Management fees paid to a former subsidiary then to-be-acquired reduced by $30,000 as we terminated the acquisition in November 2022.

(iv)Offset by an increase of $153,982 in professional fees related to our effort to become publicly traded on a national exchange.

(v)Our travel expense increased by $59,925, 100%, as our management team travelled to the US in connection with our efforts to become publicly traded on a national exchange.

As a percentage of revenues, general and administrative expenses were 71% and 162% of our revenues for the six months ended June 30, 2023 and 2022, respectively.

Other Income (Expenses), Net

Our other income (expenses) primarily consists of interest income generated from bank deposits and gains and losses on foreign currency transactions. Net interest income increased by $233 during the six months ended June 30, 2023. Additionally, there was net income of $573 and $7,491 in the six months ended June 30, 2023 and 2022, respectively, from foreign currency transactions due to the fluctuations in foreign currency exchange rates.

Income Tax Expense

Our income taxes expense was $19,202 in the six months ended June 30, 2023, as compared to the income taxes expense of $109,994 in the six months ended June 30, 2022, a decrease by $90,792 or 83%, as QSC recorded income tax expenses for prior periods in 2022, pursuant to a notice from local tax authority.

Net Income (Loss)

As a result of the foregoing, we reported a net loss of $123,989 for the six months ended June 30, 2023, representing a substantial decrease of $1,577,370, or 92%, compared to the net loss of $1,701,359 reported in the six months ended June 30, 2022.

Net Loss Attributable to Non-controlling Interest

As referenced in the discussion of our company structure, we have non-controlling interest in our equity, meaning the portion of the equity in the subsidiaries of the Company not attributable, directly or indirectly to the Company. Accordingly, we recorded net loss attributable to the non-controlling interest. The net income (loss) attributable to non-controlling interest was $(1,836) and $2,633 in the six months ended June 30, 2023 and 2022, respectively.

Net income (loss) attributable to QMIS TBS Capital Group Corp.

As a result of the foregoing, we reported a net loss attributable to QMIS TBS Capital Group Corp. of $122,153 for the six months ended June 30, 2023. This demonstrates a substantial decline of $1,581,839, representing a 93% decrease, from the net loss attributable to QMIS TBS Capital Group Corp. of $1,703,992 reported during the corresponding period in 2022.

Liquidity and Capital Resources

As of June 30, 2023, we had $120,605 in cash as compared to $183,397 as of December 31, 2022. As of June 30, 2023, our working capital was $1,810,863 in deficit as compared to $1,725,668 as of December 31, 2022, respectively. In addition, we also had $100,039 in accounts receivable as of June 30, 2023. Our accounts receivable primarily include balances due from customers for our services provided to and accepted by customers.

The following table sets forth summary of our cash flows for the periods indicated:

		For the Six Months Ended
		June 30,		June 30,
		2023		2022

Net cash used by operating activities	$	(165,675)	$	(1,350,924)
Net cash provided (used) by investing activities		(1,224)		(363)
Net cash provided (used) by financing activities		98,818		127,027
Effect on changes in foreign exchange rate		1,249		(2,137)
NET CHANGE IN CASH		(66,832)		(1,226,397)
CASH BEGINNING OF YEAR		187,437		1,409,794
CASH END OF YEAR	$	120,605	$	183,397

Operating Activities

Net cash used in operating activities was $165,675 for the six months ended June 30, 2023, primarily consisting of the following:

·Net loss of $123,989 for the six months ended June 30, 2023.

·Accounts receivable increased by $102,706 during the current period, primarily due to the increase in accounts receivable resulted from consultant services, and such accounts receivable was subsequently received.

·A decrease of $15,207 in taxes payable, as we paid off portion of the taxes accrued.

·Offset by an increase in accrued expenses of $72,827, mainly due to the increase in professional fees related to becoming publicly traded on a national exchange.

Net cash used in operating activities was $1,350,924 for the six months ended June 30, 2022, primarily consisting of the following:

·A net loss of $1,701,359 for the six months ended June 30, 2022.

·Offset by a decrease of $138,787 in accounts receivable, mainly because the Company subsequently received a payment of $240,178 for an account receivable recorded in December 2021.

·Offset by an increase of $109,993 in taxes payment, as the Company recorded income tax expense for prior periods in 2022.

Investing Activities

Net cash used in investing activities amounted to $1,224 for the six months ended June 30, 2023, as compared to net cash used in investing activities amounted to $363 for the six months ended June 30, 2022, primarily consisting of the purchase of fixed assets.

Financing Activities

Net cash provided by financing activities amounted to $98,818 for the six months ended June 30, 2023, as compared to $127,027 for the six months ended June 30, 2022. Net cash provided by financing activities in the six months ended June 30, 2023, primarily consisted of advancement from a principal officer to fund the company’s operation, offset by a payback of $17,889 for such advancement. Net cash provided by financing activities in the six months ended June 30, 2022, primarily consisted capital contribution of $999,975, and loans from related parties of $70,106, offset by a payback of $943,054 for such loans.

Lease Commitment

The Company has operating leases for corporate offices, employees’ accommodation, and office equipment. These leases have initial lease terms of 12 months to 5 years. The Company has elected not to recognize lease assets and liabilities for leases with an initial term of 12 months or less.

As of June 30, 2023, future minimum lease payments under the non-cancelable lease agreements are as follows:

		June 30, 2023

2023	$	887
2024		116
Total lease payments		1,003
Less: imputed interest		(29)
Total lease liabilities		974
Less: current portion		860
Non-current lease liabilities	$	114

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.

Going Concern

Revenue Recognition

The Company currently generates its revenue from the following main sources:

Revenue from Consultant Services

Revenue from Software Development and maintenance services

Payments for services received in advance in accordance with the contract are recognized as deferred revenues when received.

Cost of Revenues

Comprehensive Income (Loss)

Credit Risk

Customer accounts typically are collected within a short to medium period of time, and based on its assessment of current conditions and its experience collecting such receivables, management believes it has no significant risk related to accounts receivable.

Research and Development Expenses

Research and development expenses consist primarily of fees we are being charged for developing the source code of the software platform enabling us to build new products as well as improve existing products. We expense substantially all of our research and development costs as they are incurred.

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, June 30, 2023. 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 2023.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2023, 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.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On February 13, 2023, the two shareholders of all 1,000,100 of the outstanding shares of common stock of QMIS Securities Capital (M) Sdn. Bhd. (“QSC”) entered into share exchange agreements (the “Share Exchange Agreements”) with the QMIS TBS Capital Group (“QMIS TBS”). The two QSC shareholders were Dr. Chin Yung Kong, the Chief Executive Officer of QMIS TBS, and Chin Hua Fung, Dr. Chin’s son.

Dr. Chin exchanged 700,070 shares of QSC common stock for 700,070 shares of QMIS TBS common stock. Mr. Chin exchanged 300,030 shares of QSC common stock for 300,030 shares of QMIS TBS common stock. Pursuant to the Share Exchange Agreements, QMIS TBS became the sole shareholder of QSC.

The 1,000,100 shares of QMIS TBS common stock were issued without registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”) and rules and regulations promulgated under the 1933 Act.

Item 6. Exhibits.

EXHIBIT NUMBER		DESCRIPTION
3.1		Certificate of Incorporation (previously filed)
3.2		By-Laws (previously filed)
10.1		Broker/Dealer Purchase Agreement dated April 30, 2020 (previously filed)
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101 INS		XBRL Instance Document*
101 SCH		XBRL Schema Document*
101 CAL		XBRL Calculation Linkbase Document*
101 DEF		XBRL Definition Linkbase Document*
101 LAB		XBRL Labels Linkbase Document*
101 PRE		XBRL Presentation Linkbase Document*

*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: August 17, 2023

	By:	/s/ Yung Kong Chin
		Yung Kong Chin
		Chief Executive Officer
		(Principal Executive Officer)
Dated: August 17, 2023
	By:	/s/ Ong Kar Yee
		Ong Kar Yee
		Chief Financial Officer
		(Principal Financial Officer)

Delaware		32-0619708
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

100 N. Barranca St. #1000
West Covina, CA		91791
(Address of Principal Executive Offices)		(Zip Code)

Large accelerated filer	☐	Accelerated filer	☐
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QMIS TBS CAPITAL GROUP CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

					June 30,	December 31,
					2023	2022
					(Unaudited)
ASSETS
Current Assets:
	Cash and cash equivalents			$	`120,605`	`187,437`
	Accounts receivable, net (Note 4)				`100,039`	`2,054`
	Prepaid expenses				`322`	`-`
	Contract security deposit				`8,062`	`8,506`
Total Current Assets					`229,028`	`197,997`

Property, plant and equipment, net (Note 5)					`3,430`	`4,557`
Operating lease right of use asset, net (Note 10)					`550`	`12,801`
Total Assets				$	`233,008`	`215,355`

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
	Accounts payable (Note 6)			$	`36,441`	`33,566`
	Accrued expenses (Note 7)				`251,685`	`181,253`
	Deferred revenue-related parties (Note 9 (1))				`-`	`1,500`
	Taxes payable (Note 8)				`983,996`	`1,017,176`
	Operating lease liabilities – current (Note 10)				`860`	`14,796`
	Due to related parties (Note 9 (5))				`761,195`	`675,374`
		Total Current Liabilities			`2,034,177`	`1,923,665`

Operating lease liabilities – noncurrent (Note 10)					`114`	`357`
Total Liabilities					`2,034,291`	`1,924,022`

Commitments and Contingencies (Note 15)					`-`	`-`

Shareholders' Equity:
		Preferred stock, par value $0.0001, 10,000,000 shares authorized;0 share issued and outstanding as of December 31, 2022 and 2021			`-`	`-`
		Common stock, par value $0.0001, 750,000,000 shares authorized; 301,000,100 shares issued and outstanding as of June 30, 2023 and December 31, 2022 *			`30,100`	`30,100`
		Additional paid-in capital			`1,251,350`	`1,251,350`
		Retained Earnings (Accumulated deficit)			`(3,135,389)`	`(3,013,236)`
		Accumulated other comprehensive income			`60,597`	`30,104`
		Total QMIS TBS Capital Group Corp. shareholders' equity			`(1,793,342)`	`(1,701,682)`
			Non-controlling interest		`(7,941)`	`(6,985)`
		Total Shareholders' Equity (Deficit)			`(1,801,283)`	`(1,708,667)`
			Total Liabilities and Shareholders' Equity (Deficit)	$	`233,008`	`215,355`

* Retrospectively restated for effect of share issuances on February 13, 2023.

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

QMIS TBS CAPITAL GROUP CORP. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

		For the Six Months Ended
		June 30,		June 30,
		2023		2022

Cash Flows from Operating Activities

Net loss	$	`(123,989)`	$	`(1,701,359)`
Adjustments to reconcile net loss
Depreciation		`2,133`		`2,367`
Amortization of operating lease right-of-use assets		`12,065`		`11,656`
Changes in assets and liabilities
Accounts receivable		`(102,706)`		`138,787`
Prepaid expenses		`(338)`		`52,891`
Contract security deposit		`(40)`		`1,177`
Accounts payable		`5,005`		`2,892`
Accrued expenses		`72,827`		`35,204`
Taxes payable		`(15,207)`		`109,993`
Deferred revenue		`(1,481)`		`6,955`
Operating lease liabilities		`(13,944)`		`(11,487)`
Net cash used by operating activities		`(165,675)`		`(1,350,924)`

Cash Flows from Investing Activities
Purchase of property and equipment		`(1,224)`		`(363)`
Net cash provided (used) by investing activities		`(1,224)`		`(363)`

Cash Flows from Financing Activities
Shareholders capital contribution		`-`		`999,975`
Proceeds from related parties		`116,707`		`70,106`
Repayment to related parties		`(17,889)`		`(943,054)`
Net cash provided (used) by financing activities		`98,818`		`127,027`

Effect on changes in foreign exchange rate		`1,249`		`(2,137)`
Increase (decrease) in cash		`(66,832)`		`(1,226,397)`
Cash at beginning of period		`187,437`		`1,409,794`
Cash at end of period	$	`120,605`	$	`183,397`

Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest	$	`-`	$	`-`
Income tax	$	`34,353`	$	`-`

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

PART I		Page

Item 1.	Financial Statements	2

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37

Item 4.	Controls and Procedures	37

PART II

Item 1.	Legal Proceedings	39

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 6.	Exhibits	39

Signatures		40

QMIS TBS CAPITAL GROUP CORP. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

					For the Three Months Ended				For the Six Months Ended
					June 30,		June 30,		June 30,		June 30,
					2023		2022		2023		2022

Revenue
	Consultant services			$	319,937	$	(1,638)	$	1,096,284	$	630,040
	Software development and maintenance services-Related parties (Note 9 (1))				15,243		5,344		30,970		95,997
	Software development and maintenance services				2,614		-		18,085		-
		Total revenue			337,794		3,706		1,145,339		726,037

Costs of Revenue
	Costs of consultant services				291,636		32,370		412,453		1,083,141
	Costs of software development and maintenance services				11,741		1,748		31,138		65,367
		Total of costs of revenue			303,377		34,118		443,591		1,148,508

		Gross Profit			34,417		(30,412)		701,748		(422,471)

Operating Expenses

	General and administrative expenses
		Payroll and employee benefit			12,115		7,159		27,473		14,601
		Depreciation expenses			997		1,166		2,133		2,367
		Office expenses			68,346		13,338		80,816		26,643
		Rental expenses			9,230		9,909		19,133		19,770
		Due and subscription			5,300		115		39,550		33,435
		Professional fees			191,802		43,921		245,867		91,885
		Consultant fees			-		50,000		-		137,000
		Management fees			-		10,000		-		30,000
		Management fees-related party (Note 9 (2))			99,977		(2,120)		385,166		820,686
		Advisory fee-related party (Note 9 (3))			3,600		-		7,205		-
			Total general and administrative expenses		391,367		133,488		807,343		1,176,387

Total Operating Expenses					391,367		133,488		807,343		1,176,387

Income (Loss) from Operation					(356,950)		(163,900)		(105,595)		(1,598,858)

Other Income (Expenses)
	Interest income				224		-		235		2
	Gain (loss) on foreign currency transaction				(1,462)		299		573		7,491
		Total Other Income (Expenses)			(1,238)		299		808		7,493

Loss before Provision for Income Tax					(358,188)		(163,601)		(104,787)		(1,591,365)

Provision for Income Tax					77		(1,027)		19,202		109,994

Net Income (Loss)					(358,265)		(162,574)		(123,989)		(1,701,359)

	Less: net income attributable to non-controlling interest				(2,297)		(5,746)		(1,836)		2,633

Net income (loss) attributable to
	QMIS TBS Capital Group Corp.			$	(355,968)	$	(156,828)	$	(122,153)	$	(1,703,992)

Other comprehensive income (loss)
	Effects of foreign currency conversion				23,004		13,575		31,373		18,136
Total comprehensive income (loss)					(332,964)		(143,253)		(90,780)		(1,685,856)
	Less: comprehensive income attributable to non-controlling interest				435		(852)		880		(981)
Comprehensive income (loss) attributable to
	QMIS TBS Capital Group Corp.			$	(333,399)	$	(142,401)	$	(91,660)	$	(1,684,875)

Basic and Fully Diluted Loss per Share				$	(0.00)	$	(0.00)	$	(0.00)	$	(0.01)

Weighted average shares outstanding					301,000,100		301,000,100		301,000,100		301,000,100

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