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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2021

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

For the transition period from ________________ to ________________

Commission file number: 000-51190

UMATRIN HOLDING LIMITED

(Exact name of registrant as specified in its charter)

Delaware		87-0814235
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

32, JALAN RADIN BAGUS 3, BANDAR BARU SRI PETALING, KUALA LUMPUR		57000
(Address of principal executive offices)		(Zip Code)

(603) 1700-081-8988

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non--accelerated filer	☐	Smaller reporting company	☒
(Do not check if smaller reporting company)		Emerging growth company	☐

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

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

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

Title of Each Class

Trading Symbol(s)

Name of Each Exchange

on Which Registered

N/A

As of September 1, 2021, the registrant had 182,444,266 shares of common stock, $0.00001 par value per share, issued and outstanding.

UMATRIN HOLDING LIMITED

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED June 30, 2021

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	22
Item 4.	Controls and Procedures.	22

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings.	23
Item 1A.	Risk Factors.	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	23
Item 3.	Defaults Upon Senior Securities.	23
Item 4.	Mine Safety Disclosures.	23
Item 5.	Other Information.	23
Item 6.	Exhibits.	24

SIGNATURES		25

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

UMATRIN HOLDING LIMITED

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	June 30,			December 31,
	2021			2020

Assets
Current Assets
Cash and cash equivalents	$	15,582		$	50,459
Accounts receivables		24,682			15,980
Accounts receivables-related parties		12,442			22,301
Inventory		34,839			31,303
Prepaid tax		83,487			6,666
Due from related parties		388,268			523,704
Total Current Assets		559,300			650,413
Land, property and equipment, net		770,842			860,787
Deposits		63,268			45,552
Total Assets		1,393,410			1,556,752

Liabilities
Current Liabilities
Term loan payable-current portion		45,994			32,058
Hire purchase-current portion		19,252			20,296
Accounts payable and accrued expenses		155,329			431,082
Other payables		197,866			204,185
Due to related parties		286,140			354,971
Total Current Liabilities		704,581			1,042,592

Term loan payable-long term		276,655			343,408
Hire purchase payable-long term		35,220			61,289
Total Long Term Liabilities		311,875			404,697

Total Liabilities		1,016,456			1,447,289

Equity
Umatrin Holding Limited Stockholders' Equity
Preferred stock: 10,000,000 authorized; $0.00001 par value
0 and 0 shares issued and outstanding		-			-
Common stock: 500,000,000 authorized; $0.00001 par value
182,444,266 shares issued and outstanding		1,825			1,825
Additional paid in capital		3,136,561			3,136,561
Accumulated deficits		(2,773,540	)		(2,993,454	)
Accumulated other comprehensive loss		(137,344	)		(115,048	)
Total Umatrin Holding Limited Stockholders' Equity		227,502			29,884
Non-controlling interest		149,452			79,579
Total Equity		376,954			109,463
Total Liabilities and Stockholders Equity	$	1,393,410		$	1,556,752

See accompanying notes to financial statements.

Table of Contents

UMATRIN HOLDING LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	For the Three Months ended						For the Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2021			2020			2021			2020
Sales	$	370,695		$	1,022,045		$	881,597		$	1,812,636
Sales-related parties		(697	)	$	-			21,943			-
		369,998		$	1,022,045			903,540			1,812,636
Cost of sales		75,323			451,290			165,623			510,037
Gross profit		294,675			570,755			737,917			1,302,599

Operating expenses
Selling, general & administrative expenses		175,551			277,607			435,633			502,996
Total operating expenses		175,551			277,607			435,633			502,996

Profit/(Loss) from operations		119,124			293,148			302,284			799,603

Other income (expenses)
Interest expense		(3,318	)		(6,027	)		(6,922	)		(12,138	)
Total other income (expenses)		(3,318	)		(6,027	)		(6,922	)		(12,138	)

Net profit/(loss) before income taxes		115,806			287,121			295,362			787,465

Provision for income taxes		-			-			-			-

Net profit/(loss)		115,806			287,121		$	295,362		$	787,465

Less: Net profit/(loss) attributable to non-controlling interest		26,887			61,354		$	75,447		$	165,166

Net profit/(loss) attributable to Umatrin Holding Limited	$	88,919		$	225,767		$	219,914		$	622,299

Other comprehensive profit/(loss), net of tax
Foreign currency translation adjustment		(20,327	)		1,309			(27,869	)		(4,060	)

Comprehensive profit/(loss)		95,479			288,430			267,493			783,406

Comprehensive profit/(loss) attributable to the non-controlling interest		22,821			61,616			69,873			164,354

Comprehensive profit/(loss) attributable to Umatrin Holding Limited	$	72,658		$	226,814		$	197,620		$	619,052

Loss per common share - basic and diluted	$	0.00		$	0.00		$	0.00		$	0.00

Weighted average number of shares outstanding - basic and diluted		182,444,266			182,444,266			182,444,266			182,444,266

See accompanying notes to financial statements

Table of Contents

UMATRIN HOLDING LIMITED

STATEMENTS OF OWNERS’ EQUITY

For the Six Month Ended June 30, 2021 and December 31, 2020

	Umatrin Holding Limitd Shareholders'
										Accumulated
	Common Stock, $0.00001				Additional Paid-in		Retained Earnings			Other Comprehensive			Noncontrolling			Total
	Shares		Amount		Capital		(Deficit)			Loss			Interest			Equity
Balance, December 31, 2019		182,444,266	$	1,825	$	3,136,561	$	(3,369,169	)	$	(130,943	)	$	(47,223	)	$	(408,949	)
Net income (loss)								375,715						122,827			498,542
Cumulative translation adjustment											15,895			3,975			19,870
Balance, December 31, 2020		182,444,266	$	1,825	$	3,136,561	$	(2,993,454	)	$	(115,048	)	$	79,579		$	109,463
Net income (loss)								219,914						75,448			295,362
Cumulative translation adjustment											(22,296	)		(5,575	)		(27,871	)
Balance, June 30, 2021		182,444,266	$	1,825	$	3,136,561	$	(2,773,540	)	$	(137,344	)	$	149,452		$	376,954

See accompanying notes to financial statements

Table of Contents

UMATRIN HOLDING LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Six Months Ended
	June 30,			June 30,
	2021			2020
Cash flows from operating activities
Net profit/(loss) including noncontrolling interest	$	295,362		$	787,465
Adjustment to reconcile net profit/(loss) from operations:
Depreciation expense		46,600			42,588
Changes in Operating Assets and Liabilities
Inventory		(5,249	)		(240,725	)
Prepaid tax		(78,711	)		(24,276	)
Accounts receivables and deposits		(21,287	)		(288,408	)
Accounts payable and accrued expenses		(271,450	)		151,745
Other payables		11,264			8,500
Net cash provided by (used in) operating activities		(23,472	)		436,888

Cash flows from investing activity
Purchase of property and equipment		-			(2,636	)
Advances received from/(made to) related parties
Net cash used in investing activity		-			(2,636	)

Cash flows from financing activities
Proceeds/(Repayment) to related party, net		48,100			(352,031	)
Proceeds/(Repayments) from loan, net		(57,559	)		(119,023	)
Net cash used in financing activities		(9,459	)		(471,054	)

Effect of exchange rate changes		(1,946	)		(2,376	)

Net increase (decrease) in cash and cash equivalents		(34,877	)		(39,178	)
Cash and cash equivalents at beginning of period		50,459			171,678
Cash and cash equivalents at end of period	$	15,582		$	132,500

Supplemental disclosures of cash flow information
Interest paid	$	6,922		$	12,138
Income taxes (refund)/paid	$	78,711		$	24,276

See accompanying notes to financial statements

Table of Contents

UMATRIN HOLDINGS LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2021

(UNAUDITED)

1. ORGANIZATION

Umatrin Holding Limited (formerly known as Golden Opportunities Corporation) (“UMHL”) was incorporated in the state of Delaware on February 2, 2005. UMHL was originally incorporated in order to locate and negotiate with a targeted business entity for the combination of that target company with the Company.

On January 6, 2016, UMHL acquired 80% of the equity interests of U Matrin Worldwide SDN. BHD. (“Umatrin”) in exchange for the issuance of a total of 100,000,000 shares of its common stock to the two holders of Umatrin, Dato’ Sri Eu Hin Chai and Dato’ Liew Kok Hong. Immediately following the Share Exchange, the business of Umatrin became the business of UMHL.

U Matrin Worldwide SDN BHD, formerly known as OLC Worldwide SDN. BHD., was incorporated in Malaysia on July 22, 1993. The principal activities of Umatrin is direct selling and trading on beauty and personal care products, and investment holding.

UMHL entered into a share exchange agreement with Umatrin whereas the acquisition was accounted under US GAAP as a business combination under common control with UMHL being the acquirer as both entities were owned by the same controlling shareholders. Prior to the business combination, Dato’ Sri Eu Hin Chai, through Umatrin Group Ltd., held 76% of the outstanding shares of common stock of the Company. Dato’ Sri Eu Hin Chai and Dato’ Liew Kok Hong beneficially owned 61.25% and 38.75% of Umatrin immediately prior to the closing. Accordingly, historical cost will be the basis for transfer of assets and liabilities in the business combination in accordance with ASC 805-50-30-5.

Umatrin Holding Limited and its subsidiary U Matrin Worldwide SDN. BHD. shall be referred as the “Company”.

The organization structure as follows:

Umatrin Holding Ltd.

(USA)

↓

80%

U Matrin Worldwide SDN BHD

(Malaysia)

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”).

The accompanying consolidated financial statements include the accounts of the Company and its subsidiary. Significant inter-company transactions have been eliminated in consolidation.

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In accordance with ASC 805-50-45-5, for transactions between entities under common control, financial statements and financial information presented for prior periods have been be retroactively adjusted to furnish comparative information. The accompanying consolidated financial statements are presented retrospectively as though the share exchange agreement between the UMHL and Umatrin occurred at the beginning of the first period presented.

Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses.

Functional and presentation currency

The functional currency of Umatrin is the currency of the primary economic environment in which the Company operates which is Malaysia Ringgit (“MYR”).

Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on translation of monetary items at period-end are included in income statement of the period.

For the purpose of presenting these financial statements, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets.

Exchange rate used for the translation as follows:

	Period End		Average
US$ to MYR	Rate		Rate
June 30, 2021		4.2766		4.1925
December 31, 2020		4.0567		4.2017
June 30, 2020		4.1585		4.1191

Table of Contents

Fair value of financial instruments

The Company’s balance sheet includes financial instruments, including cash, term loan, accounts payable, accrued expenses, amounts due to related party and convertible notes payable to a related party. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.

Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.

Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2020. The respective carrying value of certain amounts on the balance sheet financial instruments approximated their fair values due to the short-term nature of these instruments.

Related parties

The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

Risks and Uncertainties

The Company’s operations are subject to significant risks and uncertainties including financial, operational and regulatory risks, including the potential risk of business failure.

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Commitments and contingencies

The Company adopted ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Cash and cash equivalents

The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents.

The cash and cash equivalents for the period ended June 30, 2021 and December 31, 2020 were $15,582 and $50,459 respectively.

Trade Receivables

Trade receivables are carried at anticipated realizable value. Bad debts are written off in the period in which they are identified. An estimate is made for doubtful debts based on a review of all outstanding amounts at the balance sheet date.

Bad debt expenses were $nil and $nil for the six months ended June 30, 2021 and 2020, respectively.

At June 30, 2021 and December 31, 2020, the Company’s outstanding trade receivables were $37,124 and $38,281.

Inventories

Inventories, which are primarily comprised of finished goods for sale, are stated at the lower of cost or net realizable value, using the first-in first-out (FIFO) method. The Company evaluates the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis. Only defects products could be return to our suppliers.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

Depreciation is calculated under the straight-line method to write off the cost of the assets over their estimated useful lives.

Computer and software	5 years
Furniture and fittings	10 years
Office equipment	10 years
Renovation and improvements	10 years
Motor vehicle	5 years
Building	40 years
Land	95 years

An item of equipment is derecognized upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from de-recognition of asset is recognized in profit or loss.

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Expenditures for repairs and maintenance, which do not improve or extend the expected useful lives of the assets, are expensed as incurred while major replacements and improvements are capitalized.

Impairment of Long-lived Assets

In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable, or at least annually. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value and its book value. The Company recorded no impairment charge for the six months ended June 30, 2021 and 2020.

Revenue Recognition

The Company adopted ASU 201409, Topic 606 on January 1, 2018, using the modified retrospective method. ASC 606 requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.

The adoption of Topic 606 has no impact on revenue amounts recorded on the Company’s interim financial statements.

The Company generally recognizes product sales revenue when the performance obligation have been satisfied pursuant to Malaysia law, including such factors as contract existed with the customer, delivery and acceptance of products by customer has occurred, the sales price is fixed or determinable and allocated to the products sold, sales and value-added tax laws have been complied with, and collectability is reasonably assured. The Company estimates potential returns and records such estimates against its gross revenue to arrive at its reported net sales revenue.

Commission

The Company expenses commission costs as incurred and includes it in selling expenses. The Company expenses commission costs as incurred and includes it in selling expenses. The Company grants commission to dealers and promoters to promote and sell the products. Amount of commission is based upon agreed value between the Company and the dealers and promoters as there is no fix basis for such amount.

Advertising

The Company expenses advertising costs as incurred and includes it in selling expenses. The Company recorded $nil and $nil for advertising and promotions expenses during the six months ended June 30, 2021 and 2020, respectively.

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Income taxes and valuation allowance

The Company follows ASC 740, Income Taxes. The Company records deferred tax assets and liabilities for future income tax consequences that are attributable to differences between financial statement carrying amounts of assets and liabilities and their income tax bases. The measurement of deferred tax assets and liabilities is based on enacted tax rates that are expected to apply to taxable income in the year when settlement or recovery of those temporary differences is expected to occur. The Company recognizes the effect on deferred tax assets and liabilities of any change in income tax rates in the period that includes the enactment date. The Company record a valuation allowance to reduce deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

A tax benefit from an uncertain tax position may be recognized only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities. The determination is based on the technical merits of the position and presumes that the relevant taxing authority that has full knowledge of all relevant information will examine each uncertain tax position. Although the Company believes the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals.

Comprehensive Income (Loss)

The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) ASC 220 Reporting Comprehensive Income, and establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. The Company’s comprehensive income (loss) consists of net income (loss) and foreign currency translation adjustments.

Segment Information

The Company adopted ASC-280, Disclosures about Segments of an Enterprise and Related Information, which requires certain financial and supplementary information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates in one business segment (marketing and sales) and in one geographical segment Malaysia, because all of the Company’s current operations are conducted in Malaysia.

Recent Accounting Pronouncements

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which revises the accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new guidance requires the fair value measurement of investments in equity securities and other ownership interests in an entity, including investments in partnerships, unincorporated joint ventures and limited liability companies (collectively, equity securities) that do not result in consolidation and are not accounted for under the equity method. Entities will need to measure these investments and recognize changes in fair value in net income. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities they classify under current guidance as available for sale in other comprehensive income (OCI). They also will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values. Instead, for these types of equity investments that do not otherwise qualify for the net asset value practical expedient, entities will be permitted to elect a practicability exception and measure the investment at cost less impairment plus or minus observable price changes (in orderly transactions). The ASU also establishes an incremental recognition and disclosure requirement related to the presentation of fair value changes of financial liabilities for which the fair value option (FVO) has been elected. Under this guidance, an entity would be required to separately present in OCI the portion of the total fair value change attributable to instrument-specific credit risk as opposed to reflecting the entire amount in earnings. For derivative liabilities for which the FVO has been elected, however, any changes in fair value attributable to instrument-specific credit risk would continue to be presented in net income, which is consistent with current guidance. The standard is effective beginning January 1, 2018 via a cumulative-effect adjustment to beginning retained earnings, except for guidance relative to equity securities without readily determinable fair values which is applied prospectively. ‘ The adoption of this ASU did not have any impact on the Company’s consolidated results of operations and financial condition.

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In February 2016, the FASB issued ASU No. 2016-02, Leases, replacing existing lease accounting guidance. The new standard introduces a lessee model that would require entities to recognize assets and liabilities for most leases, but recognize expenses on their income statements in a manner similar to current accounting. The ASU does not make fundamental changes to existing lessor accounting. However, it modifies what qualifies as a sales-type and direct financing lease and related accounting and aligns a number of the underlying principles with those of the new revenue standard, ASU No. 2014-09, such as evaluating how collectability should be considered and determining when profit can be recognized. The guidance eliminates existing real estate-specific provisions and requires expanded qualitative and quantitative disclosures. The standard requires modified retrospective transition by which it is applied at the beginning of the earliest comparative period presented in the year of adoption. The ASU is effective January 1, 2019. The Company adopted the new standard on January 1, 2019 using the modified retrospective method of adoption. The transition method expedient which allows entities to initially apply the requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As a result of electing this transition method, prior periods have not been restated. The adoption of this ASU did not have any impact on the Company’s consolidated results of operations and financial condition as the Company did not have any leases at the time of adoption.

3. GOING CONCERN

As reflected in the accompanying financial statements, the Company had accumulated deficit of $2,773,540 as of June 30, 2021 which include a profit of $295,362 for the six months ended June 30, 2021.

The Company ability to generate profit in the next 12 months is uncertain given that the market in which it operates is facing an economic slowdown. Management’s plans include the raising of capital through the equity markets to fund future operations, seeking additional acquisitions, and generating profits through its business operations; however, there can be no assurances the Company will be successful in its efforts to secure additional equity financing and obtaining sufficient profit. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

4 SIGNIFICANT CONCENTRATION

Financial instruments which potentially expose the Company to concentrations of credit risk consist of cash and accounts receivable as of June 30, 2021 and December 31, 2020. The Company performs ongoing evaluations of its cash position and credit evaluations to ensure collections and minimize losses.

The major part of the Company’s cash at June 30, 2021 and December 31, 2020 is maintained at financial institutions in the Malaysia which provide insurance on deposit for up to MYR 250,000 for each depositor in a bank. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk in this area.

Geographic Concentration

For the six months ended June 30, 2021 and 2020, the Company’s sales were mainly made to customers located in the Malaysia. In addition, total accounts receivables as of June 30, 2021 and December 31, 2020 also arose from customers located in the Malaysia.

Major parts of net assets of the Company are also located in the Malaysia.

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Customer Concentration

The following table sets forth information as to the revenue derived from those customers that accounted for more than 10% of our revenue for the six months ended June 30, 2021:

		Amount				%
MNS Sdn. Bhd.		$	85,291				10	%

The following table sets forth information as to the accounts receivable derived from those customers that accounted for more than 10% of our accounts receivable as of June 30, 2021:

	Amount		%
MNS Sdn. Bhd.	$	24,682		66	%
Aura Secret Sdn. Bhd.	$	12,442		34	%

5. LAND, PROPERTY & EQUIPMENT

Land, property & equipment consist of the following:

	June 30,			December 31,
	2021			2020
Computer and software	$	23,381		$	24,649
Furniture and fittings		28,525			30,071
Office equipment		41,625			43,882
Renovations and improvements		335,830			354,034
Motor vehicle		127,234			134,131
Building		871,638			918,886
Land		213,863			225,455
Total		1,642,096			1,731,108
Less: accumulated depreciation		(871,254	)		(870,321	)
Net	$	770,842		$	860,787

The depreciation expense charged to general and administrative expenses were $46,600 and $42,588 for the six months ended June 30, 2021 and 2020, respectively.

6. RELATED PARTIES TRANSACTIONS

As of June 30, 2021, accounts receivable from Aura Secret Sdn Bhd. is $12,442.

For the six months ended June 30, 2021, the Company had $10,972 and $10,972 sales from Global Bizrewards Sdn. Bhd. and Global Patronage Sdn. Bhd., respectively.

Due from related parties consists of the following:

	June 30,		December 31,
	2021		2020		Purpose
Global Bizrewards Sdn. Bhd.	$	189,411	$	199,679	Advance
Koperasi Usahawan		54,079		57,010	Advance
Global Patronage Sdn Bhd		-		14,246	Advance
Yaya Media Sdn Bhd		224		1,870	Advance
SKH Media Sdn. Bhd.		140,345		246,462	Advance
Hipland Realty Sdn. Bhd.		4,209		4,437	Advance
Total Due from		388,268		523,704

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Due to related parties consists of the following:

	June 30,		December 31,
	2021		2020		Purpose
Dato Sri Warren Eu Hin Chai	$	241,989	$	320,473	Capital Advance
Michael A. Zahorik		30,307		30,307	Capital Advance
Aura Secret Sdn. Bhd.		3,975		4,191	Capital Advance
Global Patronage Sdn. Bhd.		9,869		-	Capital Advance
Total Due to		286,140		354,971

The related parties’ relationship to the Company as follows:

Name		Relationship
Michael A. Zahorik		Former director
Global Bizrewards Sdn. Bhd.		Related by common director, Dato’ Sri Eu Hin Chai
SKH Media Sdn. Bhd.		Related by common director, Dato’ Sri Eu Hin Chai
Dato Sri Warren Eu Hin Chai		Director & Shareholder of the Company
Koperasi Usahawan		Related by common director, Dato’ Sri Eu Hin Chai
Global Patronage Sdn. Bhd.		Related by common director, Dato’ Sri Eu Hin Chai
Yaya Media Sdn. Bhd.		Related by common director, Dato’ Sri Eu Hin Chai
Aura Secret Sdn. Bhd.		Related by common director, Dato’ Sri Eu Hin Chai
Hipland Realty Sdn. Bhd.		Related by common director, Dato’ Sri Eu Hin Chai

The amounts due from or due to related parties’ were unsecured, non-interest bearing, and due on demand.

7. STOCKHOLDERS’ EQUITY

Equity – Common Stock

The Company has 182,444,266 shares of common stock issued and outstanding as of June 30, 2021.

8. COMMITMENTS, CONTINGENCIES, RISKS AND UNCERTAINTIES

Operating Lease Commitments

The Company entered into a property lease agreement for office space which started on November 15, 2020 and expired on November 14, 2023 for monthly payment of MYR13,000 (approximately $3,100).

The rent expenses were $18,604 and $nil for the six months ended June 30, 2021 and 2020, respectively.

Concentration and Credit risk

Cash deposits with banks are held in financial institutions in Malaysia, which are federally insured with deposit protection up to MYR250,000 (approximately $59,458). Accordingly, the Company has a concentration of credit risk related to the uninsured part of bank deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk.

The Company had no concentration in demand for its products.

The Company depends on few suppliers for its products. Accordingly, the Company has a concentration risk related to these suppliers. Failure to maintain existing relationships with the suppliers or to establish new relationships in the future could negatively affect the Company’s ability to obtain products sold to customers in a timely manner. If the Company is unable to obtain ample supply of products from existing suppliers or alternative sources of supply, the Company may be unable to satisfy the orders from its customers, which could materially and adversely affect revenues.

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Contingent Liability

A former Director of the Company represents that the Company owes back compensation for services he believes he rendered to the Company and expenses he paid on behalf of the Company. The Company believes all balances owed to him have been settled in prior periods. The Company asserts that a claim has not be filed against the Company for potential damages; accordingly, the Company is unable to reasonably estimate a potential loss or liability in this matter including related legal costs. In the event that a claim is filed against the Company, the Company will provide further disclosure.

9. TERM LOAN

On December 23, 2014, MYR2,300,000 (approximately $657,507) term loan was granted to the Company for the purchase of a four-story office with a repayment period of 240 months.

The term loan was secured by the title deed for the said property and guaranteed by directors of the Company. The term loan is subject to an interest charges at 2.10% per annum below the Bank’s Base Lending Rate (“BLR”) with daily rests. The BLR is currently at 5.45% for June 30, 2021.

On July 27, 2015, the Company made a drawdown of MYR2,300,000 (approx. $609,554) on the term loan. The repayment started effectively on September 1, 2015 with a fixed installment of MYR14,863.14 (approx. $3,561) for 240 installments.

The outstanding balance of the term loan is $322,649, of which $45,994 is due within one year and classified as short term, and $276,655 is due after one year, and has classified as long term.

Interest expenses were $5,889 and $12,138 for the six months ended June 30, 2021 and 2020, respectively.

	June 30,		December 31,
	2021		2020
Repayable within 1 year	$	45,994	$	32,058
Repayable within 2 year		31,950		33,132
Repayable within 3 year		33,021		34,242
Repayable within 4 year		34,127		35,389
Repayable within 5 year		35,271		36,575
Repayable after 5 year		175,797		204,070
Total Due from		356,160		375,466

10. LEASE

The Company acquired motor vehicle under hire purchase agreements under capital lease. The lease arrangement requires monthly payments of $1,869 for a period of 36 to 84 months.

The Company has included the asset as motor vehicle as follows:

	June 30,		December 31,
	2021		2020
Motor vehicle	$	127,234	$	134,130
Less: accumulated depreciation		39,659		28,395
Net		87,575		105,735

Interest expenses were $1,033 and $689 for the six months ended June 30, 2021 and 2020, respectively.

The future minimum payments under the capitalized lease, together with the present minimum value of net minimum lease payments at the period ended June 30, 2021 and December 31, 2020 as follows:

	June 30,		December 31,
	2021		2020
Repayable within 1 year	$	21,278	$	22,431
Repayable within 2 year		21,278		22,431
Repayable within 3 year		11,342		17,666
Repayable within 4 year		10,447		11,013
Repayable within 5 year		10,447		11,013
Thereafter		1,745		7,346
Total		76,537		91,900
Less amount representing interest		8,305		9,823
Present value of lease payments		68,232		82,077

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11. PROVISION FOR TAXES

United States

Umatrin Holding Ltd (“UMHL”) is established in the State of Delaware in United States and is subject to Delaware State and US Federal tax laws. UMHL has not recognized an income tax benefit for its operating losses based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the periods presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses and other temporary differences, the realization of which could not be considered more likely than not. Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes that could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant NOLs for which realization of tax benefits is uncertain. In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than not.

As of June 30, 2021, UMHL has accumulated net operating losses of $3,134,676 which carryovers as a deferred tax asset that begins to expire in 2025.

The net losses before income taxes and its provision for income taxes as follows:

	For the six months ended
	June 30,			June 30,
	2021			2020
Net loss before income taxes		(81,874	)		(38,366	)

Tax expenses (benefit) at the statutory tax rate		(17,193	)		(8,057	)
Tax effect of:
Valuation allowance		17,193			8,057
Income tax benefit		-			-

The components of deferred tax assets and liabilities as follows:

	June 30,			December 31,
	2021			2020
Deferred tax asset
Net operating losses carry forwards		542,845			525,652

Valuation allowance		(542,845	)		(525,652	)
Deferred tax assets, net		-			-

Malaysia

The Company’s subsidiary, U Matrin Worldwide Sdn Bhd, is established in Malaysia and its income is subject to Malaysia tax laws.The income tax rate is 17% (2020 : 17%) for the first MYR500,000 ($123,934) taxable income and 24% (2020 : 24%) thereafter.

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The net income before income taxes and its provision for income taxes as follows:

	For the six months ended
	June 30,			June 30,
	2021			2020
Net profit before income taxes		377,236			825,831

Tax expenses (benefit) at the statutory tax rate		64,130			198,199

Tax effects of:
Utilization of deferred tax assets previously not
recognized		(64,130	)		(198,199	)
Valuation of allowance on deferred tax assets		-			-
Income tax expense (benefit)		-			-

The components of deferred tax assets and liabilities as follows:

	June 30,		December 31,
	2021		2020
Deferred tax asset
Expenses not currently deductible		-		-
Valuation allowance		-		-
Deferred tax assets, net		-		-

The Company has prepaid income tax of $83,487 and $6,666 as of June 30, 2021 and December 31, 2020, respectively.

12. SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date the financial statements were issued. Based on our evaluation, no events have occurred which require adjustment or disclosure.

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

The information set forth in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains certain “forward--looking statements”. Forward-looking statements are statements other than historical information or statements of current condition. Some forward--looking statements may be identified by use of terms such as “believes”, “anticipates”, “intends” or “expects”. These forward--looking statements relate to our plans, liquidity, ability to complete financing and purchase capital expenditures, growth of our business including entering into future agreements with companies, and plans to successfully develop and obtain approval to market our product. We have based these forward--looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

You should read the following discussion and analysis in conjunction with the Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this report.

US Dollars are denoted herein by “USD”, “$” and “dollars”.

Overview

On January 6, 2016, UMHL acquired 80% of the equity interests of UMatrin Worldwide SDN. BHD. (“Umatrin”) in exchange for the issuance of a total of 100,000,000 shares of its common stock to the two holders of Umatrin, Dato’ Sri Eu Hin Chai and Dato’ Liew Kok Hong. Immediately following the Share Exchange, the business of Umatrin became the business of UMHL. The Company’s operation office remained in Malaysia and the business market will remain focus in Asia.

Umatrin, formerly known as OLC Worldwide SDN. BHD., was incorporated in Malaysia on July 22, 1993. Umatrin has curated non-toxic beauty, personal care to health and wellness products. We market our products through three primary methods: direct contact, online distribution and/or by our dealer program. We apply leading O2O (Online to Offline) marketing strategy to both retail and wholesale trade. We provide technology and services to enable consumers, merchants and other participants to conduct business in our cloud- based trading system. We use advanced network technology and rigorous management system to create unlimited business brand space. Without allocating large sums of operating cost, it continuously introduces new products, combined with O2O internet business model and career opportunities.

Results of Operations

Comparison for the three months ended June 30, 2021 and 2020

Sales

For the three months ended June 30, 2021, the Company generated $369,998 in revenues, which has a decrease of $652,047, or 64% compared to the three months ended June 30, 2020. This was due to decrease in sales volume for Akero product series as the economy was declining due to pandemic issues in the country.

Gross profit and gross margin

The Company was able to generate a gross profit margin of $294,675 for the three months ended June 30, 2021, which has a decrease of $276,080 or 48% compared to the three months ended June 30, 2020. This was due to decrease in sales volume for new Akero product series which has higher profit margin.

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Selling, general and administrative costs

Major operating costs include salaries and wages, advertising and promotional costs for the three months ended June 30, 2021 and 2020. Selling, general and administrative costs decreased from $277,607 for the three months ended June 31, 2020 to $175,551 for the three months ended June 30, 2021. The decrease was due to decrease in business activity.

Net income

For the three months ended June 30, 2021, the Company had $115,806 in net profit as compared to $287,121 in net profit for the three months ended June 30, 2020, which was a decrease in net profit of $171,315. The Company will continue to implement new marketing strategies to improve its financial position.

Comparison for the six months ended June 30, 2021 and 2020

Sales

For the six months ended June 30, 2021, the Company generated $903,540 in revenues, which has a decrease of $909,096, or 50% compared to the six months ended June 30, 2020. This was due to decrease in sales volume for Akero product series as the economy was declining due to pandemic issues in the country.

Gross profit and gross margin

The Company was able to generate a gross profit margin of $737,917 for the six months ended June 30, 2021, which has a decrease of $564,682 or 43% compared to the six months ended June 30, 2020. This was due to decrease in sales volume for new Akero product series which has higher profit margin.

Selling, general and administrative costs

Major operating costs include salaries and wages, advertising and promotional costs for the six months ended June 30, 2021 and 2020. Selling, general and administrative costs decreased from $502,996 for the six months ended June 30, 2020 to $435,633 for the six months ended June 30, 2021. The decrease was due to decrease in business activity.

Net income

For the six months ended June 30, 2021, the Company had $295,362 in net profit as compared to $787,465 in net profit for the six months ended June 30, 2020, which was a decrease in net profit of $492,103. The Company will continue to implement new marketing strategies to improve its financial position.

Liquidity and Capital Resources

We had cash and cash equivalent of $15,582 and $50,459 as of June 30, 2021 and December 31, 2020, respectively.

Our company’s operations have been funded through an equity financing and a series of debt transactions, primarily with shareholders, directors, and officers of our company and affiliated entities. These related party debt transactions such as advances have operated as informal lines of credit since the inception of our company, and related parties have extended credit as needed which our company has repaid at its convenience. We anticipate that we will incur operating losses in the foreseeable future and we believe we will need additional cash to support our daily operations while we are attempting to execute our business plan and produce revenues. If our related parties are unable or unwilling to provide additional capital, we would likely require financing from third parties. There can be no assurance that any additional financing will be available to us, on terms we believe to be favorable or at all. The inability to obtain additional capital would have a material adverse effect on our operations and financial condition and could force us to curtail or discontinue operations entirely and/or file for protection under bankruptcy laws.

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The following table sets forth information about our net cash flow for the six months ended June 30, 2021 and 2020:

	For the six months ended
	June 30,			June 30,
	2021			2020
Net cash provided by (used in) operating activities		(23,472	)		436,888
Net cash provided by (used in) investing activities		-			(2,636	)
Net cash provided by (used in) financing activities		(9,459	)		(471,054	)

Operating Activities

For the six months ended June 30, 2021 we used $23,472 in operating activities as compared to generated $436,888 in operating activities during the six months ended June 30, 2020. The movement in net cash used in operating activities resulted from the movement in inventory, prepaid tax, other receivables and deposits, accounts payable and accrued expenses and other payables.

Investing Activities

During the six months ended June 30, 2021 we used $nil in investing activities as compared to using $2,636 in investing activities during the six months ended June 30, 2020. The movement in net cash used in investing activity resulted from purchase of equipment.

Financing Activities

During the six months ended June 30, 2021, we used $9,459 in financing activities as compared to using $471,054 in financing activities during the six months ended June 30, 2020.

During the six months ended June 30, 2021, the net cash provided by financing activities resulted from net proceeds from related party of $48,100 and net repayment for borrowings of $57,559.

During the six months ended June 30, 2020, the net cash provided by financing activities resulted from net repayment to related party of $352,031 and net repayment to term loan of $119,023.

Loan Commitment

On December 23, 2014, MYR 2,300,000 (approximately $657,507) term loan was granted to Umatrin for the purchase of four Story Shop Offices located at No.32, 32-1, 32-2, 32-3, Jalan Radin Bagus 3, Bandar Baru Seri Petaling, 57000, Kuala Lumpur with a repayment period of 240 months. This term loan was secured by (i) title deed for the said property, and (ii) way of guarantee by directors of the Company. This term loan is subject to an interest charges at 2.10% per annum below the Bank’s Base Lending Rate (“BLR”) with daily rests. The BLR is currently at 6.85% for both June 30, 2021 and December 31, 2020.

On July 27, 2015, the drawdown of MYR2,300,000 (approximately $609,554) was made and repayment effectively starts on December 1, 2015 with a fixed installment of MYR14,863.14 (approximately $3,561) for 240 installments.

Interest expenses were $5,889 and $12,138 for the six months ended June 30, 2021 and 2020, respectively.

We have no known demands or commitments and we are not aware of any events or uncertainties as of June 30, 2021 that will result in or that are reasonably likely to materially increase or decrease our current liquidity.

We had no material commitments for capital expenditure for the six months ended June 30, 2021 and December 31, 2020 except mentioned above.

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Going Concern

Our financial statements have been prepared on a going concern basis. As reflected in the accompanying financial statements, the Company had accumulated deficit of $2,773,540 as of June 30, 2021 which include a profit of $295,362 for the six months ended June 30, 2021. We expect to finance our operations primarily through our existing cash, our operations and any future financing. However, there exists substantial doubt about our ability to continue as a going concern because we will be required to obtain additional capital in the future to continue our operations and there is no assurance that we will be able to obtain such capital, through equity or debt financing, or any combination thereof, or on satisfactory terms or at all. Additionally, no assurance can be given that any such financing, if obtained, will be adequate to meet our capital needs. If adequate capital cannot be obtained on a timely basis and on satisfactory terms, our operations would be materially negatively impacted. Therefore, our auditor has substantial doubt as to our ability to continue as a going concern. Our ability to complete additional offerings is dependent on the state of the debt and/or equity markets at the time of any proposed offering, and such market’s reception of the Company and the offering terms. There is no assurance that capital in any form would be available to us, and if available, on terms and conditions that are acceptable.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable because we are a smaller reporting company.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this report, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Our internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below. This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were lack of a functioning audit committee due to a lack of a majority of independent members; lack of a majority of outside directors on board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; inadequate segregation of duties consistent with control objectives and affecting the functions of authorization, recordkeeping, custody of assets, and reconciliation; and, management dominated by a single individual/small group without adequate compensating controls.

Management believes that the material weaknesses did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

Changes in internal controls over financial reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

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PART II— OTHER INFORMATION

Item 1. Legal Proceedings.

There are no other actions, suits, proceedings, inquiries or investigation before or by any court, public board, government agency, self- regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 1A. Risk Factors.

Not applicable because we are a smaller reporting company.

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

There were no unregistered sales of the Company’s equity securities during the six months ended June 30, 2021, that were not otherwise disclosed in a Current Report on Form 8-K.

Item 3. Defaults Upon Senior Securities.

There were no defaults upon senior securities during the quarter ended June 30, 2021.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

There is no other information required to be disclosed under this item which was not previously disclosed.

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Item 6. Exhibits.

Exhibits #		Title

31.1		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 302 of the Sarbanes--Oxley Act of 2002
32.1+		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes--Oxley Act of 2002
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
101.SCH		Inline XBRL Taxonomy Extension Schema Document.
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

___________

+ In accordance with the SEC Release 33-8238, deemed being furnished and not filed.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	UMATRIN HOLDING LIMITED

Dated: September 1, 2021	By:	/s/ Dato’ Sri Warren Eu Hin Chai
		Dato’ Sri Warren Eu Hin Chai
		President, Chief Executive Officer, and Chief Financial Officer
		(Duly Authorized Officer, Principal Executive Officer and Principal Financial Officer)

Umatrin Holding Ltd 10-Q