Overview
Adamant DRI Processing and Minerals Group (the "Company," "we" or "us" or words of similar meaning), is aNevada corporation incorporated inJuly 2014 and successor by merger toUHF Incorporated , aDelaware corporation ("UHF"), which in turn was the successor toUHF Incorporated , aMichigan corporation ("UHFMichigan "), as a result of a domicile merger effected onDecember 29, 2011 . We engaged in various business since our incorporation. We were not successful in any of the businesses we entered and discontinued all of our remaining operations effectiveMarch 31, 2019 , at which time we became a non-operating shell company with nominal assets. InAugust 2021 we filed a Registration Statement on Form 10 and became subject to the reporting requirements of the Exchange Act. We also are considered a "blank check company" subject to Rule 419. We intend to seek, investigate and, if such investigation warrants, engage in a business combination which may take the form of a "reverse merger" with a private entity whose business presents an opportunity for our stockholders. OnMarch 28, 2022 ,Global Strategies, Inc. completed the acquisition of 11,866,563 shares of our common stock from five shareholders which included the Company's major shareholder also the sole director and officer, and his affiliated company. The 11,866,563 shares represent approximately 73% of the outstanding shares of the Company as of the date hereof.
Results of Operations
Comparison of the Nine and Three Months ended
Nine months: % of % of Dollar Percentage 2022 Sales 2021 Sales Increase Increase Revenue $ - - % $ - - % $ - n/a % Cost of services provided - - % - - % - n/a % Gross profit - - % - - % - n/a % Operating expenses 59,347 - % 49,430 - % 9,917 20.1 % Loss from operations (59,347 ) - % (49,430 ) - % 9,917 20.1 %
Total non-operating income, net - - % -
- % - - % Loss before income taxes (59,347 ) - % (49,430 ) - % 9,917 20.1 % Income tax expense - - % - - % - - % Net loss$ (59,347 ) - % (49,430 ) - % 9,917 20.1 % Operating Expenses Operating expenses were$59,347 and$ 49,430 for the nine months ended September 30, 2022 and 2021, respectively. The increase of$9,917 or 20.1% for the nine months endedSeptember 30, 2022 , compared to the comparable period in 2021, primarily is the result of the increase in professional fees of$9,917 which related to the Company'sSEC filings. 13 Loss from Operations Loss from operations was$59,347 for the nine months endedSeptember 30, 2022 , compared to losses from operations of$49,430 for the nine months endedSeptember 30, 2021 . The$9,917 or 20.1% increase in loss from operations for the nine months endedSeptember 30, 2022 , compared to the comparable period in 2021 was mainly due to the increase in professional fees as described above.
Net Loss
We had a net loss of
Three months: % of % of Dollar Percentage 2022 Sales 2021 Sales (Decrease) (Decrease) Revenue $ - - % $ - - % $ - n/a %
Cost of services provided - - % - - % - n/a % Gross profit - - % - - % - n/a % Operating expenses 9,946 - % 22,908 - % (12,962 ) (56.6 )% Loss from operations (9,946 ) - % (22,908 ) - % - - % Total non-operating income, net - - % -
- % (12,962 ) (56.6 )% Loss before income taxes (9,946 ) - % (22,908 ) - % (12,962 ) (56.6 )% Income tax expense - - % - - % - - % Net loss$ (9,946 ) - %$ (22,908 ) - % (12,962 ) (56.6 )% Operating Expenses Operating expenses were$9,946 and$22,908 for the three months endedSeptember 30, 2022 and 2021, respectively. The decrease of$12,962 or 56.6% for the three months endedSeptember 30, 2022 , compared to the comparable period in 2021, primarily is the result of the decrease in professional fees of$12,983 , which related to the Company's theSEC filings.
Loss from Operations
Loss from operations was$9,946 and$22,908 for the three months endedSeptember 30, 2022 and 2021, respectively. The$12,962 or 56.6% decrease in loss from operations for the three months endedSeptember 30, 2022 , compared to the comparable period in 2021 was mainly due to the decrease in professional fees as described above. Net Loss
We had a net loss of
Liquidity and Capital Resources
As of
14 We have had to rely on loans from our then sole director and shareholders to maintain our operations since we disposed of our interest inShenzhen Technology Company and became a shell company inMarch 2019 . We anticipate incurring a minimum of$50,000 in expenses over the next twelve months and could incur more significant expenses in connection with any proposed acquisition. In all likelihood we will remain dependent upon the efforts of our current director and principal shareholder, and their willingness to provide the capital necessary to continue our business and fund our cash needs until we generate meaningful revenues or complete a business combination. There can be no assurance that we will be able to raise the funds necessary to fund our operations until such time as we complete a business combination and we cannot assure you that we can identify a suitable business to acquire or combine with. If we were to fail to raise the capital necessary to maintain our operations our common stock would likely become worthless. The following is a summary of cash provided by or used in each of the indicated types of activities during the nine months endedSeptember 30, 2022 and 2021, respectively. Nine Months EndedSeptember 30, 2022 2021
Net cash used in operating activities
- -
Net cash provided by financing activities
Net cash used in operating activities
Net cash used in operating activities was$68,706 and$32,461 for the nine months endedSeptember 30, 2022 and 2021, respectively. The increase of cash outflow from operating activities for the nine months endedSeptember 30, 2022 was mainly due to the increased net loss of$9,917 resulting from increased professional fees related to theSEC filings, and the increased cash outflow in accrued liabilities and other payables of$29,658 , which was partly offset by decreased cash outflows from prepaid expense by$3,330 .
Net cash used in investing activities
Net cash used in investing activities was
Net cash provided by financing activities
Net cash provided by financing activities was$68,706 and$32,461 for the nine months endedSeptember 30, 2022 and 2021, respectively. The increase in net cash provided by financing activities in the nine months endedSeptember 30, 2022 was primarily attributable to the proceeds of$11,519 from the note payable, and the increase of$24,726 for the loans from the former sole officer and director.
Off-Balance Sheet Arrangements
We have not entered into any financial guarantees or other commitments to guarantee the obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder's equity or that are not reflected in our financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our financial statements, which were prepared in accordance with US GAAP. While our significant accounting policies are more fully described in Note 2 to our financial statements, we believe the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis. 15 Going Concern
Our financial statements have been prepared assuming that we will continue as a going concern. We incurred losses of$59,347 and$49,430 for the nine months endedSeptember 30, 2022 and 2021, respectively. As ofSeptember 30, 2022 , we had a working capital deficit of$24,678 , and an accumulated deficit of$9,538,547 . These and other factors raise substantial doubt about our ability to continue as a going concern. Our capital requirements will depend on many factors including whether we can identify a target for acquisition. In all likelihood we will remain dependent upon the efforts of our sole director and officer, and his willingness and that of our principal stockholder to provide the capital necessary to continue our business and fund our cash needs until we generate meaningful revenues or complete a business combination. There can be no assurance that we will be able to raise the funds necessary to fund our operations until such time as we complete a business combination. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern. Basis of Presentations
Our financial statements are prepared in accordance with US GAAP and the
requirements of Regulation S-X promulgated by the
Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted inthe United States of America ("GAAP") for interim financial information and with the rules and regulations of theU.S. Securities and Exchange Commission ("SEC"). Accordingly, these condensed consolidated financial statements do not include all of the information and footnotes required for audited annual financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the condensed consolidated financial statements not misleading have been included. The unaudited condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and the notes for the year endedDecember 31, 2021 . The results of operations for the nine and three months endedSeptember 30, 2022 , are not necessarily indicative of the results to be expected for the full year.
Use of Estimates
In preparing financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Significant estimates, required by management, include the recoverability of long-lived assets, allowance for doubtful accounts, and the reserve for obsolete and slow-moving inventories. Actual results could differ from those estimates.
Revenue Recognition
The Company follows Accounting Standards Update ("ASU") 2014-09 (and related amendments subsequently issued in 2016), Revenue from Contracts with Customers (ASC 606). FASB ASC Topic 606 requires use of a new five-step model to recognize revenue from customer contracts. The five-step model requires 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 each performance obligation. 16 Segment Reporting
Disclosures about segments of an enterprise and related information require use of the "management approach" model for segment reporting, codified in FASB ASC Topic 280. The management approach model is based on the way a company's management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.
Recent Accounting Pronouncements
InAugust 2020 , the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity ("ASU 2020-06"), 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. ForSEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning afterDecember 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning afterDecember 15, 2020 . For all other entities, ASU 2020-06 is effective for fiscal years beginning afterDecember 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 financial statements and related disclosures.
Other recent accounting pronouncements issued by the FASB, including its
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