ADAMANT DRI PROCESSING AND MINERALS GROUP 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 domicile merger effected onDecember 29, 2011 . We had been 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. 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. During the next 12 months, we anticipate incurring costs to file Exchange Act reports, and, if a suitable target company is found, costs to consummate acquisition. We believe we will be able to meet these costs through amounts, as necessary, to be loaned by or invested in us by our stockholders, management or other investors. We have no specific plans, understandings or agreements with respect to the raising of such funds, and we may seek to raise the required capital by the issuance of equity or debt securities or by other means. Since we have no such arrangements or plans currently in effect, our inability to raise funds for the consummation of an acquisition may have a severe negative impact on our ability to become a viable company. Results of Operations
Comparison of the nine months ended
Dollar Percentage
Increase / Increase /
2021 % of Sales 2020 % of Sales Decrease Decrease
Revenue $ - - % $ - - % $ - n/a %
Cost of services provided - - % - - % - n/a %
Gross profit - - % - - % - n/a %
Operating expenses 49,430 - % 1,875 - % 47,555 2,499 %
Loss from operations (49,430 ) - % (1,875 ) - % (47,555 ) 2,499 %
Total non-operating
expense, net - % - - % - - %
Loss before income taxes (49,430 ) - % (1,875 ) - % (47,555 ) 2,499 %
Income tax expense - - % - - % - - %
Net loss $ (49,430 ) - % $ (1,875 ) - % $ (47,555 ) 2,499 %
Operating Expenses
Operating expenses were $49,430 for the nine months ended September 30, 2021 ,
compared to $1,875 for the nine months ended September 30, 2020 , an increase of
$47,555 or 2,536%, primarily as a result of the increase of professional, audit
and legal fees, which were related to SEC filings.
Loss from Operations
Loss from operations was $49,430 for the nine months ended September 30, 2021 ,
compared to loss from continuing operation of $1,875 for the nine months ended
September 30, 2020 . The $47,555 or 2,536% increase in loss from operations was
mainly due to the increase of general and administrative expense as described
above.
14
Net Loss
We had a net loss of
Comparison of the three months ended
Dollar Percentage
Increase / Increase /
2021 % of Sales 2020 % of Sales Decrease Decrease
Revenue $ - - % $ - - % $ - n/a %
Cost of services provided - - % - - % - n/a %
Gross profit - - % - - % - n/a %
Operating expenses 22,908 - % 625 - % 22,283 3,565 %
Loss from operations (22,908 ) - % (625 ) - % (22,283 ) 3,565 %
Total non-operating
expense, net - % - - % - - %
Loss before income taxes (22,908 ) - % (625 ) - % (22,283 ) 3,565 %
Income tax expense - - % - - % - - %
Net loss $ (22,908 ) - % $ (625 ) - % $ (22,283 ) 3,565 %
Operating Expenses
Operating expenses were $22,908 for the three months ended September 30, 2021 ,
compared to $625 for the three months ended September 30, 2020 , an increase of
$22,283 or 3,565%. We are a shell company, the expenses we incurred included
edgar service fee, stock transfer agent maintenance fee, legal, auditing and
accounting expenses, which were related to SEC filings.
Loss from Operations
Loss from operations was $22,908 for the three months ended September 30, 2021 ,
compared to loss from continuing operation of $625 for the three months ended
September 30, 2020 .
Net Loss
We had a net loss of
Liquidity and Capital Resources
As ofSeptember 30, 2021 , andDecember 31,2020 , cash and equivalents and restricted cash were$0 . AtSeptember 30, 2021 , we had a working capital deficit of$54,630 . The increase in our working capital deficit during the nine months endedSeptember 30, 2021 , reflects the fact that during such period we had expenses of$49,430 . We have had to rely on loans from our sole director to maintain our operations since we disposed of our interest inShenzhen Technology Company in 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 sole director and officer, and his willingness and that of our principal stockholders to provide the capital necessary to continue our business and fund our cash needs until we generate meaningful revenues. 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. 15 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, 2021 and 2020, respectively. Nine Months EndedSeptember 30, 2021 2020
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$32,461 and$1,875 for the nine months endedSeptember 30, 2021 and 2020, respectively. The increase of cash outflow from operating activities for the nine months endedSeptember 30, 2021 was mainly due to increased net loss resulting from increased profession fees such as legal and audit.
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$32,461 and$1,875 for the nine months endedSeptember 30, 2021 and 2020, respectively. The net cash provided by financing activities were advances from a related party for paying certain expenses of the Company.
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 consolidated 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 consolidated financial statements, which were prepared in accordance with US GAAP. While our significant accounting policies are more fully described in Note 2 to our consolidated 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.
Going Concern
Our financial statements have been prepared assuming that we will continue as a going concern. We incurred losses of$49,430 and$22,208 for the nine and three months endedSeptember 30, 2021 , respectively. As ofSeptember 30, 2021 , we had a working capital deficit of$54,630 , and accumulated deficit of$9,467,731 . These 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 stockholders to provide the capital necessary to continue our business and fund our cash needs until we generate meaningful revenues. 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. 16 Basis of Presentations
Our financial statements are prepared in accordance with US GAAP and the
requirements of Regulation S-X promulgated by the
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). The core principle underlying FASB ASC 606 is that the Company will
recognize revenue to represent the transfer of goods and services to customers
in an amount that reflects the consideration to which the Company expects to be
entitled in such exchange. This will require the Company identify contractual
performance obligations and determine whether revenue should be recognized at a
point in time or over time, based on when control of goods and services
transfers to a customer. The Company's revenue streams are recognized when
control of goods and services transfers to a customer.
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.
The Company derives its revenues from product sales and professional service
contracts with its customers, with revenues recognized upon delivery of services
and products. Persuasive evidence of an arrangement is demonstrated via
professional service contracts and invoices; and the service price to the
customer is fixed upon acceptance of the professional services contract. The
Company recognizes revenue when professional service is rendered to the customer
and collectability of payment is reasonably assured. These revenues are
recognized at a point in time after all performance obligations are satisfied.
Revenue is recognized net of returns and value-added tax charged to customers.
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
InDecember 2019 , the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistent application among reporting entities. The guidance is effective for fiscal years beginning afterDecember 15, 2020 , and interim periods within those fiscal years, with early adoption permitted. Upon adoption, the Company must apply certain aspects of this standard retrospectively for all periods presented while other aspects are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The adoption of this standard did not have a material impact on the Company's financial statements. 17
Other recent accounting pronouncements issued by the FASB, including its
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