Results of Operations
The following summary of our results of operations should be read in conjunction
with our financial statements for the three months ended September 30, 2020 and
2019, which are included herein.
Our operating results for three months ended September 30, 2020 and 2019, and
the changes between those periods for the respective items are summarized as
follows:
Three months ended
September 30,
2020 2019 Change %
Sales $ - $ - $ - -
Cost of Goods Sold - - - -
Operating Expenses 23,959 282,416 (258,457 ) 92 %
Other Expense 50,929 52,763 (1,834 ) 3 %
Net loss $ (74,888 ) $ (335,179 ) $ 260,291 78 %
The Company did not recognize any revenues for the three months ended September
30, 2020 and 2019.
Our financial statements reported a net loss of $74,888 for the three months
ended September 30, 2020 compared to a net loss of $335,179 for the three months
ended September 30, 2019. Our losses have decreased, as a result of decreases in
operating expenses of $258,457 and other expense of $1,834. The reduction in our
cost base in the three months ended September 30, 2020 were primarily the result
of the reduction in activity as a result of the lockdown in Malaysia as a result
of the COVID-19 pandemic.
Other expense decreased to $50,929 for the three months ended September 30,
2020, compared to $52,763 for the three months ended September 30, 2019. Other
expense related primarily to interest expense imputed for our non-interest
bearing advances from related parties.
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Should we be successful in our efforts to raise additional capital and able to
successfully close one or more of our outstanding offers to purchase mining and
explorations rights, and thus begin exploration and mining operations, we expect
our expenses to increase substantially.
Liquidity and Financial Condition
Working Capital
September 30, June 30, Change
2020 2020 Amount %
Cash $ 1,179 $ 1,133 $ 46 4 %
Current Assets $ 33,293 $ 31,814 $ 1,479 5 %
Current Liabilities $ 4,339,709 $ 4,249,617 $ 90,092 2 %
Working Capital (Deficiency) $ (4,306,416 ) $ (4,217,803 ) $ (88,613 ) 2 %
Our working capital deficit increased as of September 30, 2020, as compared to
June 30, 2020, primarily due to an increase in current liabilities from Nami
Corp. and additional advances from related parties to fund operating losses
along with changes in foreign exchange rates between the US Dollar and Malaysian
Ringgit.
In the coming quarters, prior to obtaining the final permits or licenses, our
largest cash outlays will be in regards to (1) professional fees for work
performed for our reporting as part of Nami Corp., and (2) for the consultants
as part of their work performed to respond to any additional requests received
from governmental authorities as part of the process of obtaining approval for
the permits and licenses. In the coming quarters we will be required to pay our
consultants.
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Because of the continuing losses and operating results to date, our financial
statements include a statement that there is a going concern in regards to the
Company. Without significant additional investment in the form of debt or equity
we may have difficulty meeting our obligations as they come due prior to
commencing our sea sand mining operations, which we expect to begin as soon as
the lockdown in Malaysia is lifted.
Cash Flows
Three months ended
September 30, Change
2020 2019 Amount %
Cash Flows used in operating (90% )
activities $ (6,408 ) $ (69,225 ) $ 62,817
Cash Flows used in investing infinite%
activities $ - $ (73,836 ) $ 73,836
Cash Flows provided by financing (96% )
activities $ 6,425 $ 159,879 $ (153,454 )
Effects on changes in foreign
exchange rate $ 29 $ (394 ) $ 423 107 %
Net increase in cash during period $ 46 $ 16,424 $ (16,378 ) (100% )
Operating Activities
Net cash used in operating activities was $6,408 for the three months ended
September 30, 2020 compared with net cash used in operating activities of
$69,225 in the same period in 2019.
During the three months ended September 30, 2020, cash used in operating
activities consisted of a net loss of $(74,888), depreciation, depletion,
amortization and impairment of $1,524, imputed interest on non-interest bearing
related party advances contributed as paid in capital of $52,643, expenses paid
by an unrelated party of 9,725, changes in other receivable and deposits of
$(594) and other payables and accruals of $5,182.
During the three months ended September 30, 2019, cash provided by operating
activities consisted of a net loss of $(335,179), depreciation, depletion,
amortization and impairment of $33,295, imputed interest on non-interest bearing
related party advances contributed as paid in capital of $52,763, expenses paid
by an unrelated party of $185,611, and changes in other receivable and deposits
of $(5,715).
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Investing Activities
The Company did not have any cash flows from investing activities during the
three months ended September 30, 2020. During the three months ended September
30, 2019, the Company purchased $1,797 of property and equipment and concession
costs of $72,039.
Financing Activities
Net cash provided by financing activities was $6,425 for the three months ended
September 30, 2020, compared to net cash provided by financing activities of
$159,879 in the same period in 2019. Net cash provided by financing activities
for the three months ended September 30, 2020 included advances received from a
related party of $8,612 and repayments of advances to a related party of $2,187.
Net cash provided by financing activities for the three months ended September
30, 2019 included dividend payments on Series A Preferred Stock of $(2,017) and
advances from an unrelated party of $161,896.
Going Concern
Our financial statements are prepared using accounting principles generally
accepted in the United States of America applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, our company has negative working capital,
recurring losses, and does not have an established source of revenues sufficient
to cover its operating costs. These factors raise substantial doubt about our
company's ability to continue as a going concern.
The ability of our company to continue as a going concern is dependent upon its
ability to successfully commence its sea sand mining operations and eventually
attain profits. The accompanying financial statements do not include any
adjustments that may be necessary if our Company is unable to continue as a
going concern.
In the coming year, our Company's foreseeable cash requirements will relate to
continual development of the operations of our business, maintaining our good
standing and making the requisite filings with the Securities and Exchange
Commission, and the payment of expenses associated with operations and business
development. Our Company may experience a cash shortfall and be required to
raise additional capital.
Historically, we have mostly relied upon internally generated funds such as
shareholder loans and advances to finance our operations and growth. Management
may raise additional capital by retaining net earnings or through future public
or private offerings of our Company's stock or through loans from private
investors, although there can be no assurance that we will be able to obtain
such financing. Our Company's failure to do so could have a material and adverse
effect upon us and our shareholders.
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This section discusses our financial statements, which have been prepared in
accordance with accounting principles generally accepted in the United States of
America. The preparation of these financial statements requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. On an ongoing basis,
management evaluates its estimates and judgments, including those related to
revenue recognition, accrued expenses, financing operations, and contingencies
and litigation. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis for making judgments
about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates under
different assumptions or conditions. The most significant accounting estimates
inherent in the preparation of our financial statements include estimates as to
the appropriate carrying value of certain assets and liabilities which are not
readily apparent from other sources.
Plan of Operations
This report contains forward looking statements relating to our Company's future
economic performance, plans and objectives of management for future operations,
projections of revenue mix and other financial items that are based on the
beliefs of, as well as assumptions made by and information currently known to,
our management. The words "expects", "intends", "believes", "anticipates",
"may", "could", "should" and similar expressions and variations thereof are
intended to identify forward-looking statements. The cautionary statements set
forth in this section are intended to emphasize that actual results may differ
materially from those contained in any forward looking statement.
If the Company is unsuccessful in raising funds through shareholder loans or
advances, it will have to seek additional funds from third party debt financing,
which would be highly difficult for a development stage company, such as the
Company, to secure; or through the private placement of its common stock.
Therefore, until the lockdown in Malaysia is lifted and the Company is able to
commence its mining operations, the Company will be highly dependent on
shareholder loans and advances. If the Company where able to secure third party
debt financing, being a development stage company with no operations to date, it
would likely have to pay additional costs associated with high-risk loans and be
subject to an above market interest rate. If these funds are required and not
available through shareholder loans or advances, or through the private
placement of the Company's securities, management will evaluate the terms of
such debt financing and determine whether the business could sustain operations
and growth and manage debt repayment terms. If these additional funds are not
obtained through either of the alternatives discussed herein, the Company maybe
required to cease its business operations. As a result, investors in the
Company's common stock would lose all of their investment.
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On July 12, 2018, we completed a reverse acquisition transaction through a share
exchange with GMCI Corp., a Nevada corporation with offices in Kuala Lumpur,
Malaysia ("GMCI"). GMCI operates in the business of financing bauxite trading
transactions. GMCI is the sole shareholder of SBS Mining Corp. Malaysia Sdn. Bhd
("SBS"). Through the reverse acquisition transaction we acquired 100% of the
outstanding shares of SBS from GMCI in exchange for the issuance of a total of
720,802,346 shares of our common stock to GMCI, representing 102.08% of our
pre-merger issued and outstanding shares of common stock. As a result of the
reverse acquisition, SBS became our wholly-owned subsidiary and the former sole
shareholders of SBS, GMCI became our controlling stockholders. The share
exchange transaction was treated as a recapitalization, with SBS as the acquirer
and the Company as the acquired party for accounting purposes. Unless the
context suggests otherwise, when we refer in this report to business and
financial information for periods prior to the consummation of the reverse
acquisition, we are referring to the business and financial information of SBS.
On January 17, 2019, Nami entered into a Letter of Intent with Pembinaan Kaya
Hebat Sdn Bhd, a Malaysian corporation engaged in granite mining business
("PKH") for the acquisition by NAMI of up to one hundred percent (100%) of the
issued and outstanding capital stock of PKH at its fair market value (the
"Acquisition"). As of the date of this report, the completion of the Acquisition
is still pending and is subject to various conditions precedent, including but
not limited to negotiating and execution a form of purchase agreement that is
acceptable to both parties, approval of the financial statements of both
parties' boards of directors, and fair market valuation of PKH. If we are able
to complete the Acquisition, we intend to operate PKH as a wholly owned
subsidiary or a majority-owned subsidiary of Nami Corp. If the Acquisition is
completed, it will trigger additional disclosure in subsequent reports and our
financial statements. We aspire to become a global diversified mining company
and are actively engaged in plans to expand by communicating with prospective
mining businesses.
On September 6, 2019, SBS Mining Corp. Malaysia Sdn. Bhd.a entered into a mining
agreement with Wan Ismail bin Wan Ahmad (the "Donor") pursuant to which the
Donor granted to SBS the sole and exclusive right to mine for river sand and
other materials from a 1.9040 hectare (4.7 acre) plot of land located at Kampung
Tiram, district of Kuala Kuantan, Kuantan, Malaysia (the "Concession") for which
the Donor had received a lease license from the State Government of Pahang. SBS
shall pay the Donor a fixed monthly rate for the sole and exclusive right to
mine the Concession. With the grant of the exclusive rights over the Concession,
the Company will expand its current business portfolio to include river sand
mining and trading. We plan to continue acquiring strategic river sand mining
concessions to enhance our river sand mining division.
Off Balance Sheet Arrangement
The Company has no off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect or change on the Company's financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources that are material to investors. The term
"off-balance sheet arrangement" generally means any transaction, agreement or
other contractual arrangement to which an entity unconsolidated with the Company
is a party, under which the Company has (i) any obligation arising under a
guarantee contract, derivative instrument or variable interest; or (ii) a
retained or contingent interest in assets transferred to such entity or similar
arrangement that serves as credit, liquidity or market risk support for such
assets.
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