The following discussion should be read in conjunction with our consolidated
unaudited condensed financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include but are not limited to those discussed below and elsewhere
in this annual report.
Our consolidated unaudited condensed financial statements are stated in United
States Dollars and are prepared in accordance with United States Generally
Accepted Accounting Principles.
Overview
We conduct our operations through our consolidated subsidiary SBS Mining Corp.
Malaysia Sdn. Bhd. (hereinafter referred to as "SBS"). SBS, founded in August
14, 2008, is a Malaysia corporation primarily engaged in mining and exploration
of properties located in Malaysia. It is located at Unit M2-3, Level M2, The
Vertical Podium, Avenue 3, Bangsar South City, No 8 Jalan Kerinchi, 59200 Kuala
Lumpur, Malaysia.
NAMI Corp. (the "Company") was incorporated in the State of Nevada on September
5, 2012. The Company was initially created to engage in developing a built in
safe with a combination lock that can store personal and or valuable items,
inside of backpacks, carry-on luggage and suitcases. Since its inception and
until the acquisition of SBS, the Company was a development stage company
without significant assets or any revenue.
On October 31, 2016, the Company filed a Certificate of Amendment with the
Nevada Secretary of State (the "Nevada SOS") whereby it amended its Articles of
Incorporation by (a) increasing the Company's authorized number of shares of
common stock from 200 million to 5 billion; and (b) increasing all of its issued
and outstanding shares of common stock at a ratio of seven (7) shares for every
one (1) share held. On November 3, 2016, the Company filed Articles of Merger
with the Nevada Secretary of State whereby it entered into a statutory merger
with its wholly-owned subsidiary, NAMI Corp. pursuant to Nevada Revised Statutes
92A.200 et. seq. The effect of such merger is that the Company was the surviving
entity and changed its name to "NAMI Corp."
Recent Developments
Acquisition of SBS
On July 4, 2018, we entered into a Share Exchange Agreement with SBS, and GMCI,
the shareholder of SBS, pursuant to which on closing date of July 12, 2018 we
acquired all of the outstanding shares of SBS from GMCI in exchange for an
issuance of 720,802,346 shares of our common stock, representing approximately
102.08% of our outstanding shares of common stock (the "Share Exchange
Agreement"). We closed the Share Exchange Agreement on July 12, 2018. Based on
negotiations between the parties, both parties agreed that after the
transaction, our former shareholders shall own 49.49% while GMCI shall own
50.51% of the capital stock of the Company. Pursuant to the Share Exchange
Agreement, the Company acquired SBS, a Malaysia corporation whose primary
business is mining and exploration of properties located in Malaysia. The SBS
Acquisition was accounted for as a "reverse acquisition" effected as a
recapitalization effected by a share exchange, wherein SBS is considered the
acquirer for accounting and financial reporting purposes. The assets and
liabilities of the acquired entity have been brought forward at their book value
and no goodwill has been recognized. As a result of the SBS acquisition, our
consolidated subsidiaries include SBS, our wholly-owned subsidiary which is
incorporated under the laws of Malaysia.
SBS was incorporated on August 14, 2008 with the name SBS Legacy Corp Malaysia
Sdn Berhad with an authorized share capital of RM100,000 and paid in capital of
RM3. It changed to its current name of SBS Mining Corporation Malaysia Sdn Bhd
on March 28, 2013. As of March 31 2018, SBS has registered share capital of
RM600,000 at RM1 per share. Subsequent to the closing of the Share Exchange
Agreement, we now conduct our operations through our controlled consolidated
subsidiary SBS. SBS is primarily engaged in mining and exploration of properties
located in Malaysia. SBS' operating office is located at No 1, 1st Floor, Lorong
Sekilau 1, Bukit Sekilau, 25200 Kuantan, Pahang Darul Makmur, Malaysia.
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Results of Operations
The following summary of our results of operations should be read in conjunction
with our financial statements for the nine months ended March 31, 2021 and 2020,
which are included herein.
Our operating results for three months ended March 31, 2021 and 2020, and the
changes between those periods for the respective items are summarized as
follows:
Three months ended
March 31,
2021 2020 Change %
Sales $ - $ - $ - -
Cost of Goods Sold - 32 (32 ) (100 )%
Gross Loss - (32 ) 32 (100 )%
Operating expenses 24,746 183,273 (158,527 ) (86 )%
Other Expense 52,313 52,635 (322 ) (1 )
Net loss $ (77,059 ) $ (235,940 ) $ 158,881 (67 )%
-
Other Comprehensive Income: $ 72,599 $ 107,764 $ (35,165 ) (33 )%
-
Comprehensive loss $ (4,460 ) $ (128,176 ) $ 123,716 (97 )%
The Company did not recognize any revenues for the three months ended March 31,
2021. The Company recognized revenues of $0 and gross loss of $32 from the sales
of mined sand from the River Sand Project during the three months ended March
31, 2020.
Our financial statements reported a net loss of $77,059 for the three months
ended March 31, 2021 compared to a net loss of $235,940 for the three months
ended March 31, 2020. Our losses have decreased, primarily as a result of
decreases in operating expenses of $158,527. The decrease in operating expenses
was primarily the result of decreases in professional fees and general
administrative expenditures as well as amortization of a concession acquisition
project which was written down to nil at June 30, 2020.
Other expense decreased to $52,313 for the three months ended March 31, 2021,
compared to $52,635 for the three months ended March 31, 2020. Other expense
related primarily to interest expense imputed for our non-interest bearing
advances from related parties.
Should we be successful in our efforts to raise additional capital and are 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 that our expenses to increase substantially.
Our operating results for nine months ended March 31, 2021 and 2020, and the
changes between those periods for the respective items are summarized as
follows:
Nine months
March 31,
2021 2020 Change %
Sales $ - $ 5,043 $ (5,043 ) (100 )%
Cost of Goods Sold - 6,107 (6,107 ) (100 )%
Gross Profit (Loss) - (1,064 ) 1,064 (100 )%
Operating expenses 68,911 708,440 (639,529 ) (90 )%
Other Expense 155,512 158,156 (2,644 ) (2 )%
Net loss $ (224,423 ) $ (867,660 ) $ 643,237 (74 )%
-
Other Comprehensive Income (Loss): $ (70,371 ) $ 83,412 $ (153,783 ) (184 )%
-
Comprehensive loss $ (294,794 ) $ (784,248 ) $ 489,454 (62 )%
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The Company did not recognize any revenues for the nine months ended March 31,
2021. The Company recognized revenues of $5,043 and incurred gross loss of
$1,064 from the sales of mined sand from the River Sand Project during the nine
months ended March 31, 2020.
Our financial statements reported a net loss of $224,423 for the nine months
ended March 31, 2021 compared to a net loss of $867,660 for the nine months
ended March 31, 2020. Our losses have decreased, primarily as a result of a
decrease in operating expenses of $639,529. The decrease in operating expenses
was primarily the result of decreases in professional fees and general
administrative expenditures as well as amortization of a concession acquisition
project which was written down to nil at June 30, 2020.
Other expense decreased to $155,512 for the nine months ended March 31, 2021,
compared to $158,156 for the nine months ended March 31, 2020. Other expense
related primarily to interest expense imputed for our non-interest bearing
advances from related parties.
Should we be successful in our efforts to raise additional capital and are 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 that our expenses to increase substantially.
Liquidity and Financial Condition
Working Capital
March 31, June 30, Change
2021 2020 Amount %
Cash $ 1,298 $ 1,133 $ 165 15 %
Current Assets $ 33,458 $ 31,814 $ 1,644 5 %
Current Liabilities $ 4,382,804 $ 4,249,617 $ 133,187 3 %
Working Capital (Deficiency) $ (4,349,346 ) $ (4,217,803 ) $ (131,543 ) 3 %
Our working capital deficit increased as of March 31, 2021, 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.
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.
In addition, we are currently in negotiations with a related entity, Nami
Development Capital Sdn Bhd ("NDC"), to enter into a management services
agreement or relationship in which NDC provides us with executive, technical and
support staff, offices and other resources, instead of the Company hiring and
acquiring all of those resources directly. At this time, NDC has begun billing
us for compensation related costs. We are still in negotiations in regards to
those other costs. We expect that the finalization of the agreement with NDC
will also contain payment deferrals until such time as revenue generation
commences.
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 our
obtaining all the necessary permits to begin contracting for sea sand mining
operations.
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Cash Flows
Nine months ended
March 31, Change
2021 2020 Amount %
Cash Flows used in operating
activities $ (29,181 ) $ (140,748 ) $ 111,567 79 %
Cash Flows provided by (used in)
investing activities $ 49,236 $ (77,326 ) $ 126,562 164 %
Cash Flows (used in) provided by (109 )%
financing activities $ (18,497 ) $ 202,797 $ (221,294 )
Effects on changes in foreign (68 )%
exchange rate $ (1,393 ) $ (4,305 ) $ 2,912
Net increase (decrease) in cash (101 )%
during period $ 165 $ (19,582 ) $ 19,747
Operating Activities
Net cash used in operating activities was $29,181 for the nine months ended
March 31, 2021 compared with $140,748 in the same period in 2020.
During the nine months ended March 31, 2021, cash used in operating activities
consisted of a net loss of $224,423, depreciation of property and equipment of
$4,659, imputed interest on non-interest bearing related party advances
contributed as paid in capital of $159,428, expenses paid by an unrelated party
of $20,802, changes in other receivable and deposits of $(594), and other
payables and accruals of $10,947.
During the nine months ended March 31, 2020, cash used in operating activities
consisted of a net loss of $867,660, depreciation of property and equipment of
$5,833, amortization of concession acquisition costs of $159,865, imputed
interest on non-interest bearing related party advances contributed as paid in
capital of $158,156, expenses paid by an unrelated party of $349,418, and
changes in prepayments of $40,000, other receivable and deposits of $(11,463),
inventory of $(27,089), and accounts payable and accrued liabilities of $52,192.
Investing Activities
During the nine months ended March 31, 2021, cash flow provided by investing
activities of $49,236 was the result of a project deposit made by a third party.
During the nine months ended March 31, 2020, the Company incurred concession
acquisition costs of $(71,943) and purchased $(5,383) of property and equipment.
Financing Activities
Net cash used in financing activities was $18,497 for the nine months ended
March 31, 2021, compared to net cash provided by financing activities of
$202,797 in the same period in 2020. Net cash used in financing activities for
the nine months ended March 31, 2021 was a result of advances received from a
related party of $31,315 and repayments of advances to an related party of
$(49,812). Net cash used in financing activities for the nine months ended March
31, 2020 included dividends on Series A Preferred Stock of $(2,014), advances
from a related party of $792 and advances from an unrelated party of $204,019.
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.
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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 rates. 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 payment 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.
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. 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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NAMI CORP. 
