NEXT-ChemX Corporation 10-Q for FY2021 Q2
NEXT-ChemX Corporation. (CHMX)
About this 10-Q
NEXT-ChemX Corporation filed this 10-Q on August 23, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).
Headline figures
Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $333.19K
- compared with net income of $132.93K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended:
| 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:
(Exact Name of Registrant as Specified in Its Charter)
| (State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices, Zip Code)
(Registrant’s telephone number, including area code)
ALLYME GROUP, INC.
(Former name, former address and former fiscal year, if changed since last report)
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 | N/A | N/A |
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.
Indicate by check mark whether the registrant has
submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of
this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
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 ☐ | |
| 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 ☐
The number of shares outstanding of each of the issuer’s classes of common stock, as of August 16, 2021 is as follows:
| Class of Securities | Shares Outstanding | |||
| Common Stock, $0.001 par value |
NEXT-ChemX Corporation
Quarterly Report on Form 10-Q
For the Quarter Ended June 30, 2021
TABLE OF CONTENTS
| PART I – FINANCIAL INFORMATION | ||
| Item 1. | Condensed Consolidated Financial Statements - unaudited | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 12 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 14 |
| Item 4. | Controls and Procedures | 14 |
| PART II – OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 14 |
| Item 1A. | Risk Factors | 14 |
| Item 2. | Unregistered Sale of Equity Securities and Use of Proceeds | 14 |
| Item 3. | Defaults Upon Senior Securities | 15 |
| Item 4. | Mine Safety Disclosures | 15 |
| Item 5. | Other Information | 15 |
| Item 6. | Exhibits | 15 |
| Signatures | 16 | |
| 2 |
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
NEXT-ChemX Corporation
(Formerly AllyMe Group, Inc.)
Condensed Balance Sheets
(Unaudited)
| June 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expense and other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | - | |||||||
| Intangible asset, net | - | |||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Other payable | - | |||||||
| Convertible loans, net of unamortized discounts | - | |||||||
| Note payable - related party | - | |||||||
| Due to related party | - | |||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders’ Equity (Deficit): | ||||||||
| Preferred stock, $par value, shares authorized, shares issued and outstanding | - | - | ||||||
| Common stock, $ par value, shares authorized, and shares issued and outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Total Stockholders’ Equity (Deficit) | ( |
) | ||||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these condensed unaudited financial statements
| 3 |
NEXT-ChemX Corporation
(Formerly AllyMe Group, Inc.)
Condensed Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Income (loss) from operations | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | ( |
) | - | ( |
) | - | ||||||||||
| Net other expense | ( |
) | - | ( |
) | - | ||||||||||
| Loss before provision for income taxes | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Gain from discontinued operations, net of income tax | - | - | ||||||||||||||
| Net income (loss) | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Less: net income (loss) attributable to non-controlling interest | - | - | ||||||||||||||
| Net income (loss) attributable to NEXT-ChemX Corporation | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation gain (loss) | - | - | ( |
) | ||||||||||||
| Total comprehensive income (loss) | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Net gain (loss) per common share: Basic and diluted | $ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Net loss from continuing operations per common share: Basic and diluted | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Net gain from discontinued operations per common share: Basic and diluted | $ | $ | $ | $ | ||||||||||||
| Weighted average number of common shares outstanding: Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed unaudited financial statements.
| 4 |
NEXT-ChemX Corporation
(Formerly AllyMe Group, Inc.)
Condensed Statement of Shareholders’ Equity (Deficit)
(Unaudited)
For the Six Months Ended June 30, 2021
| Shares | Amount | capital | issued | Deficit | Income | Interest | Total | |||||||||||||||||||||||||
| Additional | Shares | Accumulated Other |
||||||||||||||||||||||||||||||
| Common stock | paid-in | to be | Accumulated | Comprehensive | Noncontrolling | |||||||||||||||||||||||||||
| Shares | Amount | capital | issued | Deficit | Income | Interest | Total | |||||||||||||||||||||||||
| Balance, December 31, 2020 | $ | $ | - | $ | ( |
) | - | $ | ( |
) | ||||||||||||||||||||||
| Common stock issued for purchase of intangible asset | ||||||||||||||||||||||||||||||||
| Common stock issued for purchase of intangible asset, shares | ||||||||||||||||||||||||||||||||
| Cancellation of shares | ||||||||||||||||||||||||||||||||
| Cancellation of shares, shares | ||||||||||||||||||||||||||||||||
| Beneficial conversion feature | ||||||||||||||||||||||||||||||||
| Related party debt forgiveness | ||||||||||||||||||||||||||||||||
| Issue common stock for cash | ||||||||||||||||||||||||||||||||
| Issue common stock for cash, shares | ||||||||||||||||||||||||||||||||
| Shares to be issued | ||||||||||||||||||||||||||||||||
| Shares to be issued, shares | ||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | ||||||||||||||||||||||||||||||||
| Non-controlling interest | ||||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( |
) | - | - | ( |
) | ||||||||||||||||||||||
| Balance, March 31, 2021 | - | ( |
) | - | - | ( |
) | |||||||||||||||||||||||||
| Common stock issued for purchase of intangible asset | - | - | - | - | ||||||||||||||||||||||||||||
| Cancellation of shares | ( |
) | ( |
) | - | - | ||||||||||||||||||||||||||
| Beneficial conversion feature | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Related party debt forgiveness | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | ( |
) | - | - | ( |
) | ||||||||||||||||||||||
| Balance, June 30, 2021 | $ | $ | - | $ | ( |
) | - | - | $ | |||||||||||||||||||||||
| 5 |
For the Six Months Ended June 30, 2020
| Accumulated | ||||||||||||||||||||||||||||||||
| Common stock | Additional paid-in |
Shares to be | Accumulated | Other Comprehensive |
Noncontrolling | |||||||||||||||||||||||||||
| Shares | Amount | capital | issued | Deficit | Income | Interest | Total | |||||||||||||||||||||||||
| Balance, December 31, 2019 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||||||
| Issue common stock for cash | - | - | - | - | - | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | ( |
) | - | ( |
) | ||||||||||||||||||||||
| Non-controlling interest | - | - | - | - | ( |
) | ( |
) | - | |||||||||||||||||||||||
| Net loss | - | - | - | - | ( |
) | - | - | ( |
) | ||||||||||||||||||||||
| Balance, March 31, 2020 | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||
| Shares to be issued | ( |
) | - | - | - | - | ||||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Non-controlling interest | - | - | - | - | ( |
) | - | |||||||||||||||||||||||||
| Net income | - | - | - | - | - | - | ||||||||||||||||||||||||||
| Balance, June 30, 2020 | $ | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these condensed unaudited financial statements.
| 6 |
NEXT-ChemX Corporation
(Formerly AllyMe Group, Inc.)
Condensed Statements of Cash Flows
(Unaudited)
| 2021 | 2020 | |||||||
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net loss | $ | ( |
) | $ | ||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | - | |||||||
| Amortization of debt discounts | - | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Prepaid expenses | ( |
) | ||||||
| Other receivable | - | |||||||
| Accounts payable and accrued liabilities | ||||||||
| Other payable | - | ( |
) | |||||
| Customer deposit | - | ( |
) | |||||
| Net Cash Used in Operating Activities | ( |
) | ( |
) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property and equipment | ( |
) | - | |||||
| Net cash used in Investing Activities | ( |
) | - | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from convertible notes payable, net of original issue discounts | - | |||||||
| Proceeds from notes payable - related party, net of original issue discounts | - | |||||||
| Repayment of loan to related party | - | ( |
) | |||||
| Net cash provided by Financing Activities | ( |
) | ||||||
| Effect of exchange rate fluctuation on cash and cash equivalents | - | ( |
) | |||||
| Net change in cash for period | ( |
) | ||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for income taxes | $ | $ | ||||||
| Cash paid for interest | $ | $ | ||||||
| NON CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Common stock issued for purchase of asset | $ | $ | ||||||
| Cancellation of shares | $ | $ | ||||||
| Beneficial conversion feature | $ | $ | ||||||
| Related party debt forgiveness | $ | $ | ||||||
| Common stock issued for proceeds received in prior period | $ | $ | ||||||
The accompanying notes are an integral part of these condensed unaudited financial statements.
| 7 |
NEXT-ChemX Corporation
(Formerly AllyMe Group, Inc.)
NOTES TO UNAUDITED FINANCIAL STATEMENTS
June 30, 2021
NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS
Organization and Description of Business
NEXT-ChemX Corporation, formerly known as AllyMe Group Inc. (“Company”, “we” or “us”) was incorporated under the laws of the State of Nevada on August 13, 2014 (“Inception”) and has adopted a December 31 fiscal year end. The Company’s Board of Directors approved the new name on June 16, 2021 and was granted approval by FINRA on July 22, 2021 and was granted a new trading symbol on July 30,2021. The Company acquired a Novel Membrane-Based Ion Extraction Technology (“Membrane Technology”) along with its patents and patent applications, as well as the employment of its inventing scientist, and is developing pilot plant systems to demonstrate its performance to potential clients in order to market commercial systems for its applications.
Applications include:
| ● | Lithium Extraction from Natural Brines, Geothermal Wells, or Leach Solutions. | |
| ● | Extracting Fatty Acids from Vegetable Oils for More Economical Refining. | |
| ● | Extracting of Radioactive Ions from Nuclear Plant Stored Water. | |
| ● | Extracting of Metal Ions from Mine Leach Solutions, Effluent, or Tailings. | |
| ● | Desalination of Sea Water, by Extracting Ions for Water Purification |
Pursuant to a stock purchase agreement, on April 27, 2021, Zilin Wang, the previous majority shareholder of the Company, sold shares of Common Stock of the Company, to Arastou Mahjoory and Kenneth Mollicone, each an accredited investor, in equal parts. Following transfer of such shares to Messrs. Mahjoory and Mollicone, each has agreed to cancel an aggregate of shares of common stock of the company.
Also on April 27, 2021, the previous sole officer and director of the company, Zicheng Wang, resigned his positions with the Company. Upon such resignation Benton Wilcoxon was appointed as Chief Executive Officer, and Chairman of the Board, and J. Michael Johnson was appointed President, Treasurer and Secretary, and Director of the Company.
Effective April 27, 2021 (the “Closing Date”), the Company, entered into that certain Asset Purchase Agreement (the “Asset Purchase Agreement”) with NEXT-ChemX Corporation, a private Texas company (“NEXT-ChemX”), in which the Company acquired certain intellectual property assets of NEXT-ChemX, specifically certain patents and patent applications, in exchange for the issuance of an aggregate of shares of common stock of the Company (the “APA Issuance”).
Messrs. Mahjoory and Mollicone also entered into stock purchase Agreements with selling shareholders to acquire an additional shares of common stock from several minority shareholders of the Company.
As of June 30, 2021, an aggregate of shares are outstanding after the cancellation of shares by Messrs. Mahjoory and Mollicone from the previous shares of common stock that were outstanding. This reflects the APA Issuance, which results in NEXT-ChemX holding approximately % of the issued and outstanding shares of Common Stock of the Company, and as such it is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company. Also after giving effect to the acquisition and cancellation of shares by Messrs. Mahjoory and Mollicone will each hold % of the issued and outstanding shares of Common Stock in the Company.
On July 23, 2021, AllyMe Group, Inc. (the “Company”) filed Certificate of Amendment to its Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Nevada effecting a name change of the Company to NEXT-ChemX Corporation (the “Corporate Action”). The Corporate Action and the Amended Articles became effective on July 28, 2021, following compliance with notification requirements of the Financial Industry Regulatory Authority.
| 8 |
NOTE 2 – GOING CONCERN
The Company has incurred losses since inception (August
13, 2014) resulting in an accumulated deficit of $
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and, or, obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and, or, the private placement of common stock. However, there can be no assurances that management’s plans will be successful.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements
The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2020.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. GAAP 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 those estimates.
Intangible asset
The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed on a straight-line basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.
Beneficial Conversion Feature
The issuance of the convertible debt issued by the Company generated a beneficial conversion feature (“BCF”), which arises when a debt or equity security is issued with an embedded conversion option that is beneficial to the investor or in the money at inception because the conversion option has an effective strike price that is less than the market price of the underlying stock at the commitment date. The Company recognized the BCF by allocating the intrinsic value of the conversion option, which is the number of shares of common stock available upon conversion multiplied by the difference between the effective conversion price per share and the fair value of common stock per share on the commitment date, resulting in a discount on the convertible debt (recorded as a component of additional paid in capital).
| 9 |
Recent accounting pronouncements
In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements.
NOTE 4 – PREPAID EXPENSE AND OTHER CURRENT ASSETS
Prepaid expense and other current assets amounted
to $
NOTE 5 – INTANGIBLE ASSET
On April 27, 2021, the Company entered into that
Asset Purchase Agreement with NEXT-ChemX Corporation, a private Texas company (“NEXT-ChemX”), in which the Company acquired
certain intellectual property assets of NEXT-ChemX, specifically certain patents and patent applications, in exchange for the issuance
of an aggregate of shares of common stock of the Company, valued at $
During the six months ended June 30, 2021, the Company
recorded amortization of $
NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
As of June 30, 2021 and December 31, 2020, accounts payable and accrued liabilities consisted of as follows,
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
| June 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest | - | |||||||
| Accrued interest - related party | - | |||||||
| $ | $ | |||||||
NOTE 7 – CONVERTIBLE NOTES
During the six months ended June 30, 2021, the Company
issued convertible notes totaling of $
During the six months ended June 30, 2021, the Company
recognized interest expense of $
NOTE 8 – RELATED PARTY TRANSACTIONS
In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attain adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.
During the six months ended June 30, 2021, a former
related party paid operating expenses of $
| 10 |
As of June 30, 2021 and December 31, 2020, the amounts
outstanding were $
Note payable
During the six months ended June 30, 2021, the Company
issued note payable of $
NOTE 9 - STOCKHOLDERS’ EQUITY (DEFICIT)
The Company is authorized to issue shares of common stock with a par value of $ and shares of preferred stock with a par value of $. There is preferred stock issued and outstanding as of June 31, 2021.
During the six months ended June 30, 2021, the Company
issued
During the six months ended June 30, 2021, the Company cancelled shares.
There are and shares of common stock outstanding as of June 30, 2021 and December 31, 2020, respectively.
NOTE 10 – DISCONTINUED OPERATIONS
On September 30, 2020, the Company signed sales
contracts with a related party and sold shares of AllyMe for total cash consideration of $
Discontinued Operations Income Statement:
SCHEDULE OF DISCONTINUED OPERATIONS INCOME STATEMENT AND BALANCE SHEETS
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Cost of revenues | - | - | ||||||||||||||
| Gross profit | - | |||||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | - | - | ||||||||||||||
| Total operating expenses | - | - | ||||||||||||||
| Income from operations | - | - | ||||||||||||||
| Other income (expense) | ||||||||||||||||
| Other income | - | - | ||||||||||||||
| Interest income | - | - | ||||||||||||||
| Interest expense | - | ( |
) | - | ( |
) | ||||||||||
| Net other income | - | - | ||||||||||||||
| Loss from discontinued operations | $ | $ | $ | $ | ||||||||||||
NOTE 11 – SUBSEQUENT EVENTS
The Company has analyzed its operations subsequent to June 30, 2021 to the date these financial statements were issued.
| 11 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Caution Regarding Forward-Looking Information
This Quarterly Report on Form 10-Q, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
Overview
The Company was organized on August 13, 2014 as a Nevada corporation under Chapter 78 of the Nevada Revised Statutes. The Company’s registered address is 3773 Howard Hughes Pkwy STE 500S, Las Vegas, NV, 89169, USA, and its principal office is located at 1111 W 12th St, # 113, Austin, Texas 78703.
The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act which became law in April 2012. The definition of an “emerging growth company” is a company with an initial public offering of common equity securities which occurred after December 8, 2011 and has less than $1 billion of total annual gross revenues during last completed fiscal year.
Overview of the Business
The Company was originally formed as to provide consulting services. From 2018 through the first quarter of 2021, the company name was AllyMe Group, Inc. and provided consulting services in China principally focused on the development of new-high-tech products marketing and retail sales.
On April 27, 2021, the Company acquired intellectual property assets from NEXT-ChemX Corporation, a private Texas corporation (“NEXT-ChemX”) related to a novel membrane-based ion extraction process (“Membrane Technology”), which is able to extract ions exiting in low concentrations from liquid solutions. It can be used to extract lithium from brine solutions, to extract fatty acids from vegetable oils as a superior refining process, to extract radioactive ions from nuclear waste waters, to extract specific metal ions from mining leach solutions and waste effluent, and to remove ions from seawater for desalination, among other things.
Results of Operations for the Six Months Ended June 30, 2021 Compared to June 30, 2020
The following table summarizes the results of our operations during the six months ended June 30, 2021 and 2020, respectively, and provides information regarding the dollar and percentage increase or (decrease) from the current three-month period to the prior three-month period:
| Line Item | June 30, 2021 | June 30, 2020 | Increase (Decrease) | Percentage Increase (Decrease) | ||||||||||||
| Revenues | $ | - | $ | - | $ | - | - | % | ||||||||
| Cost of Revenues | - | - | - | - | % | |||||||||||
| Operating expenses | 314,655 | 32,544 | 282,111 | 867 | % | |||||||||||
| Gain from discontinued operations | - | 287,171 | (287,171 | ) | (100 | )% | ||||||||||
| Net profit (loss) | (349,836 | ) | 254,627 | (604,463 | ) | (237 | )% | |||||||||
| Profit (Loss) per share of common stock | (0.02 | ) | 0.03 | (0.05 | ) | -. | ||||||||||
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The increase in operating expenses is primarily due to amortization of intangible assets acquired in 2021 and payroll expenses.
Gain from discontinued operations is derived from subsidiaries disposed in 2020.
Net loss for the six months ended June 30, 2021 was mainly derived from operating expenses and net profit for the six months ended June 30, 2020 was mainly derived from gain from discontinued operations.
Liquidity and Capital Resources
As of June 30, 2021, we had total assets of $3,583,298, and an accumulated deficit of $514,399.
Our operating activities used $187,789 in cash for the six months ended June 30, 2021, while our operations used $255,840 cash in the six months ended June 30, 2020. We had no revenues in the six months ended June 30, 2021, or in the prior year same period.
Our cash requirements are primarily pilot plant equipment and operating expenses for the development of pilot plant systems and its demonstration to potential customers, as well as our payroll expense.
Management believes that the Company’s cash on hand will not be sufficient to fund all Company obligations and commitments for the next twelve months. Historically, we have depended on loans from our principal shareholders and their affiliated companies to provide us with working capital as required. There is no guarantee that such funding will be available when required and there can be no assurance that our stockholders, or any of them, will continue making loans or advances to us in the future.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.
Seasonality
Our operating results are not affected by seasonality.
Inflation
Our business and operating results are not affected in any material way by inflation.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with GAAP. The preparation of these financial statements requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. We continually evaluate the accounting policies and estimates used to prepare the financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position. Our critical accounting estimates are more fully discussed in Note 2 to our unaudited financial statements contained herein.
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Item 3 - Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
Item 4 - Controls and Procedures
Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s president and chief executive officer (who is the Company’s principal executive officer) and the Company’s chief financial officer, treasurer, and secretary (who is the Company’s principal financial officer and principal accounting officer) to allow for timely decisions regarding required disclosure. In designing and evaluating the Company’s disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and the Company’s management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The ineffectiveness of the Company’s disclosure controls and procedures was due to material weaknesses identified in the Company’s internal control over financial reporting, described below.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over the Company’s financial reporting. In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002. Our management, with the participation of the Company’s principal executive officer and principal financial officer has conducted an assessment, including testing, using the criteria in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013). Our system of internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. This assessment included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.
Based on this evaluation, the Company’s management concluded its internal control over financial reporting were not effective as of June 30, 2021.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2021, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.
PART II
OTHER INFORMATION
Item 1 - Legal Proceedings
None
Item 1A – Risk Factors
Not applicable.
Item 2 - Sales of Unregistered Equity Securities and Use of Proceeds
Effective April 27, 2021, the Company, entered into that certain Asset Purchase Agreement with NEXT-ChemX Corporation, a private Texas corporation (“NEXT-ChemX”), pursuant to which the Company acquired certain intellectual property assets of NEXT-ChemX, specifically certain patents and patent applications, in exchange for the issuance of an aggregate of 23,844,448 shares of common stock of the Company.
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Item 3 - Defaults upon Senior Securities
None
Item 4 - Mine Safety Disclosures
Not applicable.
Item 5 - Other Information
None
| ITEM 6. | EXHIBITS. |
The following exhibits are filed as part of this report or incorporated by reference:
| Exhibit No. | Description | |
| 31.1* | Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1* | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 32.2* | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101 | Materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 formatted in Extensible Business Reporting Language (XBRL). |
* Filed herewith
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: August 23, 2021 | NEXT-ChemX Corporation | |
| By: | /s/ Benton Wilcoxon | |
| Benton Wilcoxon | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
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