ZHEN DING RESOURCES INC. The following discussion should be read in conjunction with our consolidated audited financial statements and the related notes that appear elsewhere in this annual 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, particularly in the section entitled "Risk Factors" beginning on page 6 of this annual report.
Our consolidated audited financial statements are stated in
Plan of Operations and Cash Requirements
Our operating plan for the balance of fiscal 2023 is to seek an investment of
approximately
The funds raised would be used to:
1. upgrade tailings pond and water treatment facility;
2. design and implement groundwater remediation and protection measures;
3. extend and expand permitted mining area of
concentrate ore veins;
4. resume ore exploration and extraction activities;
5. re-start the mill; 27 Table of Contents 6. re-test the mill;
7. develop expansion plans for our plant capacity;
8. drill additional holes near the concentration plant; and
9. undertake at least three deep drill holes in the permitted area to re-commence
greater milling operations as soon as possible.
This will involve re-testing the plant equipment and re-hiring all personnel that was laid off as a result of the mining halt. We will reactively seek partnerships with mining enterprises primarily active in the gold, silver and/or copper fields and subject to the general parameters described earlier to increase our supply of raw material. In addition, we will look for a partner in the natural resources field in order to enhance our future capability to access necessary funding and seek other businesses opportunities and other strategic transactions with a view toward diversifying our business and attracting new investment.
Cash Requirements
We raised net cash of
In order to execute our business plan over the next twelve months we expect to expend funds as follows:
Estimated Net Expenditures During the Next Twelve Months
$Implementation of Environmental Planning, Remediation, and Protection Measures
1,000,000
Restart mill and mining related operations 3,000,000
General, Administrative Expenses 100,000
Consulting & Permit Fees 150,000
Contingency 250,000
Total 4,500,000
In light of our nominal cash resources, we expect that we will be required to
raise approximately
28 Table of Contents
The continuation of our business is dependent upon obtaining further financing, a successful program of exploration and/or development, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations.
Results of Operations - Years Ended
The following summary of our results of operations should be read in conjunction
with our financial statements for the years ended
Our operating results for the years endedDecember 31, 2022 and 2021, and the changes between those periods for the respective items are summarized as follows: Year Ended Year Ended December 31, December 31, 2022 2021 General and administration$ 70,004 $ 63,062 Gain on sale of assets $ (262 )$ (25,261 ) Interest expense$ (513,675 ) $ (532,023 ) Other income (expense) $ 110 $ 43 Net loss$ (583,307 ) $ (569,781 )
Our financial statements report a net loss of
Our operating expenses for the year ended
Our interest expense for the year ended
Liquidity and Financial Condition
Working Capital
At At
December 31, December 31,
2022 2021
Current assets $ 13,708 $ 29,782
Current liabilities 10,329,353 10,548,025
Working deficit $ (10,315,645 ) $ (10,518,243 )
29
Table of Contents
As of
Cash Flows
Year Ended
December 31,
2022 2021
Net cash used in operating activities
(6,322 ) (6,134 )
Net increase (decrease) in cash $ (16,074 ) $ 26,526
Operating Activities
Net cash used in operating activities was
Investing Activities
Net cash provided by investing activities was
Financing Activities
Net cash provided by financing activities was
Contractual Obligations
As a "smaller reporting company", we are not required to provide tabular disclosure obligations.
Going Concern
These financial statements have been prepared on a going concern basis, which
implies the Company will continue to meet its obligations and continue its
operations for the next twelve months. As of
Off-Balance Sheet Arrangements
We have no 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, capital expenditures or capital resources that is material to stockholders.
30 Table of Contents Critical Accounting Policies
The discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with the accounting principles generally accepted in
Principles of Consolidation
The consolidated financial statements include the accounts of our company, our
wholly subsidiary
Foreign Currency Adjustments
Assets and liabilities recorded in foreign currencies are translated at the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates of exchange prevailing during the year. Any translation adjustments are reflected as a separate component of stockholders' equity (deficit) and have no effect on current earnings. Gains and losses resulting from foreign currency transactions are included in current results of operations.
Non-controlling Interest
Non-controlling interests in our company's subsidiaries are reported as a component of equity, separate from the parent's equity. Purchase or sale of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations attributable to the minority interest are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings.
© Edgar Online, source
