Filed 2025-04-15 · Period ending 2024-12-31 · 31,984 words · SEC EDGAR
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# ZHEN DING RESOURCES INC. (RBTK) — 10-K
**Filed:** 2025-04-15
**Period ending:** 2024-12-31
**Accession:** 0001214659-25-005881
**Source:** [SEC EDGAR](https://www.sec.gov/Archives/edgar/data/1594204/000121465925005881/)
**Origin leaf:** 45eeda9dae219c18a619c5ca6ce246d40382ecdb1c9ffc729548490ea02f57d8
**Words:** 31,984
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION**
**Washington, D.C. 20549**
**FORM10-K**
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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For the fiscal year ended |
December 31, 2024 | |
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
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For the transition period from |
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Commission file number |
333-188152 | |
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ZHEN DING RESOURCES INC. | |
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(Exact name of registrant as specified in its charter) | |
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Delaware |
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11-3350926 | |
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(State or other jurisdiction of incorporation or
organization) |
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(I.R.S. Employer Identification No.) | |
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99 Ave De La Moselle, Saint-Lambert, Quebec, Canada |
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J4S 1W9 | |
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(Address of principal executive offices) |
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(Zip Code) | |
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Registrants telephone number, including area code: |
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(438) 376-5317 | |
Securities registered pursuant to Section 12(b)
of the Act:
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Title of Each Class |
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Name of Each Exchange On Which Registered | |
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Securities registered pursuant to Section 12(g)
of the Act:
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Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 the Securities Act.YesNox
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the ActYesNox
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 last 90 days.YesxNo
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).YesNox
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Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained,
to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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.
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Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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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
has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting fi rm that prepared or
issued its audit report). Yes
Nox
If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements.
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). YesNox
The aggregate market value of Common Stock held
by non-affiliates of the Registrant on June 30, 2023 was $0based on a $0 average bid and asked price of such common equity, as of
the last business day of the registrants most recently completed second fiscal quarter.
Indicate the number of shares outstanding of each
of the registrants classes of common stock as of the latest practicable date.
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110,737,348 common shares
as of April 15, 2025. |
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DOCUMENTS INCORPORATED BY REFERENCE
None.
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**TABLE OF CONTENTS**
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Item 1. |
Business |
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Item 1A. |
Risk Factors |
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Item 1B. |
Unresolved Staff Comments |
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Item 2. |
Properties |
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Item 3. |
Legal Proceedings |
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Item 4. |
Mine Safety Disclosures |
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Item 5. |
Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
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Item 6. |
Selected Financial Data |
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Item 7. |
Managements Discussion and Analysis of Financial Condition and Results of Operations |
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Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
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Item 8. |
Financial Statements and Supplementary Data |
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Item 9. |
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure |
45 | |
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Item 9A. |
Controls and Procedures |
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Item 9B. |
Other Information |
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Item 10. |
Directors, Executive Officers and Corporate Governance |
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Item 11. |
Executive Compensation |
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Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
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Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
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Item 14. |
Principal Accounting Fees and Services |
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Item 15. |
Exhibits, Financial Statement Schedules |
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| Table of Contents | |
**PART I**
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Item 1. | Business | |
This annual report contains forward-looking statements.
These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements
by terminology such as may, should, expects, plans, anticipates,
believes, estimates, predicts, potential or continue or the negative
of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties
and other factors, including the risks in the section entitled Risk Factors that may cause our or our industrys actual
results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance
or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected
in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.
Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.
Our financial statements are stated in United
States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.
In this annual report, unless otherwise specified,
all dollar amounts are expressed in United States dollars and all references to common shares refer to the common shares
in our capital stock.
As used in this current report and unless otherwise
indicated, the terms we, us and our mean Zhen Ding Resources Inc. and our subsidiaries, Z&W
Zhen Ding Corporation and Zhen Ding Mining Co. Ltd., unless otherwise indicated.
**General Overview**
We are engaged in seeking business partnership
opportunities with companies that are in the field of exploration and extraction of precious and/or base metals, primarily in China, which
are in need of funding and improved management.We would provide the necessary management expertise and assist in financing
efforts of these mining operations.In exchange, we would acquire metal ores produced by these mines and process the ores in
our ore milling plant and sell the ore concentrates to metal refineries.Our only operating company is Zhen Ding JV which,
has engaged in the processing of metal ore and the selling of ore concentrates of gold, silver, lead, zinc and copper at purity levels
ranging from 65% to 80%.Zhen Ding JV purchased metal ore in rock form from its joint venture partner, Xinzhou Gold, which
holds rights to explore and mine ore from a property located in the southwestern part of Anhui province in China.
*Corporate Background*
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Our principal office is located at 99 Ave De La
Moselle, Saint-Lambert, Quebec, Canada J4S 1W9. Our operational offices are located at:Zhen Ding Mining Co. Ltd., Wuxi
County, Town of Langqiao, Jing Xian, Anhui Province, China, Tel: 86-6270-9018.
We were incorporated in September 1996 as Robotech
Inc., and began our business in the development and marketing of specialized technological equipment. By 2003 we had not reached our financing
goals and therefore abandoned our former business plan.
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In January 2012, our Board of Directors, following
the approval of a majority of our shareholders, made an offer to the shareholders of Zhen Ding Resources Inc., a Nevada corporation (Zhen
Ding NV), to acquire, at the very least, the majority of their common shares, and, if available, up to 100% ownership.
Zhen Ding NV through its wholly owned subsidiary,
Z&W Zhen Ding Corporation, a California corporation (Zhen Ding CA), has been engaged in a joint venture with Jing Xian
Xinzhou Gold Co., Ltd. (Xinzhou Gold), a company organized under the laws of the Peoples Republic of China (PRC).
The joint venture company,Zhen Ding Mining Co. Ltd. (Zhen Ding JV) is 70% held by Zhen Ding NV through Zhen Ding CA.It
is a common practice in China to append the name of the town or city where an enterprise is located to its legally incorporated name.
Therefore many documents referencing Zhen Ding JV may refer to it as Jing Xian Zhen Ding Mining Co. Ltd. Zhen Ding JV engages in the processing
of metal ore and the selling of ore concentrates of gold, silver, lead, zinc and copper at purity levels ranging from 65% to 80%.Zhen
Ding JV purchases metal ore in rock form from Xinzhou Gold.
On March 8, 2012, we changed our name from Robotech,
Inc. to Zhen Ding Resources Inc., in anticipation of the acquisition of Zhen Ding NV. Our trading symbol, RBTK, however remained unchanged.
During 2012, a total of 50,746,358 shares of the
issued and outstanding common stock of Zhen Ding NV were tendered to our company. On August 13, 2013, an additional 13,100,000 shares
were tendered to us. Therefore, as of August 13, 2013 the shareholders of Zhen Ding NV had tendered 100% of the issued and outstanding
shares of common stock, representing 100% of the issued and outstanding equity of Zhen Ding NV to us.
On October 23, 2013, we issued 122,440 shares
of our common stock, on a one-for-one basis, to the tendering shareholders of Zhen Ding NV making Zhen Ding NV a wholly owned subsidiary
of our company.
On October 28, 2013, we dissolved Zhen Ding NV
by merging it with and into Zhen Ding DE.As a result, Zhen Ding CA became a wholly-owned subsidiary of Zhen Ding DE.Zhen
Ding CA continues to exist as an intermediate holding company with no operations of its own, but which in turn owns our 70% interest in
Zhen Ding JV.
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The following illustrates our corporate and share ownership structure:
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**Our Current Business**
Background*
Presently, we conduct our operations exclusively
through Zhen Ding JV, our joint venture company. However, we continue to look for other attractive potential acquisition targets in the
mining industry.
Our joint venture, Zhen Ding JV, is equipped to
process ore mined by our joint venture partner Xinzhou Gold when in operation.Zhen Ding JV purchases the ore in rock form
from Xinzhou Gold and processes the ore into our final product, which is a gold, silver, lead, zinc and copper ore concentrate. We estimate
that our processed product is 65% to 80% pure. The product is then sold to refineries which further purify and separate the concentrate.Zhen
Ding JV also arranges all exploration, mining process and operations, and financial and administrative support for Xinzhou Golds
mine, known as the Wuxi Gold Mine.
We purchase all of our raw material from Xinzhou
Gold for our ore processing operation and rely solely on Xinzhou Gold for our supply of ores. The veins most recently excavated by Xinzhou
Gold in the permitted areas of our mines are very low grade and, as such, the production is minimal. The higher yielding and therefore
more profitable veins run outside Xinzhou Golds permitted mining area boundaries under its current license.
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Xinzhou Gold applied for an extension of the permitted
mining area, however, the application was rejected by the government in December 2016 due to Xinzhou Golds insufficient working
capital. Xinzhou Gold intends to reapply for an extension of the permitted mining area when it is able to demonstrate sufficient working
capital to drill the extended area. However, if sufficient working capital is unavailable, or should the application be denied on other
grounds, we would not be able to secure another source with higher grade ores for our processing plant, which would severely limit our
ability to execute our plan of operation and our potential profitability.
At the beginning of fiscal 2015, we idled our
mineral processing plant due to an overall downturn in the demand and market prices for our concentrates. This downturn coincided with
an overall economic recession in China and downturn in the global commodities market during fiscal 2015 through 2016.
*Recent Activities*
Since idling our mineral processing plant, we
have actively sought an investment of between $3,000,000 and $4,000,000, which we believe is required to expand Xinzhou Golds mining
permit, and which would allow us to resume our ore extraction and refinery activities. However, as at the date of this report we have
not successfully secured any financing commitment.
Due to our continued inability to raise sufficient
financing to expand Xinzhou Golds mining permit, Xinzhou Gold elected to reapply for a new drilling permit based on a scaled-down
drilling plan. The resulting new permit application, which was submitted to the Anhui Province Land & Resources Bureau for approval
on March 8, 2017, sought renewed permission to continue drilling in the areas directly adjacent to our concentration plant.That
application was subsequently rejected due to environmental concerns regarding wastewater runoff onto nearby agricultural lands. Accordingly,
during the last six months of fiscal 2019, the Company was primarily devoted to refining its environmental impact compliance proposal
and design in consultation with government officials. A new proposal and design was submitted to the environmental protection authorities
on June 30, 2019.
During the fall of 2019, the Zhen Ding JV received
feedback from the Land & Resource Bureau regarding its June 30, 2019 proposal and design submission. The authorities requested certain
improvements to the tailing pond and wastewater treatment facility on the proposed drilling site as a condition of granting any new drilling
permit.Zhen Ding JV subsequently retained a new environmental expert to re-design the tailing pond treatment facility. The new design
would employ automated pumping systems to optimize water transfer while lowering both cost and risk. The design affords immediate control
of pressure and flowrate, as well as real-time monitoring of pump speed, flowrate, inlet/outlet water pressures, water temperature, engine
performance, and engine fuel level. The improved water treatment design report was submitted to the government in December 2019 with an
estimated budget of approximately $1.75 million over two years. The Company expected a ruling on the new proposal in March 2020, however
the ruling was delayed due to COVID-19 containment measures in Anhui province which resulted in reduced staffing and operations across
all levels of the public service. More recently, the Company was advised that no ruling would be provided on the proposal without additional
3rdparty geo-technical research to support the viability of the Companys design. The estimated cost of such additional
research is $500,000.
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*Financing and Restructuring Efforts*
During fiscal 2019 management entered into negotiations
with various related party lenders regarding a possible restructuring or conversion of related party debt. Effective December 14, 2020,
we issued an aggregate of 46,442,550 shares of our common stock to ten lenders at the price of $0.02 per share in consideration for the
cancellation of $928,851 of interest bearing debt payable on demand to the lenders in respect of cash advances made by them to the Company.
Additionally, in light of robust gold prices since
2022, management has entertained proposals from prospective investors and partners seeking to participate in a smaller drilling operation
and other joint venture projects and transactions.
Going forward, we will continue to seek sufficient
financing to re-establish our mineral extraction and refining operations. We will also seek to identify and evaluation businesses opportunities
and other strategic transactions on an ongoing basis with a view toward diversifying our business and optimizing shareholder value.
**Competition**
The mining industry is intensely competitive.
We compete with numerous individuals and companies, including many major mining companies, which have substantially greater technical,
financial and operational resources and staffs. Accordingly, there is a high degree of competition for access to funds. There are other
competitors that have operations in the area and the presence of these competitors could adversely affect our ability to compete for financing
and obtain the service providers, staff or equipment necessary for the exploration and exploitation of our properties.
**Compliance with Government Regulation**
The following summary discusses all regulations that materially affect
the business of our Company.
**Chinese Regulations Affecting Our Company**
**Environmental Regulations**
We are subject to a variety of governmental regulations
related to environmental protection. The major PRC environmental regulations applicable to us include the Environmental Protection Law
and the Environmental Impact Appraisal Law.
The Environmental Protection Law sets out the
legal framework for environmental protection in the PRC. The Ministry of Environmental Protection (MEP) of the PRC is primarily
responsible for the supervision and administration of environmental protection work nationwide and formulating national waste discharge
limits and standards. Local environmental protection authorities at the county level and above are responsible for the environmental protection
in their jurisdictions.
Companies that discharge contaminants must report
and register with the MEP or the relevant local environment protection authorities. Companies discharging contaminants in excess of the
discharge limits prescribed by the central or local authorities must pay discharge fees for the excess in accordance with applicable regulations
and are also responsible for the treatment of the excessive discharge. Government authorities can impose different penalties on individuals
or companies in violation of the Environmental Protection Law, depending on the individual circumstances of each case and the extent of
contamination. Such penalties include warnings, fines, impositions of deadlines for remedying the contamination, orders to stop production
or use, orders to re-install contamination prevention and treatment facilities which have been removed without permission or left unused,
administrative actions against relevant responsible persons or companies, or orders to close down those enterprises. Where the violation
is serious, the persons or companies responsible for the violation may be required to pay damages to victims of the contamination. Where
serious environmental contamination occurs in violation of the provisions of the Environmental Protection Law which results in serious
loss of public and private property, persons or enterprises directly responsible for such contamination may be held criminally liable.
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**Restriction on Foreign Ownership**
The principal regulation governing foreign ownership
of our business in the PRC is the Foreign Investment Industrial Guidance Catalogue, effective as of April 10, 2015 (the Catalogue).
Investment activities in the PRC by foreign investors are principally governed by the Catalogue, which was promulgated and is amended
from time to time by the Ministry of Commerce and the National Development and Reform Commission (NDRC). The Catalogue divides
industries into three categories: encouraged, restricted and prohibited. Industries not listed in the Catalogue are generally deemed as
constituting a fourth permitted category and open to foreign investment unless specifically restricted by other PRC regulations.Our
Company, in consultation with its PRC legal advisor, the Guizhou Zhonggong Law Office, has determined that the business of Zhen Ding JV,
ore processing, is not listed in the Catalogue or otherwise restricted by other PRC regulations.As a result, our business
is deemed to be a permitted industry.This status has effectively been confirmed by the PRC State Administration
for Industry and Commerce (SAIC), which has issued a business license for Zhen Ding JV, as a foreign invested joint venture,
to engage in ore milling activities.
The NDRC and MOFCOM periodically jointly revise
the Catalogue. As such, there is a possibility that our companys business may fall outside the scope of the definition of a permitted
industry in the future. Should this occur, we would face a limit or restriction on foreign investment, the likes of which we are currently
not subject to.However, based on our observation of past practices of the Chinese government, any new guidelines or changes
to foreign ownership restrictions will likely be applied prospectively, and companies such as our Company with existing foreign investments
are unlikely to be affected by such changes. Also, we are not aware of any reason why ore processing would in the future be considered
a sensitive industry justifying its inclusion in the restricted or prohibited categories.
**Draft Law on Foreign Investment**
In January 2015, MOFCOM issued a draft Law on
Foreign Investment which is expected to be finalized in the near future without major changes.The draft Law on Foreign Investment
would liberalize foreign investment in PRC businesses by reducing or eliminating the need for administrative approvals of the form of
such investments, provided such investments do not involve investment in a restricted or prohibited industry.Because our Company
is engaged in a permitted industry, and after consultation with our PRC counsel, we do not expect any adverse consequences resulting from
the final passage of the Law on Foreign Investment.
**Regulation of Foreign Currency Exchange
and Dividend Distribution**
*Foreign Currency Exchange*
The principal regulations governing foreign currency
exchange in China are the Foreign Exchange Administration Regulations (1996), as amended, and the Administration Rules of the Settlement,
Sale and Payment of Foreign Exchange (1996). Under these regulations, Renminbi are freely convertible for current account items, including
the distribution of dividends, interest payments, trade and service-related foreign exchange transactions, but not for most capital account
items, such as direct investment, loan, repatriation of investment and investment in securities outside China, unless the prior approval
of SAFE or its local counterparts is obtained. In addition, any loans to an operating subsidiary in China that is a foreign invested enterprise,
cannot, in the aggregate, exceed the difference between its respective approved total investment amount and its respective approved registered
capital amount. Furthermore, any foreign loan must be registered with SAFE or its local counterparts for the loan to be effective. Any
increase in the amount of the total investment and registered capital must be approved by MOFCOM or its local counterpart. We may not
be able to obtain these government approvals or registrations on a timely basis, if at all, which could result in a delay in the process
of making these loans.
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The dividends paid by the subsidiary to its shareholder are deemed
shareholder income and are taxable in China. Pursuant to the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange
(1996), foreign-invested enterprises in China may purchase or remit foreign exchange, subject to a cap approved by SAFE, for settlement
of current account transactions without the approval of SAFE. Foreign exchange transactions under the capital account are still subject
to limitations and require approvals from, or registration with, SAFE and other relevant PRC governmental authorities.
*Dividend Distribution*
The principal regulations governing the distribution
of dividends by foreign holding companies include the Wholly Foreign Owned Enterprise Law (1986), as amended, and the Administrative Rules
under the Wholly Foreign Owned Enterprise Law (1990), as amended.
Under these regulations, WFOEs in China may pay
dividends only out of their retained profits, if any, determined in accordance with PRC accounting standards and regulations. In addition,
WFOEs in China are required to allocate at least 10% of their respective retained profits each year, if any, to fund certain reserve funds
unless these reserves have reached 50% of the registered capital of the enterprises. These reserves are not distributable as cash dividends.
**M&A Regulations and Overseas Listings**
On August8, 2006, six PRC regulatory agencies,
including the Ministry of Commerce, the State Assets Supervision and Administration Commission, the State Administration for Taxation,
the State Administration for Industry and Commerce, CSRC and SAFE, jointly issued the Regulations on Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors, or the M&A Rules, which became effective on September8, 2006 and were amended in 2009. This
M&A Rules, among other things, include provisions that purport to require that an offshore special purpose vehicle formed for purposes
of overseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies or individuals obtain
the approval of CSRC prior to the listing and trading of such special purpose vehicles securities on an overseas stock exchange.
On September21, 2006, CSRC published on
its official website procedures regarding its approval of overseas listings by special purpose vehicles. The CSRC approval procedures
require the filing of a number of documents with the CSRC and it would take several months to complete the approval process. The application
of this new PRC regulation remains unclear with no consensus currently existing among leading PRC law firms regarding the scope of the
applicability of the CSRC approval requirement.
Our company is not an offshore special purpose
vehicle under current PRC laws and regulations, as we currently control our Chinese operating entity through a joint venture arrangement
which is permitted under Chinese regulations regarding foreign ownership. As a result, we are not required to obtain the approval of CSRC
prior to the listing and trading of our securities on an overseas stock exchange.
Our company, in consultation with our PRC legal
advisor, the Guizhou Zhonggong Law Office, has determined that we are not required to obtain PRC approvals and registrations in connection
with the CSRC, SAFE, and SAIC for our joint venture arrangement under PRC regulations regarding foreign ownership, and that our company
is not an offshore special purpose vehicle under PRC regulations.
This is the case because Zhen Ding JV was established
as a joint venture enterprise in 2005 with the approval of the relevant PRC government agencies, with 70% of the joint venture owned by
Zhen Ding CA, a California entity with foreign ownership, and 30% of the joint venture owned by Xinzhou Gold, a domestic PRC company.In
connection with the formation of Zhen Ding JV, the Anhui Provincial Peoples Government issued a Certificate of Approval for Foreign
Investment in China in 2005 and a business license was subsequently issued by the SAIC for the period from 2005 to 2025.In
connection with the formation of Zhen Ding JV, Zhen Ding CA did not acquire any existing PRC domestic company or equity or assets, but
rather established a new joint venture entity with foreign and domestic partners with funds contributed by Zhen Ding CA (70%) and Xinzhou
Gold (30%).Zhen Ding CA did not acquire an interest in Xinzhou Gold, but rather established a new joint venture company with
Xinzhou Gold as the other partner.Hence there was no acquisition of a PRC domestic company or assets that would implicate
the relevant rules on foreign ownership.
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The M&A Rules include provisions that purport to require that an
offshore special purpose vehicle formed for the purpose of an overseas listing of securities in a PRC company obtain the approval of the
CSRC prior to the listing and trading of such special purpose vehicles securities on an overseas stock exchange.However,
CSRC approval is not required in the context of the current offering covered by this Registration Statement because when our company acquired
Zhen Ding CA, it acquired the previously established foreign ownership in a government approved joint venture and not an interest in a
PRC domestic company.Accordingly, our Company is not an offshore special purpose vehicle and the relevant PRC
agencies are not concerned with a change of ownership in a foreign owned joint venture partner.
Our companys PRC legal advisor, the Guizhou
Zhonggong Law Office, also made inquiries with official representatives of each of the CSRC, SAFE, and SAIC and those official representatives
all confirmed that there was no requirement for our company to obtain the approval of or register with such agency.
For the foregoing reasons, our company is not
required to obtain PRC approvals and registrations in connection with the CSRC, SAFE, and SAIC for its joint venture arrangement under
PRC regulations regarding foreign ownership.
**Regulations on Offshore Parent Holding Companies
Direct Investment in and Loans to Their PRC Subsidiaries**
An offshore company may invest equity in a PRC
company, which will become the PRC subsidiary of the offshore holding company after investment. Such equity investment is subject to a
series of laws and regulations generally applicable to any foreign-invested enterprise in China, which include the Wholly Foreign Owned
Enterprise Law, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Contractual Joint Venture Enterprise Law, all as
amended from time to time, and their respective implementing rules; the Tentative Provisions on the Foreign Exchange Registration Administration
of Foreign-Invested Enterprise; and the Notice on Certain Matters Relating to the Change of Registered Capital of Foreign-Invested Enterprises.
Under the aforesaid laws and regulations, the
increase of the registered capital of a foreign-invested enterprise is subject to the prior approval by the original approval authority
of its establishment. In addition, the increase of registered capital and total investment amount shall both be registered with SAIC and
SAFE.
Shareholder loans made by offshore parent holding
companies to their PRC subsidiaries are regarded as foreign debts in China for regulatory purposes, which are subject to a number of PRC
laws and regulations, including the PRC Foreign Exchange Administration Regulations, the Interim Measures on Administration on Foreign
Debts, the Tentative Provisions on the Statistics Monitoring of Foreign Debts and its implementation rules, and the Administration Rules
on the Settlement, Sale and Payment of Foreign Exchange.
Under these regulations, the shareholder loans
made by offshore parent holding companies to their PRC subsidiaries shall be registered with SAFE. Furthermore, the total amount of foreign
debts that can be borrowed by such PRC subsidiaries, including any shareholder loans, shall not exceed the difference between the total
investment amount and the registered capital amount of the PRC subsidiaries, both of which are subject to the governmental approval.
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**U.S. Regulations Affecting Our Company**
**FCPA Policy**
The Foreign Corrupt Practices Act, or the FCPA,
prohibits companies and individuals subject to FCPA jurisdiction from providing to foreign officials any corrupt payments
(*i.e*., bribes, kickbacks, and similar benefits) in order to obtain any unfair advantage with respect to government contracts, regulatory
approvals, licenses, and other government actions for the purpose of obtaining or retaining business. The FCPA applies to: (1) issuers
U.S. and foreign companies subject to SEC jurisdiction; (2) domestic concerns individuals who are citizens,
nationals or residents of the United States and companies with a principal place of business in the United States or organized under U.S.
law; and (3) other persons foreign companies or persons who act in the United States to further a corrupt payment.
The term other persons has been interpreted broadly to include foreign entities that send an email in furtherance of a corrupt
act to a U.S. recipient, or that clear a corrupt payment through a U.S. bank. The FCPA requires issuers to maintain accurate books and
records that do not misrepresent their payments or expenses. Issuers are also liable for the accuracy of their majority-owned subsidiaries
books and records and are required to act in good faith to encourage their minority-owned subsidiaries to adopt reasonable internal accounting
controls intended to avoid corrupt payments. Issuers, domestic concerns and other persons may be liable for the actions of their foreign
subsidiaries and agents if they know or should know that a subsidiary or agent is likely to make a corrupt payment to a foreign official.
Issuers, domestic concerns and other persons subject
to the FCPA are subject to severe criminal and civil penalties for violations of the FCPA. Entities that make corrupt payments may be
fined as much as $2 million per violation, or twice the amount of the benefit sought in return for the payment. Individuals may be fined
up to $100,000 and/or imprisoned for up to five years. Issuers who violate the FCPAs books and records requirements are subject
to fines up to $25 million, and individuals can be fined up to $5 million and/or imprisoned for up to 20 years. Companies may not indemnify
their officers or employees for FCPA violations.
**Research and Development**
We did not incur any research or development expenditures
over the last two fiscal years.
**Intellectual Property**
We do not currently have any intellectual property,
other than our domain name and website, www.zhendingresources.com.
**Employees**
Currently we have no paid employees. Our management
team consists of our CEO and CFO and they currently do not receive compensation for their services. We intend to provide compensation
to our CEO and CFO in the future and formalize their employment relationship with our company at that time.
None of the management employees have employee
contracts.
Our company may from time to time hire paid consultants
to assist it in achieving various goals.Currently, these include Mr. Victor Sun, who has served as a management and operations
consultant since our inception, and Mr. Dai Honglin, who serves as Chief Engineer and general manager of our joint venture gold mining
operations.
Due in part to his other business activities in
Anhui, China, Mr. Sun currently assists our company by helping to co-ordinate certain business activities and functions between the company
and Zhen Ding JV. Mr. Sun also assists our Principle Executive Officer to coordinate the companys professional advisors and
the execution of day to day public reporting obligations.
Zhen Ding JV also recently employed Wei Dong Sun,
a Professor of Geochemistry at the Guangzhou Institute of Geochemistry, as a consultant with respect to certain geological matters at
its Wuxi Gold Mine project.
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|
Item 1A. | Risk Factors | |
Our business operations are subject to a number
of risks and uncertainties, including, but not limited to those set forth below:
**Risks Relating To Our Company**
*We Are Still Considered To Be A Start-Up Company
And Have Little Operating History On Which To Evaluate Our Potential For Future Success.*
Our company was formed in 1996. During the years
ended December 31, 2023 and 2024, we did not derive any revenue from the processing and sale of ore concentrates. We have had limited
operating history under our proposed business model upon which you can adequately evaluate our business and prospects. Our limited operating
history may prevent a meaningful evaluation of our business, financial performance and prospects.
You must also consider all the risks and uncertainties
frequently encountered by developing companies in a very competitive field, such as ours. Our inability to find viable or profitable acquisition
candidates and then finding the necessary funding for these purchases may adversely affect our ability to progress.
Our acquisition of Zhen Ding NV provided us with
our first business operations.Despite this acquisition, we are still operating at a loss.Until we are able to
integrate Zhen Ding JV and obtain enough funding to execute our business plan for Zhen Ding JV, we will not generate sufficient revenue
to cover our operating expenses.
Doubts exist about our ability to continue as
a going concern.
*If We Do Not Obtain Additional Capital, We
May Be Unable To Sustain Our Business.*
Our operating plan for 2023 and 2024 was focused
on restarting the Wuxi ore milling operations through the permitting and exploration of further reserves by Xinzhou Gold and the subsequent
expansion of the mill. We estimate we will require a minimum of approximately $4,500,000 to support this plan for the next 12 months.
We are actively seeking additional funding, but to date have not entered into any agreements or other arrangements for such financing.
There can be no assurance that the required additional financing will be available on terms favorable to us, or at all.
Without additional funding, our company will not
be able to pursue its business model. If adequate funds are not available or are not available on acceptable terms when required, we would
be required to significantly curtail our operations and would not be able to fund the development of the business envisioned by our business
model. These circumstances could have a material adverse effect on our business and our ability to continue to operate as a going concern.
If additional funds are raised through the issuance of equity or convertible debt securities, our existing shareholders may experience
substantial dilution, and such securities may have rights, preferences and privileges senior to those of our common stock.
If we cannot obtain additional funding, we may
be required to:
reduce or possibly eliminate
our expenditures on exploration; and
seek other businesses opportunities and other
strategic transactions with a view toward diversifying our business and attracting new investment.
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Even if we do find a source of additional capital,
we may not be able to negotiate acceptable terms and conditions for receiving the additional capital. Any future capital investments could
dilute or otherwise materially and adversely affect the holdings or rights of our existing shareholders. In addition, new equity or convertible
debt securities issued by us to obtain financing could have rights, preferences and privileges senior to our common stock. We cannot give
you any assurance that any additional financing will be available to us, or if available, will be on terms favorable to us.
*We May Have Difficulty Raising Necessary Capital
to Fund Operations As A Result Of Market Price Volatility Of Our Shares Of Common Stock.*
The price per share of our shares on the OTC market
may at any time become subject to volatility resulting from purely market forces over which we will have no control. Such volatility may
make it more difficult to find investors willing to invest in our common stock, or to negotiate equity financing or terms that are acceptable
to us, furthering hampering our plans of expansion and growth.
*We Have Incurred Losses in Certain Prior Periods
And May Incur Losses In The Future.*
As of December 31, 2024,
we had accumulated losses of $23,419,382 since inception and had a working capital deficit of $10,927,863. We may incur additional losses
in the future. We expect our costs and expenses to increase as we expand our operations. Our ability to achieve profitability depends
on the ability to raise necessary funding, our ability to integrate new projects, the extensiveness of any reserves, and the global pricing
of precious and base metals. We may not be able to achieve or sustain profitability on a quarterly or annual basis.
*Our Profitability Is Heavily Dependent on The
World Price Of Commodities.*
The selling price that we will obtain for any
metal production is almost totally dependent on the world price. Should the price of gold, silver, or copper, our main interests, fall
below the cost of production, we may have to cease all mining and milling activities. Our future, at that point, will become extremely
doubtful.
*We Have Not Properly Explored the Potential
Resources on The Wuxi Property*
Most established and experienced mining enterprises
expend time and resources exploring and drilling to establish likely reserves within a given prospect. The method of mining chosen by
the previous owners of the Wuxi property, stated in common terms, is to follow the veins, a technique that is cost effective,
yet has the very real risk of mining activities being suddenly curtailed as the veins may narrow and yields per ton suddenly
become unprofitable.****This may cause us to terminate extraction and milling activities at this site.
*We Cannot Assure You That Our Growth Strategy
Will Be Successful.*
Our growth strategy is primarily through the acquisition
of new mines and their expandability. However, many obstacles exist to incorporating any new entity into our existing operations. Acquisitions
of businesses or other material operations may require debt financing or additional equity financing, resulting in leverage or dilution
of ownership. Integration of acquired business operations could disrupt our business by diverting management away from day-to-day operations.
The difficulties of integration may be increased by the necessity of coordinating geographically dispersed organizations, integrating
personnel with disparate business backgrounds and combining different corporate cultures. We also may not be able to maintain key employees
or customers of an acquired business or realize cost efficiencies or synergies or other benefits we anticipated when selecting our acquisition
candidates. In addition, we may need to record write-downs from future impairments of intangible assets, which could reduce our future
reported earnings. At times, acquisition candidates may have liabilities or adverse operating issues that we fail to discover through
due diligence prior to the acquisition which will be required to comply with laws of PRC, to the extent applicable. There can be no assurance
that any proposed acquisition will be able to comply with PRC requirements, rules and/or regulations, or that we will successfully obtain
governmental approvals to the extent required, which may be necessary to consummate such acquisitions.
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We cannot, therefore, assure you that we will
be able to successfully overcome such obstacles and establish these new additions. Our inability to successfully implement our growth
strategy may have a negative impact on existing operations and our future financial condition, results of operations or cash flows.
*If We Are Not Able To Implement Our Strategies
To Achieve Our Business Objectives, Our Business Operations And Financial Performance May Be Adversely Affected.*
Our business plan and growth strategy is based
on currently prevailing circumstances and the assumption that certain circumstances will or will not occur, as well as the inherent risks
and uncertainties involved in various stages of development. However, there is no assurance that we will be successful in implementing
our strategies or that our strategies, even if implemented, will lead to the successful achievement of our objectives. If we are not able
to successfully implement our strategies, our business operations and financial performance may be adversely affected.
*We Depend On Our KeyManagement Personnel
And The Loss Of Their Services Could Adversely Affect Our Business.*
We place substantial reliance upon the efforts
and abilities of our executive officers, Mr. De Gang Wei, our Chairman and key member of Management of our mining operations and CFO;
and Ms. Wen Mei Tu, our President and CEO. The loss of the services of any of our executive officers could have a material adverse effect
on our business, operations, revenues or prospects. We do not maintain key man life insurance on the lives of these individuals. As well,
both Mr. Wei and Ms. Tu have significant activities outside our company that put demands on their time that could detract from their management
of our companys business.
*Failure To Attract And Retain Personnel Could
Have An Adverse Impact On Our Operations.*
Our future success depends on our ability to identify,
attract, hire, retain and motivate other well-qualified managerial, technical, and operational personnel. There is intense competition
for these individuals, and there can be no assurance that these professionals will be available in the market or that we will be able
to meet their compensation requirements.
**Other Risks Related to Our Business**
*Reserves And Mineralization Estimates Are Uncertain.*
We rely on Xinzhou Gold for our supply of ores.There
are numerous uncertainties inherent in estimating proven and probable reserves and mineralization, including many factors beyond our control.
The estimation of reserves and mineralization is a subjective process and the accuracy of any such estimates is a function of the quality
of available data and of engineering and geological interpretation and judgment. Results of drilling, metallurgical testing and production
and the evaluation of mine plans subsequent to the date of any estimate may justify revision of such estimates. No assurances can be given
that the volume and grade of reserves recovered and rates of production will not be less than anticipated. Assumptions about prices are
subject to great uncertainty and gold prices have fluctuated widely in the past. Declines in the market price of gold or other precious
metals also may render reserves or mineralization containing relatively lower grades of ore uneconomic to exploit. Changes in operating
and capital costs and other factors including, but not limited to, short-term operating factors such as the need for sequential development
of ore bodies and the processing of new or different ore grades, may materially and adversely affect Xinzhou Golds mine reserves
and as a result affect our production.
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*We Potentially Face Intense Competition From
Other Companies In The Mining Field That Have Greater Resources Than Us.*
Most of our potential competitors have substantially
greater financial, technical, production and other resources than we do. Greater size in some cases provides them with a competitive advantage
with respect to production costs because of their economies of scale and their ability to purchase raw materials at lower prices. These
companies may be more attractive for qualified and experienced personnel. Companies with greater financial resources may readily outbid
us for potential lucrative acquisitions.
*Acts Of Terrorism, Responses To Acts Of Terrorism
And Acts Of War May Impact Our Business And Our Ability To Raise Capital.*
Future acts of war or terrorism, national or international
responses to such acts, and measures taken to prevent such acts may harm our ability to raise capital or our ability to operate, especially
to the extent we depend upon activities conducted in foreign countries, such as China. In addition, the threat of future terrorist
acts or acts of war may have effects on the general economy or on our business that are difficult to predict. We are not insured
against damage or interruption of our business caused by terrorist acts or acts of war.
**Risks Relating to The People's Republic Of
China**
*Currency Conversion and Exchange Rate Volatility
Could Adversely Affect Our Financial Condition.*
The PRC government imposes control over the conversion
of Renminbi into foreign currencies. Under the current unified floating exchange rate system, the People's Bank of China publishes an
exchange rate, which we refer to as the People's Bank of China exchange rate, based on the previous day's dealings in the inter-bank foreign
exchange market. Financial institutions authorized to deal in foreign currency may enter into foreign exchange transactions at exchange
rates within an authorized range above or below the People's Bank of China exchange rate according to market conditions. Pursuant to the
Foreign Exchange Control Regulations of thePRC issued by the State Council which came into effect on April 1, 1996, and the Regulations
on the Administration of Foreign Exchange Settlement, Sale and Payment of the PRC which came into effect on July 1, 1996, regarding foreign
exchange control, conversion of Renminbi into foreign exchange by Foreign Investment Enterprises, for use on current account items, including
the distribution of and profits to foreign investors, is permissible. Conversion of Renminbi into foreign currencies for capital account
items, including direct investment, loans, and security investment, is still under certain restrictions. On January 14, 1997, the State
Council amended the Foreign Exchange Control Regulations and added, among other things, an important provision, which provides that the
PRC government shall not impose restrictions on recurring international payments and transfers under current account items.
Enterprises in the PRC (including Foreign Investment
Enterprises) which require foreign exchange for transactions relating to current account items, may, without approval of the State Administration
of Foreign Exchange, or SAFE, effect payment from their foreign exchange account or convert and pay at the designated foreign exchange
banks by providing valid receipts and proofs.
*Natural Disasters, Health Epidemics and Other
Outbreaks*
**
We face risks related to natural disasters, health
epidemics and other outbreaks, especially the outbreak of COVID-19 since December 2019 which may have a material effect on our business,
results of operation and financial condition.
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*To The Extent That Our Assets Are Located In
China, Payment of Any Dividends Or Proceeds From Liquidation Will Be Subject To The Regulation and Approval Of The Relevant Chinese Government
Agencies.*
If we pursue our plans to operate mainly in China,
our assets will be predominantly located inside China. Under the laws governing foreign invested enterprises in China, the liquidation
of assets and distribution of proceeds from such liquidation are permitted, but are subject to special procedures and government approvals
under relevant tax, accounting, corporate, creditor protection, insolvency, and foreign exchange laws and regulations. Any liquidation
of our assets or distribution of liquidation proceeds by our PRC subsidiary(ies) will be subject, without limitation, to the settlement
of any outstanding tax, environmental and regulatory obligations, to the settlement of outstanding obligations to creditors and employees,
and to a rigorous audit and government approvals process. The aforementioned restrictions on the distribution liquidation proceeds are
subject to periodic change and revision, and may significantly restrict or impede our ability to distribute any net proceeds from the
sale of our assets in China to our parent company and shareholders. .
*Chinas Economic Policies Could Affect Our Business.*
To the extent our assets will be located in China
and to the extent our revenue will be derived from our operations in China, our results of business and prospects would be subject to
the economic, political and legal developments in China.
While China's economy has experienced a significant
growth in the past twenty years, growth has been irregular, both geographically and among various sectors of the economy. The Chinese
government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures
benefit the overall economy of China, but may also have a negative effect on us. For example, our sales results and financial condition
may be adversely affected by the government control over capital investments or changes in tax regulations with our future investors and/or
customers.
The economy of China has been transitioning from
a planned economy to a more market-oriented economy. In recent years the Chinese government has implemented measures emphasizing the utilization
of market forces for economic reform and the reduction of state ownership of productive assets and the establishment of corporate governance
in business enterprises; however, a substantial portion of productive assets in China are still owned by the Chinese government. In addition,
the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. It also
exercises significant control over China's economic growth through the allocation of resources, controlling payment of foreign currency-denominated
obligations, setting monetary policy and providing preferential treatment to particular industries or companies.
*We May Face Obstacles from the Communist System
in the People's Republic Of China.*
Foreign companies conducting operations in The
People's Republic of China face significant political, economic and legal risks. The Communist regime in The People's Republic of China
includes a stifling bureaucracy that may discourage Western investment.
*We May Have Difficulty Establishing Adequate
Management, Legal and Financial Controls In The People's Republic Of China.*
The People's Republic of China historically has
been deficient in Western style management and financial reporting concepts and practices, as well as in modern banking, computer and
other control systems. We may have difficulty in hiring and retaining a sufficient number of qualified employees to work in The People's
Republic of China. As a result of these factors, we may experience difficulty in establishing management, legal and financial controls,
collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices
that meet Western standards.
*Because Our Assets And Operations Are Located
In China, You May Have Difficulty Enforcing Any Civil Liabilities Against Us Under The Securities And Other Laws Of The United States
Or Any State.*
All of our assets are currently located in the
Republic of China. In addition, our directors and officers are non-residents of the United States, and all or a substantial portion of
the assets of these non-residents are located outside the United States. As a result, it may be difficult for investors to effect service
of process within the United States upon these non-residents, or to enforce against them judgments obtained in United States courts, including
judgments based upon the civil liability provisions of the securities laws of the United States or any state.
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There is uncertainty as to whether courts of the
Republic of China would enforce:
|
| Judgments of United States courts obtained against us or these non-residents based on the civil liability provisions of the securities
laws of the United States or any state; or | |
|
| In original actions brought in the Republic of China, liabilities against us or non-residents predicated upon the securities laws
of the United States or any state. Enforcement of a foreign judgment in the Republic of China also may be limited or otherwise affected
by applicable bankruptcy, insolvency, liquidation, arrangement, moratorium or similar laws relating to or affecting creditors' rights
generally and will be subject to a statutory limitation of time within which proceedings may be brought. | |
*The PRC Legal System Embodies Uncertainties,
Which Could Limit Law Enforcement Availability.*
The PRC legal system is a civil law system based
on written statutes. Unlike common law systems, decided legal cases have little precedence. In 1979, the PRC government began to promulgate
a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past
27 years has significantly enhanced the protections afforded to various forms of foreign investment in China. Each of our PRC operating
subsidiaries and affiliates is subject to PRC laws and regulations. However, these laws and regulations change frequently and the interpretation
and enforcement involve uncertainties. For instance, we may have to resort to administrative and court proceedings to enforce the legal
protection that we are entitled to by law or contract. However, since PRC administrative and court authorities have significant discretion
in interpreting statutory and contractual terms, it may be difficult to evaluate the outcome of administrative court proceedings and the
level of law enforcement that we would receive in more developed legal systems. Such uncertainties, including the inability to enforce
our contracts, could affect our business and operation. In addition, intellectual property rights and confidentiality protections in China
may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in
the PRC legal system, particularly with regard to the industries in which we operate, including the promulgation of new laws. This may
include changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws.
These uncertainties could limit the availability of law enforcement, including our ability to enforce our agreements with the government
entities and other foreign investors.
*Any Dividends And Other Distributions From
Any Subsidiaries In China Are Subject To Various Legal And Contractual Restrictions And Uncertainties, And Our Ability To Pay Dividends
Or Make Other Distributions To Our Shareholders Are Negatively Affected By Those Restrictions And Uncertainties.*
We plan to operate in China through PRC subsidiaries.
As a result, our profits available for distribution to our shareholders are dependent on the profits available for distribution
from PRC subsidiaries. If the subsidiary incurs debt on its own behalf, the debt instruments may restrict its ability to pay dividends
or make other distributions, which in turn would limit our ability to pay dividends on our shares. Under the current PRC laws, because
we are incorporated in the Delaware, any PRC subsidiaries would be regarded as Sino-foreign joint venture enterprises in China. Although
dividends paid by foreign invested enterprises, such as wholly foreign-owned enterprises and Sino-foreign joint ventures, are not subject
to any PRC corporate withholding tax, the PRC laws permit payment of dividends only out of net income as determined in accordance with
PRC accounting standards and regulations. Determination of net income under PRC accounting standards and regulations may differ
from determination under U.S. GAAP in significant aspects, such as the use of different principles for recognition of revenues and expenses.
In addition, if we make additional capital contributions to PRC subsidiaries, (which may occur through the capitalization of undistributed
profits), then additional approval of the PRC government would be required due to an increase in our registered capital and total investment.
Under the PRC laws, a Sino-foreign joint venture enterprise is required to set aside a portion of its net income each year to fund
designated statutory reserve funds. These reserves are not distributable as cash dividends. As a result, our primary internal
source of funds of dividend payments from PRC subsidiaries are subject to these and other legal and contractual restrictions and uncertainties,
which in turn may limit or impair our ability to pay dividends to our shareholders. Moreover, any transfer of funds from us to PRC
subsidiaries, either as a shareholder loan or as an increase in registered capital, is subject to registration with or approval by PRC
governmental authorities. We currently do not intend on paying any dividends in the future and expect to retain all available funds to
support our operations and to finance growth and development of our business. We have never declared dividends or paid cash dividends.
Our board of directors will make any future decisions regarding dividends. We currently intend to retain and use any future
earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the near future. Therefore,
any gains on an investment in our common stock will likely occur through an increase in our stock price, which may or may not occur.
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*We May Be Exposed To Liabilities Under The
Foreign Corrupt Practices Act, And Any Determination That We Violated The Foreign Corrupt Practices Act Could Have A Material Adverse
Effect On Our Business.*
We are subject to the Foreign Corrupt Practice
Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political
parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. We have operations,
agreements with third parties and we make sales in China. Our activities in China create the risk of unauthorized payments or offers
of payments by the employees, consultants, sales agents or distributors of our Company, even though they may not always be subject to
our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing
safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents or distributors
of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA may result in severe criminal
or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial
condition. In addition, the U.S. government may seek to hold our Company liable for successor liability FCPA violations committed by companies
in which we invest or that we acquire.
**Risks Related to Corporate And Stock Matters**
**
*Our Common Stock Is A Penny Stock. Trading
Of Our Stock May Be Restricted by The SECs Penny Stock Regulations That May Limit A Stockholders Ability To Buy And Sell
Our Stock.*
Our common shares are deemed a penny stock.
The SEC has adopted Rule 15g-9 which generally defines penny stock to be any equity security that has a market price (as
defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than
established customers and accredited investors. The term accredited investor refers generally to institutions
with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt
from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid
and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customers account. The bid and offer quotations, and the broker-dealer
and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must
be given to the customer in writing before or with the customers confirmation. In addition, the penny stock rules require that
prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination
that the penny stock is a suitable investment for the purchaser and receive the purchasers written agreement to the transaction.
These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that
is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities.
We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.
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In addition, we intend to apply for our common
stock to be quoted on the electronic stock quotation service operated by OTC Markets Group the (OTC). There can be no assurance
that we will succeed in this effort. Failure to have our shares quoted on the OTC may impair the liquidity of our common stock.
*NASD Sales Practice Requirements May Also Limit
A Stockholders Ability To Buy And Sell Our Stock.*
Section 15(g) of the Securities Exchange Act of
1934, as amended, and Rule 15g-2 promulgated thereunder by the SEC require broker-dealers dealing in penny stocks to provide potential
investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document
before effecting any transaction in a penny stock for the investors account.
Potential investors in our common stock are urged
to obtain and read such disclosure carefully before purchasing any shares that are deemed to be penny stock. Moreover, Rule
15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any
penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or
her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions
in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable
of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which
the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor,
confirming that it accurately reflects the investors financial situation, investment experience and investment objectives. Compliance
with these requirements may make it more difficult for holders of our common stock to resell their shares to third parties or to otherwise
dispose of them in the market or otherwise.
*Shares Eligible for Future Sale May Adversely
Affect The Market Price Of Our Common Stock, As The Future Sale Of A Substantial Amount Of Our Restricted Stock In The Public Marketplace
Could Reduce The Price Of Our Common Stock.*
From time to time, certain of our stockholders
may be eligible to sell all or some of their shares of common stock by means of ordinary brokerage transactions in the open market pursuant
to Rule 144, promulgated under the Securities Act (Rule 144), subject to certain limitations. In general, pursuant to Rule
144, a stockholder (or stockholders whose shares are aggregated) who has satisfied a one-year holding period may, under certain circumstances,
sell within any three-month period a number of securities which does not exceed the greater of 1% of the then outstanding shares of common
stock or the average weekly trading volume of the class during the four calendar weeks prior to such sale. Rule 144 also permits,
under certain circumstances, the sale of securities, without any limitations, by a non-affiliate of our company that has satisfied a two-year
holding period. Any substantial sale of common stock pursuant to Rule 144 or pursuant to any resale prospectus may have an adverse effect
on the market price of our securities.
*You May Not Be Able To Liquidate Your Investment
Since There Is No Assurance That A Public Market Will Develop For Our Common Stock Or That Our Common Stock Will Ever Be Approved For
Trading On A Recognized Exchange.*
There is no established public trading market
for our securities. After this document is declared effective by the U.S. Securities and Exchange Commission, we intend to seek a market
maker to apply for a quotation on the OTC in the United States. We cannot assure you that a market maker will agree to file the necessary
documents with the OTC, nor can there be any assurance that such an application for quotation will be approved or that a regular trading
market will develop or that if developed, will be sustained. In the absence of a trading market, you may be unable to liquidate its investment,
which will result in the loss of your investment.
| | 20 | | |
| Table of Contents | |
*Our Directors And Executive Officers, Collectively,
Own Approximately 34% Of Our Outstanding Common Stock And May Be Able To Control Our Management And Affairs.*
As of December 31, 2024, our executive officers
and directors beneficially owned an aggregate of approximately 34.0% of our outstanding common stock. As a result, our directors and executive
officers, acting together, may be able to control our management and affairs, including the election of directors and approval of significant
corporate transactions, such as mergers, consolidation, and sale of all or substantially all of our assets. Consequently, this concentration
of ownership may have the effect of delaying or preventing a change of control, including a merger, consolidation or other business combination
involving us, even if such a change of control would benefit our stockholders. It could also deprive our shareholders of an opportunity
to receive a premium for their shares as part of a sale of our company and it may affect the market price of our common stock. In deciding
how to vote on such matters, those shareholders interests may conflict with yours.
|
Item 1B. | Unresolved Staff Comments | |
As a smaller reporting company,
we are not required to provide the information required by this Item.
|
Item 2. | Properties | |
Our principal office is located at 99 Avenue De
la Moselle, Quebec, Canada J4S 1W9. The offices, located in a suburb of Montreal, are not under written lease but are rented through
a verbal agreement, on a month to month basis, from Immeuble Wing Kei Inc. at$500per month, due and payable at each calendar
quarter end. The occupancy began October 15, 2018.
Our operational offices are located at:Zhen
Ding Mining Co. Ltd., Wuxi County, Town of Langqiao, Jing Xian, Anhui Province, China, Tel: 86-6270-9018.
**Mineral Properties**
*Description of the Property of the Wuxi Gold
Project*
Zhen Ding JV relies on Xinzhou Gold for its supply
of metal ores and its processing plant is located on the site of the underground mine where Xinzhou Gold has licenses to explore and mine
ore (the Wuxi Gold Project) to reduce transportation cost.The Wuxi Gold Project is located in Jingxian county,
situated in the southeastern part of Anhui Province, PRC. The site is 63km southwest of the city of Xuancheng, a significant city of about
2.8 million inhabitants, and is 15 km south of the town of Jingxian.The project site falls under the administration of the
township of Langqaio and is located near the village of Wuxi (see Figure 1).
| | 21 | | |
| Table of Contents | |
*
Figure 1- Location of Wuxi
The geographical position of the Wuxi Gold Project
is located within the area bounded by the coordinates: 1182420 to 1182720 E and 303130
to 303530 N.
Access to the site from the city of Huangshan,
the nearest city with regular air service, is by Express Highway #205 for approximately 125km to the village of Wuxi and subsequently
by a 2 km all-weather road to the project site. All roads are public roads. Access is also available through the rail system at Xuancheng.
(Please refer to Figure 2 for access to Wuxi via highways).
| | 22 | | |
| Table of Contents | |
The area was eroded by glacial activity and subsequently
by meteoric waters to a rolling landform. The elevations in the Wuxi Gold Project area are generally higher in the east and lower in the
west.The highest elevation, in the area, is less than 300m above sea level.
Gullies and creeks are well developed and are
recharged by meteoric water. A river near the Wuxi Gold Project site will, via surface channel, conduit sufficient water for process and
mining purposes. All rivers, gullies and creeks in the area flow into the Shuiyang river system.
The area has a mild climate. The highest temperatures
occur in July and August reaching highs of + 41C and the lowest are during January and February reaching lows of 8C.
Annual precipitation varies between 1348.2mm and 1422.8mm, concentrated from April to August.
The Wuxi Gold Project is located near the village
of Wuxi and the work force comes from this and other nearby villages. A plentiful, although inexperienced, work force is available locally.
Electric power is supplied by the local power
grid and additional demand can be met by existing infrastructure. Energy cost is low and reliability is reportedly good. No backup power
supply is provided or required on site. Telephone lines are available. Cellular phone coverage is good. Required roads, power lines, and
water lines are in place.
Our joint venture partner, Xinzhou Gold mined
ores at the Wuxi Gold Project under two permits: (1) Mining License No. C3400002009114110049341 (the Mining License) and
(2) Gold Mining License No. (2005) 42 (the Gold Mining License).
The Mining License was valid from November 20,
2014 until November 20, 2017and was issued by the Mining Resources Department of Anhui Province.This license allowed
ore to be mined in a specific area spanning 0.744 square kilometers with an ore extraction limit of 60,000 tons per year. The Mining License
allows for underground mining.
| | 23 | | |
| Table of Contents | |
The Gold Mining Licensewas issued by the
National Commission on National Development and Reform andspecifically grants the right to extract gold ore up to 200 tons a day
in the Wuxi Gold Mine and was valid from June 3, 2005 until June 3, 2015. The permit extension application is currently in process.Without
a valid Gold Mining License, Xinzhou Gold may not mine any gold ore from the Wuxi Gold Mine and therefore would not have any gold ore
available for sale to us, which could have a material adverse effect on our revenues and income.
In December, 2016, the application to expand Xinzhou Golds permit
was rejected due to the companys insufficient working capital. Xinzhou Gold intends to reapply for an extension of the permitted
mining area when it is able to demonstrate sufficient working capital to drill the extended area. As such, mining of ore has been
reduced awaiting an expansion of the working area permitted under the Mining License. However, if sufficient working capital is
unavailable, or should the application be denied on other grounds, we would not be able to secure another source with higher grade ores
for our processing plant, which would severely limit our ability to execute our plan of operation and our potential profitability.
History of the Wuxi Gold Project*
Initial regional geologic work began, in this
area, in the 1930s. Geologists, including Li Yuyao and Wang Hengjie, began investigations into the origin of the carbonaceous zone
in southern Anhui. Mineral exploration work began subsequent to the investigation for coal by Zhaoxian Bian and Yunyuan Liu in the 1940s.
Additional regional geology and mineral geological
surveys were performed between 1960 and 1965, by the Anhui Regional Geological Survey Team. This team provided a detailed Lithological/Stratigraphic
study of the area. Concomitantly, this team performed stream sampling and investigations of old mine workings as well as additional mineral
prospecting which has laid the basis for all subsequent geological work.
Since that time, there have been sporadic geological
investigations primarily for the purpose of scientific research. Official regional geologic survey mapping is limited to a 1:50000 scale
survey map; this limitation is indicative of the minor amounts of previous geological work performed in the area.
In 1998, the Anhui Exploration (Nuclear Technology)
Institute discovered gold and poly-metallic deposits in the district. The mineral resource, subject of this report, was located primarily
by surface exploration techniques, primarily surface trenching.
In March of 1999, the Anhui Exploration (Nuclear
Technology) Institute sought additional investors; their involvement resulted in the formation of our joint venture partner, Xinzhou Gold.
Senior management and owners of Xinzhou Gold are also our partner in Zhen Ding JV and also form part of the senior management of Zhen
Ding DE.
In 2010, an additional financial partner was admitted
to the Wuxi Gold Project and committed to expending up to US$4,000,000 to firm up the mining tunnels, for additional drilling and building
an ore processing (concentration) plant. From 2006 through 209, Zhen Ding JV spent approximately $27.5 million RMB (about US$4.3 million)
in respect of the Wuxi Gold Project.
*The Physical Plant at the Wuxi Gold Project*
The processing of the ore is through a gravity
concentration plant which has been built on the northeast side of the mountain located within the Zhen Ding JV prospect. The plant is
owned by Zhen Ding JV and is approximately six years old.
In the PRC, land use rights are the legal rights
for an entity to use land for a fixed period of time. The PRC has adopted a dual land tenure system under which land ownership is independent
of land use rights. The land is either owned by the state or by rural collective economic organizations.As ofDecember
31, 2019,the Zhen Ding JV did not have any land use rights agreements with the PRC for the buildings owned by our Company. The Government
owns the land where our Companys buildings are located and allows our Company free usage of the land.
| | 24 | | |
| Table of Contents | |
The overview of milling process is for the ore
to be extracted and brought to the plant and initially passed through two crushers, one coarse and one more refined, which is then fed
into one of three grinding mills, where the ore is ground into powder form. At the grinding process, the powdered ore is mixed with chemicals
and then fed into a floatation machine. After the chemical treatment, output from the floatation machine goes through a filter and drying
machine. The output of the drying produces our final product, which is a gold, silver, lead, zinc and copper concentrate. We do not produce
pure metal. We estimate our extracted ore is 65-80% pure and is sold to refineries that further purify and separate the concentrate. Tailing
are sent directly to a tailing pond near the entrance side of the plant. There is no hazardous waste produced by our concentration plant
and we recycle nearly all of the waste water.
The plant was completed, tested, and inspected
by authorities during 2012. Milling activity commenced during the summer of 2012. In the five months ended December 31, 2012, Zhen
Ding JV milled and sold $2,101,200of metal concentrate. However, mining and production decreased at year end as Xinzhou Gold exhausted
its higher concentrated gold deposits and needed to extract beyond the areas permitted by the mining license.
At the beginning of fiscal 2015, we idled our
mineral processing plant due to an overall downturn in the demand and market prices for our concentrates. This downturn coincided with
an overall economic recession in China and downturn in the global commodities market during fiscal 2015 through 2016. Our plant has subsequently
remained idle, and Xinzhou Golds prospecting and mining licenses have lapsed.
Due to our continued inability to raise
sufficient financing to expand Xinzhou Golds mining permit, Xinzhou Gold elected to reapply for a new drilling permit based on
a scaled-down drilling plan. The resulting new permit application, which was submitted to the Anhui Province Land & Resources Bureau
for approval on March 8, 2017, sought renewed permission to continue drilling in the areas directly adjacent to our concentration plant.That
application was subsequently rejected due to environmental concerns regarding wastewater runoff onto nearby agricultural lands. Accordingly,
during the last six months of fiscal 2019, the Company was primarily devoted to refining its environmental impact compliance proposal
and design in consultation with government officials. A new proposal and design for a tailing pond treatment facility was submitted to
the environmental protection authorities on June 30, 2019.
During the fall of 2019, the Zhen Ding JV received
feedback from the Land & Resource Bureau regarding its June 30, 2019 proposal and design submission. The authorities requested certain
improvements to the tailing pond and wastewater treatment facility on the proposed drilling site as a condition of granting any new drilling
permit.Zhen Ding JV subsequently retained a new environmental expert to re-design the tailing pond treatment facility. The new design
would employ automated pumping systems to optimize water transfer while lowering both cost and risk. The design affords immediate control
of pressure and flowrate, as well as real-time monitoring of pump speed, flowrate, inlet/outlet water pressures, water temperature, engine
performance, and engine fuel level. The improved water treatment design report was submitted to the government in December 2019 with an
estimated budget of approximately $1.75 million over two years. The Company expected a ruling on the new proposal in March 2020, however
the ruling was delayed due to COVID-19 containment measures in Anhui province which resulted in reduced staffing and operations across
all levels of the public service. More recently, the Company was advised that no ruling would be provided on the proposal without additional
3rdparty geo-technical research to support the viability of the Companys design. The estimated cost of such additional
research is $500,000.
Recent Operations
*Recent Activities*
Since December 2022, our joint venture has partnered
with the Guangzhou Institute of Geophysical Chemistry, a branch of the Chinese Academy of Sciences, and the 217 Institute of Geology in
Anhui Province to carry out preliminary prospecting, research, and planning activities in preparation for an application to renew mining
and processing permits. Students and faculty of the Chinese Academy of Sciences provide theoretical support and analysis, while the 271
Nuclear Engineering Company has carried out exploration project mapping and design. Xinzhou Gold has also engaged environmental consultants
to laisse with The Environmental Protection Bureau of Jingxian County, Anhui Province regarding the renewal of our environmental licenses
and permits.
*Financing and Restructuring Efforts*
During fiscal 2019 our management entered into
negotiations with various related party lenders regarding a possible restructuring or conversion of related party debt. Effective December
14, 2020, we issued an aggregate of 46,442,550 shares of our common stock to ten lenders at the price of $0.02 per share in consideration
for the cancellation of $928,851 of interest bearing debt payable on demand to the lenders in respect of cash advances made by them to
the Company.
**
Since idling our mineral processing plant, we
have intermittently sought an investment of between $3,000,000 and $4,000,000, which we believe is required to resume our ore extraction
and refinery activities. However, as at the date of this report we have not successfully secured any financing commitment. Due to the
gradual recovery in global commodities markets during the fall of 2023, including the market for precious metals, we intend to resume
our search to identify sources of equity financing required to complete permitting and resumption of our mineral extraction and refining
operations. Meanwhile, our management has continued to identify and evaluate businesses opportunities and other strategic transactions
with a view to diversifying our business and creating shareholder value.
| | 25 | | |
| Table of Contents | |
|
Item 3. | Legal Proceedings | |
From time to time, we may become involved in litigation
relating to claims arising out of its operations in the normal course of business. We are not involved in any pending legal proceeding
or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we area party or to
which any of our properties is subject, which would reasonably be likely to have a material adverse effect on us.
|
Item 4. | Mine Safety Disclosures | |
Not applicable.
|
Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |
Our common shares are quoted on the OTC Markets
under the symbol RBTK. The following quotations, obtained from Stockwatch, reflect the high and low bids for our common
shares based on inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.
The following table reflects the high and low
bid information for our common stock obtained from Stockwatch and reflects inter-dealer prices, without retail mark-up, markdown or commission,
and may not necessarily represent actual transactions.
The high and low bid prices of our common stock
for the periods indicated below are as follows:
|
OTC Markets | |
|
Period Ended |
High |
Low | |
|
April 1, 2025 |
* |
* | |
|
December 31, 20224 |
* |
* | |
|
September 30, 2024 |
* |
* | |
|
June 30, 2024 |
* |
* | |
|
March 31, 2024 |
* |
* | |
|
December 31, 2023 |
* |
* | |
|
September 30, 2023 |
* |
* | |
|
June 30, 2023 |
* |
* | |
|
March 31, 2023 |
* |
* | |
|
December 31, 2022 |
* |
* | |
** No trades occurred during this period.*
Our shares are issued in registered form. Worldwide Stock Transfer,
LLC, One University Plaza, Suite 505, Hackensack, NJ 07601, Telephone: (201) 820-2008; Facsimile: (201) 820-2010is the registrar
and transfer agent for our common shares.
On March 30, 2025, the
shareholders list showed 193 registered shareholders with 110,737,348 common shares outstanding.
| | 26 | | |
| Table of Contents | |
**Dividend Policy**
We have not paid any cash dividends on our common stock and have no
present intention of paying any dividends on the shares of our common stock. Our current policy is to retain earnings, if any, for use
in our operations and in the development of our business. Our future dividend policy will be determined from time to time by our board
of directors.
**Equity Compensation Plan Information**
We do not have a stock option plan in favor of
any director, officer, consultant or employee of our company.
**Convertible Securities**
As of December 31, 2024, we did not have any convertible
securities outstanding.
**Recent Sales of Unregistered Securities; Use
of Proceeds from Registered Securities**
We did not sell any equity securities which were
not registered under the Securities Act during the year ended December 31, 2024 that were not otherwise disclosed on our quarterly reports
on Form 10-Q or our current reports on Form 8-K filed during the year ended December 31, 2024.
**Purchase of Equity Securities by the Issuer
and Affiliated Purchasers**
We did not purchase any of our shares of common
stock or other securities during the fourth quarter of our fiscal year ended December 31, 2024.
|
Item 6. | Selected Financial Data | |
As a smaller reporting company,
we are not required to provide the information required by this Item.
|
Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations | |
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 United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
**Plan of Operations and Cash Requirements**
Our operating plan for the balance of fiscal 2025
is to seek an investment of approximately US$3,350,000, which we believe is required to restart our mineral processing plant in China
and extend Xinzhou Golds mining permit, which would allow us to resume our ore extraction and refinery activities, although we
have not secured any financing commitment thus far.
The funds raised would be used to:
|
1. | upgrade tailings pond and water treatment facility; | |
|
2. | extend and expand permitted mining area of Xinzhou Gold to access higher concentrate ore veins; | |
|
3. | resume ore exploration and extraction activities; | |
|
4. | re-start the mill; | |
|
5. | re-test the mill; | |
|
6. | develop expansion plans for our plant capacity; | |
|
7. | drill additional holes near the concentration plant; and | |
|
8. | 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.
| | 27 | | |
| Table of Contents | |
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**
|
| |
$ | | | |
|
Restart mill and mining related operations | |
| 3,000,000 | | |
|
General, Administrative Expenses | |
| 100,000 | | |
|
Consulting & Permit Fees | |
| 150,000 | | |
|
Misc | |
| 100,000 | | |
|
| |
| | | |
|
| |
| | | |
|
Total | |
| 3,350,000 | | |
In light of our nominal cash resources, we expect
that we will be required to raise approximately $3,500,000 in order to execute our proposed business plan during fiscal 2025. In
the event that we are unable to raise sufficient funds to carry out our planned investment in drilling equipment and our planned exploration
program, we anticipate that we will require a minimum of $350,000 to maintain our current business operations without engaging in any
significant exploration activities or investment. We have suffered recurring losses from operations. The continuation of our company is
dependent upon our company attaining and maintaining profitable operations and raising additional capital as needed.
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 December
31, 2024 and 2023**
The following summary of our results of operations
should be read in conjunction with our financial statements for the years ended December 31, 2024 and 2023, which are included herein.
Our operating results for the years ended December
31, 2024 and 2023, and the changes between those periods for the respective items are summarized as follows:
|
| |
Year Ended December 31, 2024 | | |
Year Ended December 31, 2023 | | |
|
| |
| | |
| | |
|
General and administrative | |
$ | 605,032 | | |
$ | 749,021 | | |
|
Interest expense | |
$ | (501,273 | ) | |
$ | (498,120 | ) | |
|
Other income (expenses) | |
$ | - | | |
$ | 42 | | |
|
| |
| | | |
| | | |
|
Net loss | |
$ | (1,106,305 | ) | |
$ | (1,2247,099 | ) | |
| | 28 | | |
| Table of Contents | |
Our financial statements
report a net loss of$1,106,305 for the year ended December 31, 2024 as compared to $1,247,099 for the year ended December 31, 2023,
representing a decrease of 11.28% during the most recent fiscal year.
Our operating expenses
for the year ended December 31, 2024 were $605,032 compared to $749,021 for the year ended December 31, 2023.
Our interest expense
for the year ended December 31, 2024 was $501,273 compared to $498,120 during fiscal 2023.
**Liquidity and Financial Condition**
*Working Capital*
|
| |
At December 31, 2024 | | |
At December 31, 2023 | | |
|
Current assets | |
$ | 1,977 | | |
$ | 6,293 | | |
|
Current liabilities | |
| 10,929,840 | | |
| 10,609,296 | | |
|
Working deficit | |
$ | ($10,927,863 | ) | |
$ | (10,603,003 | ) | |
As of December 31 2024, we had accumulated
losses of approximately $23,419,382 since inception. We anticipate generating losses and, therefore, may be unable to continue operations
further in the future.
*Cash Flows*
|
| |
Year Ended | | |
|
| |
December 31, | | |
|
| |
2024 | | |
2023 | | |
|
Net cash used in operating activities | |
$ | (107,228 | ) | |
$ | 9,258 | | |
|
Net cash provided by financing activities | |
| 105,475 | | |
| 66,764 | | |
|
Foreign currency translation | |
| (2,563 | ) | |
| (83,437 | ) | |
|
Net increase (decrease) in cash | |
$ | (4,316 | ) | |
$ | (7,415 | ) | |
*Operating Activities*
Net cash used in operating activities was $107,228 for the year ended
December 31, 2024 compared to $9,258 for the year ended December 31, 2023, representing an increase of 754.54%.
*Investing Activities*
Net cash provided by investing activities was
nil for the years ended December 31, 2023 and December 31, 2024, respectively.
*Financing Activities*
Net cash provided by financing activities was $105,475 for the year
ended December 31, 2024 compared to $66,764 for the year ended December 31, 2023. Proceeds from financing activities during both years
were from short-term operating loans.
| | 29 | | |
| Table of Contents | |
**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 December 31, 2024, the Company had accumulated losses of $23,419,382 since inception and had a working
capital deficit of $10,927,863. These factors raise substantial doubt regarding the Companys ability to continue as a going concern.
The continuation of the Company as a going concern is dependent upon financial support from its stockholders, the ability of the Company
to obtain necessary debt or equity financing to continue operations, and the attainment of profitable operations. Realization value may
be substantially different from carrying values as shown and these financial statements do not include any adjustments to the recoverability
and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to
continue as a going concern.
**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.
**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 the United States of America. Preparing financial statements requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by managements
application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with
the following aspects of our financial statements is critical to an understanding of our financial statements.
*Principles of Consolidation*
The consolidated financial statements include
the accounts of our company, our wholly subsidiary Z&W Zhen Ding Corporation and our majority owned subsidiary Zhen Ding Mining Co.
Ltd. All inter-company transactions and balances were eliminated. The portion of the income applicable to non-controlling interests in
subsidiary undertakings is reflected in the consolidated statements of operations.
*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 companys
subsidiaries are reported as a component of equity, separate from the parents 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.
|
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk | |
As a smaller reporting company,
we are not required to provide the information required by this Item.
| | 30 | | |
| Table of Contents | |
|
Item 8. | Financial Statements and Supplementary Data | |
Index to Financial Statements
|
Report of Independent Registered Public Accounting Firm (PCAOB ID 7000) |
32 | |
|
Report of Independent Registered Public Accounting Firm (PCAOB ID6706) |
34 | |
|
Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023 |
36 | |
|
Consolidated Statements of Operations and Comprehensive Loss |
37 | |
|
Consolidated Statements of Cash Flows |
38 | |
|
Consolidated Statement of Stockholders Deficit |
39 | |
|
Notes to the Consolidated Financial statements |
40 | |
| | 31 | | |
| Table of Contents | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
To the Board of Directors and Stockholders
Zhen Ding Resources Inc.
Opinion on The Financial Statements
We have audited the accompanying consolidated
balance sheet of Zhen Ding Resources Inc. and subsidiaries (the "Company) as of December 31, 2024, and the related consolidated
statements of operations and other comprehensive loss, changes in stockholders deficit, and cash flows for the year ended, December
31, 2024, and the related notes (collectively referred to as financial statements). In our opinion, the financial statements
present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2024, and the results
of its operations and its consolidated cash flows for the year ended December 31, 2024, in accordance with accounting principles generally
accepted in the United States of America.
Going Concern
The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As described in Note 3 to the financial statements the Company has
suffered recurring losses from operations and has cash flows used in operations that raise substantial doubt about its ability to continue
as a going concern. Managements plans regarding these matters are also described in Note 3. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility
of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control
over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control
over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess
the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audit provided a reasonable basis for our opinion.
**Critical Audit Matter**
The critical audit matter communicated below is
a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the
audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective or complex judgement. The communication of a critical audit matter does not alter in anyway our opinion on the
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion
on the critical audit matter or on the accounts or disclosures to which it relates.
**Going Concern Assessment**
As described in Note 3 to the consolidated financial
statements and in the going concern paragraph above, the Company prepared its financial statements on a going concern basis, and management
has concluded that the Company has not generated significant income to date. For the year ended December 31, 2024, the Company incurred
net losses of USD 1,106,305. As of December 31, 2024, accumulated deficit amounted to USD 23.4 million and the current liabilities exceeded
the current assets in the amount of USD 10.9 million.
| | 32 | | |
| | |
The principal consideration
for our determination that performing procedures relating to the Companys going concern assessment is a critical audit matter is
the significant judgment by management related to the Companys ability to raise funds and continue operations.
Addressing the matter
involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.
These procedures included verifying with certain stockholders about their commitment to financially support the Company for the next twelve
months from December 31, 2024.
*
HTL International, LLC
We have served as Zhen Ding Resources Incs auditor since 2024.
Houston, TX
April 15, 2025
| | 33 | | |
| | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Board of Directors and Stockholders
Zhen Ding Resources Inc.
**Opinion on the Financial Statements**
We have audited the accompanying consolidated
balance sheets of Zhen Ding Resources Inc. (the Company), as of December 31, 2023 and 2022, and the related consolidated
statements of operations and comprehensive loss, changes in stockholders deficit and cash flows for each of the two years in the
period ended December 31, 2023, and the related notes (collectively referred to as the financial statements). In our opinion,
the financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31,
2023 and 2022, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December
31, 2023, in conformity with U.S generally accepted accounting principles.
**Going Concern**
The accompanying financial statements have been
prepared assuming that the Company will continue as a going concern. As described in Note 3 to the financial statements and going concern
assessment of critical audit matter below, the Company has suffered recurring losses from operations and has working capital and stockholders
deficit that raise substantial doubt about its ability to continue as a going concern. Managements plans regarding these matters
are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
**Basis for Opinion**
These financial statements are the responsibility
of the Companys management. Our responsibility is to express an opinion on the Companys financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Companys
internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess
the risks of material misstatements of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
**Critical Audit Matter**
The critical audit matter communicated below is
a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the
audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective or complex judgement. The communication of a critical audit matter does not alter in anyway our opinion on the
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion
on the critical audit matter or on the accounts or disclosures to which it relates.
Going Concern Assessment
As described in Note 3 to the consolidated financial
statements and in the going concern paragraph above, the Company prepared its financial statements on a going concern basis, and management
has concluded that the Company has not generated significant income to date. For the year ended December 31, 2023, and 2022, the Company
incurred net losses of USD 1,247,099 and USD 583,307, respectively. As of December 31, 2023, and 2022, the accumulated deficit amounted
to USD 22.59 million and USD 21.34 million, respectively and the current liabilities exceeded the current assets in the amount of USD
10.6 million and USD 10.3 million, respectively.
| | 34 | | |
| | |
The principal consideration
for our determination that performing procedures relating to the Companys going concern assessment is a critical audit matter is
the significant judgment by management related to the Companys ability to raise funds and continue operations.
Addressing the matter
involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.
These procedures included verifying with certain stockholders about their commitment to financially support the Company for the next twelve
months from December 31, 2023.
TPS Thayer, LLC
We have served as the Companys auditor
since 2020.
Sugar Land, Texas
April 12, 2024
| | 35 | | |
| Table of Contents | |
**Zhen Ding Resources Inc.**
**Consolidated Balance Sheets**
**(In US Dollars, except for number of shares)**
**As of December 31, 2024 and December 31, 2023**
|
| |
| | | |
| | | |
|
| |
2024 | | |
2023 | | |
|
Assets | |
| | | |
| | | |
|
| |
| | | |
| | | |
|
Current Assets: | |
| | | |
| | | |
|
Cash and cash equivalents | |
$ | 1,977 | | |
$ | 6,293 | | |
|
Total current assets | |
$ | 1,977 | | |
$ | 6,293 | | |
|
| |
| | | |
| | | |
|
Liabilities and Stockholders Deficit | |
| | | |
| | | |
|
| |
| | | |
| | | |
|
Current Liabilities: | |
| | | |
| | | |
|
Accounts payable and accrued liabilities | |
$ | 505,428 | | |
$ | 480,912 | | |
|
Accounts payable and accrued liabilities-related parties | |
| 6,105,974 | | |
| 5,807,460 | | |
|
Deferred revenue | |
| 124,209 | | |
| 127,654 | | |
|
Due to related parties | |
| 733,465 | | |
| 753,809 | | |
|
Short-term debt | |
| 154,500 | | |
| 154,500 | | |
|
Short-term debt-related parties | |
| 3,306,264 | | |
| 3,284,961 | | |
|
Total current liabilities | |
| 10,929,840 | | |
| 10,609,296 | | |
|
| |
| | | |
| | | |
|
Commitments and contingencies | |
| - | | |
| - | | |
|
| |
| | | |
| | | |
|
Stockholders deficit | |
| | | |
| | | |
|
Common stock, 150,000,000 authorized, $0.0001 par value, 110,967,348 and 110,737,348 shares issued and
outstanding, respectively | |
| 11,097 | | |
| 11,074 | | |
|
Additional paid-in capital | |
| 14,866,506 | | |
| 14,365,129 | | |
|
Subscriptions receivable | |
| (5,431 | ) | |
| (5,431 | ) | |
|
Accumulated other comprehensive income | |
| 955,580 | | |
| 759,550 | | |
|
Accumulated deficit | |
| (23,419,382 | ) | |
| (22,452,142 | ) | |
|
Total deficit attributable to Zhen Ding Resources Inc. | |
| (7,591,630 | ) | |
| (7,321,820 | ) | |
|
| |
| | | |
| | | |
|
Non-controlling interests | |
| (3,336,233 | ) | |
| (3,281,183 | ) | |
|
| |
| | | |
| | | |
|
Total Stockholders deficit | |
| (10,927,863 | ) | |
| (10,603,003 | ) | |
|
| |
| | | |
| | | |
|
Total liabilities and Stockholders deficit | |
$ | 1,977 | | |
$ | 6,293 | | |
The accompanying notes are an integral part of
these consolidated financial statements
| | 36 | | |
| Table of Contents | |
**Zhen Ding Resources Inc.**
**Consolidated Statements of Operations and Comprehensive
Loss (In US Dollars)**
**For the years ended December 31, 2024 and 2023**
|
| |
| | | |
| | | |
|
| |
| | |
| | |
|
| |
2024 | | |
2023 | | |
|
Operating expenses: | |
| | | |
| | | |
|
General and administrative | |
$ | 605,032 | | |
$ | 749,021 | | |
|
| |
| | | |
| | | |
|
Total operating expenses | |
| 605,032 | | |
| 749,021 | | |
|
| |
| | | |
| | | |
|
Operating loss | |
| (605,032 | ) | |
| (749,021 | ) | |
|
| |
| | | |
| | | |
|
Other expense: | |
| | | |
| | | |
|
Interest expenses | |
| (501,273 | ) | |
| (498,120 | ) | |
|
Other income (expenses) | |
| - | | |
| 42 | | |
|
| |
| | | |
| | | |
|
Net loss | |
| (1,106,305 | ) | |
| (1,247,099 | ) | |
|
| |
| | | |
| | | |
|
Loss attributable to non-controlling interests | |
| 139,065 | | |
| 140,866 | | |
|
| |
| | | |
| | | |
|
Net loss attributable to Zhen Ding Resources Inc. | |
$ | (967,240 | ) | |
$ | (1,106,233 | ) | |
|
| |
| | | |
| | | |
|
Basic and diluted loss per common share | |
$ | (0.01 | ) | |
$ | (0.01 | ) | |
|
| |
| | | |
| | | |
|
|
| | | |
| | | |
|
Basic and diluted weighted average number of common shares outstanding | |
| 110,779,567 | | |
| 110,527,458 | | |
|
| |
| | | |
| | | |
|
Comprehensive loss: | |
| | | |
| | | |
|
Net loss | |
$ | (1,106,305 | ) | |
$ | (1,247,099 | ) | |
|
Other comprehensive income (loss): | |
| | | |
| | | |
|
Foreign currency translation adjustments | |
| 280,045 | | |
| 281,661 | | |
|
Total comprehensive loss | |
| (826,260 | ) | |
| (965,438 | ) | |
|
Comprehensive loss attributable to non-controlling interest | |
| 55,050 | | |
| 61,363 | | |
|
Comprehensive loss attributable to Zhen Ding Resources Inc. | |
$ | (881,310 | ) | |
$ | (1,026,801 | ) | |
The accompanying notes
are an integral part of these consolidated financial statement
| | 37 | | |
| Table of Contents | |
**Zhen Ding Resources Inc.**
**Consolidated Statements of Cash Flows**
**(In US Dollars)**
**For the years ended December 31, 2024 and 2023**
|
| |
| | | |
| | | |
|
| |
December 31, | | |
December 31, | | |
|
| |
2024 | | |
2023 | | |
|
Cash flows from operating activities | |
| | | |
| | | |
|
Net loss | |
$ | (1,106,305 | ) | |
$ | (1,247,099 | ) | |
|
Adjustment to reconcile net loss to net cash used in operating activities: | |
| | | |
| | | |
|
Stock based compensation | |
| 501,400 | | |
| 678,080 | | |
|
Changes in operating assets and
liabilities: | |
| | | |
| | | |
|
Accounts payable and accrued liabilities | |
| 24,516 | | |
| 80,157 | | |
|
Accounts payable and accrued liabilities-related parties | |
| 473,161 | | |
| 498,120 | | |
|
Net cash (used in) provided by operating activities | |
| (107,228 | ) | |
| 9,258 | | |
|
| |
| | | |
| | | |
|
Cash flows from financing activities | |
| | | |
| | | |
|
Proceeds from borrowings on short-term debt related parties | |
| 105,475 | | |
| 66,764 | | |
|
Net cash provided by financing activities | |
| 105,475 | | |
| 66,764 | | |
|
| |
| | | |
| | | |
|
Foreign currency translation | |
| (2,563 | ) | |
| (83,437 | ) | |
|
| |
| | | |
| | | |
|
Net change in cash | |
| (4,316 | ) | |
| (7,415 | ) | |
|
| |
| | | |
| | | |
|
Cash and cash equivalents - beginning of the period | |
| 6,293 | | |
| 13,708 | | |
|
| |
| | | |
| | | |
|
Cash and cash equivalents - end of the period | |
$ | 1,977 | | |
$ | 6,293 | | |
|
| |
| | | |
| | | |
|
Supplemental cash flow information: | |
| | | |
| | | |
|
Cash paid for interest | |
$ | - | | |
$ | - | | |
|
Cash paid for income tax | |
$ | - | | |
$ | - | | |
The accompanying notes are an integral part of
these consolidated financial statements.
| | 38 | | |
| Table of Contents | |
**Zhen Ding Resources Inc.**
**Condensed Consolidated Statement of Stockholders
Deficit**
**(In US Dollars, except for number of shares)**
**For the years ended December 31, 2024 and 2023**
****
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
| |
Common Stock | | |
Additional Paid in | | |
Subscriptions | | |
Accumulated Other Comprehensive | | |
Accumulated | | |
Non- controlling | | |
Total Stockholders' | | |
|
| |
Shares | | |
Par | | |
Capital | | |
Receivable | | |
Income | | |
Deficit | | |
Interest | | |
Deficit | | |
|
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Balances, December 31, 2023 | |
| 110,737,348 | | |
$ | 11,074 | | |
$ | 14,365,129 | | |
$ | (5,431 | ) | |
$ | 759,550 | | |
$ | (22,452,142 | ) | |
$ | (3,281,183 | ) | |
$ | (10,603,003 | ) | |
|
Stock based compensation | |
| 230,000 | | |
| 23 | | |
| 501,377 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 501,400 | | |
|
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| 196,030 | | |
| - | | |
| 84,015 | | |
| 280,045 | | |
|
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (967,240 | ) | |
| (139,065 | ) | |
| (1,106,305 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Balances, December 31, 2024 | |
| 110,967,348 | | |
$ | 11,097 | | |
$ | 14,866,506 | | |
$ | (5,431 | ) | |
$ | 955,580 | | |
$ | (23,419,382 | ) | |
$ | (3,336,233 | ) | |
$ | (10,927,863 | ) | |
****
****
|
| |
Common Stock | | |
Additional Paid in | | |
Subscriptions | | |
Accumulated Other Comprehensive | | |
Accumulated | | |
Non- controlling | | |
Total Stockholders' | | |
|
| |
Shares | | |
Par | | |
Capital | | |
Receivable | | |
Income | | |
Deficit | | |
Interest | | |
Deficit | | |
|
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Balances, December 31, 2022 | |
| 110,411,348 | | |
$ | 11,041 | | |
$ | 13,687,082 | | |
$ | (5,431 | ) | |
$ | 557,392 | | |
$ | (21,345,909 | ) | |
$ | (3,219,820 | ) | |
$ | (10,315,645 | ) | |
|
Stock based compensation | |
| 326,000 | | |
| 33 | | |
| 678,047 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 678,080 | | |
|
Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| 202,158 | | |
| - | | |
| 79,503 | | |
| 281,661 | | |
|
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,106,233 | ) | |
| (140,866 | ) | |
| (1,247,099 | ) | |
|
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|
Balances, December 31, 2023 | |
| 110,737,348 | | |
$ | 11,074 | | |
$ | 14,365,129 | | |
$ | (5,431 | ) | |
$ | 759,550 | | |
$ | (22,452,142 | ) | |
$ | (3,281,183 | ) | |
$ | (10,603,003 | ) | |
The accompanying notes are an integral part of
these condensed consolidated financial statements.
| | 39 | | |
| Table of Contents | |
**Zhen Ding Resources Inc.**
**Notes to Consolidated
Financial Statements**
**Note 1.Description of Business**
Zhen Ding Resources Inc. (formerly Robotech Inc.)
(the Company, Zhen Ding DE, or ZDRI) was incorporated in the State of Delaware in September
1996 and began its business activities in the development and marketing of specialized technological equipment. In early 2010, the business
direction of our Company was changed to seek opportunities to focus particularly on searching for companies engaged in the mining of gold,
silver and copper.
The Company indirectly owns 70% of a Chinese Joint
Venture entity, Zhen Ding Mining Co. Ltd. (Zhen Ding JV or JXZD). This indirect ownership is through a 100%
ownership of a California company Z&W, Zhen Ding Corporation (Z&W CA).
Our Company, through Z&W CA, participates
in a joint venture with Jing Xian Xinzhou Gold Co., Ltd. (Xinzhou Gold), a company organized under the laws of the Peoples
Republic of China (PRC). The joint venture company, JXZD, is 70% held by our Company through Z&W CA who has the mineral
exploration, mineral mining and gold mining rights to a property located in the southwestern part of Anhui province in China, near the
town of Jing Xian. Xinzhou Gold, the other 30% partner of JXZD is the actual named owner of the various licenses used by JXZD and transferred
all rights emanating from these licenses as part of the joint venture agreement between Z&W CA and Xinzhou Gold. Our Companys
primary activity, through JXZD, is ore processing and production in China.
In 2017, the Company shut down its mineral processing
plant in China due to insufficient working capital. The Company had limited operations and plans to resume selling processed ore concentrate
as soon as possible to provide Zhen Ding JV the cash flow needed to keep its plant operating and to maintain a viable work force for future
expansion.
**Note 2. Summary of Significant Accounting Policies**
**Basis of Presentation**
The summary of significant
accounting policies presented below is designed to assist in understanding the Companys financial statements. Such financial statements
and accompanying notes are the representations of the Companys management, which is responsible for the integrity and objectivity.
These accounting policies conform to accounting principles generally accepted in the United States of America (U.S. GAAP)
in all material respects and have been consistently applied in preparing the accompanying financial statements.
**Principles of Consolidation**
The consolidated financial
statements include the accounts of the Company, its wholly-owned subsidiaries Z&W CA and its majority owned subsidiary JXZD. All inter-company
transactions and balances were eliminated. The portion of the income applicable to non-controlling interests in subsidiary undertakings
is reflected in the consolidated statements of operations.
**Use of Estimates and
Assumptions**
The Company prepares
its financial statements in conformity with U.S. GAAP, which 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.
**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.
During the periods ended December 31, 2024 and 2023, the Company had aggregate foreign currency translation gains (loss) of $280,045 and
$281,661, respectively.
**Income Taxes**
An asset and liability approach is used for financial
accounting and reporting for income taxes. Deferred income taxes arise from temporary differences between income tax and financial reporting
and principally relate to recognition of revenue and expenses in different periods for financial and tax accounting purposes and are measured
using currently enacted tax rates and laws. In addition, a deferred tax asset can be generated by net operating loss carry forwards. If
it is more likely than not that some portion or all of a deferred tax asset will not be realized, a valuation allowance is recognized.
The Company has tax losses that may be applied against future taxable income. The potential tax benefit arising from these loss carryforwards
are offset by a valuation allowance due to uncertainty of profitable operations in the future.
| | 40 | | |
| Table of Contents | |
The Company follows the FASB guidance for how
uncertain tax positions should be recognized, measured and presented in the financial statements. This requires the evaluation of tax
positions taken or expected be taken in the course of preparing the Companys tax returns to determine whether the tax positions
are more-likely-than-not of being sustained when challenged or when examined by the applicable
tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense and liability in
the current year. Management has evaluated the Companys tax positions and concluded that the Company has taken no uncertain tax
positions that require adjustment to the financial statements to comply with the provisions of this guidance as of December 31, 2023.
The Company is not currently under audit by any tax jurisdiction.
**Stock-Based Compensation**
We account for stock-based compensation under
the fair value method which requires all such compensation to employees, including the grant of employee stock options, to be calculated
based on its fair value at the measurement date (generally the grant date), and recognized in the condensed consolidated statement of
operations over the requisite service period.
**Fair Values of Financial Instruments**
Management believes that the carrying amounts
of the Companys financial instruments, consisting primarily of cash, due to related parties, short term debt and short term debt
related parties, approximated their fair values as of December 31, 2024 and 2023, due to their short-term nature.
**Non-controlling Interests**
Non-controlling interests in the Companys
subsidiaries are reported as a component of equity, separate from the parents 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.
**Basic and Diluted Earnings (Loss) Per
Common Share**
The basic net loss per common share is computed
by dividing the net loss by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by
dividing the net loss adjusted on an as converted basis, by the weighted average number of common shares outstanding plus
potential dilutive securities. For all periods presented, there were no potentially dilutive securities outstanding.
**Recently Issued Accounting Pronouncements**
On December 14, 2023,
the FASB issued a final standard on improvements to income tax disclosures.The standard requires disaggregated information about
a reporting entitys effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to
benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. ASU
2023-09,Improvements to Income Tax Disclosures,*applies to all entities subject to income taxes. For public business
entities (PBEs), the new requirements will be effective for annual periods beginning after December 15, 2024. For entities other than
public business entities (non-PBEs), the requirements will be effective for annual periods beginning after December 15, 2025. The Company
is currently evaluating the potential impact of adopting this new guidance.
In November 2023, the
FASB issued Accounting Standard Update No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU
2023-07"), intended to improve reportable segments disclosure requirements primarily through enhanced disclosures about significant
segment expenses.
ASU 2023-07 includes
a requirement to disclose significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included
within each reported measure of segment profit or loss, the title and position of the CODM, an explanation of how the CODM uses the reported
measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources, and all segments' profit
or loss and assets disclosures. ASU 2023-07 is effective for all public companies for fiscal years beginning after December 15, 2023,
and interim periods for the interim period beginning on January 1, 2025. Adoption of ASU 2023-07 did not have a material impact on the
Company's financial statement.
| | 41 | | |
| Table of Contents | |
**Note 3. 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 December 31, 2024, the Company had accumulated losses of $23,419,382
since inception and had a working capital deficit of $10,927,863.
These factors raise substantial doubt regarding the Companys ability to continue as a going concern. The continuation of the Company
as a going concern is dependent upon financial support from its stockholders, the ability of the Company to obtain necessary equity financing
to continue operations, and the attainment of profitable operations. Realization value may be substantially different from carrying values
as shown and these financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts
and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
**Note 4. Short-Term Debt**
The following table represents the details of the short-term debts
atDecember 31, 2024 and 2023:
|
Schedule of short-term debts | |
| |
| |
| | | |
| | | |
|
Issuance date | |
Maturity | |
Interest Rate | |
12.31.2024 | | |
12.31.2023 | | |
|
October 2, 2019 | |
October 1, 2020 | |
1% per month | |
$ | 10,000 | | |
$ | 10,000 | | |
|
January 15, 2020 | |
January 15, 2021 | |
1% per month | |
| 22,000 | | |
| 22,000 | | |
|
April 16, 2020 | |
April 15, 2021 | |
1% per month | |
| 13,500 | | |
| 13,500 | | |
|
July 2, 2020 | |
July 1, 2021 | |
1% per month | |
| 18,500 | | |
| 18,500 | | |
|
October 23, 2020 | |
October 22, 2021 | |
1% per month | |
| 6,500 | | |
| 6,500 | | |
|
January 5, 2021 | |
January 15, 2022 | |
1% per month | |
| 22,500 | | |
| 22,500 | | |
|
March 10, 2021 | |
March 10, 2022 | |
1% per month | |
| 20,000 | | |
| 20,000 | | |
|
July 13, 2021 | |
July 13,2022 | |
1% per month | |
| 16,500 | | |
| 16,500 | | |
|
December 14, 2021 | |
December 14, 2022 | |
1% per month | |
| 25,000 | | |
| 25,000 | | |
|
| |
| |
| |
$ | 154,500 | | |
$ | 154,500 | | |
According to the loan agreements, there is not
any additional interest and penalty for the loans passing maturity date.
During the years ended
December 31, 2024 and 2023, the Company recorded interest expense and accrued interest of $18,540 and $18,540 respectively
and is included in interest expense in the consolidated statements of operations.
**Note 5. Related Party
Transactions**
**Accounts payable**
As of December 31, 2024
and 2023, the Company had payables of $733,465 and $753,809, respectively, to Xinzhou Gold.
These payables bear no interest, are unsecured and are due on demand.
| | 42 | | |
| Table of Contents | |
**Short-term debt**
As of December 31, 2024 and2023, the Company
had short-term debts to related parties of $3,306,264 and $3,284,961, respectively. The details of the loans are described as below.
AtDecember 31, 2024:
|
Schedule of debt | |
| |
| | | |
| |
| |
| |
|
Name | |
Relationship to the Company | |
Amount | | |
Interest Rate | |
Start Date | |
Maturity | |
|
Shor-term debt | |
| |
| | | |
| |
| |
| |
|
Wei De Gang | |
CEO & Legal person of JXZD | |
$ | 2,435,873 | | |
15% | |
May 31, 2011 | |
May 31, 2014 | |
|
Zhao Yan Ling | |
Former office manager of JXZD, wife of Zhou Zhi Bin | |
| 14,385 | | |
15% | |
January 1, 2011 | |
December 31, 2013 | |
|
Zhou Zhi Bin | |
Former CEO & Legal person of JXZD | |
| 6,850 | | |
15% | |
January 1, 2011 | |
December 31, 2013 | |
|
Tang Yong Hong | |
Manager of JXZD | |
| 295,293 | | |
15% | |
February 28, 2015 | |
February 28, 2016 | |
|
Yan Chun Yan | |
Accountant of JXZD | |
| 9,231 | | |
15% | |
August 31, 2014 | |
August 31, 2015 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 50,282 | | |
- | |
January 1, 2011 | |
On Demand | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,000 | | |
15% | |
April 25, 2022 | |
May 2, 2023 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 13,000 | | |
15% | |
May 2, 2022 | |
May 2, 2023 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,000 | | |
15% | |
July 12, 2022 | |
July 12, 2023 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,500 | | |
15% | |
December 6, 2022 | |
December 5, 2023 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 13,500 | | |
15% | |
January 11, 2023 | |
January 11, 2024 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 14,500 | | |
15% | |
April 03, 2023 | |
April 03, 2024 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 13,850 | | |
15% | |
June 07, 2023 | |
June 06, 2024 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,000 | | |
15% | |
July 10, 2023 | |
July 10, 2024 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,500 | | |
15% | |
October 13, 2023 | |
October 13,2024 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 15,000 | | |
15% | |
January 18, 2024 | |
January 18, 2025 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 15,000 | | |
15% | |
April 11,2024 | |
April 11, 2025 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 10,000 | | |
15% | |
May 17, 2024 | |
June 16, 2025 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 16,500 | | |
15% | |
June 10, 2024 | |
June 10, 2025 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 6,500 | | |
15% | |
July 28, 2024 | |
July 28, 2025 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 19,500 | | |
15% | |
July 28, 2024 | |
July 28, 2025 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 5,000 | | |
15% | |
September 11, 2024 | |
September 11, 2025 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 5,000 | | |
15% | |
September 15, 2024 | |
September 15, 2025 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,000 | | |
15% | |
October 15, 2024 | |
October 15, 2025 | |
|
| |
| |
| | | |
| |
| |
| |
|
Current portion of long-term debt | |
| | | |
| |
| |
| |
|
Zhou Qiang | |
Office manager of JXZD | |
| 274,000 | | |
15% | |
December 18, 2012 | |
December 18,2015 | |
|
Total | |
| |
$ | 3,306,264 | | |
| |
| |
| |
AtDecember 31, 2023:
|
Name | |
Relationship to the Company | |
Amount | | |
Interest Rate | |
Start Date | |
Maturity | |
|
Shor-term debt | |
| |
| | | |
| |
| |
| |
|
Wei De Gang | |
CEO & Legal person of JXZD | |
$ | 2,503,437 | | |
15% | |
May 31, 2011 | |
May 31, 2014 | |
|
Zhao Yan Ling | |
Former office manager of JXZD, wife of Zhou Zhi Bin | |
| 14,784 | | |
15% | |
January 1, 2011 | |
December 31, 2013 | |
|
Zhou Zhi Bin | |
Former CEO & Legal person of JXZD | |
| 7,040 | | |
15% | |
January 1, 2011 | |
December 31, 2013 | |
|
Tang Yong Hong | |
Manager of JXZD | |
| 303,483 | | |
15% | |
February 28, 2015 | |
February 28, 2016 | |
|
Yan Chun Yan | |
Accountant of JXZD | |
| 8,485 | | |
15% | |
August 31, 2014 | |
August 31, 2015 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 50,282 | | |
| |
January 1, 2011 | |
On Demand | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,000 | | |
15% | |
April 25, 2022 | |
May 2, 2023 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 13,000 | | |
15% | |
May 2, 2022 | |
May 2, 2023 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,000 | | |
15% | |
July 12, 2022 | |
July 12, 2023 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,500 | | |
15% | |
December 6, 2022 | |
December 5, 2023 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 13,500 | | |
15% | |
January 11, 2023 | |
January 11, 2024 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 14,500 | | |
15% | |
April 03, 2023 | |
April 03, 2024 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 13,850 | | |
15% | |
June 07, 2023 | |
June 06, 2024 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,000 | | |
15% | |
July 10, 2023 | |
July 10, 2024 | |
|
Victor Sun | |
Shareholder of ZDRI | |
| 12,500 | | |
15% | |
October 13, 2023 | |
October 13,2024 | |
|
| |
| |
| | | |
| |
| |
| |
|
Current portion of long-term debt | |
| | | |
| |
| |
| |
|
Zhou Qiang | |
Office manager of JXZD | |
| 281,600 | | |
15% | |
December 18, 2012 | |
December 18,2015 | |
|
Total | |
| |
$ | 3,284,961 | | |
| |
| |
| |
| | 43 | | |
| Table of Contents | |
As of December 31, 2024 and 2023, the Company
had accrued interest payable to the related parties of $6,105,974 and $5,807,460, respectively.
For the periods ended December 31, 2024 and 2023, the Company recorded interest expense of $482,733
and $479,580, respectively. The Company has received no demands for repayment of matured debt instruments.
**Note 6. Accounts Payable
and Accrued Liabilities**
As of December 31, 2024 and 2023, the Company
had accounts payable of $174,297 and $184,574 respectively. As of December 31, 2024 and 2023
the Company had accrued liabilities of $331,131 and $296,338.
**Note 7. Issuance of Common Stock**
****
On October 25, 2024 the Company issued 230,000
common shares for discretionary bonuses during the fiscal year ended December 31, 2024.
**Note 8. Deferred Revenues**
As of December 31, 2024 and 2023, the Company
had deferred revenue of $124,209 and $127,654 related to receipts of payment for unprocessed
ore from Xinzhou Gold Co. Ltd, respectively, related to advances that the Company received from its customers. The Company has received
no demands for repayment of deferred revenues.
**Note 9.Concentration of Credit Risk**
Substantially all of the Companys bank
accounts are in banks located in The Peoples Republic of China and are not covered by protection similar to that provided by the
FDIC on funds held in United States banks.
****
**Note 10. Income Taxes**
The following table sets
forth a reconciliation of income tax expense (benefit) at the federal statutory rate to recorded income tax expense (benefit) for the
years ended December 31, 2024 and 2023
|
Schedule of reconciliation of income tax expense (benefit) | |
| | | |
| | | |
|
| |
December 31,2024 | | |
December 31,2023 | | |
|
| |
| | |
| | |
|
Tax provision (recovery) at effective tax rate (21%) | |
| 203,100 | | |
| 232,300 | | |
|
Change in valuation reserve | |
| (203,100 | ) | |
| (232,300 | ) | |
|
Tax provision (recovery), net | |
| 0 | | |
| 0 | | |
As of December 31, 2024,
the Company had approximately $23.4 million in net operating loss carry forwards for federal income tax purposes which expire at various
times through 2039. Generally, these can be carried forward and applied against future taxable income at the tax rate applicable at that
time. We are currently using a 21% effective tax rate for our projected available net operating loss carry-forward. However, as a result
of potential stock offerings and stock issuance in connection with potential acquisitions, as well as the possibility of the Company not
realizing its business plan objectives and having future taxable income to offset, the Companys use of these NOLs may be limited
under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended. The Company is in the process of evaluating the
implications of Section 382 on its ability to utilize some or all of its NOLs.
Components of deferred
tax assets and (liabilities) are as follows:
|
Schedule of net deferred tax assets | |
| | | |
| | | |
|
| |
December 31, 2024 | | |
December 31, 2023 | | |
|
Net operating loss carry forwards available at effective tax rate (21%) | |
| 677,600 | | |
| 474,500 | | |
|
Valuation Allowances | |
| (677,600 | ) | |
| (474,500 | ) | |
|
Deferred Tax Asset | |
| 0 | | |
| 0 | | |
In accordance with FASB
ASC 740 Income Taxes, valuation allowances are provided against deferred tax assets, if based on the weight of available
evidence, some or all of the deferred tax assets may or will not be realized. The Company has evaluated its ability to realize some or
all of the deferred tax assets on its balance sheet and has established a valuation allowance of approximately $677,600 at December 31,
2024. The Company is in the process of filing the Company tax returns for the open years 2021 through
2024.
**Note 11. Subsequent Events**
The Company does not have any events subsequent to December 31, 2024
through April 15, 2025, the date the financial statements were issued for disclosure consideration.
****
| | 44 | | |
| Table of Contents | |
****
|
Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | |
There were no disagreements related to accounting
principles or practices, financial statement disclosure, internal controls or auditing scope or procedure during the two fiscal years
and interim periods.
|
Item 9A. | Controls and Procedures | |
*Managements Report on Disclosure Controls
and Procedures*
We maintain disclosure controls and procedures
that are designed to ensure that information required to be disclosed in our reports filed under the*Securities Exchange Act of
1934*, as amended, is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms,
and that such information is accumulated and communicated to our management, including our president and chief executive officer (our
principal executive officer) and our chief financial officer (our principal financial officer and principle accounting officer) to allow
for timely decisions regarding required disclosure.
As of December 31, 2024, the end of our fiscal
year covered by this report, we carried out an evaluation, under the supervision and with the participation of our sole officer (our principal
executive officer, principal financial officer and principle accounting officer), of the effectiveness of the design and operation of
our disclosure controls and procedures. Based on the foregoing, our sole officer concluded that our disclosure controls and procedures
were not effective as of the end of the period covered by this annual report due to the material weakness in our control environment and
financial reporting process consisting of the following:
1) lack of a functioning audit committee due to a lack of a majority
of independent members and a lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in
the establishment and monitoring of required internal control and procedures;
2) inadequate segregation of duties consistent with control objectives;
3) ineffective controls over period end financial disclosure and reporting
processes; and
4) lack of accounting personnel with adequate
experience and training.
*Managements Report on Internal Control
Over Financial Reporting*
Our management is responsible for establishing
and maintaining adequate internal control over financial reporting responsibility, estimates and judgments by management are required
to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management
with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions
are executed in accordance with managements authorization and recorded properly to permit the preparation of consolidated financial
statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness
of our internal control over financial reporting as of December 31, 2024. In making this assessment, our management used the criteria
set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in*Internal Control-Integrated
Framework*. Our management has concluded that, as of December 31, 2024, our internal control over financial reporting is not effective.
Our management reviewed the results of their assessment with our directors due to the material weakness in our control environment and
financial reporting process consisting of the following:
1) lack of a functioning audit committee
due to an absence of independent committee members, and an absence of independent directors on our Board of Directors, resulting in ineffective
oversight in the establishment and monitoring of required internal control and procedures;
2) inadequate segregation of duties consistent
with control objectives;
3) ineffective controls over period end
financial disclosure and reporting processes; and
4) lack of accounting
personnel with adequate experience and training.
| | 45 | | |
| Table of Contents | |
This annual report does not include an attestation report of our companys
registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation
by our companys registered public accounting firm pursuant to temporary rules of the SEC that permit our company to provide only
managements report in this annual report.
*Inherent Limitations on Effectiveness of Controls*
Internal control over financial reporting has
inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation
of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. Internal
control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns
resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management
override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into
the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide
only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
*Changes in Internal Control Over Financial
Reporting*
There have been no changes
in our internal controls over financial reporting that occurred during the year ended December 31, 2024 that have materially or are reasonably
likely to materially affect, our internal controls over financial reporting.
|
Item 9B. | Other Information | |
None.
**PART III**
|
Item 10. | Directors, Executive Officers and Corporate Governance | |
All directors of our company hold office until
the next annual meeting of the security holders or until their successors have been elected and qualified. The officers of our company
are appointed by our board of directors and hold office until their death, resignation or removal from office. Our directors and executive
officers, their ages, positions held, and duration as such, are as follows:
|
Name |
Position Held
with the Company
|
Age |
Date First Elected or Appointed | |
|
Victor Sun |
President, Chief Executive Officer, Treasurer, Secretary, Treasurer, and Director |
81 |
May 5, 2023 | |
|
Zhou, Qiang |
Director |
76 |
August 13, 2012 | |
**Business Experience**
The following is a brief account of the education
and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating
the persons principal occupation during that period, and the name and principal business of the organization in which such occupation
and employment were carried out.
| | 46 | | |
| Table of Contents | |
*Victor Sun - President, Chief Executive Officer,
Treasurer, Secretary and Director*
Mr. Sun
is by profession an engineer with over 50 years of engineering and management experience of which 14 years were with Lafarge Cement, where
he directed the design of control and automation systems for all new and rehabilitation projects. Prior to co-founding Asia Pacific Concrete
Inc. he worked for Monenco Agra as the instrumentation discipline engineer on the Hibernia Offshore Platform Project. Starting during
his employment with Lafarge Cement and continuing to date, his experience in developing business in China dates back over forty years.
He was a co-founder and vice-president of Sino-Canadian Resources Inc. in 1995, a Canadian gold company operating in China. He was President
and CEO of AVIC Technologies Ltd, from 2001 to 2003, an NASD Bulletin Board listed company. He was also a director of IVG Enterprises
Ltd., a China investment holding company listed on the TSX Venture Exchange. He continues to build relationships with Chinese contacts
and has been instrumental in developing many joint venture projects in China. Mr. Sun is 80 years of age.
*Qiang Zhou Director*
Mr. Zhou graduated from Shanghai Gymnastic University
with a degree in Phys-Ed Management. From 1989 to 1996, he was the assistant general manager for Shanghai Hui Feng Co. Ltd., an international
tradingcompany. From 1996 to 2002, he was the assistant General Manager for Shanghai Heng De Investment Co. Ltd.., an international
investment company dealing with office and residential real estate and small manufacturing business investment. Subsequently he became
one of the co-founders and a directorofXinzhou Gold Co. He has worked as consultant for the JV in since its founding in 2005,
and is currently also a director of the Company.
**Employment Agreements**
We have no formal employment agreements with any of our directors or
officers.
**Family Relationships**
There are no family relationships between any
of our directors, executive officers and proposed directors or executive officers.
**Involvement in Certain Legal Proceedings**
To the best of our knowledge, none of our directors
or executive officers has, during the past ten years:
|
1. | been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic
violations and other minor offences); | |
|
2. | had any bankruptcy petition filed by or against the business or property of the person, or of any partnership,
corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing
or within two years prior to that time; | |
|
3. | been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise
limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance
activities, or to be associated with persons engaged in any such activity; | |
|
4. | been found by a court of competent jurisdiction in a civil action or by the SEC or the Commodity Futures
Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended,
or vacated; | |
|
5. | been the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree,
or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants),
relating to an alleged violation of any federal or state securities or commodities law or regulation, any law or regulation respecting
financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement
or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation
prohibiting mail or wire fraud or fraud in connection with any business entity; or | |
|
6. | been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated,
of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26)), any registered entity
(as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29)), or any equivalent exchange, association, entity or
organization that has disciplinary authority over its members or persons associated with a member. | |
| | 47 | | |
| Table of Contents | |
**Compliance with Section 16(A) of the Securities Exchange Act of
1934**
Our common stock is not registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the Exchange Act). Accordingly, our officers, directors,
and principal stockholders are not subject to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act.
**Code of Ethics**
We have not yet adopted a code of ethics that
applies to our sole officer and director, or persons performing similar functions because we are in the start-up phase and are in the
process of establishing our operations. We plan to adopt a code of ethics as and when our company grows to a sufficient size to warrant
such adoption.
**Board and Committee Meetings**
Our board of directors held no formal meetings
during the year ended December 31, 2024. All proceedings of the board of directors were conducted by resolutions consented to in writing
by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors
entitled to vote on that resolution at a meeting of the directors are, according to the Delaware Corporation Law and our Bylaws, as valid
and effective as if they had been passed at a meeting of the directors duly called and held.
**Nomination Process**
During the year ended December 31, 2024, and subsequently,
we did not effect any material changes to the procedures by which our shareholders may recommend nominees to our board of directors. Our
board of directors does not have a policy with regards to the consideration of any director candidates recommended by our shareholders.
Our board of directors has determined that it is in the best position to evaluate our companys requirements as well as the qualifications
of each candidate when the board considers a nominee for a position on our board of directors. If shareholders wish to recommend candidates
directly to our board, they may do so by sending communications to the president of our company at the address on the cover of this annual
report.
**Audit Committee and Audit Committee Financial
Expert**
We do not currently have an audit committee or
a committee performing similar functions. The board of directors as a whole participates in the review of financial statements and disclosure.
Our board of directors has determined that it
does not have a member of its audit committee that qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii)
of Regulation S-K, and is independent as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange
Act of 1934, as amended.
We believe that the sole member of our board of
directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial
reporting. We believe that retaining an independent director who would qualify as an audit committee financial expert would
be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development and the fact that
we have not generated any material revenues to date. In addition, we currently do not have nominating, compensation or audit committees
or committees performing similar functions nor do we have a written nominating, compensation or audit committee charter. Our sole director
does not believe that it is necessary to have such committees because believes the functions of such committees can be adequately performed
by the sole member of our board of directors
| | 48 | | |
| Table of Contents | |
|
Item 11. | Executive Compensation | |
The particulars of the compensation paid to the
following persons:
|
(a) | our principal executive officer; | |
|
(b) | each of our two most highly compensated executive officers who were serving as executive officers at the
end of the years ended December 31, 2024 and 2023; and | |
|
(c) | up to two additional individuals for whom disclosure would have been provided under (b) but for the fact
that the individual was not serving as our executive officer at the end of the years ended December 31, 2024 and 2023, who we will collectively
refer to as the named executive officers of our company, are set out in the following summary compensation table, except that no disclosure
is provided for any named executive officer, other than our principal executive officers, whose total compensation did not exceed $100,000
for the respective fiscal year: | |
|
SUMMARY COMPENSATION TABLE | |
|
Name
and Principal
Position |
Year |
Salary
($) |
Bonus
($) |
Stock
Awards
($) |
Option
Awards
($) |
Non-
Equity
Incentive
Plan
Compensation
($) |
Change
in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) |
All
Other
Compensation
($) |
Total
($) | |
|
Wen Mei Tu(1)
Former President,
CEO,
Treasurer,
Secretary and
Former Director |
2024
2023 |
Nil
Nil |
Nil
Nil |
Nil
9.60(2) |
Nil
Nil |
Nil
Nil |
Nil
Nil |
Nil
Nil |
Nil
Nil | |
|
Victor Sun(3)
President,
CEO,
Treasurer,
Secretary and
Director |
2024
2023 |
Nil
n/a |
Nil
n/a |
12(4)
n/a |
Nil
n/a |
Nil
n/a |
Nil
n/a |
Nil
n/a |
Nil
n/a | |
|
(1) | Wen Mei Tu served as President, CEO, Treasurer, Secretary and Director from August 13, 2012 until May 5, 2023. | |
|
(2) | Represents 96,000 common shares issued to Ms. Tu as discretionary compensation at the price of $0.0001 per share. | |
|
(3) | Victor Sun was appointed President, CEO, Treasurer, Secretary and Director effective on May 5, 2023. | |
|
(4) | Represents 120,000 common shares issued to Mr. Sun as discretionary compensation at the price of $0.0001 per share. | |
There are no arrangements or plans in which we
provide pension, retirement or similar benefits for directors or executive officers. Our directors and executive officers may receive
share options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant
to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that share options may be granted
at the discretion of our board of directors.
****
**Grants of Plan-Based Awards**
During the fiscal year ended December 31, 2024
we did not grant any stock options.
**Stock Option Plan**
Currently, we do not have a stock option plan
in favor of any director, officer, consultant or employee of our company.
| | 49 | | |
| Table of Contents | |
**Option Grants**
We have not granted any options or stock appreciation
rights to our named executive officers or directors since inception. We do not have any stock option plans.
**Management Agreements**
We have not entered into any management agreements
with any of our executive officers.
**Compensation of Directors**
We do not have any agreements for compensating
our directors for their services in their capacity as directors, although such directors are expected in the future to receive stock options
to purchase shares of our common stock as awarded by our board of directors.
We have determined that none of our directors
are independent directors, as that term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the*Securities Exchange Act of 1934*,
as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.
**Pension, Retirement or Similar Benefit Plans**
There are no arrangements or plans in which we
provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans
pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may
be granted at the discretion of the board of directors or a committee thereof.
****
**Compensation Committee**
We do not currently have a compensation committee
of the board of directors or a committee performing similar functions. The board of directors as a whole participates in the consideration
of executive officer and director compensation.
**Indebtedness of Directors, Senior Officers,
Executive Officers and Other Management**
None of our directors or executive officers or
any associate or affiliate of our company during the last two fiscal years is or has been indebted to our company by way of guarantee,
support agreement, letter of credit or other similar agreement or understanding currently outstanding.
|
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |
The following table sets forth, as of April 3,
2024 certain information with respect to the beneficial ownership of our common shares by each shareholder known by us to be the beneficial
owner of more than 5% of our common shares, as well as by each of our current directors and executive officers as a group. Each person
has sole voting and investment power with respect to the shares of common stock, except as otherwise indicated. Beneficial ownership consists
of a direct interest in the shares of common stock, except as otherwise indicated.
*Shareholders Holding over 5%*
|
Name and Address of Beneficial Owner |
Amount and Nature of
Beneficial Ownership |
Percentage
of Class(1) | |
|
De Gang Wei(2)
Gong Shan Zhen, DagongcunAPPX
Anhui Province 244011 China |
8,400,000(3)Common Shares |
7.58% | |
|
Zhi Bin Zhou(4)
5-37 Hao du guo ji hua yuan
qing pu qu, Xu jin zhen
Shanghai China |
7,000,000(5)Common Shares |
6.32% | |
|
Felicia Fitzpatrick
4020 Rue Orly
Brossard Quebec J4Y 2K7 Canada |
8,919,233 Common Shares |
8.05% | |
|
Shareholders Holding Over 5% |
24,319,233 Common Shares |
21.96% | |
| | 50 | | |
| Table of Contents | |
Directors and Officers
|
Name and Address of Beneficial Owner |
Amount and Nature of
Beneficial Ownership |
Percentage
of Class(1) | |
|
Wen Mei Tu(6)
7308 Rostand
Brossard Quebec J4X 2R6 Canada
|
30,035,100 Common Shares |
27.12% | |
|
Qiang Zhou(7)
No. 6 Long 774
Chang Le Lu, Jing An Qu
Shanghai China |
5,140,000(8)Common Shares |
4.64% | |
|
Victor Sun(9) |
120,000 Common Shares |
(9) | |
|
Directors and Executive Officers as a Group |
35,295,100Common Shares |
31.87% | |
|
(1) | Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through
any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote,
or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares.
Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the
power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire
the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing
the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned
by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any
person as shown in this table does not necessarily reflect the persons actual ownership or voting power with respect to the number
of shares of common stock actually outstanding on March 29, 2024. As of March 29, 2024 there were 110,737,348
common shares of our companys common stock issued and outstanding. | |
|
(2) | De Gang Wei served as Chairman and as a Director of our Company from August 13, 2012 to May 9, 2018. | |
|
(3) | Includes 2,200,000 common shares held by his spouse Ms. Wei. | |
|
(4) | Zhi Bin Zhou served as a Director of our Company from August 13, 2012 to May 9, 2018. | |
|
(5) | Includes 1,000,000 common shares held by his spouse Ms. Yan Ling Zhao. | |
|
(6) | Wen Mei Tu served as President, Chief Executive Officer, Treasurer, Secretary, and as a Director of our Company from August 13, 2012
to May 5, 2023. | |
|
(7) | Qiang Zhou was appointed as a Director of our Company on August 13, 2012. | |
|
(8) | Includes 2,100,000 common shares held by his wife Ms. Yao Zi Wang. | |
(9) Less than
1%.
**Changes in Control**
We are unaware of any contract or other arrangement
or provisions of our Articles or Bylaws the operation of which may at a subsequent date result in a change of control of our company.
There are not any provisions in our Articles or Bylaws, the operation of which would delay, defer, or prevent a change in control of our
company.
|
Item 13. | Certain Relationships and Related Transactions, and Director Independence | |
Except as disclosed herein, no director, executive
officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct
or indirect, in any transaction, or proposed transaction since the year ended December 31, 2024, in which the amount involved in the transaction
exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at the year-end for the last three completed
fiscal years.
**Accounts payable**
As of December 31, 2024 and 2023, the Company
had payables of $733,465 and $753,809, respectively, to Xinzhou Gold. These payables bear no interest, are unsecured and are due on demand.
| | 51 | | |
| Table of Contents | |
**Short-term debt**
As of December 31, 2024 and2023, the Company had short-term debts
to related parties of $3,306,264 and $3,284,961, respectively. The details of the loans are described as below.
AtDecember 31, 2024:
|
Name |
|
Relationship to the Company |
|
Amount |
|
Interest Rate |
|
Start Date |
|
Maturity | |
|
Shor-term debt |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Wei De Gang |
|
CEO & Legal person of JXZD |
|
$ |
2,435,873 |
|
|
15% |
|
May 31, 2011 |
|
May 31, 2014 | |
|
Zhao Yan Ling |
|
Former office manager of JXZD,
wife of Zhou Zhi Bin |
|
|
14,385 |
|
|
15% |
|
January 1, 2011 |
|
December 31, 2013 | |
|
Zhou Zhi Bin |
|
Former CEO & Legal person of
JXZD |
|
|
6,850 |
|
|
15% |
|
January 1, 2011 |
|
December 31, 2013 | |
|
Tang Yong Hong |
|
Manager of JXZD |
|
|
295,293 |
|
|
15% |
|
February 28, 2015 |
|
February 28, 2016 | |
|
Yan Chun Yan |
|
Accountant of JXZD |
|
|
9,231 |
|
|
15% |
|
August 31, 2014 |
|
August 31, 2015 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
50,282 |
|
|
- |
|
January 1, 2011 |
|
On Demand | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,000 |
|
|
15% |
|
April 25, 2022 |
|
May 2, 2023 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
13,000 |
|
|
15% |
|
May 2, 2022 |
|
May 2, 2023 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,000 |
|
|
15% |
|
July 12, 2022 |
|
July 12, 2023 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,500 |
|
|
15% |
|
December 6, 2022 |
|
December 5, 2023 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
13,500 |
|
|
15% |
|
January 11, 2023 |
|
January 11, 2024 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
14,500 |
|
|
15% |
|
April 03, 2023 |
|
April 03, 2024 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
13,850 |
|
|
15% |
|
June 07, 2023 |
|
June 06, 2024 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,000 |
|
|
15% |
|
July 10, 2023 |
|
July 10, 2024 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,500 |
|
|
15% |
|
October 13, 2023 |
|
October 13,2024 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
15,000 |
|
|
15% |
|
January 18, 2024 |
|
January 18, 2025 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
15,000 |
|
|
15% |
|
April 11,2024 |
|
April 11, 2025 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
10,000 |
|
|
15% |
|
May 17, 2024 |
|
June 16, 2025 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
16,500 |
|
|
15% |
|
June 10, 2024 |
|
June 10, 2025 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
6,500 |
|
|
15% |
|
July 28, 2024 |
|
July 28, 2025 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
19,500 |
|
|
15% |
|
July 28, 2024 |
|
July 28, 2025 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
5,000 |
|
|
15% |
|
September 11, 2024 |
|
September 11, 2025 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
5,000 |
|
|
15% |
|
September 15, 2024 |
|
September 15, 2025 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,000 |
|
|
15% |
|
October 15, 2024 |
|
October 15, 2025 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Current portion of long-term debt |
|
|
|
|
|
|
| |
|
Zhou Qiang |
|
Office manager of JXZD |
|
|
274,000 |
|
|
15% |
|
December 18, 2012 |
|
December 18,2015 | |
|
Total |
|
|
|
$ |
3,306,264 |
|
|
|
|
|
|
| |
| | 52 | | |
| Table of Contents | |
AtDecember 31, 2023:
|
Name |
|
Relationship to the Company |
|
Amount |
|
Interest Rate |
|
Start Date |
|
Maturity | |
|
Shor-term debt |
|
|
|
|
|
|
|
|
|
|
|
| |
|
Wei De Gang |
|
CEO & Legal person of JXZD |
|
$ |
2,503,437 |
|
|
15% |
|
May 31, 2011 |
|
May 31, 2014 | |
|
Zhao Yan Ling |
|
Former office manager of JXZD,
wife of Zhou Zhi Bin |
|
|
14,784 |
|
|
15% |
|
January 1, 2011 |
|
December 31, 2013 | |
|
Zhou Zhi Bin |
|
Former CEO & Legal person of
JXZD |
|
|
7,040 |
|
|
15% |
|
January 1, 2011 |
|
December 31, 2013 | |
|
Tang Yong Hong |
|
Manager of JXZD |
|
|
303,483 |
|
|
15% |
|
February 28, 2015 |
|
February 28, 2016 | |
|
Yan Chun Yan |
|
Accountant of JXZD |
|
|
8,485 |
|
|
15% |
|
August 31, 2014 |
|
August 31, 2015 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
50,282 |
|
|
|
|
January 1, 2011 |
|
On Demand | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,000 |
|
|
15% |
|
April 25, 2022 |
|
May 2, 2023 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
13,000 |
|
|
15% |
|
May 2, 2022 |
|
May 2, 2023 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,000 |
|
|
15% |
|
July 12, 2022 |
|
July 12, 2023 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,500 |
|
|
15% |
|
December 6, 2022 |
|
December 5, 2023 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
13,500 |
|
|
15% |
|
January 11, 2023 |
|
January 11, 2024 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
14,500 |
|
|
15% |
|
April 03, 2023 |
|
April 03, 2024 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
13,850 |
|
|
15% |
|
June 07, 2023 |
|
June 06, 2024 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,000 |
|
|
15% |
|
July 10, 2023 |
|
July 10, 2024 | |
|
Victor Sun |
|
Shareholder of ZDRI |
|
|
12,500 |
|
|
15% |
|
October 13, 2023 |
|
October 13,2024 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Current portion of long-term debt |
|
|
|
|
|
|
|
| |
|
Zhou Qiang |
|
Office manager of JXZD |
|
|
281,600 |
|
|
15% |
|
December 18, 2012 |
|
December 18,2015 | |
|
Total |
|
|
|
$ |
3,284,961 |
|
|
|
|
|
|
| |
| | 53 | | |
| Table of Contents | |
As of December 31, 2024 and 2023, the Company had accrued interest
payable to the related parties of $6,105,974 and $5,807,460, respectively. For the periods ended December 31, 2024 and 2023, the Company
recorded interest expense of $482,733 and $479,580, respectively. The Company has received no demands for repayment of matured debt instruments.
**Director Independence**
We currently act with two directors, including
Victor Sun and Qiang Zhou.
We have determined that neither Qiang Zhou nor
Victor Sun is an independent director, as that term is used in Rule 5605 (a)(2) of the Rules of National Association of Securities Dealers.
Currently our audit committee consists of our
entire board of directors. We currently do not have nominating, compensation committees or committees performing similar functions. There
has not been any defined policy or procedure requirements for shareholders to submit recommendations or nomination for directors.
From inception to present date, we believe that
the members of our audit committee and the board of directors have been and are collectively capable of analyzing and evaluating our financial
statements and understanding internal controls and procedures for financial reporting.
The offices, located in a suburb of Montreal,
are not under written lease but are rented through a verbal agreement, on a month to month basis, from Immeuble Wing Kei Inc. at$500per
month, due and payable at each calendar quarter end. The occupancy began October 15, 2018.
|
Item 14. | Principal Accounting Fees and Services | |
The aggregate fees billed for the most recently
completed fiscal year ended December 31, 2024 and for fiscal year ended December 31, 2023 for professional services rendered by the principal
accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on
Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements
for these fiscal periods were as follows:
|
|
Year Ended | |
|
|
December 31, 2024 |
December 31, 2023 | |
|
Audit Fees |
$35,000 |
$35,0000 | |
|
Audit Related Fees |
Nil |
Nil | |
|
Tax Fees |
Nil |
Nil | |
|
All Other Fees |
Nil |
Nil | |
|
Total |
$35,000 |
$35,000 | |
Our board of directors pre-approves all services
provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before
or after the respective services were rendered.
Our board of directors has considered the nature
and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit
is compatible with maintaining our independent auditors independence.
| | 54 | | |
| Table of Contents | |
**PART IV**
|
Item 15. | Exhibits, Financial Statement Schedules | |
|
(a) | Financial Statements | |
|
(1) | Financial statements for our company are listed in the index under Item 8 of this document. | |
|
(2) | All financial statement schedules are omitted because they are not applicable, not material or the required
information is shown in the financial statements or notes thereto. | |
|
(b) | Exhibits | |
|
Exhibit
Number |
|
Description | |
|
(3) |
|
Articles of Incorporation and Bylaws | |
|
3.1 |
|
Articles of Incorporationfiled with the Secretary of State of the State of Delaware on September 6, 1996(Incorporated by reference to our Registration Statement on Form S-1 filed January 6, 2014) | |
|
3.2 |
|
Bylaws(Incorporated by reference to our Registration Statement on Form S-1 filed January 6, 2014) | |
|
3.3 |
|
Certificate of Amendment of Certificate of Incorporation filed with the Secretary of State of the State of Delaware on November 4, 1996(Incorporated by reference to our Registration Statement on Form S-1 filed January 6, 2014) | |
|
3.4 |
|
Certificate of Amendment of Certificate of Incorporation filed with the Secretary of State of the State of Delaware on February 28, 2012(Incorporated by reference to our Registration Statement on Form S-1 filed January 6, 2014) | |
|
3.5 |
|
Certificate of Amendment of Certificate of Incorporation filed with the Secretary of State of the State of Delaware on March 20, 2012(Incorporated by reference to our Registration Statement on Form S-1 filed January 6, 2014) | |
|
3.6 |
|
Certificate of Ownership and Merger filed with the Secretary of State of the State of Delaware on October 28, 2013(Incorporated by reference to our Registration Statement on Form S-1 filed January 6, 2014) | |
|
(10) |
|
Material Contracts | |
|
10.1 |
|
The Contract for Sino-Foreign Equity Joint Venture dated as of November 12, 2004 by and between Zhen Ding Corporation and Jing Xiang Xin Zhou Gold Co. Ltd.(Incorporated by reference to our Registration Statement on Form S-1 filed January 6, 2014) | |
|
10.2 |
|
Articles of Association for Zhen Ding JV dated as of October 12, 2006 by and between Z&W Zhen Ding Corporation and Jing Xiang Xin Zhou Gold Co. Ltd.(Incorporated by reference to our Registration Statement on Form S-1/A filed on February 13, 2015) | |
|
10.3 |
|
Supply Contract of Gold Concentrate Fines dated July 20, 2012 between Zhen Ding Mining Co., Ltd. and Yantai Jin Ao Metallurgical Co. Ltd.(Incorporated by reference to our Registration Statement on Form S-1/A filed on February 13, 2015) | |
|
10.4 |
|
Mining License No. C3400002009114110049341 dated November 5, 2014 in favor of Jing Xiang Xin Zhou Gold Co. Ltd.(Incorporated by reference to our Registration Statement on Form S-1/A filed on February 13, 2015) | |
|
10.5 |
|
Gold Mining License No. (2005) 042 in favor of Jing Xiang Xin Zhou Gold Co. Ltd.(Incorporated by reference to our Registration Statement on Form S-1/A filed on February 13, 2015) | |
|
10.6 |
|
Form of Loan Agreements between Wen Mei Tu and Zhen Ding Resources Inc.(Incorporated by reference to our Registration Statement on Form S-1/A filed on February 13, 2015) | |
|
10.7 |
|
Business License Registration No. 3425004000003061(1-1) dated November 17, 2014 in favor of Zhen Ding Mining Co. Ltd.(Incorporated by reference to our Registration Statement on Form S-1/A filed June 9, 2015) | |
|
(21) |
|
List of Subsidiaries | |
|
21.1 |
|
Z&W Zhen Ding Corporation, a California corporation (100% held) | |
|
21.2 |
|
Zhen Ding Mining Co. Ltd., a PRC corporation (70% held) | |
|
(23) |
|
Consent
of Registered Independent Public Accounting Firm | |
|
23.1* |
|
Consent of TPS Thayer, LLC | |
|
(31) |
|
Rule 13a-14 (d)/15d-14d) Certifications | |
|
31.1* |
|
Section 302 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer | |
| | 55 | | |
| Table of Contents | |
|
(32) |
|
Section 1350 Certifications | |
|
32.1* |
|
Section 906 Certification by the Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer | |
|
101* |
|
Interactive Data File | |
|
101.INS |
|
XBRL Instance Document | |
|
101.SCH |
|
XBRL Taxonomy Extension Schema Document | |
|
101.CAL |
|
XBRL Taxonomy Extension Calculation Linkbase Document | |
|
101.DEF |
|
XBRL Taxonomy Extension Definition Linkbase Document | |
|
101.LAB |
|
XBRL Taxonomy Extension Label Linkbase Document | |
|
101.PRE |
|
XBRL Taxonomy Extension Presentation Linkbase Document | |
**Filed
herewith.*
| | 56 | | |
| Table of Contents | |
**SIGNATURES**
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
|
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|
ZHEN DING RESOURCES INC. | |
|
|
|
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(Registrant) | |
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| |
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| |
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Dated: April 15, 2025 |
|
|
/s/Victor Sun | |
|
|
|
|
Victor Sun | |
|
|
|
|
President, Treasurer, Secretary and Director | |
|
|
|
|
(Principal Executive Officer, Principal Financial Officer
and Principal Accounting Officer) | |
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
Dated: April 15, 2025 |
|
/s/ Victor Sun | |
|
|
|
Victor Sun | |
|
|
|
President, Treasurer, Secretary and Director | |
|
|
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(Principal Executive Officer) | |
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| |
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| |
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Dated: April 15, 2025 |
|
/s/ Qiang Zhou | |
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|
Qiang Zhou | |
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|
Director | |
57