PARADIGM RESOURCE MANAGEMENT CORP - 10-K - Management's Discussion and Analysis of Financial Condition and Results of Operation.
(Edgar Glimpses Via Acquire Media NewsEdge) You should read the following discussion of our results of operations and
financial condition with the audited financial statements and related notes
included elsewhere in this report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs, and
that involve numerous risks and uncertainties, including, but not limited to,
those described in the "Risk Factors" section of this report. Actual results may
differ materially from those contained in any forward-looking statements. See
"Cautionary Statement Concerning Forward-Looking Statements."
The Company was incorporated in Nevada on March 26, 2007 under the name of China
Digital Ventures Corporation and was in the web based telecom services business
in China. The Company's mission was to acquire, own and manage a portfolio of
"technology", "media" and "telecommunication" assets in China. During the
periods presented all revenue was derived from the telecom business sector.
In July 2009, the Company acquired a 76.8% interest in China Integrated Media
Corporation Limited ("CIMC"), a public company in Australia.
In February 2010, the Company decided to divest from its investment in CIMC due
to its inability to raise the capital necessary to pursue this investment on a
timely manner and concerns on its internal liquidity. On April 30, 2010 the
Company disposed of CIMC for $50,000 and realized a gain on the disposal of
$92,975. The proceeds from the disposal were used to pay debts of the Company.
On June 20, 2010, the Company disposed of its subsidiary company, Lead Concept
Limited, which operated its web based VOIP business as the Company was no longer
competitive in this market segment. After the disposal, the Company had no
On July 23, 2010, the Company experienced a change in control. Canton
Investments Ltd ("CIL") acquired a majority of the issued and outstanding common
stock of the Company in accordance with stock purchase agreements by and between
CIL and Wireless One International Limited ("Wireless One"), Bing HE and Ning
HE, the Company's former directors, and other various shareholders. On the
closing date, July 23, 2010, pursuant to the terms of the Stock Purchase
Agreement, CIL purchased from Wireless One and Bing HE and Ning HE 1,150,000,000
shares of the Company's outstanding common stock for $205,750. Also on July 23,
2010, CIL purchased 244,000,000 shares of the Company's outstanding common stock
for $36,600 from various shareholders. As a result of the change in control, CIL
owned a total of 1,394,000,000 shares of the Company's common stock representing
In accordance with the change in control Mr. Bing HE resigned as the Company's
President, CEO, and any other positions held by him on July 23, 2010. The
resignation was not the result of any disagreement with the Company or any
matter relating to the Company's operations, policies or practices. The same
date Mr. Robert M. Price was named as the new Director, Chief Executive Officer
and Chief Financial Officer.
On May 10, 2012, the Company filed an amendment to its Articles of Incorporation
in the State of Nevada to change its name to Paradigm Resource Management
Corporation. The Company is currently contemplating acquisitions of certain
gold, copper and uranium mineral property rights.
On September 10, 2012, CIL contributed 1,200,000,000 shares of common stock to
the Company's treasury. The Company immediately retired and canceled these
shares. As a result of the contribution of shares, CIL owns a total of
194,000,000 shares of the Company's common stock representing 60.1%.
Plan of Operation
On March 21, 2012, the Company signed a Letter of Intent to acquire all of the
mineral rights properties of ARNEVUT Resources, Inc. ("ARNEVUT"), an exploration
and mining company engaged in the identification, acquisition, evaluation,
exploration and development of mineral properties in the United States. ARNEVUT
holds mineral rights, or options to acquire mineral rights, on certain
properties in Nevada, Utah, and New Mexico. After the completion of our due
diligence, management decided not to complete the acquisition.
On May 22, 2012, the Company signed a Memorandum of Understanding between the
shareholder group of Sao Camilo Mineradora Ltda. Group ("Sao Camilo") to acquire
a strategic equity interest in Sao Camilo. Sao Camilo was founded in 2006 with
the objective of developing an iron ore processing project, The Sao Camilo
Project, to produce and export pellet feeds from its mining resources located
nearby the city of Sao Raimundo Nonato, south of Piaui State, in the northeast
region of Brazil. To date, Sao Camilo has acquired two farms totaling 690
hectares, which cover most of the mining rights, including the ideal location
for the construction of plant facilities, piling stocks and tailings dam. After
the completion of our due diligence, management decided not to complete the
Management is currently assessing and evaluating new strategic opportunities as
it remains in its development stage.
Critical Accounting Policies and Estimates
Our significant accounting policies are described in Note 2 of the audited
financial statements included elsewhere in this report. The preparation of the
financial statements in accordance with U.S. GAAP requires management to make
significant judgments and estimates. Some accounting policies have a significant
impact on amounts reported in these financial statements. Our financial position
and results of operations may be materially different when reported under
different conditions or when using different assumptions in the application of
such policies. In the event estimates or assumptions prove to be different from
actual amounts, adjustments are made in subsequent periods to reflect more
current information. The preparation of interim financial statements involves
the use of certain estimates that are consistent with those used in the
preparation of our annual financial statements.
Results of Operations
For the Years Ended September 30, 2012 and 2011 and For the Period March 26,
2007 (Inception) to September 30, 2012
The Company had no revenue for the years ended September 30, 2012 and 2011.
For the period from March 26, 2007 (date of inception) to September 30, 2012,
the Company realized revenue of $31,912, incurred a cost of revenue of $15,731
and achieved a gross profit of $16,181. All revenue was derived from the telecom
business and reflects the disposal of the Company's operating subsidiaries
during the period.
For the year ended September 30, 2012, our total operating expenses were
$103,254, all of which were selling, general and administrative expenses. Our
net loss to our shareholders for the year ended September 30, 2012 was $103,254.
For the year ended September 30, 2011, our total operating expenses were
$47,758, all of which were selling, general and administrative expenses. Our net
loss to our shareholders for the year ended September 30, 2012 was $47,758.
For the period from March 26, 2007 (date of inception) to September 30, 2012,
the accumulated gross profit was $16,181, the total operating expenses were
$416,213 which were all selling, general and administrative expenses and had
$118,193 in gain on disposal of subsidiary, $1,028 in exchange gain, $2,170 in
interest expense, $1,196 in interest and other income and loss attributable to
noncontrolling interest of $24,430, resulting in an accumulated net loss to our
shareholders of $257,355.
Liquidity and Capital Resources
We used cash in operating activities of $62,767 and $35,379 for the years ended
September 30, 2012, and 2011, respectively. The principal elements of cash flow
used in operations for the year ended September 30, 2012 included a net loss of
$103,254, offset by increases in accounts payable of $20,737 and accrued
expenses of $19,750. The principal elements of cash flow used in operations for
the year ended September 30, 2011 included a net loss of $47,758, offset by
increases in accounts payable of $379 and accrued expenses of $12,000.
No cash was used in investing activities during the years ended September 30,
2012 and 2011.
Cash generated in our financing activities was $62,767 and $35,379 for the years
ended September 30, 2012 and 2011, respectively. These amounts represent amounts
received from our principal shareholder for expenses paid on our behalf by the
We do not have sufficient resources to effectuate our business. As of September
30, 2012, we had no cash. We expect to incur a minimum of $125,000 in expenses
during the next twelve months of operations. We estimate that this will be
comprised of the following expenses: $25,000 for business planning and
development, and $100,000 will be needed for general overhead expenses such as
salaries, legal and accounting fees, office overheads and general expenses.
We will have to raise funds to pay for our expenses. We may have to borrow money
from shareholders or issue debt or equity or enter into a strategic arrangement
with a third party. There can be no assurance that additional capital will be
available to us. We currently have no arrangements or understandings with any
person to obtain funds through bank loans, lines of credit or any other sources.
Since we have no such arrangements or plans currently in effect, our inability
to raise funds for our operations will have a severe negative impact on our
ability to remain a viable company.
Our independent auditors included an explanatory paragraph in their report on
the accompanying financial statements regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company has incurred a net
loss of $103,254 for the year ended September 30, 2012, has incurred cumulative
losses since inception of $257,355, and has a stockholders' deficit of $172,795
at September 30, 2012. These factors raise substantial doubt about the ability
of the Company to continue as a going concern for a reasonable period of time.
The Company is highly dependent on its ability to continue to obtain investment
capital and loans from an affiliate and shareholder in order to fund the current
and planned operating levels. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded asset
amounts or the amounts and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. The Company's
continuation as a going concern is dependent upon its ability to bring in income
generating activities and its ability to continue receiving investment capital
and loans from an affiliate and shareholder to sustain its current level of
operations. No assurance can be given that the Company will be successful in
Off-Balance Sheet Arrangements
We currently have no off-balance sheet arrangements that have or are reasonably
likely to have a current or future material effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
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