The accompanying notes are an integral part of these consolidated financial statements.
NOTES
TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
March
31, 2022
NOTE
1 - ORGANIZATION AND BUSINESS OPERATIONS
Organization
and Description of Business
NEXT-ChemX
Corporation, formerly known as AllyMe Group Inc. (“Company”, “we” or “us”) was incorporated under
the laws of the State of Nevada on August 13, 2014 (“Inception”) and has adopted a December 31 fiscal year end. The Company’s
Board of Directors approved the new name on June 16, 2021 and was granted approval by FINRA on July 22, 2021. The Company began trading
under the new trading symbol “CHMX” on July 30, 2021.
In
Q2, 2021, the business of the Company changed fundamentally with the acquisition of a Novel Membrane-Based Ion Extraction Technology
(“Membrane Technology” as further described in Note 5 below) along with certain patents and patent applications, as well
as securing the employment of the Membrane Technology inventing scientist. Potential applications for the Membrane Technology include:
|
● |
Lithium
Extraction from Natural Brines, Geothermal Wells, or Leach Solutions; |
|
● |
Extracting
Fatty Acids from Vegetable Oils for More Economical Refining; |
|
● |
Extracting
of Radioactive Ions from Nuclear Plant Stored Water; |
|
● |
Extracting
of Metal Ions from Mine Leach Solutions, Effluent, or Tailings; and |
|
● |
Desalination
of Sea Water, by Extracting Ions for Water Purification |
During
the first quarter of 2022, the Company has completed the first testing of a pilot of the Membrane Technology to identify the rates of
extraction and to increase the efficiency of the hollow fiber design. Further work will continue to optimize the parameters of the extraction
units. The Company hired certain key individuals with expertise in hollow fiber design.
The
Company continues to pursue its intellectual property protection strategy with testing and development to support a strong protection
profile.
NOTE
2 – GOING CONCERN
The
Company has incurred losses since inception (August 13, 2014) resulting in an accumulated deficit of $2,336,823 as of March 31, 2022,
and further losses are anticipated in the development of its business. The Company had a net loss of $387,890 and net cash used in operating
activities of $110,661 for the period ended March 31, 2022. Accordingly, there is substantial doubt about the Company’s ability
to continue as a going concern. Management believes that the Company’s capital requirements will depend on many factors including
the success of the Company’s development efforts and its efforts to raise capital. Management also believes the Company needs to
raise additional capital for working capital purposes. There is no assurance that such financing will be available in the future. The
conditions described above raise substantial doubt about our ability to continue as a going concern. The financial statements of the
Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications
of liabilities that might be necessary should the Company be unable to continue as a going concern.
The
ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and, or, obtaining
the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.
Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and, or, the
private placement of common stock. However, there can be no assurances that management’s plans will be successful.
NOTE
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim
Financial Statements
The
accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with
the rules and regulations of the United States Securities and Exchange Commission with respect to Form 10-Q and Article 8 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The
unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) that are, in the
opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily
indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the audited
financial statements of the Company for the year ended December 31, 2021.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles generally accepted in the U.S. GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Intangible
asset
As
of October 1, 2021 and in accordance with the evaluation of the intangible intellectual property asset of the Company that has been further
developed and strengthened during the second and third quarters of 2021, the Membrane Technology was reclassified as an indefinite intangible
asset. This reclassification was further justified when the Company filed a new patent in Q4 2021. Since reclassification of the intangible
asset, no further amortization has been recorded for the asset which remains at its October 1, 2021 value of $3,150,114. The Company
carries out regular assessments of the Membrane Technology to identify if its value is impaired in any way, (i) on an annual basis and
(ii) in the event that, in the opinion of Management, there exists any reason external or internal why the asset might be impaired.
Recently
Adopted Accounting Guidance
In
August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options”
and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity”. The standard reduced the number of accounting
models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation
models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition
of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued
with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal
years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier
than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has adopted this
standard on January 1, 2021.
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements
will have a material impact on its financial statements.
NOTE
4 – PREPAID EXPENSE AND OTHER CURRENT ASSETS
Prepaid
expense and other current assets amounted to $1,600 as of March 31, 2022 and December 31, 2021. Prepaid expenses in 2022 and 2021 are
for a deposit on the rental of laboratory facilities.
NOTE
5 – INTANGIBLE ASSET
The
Company’s principal asset is certain indefinite intangible intellectual property, specifically certain patents and patent applications
along with the existing and developing knowhow, relating to a novel extraction process proven capable of removing ions from solution
using hollow fiber membranes (the “Extraction Technology”). The technology represents, in the opinion of management, an entirely
novel approach to the process of extraction of ions that is anticipated to be cheaper, more efficient and less damaging to the environmental.
Following an assessment of the Extraction Technology carried out at the end of Q3, 2021, it was determined that the Extraction Technology
had an indefinite useful life. The said indefinite, intangible asset will not be amortized; however, the value of the Asset will be examined
for impairment periodically in accordance with ASC 350. At March 31, 2022, the Extraction Technology is valued on the balance sheet at
$3,150,114.
NOTE
6 - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
As
of March 31, 2022 and December 31, 2021, accounts payable and accrued liabilities consisted of as follows,
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
| |
March 31, | | |
December 31, | |
| |
2022 | | |
2021 | |
Accounts payable | |
$ | 435,737 | | |
$ | 394,530 | |
Accrued payroll | |
| 581,539 | | |
| 360,500 | |
Accrued interest | |
| 36,517 | | |
| 22,767 | |
Accrued interest- related party | |
| 31 | | |
| - | |
Accounts payable and
accrued liabilities | |
$ | 1,053,824 | | |
$ | 777,797 | |
NOTE
7 – CONVERTIBLE NOTES
During
the three months ended March 31, 2022, the Company did not issue new convertible notes. As of March 31, 2022 the Company had 16 outstanding
convertible notes with a total balance of $687,500, $15,000 of that was payable to a related party. All the notes are convertible at
a conversion price of $1.00 per share. The convertible notes are unsecured, bear interest at 8% per annum, and have a one-year or less
maturity.
During
the three months ended March 31, 2022, the Company recognized interest expense of $13,781.
NOTE
8 – RELATED PARTY TRANSACTIONS
In
support of the Company’s efforts and cash requirements, the Company has partially relied and expects in the future to rely partially
on advances from related parties until such time that the Company can support its operations or attain adequate financing through sales
of its equity or traditional debt financing. During the three months ended March 31, 2022, the company received a total amount of $118,220
in a form of payments made to third parties on behalf of the Company to fund operation. The advances are due on demand and bear no interest.
During
the course of 2021, while the Company was refocusing its business, changing its name and waiting for the change of name and management
to take effect with the IRS and other governmental authorities, the Company was unable to operate normally, in particular in relation
to international transfers. As a result, during 2021, the Company relied on a related party shareholder company to make disbursements
on its behalf. Since January 1, 2022 the managers of the business have taken full responsibility for all expenses and disbursements and
these are directly reimbursed to such managers.
NOTE
9 - STOCKHOLDERS’ EQUITY (DEFICIT)
The
Company is authorized to issue 100,000,000 shares of common stock with a par value of $0.001 and 5,000,000 shares of preferred stock
with a par value of $0.001. There is no preferred stock issued and outstanding as of March 31, 2022.
During
the three months ended March 31, 2022, the Company issued no shares of common stock.
During
the three months ended March 31, 2022, the Company issued no options under the Company’s 2021 Stock Incentive Plan (the “Plan”).
During
the three months ended March 31, 2022, the Company issued no convertible debt exchangeable into shares of common stock.
There
are 27,385,437 shares of common stock outstanding, unchanged as of March 31, 2022 and December 31, 2021.
NOTE
10 – SUBSEQUENT EVENTS
On
April 18, 2022 the Company issued convertible notes to a related party totaling $18,000, with a conversion price of $1.00 per share in
forgiveness of debt. The convertible notes are unsecured, bears interest at 8% per annum, have a one-year maturity.
On
April 25, 2022 the Company issued convertible notes to two related parties totaling $42,000, with a conversion price of $1.00 per share
with $41,000 being forgiveness of debt. The convertible notes are unsecured, bear interest at 8% per annum and have a one year maturity.