NINK Nami Corporation (CE)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

Commission file number: 333-187007

112 North Curry Street

Carson City

89703-4934 

(Address of principal executive offices) 

+609-5158380 

(Registrant’s telephone number, including area code) 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐     No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐     No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

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). Yes ☐     No ☒

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.

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. Yes ☐   No ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☒

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. No market value can be provided as no trading was done during the period referenced.

The number of shares outstanding of the registrant’s common stock as of August 22, 2023 was 1,426,927,346 shares, $0.001 par value.

NAMI Corp.

FORM 10-K

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This annual report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. All statements, other than statements of historical fact, included in this annual report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management are forward-looking statements. The words “anticipates,” “believes,” “continue,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” the negative of these terms and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that the expectations underlying our forward-looking statements are reasonable, these expectations may prove to be incorrect, and all of these statements are subject to risks and uncertainties. Therefore, you should not place undue reliance on our forward-looking statements. We have included important risks and uncertainties in the cautionary statements included in this annual report. We believe these risks and uncertainties could cause actual results or events to differ materially from the forward-looking statements that we make. Should one or more of these risks and uncertainties materialize, or should underlying assumptions, projections or expectations prove incorrect, actual results, performance or financial condition may vary materially and adversely from those anticipated, estimated or expected. Our forward-looking statements do not reflect the potential impact of future acquisitions, mergers, dispositions, joint ventures or investments that we may make. We do not assume any obligation to update any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise, except as required by law. In the light of these risks and uncertainties, the forward-looking events and circumstances discussed in this annual report may not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements.

PART I

ITEM 1. BUSINESS.

OUR COMPANY

NAMI Corp. (the “Company,” “we,” “us” or “our”) conducts its operations through its controlled, consolidated subsidiary SBS Mining Corp. Malaysia Sdn. Bhd. (hereinafter referred to as “SBS”). SBS, founded on August 14, 2008, is a Malaysian corporation primarily engaged in trading activities for certain mineral ores and mining and exploration of properties located in Malaysia.

OUR CORPORATE HISTORY AND BACKGROUND

We were incorporated in the State of Nevada on September 5, 2012. Initially, we established November 30 as our fiscal year-end. On July 4, 2018, we changed our fiscal year-end to June 30. We were originally developing a built-in safe with a combination lock that could store personal and/or valuable items inside of backpacks, carry-on luggage, and suitcases. Since our inception and until the acquisition of SBS, we were a development stage company without significant assets or revenue.

On October 31, 2016, a change in control occurred because the Company’s largest shareholder sold 60,750,000 shares of our common stock to Mr. Ong Tee Keat, a member of the Company’s board of directors and advisor, who resides in Malaysia, which represented 60.22% of the total issued and outstanding shares of common stock at that time. Such 60,750,000 shares sold represented all of the shares of the Company’s common stock owned by the prior shareholder.

On October 31, 2016, we filed a Certificate of Amendment with the Nevada Secretary of State (the “Nevada SOS”) whereby we amended our Articles of Incorporation by (a) increasing the authorized number of shares of common stock from 200 million to 5 billion; and (b) increasing all of our issued and outstanding shares of common stock at a ratio of seven (7) shares for every one (1) share issued and outstanding. Our board of directors and shareholders approved this amendment on October 26, 2016.

Prior to November 3, 2016, we operated our business under the name “Pack Fuerte, Inc.” On November 3, 2016, Pack Fuerte, Inc. filed Articles of Merger, pursuant to the Nevada Revised Statutes 92A.200 et. seq., with the Nevada SOS. The Articles of Merger set forth the terms and conditions under which we entered into a statutory merger with our wholly owned subsidiary, NAMI Corp., with Pack Fuerte, Inc. as the merging corporation and NAMI Corp. as the surviving corporation. Thereafter we have operated under the name NAMI Corp.

Acquisition of SBS

On July 12, 2018, we acquired 100% of the outstanding shares of SBS from GMCI Corp (“GMCI”) in exchange for the issuance of a total of 720,802,346 shares of our common stock to GMCI (the “SBS Acquisition”). As a result of the SBS acquisition, SBS became our wholly owned subsidiary; and the former SBS Shareholder, GMCI, became our controlling stockholder. The SBS Acquisition was treated as a recapitalization, with SBS as the acquirer and the Company as the acquired party for accounting purposes. Unless the context suggests otherwise, when we refer in this report to business and financial information for periods prior to the consummation of the SBS Acquisition, we are referring to the business and financial information of SBS.

Immediately prior to the SBS Acquisition, GMCI owned all the issued and outstanding capital stock of SBS. As a result of the SBS Acquisition, we now own all the issued and outstanding capital stock of SBS. Following the closing of the SBS Acquisition, we conduct our operations through our controlled, consolidated subsidiary SBS. SBS is primarily engaged in mining and exploration of properties located in Malaysia.

On July 19, 2018, we were notified that the board of directors of GMCI deemed it to be in the best interests of GMCI and its stockholders for GMCI to approve and declare a dividend of restrictive shares of NAMI Corp. to the stockholders of GMCI, on a pro rata basis, determined in accordance with the number of shares of capital stock of GMCI held by such stockholders, thereby transferring ownership of 100% of the outstanding restrictive shares of NAMI Corp. owned by GMCI to the stockholders of GMCI (collectively, the “Nami Stock Dividend”). The Nami Stock Dividend was completed on August 21, 2018.

Filing of S-1 Registration Statement for our Selling Shareholders

On November 13, 2018, the Company filed a S-1 Registration Statement to register for the sale of up to 322,388,472 shares of our common stock by persons who received shares of our common stock pursuant to the Nami Stock Dividend and by persons who purchased shares of our common stock in private placements that took place from April to September 2017 (the “Private Investors”). The recipients of the Nami Stock Dividend and the Private Investors are referred to in this annual report as the “selling stockholders”. The selling stockholders may sell common stock from time to time in the principal market on which the stock will be traded at the prevailing market price or in negotiated transactions. With respect to shares of our common stock that may be offered and sold from time to time by the selling stockholders, we will receive no proceeds from the sale of shares of our common stock pursuant to such offering. The Securities and Exchange Commission (“SEC”) declared the effectiveness of the resale S-1 Registration Statement on November 26, 2018.

Temporary Business Interruptions Caused by Covid-19

In March of 2020 the outbreak of a novel strain of coronavirus (COVID-19) was declared a pandemic by the World Health Organization. The COVID-19 pandemic and preventative measures taken to contain or mitigate the outbreak caused disruption in business, the financial markets, and economies globally.

The COVID-19 pandemic negatively impacted the Company’s business, financial condition, and results of operations, as a result of a Moving Control Order (“MCO”) implemented by the government of Malaysia in March of 2020 which caused us to temporarily suspend our business operations. On June 1, 2021 the government of Malaysia implemented the National Recovery Plan (“NRP”) which consisted of a four phase recovery plan designed to steer Malaysia out of the pandemic. As of the date of this annual report, we have re-initiated our business operations, but have to yet to accurately determine the extent of the effects of the COVID-19 pandemic on our business.

The ultimate magnitude of the COVID-19 pandemic and its effects in business globally remains unknown. Uncertainty surrounding the effects and magnitude of the COVID-19 pandemic have caused instability in the global markets and economies, affecting our business in a multitude of ways and in varying magnitudes. Although we are yet unable to estimate the ultimate impact that the COVID-19 pandemic had on our business, financial condition, and results of operations, it adversely affected:

Further or prolonged deterioration of adverse conditions could continue to negatively impact our business, financial condition, and results of operations.

OVERVIEW

SBS, founded in August 14, 2008, is a Malaysian corporation primarily engaged in sea sand mining of properties located in Malaysia.

SBS’ executive offices are located at No 1, 1st Floor, Lorong Sekilau 1, Bukit Sekilau, 25200 Kuantan, Pahang Darul Makmur, Malaysia.

In August 2018, SBS created a new class of preferred equity, designated as the “12% Redeemable Cumulative Preference Shares,” in its attempt to raise capital for business expansion and exploration of mining activities. SBS authorized the issuance of up to 50 million shares of the newly created class of preferred stock at an issue price of RM 1.00 per share.

This new preferred equity carried a cumulative 12% preferred dividend, payable on a quarterly basis, based on the issue price of the preferred shares (the “Preferred Dividend”). The preferred shares would be redeemed by SBS at the “Redemption Price.” The Redemption Price for each share was an amount of shares of NAMI Corp., equal to the issue price of the preferred shares, plus the unpaid Preferred Dividends. SBS should have redeemed the 12% Redeemable Cumulative Preference Shares on the second anniversary of their issuing date. This, however, was impossible due to SBS being forced to halt its operations to comply with movement restriction orders issued by the government of Malaysia.

In the event of a liquidation, dissolution or winding up of SBS, the holders of 12% Redeemable Cumulative Preference Shares, were entitled to have the assets available for distribution applied first to pay them an amount equal to the issue price, plus all unpaid Preferred Dividends. The holders of 12% Redeemable Cumulative Preference Shares had no voting rights, except: (i) upon any resolution put forth when the Preferred Dividends remain in arrears and unpaid; (iv) upon any resolution that varies the rights of the preferred shares; (iii) upon any resolution for the winding up of SBS; (iii) upon any resolution to approve a capital reduction, repayment or distribution of SBS; (iv) upon any proposal to effect a scheme of arrangement; and (v) as required by law. As of June 30, 2022 dividends in arrears were paid and the outstanding balance was $0. 

In August 2018, SBS commenced a capital raise of up to RM 50,000,000 (approximately USD $12.4 million) by offering shares of SBS’ 12% Redeemable Cumulative Preference Shares at a price of RM1.00 per share (the “12% Redeemable Cumulative Preference Shares Offering”). The Company received approximately $59,530 (MYR 240,000) in the first subscription of the 12% Redeemable Cumulative Preference Shares offering; and approximately $8,878 (MYR 40,000) in the second subscription of the 12% Redeemable Cumulative Preference Shares offering. The 12% Redeemable Cumulative Preference Shares offering was closed on February 28, 2019.

As of the date of this annual report, SBS has redeemed the 280,000 shares of 12% Redeemable Cumulative Preference Shares which were outstanding for a total of 46,667 shares of NAMI Corp. As of the date of this report, there are no shares of 12% Redeemable Cumulative Preference Shares outstanding. 

Products and Suppliers

Bauxite Financing

SBS provides financing for the acquisition, stockpiling storage, exporting and shipment of bauxite ore from Malaysia. Currently, SBS has provided funding to Sincere Pacific Mining (M) Sdn. Bhd. (“Sincere Pacific”) to purchase and sell and export bauxite through a verbal agreement. Sincere Pacific is considered a related party as Mr. Liew Chin Loong, a director and officer of SBS, is also a fifty percent (50%) owner and a director of Sincere Pacific.

SBS and Sincere Pacific have verbally agreed to work in partnership to acquire and arrange transport for stockpiled bauxite shipments to mainland China. Services required for the loading, processing and transport of bauxite from mine sites to the port will be provided by SBS and Sincere Pacific directly. Sincere Pacific has agreed to manage all labor, processing, transport and export of the ore until such time as the parties have concluded a total of seven (7) shipments.

Sincere Pacific holds a special permit from the government of Malaysia that allows it to hold up to 1.8 million metric tons (all tons referred to herein are metric) of bauxite stockpile for shipment at Felda Bukit Goh, Kuantan. This permit has no expiration date. Sincere Pacific and SBS intend to conclude approximately seven (7) shipments under this permit. As of June 30, 2022, the two parties have concluded five (5) shipments. The remaining two shipments have not been concluded and do not have an estimated shipment date due to the fact that the Malaysian government has yet to issue the finalized standard operating procedure rules for the export of bauxite. On March 22, 2018, Sincere Pacific obtained an additional bauxite export license for a total tonnage of 124,160.67 metric tons. The permit expired on April 30, 2018. No sales were made by Sincere Pacific under the verbal agreement in the year ended June 30, 2022. Sincere Pacific acquires or purchases bauxite from multiple sources in Malaysia for selling the ore to customers in China.

Upon purchasing bauxite in Malaysia, Sincere Pacific processes the ore in its facilities, then stockpiles the ore pending shipment. Each shipment of bauxite consists of up to 55,000 metric tons. SBS does not take physical possession of the minerals at any time. It has been verbally agreed between Sincere Pacific and SBS that SBS, in return for providing exporting financing, shall receive a commission based on the gross amount of washed bauxite tonnage of up to 20,000 metric tons per shipment. Thereafter, if successful, the two parties will enter a formal agreement with respect to further shipments under newly negotiated terms. It is anticipated by our management team that the sales price obtained by Sincere Pacific for unwashed bauxite could gross a total of up to USD $24.50 to USD $26.00 per dry and delivered metric ton, free on board stowed and trimmed, subject to certain penalties or bonus based on the percentage of certain mineral compounds present (primarily aluminum oxide and silicon dioxide). Sincere Pacific issues payment to SBS upon successful conclusion of shipments, at an agreed USD $1.00 per delivered dry ton, net any applicable fees such as storage, etc. The parties intend to formalize a written agreement for future mineral trading activities following successful conclusion of approximately seven (7) shipments whereby we hope that SBS will receive commissions on up to 140,000 gross tons. As of the date of this report, no formalized written agreement has been completed.

However, the price at which Sincere Pacific sells a shipment of bauxite is subject to negotiation and current market prices. Therefore, this average net income of USD$1.00 per ton payable to SBS is subject to adjustment and possible volatility.

To date, Sincere Pacific has completed five (5) shipments of bauxite and SBS has provided Sincere Pacific with $614,226 (RM$2,504,769) of financing used towards a portion of these shipments. Of the total financing advanced by SBS, $186,744 (RM$800,000) has been repaid by Sincere Pacific as of the date of this filing. Through June 30, 2018, SBS has received revenue of $84,271 (RM$350,306) in commissions from Sincere Pacific from its bauxite trading operations. No sales were made by Sincere Pacific under the agreement in the year ended June 30, 2021 and June 30, 2022 and therefore no commissions were received by the Company during the year ended June 30, 2021 and June 30, 2022.

Sea Sand Mining

On August 30, 2017, SBS entered into an agreement with JHW Holdings Sdn. Bhd. (“JHW”), whereby JHW applied for and obtain a three (3) year mining concession from the Malaysian government to mine and dredge sea sand on the east coast of Peninsular Malaysia, effective beginning in January 2019. JHW was first granted a concession with an area of 1,113km², which was later amended and reduced to 383km². The final approved area is 20.48km² within the jurisdiction of the state of Terengganu, Malaysia (the “Area”). Pursuant to the agreement, JHW was responsible for carrying out and submitting to the relevant authorities all necessary study reports, including, but not limited to, Environmental Impact Assessment (“EIA”) reports and feasibility and hydraulic studies with respect to the Area to obtain approval for the sea sand mining and dredging license (the “Final Approval”). SBS was responsible for bearing all costs and expenses incurred with respect to such application, and for providing all the required technical assistance with obtaining the concession licenses. In exchange for covering all costs and expenses in connection with the obtainment of the Final Approval, JHW granted SBS the exclusive right to develop, carry out and operate all mining and extraction activities in the Area, and to manage all matters related to the operation and extraction of sea sand, either by itself or by a nominee. Gross profits from operations of the mining activities in the Area shall be allocated 25% to JHW and 75% to SBS pursuant to the terms of the agreement. In addition, SBS was required to prepay an advance of MYR 500,000 of future net incomes to JHW. As of June 30, 2022, SBS had paid MYR 250,000 (approximately USD $60,000) to JHW, the residual MYR 250,000, remain outstanding and will be paid once operations commence.

SBS and JHW fulfilled all regulatory requirements and obtained the necessary approvals from all governmental agencies, including Department of Environment (“DOE”) (Jabatan Alam Sekitar), Department of Mineral and Geoscience Malaysia (“JMG”) (Jabatan Mineral dan Geosains Malaysia) and all 13 agencies under the jurisdiction of the state and federal governments of Malaysia for the three (3) year concession in January of 2019.

The Final Approval of the sea sand mining and dredging license was obtained on January 10, 2019. The license expired on January 9, 2022; and has since then been renewed for an additional three (3) year period, commencing in August 2, 2022 and ending in August 1, 2025. The Company, who has been focusing its commercial efforts on its sea sand mining and dredging operations, expects to export sea sand mined from the Area to China, Japan and Hong Kong. 

On May 27, 2022, SBS entered into a sea sand sub-operator mining agreement with One Standard Continent SDN BHD (the “Sub-operator Agreement”). The Sub-operator Agreement was executed pursuant to a power of attorney entered into between SBS and One Standard Continent SDN BHD (“OSC”) on December 10, 2021, whereby OSC was granted the right to carry out dredging, removal, transportation, exploration and sale of natural sea sand from a sea area of 325.30 sq. km (the “Specified Area”). The Specified Area would be divided into separate areas to apply and obtain separate mining licenses (the “Concession Area”).

Under the terms of the Sub-operator Agreement, OSC will bear all costs and expenses incurred by SBS to carry out and submit all environmental impact and feasibility studies and other surveys as may be required to obtain the approval of a mining license. SBS granted OSC the exclusive right to manage, operate, develop and carry out mining activities within the Specified Area.

As consideration for the exclusive right to manage and operate mining activities in the Specified Area, OSC paid SBS a retainer fee of RM550,000 (the “Retainer Fee”). OSC may claim refunds for the Retainer Fee, through set off of the Tribute Fee (as defined below) payable by OSC to SBS for the last few shipments upon completion of the first Concession Area or upon expiration or termination of the Sub-operator Agreement. In addition to the Retainer Fee, SBS shall be entitled to receive RM11.50 for every metric cube of sea sand dredged, removed, transported, exported and sold from the Concession Area (the “Tribute Fee”).  Subsequent to this, the Company and OSC entered into a verbal agreement, in which OSC agreed to remit to the Company, upon receiving a power of attorney RM 2 million (approximately $450,000 USD) and further upon signing of a concession related agreement a further RM 3.15 million (approximately $715,000 USD).

Upon the issuance of a mining license for any given Concession Area, SBS will obtain all approvals required to guarantee OSC a legally workable operation and export. OSC shall pay SBS, in advance, the first Tribute Fee calculated on the basis of 200,000 cubic meters of sea sand sold within 21 days of the issuance of the mining license. OSC shall dredge, remove, transport, export and sale a monthly minimum of 600,000 cubic meters of sea sand from the Concession Area (the “Minimum Quantity”). OSC shall pay SBS the Tribute Fee calculated on the Minimum Quantity on the 14^th day of every calendar month, commencing on the second month after the commencement of operations by OSC in the Concession Area. If the monthly sales exceed the Minimum Quantity, OSC shall pay the difference to SBS.

Entry into Letter of Intent of Granite Mining Business

On January 17, 2019, we entered into a Letter of Intent with Pembinaan Kaya Hebat Sdn Bhd, a Malaysian corporation engaged in granite mining business (“PKH”), for the acquisition by us of up to one hundred percent (100%) of the issued and outstanding capital stock of PKH at its fair market value (the “PKH Acquisition”). The completion of the PKH Acquisition is subject to various conditions precedent, including, but not limited to, negotiating and executing a form of purchase agreement that is acceptable to both parties, approval of the financial statements of both parties’ boards of directors, and fair market valuation of PKH. If we are able to complete the PKH Acquisition, we intend to operate PKH as a wholly owned subsidiary or a majority-owned subsidiary. As of the date of this report, the PKH acquisition is still under negotiations. If the PKH acquisition is completed, it will trigger additional disclosure in subsequent reports and our financial statements.

NAMI Corp. aspires to become a globally diversified mining company and is actively engaged in expansion plans by engaging with prospective mining businesses.

River Sand Mining

On September 6, 2019, SBS entered into a mining agreement with Wan Ismail bin Wan Ahmad (the “Donor”) pursuant to which the Donor granted to SBS the sole and exclusive rights to mine for river sand and other materials from a 1.9040-hectare (4.7 acre) plot of land located at Kampung Tiram, district of Kuala Kuantan, Kuantan, Malaysia (the “Concession”) for which the Donor had received a lease license from the State Government of Pahang. SBS shall pay the Donor a fixed monthly rate for the sole and exclusive rights to mine the Concession.

With the grant of the sole and exclusive rights of the aforementioned mining concession for river sand, the Company will expand its current business portfolio to river sand mining and trading. Meanwhile, the Company plans to continue acquiring strategic mining concessions to enhance its river sand mining division.

OUR INDUSTRY

Bauxite Trading

In 2015, Malaysia exported 24.3 million tons of bauxite, resulting in $1.1 billion of revenue to exporters. China accounted for 99% of Malaysia’s export of bauxite. In 2016, the government of Malaysia banned all bauxite mining activities due to environmental concerns and ordered the clearing of the country’s stockpiled inventory of bauxite, requiring all exports to be done pursuant to approved permits issued by the Malaysian government (“Approved Permits”).² As a result, Malaysia exported just 7.4 million metric tons of bauxite in 2016. The ban on the mining of bauxite in Malaysia lasted for three years and was finally lifted in April 2019. The total approximate amount of exported bauxite in 2018 decreased significantly to 515,217 tons as compared to 822,668 tons of bauxite exported in 2017.

Sincere Pacific currently holds an Approved Permit to export bauxite, which ensures the company applies sustainable mining practices to avoid environmental damage.

Car manufacturers are the worlds’ number one industrial consumers of aluminum, using 18% of all aluminum consumed worldwide in 2019. The industry’s demand for aluminum is forecasted to double by 2050 as car manufacturers increase the use of this lightweight metal in order to improve battery performance in electric vehicles. China now dominates the global production of aluminum. In the first half of 2020, China imported 58.3 million tons of bauxite, up 30.3% when compared to 2019, and in the past five years, China’s bauxite imports have grown at an annual rate of 20%. Industry experts predict that this trend will continue to grow and that China’s reliance on imported bauxite for its internal aluminum production may increase from the current 50% to reach 80% in the coming years.

Sea Sand Mining

The process of sea sand mining is extracting sand from the ocean bed with heavy machinery. Then sands are dredged and stored into bunkers or vessels that will be shipped to a buyer’s destination. In commercial businesses, sands are mainly used as construction materials (e.g., brick, concrete, and roads) and for land reclamation (also known as landfills).

The demand for sea sand has soared globally, mostly for industrial and land reclamation purposes. According to the United Nations Commodity Trade Statistics Database (UN COMTRADE), the international trade value of sea sand has increased six-fold in the last 25 years. The Department of Mineral & Geoscience Malaysia reported that out of 36.7 million tons of sea sand produced in Malaysia in 2017, 1.5 million tons were exported, almost exclusively to Singapore.

On October 3, 2018, Malaysia banned all exports of sea sand due to environmental concerns, to satisfy domestic demand, and to clamp down on illegal sand smuggling. Nowadays, sea sand can only be exported from Malaysia under a specific export Approved Permit. Our partner, JHW, holds this export Approved Permit. Under the terms of JHW’s export Approved Permit, we can export up to 19,640,000m3 of sea sand. JHW applied for and obtained the export Approved Permit on April 9, 2021. The Approved Permit expired on January 9, 2022. Subsequent to June 30, 2022, the Approved Permit was renewed for an additional three year period, commencing on August 2, 2022 and ending in August 1, 2025

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¹ See http://www.themalaymailonline.com/money/article/indonesias-bauxite-ban-malaysias-boom#Y9AbyelSfUL4o1Uj.97.

² See http://www.alcircle.com/news/malaysia-exported-24-million-tons-of-bauxite-to-china-in-2015-up-650-yoy-26443.

River Sand Mining

River sand can originate from a wide variety of sources such as from decomposed igneous, metamorphic, and sedimentary rocks; deposits of glacial sands or deposits of ancient sea sands in the form of uplifted or stranded beaches. Sands from rivers are a preferred source.

Apart from Perlis and Melaka, all other Malay states contributed to the production of river sand in 2017. Local demand is expected to increase from the revival of mega projects that were halted previously such as the Bandar Malaysia and East Coast Rail Link and Light Rail Transit 3 (“LRT 3”) projects. Bandar Malaysia’s development, which occupies the former airport in Sungai Besi, is estimated to be 196 hectares in size and will include 10,000 affordable housing units, a people’s park and priority for the use of local content and materials. Completion date is not confirmed yet but development is expected to take 20 years to complete. Tech giants such as Alibaba and Huawei have also expressed interest in establishing their ICT centers in Bandar Malaysia.

Another project that received the green light in April 2019 is the East Coast Rail Link (the “ECRL”). The ECRL is a key railway project consisting of 655 kilometers of railways connecting the eastern coast of Malaysia with the western part of the country. The project is expected to be completed in December 2026.

Competition

Currently, we do not have any direct competition with respect to the specific properties to which our respective partners, Sincere Pacific, JHW and Donor hold licenses. Sincere Pacific is one of the few holders of Approved Permits in Malaysia to export bauxite. It has little competition in terms of purchasing and exporting bauxite.

In terms of developing our business plan and conducting exploration and later deposit development, we expect to compete for qualified geological and environmental experts to assist us in our exploration of mining prospects, as well as any other consultants, employees and equipment that we may require in order to conduct our operations.

Currently, there is significant competition for financial capital to be deployed in mining and material extraction. Therefore, it is difficult for smaller companies such as us to attract investment for our exploration activities. We cannot give any assurances that we will be able to compete for capital funds; and without adequate financial resources, we cannot assure our investors or shareholders that the Company will be able to compete in exploration activities and ultimately in material deposit development, production and sales.

Markets, Sales and Distribution

JHW and SBS received the sea sand mining and dredging license on January 10, 2019. The license expired on January 9, 2022; and was renewed for an additional three-year period, commencing on August 2, 2022 and ending in August 1, 2025. The license permits JHW to export sea sand to China, Hong Kong and Japan. We plan to distribute and sell sea sand to customers in these locations.

Intellectual Property

SBS has no significant intellectual property as of the date of this filing.

Regulation

Because our sole operating subsidiary SBS is located in Malaysia, our business is regulated by the national and local laws of Malaysia. We believe our conduct of business complies with existing Malaysia laws, rules and regulations.

Bauxite exports require Approved Permits issued by the Ministry of Malaysia. Sincere Pacific was issued an Approved Permit that can be renewed with the Malaysian government.

The exploration and development of a mining prospect in Malaysia is subject to regulation by a number of governmental authorities. The regulations address many environmental issues relating to air, soil and water contamination and apply to many mining-related activities, including exploration, mine construction, mineral and ore extraction, ore milling, water use, waste disposal and use of toxic substances.

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³ See http://www.bloomberg.com/news/articles/2017-10-30/singapore-is-finding-it-harder-to-grow-literally.

⁴ See http://www.straitstimes.com/asia/se-asia/vietnam-to-run-out-of-sand-in-5-years-say-experts.

⁵ See http://www.asiaone.com/asia/illegal-sand-mining-vietnam-reaches-epidemic-proportions.

⁶ See http://www.business-humanrights.org/en/indonesia-locals-resist-sand-mining-and-construction-of-artificial-islands-due-to-potential-harm-to-fish-stocks-and-environment.

⁷ See http://www.asiaone.com/singapore/cambodia-bans-exports-coastal-sand-mainly-singapore.

⁸ See http://www.rfa.org/english/news/cambodia/sand-storm-11022016160124.html.

In addition, we are subject to regulations relating to labor standards, occupational health and safety, mine safety, general land use, export of minerals and taxation. Many of the regulations require permits or licenses to be obtained and the filing of certain notices, the absence of which, or the inability to obtain, will adversely affect the ability for us to conduct our exploration, development and operation activities. The failure to comply with the regulations and terms of permits and licenses may result in fines or other penalties or in revocation of a permit or license or loss of a prospect.

Insurance

Insurance companies in Malaysia offer limited business insurance products. While business interruption insurance is available to a limited extent in Malaysia, we have determined that the risks of interruption, the cost of such insurance and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. As a result, we are subject to risk inherent to our business, including equipment failure, theft, natural disasters, industrial accidents, labor disturbances, business interruptions, property damage, product liability, personal injury and death. Furthermore, if we suffer losses, damages or liabilities, including those caused by natural disasters or other events beyond our control and we are unable to make a claim against a third party, we will be required to bear all such losses from our own funds, which could have a material adverse effect on our business, financial condition and results of operations.

Principal Address

The Company’s office is located at Lorong Sekilau 1, Bukit Sekilau, No 1, 1st Floor, Kuantan, Pahang 25200 and is operating at 100% capacity. Management is planning to rent a new business administration office once we commence shipment operations. Our U.S. registered office is located at 112 North Curry Street, Carson City, Nevada 89703-4934. Our telephone number is +609-5158380.

Employees

The Company has no employees, only the officers listed in this Annual Report in Part III.

ITEM 1A. RISK FACTORS.

We are a smaller reporting company as defined in Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2. PROPERTIES.

The Company does not own any real property or facilities. SBS leases its operating offices located at Lorong Sekilau 1, Bukit Sekilau, No 1, 1st Floor, Kuantan, Pahang 25200.

ITEM 3. LEGAL PROCEEDINGS.

The Company is not a party to any material legal proceedings.

ITEM 4. MINE SAFETY DISCLOSURES.

Mine safety disclosures are not applicable to our Company because our operations are not subject to the Federal Mine Safety and Health Act.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES.

Market Information

Our shares of common stock are not traded on a national exchange; rather, they are traded on the OTC Pink Market under the symbol “NINK.” On February 23, 2022 the most recently quoted price for one share of common stock on OTC Markets was $0.0002. The following table sets forth, for the periods indicated, the high and low trade prices for our common stock as reported on the OTC PINK Market. During the fiscal years 2022 and 2021 our common stock did not trade above $3.

On November 1, 2016, our common stock was verified for trading on OTCQB Marketplace under the trading symbol NINK. Prior to that time, there was no public market for our stock. The following table sets forth for the indicated periods the high and low intra-day sales price per share for our common stock on the OTC Pink Market for the two quarters of 2020, for the four quarters of 2021, and for the four quarters of 2022.

Number of Holders

As at June 30, 2022, 1,426,927,346 shares of our common stock were outstanding and held of record by approximately 3,122 stockholders of record.

Dividends

No cash dividends were paid on our shares of common stock during the fiscal year ended June 30, 2022. We have not paid any cash dividends since inception and do not foresee declaring any cash dividends on our common stock in the foreseeable future.

Recent Sales of Unregistered Securities

None.

Securities Authorized for Issuance under Equity Compensation Plans

We have not adopted an Equity Compensation Plan.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable.

ITEM 7. MANAGEMENT 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 within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended that involve substantial risks and uncertainties. All statements, other than statements of historical fact, included in this annual report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects and plans and objectives of management are forward-looking statements. The words “anticipates,” “believes,” “continue,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “projects,” “should,” “will,” “would,” the negative of these terms and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. 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.

Our consolidated audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the years ended June 30, 2022 and 2021, which are included herein.

Our operating results for the years ended June 30, 2022 and 2021, and the changes between those periods for the respective items are summarized as follows:

During the years ended June 30, 2022 and 2021, the Company did not recognize any revenues, $47 and $0 in cost of goods sold, and $47 and $0 in gross loss.

Our financial statements reported a net loss of $2,316,033 for the year ended June 30, 2022 compared to a net loss of $690,350 for the year ended June 30, 2021. Our losses have increased on a year-over-year basis, primarily as a result of the near total lockdown of Malaysia as a result of the COVID 19 pandemic during the prior year and the subsequent partial restriction lifting that occurred in July 2021 allowing for the resumption of administrative activities during the current period. Additionally, during the year ended June 30, 2022, the results included other expense of $1,593,282 compared to $108,552 for the year ended June 30, 2021. Interest expense of $1,795,902 primarily related to the amortization of the debt discount, imputed interest on related party advances and interest expense on our project financing arrangements, which was significantly higher than the $249,654 for the year ended June 30, 2021. Also, during the year ended June 30, 2022, the results included operating expense of $722,734 compared to $581,798 for the year ended June 30, 2021.  As we expect in the near future to begin seeking sales contracts for dredged sea sand, we expect a continued increase in our operating expenses in the fiscal years ahead.

Operating expense increased to $722,781 for the year ended June 30, 2022 compared to $581,798 for the year ended June 30, 2021. The increase in operating expense during the year ended June 30, 2022 compared to the same period in the prior year was an increase in general and administrative expenses as a result of increased corporate activity, an increase in professional fees incurred as a result of the Company completing several filings during the period.  Costs related to our exploration activities decreased significantly as a result of receipt of reimbursement from One Standard Continent Sdh. Bhd. of approximately $290,000 in the fiscal year ended June 30, 2022.

Other expense increased to $1,895,979 for the year ended June 30, 2022, compared to $108,552 for the year ended June 30, 2021. The increase in other expense was mainly related to interest expense primarily resulting from the amortization of debt discounts on the Company’s project financing debt, increased imputed interest on non-interest bearing advances and the change in estimate for the project financing liabilities resulting in a significant increase in interest expense. We expect interest expense to increase in future periods until such time as we are able to generate profitable operations and begin to repay our advances from our unrelated debtors as well as our directors and entities related to our directors.

Should we be successful in our efforts to raise additional capital, and to close one or more of our outstanding offers to purchase mining and explorations rights and thus begin exploration and mining operations, we expect our expenses to increase substantially.

Liquidity and Financial Condition

Working Capital

 Our working capital deficit increased as of June 30, 2022, as compared to June 30, 2021, primarily due to an increase in current liabilities to fund operating losses, increased debt levels and derivative liabilities related to our project financing investment offset by funds received from the Company’s project financing debt.

In the coming quarters our largest cash outlays will be in regards to (1) professional fees for work performed for our reporting as part of Nami Corp., (2) for the consultants as part of their work performed to respond to any additional requests received from governmental authorities as part of the process of obtaining approval for the permits and licenses. (3) repayments of the project financing debt.

Management believes that the level of our pre-operating losses are normal for companies in the mining business, and that we will be able to off-set such losses against future revenues once the Company commences its operations and exports. However, our financial statements include a statement that there is a going concern in regards to the Company. Without significant additional investment in the form of debt or equity we may have difficulty meeting our obligations as they come due prior to our obtaining all the necessary permits to begin contracting for sea sand mining operations.

Cash Flows

Operating Activities

Net cash used in operating activities was $546,653 for the year ended June 30, 2022 compared to $577,023 in the same period in 2021.

During the year ended June 30, 2022, cash used in operating activities consisted of a net loss of $2,316,063, depreciation of property and equipment of $5,318, imputed interest on non-interest bearing related party advances contributed as paid in capital of $251,247, noncash interest of $1,543,740, change in fair value of derivative liability of $205,000, expenses paid directly through related party advances of $156, expenses paid directly through unrelated party advances of $5,262, accounts payable and accrued liabilities of $40,026 and deferred revenue of $128,661.

During the year ended June 30, 2021, cash used in operating activities consisted of a net loss of $690,350, depreciation of property and equipment of $6,211, imputed interest on non-interest bearing related party advances contributed as paid in capital of $214,234, amortization of debt discount of $35,420, change in fair value of derivative liability of $(137,186), expenses paid directly through unrelated party advances of $16,196 other receivable and deposits of $(594) and accounts payable and accrued liabilities of $(20,954).

Investing Activities

There were no investing activities for the years ended June 30, 2022 and 2021. 

Financing Activities

Net cash provided by financing activities was $519,955 for the year ended June 30, 2022, compared to net cash provided by financing activities of $604,154 in the same period in 2021. Net cash provided by financing during the year ended June 30, 2022 was the result of proceeds of project financing advances of $417,183, principal repayments of project financings of $614,412, advances from related parties of $155,608, advances from an unrelated party of $640,194, repayments of related party advances of $26,664, and repayments of advances to an unrelated party of $47,993. Net cash provided by financing during the year ended June 30, 2021 was the result of project financing advances of $97,712, project financing investments of $484,760, advances from related parties of $44,447, advances from an unrelated party of $10,907, repayments of related party advances of $11,338, and repayments of advances to an unrelated party of $22,334. 

Contractual Obligations

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

Going Concern

Our financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, our company has negative working capital, recurring losses, and does not have an established source of revenues sufficient to cover its operating costs. These factors raise substantial doubt about our company’s ability to continue as a going concern.

The ability of our company to continue as a going concern is dependent upon its ability to successfully commence its sea sand mining operations and eventually attain profits. The accompanying financial statements do not include any adjustments that may be necessary if our Company is unable to continue as a going concern.

In the coming year, our Company’s foreseeable cash requirements will relate to continual development of the operations of our business, maintaining our good standing and making the requisite filings with the Securities and Exchange Commission, and the payment of expenses associated with operations and business development. Our Company may experience a cash shortfall and be required to raise additional capital.

Historically, we have mostly relied upon internally generated funds such as shareholder loans and advances to finance our operations and growth. Management may raise additional capital by retaining net earnings or through future public or private offerings of our Company’s stock or through loans from private investors, although there can be no assurance that we will be able to obtain such financing. Our Company’s failure to do so could have a material and adverse effect upon us and our shareholders.

Plan of Operations

This report contains forward looking statements relating to our Company’s future economic performance, plans and objectives of management for future operations, projections of revenue mix and other financial items that are based on the beliefs of, as well as assumptions made by and information currently known to, our management. The words “expects”, “intends”, “believes”, “anticipates”, “may”, “could”, “should” and similar expressions and variations thereof are intended to identify forward-looking statements. The cautionary statements set forth in this section are intended to emphasize that actual results may differ materially from those contained in any forward looking statement.

If the Company is unsuccessful in raising funds through shareholder loans or advances, it will have to seek additional funds from third party debt financing, which would be highly difficult for a development stage company, such as the Company, to secure; or through the private placement of its common stock. Malaysia eased the Covid 19 lockdown in February 2022 and transitioned to the endemic phase in April 2022; however, the Russia-Ukraine war, which started in February of 2022, has severely disrupted shipping costs, causing cargo movements to our Chinese buyers to remain at a standstill. This has had a negative effect on the operations of the Company and on the shipment of our sea sand to China. Until the Company is able to sell sand from its mining operations, the Company will be highly dependent on shareholder loans and advances. If the Company were able to secure third party debt financing, being a development stage company with no operations to date, it would likely have to pay additional costs associated with high-risk loans and be subject to an above market interest rate. If these funds are required and not available through shareholder loans or advances, or through the private placement of the Company’s securities, management will evaluate the terms of such debt financing and determine whether the business could sustain operations and growth and manage debt repayment terms. If these additional funds are not obtained through either of the alternatives discussed herein, the Company maybe required to cease its business operations. As a result, investors in the Company’s common stock would lose all of their investment.

On May 27, 2022, the Company entered into an operator agreement with One Standard Continent SDN BHD (“OSC”), in which OSC has been provided with the ability to carry out all dredging activities, all transportation, insurance, risk management and export in an area comprised of 21.10 sq/km. within the Company’s 325.3 sq/km new concession area. The Company will receive a retainer fee, concession related fee and tribute fee from OSC for sand sold. As part of this transaction, the Company and OSC have executed a power of attorney and exclusive sole marketing agent agreement. The power of attorney allows OSC to act as the Company’s sub-operator within the concession area; in the exclusive sole marketing agent agreement the Company appoints OSC to act as exclusive sole marketing agent to promote and negotiate the sale of sea sands and to seek funding for the Company’s sea sand projects. The Company will bear responsibility for payment of 25% to JHW and a royalty to the Ministry of Land and Natural Resources of MYR 0.70 per cubic meter dredged.  Subsequent to June 30, 2022, the mining licence was renewed increasing the available sand to dredge to 32 million cubic meters.  The licence commended August 2, 2022 and ends August 1, 2025.

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 management’s 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.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Our Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

NAMI CORP.

AUDITED FINANCIAL STATEMENTS

June 30, 2022 and 2021

TABLE OF CONTENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Nami Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Nami Corp. (the “Company”) as of June 30, 2022 and 2021, and the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the years in the two years ended June 30, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of the years in the two years ended June 30, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s 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 audits, 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 Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement 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 Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ L J Soldinger Associates, LLC

L J Soldinger Associates, LLC (318)

Deer Park, Illinois

August 22, 2023

We have served as the Company’s auditor since 2018.

NAMI Corp.

Consolidated Balance Sheets

The accompanying notes are an integral part of these consolidated financial statements.

NAMI Corp.

Consolidated Statements of Operations and Comprehensive Loss

 The accompanying notes are an integral part of these consolidated financial statements.

NAMI Corp.

Consolidated Statements of Changes in Stockholder’s Deficit

  The accompanying notes are an integral part of these consolidated financial statements.

NAMI Corp.

Consolidated Statements of Cash Flows

  The accompanying notes are an integral part of these consolidated financial statements.

NAMI Corp.

NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022