The information contained in this Form 10-Q is intended to update the
information contained in our Annual Report on Form 10-K for the year ended March
31, 2020 and presume readers have access to, and will have read, the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other information contained in such Form 10-K. The following
discussion and analysis also should be read together with our consolidated
financial statements and the notes to the consolidated financial statements
included elsewhere in this Form 10-Q.
The following discussion contains certain statements that may be deemed
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements appear in a number of places in
this Report, including, without limitation, "Management's Discussion and
Analysis of Financial Condition and Results of Operations." These statements are
not guarantees of future performance and involve risks, uncertainties and
requirements that are difficult to predict or are beyond our control.
Forward-looking statements speak only as of the date of this quarterly report.
You should not put undue reliance on any forward-looking statements. We strongly
encourage investors to carefully read the factors described in our Annual Report
on Form 10-K for the year ended March 31, 2020 in the section entitled "Risk
Factors" for a description of certain risks that could, among other things,
cause actual results to differ from these forward-looking statements. We assume
no responsibility to update the forward-looking statements contained in this
quarterly report on Form 10-Q. The following should also be read in conjunction
with the unaudited consolidated financial statements and notes thereto that
appear elsewhere in this report.
Overview
AuraSource focuses on the development and production of environmentally friendly
and cost-effective beneficiation process for complex ore, tailings and slimes
materials as industrial application solutions. AuraSource's core technology
includes physical separation, hydrometallurgical and pyrometallurgy processes.
Recently, due to our various international sourcing contacts, we have been
requested from various parties to source vendors and customers in the automotive
industry. There can be no assurances that our efforts towards this line of
business will succeed.
AuraSource's physical separation includes ultrafine grinding and impurities
removal, which separate metallic and non-metallic minerals. AuraSource develops
and tests hydrometallurgical flow sheets for the recovery and refining of metals
from concentrate leaching, precipitation, cementation, ion-exchange, solvent
extraction, electro-winning, and process simulations. AuraSource also carries
out high-temperature research and process development for the production of a
wide variety of mineral commodities.
AuraSource formed AuraSource Qinzhou, to acquire these types of technologies,
performing R&D related to the reduction of harmful emissions and energy costs.
AuraSource is currently looking to license this technology to third parties
through joint ventures with strategic partners and/or selling services and
products derived from this technology. Currently, we have seven patents patent
issued related to our technologies: 1) ultrafine grinding and 2) ultrafine
separation.
There can be no assurance we will be able to carry out our development plans for
our technology. Our ability to pursue this strategy is subject to the
availability of additional capital and further development of our technology. We
also need to finance the cost of effectively protecting our intellectual
property rights in the United States ("US") and abroad where we intend to market
our technology and products.
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Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America ("US
GAAP") requires management to make estimates, judgments and assumptions that
affect the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and
the reported amount of expenses during the reporting period. On an ongoing
basis, we evaluate our estimates which are based on historical experience and on
other assumptions that we believe to be reasonable under the circumstances. The
result of these evaluations forms the basis for making judgments about the
carrying values of assets and liabilities and the reported amount of expenses
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions. The following accounting policies
require significant management judgments and estimates:
We account for our business acquisitions under the purchase method of accounting
in accordance with Financial Accounting Standards Board ("FASB") Accounting
Standards Codification ("ASC") Topic 805, "Business Combinations." The total
cost of acquisitions is allocated to the underlying net assets, based on their
respective estimated fair values. The excess of the purchase price over the
estimated fair value of the tangible net assets acquired is recorded as
intangibles. Determining the fair value of assets acquired and liabilities
assumed requires management's judgment and often involves the use of significant
estimates and assumptions, including assumptions with respect to future cash
inflows and outflows, discount rates, asset lives, and market multiples, among
other items.
We base our estimates on historical experience and various other assumptions
that we believe to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities not readily apparent from other sources. There can be no assurance
that actual results will not differ from these estimates.
Results of Operations
For the Three Months Ended September 30, 2021 and 2020
Revenues
Revenues were $0 and $0 for the three months ended September 30, 2021 and 2020,
respectively.
Cost of Sales
Cost of sales was $0 and $0 for the three months ended September 30, 2021 and
2020, respectively.
Gross Profit
Gross profit was $0 and $0 for the three months ended September 30, 2021 and
2020, respectively.
General and Administrative Expenses
General and administrative expenses were $212,483 and $139,638 for the three
months ended September 30, 2021 and 2020, respectively.
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Interest Income (Expense) and Other
Interest income (expense) and other was $(87,572) and $(46,189) for the three
months ended September 30, 2021 and 2020, respectively.
For the Six Months Ended September 30, 2021 and 2020
Revenues
Revenues were $0 and $0 for the six months ended September 30, 2021 and 2020,
respectively. The increase in revenues were due to one mineral processing
contract.
Cost of Sales
Cost of sales was $0 and $0 for the six months ended September 30, 2021 and
2020, respectively.
Gross Profit
Gross profit was $0 and $0 for the six months ended September 30, 2021 and 2020,
respectively.
General and Administrative Expenses
General and administrative expenses were $411,336 and $275,239 for the six
months ended September 30, 2021 and 2020, respectively.
Interest Income (Expense) and Other
Interest income (expense) and other was $(172,629) and $(101,806) for the six
months ended September 30, 2021 and 2020, respectively.
Liquidity and Capital Resources
Net cash used in operating activities was $(23,423) and $(31,020) in the six
months ended September 30, 2021 and 2020, respectively. The decrease in cash
used for operations was mainly due to an increase in interest payable offset by
a reduction in accounts payable for the six months ended September 30, 2021 and
2020, respectively.
Net cash used in investing activities was $0 and $5,481 in the six months ended
September 30, 2021 and 2020, respectively.
Net cash received from / (used in) financing activities was $0 and $44,232 in
the six months ended September 30, 2021 and 2020, respectively. This was
primarily due to the proceeds from the issuance of loans and stock received in
2020.
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The Company suffered recurring losses from operations and has an accumulated
deficit of $20,047,883 at September 30, 2021. The Company has incurred losses of
$583,966 and $377,045 for the six months ended September 30, 2021 and 2020,
respectively. The Company has not continually generated significant revenues.
Unless our operations continue to generate significant revenues and cash flows
from operating activities, our continued operations will depend on whether we
are able to raise additional funds through various sources, such as equity and
debt financing, other collaborative agreements and strategic alliances. Our
management is actively engaged in seeking additional capital to fund our
operations in the short to medium term. Such additional funds may not become
available on acceptable terms and there can be no assurance that any additional
funding that we do obtain will be sufficient to meet our needs in the short and
long term.
Inflation and Seasonality
Inflation has not been material to us during the past five years. Seasonality
has not been material to us.
Recent Accounting Pronouncements
Refer to the notes to the consolidated financial statements in our March 31,
2021 Annual Report on Form 10-K for a complete description of recent accounting
standards which we have not yet been required to implement and may be applicable
to our operation, as well as those significant accounting standards that have
been adopted during the current year.
Off-Balance Sheet Arrangements
As of September 30, 2021, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.
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