UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 20202021

[  ]☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ______ to _______

Commission File Number 000-56047

ADM ENDEAVORS, INC.

(Exact name of registrant as specified in its charter)

5941 Posey Lane

Haltom City, Texas76117

(Address of principal executive offices)

(701) 226-9058(817)840-6271

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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 ☐

[X] Yes [  ] No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted 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 and post such files).Yes ☒ No ☐

[X] Yes [  ] No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“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. ☐

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

[  ] Yes [X] No

As of October 22, 2020,November 3, 2021, there were 163,652,143 shares of the registrant’s $0.001 par value common stock issued, issuable, and outstanding.

ADM ENDEAVORS, INC.

PART I – FINANCIAL INFORMATION

TABLE OF CONTENTS

ITEM 1. FINANCIAL STATEMENTS

ADM Endeavors, Inc.

and Subsidiaries

Consolidated Balance Sheets

(unaudited)(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

ADM Endeavors, Inc.

and Subsidiaries

Consolidated Statements of Operations

(unaudited)(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

ADM Endeavors, Inc.

and Subsidiaries

Consolidated StatementStatements of Shareholders’ Equity

September 30, 2020(Unaudited)

(unaudited)

See accompanying notes to unaudited consolidated financial statements.

ADM Endeavors, Inc.

and Subsidiaries

Consolidated Statements of Cash Flows

For the Nine Months Ended September 30,

(unaudited)(Unaudited)

See accompanying notes to unaudited consolidated financial statements.

ADM ENDEAVORS, INC.

and Subsidiaries

Notes to the Consolidated Financial Statements

September 30, 20202021

(unaudited)

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

On January 4, 2001, we were incorporated in North Dakota as ADM Enterprises, Inc. On May 9, 2006, the Company changed both its name to ADM Endeavors, Inc. (“ADM Endeavors,” or the “Company,” “we,” “us,” or “our”) and its domicile to the state of Nevada. On July 1, 2008, the Company acquired all of the assets of ADM Enterprises, LLC (“ADM Enterprises”), a sole proprietorship owned by Ardell and Tammera Mees, in exchange for 10,000,000 newly issued shares of our common stock. As a result, ADM Enterprises became a wholly owned subsidiary of the Company. Even though the Company was incorporated on January 4, 2001, it had no operations until the share exchange agreement with ADM Enterprises on July 1, 2008. ADM providesthen provided installation services to grocery décor and design companies primarily in North Dakota.

In May 2013, the Company amended its Articles of Incorporation to provide for an increase in its authorized share capital. The authorized common stock increased to 800,000,000 shares at a par value of $0.001 per share and preferred stock increased to 80,000,000 shares at a par value of $0.001 per share.

On April 19, 2018, the Company acquired Just Right Products, Inc. (“JRP”), a Texas corporation. JRP was incorporated on January 17, 2010. The acquisition of 100% of JRP from its sole shareholder, Marc Johnson, was through a stock exchange whereaswhereby the Company issued 2,000,000 shares of restricted Series A preferred stock (the “Acquisition Shares”). to Mr. Johnson in consideration of the acquisition of 100% of JRP from Mr. Johnson. Each share of the Series A preferred stock is convertible into ten shares of common stock, and each share has 100 votes on a fully diluted basis. The Acquisition Shares represents represented 61% of the voting shares of the Company, and thus there iswas a change of voting control. Thecontrol in connection with the transaction, and the transaction was accounted for as a reverse acquisition.

JRP is focused on being an added value reseller with concentration in embroidery, screen printing, importing and uniforms for businesses, schools and individuals in the State of Texas.

On January 1, 2020, the Company determined that it would discontinue its business operations in North Dakota, specifically, ADM Enterprises (the “Disposed Company”). The Company has reached a settlementsettled with Ardell Mees to provide him with the assets of the Disposed Company and in exchange for Mr. Mees will assumeassuming all liabilities ofassociated with the Disposed Company. As part ofIn connection with the transaction, Mr. Mees resigned from all positions with the Company, and, in a private transaction, sold a significant portion of his ownership in the Company to Marc Johnson. The Company and Mr. Mees entered into an indemnification agreement whereby Mr. Mees indemnifiedagreed to indemnify the Company for any liabilities of the Disposed Company.

The Company has been affected negatively by COVID-19 as a significant portion of the Company’s sales are for school uniforms which, due to COVID-19 and the closing of schools nationwide, should have a negative impact on the Company’s financials. Additionally, the Company experienced delivery delays duringfinancials in the first quarter of 2020 due to slowed production in China due to COVID-19, but management does not2020. We expect this will significantly impact gross sales duetrend to the diverse growth the Company is experiencing.gradually improve going forward.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP)(“U.S. GAAP”) and has a year-end of December 31.

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that 1) recorded transactions are valid; 2) valid transactions are recorded; and 3) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

The unaudited consolidated financial statements of the Company for the nine month periods ended September 30, 20202021 and 20192020 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 20192020 was derived from the audited financial statements included in the Company’s financial statements as of and for the year ended December 31, 20192020 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on May 13, 2020.March 24, 2021. These financial statements should be read in conjunction with that report.

Principles of Consolidation

The accompanying unaudited consolidated financial statements include all of the accounts of the Company and its wholly owned subsidiary, JRP, at September 30, 2020.2021. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of the Consolidated Financial Statements in accordance with U.S. GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Consolidated Financial Statements and the reported amounts of revenue and expenses during the reported periods. The Company bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Significant estimates are related to allowance for doubtful accounts, goodwill, derivative liability, stock-based compensation and deferred tax valuations.

Stock-Based Compensation

Stock-based compensation expense is recorded in accordance with FASB ASC Topic 718, Compensation – Stock Compensation, for stock and stock options awarded in return for services rendered. The expense is measured at the grant-date fair value of the award and recognized as compensation expense on a straight-line basis over the service period, which is the vesting period. The Company estimates forfeitures that it expects will occur and records expense based upon the number of awards expected to vest.

Cash Equivalents

The Company considers all highly liquid investments with an original maturity of nine months or less when purchased to be cash equivalents. At September 30, 20202021 and December 31, 2019,2020, the Company had no0 cash equivalents. IncludedPeriodically, the Company may carry cash balances at financial institutions in assets attributable to discontinued operations is $0 and $12,758excess of cash asthe federally insured limit of $250,000. The amount in excess of the FDIC insurance at September 30, 20202021 was $404,200. The Company has not experienced losses on these accounts and December 31, 2019, respectively.management believes, based upon the quality of the financial institutions, that the credit risk with regard to these deposits is not significant.

Allowance for Doubtful Accounts

The Company establishes an allowance for doubtful accounts to ensure trade and notes receivable are not overstated due to non-collectability. The Company’s allowance is based on a variety of factors, including age of the receivable, significant one-time events, historical experience, and other risk considerations. The Company had an 0allowance at September 30, 20202021 and December 31, 2019 of $0.2020. The Company had bad debt expense of $5,106 $2,221 and $5,336 $5,106 for the nine months ended September 30, 2021 and 2020, and 2019, respectively.

Inventory

Inventory is valued at the lower of cost or net realizable value. Cost is determined using a weighted-average cost method. The Company decreases the value of inventory for estimated obsolescence equal to the difference between the cost of inventory and the estimated market value, based upon an aging analysis of the inventory on hand, specifically known inventory-related risks, and assumptions about future demand and market conditions. The Company has inventory of $205,145$60,545 and $138,693$207,576 as of September 30, 20202021 and December 31, 2019,2020, respectively.

Four vendors accounted for approximately 83% of inventory purchases during the nine months ended September 30, 2021. Two vendors accounted for approximately 37% of inventory purchases during the nine months ended September 30, 2020. Three vendors accounted for approximately 42% of inventory purchases during the nine months ended September 30, 2019. These same vendors made up 34%77% and 0% of our accounts payable as of September 30, 20202021 and December 31, 2019,2020, respectively.

Derivative Instruments

Derivatives are measured at their fair value on the balance sheet. In determining the appropriate fair value, the Company uses the Black-Scholes-Merton option pricing model. Changes in fair value are recorded in the consolidated statements of operations.

Fair Value of Financial Instruments

The Company measures its financial assets and liabilities in accordance with U.S. GAAP. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and short-term loans the carrying amounts approximate fair value due to their short maturities.

We follow accounting guidance for financial and non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

The Company adopted the provisions of FASB ASC 820 (the “FairFair Value Topic”)Topic) which defines fair value, establishes a framework for measuring fair value under U.S. GAAP, and expands disclosures about fair value measurements.

The Company had no0 assets or liabilities other than derivative liabilities measured at fair value on a recurring basis at September 30, 20202021 and December 31, 2019.2020.

Fixed Assets

Fixed assets are recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation is computed by the straight-line method over the assets estimated useful life. Upon the sale or retirement of property and equipment, the related cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in consolidated statements of operations.

SCHEDULE OF ESTIMATED USEFUL LIFE OF ASSETS

Goodwill

Goodwill represents the excess of purchase price and related costs over the value assigned to the net tangible assets of businesses acquired. Goodwill is not amortized, but instead assessed for impairment. We perform our annual impairment review of goodwill in our fiscal fourth quarter or when a triggering event occurs between annual impairment tests. No impairment was recorded in fiscal 20192021 or 2020 as a result of our qualitative assessments over our single reporting segment.

The Company performs a qualitative assessment for each of its reporting units to determine if the two-step process for impairment testing is required. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company would then evaluate the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the fair value for the reporting unit is compared to its book value including goodwill. In the case that the fair value of the reporting unit is less than book value, a second step is performed which compares the implied fair value of the reporting unit’s goodwill to the book value of the goodwill. The fair value for the goodwill is determined based on the difference between the fair values of the reporting unit and the net fair values of the identifiable assets and liabilities of such reporting unit. If the implied fair value of the goodwill is less than the book value, the difference is recognized as impairment.

Impairment of Long-lived Assets

The Company follows paragraph 360-10-05-4 of the FASB Accounting Standards Codification for its long-lived assets. The Company’s long-lived assets, such as intellectual property, are required to be reviewed for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

The Company assesses the recoverability of its long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.

The Company determined that there were no0 impairments of long-lived assets at September 30, 20202021 and December 31, 2019.2020.

Revenue Recognition

We recognize revenue for merchandise sales, net of expected returns and sales tax, at the time of in-store purchase or delivery of the product to our customer. When merchandise is shipped to our guests, we estimate receipt based on historical experience. Revenue is deferred and a liability is established for sales returns based on historical return rates and sales for the return period. We recognize an asset and corresponding adjustment to cost of sales for our right to recover returned merchandise. At each financial reporting date, we assess our estimates of expected returns, refund liabilities and return assets. For merchandise sold in our stores and online, tender is accepted at the point of sale. When we receive payment before the guest has taken possession of the merchandise, the amount received is recorded as deferred revenue until the transaction is complete. Our performance obligations for unfulfilled merchandise orders are typically satisfied within one week. Shipping and handling fees charged to guests relate to fulfilment activities and are included in net sales with the corresponding costs recorded in cost of sales.

We provided consulting services from our discontinued operations which were minimal for the nine months ended September 30, 2019.

Cost of Sales

Cost of sales includes the actual cost of merchandise sold and services performed; the cost of transportation of merchandise from vendors to our distribution network, stores, or customers; shipping and handling costs from our stores or distribution network to customers; and the operating cost and depreciation of our sourcing and distribution network and online fulfilment centers.

Net Income (Loss) per Share

The Company computes basic and diluted income (loss) per share amounts pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic lossincome per share is computed by dividing net lossincome available to common shareholders, by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted lossincome per share is computed by dividing net lossincome available to common shareholders by the diluted weighted average number of shares of common stock during the period. The diluted weighted average number of common shares outstanding is the basic weighted number of shares adjusted as of the first day of the year for any potentially diluted debt or equity.

The dilutive effect of outstanding convertible securities and preferred stock is reflected in diluted earnings per share by application of the if-converted method.

The following is a reconciliation of basic and diluted earnings (loss) per common share for the nine months ended September 30, 20202021 and 2019:2020:

SCHEDULE OF BASIC AND DILUTED EARNINGS PER COMMON SHARE

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statements carrying amounts of existing assets and liabilities and loss carryforwards and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (loss) in the years in which those temporary differences are expected to be recovered or settled.

The effect of a change in tax rules on deferred tax assets and liabilities is recognized in operations in the year of change. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

Tax benefits of uncertain tax positions are recognized only if it is more likely than not that the Company will be able to sustain a position taken on an income tax return. The Company has no liability for uncertain tax positions as of September 30, 20202021 and December 31, 2019.2020. Interest and penalties, if any, related to unrecognized tax benefits would be recognized as interest expense. The Company does not0t have any accrued interest or penalties associated with unrecognized tax benefits, nor was any significant interest expense recognized during the periods ended September 30, 2020, 2021 and 2019.2020.

Segment Information

In accordance with the provisions of ASC 280-10, “Disclosures about Segments of an Enterprise and Related Information,” the Company is required to report financial and descriptive information about its reportable operating segments. The Company has one1 operating segment as of September 30, 20202021 and December 31, 2019.2020.

Effect of Recent Accounting Pronouncements

Recently Issued Accounting Standards Not Yet Adopted

The Company has reviewed all recently issued, but not yet adopted, accounting standards, in order to determine their effects, if any, on its results of operations, financial position or cash flows. Based on that review, the Company believes that no other pronouncements will have a significant effect on its financial statements.

NOTE 3 – GOING CONCERN

The accompanying unaudited financial statements and the factors within it, 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 and the ability of the Company to continue as a going concern for a reasonable period of time. The Company had a net income of $14,065$583,290 and cash used inprovided by operating activities of $151,303$622,183 for the nine months ended September 30, 2020.2021. As of September 30, 2020,2021, the Company had a working capital surplus of $341,259,$222,541, and retained earnings of $115,463.$661,401. The Company’s continuation as a going concern is dependent upon its ability to generate revenues and its ability to continue receiving investment capital and loans from third parties to sustain its current level of operations. The Company is in the process of securing working capital from investors for common stock, convertible notes payable, and/or strategic partnerships. No assurance can be given that the Company will be successful in these efforts. 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.

NOTE 4 – COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of October 22, 2020,November 3, 2021, there were no pending or threatened lawsuits.

Franchise Agreement

The Company has a franchise agreement effective February 19, 2014 expiring in February 2024, with a right to renew for an additional 5five yearsto operate stores and websites in the Company’s exclusive territory. The Company is obligated to pay 5% of gross revenue for use of systems and manuals.

During the nine months ended September 30, 20202021 and 2019,2020 the Company paid $16,076$62,870 and $49,699,$16,076, respectively, for the franchise agreement.

Uniform Supply Agreement

The Company has an agreement to be the exclusive provider of school uniforms and logos for a charter school. The Company is obligated to provide a 3% donation to the charter school each school year. The agreement is for each school year ending through May 31, 2021.

During the nine months ended September 30, 20202021 and 2019,2020, the Company paid $0 and $16,618$4,459 and$0 for the uniform supply agreement, respectively.agreement.

NOTE 5 – FIXED ASSETS

Fixed assets and finance lease right of use assets, stated at cost, less accumulated depreciation at September 30, 20202021 and December 31, 20192020 consisted of the following:

SCHEDULE OF FIXED ASSETS AND FINANCE LEASE RIGHT OF USE ASSETS

During August 2021, the Company acquired land and building for consideration totaling $282,537, of which $110,537 was paid in cash and the remainder with a Note Payable.

Depreciation expense for the nine months ended September 30, 2021 and 2020 was $50,095 and 2019 was $50,547 and $35,456,$50,457, respectively.

NOTE 6 – CONVERTIBLE NOTE PAYABLE AND NOTES PAYABLEPAYABLE

Convertible Notes Payable

On April 1, 2018, the Company assumed a convertible promissory note in connection with the reverse acquisition. The funding was in tranches whereby the Company assumed the first tranche of $48,697.$48,697. The Company received the remaining tranches totaling $57,395$57,395 during the year ended December 31, 2018. The Company received total funding of $106,092$106,092 as of December 31, 2018. The note had fees of $53,046$53,046 which were recorded as a discount to the convertible promissory note and are being amortized over the life of the loan using the effective interest method. The Company recorded interest expenseoriginal maturity of $0 during the nine months ended September 30, 2020.note was March 5, 2019 and at that time, the note was extended to March 5, 2020. In March 2020, the note was extended to March 5, 2021. Subsequent to March 5, 2021, the note was extended to March 5, 2022.

The note is convertible into common stock at a price of 35%35% of the lowest three trading prices during the ten days prior to conversion. As of September 30, 2020,2021, the convertible debt would convert to 5,511,2734,433,740 common shares.

The note balance was $106,092$106,092 as of September 30, 20202021 and December 31, 2019.2020.

Derivative liabilities

The conversion features embedded in the convertible notes were evaluated to determine if such conversion feature should be bifurcated from its host instrument and accounted for as a freestanding derivative. In the convertible notes with variable conversion terms, the conversion feature was accounted for as a derivative liability. The derivatives associated with the term convertible notes were recognized as a discount to the debt instrument and the discount is amortized over the expected life of the notes with any excess of the derivative value over the note payable value recognized as additional interest expense at the issuance date.

The following table presents information about the Company’s liabilities measured at fair value on a recurring basis and the Company’s estimated level within the fair value hierarchy of those assets and liabilities as of September 30, 2021 and December 31, 2020:

SCHEDULE OF FAIR VALUE LIABILITIES MEASURED ON RECURRING BASIS

As of September 30, 2021 and 2020, the derivative liability was calculated using the Black-Scholes method over the expected terms of the convertible debt with aand the following assumptions: volatility of 100%, exercise price of $0.0239 and $0.0163, risk-free rate of 0.17%0.05% and volatility of 100% as of September 30, 2020.0.11% and, respectively. Included in Derivative Incomederivative income (loss) in the accompanying unaudited consolidated statements of operations is expenseincome (expense) arising from the change in fair value of the derivatives gain of $2,193$4,207 and derivative loss of $2,193 during the nine months ended September 30, 2020.2021 and 2020, respectively.

SCHEDULE OF DERIVATIVE LIABILITIES AT FAIR VALUE

Notes Payable

On April 5, 2020, the Company received a Small Business Administration (“SBA”) loan under the government’s assistance related to COVID-19. The SBA loan was for $169,495$169,495 with an interest rate of 0.98%0.98% and due in eight weeks.weeks. The SBA loan is to assist the Company in payroll during the COVID-19 time period. The SBA loan is forgivable if the Company payroll during this time utilizes all of the monies provided.

On April 29, In 2020, the Company receivedapplied for loan forgiveness under the government assistance checkprovisions of $10,000 related toSection 1106 of the COVID-19 responseCARES Act. During the nine months ended September 30, 2021, the Company was notified that the outstanding principal and accrued interest for the PPP Loan was forgiven in full by the government to assist companies during the pandemic.U.S. Small Business Administration (“SBA”).

NOTE 7 – FINANCE LEASES

On November 17, 2016,October 16, 2020, the Company obtainedentered into a finance lease for equipment. Payments were $2,667 per month for three yearssecured promissory note in the amount of $372,000. The note is secured by the deed of trust on the property and bears interest at 5% and is due on October 16, 2021. In October 2021, the leasenote was paid offextended to October 16, 2022.

On August 3, 2021, the Company entered into a secured promissory note in 2019.the amount of $172,000. The note is secured by the deed of trust on the property and bears interest at 4.5% and is due on August 3, 2026.

As of September 30, 2021, the secured notes payable balance was $391,393, consisting of long term notes payable of $129,514 and current portion of notes payable of $261,879. As of December 31, 2021 the notes payable balance was $523,698.

NOTE 87 – ACCRUED EXPENSES

The Company had total accrued expenses of $148,067$342,576 and $201,790$172,923 as of September 30, 20202021 and December 31, 2019,2020, respectively. See breakdown below of accrued expenses as follows:

SCHEDULE OF ACCRUED EXPENSES

NOTE 98 – RELATED PARTY TRANSACTIONS

The majority shareholder, director and officer, is the owner of M & M Real Estate, Inc. (“M & M”). M & M leases the Haltom City, Texas facility to the Company. The monthly lease payment, under a month to monthmonth-to-month lease, is currently $6,500.$6,500. The Company incurred lease expense of $58,500 and $58,500, respectively, $65,000 to M & M for the nine months ended September 30, 20202021 and 2019, respectively.2020.

The Company has accounts payable to M&M of $0 and $0 as of September 30, 2020 and December 31, 2019, respectively. The accounts payable is for unpaid lease obligations and products the Company purchased from M&M during the nine months ended September 30, 2020 and 2019, respectively. The Company purchased approximately $0 and $14,060, respectively. M&M marks up their sales to JRP by 10%.

The Company has been provided office space by its chief executive officer, Ardell Mees, at no cost. Management has determined that such cost is nominal and did not recognize the rent expense in its financial statements.

The Company had expenses of approximately $15,985 related to Ardell Mees and family for the year ended December 31, 2019, respectively. These expenses are considered compensation and are included in discontinued operations.

In April 2020, Marc Johnson advanced $40,000 to the Company. The advance was repaid in May 2020.

On July 28, 2020, Just Right Products, Inc., a wholly owned subsidiary of ADM Endeavors, Inc. (collectively, the “Company”) entered into an asset purchase agreement (the “APA”) with M&M Real Estate, Inc. (“M&M”). M&M is owned by Marc Johnson, the Company’s CEO, CFO and Chairman. The Company utilized the APA to acquire 10.4 acres of land with a cost basis of $498,000$498,000 from M&M. It is anticipated that this land will be used this year for the construction of the Company’s corporate office and expanded operational facilities. The Company compensated M&M in the amount of 22,232,143 shares of common stock of the Company.

Employment and Consulting Agreements

In April 2018,A Consultant engaged by the Company executedin 2020 is the owner of 24.7.365 Hockey, Inc., a two-year employment agreement with Ardell D. Mees,customer of the Company’s Chief Executive Officer and Chief Financial Officer. As compensation for services, Mr. Mees is to receive an annual base salary of $60,000. On December 31, 2019, Mr. Mees waived all balances due to him.

In April 2018,Company. During the Company executed a two-year employment agreement with Marc Johnson, the Company’s Chief Operating Officer. As compensation for services, Mr. Johnson is to receive an annual base salary of $60,000. On December 31, 2019, Mr. Johnson waived all balances due to him.

On May 1, 2018, the Company entered into a consulting agreement for financial services and business development for a term of one year and agreed to issue 2,250,000 common shares earned on a monthly basis to a former officer’s family member. On January 9, 2019, the Company issued the shares of common stock. The Company incurred stock compensation expense of $0 for the nine months ended September 30, 2020, and $112,500 as24.7.365 Hockey, Inc. made up approximately 1.4% of revenue. As of September 30, 2019. In2021 and December 31, 2020, the Company issued 4,500,000 shares24.7.365 Hockey, Inc. accounted for 0% and 62% of common stock related to the currentaccounts receivable, respectively.

Employment and prior agreements.Consulting Agreements

On February 28, 2019, the Company entered into a consulting agreement for financial services and business development for a term of nine months and issued 1,500,000 common shares earned on a monthly basis. On February 28, 2019, the Company issued the shares of common stock. The Company incurred stock compensation expense of $0 for the nine months ended September 30, 2020 and $25,000 as of September 30, 2019.

On January 9, 2020, Motasem Khanfur, the controller of the Company, was appointed as chief financial officer of the Company. As part of his compensation, Mr. Khanfur was awarded 500,000 shares of common stock.

On January 9, 2020, Sarah Nelson was appointed as chief operating officer and director of the Company. As part of her compensation, Ms. Nelson was awarded 1,000,000 shares of common stock.

On January 9, 2020, Andreana McKelvey resigned as director. She was awarded 250,000 shares of common stock of the Company.

On May 30, 2020, the Company entered into a consulting agreement for financial services and business development for a term of one year and agreed to issue 2,250,000 common shares earned on the date of issuance.

NOTE 109 – STOCKHOLDERS’ EQUITY

Our Articles of Incorporation authorize the issuance of 800,000,000 shares of common stock and 80,000,000 shares of preferred stock, with $0.001$0.001 par valuesvalue per share. There were 163,652,143 and 136,920,000 outstanding shares of common stock at September 30, 20202021 and December 31, 2019, respectively.2020. There were 2,000,000 outstanding shares of preferred stock as of September 30, 20202021 and December 31, 2019,2020, respectively. Each share of preferred stock has 100 votes per share and is convertible into 10 shares of common stock.stock. The preferred stock pays dividends equal with common stock and has preferential liquidation rights to common stockholders.

On May 1, 2018, the Company entered into a consulting agreement for financial services and business development for a term of one year and agreed to issue 2,250,000 common shares earned on a monthly basis to an officer’s family member. On January 9, 2019, the Company issued the shares of common stock. The Company incurred stock compensation expense of $0 for the nine months ended September 30, 2020 and $112,500 as of September 30, 2019. In 2020 the Company issued 4,500,000 shares of common stock related to the current and prior agreements.

On January 28, 2019, the Company entered into a consulting agreement for 6 months and agreed to issue 1,500,000 common shares vesting on a monthly basis. The shares were issued on February 28, 2019. The Company incurred stock compensation expense of $0 for the nine months ended September 30, 2020 and $25,000 as of September 30, 2019.

On January 9, 2020, Motasem Khanfur, the controller of the Company, was appointed as chief financial officer of the Company. As part of his compensation, Mr. Khanfur was awarded 500,000 shares of common stock. The Company recorded $10,000 as stock-based compensation.

On January 9, 2020, Sarah Nelson was appointed as chief operating officer and director of the Company. As part of her compensation, Ms. Nelson was awarded 1,000,000 shares of common stock. The Company recorded $20,000 as stock-based compensation.

On January 9, 2020, Andreana McKelvey resigned as director. She was awarded 250,000 shares of common stock of the Company. The Company recorded $5,000 as stock-based compensation.

On April 24, 2020, the Company entered into a consulting agreement for financial services and agreed to issue 650,000 shares of common stock. The shares were valued at $65,000 and were expensed.

On May 30, 2020, the Company entered into a consulting agreement for financial services and business development for a term of one year and agreed to issue 2,250,000 common shares earned on the date of issuance. The Company will amortize the stock compensation on a monthly basis in the amount of $13,125. As of September 30, 2020, the Company has recorded an expense of $52,500.

On July 28, 2020, Just Right Products, Inc., a wholly owned subsidiary of ADM Endeavors, Inc. (collectively, the “Company”) entered into an asset purchase agreement (the “APA”) with M&M Real Estate, Inc. (“M&M”). M&M is owned by Marc Johnson, the Company’s CEO, CFO and Chairman. The Company utilized the APA to acquire 10.4 acres of land with a cost basis of $498,000 from M&M. It is anticipated that this land will be used this year for the construction of the Company’s corporate office and expanded operational facilities. The Company compensated M&M in the amount of 22,232,143 shares of common stock of the Company.

On September 24, 2020, the Company issued 500,000 shares of common stock to legal counsel for services. The shares were valued at $40,000 and were expensed.

NOTE 1110 – CONCENTRATION OF CUSTOMERS

Concentration of Revenue

For the nine months ended September 30, 2021, two customers made up 42% of revenues, and for the nine months ended September 30, 2020 one customer made up 52% of revenues and for the nine months ended September 30, 2019 two customers made up 54%52% of revenues, respectively. One customerTwo customers accounted for 64%67% of accounts receivable as of September 30, 2020.2021. There were no customers that accounted for more than 10%10% of accounts receivable as of December 31, 2019.2020.

NOTE 1211 – LEASE LIABILITY

Finance Leases

Finance leases are included in finance lease right-of-use lease assets and finance lease liability current and long-term debt on the consolidated balance sheets. The associated amortization expense and interest expense are included in depreciation and amortization and interest expense, respectively, on the consolidated income statements.

Operating Leases

The Company leases office space. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Leases with initial terms in excess of 12 months are recorded as operating or financing leases in our consolidated balance sheet. Lease expense is recognized on a straight-line basis over the term of the lease. For leases beginning in 2018 and later, the Company accounts for lease components separately from the non-lease components. Most leases include one or more options to renew. The exercise of the lease renewal options is at the sole discretion of the Company. The depreciable life of the assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

The Company leases approximately 18,000 square feet of space in Haltom City, Texas, pursuant to a month to month lease. This facility serves as our corporate headquarters, manufacturing facility and showroom. The lease is with M & M Real Estate, Inc. (“M & M”), a company owned solely by our majority shareholder and director of the Company.

The Company has approximately 6,000 square feet of space in Arlington, Texas, which serves as an academic showroom, pursuant to a lease that expired on June 1, 2020.2020. The Company is leasing this space on a month-to-month basis beginning June 1, 2020.

As of September 30, 2020, the operating lease right-of-use assets and operating lease liabilities were $0. Operating lease expense during the nine months ended September 30, 2020 was $35,961 and was included as part of operating expenses.

NOTE 1312 – DISCONTINUED OPERATIONS

On January 1, 2020, the Company determined that it would discontinue its business operations in North Dakota, specifically, ADM Enterprises LLC (the “Disposed Company”). The Company has made a settlement with Ardell Mees to provide him with the assets of the Disposed Company and in exchange, Mr. Mees will assume all liabilities of the Disposed Company. As part of the transaction, Mr. Mees resigned from all positions with the Company and, in a private transaction, sold a significant portion of his ownership in the Company to Marc Johnson. The Company and Mr. Mees entered into an indemnification agreement whereby Mr. Mees indemnified the Company for any liabilities of the Disposed Company.

Reconciliation of the Items Constituting Profit and (Loss)

from Discontinued Operations

For the Nine Months Ended September 30,

(unaudited)

SUMMARY OF RECONCILIATION OF ITEMS CONSTITUTING PROFIT AND LOSS FROM DISCONTINUED OPERATIONS

NOTE 14 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the financial statements were issued and filed with the Securities and Exchange Commission. The Company has determined that there are no other such events that warrant disclosure or recognition in the financial statements, except as stated herein.

The outbreak of the coronavirus (COVID-19) resulted in increased travel restrictions, and shutdown of businesses, which may cause slower recovery of the economy. We may experience impact from quarantines, market downturns and changes in customer behavior related to pandemic fears and impact on our workforce if the virus continues to spread. In addition, one or more of our customers, partners, service providers or suppliers may experience financial distress, delayed or defaults on payment, file for bankruptcy protection, sharp diminishing of business, or suffer disruptions in their business due to the outbreak. The extent to which the coronavirus impacts our results will depend on future developments and reactions throughout the world, which are highly uncertain and will include emerging information concerning the severity of the coronavirus and the actions taken by governments and private businesses to attempt to contain the coronavirus. It is likely to result in a potential material adverse impact on our business, results of operations and financial condition. Wider-spread COVID-19 globally could prolong the deterioration in economic conditions and could cause decreases in or delays in advertising spending and reduce and/or negatively impact our short-term ability to grow our revenues. Any decreased collectability of accounts receivable, bankruptcy of small and medium businesses, or early termination of agreements due to deterioration in economic conditions could negatively impact our results of operations.

On October 16, 2020, the Company acquired 7.5 acres of land adjacent to the current land acquired previously to facilitate the space for long-term growth and infrastructure. The purchase price for the land was $465,000 paid in cash and a note payable of $372,000. The note bears interest at 5% and is payable in full on October 16, 2021.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

SPECIAL NOTE CONCERNING FORWARD-LOOKING STATEMENTS

We believe that it is important to communicate our future expectations to our security holders and to the public. This report, therefore, contains statements about future events and expectations which are “forward-looking statements” within the meaning of Sections 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934, including the statements about our plans, objectives, expectations and prospects under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” You can expect to identify these statements by forward-looking words such as “may,” “might,” “could,” “would,” “will,” “anticipate,” “believe,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek” and other similar expressions. Any statement contained in this report that is not a statement of historical fact may be deemed to be a forward-looking statement. Although we believe that the plans, objectives, expectations and prospects reflected in or suggested by our forward-looking statements are reasonable, those statements involve risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements, and we can give no assurance that our plans, objectives, expectations and prospects will be achieved.

Important factors that might cause our actual results to differ materially from the results contemplated by the forward-looking statements are contained in the “Risk Factors” section of and elsewhere in our Annual Report on Form 10-K for the fiscal year ended December 31, 20192020 and in our subsequent filings with the Securities and Exchange Commission. The following discussion of our results of operations should be read together with our financial statements and related notes included elsewhere in this report.

Company Overview

We began operations in 1988, under the ownership and control of Ardell Mees, who provided installation services to grocery decor design companies. As our reputation for excellent workmanship has grown, we have expanded our operations to serve a larger geographic region. On January 4, 2001, we were incorporated in North Dakota as ADM Enterprises, Inc. On May 9, 2006, the Company changed both its name to ADM Endeavors, Inc. (“ADM Endeavors,” or the “Company,” “we,” “us,” or “our”) and its domicile to the state of Nevada. On July 1, 2008, the Company acquired all of the assets of ADM Enterprises, LLC (“ADM Enterprises”), a sole proprietorship owned by Ardell and Tammera Mees, in exchange for 10,000,000 newly issued shares of our common stock. As a result, ADM Enterprises became a wholly owned subsidiary of the Company. Even thoughADM then provided installation services to grocery décor and design companies primarily in North Dakota.

On April 19, 2018, the Company acquired Just Right Products, Inc. (“JRP”), a Texas corporation. JRP was incorporated on January 4, 2001, it had no operations until17, 2010. The acquisition of 100% of JRP from its sole shareholder, Marc Johnson, was through a stock exchange whereby the share exchange agreement with ADM Enterprises on July 1, 2008. All business operations are those solelyCompany issued 2,000,000 shares of restricted Series A preferred stock (the “Acquisition Shares”) to Mr. Johnson in consideration of the Company’s wholly owned subsidiary, ADM Enterprises.

In May 2013,acquisition of 100% of JRP from Mr. Johnson. Each share of the Series A preferred stock is convertible into ten shares of common stock, and each share has 100 votes on a fully diluted basis. The Acquisition Shares represented 61% of the voting shares of the Company, amended its Articlesand thus there was a change of Incorporation to providevoting control in connection with the transaction, and the transaction was accounted for as a reverse acquisition.

JRP is focused on being an increaseadded value reseller with concentration in its authorized share capital. The authorized common stock increased to 800,000,000 shares at a par valueembroidery, screen printing, importing and uniforms for businesses, schools and individuals in the State of $0.001 per share and preferred stock increased to 80,000,000 shares at a par value of $0.001 per share.Texas.

On January 1, 2020, the Company determined that it would discontinue its business operations in North Dakota, specifically, ADM Enterprises (the “Disposed Company”). The Company has made a settlement with Ardell Mees to provide him with the assetsdivested itself of the Disposed Company, and in exchange, Mr. Mees will assume all liabilities of the Disposed Company. As part of the transaction, Mr. Mees resigned from all positions withsince that time, the Company and, in a private transaction, sold a significant portionhas been focusing exclusively on the business of his ownership in the Company to Marc Johnson. The Company and Mr. Mees entered into an indemnification agreement whereby Mr. Mees indemnified the Company for any liabilities of the Disposed Company.its operational subsidiary, JRP.

The Company has been affected negatively by COVID-19 as a significant portion of the Company’s sales are for school uniforms which, due to COVID-19 and the closing of schools nationwide, should have a negative impact on the Company’s financials. Additionally, the Company experienced delivery delays have been seen induring the first quarter of 2020 due to slowed production in China due to COVID-19, but management does not expect this will significantly impact gross sales due to the diverse growth the Company is experiencing. The Company has seen a reduced negative affect from COVID. Sales in the school uniform division have rebounded nicely. The new threat on the horizon is the supply chain challenges. It has become harder and more expensive to find and source product. We are not sure of how long this will continue and to what extent it will affect future sales.

For the Three Months Ended September 30, 2021 and 2020 and 2019

Revenues

Our revenue was $2,479,751 for the three months ended September 30, 2021, compared to $1,590,457 for the three months ended September 30, 2020 compared to $1,409,403 for the three months ended September 30, 2019 for continuing operations, resulting in an increase of $181,054,$889,294, or 12.8%.55.9%, over the comparative quarters. The increase is primarily due to growthnew government customers and a return of existing customers as the effects of COVID-19 have been mitigated, schools have generally recommenced in-person learning, mandatory lock-downs have generally decreased in the business through the use of a new marketing techniquefrequency, and the conversion of products to adapt for the effect of COVID-19.general economic conditions have generally improved year-over-year.

Operating Expenses

Direct costs of revenues were $1,036,336$1,540,937 and $954,343$750,185 (for continuing operations) for the three months ended September 30, 20202021 and 2019,2020, respectively, resulting in an increase of $81,993,$790,752, or 8.67% due to the105.4%. This increase in revenue which is thewas a result of ahigher overall sales including new marketing technique and the effect of the conversion of products to adapt for the effect of COVID-19. Thelower margin government sales. Our gross margin increaseddecreased from 32.3% as of September 30, 2019 to 34.8% as of September 30, 2020. The increase is related to the growth in revenues.

For52.8% during the three months ended September 30, 2020, our generalto 37.9% during the three months ended September 30, 2021. The decrease in margin is primarily due to lower margins on government contracts.

General and administrative expenses and marketing and selling expenses were $557,116 compared to $609,712 for continuing operations$397,259 for the three months ended September 30, 2019, resulting2021, compared to $804,897 for the same period in a2020. This decrease of $52,596 or 8.6%. The increase was primarily due to the increase ofin general and administrative expenses from $397,546was approximately 50.6%, primarily due to $479,371 offset bydue to cost cutting and more efficient use of resources.

Marketing and selling expenses were $50,426 for the decreasethree months ended September 30, 2021, compared to $38,370 for the same period in stock-based compensation from $176,8752020. The increase in marketing and selling expenses was approximately 31.4%, primarily due to $39,375.new marketing techniques utilized in the most recent comparative period and an increased stockholder awareness in our products.

AsPrimarily as a result of the factors described above, our net income from continuing operations was $593,494 for the three months ended September 30, 2021, compared to net loss from continuing operations wasof $20,114 for the three months ended September 30, 2020, compared to net loss for continuing operations of $150,060 for the three months ended September 30, 2019.2020.

For the Nine Months Ended September 30, 2021 and 2020 and 2019

Revenues

Our revenue was $4,935,340 for the nine months ended September 30, 2021, compared to $3,523,219 for the nine months ended September 30, 2020 compared to $2,924,506 for the nine months ended September 30, 2019 for continuing operations, resulting in an increase of $598,713,$1,412,121, or 20.5%40.1%. The increase is primarily due to growth in the business through the usenew government customers and a return of a new marketing technique and theexisting customers. The negative COVID19 effect of the conversion of productson sales seems to adapt for the effect of COVID-19.be declining.

Operating Expenses

Direct costs of revenues were $2,033,559$3,080,485 and $1,581,240$2,033,559 (for continuing operations) for the nine months ended September 30, 20202021 and 2019,2020, respectively, resulting in an increase of $452,319,$1,046,926, or 28.6% due to the51.5%. This increase was a direct result of increased sales with a minimal increase in revenue which is the result of a new marketing technique and the effect of the conversion of products to adapt for the effect of COVID-19.fixed expenses. The gross margin decreased from 45.9% as of September 30, 2019 to 42.3% as of September 30, 2020. The decrease is related to the increase in revenues and the increase in direct costs of revenue as a higher percent of revenue.