Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

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, 2024, 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

On January 4, 2001, ADM Endeavors, Inc. ("ADM Endeavors," "ADM," "we," "us," "our" or the "Company") was incorporated in North Dakota as "ADM Enterprises, Inc." On May 9, 2006, the Company changed its name to "ADM Endeavors, Inc." 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") in exchange for 10,000,000 newly issued shares of Company common stock. As a result, ADM Enterprises became a wholly owned subsidiary of the Company. ADM 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. ("Just Right Products"), a Texas corporation, from its sole shareholder, Marc Johnson, through a share exchange transaction whereby the Company acquired 100% of Just Right Products and issued 2,000,000 shares of Series A Convertible Preferred stock ("Series A Preferred Stock") to the shareholder of Just Rights Products. Each share of the Series A Preferred Stock is convertible into 10 shares of Company common stock and each share has 100 votes on a fully diluted basis. The preferred shares represented 61% of the Company's voting shares and constituted a change of voting control of the Company, with the transaction accounted for as a reverse acquisition. As a result of the transaction, Just Right Products became a wholly owned subsidiary of the Company.

Since that time, the Company has exclusively focused on its Just Right Productions operations, which includes a diverse vertical integrated business consisting of a retail sales division, screen print promotions, embroidery production, digital production, import wholesale sourcing, and uniforms.

On April 27, 2023, the Company entered into an Asset Purchase Agreement with Innovative Impressions, Inc., a Texas corporation (the "Seller" or "Innovative Impressions"), pursuant to which the Company acquired embroidery equipment, inventory, and related assets from the Seller, which was paid by the issuance by the Company of a $200,000 secured promissory note (with a fair value of $143,637) to the Seller's principal.

The school uniform industry is undergoing a great deal of uncertainty due to tariff factors. As a result, many of the major vendors in the school uniform distribution business have or are in the process of shutting down their school uniform business. The majority of uniforms we usually purchase from these vendors are now being discounted between 50-70% off the prices we usually pay. We have been diligent in capitalizing on all discounts and savings when available. While we have been able to purchase in advance a great deal of inventory, we also have sourced our own school uniforms, allowing us to produce our own branded school uniforms moving forward.

For the Three Months Ended September 30, 2025, and 2024

Revenues

Our revenue was $2,205,225 for the three months ended September 30, 2025, compared to $2,166,235 for the three months ended September 30, 2024, resulting in an increase of $38,990, or 1.8%, between the periods. The increase was primarily due to a 13% increase in Q3 promotional sales revenue.

Operating Expenses

Direct costs of revenues were $1,616,201 and $1,600,925 for the three months ended September 30, 2025, and 2024, respectively, resulting in a increase of $15,276, or 1%, between the periods. Direct costs remained steady and did not change with our sales because we project needing our current staff levels as we transition into our newly completed 100,000 square foot manufacturing facility. The gross margin increased from 26% during the three months ended September 30, 2024, to 27% during the three months ended September 30, 2025.

General and administrative expenses were $371,344 for the three months ended September 30, 2025, compared to $393,890 for the same period in 2024, resulting in a decrease of $22,546, or 6%, between the periods. General and administrative expenses were slightly down due recognized efficiencies in our school uniform operations.

Marketing and selling expenses were $12,114 for the three months ended September 30, 2025, compared to $9,977 for the same period in 2024. The increase in marketing and selling expenses was directly tied to our continued investment in our online visibility and web assets.

Other income was $10,410 for the three months ended September 30, 2025, compared to other expense of $431 for the same period in 2024. The change in 2025 other expense was primarily due to a gain on sale of property of $63,195 which was offset by a loss on change in fair value of derivative liabilities of $51,825.

Net income was $215,976 for the three months ended September 30, 2025, compared to net income of $125,809 for the three months ended September 30, 2024, for the reasons stated above.

For the Nine Months Ended September 30, 2025, and 2024

Revenues

Our revenue was $4,305,588 for the nine months ended September 30, 2025, compared to $4,444,973 for the nine months ended September 30, 2024, resulting in a decrease of $42,768, or 3%, between the periods. The decrease was primarily due to the fact that existing customers purchased less in the first and second quarter most likely due to the heightened economic uncertainty in the first half of the year centered around tariff uncertainty.

Operating Expenses

Direct costs of revenues were $3,139,999 and $3,122,367 for the nine months ended September 30, 2025, and 2024, respectively, resulting in an increase of $17,632, or 0.56%, between the periods. The increase in direct costs was a direct result of higher costs of goods due to tariffs for the most recent nine months September 30, 2025 as compared to the comparative period during the prior year. The gross margin increased from 30% during the nine months ended September 30, 2024, to 27% during the nine months ended September 30, 2025.

General and administrative expenses were $1,142,253 for the nine months ended September 30, 2025, compared to $1,191,459 for the same period in 2024, resulting in a decrease of $49,206, or 4%, between the periods. The decrease was due to lower sales and the fact no changes were made in our administration staff.

Marketing and selling expenses were $29,253 for the nine months ended September 30, 2025, compared to $27,303 for the same period in 2024. This is in line with our budget.

Other income was $256,238 for the nine months ended September 30, 2025, compared to other expense of $20,267 for the same period in 2024. The change was primarily due to $264,514 net proceeds from an insurance loss claim at our new building under construction and a gain on sale of property of $63,195 which were offset by a loss on change in fair value of derivative liabilities of $65,508.

Net income was $250,321 for the nine months ended September 30, 2025, compared to net loss of $48,374 for the nine months ended September 30, 2024, for the reasons stated above.

Liquidity and Capital Resources

Liquidity and Capital Resources during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024

We had cash used in operations of $5,730 for the nine months ended September 30, 2025, compared to cash provided by operations of $559,125 for the nine months ended September 30, 2024. The decrease in positive cash flow from operating activities for the nine months ended September 30, 2025, was primarily attributable to a gain on insurance claim, gain on sale of property and changes to operating assets and liabilities.

We had cash used in investing activities of $2,444,946 for the nine months ended September 30, 2025, and $1,729,585 for the nine months ended September 30, 2024. The change in cash flow from investing activities for the nine months ended September 30, 2025, was mainly attributable to an increase in the purchase of property and equipment.

We had cash provided by financing activities of $2,409,858 for the nine months ended September 30, 2025, compared to cash provided by financing activities of $1,618,201 for the same period in 2024. Cash used in financing activities consisted of proceeds from notes payable offset by repayments on notes payable.

We will likely have to raise funds to pay for growth and acquisitions. We may have to borrow money from shareholders or issue debt or equity or enter into a strategic arrangement with a third party. There can be no assurance that additional capital will be available to us. We currently have no arrangements or understandings with any person to obtain funds through bank loans, lines of credit or any other sources.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of 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. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experiences and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions and conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 1, "Summary of Significant Accounting Policies" in our audited financial statements for the year ended December 31, 2024, included in our Annual Report on Form 10-K as filed on September 30, 2025, for a discussion of our critical accounting policies and estimates.