ITEM 1. FINANCIAL STATEMENTS
AQUA POWER SYSTEMS INC.
CONSOLIDATED BALANCE SHEETS
| | |
As of September 30, 2022 (unaudited) | | |
As of
March 31, 2022 | |
| | |
| | |
| |
| ASSETS | |
| | | |
| | |
| Current Assets | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 82,315 | | |
$ | 130,778 | |
| Digital currency | |
| 596 | | |
| 1,726 | |
| Total Current Assets | |
| 82,911 | | |
| 132,504 | |
| | |
| | | |
| | |
| Other Assets | |
| | | |
| | |
| Intangible asset | |
| 7,850 | | |
| 23,229 | |
| Total Other Assets | |
| 7,850 | | |
| 23,229 | |
| | |
| | | |
| | |
| Total Assets | |
$ | 90,761 | | |
$ | 155,733 | |
| | |
| | | |
| | |
| LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT) | |
| | | |
| | |
| | |
| | | |
| | |
| Current Liabilities | |
| | | |
| | |
| Accounts payable and accrued expenses - related party | |
$ | 44,990 | | |
$ | 32,990 | |
| Notes payable - related party | |
| 30,055 | | |
| 30,055 | |
| Total Liabilities | |
| 75,045 | | |
| 63,045 | |
| | |
| | | |
| | |
| Shareholders' Equity (Deficiency) | |
| | | |
| | |
| Undesignated Preferred Stock, $0.001 par value, 4,000,000 shares authorized, at September 30, 2022 and March 31, 2022, there were none issued and outstanding, respectively | |
| – | | |
| – | |
| Preferred A Stock, $0.001 par value; 5,000,000 shares authorized, at September 30, 2022 and March 31, 2022, there were none issued and outstanding, respectively | |
| – | | |
| – | |
| Preferred B Stock $0.001 par value 1,000,000 shares authorized, at September 30, 2022 and March 31, 2022, there were 500,000 and 500,000 issued and outstanding, respectively | |
| 500 | | |
| 500 | |
| Common stock, $0.0001 par value; 200,000,000 shares authorized, at September 30, 2022 and March 31, 2022, there were 17,204,180 and 50,146,804 issued and outstanding, respectively | |
| 1,720 | | |
| 5,014 | |
| Additional paid-in capital | |
| 654,170 | | |
| 650,876 | |
| Accumulated deficit | |
| (640,674 | ) | |
| (563,702 | ) |
| Total Shareholders' Equity (Deficit) | |
| 15,716 | | |
| 92,688 | |
| | |
| | | |
| | |
| Total Liabilities and Shareholders' Equity (Deficit) | |
$ | 90,761 | | |
$ | 155,733 | |
See accompanying notes to condensed consolidated
financial statement
AQUA POWER SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| | |
| | |
| | |
| | |
| |
| | |
Three Months Ended September 30, | | |
Six Months Ended September 30, | |
| | |
2022 | | |
2021 | | |
2022 | | |
2021 | |
| | |
| | |
| | |
| | |
| |
| Revenue | |
$ | – | | |
$ | – | | |
$ | – | | |
$ | – | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating Expenses | |
| | | |
| | | |
| | | |
| | |
| Professional fees | |
| 13,024 | | |
| 19,103 | | |
| 48,463 | | |
| 56,407 | |
| Rent | |
| 6,000 | | |
| 6,000 | | |
| 12,000 | | |
| 12,000 | |
| Total Operating Expenses | |
| 19,024 | | |
| 25,103 | | |
| 60,463 | | |
| 68,407 | |
| | |
| | | |
| | | |
| | | |
| | |
| Profit (Loss) from Operations | |
| (19,024 | ) | |
| (25,103 | ) | |
| (60,463 | ) | |
| (68,407 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Other Income (Expense) | |
| | | |
| | | |
| | | |
| | |
| Gain on extinguishment of debt | |
| – | | |
| 678,233 | | |
| – | | |
| 678,233 | |
| Loss of value of digital assets | |
| (16,509 | ) | |
| – | | |
| (16,509 | ) | |
| – | |
| Interest expense – related party | |
| – | | |
| (2,743 | ) | |
| – | | |
| (9,304 | ) |
| Interest expense – other | |
| – | | |
| (4,144 | ) | |
| – | | |
| (14,796 | ) |
| Total Other Income (Expense) | |
| (16,509 | ) | |
| 671,346 | | |
| (16,509 | ) | |
| 654,133 | |
| | |
| | | |
| | | |
| | | |
| | |
| Provision for Income Taxes | |
| – | | |
| – | | |
| – | | |
| – | |
| | |
| | | |
| | | |
| | | |
| | |
| NET PROFIT (LOSS) | |
$ | (35,533 | ) | |
$ | 646,243 | | |
$ | (76,972 | ) | |
$ | 585,726 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net Profit (Loss) Per Share – Basic | |
$ | 0.00 | | |
$ | 0.01 | | |
$ | 0.00 | | |
$ | 0.01 | |
| Net Profit (Loss) Per Share – Diluted | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | | |
$ | 0.00 | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted Average Number of Shares Outstanding – Basic | |
| 17,204,180 | | |
| 58,510,007 | | |
| 25,892,345 | | |
| 58,788,474 | |
| Weighted Average Number of Shares Outstanding – Diluted | |
| 17,204,180 | | |
| 558,510,007 | | |
| 25,892,345 | | |
| 558,788,474 | |
See accompanying notes to condensed consolidated
financial statement
AQUA POWER SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’
(DEFICIT)
For the 6 months ended September 30, 2022 and
2021
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
Series A Preferred | | |
Series B Preferred | | |
Common Stock | | |
Additional Paid-In Capital | | |
Accumulated Deficit | | |
Total Stockholders’ Equity/ (Deficit) | |
| | |
Shares | | |
Amount ($) | | |
Shares | | |
Amount ($) | | |
Shares | | |
Amount ($) | | |
($) | | |
($) | | |
($) | |
| Balance March 31, 2021 | |
| – | | |
| – | | |
| 500,000 | | |
| 500 | | |
| 59,066,942 | | |
| 5,906 | | |
| 6,810 | | |
| (1,118,613 | ) | |
| (1,105,397 | ) |
| Issuance of shares for subscription agreement | |
| – | | |
| – | | |
| – | | |
| – | | |
| 100,000 | | |
| 10 | | |
| 199,990 | | |
| – | | |
| 200,000 | |
| Net loss | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (60,517 | ) | |
| (60,517 | ) |
| Balance June 30, 2021 | |
| – | | |
| – | | |
| 500,000 | | |
| 500 | | |
| 59,166,942 | | |
| 5,916 | | |
| 206,800 | | |
| (1,179,130 | ) | |
| (965,914 | ) |
| Cancellation of shares | |
| – | | |
| – | | |
| – | | |
| – | | |
| (9,020,138 | ) | |
| (902 | ) | |
| 902 | | |
| – | | |
| – | |
| Net income | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| 646,243 | | |
| 646,243 | |
| Balance Sept 30, 2021 | |
| – | | |
| – | | |
| 500,000 | | |
| 500 | | |
| 50,146,804 | | |
| 5,014 | | |
| 207,702 | | |
| (532,887 | ) | |
| (319,671 | ) |
| | |
Series A Preferred | | |
Series B Preferred | | |
Common Stock | | |
Additional Paid-In Capital | | |
Accumulated Deficit | | |
Total Stockholders’ Equity/ (Deficit) | |
| | |
Shares | | |
Amount ($) | | |
Shares | | |
Amount ($) | | |
Shares | | |
Amount ($) | | |
($) | | |
($) | | |
($) | |
| Balance March 31, 2022 | |
| – | | |
| – | | |
| 500,000 | | |
| 500 | | |
| 50,146,804 | | |
| 5,014 | | |
| 650,876 | | |
| (563,702 | ) | |
| 92,688 | |
| Cancellation of shares | |
| – | | |
| – | | |
| – | | |
| – | | |
| (32,942,624 | ) | |
| (3,294 | ) | |
| 3,294 | | |
| – | | |
| – | |
| Net loss | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (41,439 | ) | |
| (41,439 | ) |
| Balance June 30, 2022 | |
| – | | |
| – | | |
| 500,000 | | |
| 500 | | |
| 17,204,180 | | |
| 1,720 | | |
| 654,170 | | |
| (605,141 | ) | |
| 51,249 | |
| Net loss | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| – | | |
| (35,533 | ) | |
| (35,533 | ) |
| Balance Sept 30, 2022 | |
| – | | |
| – | | |
| 500,000 | | |
| 500 | | |
| 17,204,180 | | |
| 1,720 | | |
| 654,170 | | |
| (640,674 | ) | |
| 15,716 | |
See accompanying notes to condensed consolidated
financial statement
AQUA POWER SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | |
| | | |
| | |
| | |
For the Six Months Ended September 30, | |
| | |
2022 | | |
2021 | |
| Cash Flows From Operating Activities: | |
| | | |
| | |
| Net Income (Loss) | |
$ | (76,972 | ) | |
$ | 585,726 | |
| Adjustments to reconcile net loss to net cash used in operations | |
| | | |
| | |
| Gain on extinguishment of debt | |
| – | | |
| (678,233 | ) |
| Loss on value of digital assets | |
| 16,509 | | |
| – | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Increase (decrease) in accrued expenses – related party | |
| 12,000 | | |
| 18,000 | |
| Increase (decrease) in accrued interest | |
| – | | |
| 24,100 | |
| Net Cash Used In Operating Activities | |
| (48,463 | ) | |
| (50,407 | ) |
| | |
| | | |
| | |
| Cash Flows From Investing Activities: | |
| | | |
| | |
| Net Cash Used in Investing Activities | |
| – | | |
| – | |
| | |
| | | |
| | |
| Cash Flows From Financing Activities: | |
| | | |
| | |
| Proceeds from common stock sale | |
| – | | |
| 200,000 | |
| Proceeds from note payable - related party | |
| – | | |
| – | |
| Net Cash Provided by Financing Activities | |
| – | | |
| 200,000 | |
| | |
| | | |
| | |
| Net Increase (Decrease) in Cash | |
| (48,463 | ) | |
| 149,593 | |
| | |
| | | |
| | |
| Cash at Beginning of Period | |
| 130,778 | | |
| – | |
| | |
| | | |
| | |
| Cash at End of Period | |
$ | 82,315 | | |
$ | 149,593 | |
| | |
| | | |
| | |
| Supplemental disclosure of cash flow information: | |
| | | |
| | |
| Cash paid for interest | |
$ | – | | |
$ | – | |
| Cash paid for taxes | |
$ | – | | |
$ | – | |
| | |
| | | |
| | |
| Supplemental disclosure of non-cash investing activities: | |
| | | |
| | |
| Cancellation of shares | |
$ | 3,294 | | |
$ | 902 | |
See accompanying notes to condensed consolidated
financial statement
AQUA POWER SYSTEMS, INC.
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
September 30, 2022
NOTE 1 – ORGANIZATION AND BUSINESS
Aqua Power Systems, Inc. (APSI), (the "Company")
was incorporated in the State of Nevada on December 9, 2010.
On December 1, 2020, the Eight Judicial District
Court of Nevada entered an order appointing Small Cap Compliance, LLC as custodian of the Company, authorizing and directing it to, among
other things, take any action reasonable, prudent and for the benefit of the Company, including reinstating the Company under Nevada law,
appointing officers and convening a meeting of stockholders. Small Cap Compliance, LLC was not a shareholder of the Company on the date
that it applied to serve as a custodian of the Company.
On December 7, 2020, Small Cap Compliance, LLC
filed the Certificate of Reinstatement for the Company, thereby reinstating the Company, appointed Stephen Carnes as the sole officer
and director of the Company and amended the Company’s Certificate of Incorporation to authorize the issuance of up to one million
shares of Series B Preferred Stock.
On March 3, 2021, the Eight Judicial District
Court of Nevada entered an order approving Small Cap Compliance, LLC’s actions, without prejudice to the claims of interested parties
as to dilution of their interest, terminated Small Cap Compliance, LLC’s custodianship of the Company, and discharged Small Cap
Compliance as the custodian of the Company.
The Company is a shell company in that it has
no or nominal operations with either no or nominal assets. The Company’s business purpose is to identify, research and if determined
to meet the Company’s criteria, acquire an interest in business opportunities available for the Company to leverage. The Company
is not restricting its business development criteria to any specific business, industry, or geographical location. The Company may in
fact participate in a business venture of virtually any kind or nature so long that it is in the best interest of the Company and its
shareholders in an effort to build long-term shareholder value.
NOTE 2 – GOING CONCERN
The accompanying financial statements 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. The Company has generated no revenues for the six months ended September 30, 2022. The Company reported net loss of $(76,972)
and has an accumulated deficit of ($640,674) and used cash for operations of $48,463. These factors raise substantial doubt regarding
the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon, among
other things, the Company’s ability to execute its plans by acquiring assets and begin generating revenue. The Company currently
relies on its ability to obtain financing through the sale of securities and funding from related parties. No assurance can be given that
the Company will be successful in these efforts in the future.
Management plans to identify adequate sources
of funding to provide operating capital for continued growth.
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 3 – SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Basis of Presentation
The Company’s financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation
of financial statements in conformity with accounting principles generally accepted in the United States of America requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates. 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.
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 the financial statements and the reported amount
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Principals of Consolidation
The consolidated financial statements have been
prepared in accordance with U.S. generally accepted accounting principles (GAAP). The consolidated financial statements include the accounts
of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.
Cash and Cash Equivalents
The Company accounts for cash and cash equivalents
under FASB ASC 305, “Cash and Cash Equivalents”, and considers all highly liquid investments with an original maturity
of three months or less to be cash equivalents. The Company had no cash equivalents as of September 30, 2022 and March 31, 2022, respectively.
Deferred Income Taxes and Valuation Allowance
The Company accounts for income taxes under ASC
740 Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in
the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred
tax assets if it is more likely than not that the Company will not realize tax assets through future operations. No deferred tax assets
or liabilities were recognized at September 30, 2022.
Financial Instruments
The Company’s balance sheet is limited to
organizational startup costs due to the Acquisition in December 2020. ASC 820, “Fair Value Measurements and Disclosures,”
defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal
or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market
data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions
developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three
broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level
1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
| |
Level 1 – |
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
| |
Level 2 – |
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| |
Level 3 – |
Inputs that are both significant to the fair value measurement and unobservable. |
Fair value estimates discussed herein are based
upon certain market assumptions and pertinent information available to management as of September 30, 2022. The respective carrying value
of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.
The Company does not have any assets or liabilities
measured at fair value on a recurring basis.
Long-lived Assets
Long-lived assets such as property, equipment
and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be
recoverable. When required impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair
value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals,
if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is
recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company
estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery
of the assets. We did not recognize any impairment losses for any periods presented. As of September 30, 2022, the Company does not have
any Long-Lived Assets and we did not recognize any impairment losses for any periods presented.
Property and Equipment
The Company follows ASC 360, Property, Plant,
and Equipment, for its fixed assets. Equipment is stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line
basis over the estimated useful lives of the assets (3 years). As of September 30, 2022, the Company did not have any Fixed Assets.
Related Parties
The Company follows ASC 850, “Related
Party Disclosures,” for the identification of related parties and disclosure of related party transactions. The Company leases
office space from an entity that is controlled by the CEO and a Director of the Company.
Stock-Based Compensation
FASB ASC 718 “Compensation – Stock
Compensation,” prescribes accounting and reporting standards for all stock-based payments award to employees, including employee
stock options, restricted stock, employee stock purchase plans and stock appreciation rights, may be classified as either equity or liabilities.
The Company determines if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present
obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance
or (b) the present obligation is implied because of an entity’s past practices or stated policies. If a present obligation exists,
the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity.
The Company accounts for stock-based compensation
issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 “Equity – Based Payments to
Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is
more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based
payment transaction is determined at the earlier of performance commitment date or performance completion date. As of September 30, 2022,
the company did not have any stock-based transactions.
Earnings (loss) per share
Basic income (loss) per share is computed by dividing
net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period. Diluted income
(loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common shares may consist of
incremental shares issuable upon the exercise of stock options and warrants and upon the conversion of notes. In periods in which a net
loss has been incurred, all potentially dilutive common shares are considered anti-dilutive and thus are excluded from the calculation.
As of September 30, 2022 and March 31, 2022 there were 500,000,000 shares issuable upon conversion of preferred shares.
Recently Issued Accounting Pronouncements
We have reviewed the FASB issued Accounting Standards
Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported
and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles
and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position
or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain
standards are under consideration.
NOTE 4 – NOTES PAYABLE
Effective August 5, 2021, the Eighth Judicial
District Court of Clark County, Nevada granted a motion to bar any asserted and unasserted claims against the assets of the Company prior
to the date of judgment. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past
debts, the principal and accrued interest related to all notes due by the Company prior to August 5, 2021 have been recorded as a gain
on extinguishment of debt on the income statement.
NOTE 5 – RELATED PARTY TRANSACTIONS
Effective August 5, 2021, the Eighth Judicial
District Court of Clark County, Nevada granted a motion to bar any asserted and unasserted claims against the assets of the Company prior
to the date of judgment. In connection with the court’s ruling on August 5, 2021, relieving the Company of its obligations on past
debts, the principal and accrued interest related to all notes due by the Company prior to August 5, 2021 (with the exception of the transactions
noted below with a current officer of the Company) have been recorded as a contribution of capital in equity due to the prior related
party nature of the note.
On December 16, 2020, the Company issued an unsecured
promissory note in principal amount of $5,100 to an officer of the Company. The note is non-interest bearing and due on demand.
On February 14, 2022, an officer of the Company
transferred 8.5 Ethereum cryptocurrency (ETH) from a personal digital wallet to the Company’s digital wallet. The ETH transferred
was valued at $24,955 on the date of the transaction and recorded as a note payable. The note is unsecured, non-interest bearing note
and due on demand.
NOTE 6 – INTANGIBLE ASSETS
On February 14, 2022, the Company acquired a digital asset commonly
referred to as “land” within the Sandbox metaverse. The Sandbox is a decentralized, community-driven gaming ecosystem where
creators can share and monetize voxel assets and gaming experiences on the Ethereum blockchain. The purchase price was 7.9 Ethereum (ETH).
The digital asset (“land”) is an ERC-721 token on the Ethereum network commonly referred to as Sandbox Lands. The asset was
valued based on the market rate of ETH on the date of transaction for a value of $23,229, due to the decline in the value of digital assets,
the asset was revalued at $7,850 at September 30, 2022, based on the lowest value of ETH during the six months ended September 30, 2022.
Management evaluated the asset for impairment and determined that no impairment was necessary.
NOTE 7 – SHAREHOLDERS’ EQUITY
Common Stock
The Company has 200,000,000 authorized common
shares with a par value of $0.0001 per share. Each common share entitles the holder to one vote, in person or proxy, on any matter on
which action of the stockholders of the corporation is sought.
On April 22, 2021, the Company issued 100,000
shares of its Common Stock in return for an investment of $200,000 via a Subscription Agreement.
During September 2021, as a result of a court
order, the Company canceled a total of 9,020,138 shares of its common stock. Specifically, 6,330,138 of these shares were held by Silverton
SA as disclosed in prior filings and canceled on September 22, 2021, and 2,690,000 of these shares were held by Paramount Trading Company
and canceled on September 24, 2021.
On November 4, 2021, the Company filed a lawsuit
for declaratory relief, seeking an order declaring void 32,942,624 shares of its common stock that were held Mr. Tadashi Ishikawa, the
former CEO of the Company. On May 19, 2022, the Court ruled that the Motion for Entry of Default Final Judgement was granted and the Court
declared the 32,942,624 shares of common stock in APSI issued to Tadashi Ishikawa, held in Book Entry, void and cancelled.
Preferred Stock
The Company is authorized to a total of 10,000,000
shares of preferred stock.
There are 6,000,000 shares currently designated.
A designation for 5,000,000 Series A Preferred Stock with a par value of $0.001 was filed on September 9, 2015, and another designation
for 1,000,000 Series B Preferred Stock with a par value of $0.001 was filed on December 7, 2020.
There are currently no Series A Preferred shares
issued and outstanding.
On December 7, 2020, 500,000 Series B Preferred
shares were issued to Small Cap Compliance, LLC after the Eight Judicial District Court of Nevada entered an order appointing Small Cap
Compliance, LLC as custodian of the Company, authorizing and directing it to, among other things, take any action reasonable, prudent
and for the benefit of the Company, including reinstating the Company under Nevada law, appointing officers and convening a meeting of
stockholders. Small Cap Compliance, LLC was not a shareholder of the Company on the date that it applied to serve as a custodian of the
Company. On that same day, Small Cap Compliance, LLC filed the Certificate of Reinstatement for the Company, thereby reinstating the Company,
appointed Stephen Carnes as the sole officer and director of the Company and amended the Company’s Certificate of Incorporation
to authorize the issuance of up to one million shares of Series B Preferred Stock.
Preferred Class A Stock
Each share of Preferred Class A Stock is entitled
to one hundred (100) votes per share on all matters. Except as provided by law, the holders of shares of Preferred Class A Stock vote
together with the holders of shares of Common Stock as a single class.
In addition, so long as any shares of Preferred
Class A Stock remains outstanding, in addition to any other vote or consent of stockholders required by our certificate of incorporation,
the company will not, without first obtaining the approval (by written consent, as provided by law or otherwise) of the holders of a majority
of the then outstanding shares of Series A Preferred Stock, voting together as a class: (i) Increase or decrease (other than by redemption
or conversion) the total number of authorized shares of Series A Preferred Stock; (ii) Effect an exchange reclassification, or cancellation
of all or a part of the Series A Preferred Stock, but excluding a stock split or reverse stock split of the Company’s Common Stock
or Preferred Stock; (iii) Effect an exchange, or create a right of exchange, of all or part of the shares of another class of shares into
shares of Series A Preferred Stock; or (iv) Alter or change the rights, preferences or privileges of the shares of Series A Preferred
Stock so as to affect adversely the shares of such series, including the rights set forth in this Designation. For clarification, issuances
of additional authorized shares of Series A Preferred under the terms herein shall not require the authorization or approval of the existing
shareholders of Preferred Stock.
The Company is not required to pay dividends at
any specific rate on the Series A Preferred Stock.
In the event of any liquidation, dissolution,
or winding up of the Company, either voluntarily or involuntarily, the holders of Class A Preferred Stock shall be entitled to receive,
prior and in preference to any distribution of any assets of the Company to the holders of the junior stock by reason of their ownership
of such stock, but not prior to any holders of the Company’s senior securities, which holders shall have priority to the distribution
of any assets of the Company, an amount per share for each share of Class A Preferred Stock held by them equal to the sum of the liquidation
preference specified for each share of preferred stock. If upon the liquidation, dissolution or winding up of the Company, the assets
of the Company legally available for distribution to the holders of the Class A Preferred Stock are insufficient to permit the payment
to such holders of the full amounts of their liquidation preference, subsequent to the payment to the senior securities then the entire
remaining assets of the Company following the payment to the senior securities legally available for distribution shall be distributed
with equal priority and pro rata among holders of the Class A Preferred Stock in proportion to the full amounts they would otherwise be
entitled to receive pursuant to their liquidation preference. The liquidation preference of Class A Preferred Stock shall be equal to
the original issue price per share of Class A Preferred Stock, as adjusted for any recapitalizations.
Holders of Class A Preferred Stock shall have
the right, exercisable at any time and from time to time (unless otherwise prohibited by law, rule or regulation), to convert any or all
of their shares of the Class A Preferred Shares into Common Stock at the conversion ratio of (1) one Preferred A share to (100) one hundred
common shares.
Holders of Preferred Class A Stock have no preemptive
or subscription rights and there are no redemption or sinking fund provisions applicable to our Preferred Class A Stock.
Preferred Class B Stock
Each share of Preferred Class B Stock is entitled
to one thousand (1,000) votes per share on all matters. Except as provided by law, the holders of shares of Preferred Class B Stock vote
together with the holders of shares of Common Stock as a single class.
The Preferred Class B Stock is not entitled to
receive any dividends in any amount during which such shares are outstanding.
In the event of any liquidation, dissolution or
winding up of the Company, either voluntary or involuntary, after setting apart or paying in full the preferential amounts due to holders
of senior capital stock, if any, the holders of Preferred Class B Stock and parity capital stock, if any, shall be entitled to receive,
prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of junior capital stock,
including Common Stock, an amount equal to $0.001 per share [the "Liquidation Preference"]. If upon such liquidation, dissolution
or winding up of the Company, the assets of the Company available for distribution to the holders of the Preferred Class B Stock and parity
capital stock, if any, shall be insufficient to permit in full the payment of the Liquidation Preference, then all such assets of the
Company shall be distributed ratably among the holders of the Preferred Class B Stock and parity capital stock, if any. Neither the consolidation
or merger of the Company nor the sale, lease or transfer by the Company of all or a part of its assets shall be deemed a liquidation,
dissolution or winding up of the Company.
Each share of Preferred Class B Stock shall be
convertible, at the option of the Holder, into 1,000 (One Thousand) fully paid and non-assessable shares of the Corporation's Common Stock.
The aforementioned 1 to 1,000 ratio will be adjusted by stock splits, dividends, and distributions, and that adjustment will apply to
reclassifications, consolidations, and mergers.
Holders of Preferred Class B Stock have no preemptive
or subscription rights and there are no redemption or sinking fund provisions applicable to our Preferred Class B Stock.
NOTE 8 – SUBSEQUENT EVENTS
On October 6, 2022, Aqua Power Systems Inc. (“APSI”)
entered into a Letter of Intent (“LOI”) to acquire all of the outstanding shares of Tradition Transportation Group, Inc. (“Tradition”).
Terms of the LOI are attached as an Exhibit to this filing and incorporated by reference. Both APSI and Tradition request APSI shareholders
and other interested parties respect and refrain from contacting Tradition or its employees and affiliates for details so as not to interrupt
operations and the process of finalizing a transaction. APSI and Tradition shall in best efforts work toward Definitive Agreements as
outlined in the LOI attached hereto.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Some of the statements contained in this registration
statement on Form 10 (this “Registration Statement”) of Aqua Power Systems, Inc. (the “Company”, “we”,
“our” or “Aqua Power Systems”) discuss future expectations, contain projections of our plan of operation or financial
condition or state other forward-looking information. In this registration statement, forward-looking statements are generally identified
by the words such as “anticipate”, “plan”, “believe”, “expect”, “estimate”,
and the like. Forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results or
plans to differ materially from those expressed or implied. These statements are subject to known and unknown risks, uncertainties, and
other factors that could cause the actual results or plans to differ materially from those contemplated by the statements. The forward-looking
information is based on various factors and is derived using numerous assumptions. A reader, whether investing in the Company’s
securities or not, should not place undue reliance on these forward-looking statements, which apply only as of the date of this Registration
Statement. Important factors that may cause actual results to differ from projections include, for example:
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the ability of the Company to fund its operating expenses; |
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the ability of the Company to compete with other companies that have a similar business plan; |
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the effect of changing economic conditions impacting our plan of operation; and |
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the ability of the Company to meet the other risks as may be described in future filings with the Securities and Exchange Commission. |
Readers are cautioned not to place undue reliance
on the forward-looking statements contained herein, which speak only as of the date hereof. We believe the information contained in this
Registration Statement to be accurate as of the date hereof. Changes may occur after that date. We will not update that information except
as required by law in the normal course of our public disclosure practices.
Corporate History
We were originally incorporated in Nevada on December
9, 2010, as NC Solar Inc. with the goal of developing solar energy collection farms on commercial and/or industrial buildings located
on distressed, blighted and/or underutilized commercial land in North Carolina and other southern states of the United States. On June
6, 2014, management changed and, on August 12, 2014, we changed our name to Aqua Power Systems Inc.
Custodianship
Aqua Power Systems Inc., a Nevada Corporation.
(Petition of SMALL CAP COMPLIANCE, LLC)
On October 19, 2020, Small Cap Compliance, LLC
filed its motion to serve as custodian of the Company; it was not a shareholder of the Company on the aforementioned date.
On December 1, 2020, the Eight Judicial District
Court of Nevada entered an order approving the appointment of Small Cap Compliance, LLC as custodian of the Company, authorizing and directing
it to, among other things, take any action reasonable, prudent and for the benefit of the Company, including reinstating the Company under
Nevada law, appointing officers and convening a meeting of stockholders. (Small Cap Compliance, LLC and the Company entered into a Custodian
Services Agreement on December 1, 2020, which set forth the duties of Small Cap Compliance, LLC)
On December 7, 2020, Small Cap Compliance, LLC
filed a Certificate of Reinstatement for the Company, thereby reinstating the Company, appointed Stephen Carnes as the sole officer and
director of the Company and amended the Company’s Certificate of Incorporation to authorize the issuance of one million shares of
Series B preferred stock. The aforementioned were approved, and Stephen Carnes was elected as the sole director and the sole executive
officer, at a meeting of the shareholders on January 4, 2021.
On January 1, 2021, Small Cap Compliance, LLC
filed a Motion to Terminate Custodianship.
On March 3, 2021, the Eight Judicial District
Court of Nevada entered an order approving Small Cap Compliance, LLC’s actions, without prejudice to the claims of interested parties
as to dilution of their interest, terminated Small Cap Compliance, LLC’s custodianship of the Company, and discharged Small Cap
Compliance as custodian of the Company.
Receivership
In re: AQUA POWER SYSTEMS INC., a Nevada Corporation,
(Application of Stephen Carnes)
On January 28, 2021, Stephen Carnes filed an application
with the Eight District Court of Nevada to be appointed as the Receiver of the Company and requested that the Court Order written proof
of claim from all Claimants and Creditors of the Company as a reasonable and necessary step toward rehabilitating our insolvency.
On March 1, 2021, the Eighth Judicial District
Court of Nevada ordered that Stephen Carnes be appointed “Receiver” of the Company, with the authority to rehabilitate the
Company by, including but not limited to, collecting the debts and property due and belonging to the Company, to compromise and settle
with the debtors and creditors of the Company, to prosecute and defend lawsuits in the name of the Company, to do all other acts as might
be done by the Com, to do all other acts as may be reasonable and necessary to continue the business of the Company, and to appoint agents
for the exercise of these duties.
On March 1, 2021, the Eighth Judicial District
Court of Nevada ordered that all claimants and creditors of the Company had sixty (60) days, from March 1, 2021, to submit written proof
of claim to the receiver.
On May 3, 2021, Claimant Graham Taylor submitted
claims on behalf of himself, Heng Hong Investment, and Puriwanto Handoko.
On June 28, 2021, Receiver filed a motion to shorten
time and a motion to bar asserted claims and unasserted claims.
On August 5, 2021, the Eighth Judicial District
Court of Nevada ordered that all claimants and creditors of the Company are barred from participating in the distribution of assets of
the Company which arose on or before August 6, 2021 (Notice of entry of the Order). No appeal was filed by the claimants within the timeframe
for an appeal.
On October 4, 2021, filed a Motion to Terminate
the Receivership and a hearing is set for November 8, 2021.
Blank Check Company Status
Many states have enacted statutes, rules and regulations
limiting the sale of securities of “blank check” companies in their respective jurisdictions. Management does not intend to
undertake any efforts to cause a market to develop in our securities, either debt or equity, until we have successfully concluded a business
combination. The Company intends to comply with the periodic reporting requirements of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”) for so long as it is subject to those requirements.
At present, the Company is a blank check company
with no revenues while the Company has plans to pursue new business opportunities or to engage in merger or acquisition opportunities.
As a blank check company, any offerings of our securities would need to comply with Rule 419 under the Securities Act. The provisions
of Rule 419 apply to every registration statement filed under the Securities Act by a blank check company. Rule 419 requires that the
blank check company filing such registration statement to deposit the securities being offered and proceeds of the offering into an escrow
or trust account pending the execution of an agreement for an acquisition or merger. In addition, the registrant is required to file a
post-effective amendment to the registration statement containing the same information as found in a Form 10 registration statement upon
execution of an agreement for such acquisition or merger. The rule provides procedures for the release of the offering funds in conjunction
with the post effective acquisition or merger. The Company has no current plans to engage in any such offerings.
Acquisition Opportunities
The Company is a shell company in that it has
no or nominal operations and either no or nominal assets. At this time, the Company’s purpose is to seek, investigate and, if such
investigation warrants, acquire an interest in business opportunities presented to it by persons or firms who or which desire to seek
the perceived advantages of an Exchange Act registered corporation. The Company will not restrict its search to any specific business,
industry, or geographical location and the Company may participate in a business venture of virtually any kind or nature. This discussion
of the proposed business is purposefully general and is not meant to be restrictive of the Company’s virtually unlimited discretion
to search for and enter into potential business opportunities.
Negotiations with any merger candidate are expected
to focus on the percentage of the Company which the target company shareholders would acquire in exchange for all of their shareholdings
in the target company. Depending upon certain factors, such as the target company’s assets and liabilities, the Company’s
current shareholders will most likely hold a substantially lesser percentage ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to significant reduction in the event the Company acquires an operating business
with substantial assets. Any merger or acquisition effected by the Company can be expected to have a significant dilutive effect on the
percentage of shares held by the Company’s then shareholders. Management does not expect to negotiate a cash payment in exchange
for the outstanding shares held by non-affiliates.
In applying the foregoing criteria, none of which
will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative
measures and available data. Potentially available business opportunities may occur in many different industries, and at various stages
of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult
and complex. Due to the Company’s limited capital available for investigation, we may not discover or adequately evaluate adverse
facts about the opportunity to be acquired. In addition, we will be competing against other entities that possess greater financial, technical
and managerial capabilities for identifying and completing business combinations.
We may seek a business opportunity with entities
which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order
to expand into new products or markets, to develop a new product or service, or for other corporate purposes. We may acquire assets and
establish wholly owned subsidiaries in various businesses or acquire existing businesses as subsidiaries.
On February 14, 2022, the Company acquired a digital
asset commonly referred to as “land” within the Sandbox metaverse. The Sandbox is a decentralized, community-driven gaming
ecosystem where creators can share and monetize voxel assets and gaming experiences on the Ethereum blockchain. The Company acquired the
land purchase in a non-related, third-party transaction and is included in the records of the Company as an intangible asset. The purchase
price was 7.9 Ether (ETH). The digital asset (“land”) is an ERC-721 token on the Ethereum network commonly referred to as
Sandbox LANDs. The official website of the gaming platform is located at www.sandbox.game. The Company continues to monitor the market,
and as this market sector evolves, this acquisition along with other metaverse-based and the surrounding operations associated with these
transactions will contribute to a departure from shell status.
Acquisition Target Analysis
The analysis of new business opportunities will
be undertaken by, or under the supervision of, our officers and directors, or successor management, with such outside assistance as they
may deem appropriate. The Company intends to concentrate on identifying preliminary prospective business opportunities, which may be brought
to our attention through present associations of the Company’s officers and directors. In analyzing prospective business opportunities,
the Company will consider such matters as the available technical, financial and managerial resources; working capital and other financial
requirements; history of operations, if any; prospects for the future; nature of present and expected competition; the quality and experience
of management services which may be available and the depth of that management; the potential for further research, development, or exploration;
specific risk factors not now foreseeable but which then may be anticipated to impact the proposed activities of the Company; the potential
for growth or expansion; the potential for profit; the perceived public recognition or acceptance of products, services, or trades; name
identification; and other relevant factors. The Company will not acquire or merge with any company for which audited financial statements
are not available.
The Company will participate in a business opportunity
only after the negotiation and execution of appropriate written agreements. Although the terms of such agreements cannot be predicted,
generally such agreements will require some specific representations and warranties by all of the parties thereto, will specify certain
events of default, will detail the terms of closing and the conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs associated with the Company’s attorneys and accountants,
will set forth remedies on default, and will include miscellaneous other terms.
The Company does not intend to provide its security
holders with any complete disclosure documents or audited financial statements concerning an acquisition or merger candidate and its business
prior to the consummation of any acquisition or merger transaction. In the event a proposed business combination involves a change in
a majority of the directors of the Company, the Company will file and provide to stockholders a Schedule 14F-1, which shall include, information
concerning the target company, as required. The Company will file a current report on Form 8-K, as required, within four business days
of a business combination which results in the Company ceasing to be a shell company. This Form 8-K will include complete disclosure of
the target company, including audited financial statements.
Stephen Carnes, the sole officer and director
of the Company, has the ability, through his ownership of Series B preferred stock, to elect directors of his choosing and thus, is able
to control the direction of the Company. Accordingly, Stephen Carnes will have substantial flexibility in identifying and selecting a
prospective new business opportunity. In reviewing business opportunities, management will also consider such factors as:
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potential for growth, indicated by new technology, anticipated market expansion or new products; |
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competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole; |
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strength and diversity of management, either in place or scheduled for recruitment; |
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capital requirements and anticipated availability of required funds, to be provided by the registrant or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources; and |
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the extent to which the business opportunity can be advanced considering the availability of both human and economic capital. |
The foregoing criteria are not intended to be
exhaustive and there may be other criteria that the Company may deem relevant.
In evaluating a prospective business combination,
we will conduct as extensive a due diligence review of potential targets as possible given the lack of information which may be available
regarding private companies, our limited personnel and financial resources and the relative inexperience of our management with respect
to such activities. We believe there are many companies and professionals with significantly more experience than our management that
also are seeking business combination targets.
Due Diligence on Potential Acquisition Targets
We expect that our due diligence will encompass,
among other things, meetings with the target business’s incumbent management and inspection of its facilities, as necessary, as
well as a review of financial and other information which is made available to us. This due diligence review will be conducted either
by our management or by unaffiliated third parties we may engage, including but not limited to attorneys, accountants, consultants or
other such professionals. At this time, the Company has not specifically identified any third parties that it may engage. The costs associated
with hiring third parties as required to complete a business combination may be significant and are difficult to determine as such costs
may vary depending on a variety of factors, including the amount of time it takes to complete a business combination, the location of
the target company, and the size and complexity of the business of the target company.
Our limited funds and the lack of full-time management
will likely make it impracticable to conduct a complete and exhaustive investigation and analysis of a target business before we consummate
a business combination. Management decisions, therefore, will likely be made without detailed feasibility studies, independent analysis,
market surveys and the like which, if we had more funds available to us, would be desirable. We will be particularly dependent in making
decisions upon information provided by the promoters, owners, sponsors or others associated with the target business seeking our participation.
The time and costs required to select and evaluate
a target business and to structure and complete a business combination cannot presently be ascertained with any degree of certainty. The
amount of time it takes to complete a business combination, the location of the target company, and the size and complexity of the business
of the target company, whether current stockholders of the Company will retain equity in the Company, the scope of the due diligence investigation
required, the involvement of the Company’s auditors in the transaction, possible changes in the Company’s capital structure
in connection with the transaction, and whether funds may be raised contemporaneously with the transaction are all factors that determine
the costs associated with completing a business combination transaction. The time and costs required to complete a business combination
can be estimated once a business combination target has been identified. Any costs incurred with respect to the evaluation of a prospective
business combination that is not ultimately completed will result in a loss to us.
Marketing Strategy
The Company intends to promote itself privately.
The Company anticipates that the selection of a business opportunity in which to participate will be complex and risky. Due to general
economic conditions, rapid technological advances being made in some industries and shortages of available capital, management believes
that there are numerous firms seeking the perceived benefits of a publicly registered corporation. Such perceived benefits may include
facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options
or similar benefits to key employees, providing liquidity (subject to restrictions of applicable statutes), for all shareholders, and
other factors.
There are different situations for private companies
which may make a reverse merger more attractive to an operating private company than filing its own registration statement on Form 10.
It takes significant time and effort just to be able to learn to file the necessary documents through the EDGAR database, especially if
the operating company has not invested in filing software to streamline the process, which is expensive. We believe that small companies
are usually in a hurry to raise capital and some investors require that the private companies they invest in are or become Securities
and Exchange Commission (“SEC”) reporting. This is because some investors desire to have an exit strategy and a reverse merger
with a Form 10 shell company is perceived to be one step closer to liquidity. It should be noted that if a public shell company consummates
a reverse merger with a private operating company, the Company will be required to file a Current Report on Form 8-K within four days
of the transaction and that the Form 8-K will need to include audited financial statements of the private operating company and pro forma
financial statements giving effect to the business combination.
The Company has, and will continue to have, little
or no capital with which to provide the owners of business opportunities with any significant cash or other assets. As of the six months
ended September 30, 2022, the Company had a cash balance of $82,315. Management believes that the Company will be able to offer owners
of acquisition candidates the opportunity to acquire a controlling ownership interest in a publicly registered company without incurring
the cost and time of completing such initial registration. The owners of the business opportunities will, however, incur significant legal
and accounting costs in connection with the acquisition of a business opportunity, including the costs of preparing Current Reports on
Form 8-K, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and agreements and related reports and documents. The Exchange Act
specifically requires that any merger or acquisition candidate comply with all applicable reporting requirements, which include providing
audited financial statements to be included within the numerous filings relevant to complying with the Exchange Act. The Company has not
conducted market research and is not aware of statistical data which would support the perceived benefits of a merger or acquisition transaction
for the owners of a business opportunity.
Effect of an Acquisition on the Company’s
Current and Future Shareholders
Although there is no guarantee that a merger with
a private, operating business would result in any benefit to our current or future shareholders, the Company believes there exists a potential
benefit to the shareholders from the consummation of such a merger or acquisition. For example, our common stock may become more attractive
to the financial community, resulting in an increased share price and/or greater liquidity. Moreover, if all of the preconditions of Rule
144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), are met, including the introduction of
an operating business, current restricted shareholders may be able to utilize Rule 144 for the sale of their shares. Currently, Rule 144
is not available as further described below in Risk Factors. There is no guarantee that any of these possible benefits will come to fruition.
Other perceived benefits of becoming a publicly
traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained,
providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar
benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance
of stock.
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another
corporation or entity. It may also acquire stock or assets of an existing business. On the consummation of a transaction, it is probable
that the present management and shareholders of the Company will no longer be in control of the Company. In addition, the Company’s
directors may, as part of the terms of the acquisition transaction, resign and be replaced by new directors without a vote of the Company’s
shareholders or may sell their stock in the Company. Moreover, management may sell or otherwise transfer its interest in the Company to
new management who will then continue the Company business plan of seeking new business opportunities.
It is anticipated that any securities issued in
any reorganization would be issued in reliance upon an exemption from registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of its transaction, the Company may agree to register all or a part of such securities
immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be
no assurance, it will be undertaken by the surviving entity after the Company has successfully consummated a merger or acquisition.
The present stockholders of the Company will likely
not have control of a majority of the voting securities of the Company following a reorganization transaction. As part of such a transaction,
all or a majority of the Company’s directors may resign and one or more new directors may be appointed without any vote by stockholders.
Government Regulations
The Company intends to conduct its activities
so as to avoid being classified as an “investment company” under the Investment Company Act of 1940, as amended (the “1940
Act”) and therefore to avoid application of the costly and restrictive registration and other provisions of the 1940 Act and the
regulations promulgated thereunder.
As a public company, we will be subject to the
reporting requirements of the Exchange Act, which include the preparation and filing of current, quarterly and annual reports on Forms
8-K, 10-Q and 10-K, respectively. The Exchange Act specifically requires that any merger or acquisition candidate comply with all applicable
reporting requirements, which include providing audited financial statements to be included within the numerous filings relevant to complying
with the Exchange Act.
Plan for the Remainder of the Year
The Company’s plan for the remainder of
the fiscal year is to identify merger and acquisition candidates, complete one of the aforementioned business combinations, and comply
with the reporting requirements of the Exchange Act
Current Status of Operations
The Company has not expended funds on and has
no plans to expend funds or time on product research or development.
Management intends to devote such time as it deems
necessary to carry out the Company’s affairs. We cannot project the amount of time that our management will actually devote to our
plan of operations.
Competition
The Company will remain an insignificant participant
among the firms which engage in acquisition opportunities. There are many established venture capital and financial concerns which have
significantly greater financial and personnel resources and technical expertise than the Company. In view of the Company’s combined
extremely limited financial resources and limited management availability, the Company will continue to be at a significant competitive
disadvantage compared to the Company’s competitors which are also in the business of seeking opportunities to engage in a merger
or acquisition with other companies.
Smaller Reporting Company Status
We qualify as a “smaller reporting company”
under Rule 12b-2 of the Exchange Act, which is defined as a company with a public equity float of less than $250 million or it has less
than $100 million in annual revenues and no public float or public float of less than $700 million. To the extent that we remain a smaller
reporting company, we will have reduced disclosure requirements for our public filings, including: (1) less extensive narrative disclosure
than required of other reporting companies, particularly in the description of executive compensation and (2) the requirement to provide
only two years of audited financial statements, instead of three years. In addition, until such time as the public float of our common
stock exceeds $75 million, we will be a non-accelerated filer and will not be required to comply with the auditor attestation requirements
of Section 404(b) of the Sarbanes Oxley Act.
Employees and Board Members
The Company currently has no employees. The business
of the Company will be managed by its officers and directors and such officers or directors which may join the Company in the future,
and who may become employees of the Company. The Company does not anticipate a need to engage any fulltime employees at this time.
On April 27, 2022, the Board of Directors appointed Robert Morris to
the Board of Directors, effective May 1, 2022. Mr. Morris joins the Board of Directors to assist with merger and acquisition initiatives.
Mr. Morris is a graduate of Indiana University (Bloomington) and has served as a State Representative in the Indiana House of Representatives
since 2010. In the Indiana House of Representatives, Mr. Morris serves on the following committees: Commerce, Small Business and Economic
Development (Chairman), Utilities, Energy and Telecommunications, Roads and Transportation.
Results of Operations for the three months
ended September 30, 2022 and 2021
For the three months ended September 30, 2022
and 2021, we have neither engaged in any operations nor generated any revenues. We will not generate any operating revenues until we are
able to execute our business plan and secure the rights to offer products to the market.
For the three months ended September 30, 2022,
we incurred total operating expenses of $19,024 which included professional fees of $13,024 and rent of $6,000, in addition we incurred
a loss on the value of digital assets of $16,509. As a result, we had a net loss of $35,533 for the three months ended September 30, 2022.
For the three months ended September 30, 2021,
we incurred total operating expenses of $25,103 which included professional fees of $19,103 and rent of $6,000. We had a gain on the extinguishment
of debt of $678,233, and interest expenses of $6,887. As a result, we had net income of $646,243 for the three months ended September
30, 2021.
Results of Operations for the six months ended
September 30, 2022 and 2021
For the six months ended September 30, 2022 and
2021, we have neither engaged in any operations nor generated any revenues. We will not generate any operating revenues until we are able
to execute our business plan and secure the rights to offer products to the market.
For the six months ended September 30, 2022, we
incurred total operating expenses of $60,463 which included professional fees of $48,463 and rent of $12,000, in addition we incurred
a loss on the value of digital assets of $16,509. As a result, we had a net loss of $76,972 for the six months ended September 30, 2022.
For the six months ended September 30, 2021, we
incurred total operating expenses of $68,407 which included professional fees of $56,407 and rent of $12,000. We had a gain on the extinguishment
of debt of $678,233, and interest expenses of $24,100. As a result, we had net income of $585,726 for the three months ended September
30, 2021.
Liquidity and Capital Resources
Operating Activities
For the six months ended September 30, 2022, we
had a net loss of $76,972. For the six months ended September 30, 2022, we had a loss on valuation of digital assets of $16,509, an increase
in accrued expenses – related party of $12,000. As a result, we had net cash used in operating activities of $48,463 for the six
months ended September 30, 2022.
For the six months ended September 30, 2021, we
had a net income of $585,726. For the six months ended September 30, 2021, we had a gain on the extinguishment of debt of $678,233, an
increase in accrued expenses – related party of $18,000, and an increase in accrued interest of $24,100. As a result, we had net
cash used in operating activities of $50,407 for the six months ended September 30, 2021.
Investing Activities
For the six months ended September 30, 2022 and
2021, we did not pursue any investing activities.
Financing Activities
For the six months ended September 30, 2022, we
did not pursue any financing activities.
For the six months ended September 30, 2021, we
had proceeds from the sale of our common stock for cash of $200,000. As a result, we had net cash provided by financing activities of
$200,000 for the six months ended September 30, 2021.
Plan of Operation
Over the next twelve months, we expect to incur
costs and expenses related to:
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· |
maintaining our corporate existence, such as annual fees due to the State of Nevada; |
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· |
filing periodic reports under the Exchange Act, including filing, accounting and legal fees; |
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· |
investigating and analyzing targets and possibly consummating a business transaction. |
We expect to incur costs associated with filing
reports under the Exchange Act over the next twelve months of approximately $25,000 to $50,000. Costs associated with investigating and
analyzing targets and possibly consummating a business transaction are difficult to quantify given the multitude of variables associated
with such activities. Our ongoing expenses will result in continued net operating losses that will increase until we can consummate a
business transaction with a profitable target business, if ever. We estimate that these costs will be in the range of $30,000 to $55,000
per year, and that we will be able to meet these costs as necessary, with funds from the aforementioned private placement.
Once we use all of the funds from our private
placement, we will require additional capital to pay operating expenses.
Off-balance Sheet Arrangements
We have not entered into any other financial guarantees
or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that
are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements.
Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit,
liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing,
liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.