UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ Quarterly Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2023
☐ Transition Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ___________ to __________
Commission File No. 000-56301
OUTDOOR SPECIALTY PRODUCTS, INC.
(Exact name of registrant as specified in charter)
| NEVADA | | 46-4854952 |
(State or other jurisdiction of
incorporation or organization) | | (IRS Employer
Identification No.) |
| 3842 Quail Hollow Drive, Salt Lake City, Utah | | 84109 |
| (Address of principal executive offices) | | (Zip Code) |
(801) 560-5184
Registrant’s telephone number, including
area code)
(Former name, former address and former fiscal
year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act: None.
Indicate
by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files). Yes ☒ No ☐
Indicate by check mark whether the Registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ |
| Non-accelerated filer ☒ | Smaller reporting company ☒ |
| | Emerging Growth Company ☐ |
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
news 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 ☒
The number of shares outstanding of each of the issuer’s classes
of common stock as of August 3, 2023 is 5,284,318.
OUTSIDE SPECIALTY PRODUCTS, INC.
FORM 10-Q
FOR THE NINE MONTHS ENDED JUNE 30, 2023
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements and information in this report on Form 10-Q may
constitute forward-looking statements. The words believe, may, potentially, estimate, continue, anticipate,
intend, could, would, project, plan, expect and similar expressions that convey uncertainty
of future events or outcomes are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties
and other important factors that may cause our actual results, performance, or achievements to be materially different from any future
results, performances or achievements expressed or implied by the forward-looking statements. These forward-looking statements include,
but are not limited to, statements concerning the following:
| ● | our future financial and operating results; |
| ● | our intentions, expectations and beliefs regarding anticipated growth, market
penetration and trends in our business; |
| ● | the effects of market conditions on our stock price and operating results; |
| ● | our ability to maintain our competitive technological advantages against
competitors in our industry; |
| ● | our ability to timely and effectively adapt our existing technology and have
our technology solutions gain market acceptance; |
| ● | our ability to introduce new products and bring them to market in a timely
manner; |
| ● | our ability to maintain, protect and enhance our intellectual property; |
| ● | the effects of increased competition in our market and our ability to compete
effectively; |
| ● | costs associated with defending intellectual property infringement and other
claims; |
| ● | our expectations concerning our relationships with customers and other third
parties; |
| ● | the impact of outbreaks, and threat or perceived threat of outbreaks, of
epidemics and pandemics, including, without limitation, the coronavirus outbreak, on our sourcing and manufacturing operations as well
as consumer spending; |
| ● | risks associated with sourcing and manufacturing; and |
| ● | our ability to comply with evolving legal standards and regulations, particularly
concerning requirements for being a public company and United States export regulations. |
These forward-looking statements speak only as of the date of this
Form 10-Q and are subject to uncertainties, assumptions, and business and economic risks. As such, our actual results could differ materially
from those set forth in the forward-looking statements. Moreover, we operate in a competitive and changing environment, and new risks
emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any
forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances
discussed in this Form 10-Q may not occur, and actual results could differ materially and adversely from those anticipated or implied
in our forward-looking statements.
You should not rely upon forward-looking statements as predictions
of future events. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee
that the future results, levels of activity, performance or events and circumstances described in the forward-looking statements will
be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking
statements. We undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Form 10-Q
to conform these statements to actual results or to changes in our expectations, except as required by law.
You should read this Report on Form 10-Q and the documents that we
have filed with the SEC as exhibits hereto with the understanding that our actual future results and circumstances may be materially different
from what we expect.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Index to Financial Statements
OUTDOOR SPECIALTY PRODUCTS, INC.
Balance Sheets
(Unaudited)
| Assets: | |
June 30,
2023 | | |
September 30,
2022 | |
| Current Assets: | |
| | |
| |
| Cash | |
$ | 1,630 | | |
$ | 1,241 | |
| Prepaid expense | |
| 1,833 | | |
| 458 | |
| Inventory | |
| 4,591 | | |
| 4,638 | |
| Total current assets | |
| 8,054 | | |
| 6,337 | |
| | |
| | | |
| | |
| Other Assets: | |
| | | |
| | |
| Patents, net | |
| 4,285 | | |
| 4,591 | |
| | |
| | | |
| | |
| Total Assets | |
$ | 12,339 | | |
$ | 10,928 | |
| | |
| | | |
| | |
| Liabilities and Stockholders’ Deficit: | |
| | | |
| | |
| Current Liabilities: | |
| | | |
| | |
| Accrued interest | |
$ | 4,184 | | |
$ | 2,088 | |
| Line of credit – related party | |
| 89,299 | | |
| 60,769 | |
| | |
| | | |
| | |
| Total Liabilities: | |
| 93,483 | | |
| 62,857 | |
| | |
| | | |
| | |
| Stockholders’ Deficit: | |
| | | |
| | |
| Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding | |
| - | | |
| - | |
| Common stock, $0.001 par value, 190,000,000 shares authorized, 5,284,318 shares issued and outstanding | |
| 5,285 | | |
| 5,285 | |
| Additional paid-in capital | |
| 99,232 | | |
| 99,232 | |
| Accumulated deficit | |
| (185,661 | ) | |
| (156,446 | ) |
| Total Stockholders’ Deficit | |
| (81,144 | ) | |
| (51,929 | ) |
| | |
| | | |
| | |
| Total Liabilities and Stockholders’ Deficit | |
$ | 12,339 | | |
$ | 10,928 | |
The accompanying notes are an integral part of
these unaudited condensed financial statements.
OUTDOOR SPECIALTY PRODUCTS, INC.
Statements of Operations
(Unaudited)
| | |
Three Months
Ended
June 30, 2023 | | |
Three Months
Ended
June 30, 2022 | | |
Nine Months
Ended
June 30, 2023 | | |
Nine Months
Ended
June 30, 2022 | |
| | |
| | |
| | |
| | |
| |
| Revenue | |
$ | 155 | | |
$ | 117 | | |
$ | 480 | | |
$ | 264 | |
| Cost of sales | |
| 14 | | |
| 12 | | |
| 46 | | |
| 27 | |
| Gross profit | |
| 141 | | |
| 105 | | |
| 434 | | |
| 237 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating Expenses: | |
| | | |
| | | |
| | | |
| | |
| General and administrative | |
| 5,857 | | |
| 6,854 | | |
| 27,553 | | |
| 28,483 | |
| Total Operating Expenses | |
| 5,857 | | |
| 6,854 | | |
| 27,553 | | |
| 28,483 | |
| Loss from Operations | |
| (5,716 | ) | |
| (6,749 | ) | |
| (27,119 | ) | |
| (28,246 | ) |
| Other Expense | |
| | | |
| | | |
| | | |
| | |
| Interest expense | |
| (774 | ) | |
| (459 | ) | |
| (2,096 | ) | |
| (1,160 | ) |
| Net Loss | |
$ | (6,490 | ) | |
$ | (7,208 | ) | |
$ | (29,215 | ) | |
$ | (29,406 | ) |
Net loss per share of common stock- basic and diluted | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.01 | ) | |
$ | (0.01 | ) |
Weighted average number of common shares outstanding – basic and diluted | |
| 5,284,318 | | |
| 5,284,318 | | |
| 5,284,318 | | |
| 5,284,318 | |
The accompanying notes are an integral part of
these unaudited condensed financial statements.
OUTDOOR SPECIALTY PRODUCTS, INC.
Statements of Changes in Stockholders’ Deficit
For the three and nine months ended June 30, 2023
and 2022
(Unaudited)
| | |
Common Stock | | |
Additional
Paid-in | | |
Accumulated | | |
Total
Stock-
holders’ | |
| | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
| Balance, September 30, 2021 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (119,280 | ) | |
$ | (14,763 | ) |
| Net loss for the three months ended December 31, 2021 | |
| - | | |
| - | | |
| - | | |
| (8,904 | ) | |
| (8,904 | ) |
| Balance December 31, 2021 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (128,184 | ) | |
$ | (23,667 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net loss for the three months ended March 31, 2022 | |
| - | | |
| - | | |
| - | | |
| (13,294 | ) | |
| (13,294 | ) |
| Balance, March 31, 2022 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (141,478 | ) | |
$ | (36,961 | ) |
| Net loss for the three months ended June 30, 2022 | |
| - | | |
| - | | |
| - | | |
| (7,208 | ) | |
| (7,208 | ) |
| Balance, June 30, 2022 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (148,686 | ) | |
$ | (44,169 | ) |
| | |
Common Stock | | |
Additional
Paid-in | | |
Accumulated | | |
Total
Stock-
holders’ | |
| | |
Shares | | |
Amount | | |
Capital | | |
Deficit | | |
Deficit | |
| Balance, September 30, 2022 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (156,446 | ) | |
$ | (51,929 | ) |
| Net loss for the three months ended December 31, 2022 | |
| - | | |
| - | | |
| - | | |
| (10,550 | ) | |
| (10,550 | ) |
| Balance December 31, 2022 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (166,996 | ) | |
$ | (62,479 | ) |
| | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net loss for the three months ended March 31, 2023 | |
| - | | |
| - | | |
| - | | |
| (12,175 | ) | |
| (12,175 | ) |
| Balance, March 31, 2023 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (179,171 | ) | |
$ | (74,654 | ) |
| Net loss for the three months ended June 30, 2023 | |
| - | | |
| - | | |
| - | | |
| (6,490 | ) | |
| (6,490 | ) |
| Balance, June 30, 2023 | |
| 5,284,318 | | |
$ | 5,285 | | |
$ | 99,232 | | |
$ | (185,661 | ) | |
$ | (81,144 | ) |
The accompanying notes are an integral part of
these unaudited condensed financial statements.
OUTDOOR SPECIALTY PRODUCTS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
| | |
For the Nine Months Ended | |
| | |
June 30,
2023 | | |
June 30,
2022 | |
| CASH FLOWS FROM OPERATING ACTIVITIES | |
| | |
| |
| Net Loss | |
$ | (29,215 | ) | |
$ | (29,406 | ) |
| Adjustments to Reconcile Net Loss | |
| | | |
| | |
| To Net Cash Used by Operating Activities | |
| | | |
| | |
| Depreciation and Amortization | |
| 306 | | |
| 307 | |
| Changes in Operating Assets and Liabilities: | |
| | | |
| | |
| Increase in prepaid expense | |
| (1,375 | ) | |
| (1,375 | ) |
| Decrease in inventory | |
| 47 | | |
| 28 | |
| Decrease in accounts payable | |
| - | | |
| (414 | ) |
| Increase in accrued interest | |
| 2,096 | | |
| 1,160 | |
| Net Cash Used by Operating Activities | |
| (28,141 | ) | |
| (29,700 | ) |
| | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES | |
| - | | |
| - | |
| | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
| Proceeds from line of credit - related party | |
| 28,530 | | |
| 23,887 | |
| Net Cash Provided by Financing Activities | |
| 28,530 | | |
| 23,887 | |
| | |
| | | |
| | |
| Net Increase (Decrease) in Cash | |
| 389 | | |
| (5,813 | ) |
| Cash at Beginning of Period | |
| 1,241 | | |
| 6,168 | |
| Cash at End of Period | |
$ | 1,630 | | |
$ | 355 | |
| | |
| | | |
| | |
| SUPPLEMENTAL DISCLOSURES: | |
| | | |
| | |
| Cash Paid During the Period For: | |
| | | |
| | |
| Interest | |
$ | - | | |
$ | - | |
| Income taxes | |
$ | - | | |
$ | - | |
The accompanying notes are an integral part of
these unaudited condensed financial statements.
OUTDOOR SPECIALTY PRODUCTS, INC.
Notes to the Unaudited Condensed Financial Statements
Nine Months Ended June 30, 2023
NOTE 1: Condensed Financial Statements
The accompanying unaudited financial statements
of Outdoor Specialty Products, Inc. (the “Company”) were prepared pursuant to the rules and regulations of the United States
Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such
rules and regulations. Management of the Company (“Management”) believes that the following disclosures are adequate to make
the information presented not misleading. These financial statements should be read in conjunction with the audited financial statements
and the notes thereto for the year ended September 30, 2022.
These unaudited financial statements reflect all adjustments, consisting
only of normal recurring adjustments that, in the opinion of Management, are necessary to present fairly the financial position and results
of operations of the Company for the periods presented. Operating results for the nine months ended June 30, 2023, are not necessarily
indicative of the results that may be expected for the year ending September 30, 2023.
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. As shown in the accompanying financial statements, the Company did not generate sufficient revenue to generate
net income, has a negative working capital, and has a limited operating history. These factors, among others, may indicate that there
is substantial doubt that the Company will be unable to continue as a going concern for a reasonable period of time.
The financial statements do not include any adjustments
relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue
as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient
cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company intends to seek additional
funding through debt or equity offerings and additional stockholder loans if required to fund its business plan. There is
no assurance that the Company will be successful in raising additional funds.
NOTE 3 – LINE OF CREDIT – RELATED
PARTY
During the nine months ending June 30, 2023, the
Company amended the revolving promissory note agreement with its related party to extend the maturity date to December 31, 2023, and increase
the maximum principal indebtedness to $85,000. The revolving promissory note bears interest at the rate of 3.5%. The Company received
proceeds under the revolving promissory note of $26,430 during the nine months ended June 30, 2023, resulting in principal balances of
$78,473 and $52,043, with accrued interest of $3,743 and $1,909, at June 30, 2023 and September 30, 2022, respectively.
Also, during the nine months ended June 30, 2023,
the Company amended the revolving promissory note agreement with another principal stockholder to extend the maturity date to December
31, 2023 and increase the maximum principal indebtedness to $15,000. The revolving promissory note bears interest at the rate of 3.5%
per annum. The Company received proceeds under the revolving promissory note of $2,100 during the nine months ended June 30, 2023, resulting
in principal balances of $10,826 and $8,726, with accrued interest of $441 and $179, on June 30, 2023, and September 30, 2022, respectively.
NOTE 4 – SUBSEQUENT EVENTS
The Company has evaluated subsequent events from
the balance sheet date through the date the financial statements were issued and determined that there are no events requiring disclosure.
Item 2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
You should read the following discussion in conjunction with our
financial statements, which are included elsewhere in this report.
Overview
We are and have since our inception in 2014 been engaged in the business
of developing, selling, and marketing products in niche markets within the specialty outdoor products marketplace. We introduced our proprietary
“Reel Guard” product in 2014 and continue to offer it for sale. We postponed the production of our SLINKOR product pending
completion of a design change in the composition of the weighting component from lead to another material and the proposed use of molded
product components. We have not been able to identify an effective substitute for lead as the weighting component and are currently reviewing
a process in which a premanufactured lead cylinder would be encapsulated with foam using an injection molding process. Both the lead cylinder
manufacturing and injection molding processes would be automated, which we believe would result in greater manufacturing efficiencies
and lower production costs. While we intend to finalize the design for the SLINKOR product in the near future, the commencement of production
will be subject to our receipt of additional financing adequate to cover the initial production costs and product run.
Our 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. We did not
generate sufficient revenue to generate net income, we have negative working capital, and we have a limited operating history. These factors,
among others, may indicate that there is substantial doubt that we will be able to continue as a going concern for a reasonable period
of time. Our financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities
that might be necessary should we be unable to continue as a going concern. Our continuation as a going concern is dependent
upon our ability to generate sufficient cash flow to meet our obligations on a timely basis and ultimately to attain profitability. We
intend to seek additional funding through additional stockholder loans and debt or equity offerings. We also intend to increase
our sales through the addition of our SLINKOR product upon the completion of its redesign. There is no assurance that we will be successful
in raising additional funds or that the SLINKOR product will result in an increase in sales.
Results of Operations for the Three and Nine months Ended June 30,
2023 and 2022
Revenues
From our inception in 2014 through the present, our revenue has resulted
solely from sales of our proprietary Reel Guard product and our cost of sales also relate solely to that product. Our Reel Guard product
is offered for sale on our website and on eBay and sales vary from quarter to quarter based on the number of customers that become aware
of the product and decide to make a purchase. Total revenue for the three months ended June 30, 2023, was $155, compared to $117 for the
three months ended June 30, 2022, an increase of $38, or approximately 32%. Total revenue for the nine months ended June 30, 2023, was
$480, compared to $264 for the nine months ended June 30, 2022, an increase of $216, or approximately 82%.
Cost of Sales
Cost of sales for the three months ended June 30, 2023 was $14, compared
to $12 for the three months ended June 30, 2022, an increase of $2, or approximately 17%. Cost of sales for the nine months ended June
30, 2023 was $46, compared to $27 for the nine months ended June 30, 2022, an increase of $19, or approximately 70%. Cost of sales as
a percentage of revenue for the nine months ended June 30, 2023 and 2022 was approximately 10% and 11%, respectively. Our cost of sales
as a percentage of revenue did not differ significantly from 2022 to 2023 since we offered only one product for sale and there have been
no material change in the sales price or manufacturing cost of our product.
General and Administrative Expenses
General and administrative expenses were $5,857 for the three months
ended June 30, 2023, compared to $6,854 for the three months ended June 30, 2022, a decrease of $997 or approximately 15%. General and
administrative expenses were $27,553 for the nine months ended June 30, 2023, compared to $28,483 for the nine months ended June 30, 2022,
a decrease of $930 or approximately 3.0%. General and administrative expenses consist primarily of legal, accounting, and Edgar filing
expenses.
Depreciation and Amortization Expense
Depreciation and amortization expenses currently are not material to
our business. Depreciation and amortization expense was $306 for the nine months ended June 30, 2023 as compared to $307 for the nine
months ended June 30, 2022.
Research and Development Expenses
Research and development expenses are not currently material to our
business. We did not incur research and development expenses in the nine months ended June 30, 2023 or 2022.
Liquidity and Capital Resources
As of June 30, 2023, we had total current assets of $8,054, including
cash of $1,630, and current liabilities of $93,483, resulting in a working capital deficit of $85,429. Our current liabilities include
a principal outstanding balance of $89,299, and $4,184 in accrued interest, under the short-term revolving loan agreements with our president
and another principal stockholder that are due on or before December 31, 2023. As of June 30, 2023, we had an accumulated deficit of $185,661
and a total stockholders’ deficit of $81,144. We have financed our operations to date from sales of our Reel Guard product, proceeds
from our 2014 private placement, and proceeds from the short-term revolving loan agreements.
For the nine months ended June 30, 2023, net cash used by operating
activities was $28,141, as a result of a net loss of $29,215, which was (i) reduced by depreciation and amortization of $306, a decrease
in inventory of $47, and an increase in accrued interest of $2,096, and (ii) increased by an increase in prepaid expense of $1,375. By
comparison, for the nine months ended June 30, 2022 net cash used by operating activities was $29,700, as a result of a net loss of $29,406,
which was (i) reduced by depreciation and amortization of $307, a decrease in inventory of $28, and an increase in accrued interest of
$1,160, and (ii) increased by an increase in prepaid expense of $1,375 and a decrease in accounts payable of $414.
For the nine months ended June 30, 2023 and 2022, we had no cash flows
used in or provided by investing activities.
For the nine months ended June 30, 2023, we had net cash provided by
financing activities of $28,530 consisting of proceeds from the revolving loan agreements. For the nine months ended June 30, 2022, we
had net cash provided by financing activities of $23,887, also consisting of proceeds from the revolving loan agreements.
Following our incorporation in 2014, we completed
the private placement of 285,714 shares of our common stock to accredited investors in a private placement at a price of $0.35 per share
for total proceeds of $100,011. The proceeds from the private placement together with our limited product sales were sufficient to fund
our operations through our fiscal year ended September 30, 2020. On January 4, 2021, we entered into a revolving promissory note agreement
with our president and principal stockholder that, as amended, provides for total loans of up to $85,000 at an interest rate 3.5% per
annum, which is repayable on or before December 31, 2023. We received proceeds under the revolving promissory note of $26,430 during the
nine months ended June 30, 2023, resulting in principal balances of $78,473 and $52,043, with accrued interest of $3,743 and $1,909, at
June 30, 2023 and September 30, 2022, respectively. During December 2021, we entered into a revolving promissory note agreement with another
principal stockholder that, as amended, provides for loans of up to $15,000 at an interest rate of 3.5% per annum, which is repayable
on or before December 31, 2023. We received proceeds under the second revolving promissory note of $2,100 during the nine months ended
June 30, 2023, resulting in principal balances of $10,826 and $8,726, with accrued interest of $441 and $179, at June 30, 2023 and September
30, 2022, respectively.
We believe we will have adequate funds to meet our obligations for
the next twelve months from our current cash, the revolving note agreements, and cash flows from operations, subject to an anticipated
increase in the maximum principal amounts of the revolving note agreements. Cash flow from operations has not historically been sufficient
to sustain our operations without the additional sources of capital described above. Our future working capital requirements will depend
on many factors, including an increase in the amounts and extension of the due dates of the revolving loan agreements, the expansion of
our product line to include the new SLINKOR product, and the costs of redesigning and manufacturing the SLINKOR product. To the extent
our cash, cash equivalents, and cash flows from operating activities and the revolving note agreements are insufficient to fund our future
activities, we may need to raise additional funds through additional stockholder loans or private equity or debt financing. We also may
need to raise additional funds in the event we determine in the future to effect one or more acquisitions of businesses, technologies,
or products. If additional funding is required, we may not be able to effect an equity or debt financing on terms acceptable to us or
at all.
Cash Requirements
As of June 30, 2023 and September 30, 2022, we did not have any lease
obligations or requirements or other agreements requiring a significant commitment of cash.
Off-Balance Sheet Arrangements
As of June 30, 2023 and September 30, 2022, we did not have any off-balance
sheet financing arrangements.
Critical Accounting Estimates
There have been no material changes to our critical accounting estimates
as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable. The Company is a “smaller reporting company.”
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures.
Under the supervision and with the participation
of our management, including our President and Treasurer who serves as our principal executive and principal financial officer, we evaluated
the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under
the Securities Exchange Act of 1934 (“the Exchange Act”) as of June 30, 2023, the end of the period covered by this report.
Based upon that evaluation, our President and Treasurer, concluded that our disclosure controls and procedures as of June 30, 2023 were
effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to
our management, including our President and Treasurer, as appropriate to allow timely decisions regarding disclosure. A controls system
cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud, if any, within a company have been detected.
Changes in internal controls over financial reporting.
There was no change in our internal control over financial reporting
during the three months ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material pending legal proceedings.
Item 1A. Risk Factors
Not Applicable. The Company is a “smaller reporting company.”
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
Not Applicable.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.
Item 6: Exhibits
The following are included as exhibits to this report:
| (1) | Incorporated by reference to the Company’s Registration
Statement on Form 10-12G filed June 24, 2021. |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
| |
Outdoor Specialty Products, Inc. |
| |
|
| Dated: August 8, 2023 |
By |
/s/ Kirk Blosch |
| |
|
Kirk Blosch |
| |
|
President, Secretary and Treasurer |
| |
|
(Principal Executive and Accounting Officer) |
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This Fourth Amendment to Revolving Promissory Note
Agreement is made and entered into as of the 10th day of May 2023, by and between Outdoor Specialty Products, Inc., a Nevada corporation
(“Borrower”), and Kirk Blosch (“Noteholder”).
WHEREAS, Borrower and Noteholder entered into that
certain Revolving Promissory Note Agreement, dated January 4, 2021, in the original principal amount of $40,000.00, as amended on December
1, 2021, June 2, 2022, and November 21, 2022 (collectively, the “Original Note”), which currently provides for a maturity
date of December 31, 2023 and a maximum principal indebtedness of $75,000.00; and
WHEREAS, Borrower and Noteholder desire to further
amend the Original Note to increase the amount of principal indebtedness as provided herein.
NOW, THEREFORE, in consideration of the premises
and covenants set forth herein, the parties hereto agree as follows:
1. Increase in Principal Indebtedness. The
Original Note is hereby amended by changing the principal amount of the Note at the top of the first page from US $75,000 to US $85,000
and by changing the amount of the Principal Indebtedness in the preamble of the Original Note from SEVENTY-FIVE THOUSAND AND NO/100
DOLLARS ($75,000) to EIGHTY-FIVE THOUSAND AND NO/100 DOLLARS ($85,000.00).
2. Defined Terms / No Further Modification.
Any terms used but not defined herein shall have the meanings ascribed to them in the Original Note. Except as expressly set forth herein,
the Original Note shall remain unmodified and shall continue in full force and effect.
Dated as of the date first written above.
This Third Amendment to Revolving Promissory Note
Agreement is made and entered into as of the 10th day of May 2023, by and between Outdoor Specialty Products, Inc., a Nevada corporation
(“Borrower”), and Ed Bailey (“Noteholder”).
WHEREAS, Borrower and Noteholder entered into that
certain Revolving Promissory Note Agreement, dated December 1, 2021, in the original principal amount of $7,000.00, as amended on June
2, 2022 and November 21, 2022 (collectively, the “Original Note”), which currently provides for a maturity date of December
31, 2023 and a maximum principal indebtedness of $13,240.00; and
WHEREAS, Borrower and Noteholder desire to further
amend the Original Note to increase the amount of principal indebtedness as provided herein.
NOW, THEREFORE, in consideration of the premises
and covenants set forth herein, the parties hereto agree as follows:
1. Increase in Principal Indebtedness. The
Original Note is hereby amended by changing the principal amount of the Note at the top of the first page from US $13,240 to US $15,000.00
and by changing the amount of the Principal Indebtedness in the preamble of the Original Note from THIRTEEN THOUSAND TWO HUNDRED FORTY
AND NO/100 DOLLARS (US$13,240) to FIFTEEN THOUSAND AND NO/100 DOLLARS (US$15,000.00).
2. Defined Terms / No Further Modification.
Any terms used but not defined herein shall have the meanings ascribed to them in the Original Note. Except as expressly set forth herein,
the Original Note shall remain unmodified and shall continue in full force and effect.
Dated as of the date first written above.
In connection with the Quarterly Report of Outdoor
Specialty Products, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2023, as filed with the Securities and
Exchange Commission on or about the date hereof (the “Report”), I, Kirk Blosch, President, Secretary and Treasurer of the
Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
A signed original of this written statement
required by Section 906 of the Sarbanes-Oxley Act has been furnished to Outdoor Specialty Products, Inc. and will be retained by Outdoor
Specialty Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.