ITEM 1. FINANCIAL STATEMENTS
AQUA POWER SYSTEMS
INC.
CONSOLIDATED BALANCE SHEETS
|
|
|
As of
December 31,
|
|
As of March 31,
|
|
|
|
2021
|
|
2021
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
139,569
|
|
|
$
|
–
|
|
|
Total Current Assets
|
|
|
139,569
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
139,569
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIENCY)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses, including related party payables of $27,000 and $3,000 respectively
|
|
$
|
27,000
|
|
|
$
|
40,916
|
|
|
Accrued interest payable convertible notes
|
|
|
–
|
|
|
|
206,961
|
|
|
Accrued interest related party
|
|
|
–
|
|
|
|
154,099
|
|
|
Convertible note payable - related party, net
|
|
|
–
|
|
|
|
263,158
|
|
|
Convertible note, net
|
|
|
–
|
|
|
|
411,050
|
|
|
Note payable - related party
|
|
|
5,100
|
|
|
|
21,713
|
|
|
Note payable
|
|
|
–
|
|
|
|
7,500
|
|
|
Total Liabilities
|
|
|
32,100
|
|
|
|
1,105,397
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity (Deficiency)
|
|
|
|
|
|
|
|
|
|
Preferred A Stock, $0.001 par value; 5,000,000 shares authorized, none issued and outstanding
|
|
|
–
|
|
|
|
–
|
|
|
Preferred B Stock $0.001 par value 1,000,000 shares authorized, 500,000 issued and outstanding at December 31, 2021 and March 31, 2021
|
|
|
500
|
|
|
|
500
|
|
|
Common stock, $0.0001 par value; 200,000,000 shares authorized, 50,146,804 and 59,066,942 issued and outstanding, at December 31, 2021 and March 31, 2021 respectively
|
|
|
5,014
|
|
|
|
5,906
|
|
|
Additional paid-in capital
|
|
|
207,702
|
|
|
|
6,810
|
|
|
Accumulated deficit
|
|
|
(105,747
|
)
|
|
|
(1,118,613
|
)
|
|
Total Stockholders' Equity (Deficit)
|
|
|
107,469
|
|
|
|
(1,105,397
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity (Deficit)
|
|
$
|
139,569
|
|
|
$
|
–
|
|
See accompanying notes to condensed consolidated
financial statement
AQUA POWER SYSTEMS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Nine Months Ended
December 31,
|
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue, net
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
16,024
|
|
|
|
–
|
|
|
|
84,421
|
|
|
|
–
|
|
|
Total Operating Expenses
|
|
|
16,024
|
|
|
|
–
|
|
|
|
84,421
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit (Loss) from Operations
|
|
|
(16,024
|
)
|
|
|
–
|
|
|
|
(84,421
|
)
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on extinguishment of debt
|
|
|
–
|
|
|
|
–
|
|
|
|
1,121,407
|
|
|
|
–
|
|
|
Interest expense – related party
|
|
|
–
|
|
|
|
(7,241
|
)
|
|
|
(9,304
|
)
|
|
|
(21,644
|
)
|
|
Interest expense – other
|
|
|
–
|
|
|
|
(10,361
|
)
|
|
|
(14,796
|
)
|
|
|
(30,980
|
)
|
|
Total Other Income (Expense)
|
|
|
–
|
|
|
|
(17,602
|
)
|
|
|
1,097,307
|
|
|
|
(52,624
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET PROFIT (LOSS)
|
|
$
|
(16,024
|
)
|
|
$
|
(17,602
|
)
|
|
$
|
1,012,866
|
|
|
$
|
(52,624
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Profit (Loss) Per Share: Basic and Diluted
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares Outstanding: Basic and Diluted
|
|
|
50,146,804
|
|
|
|
59,066,942
|
|
|
|
55,886,892
|
|
|
|
59,066,942
|
|
See accompanying notes
to condensed consolidated financial statement
AQUA POWER SYSTEMS INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’
EQUITY (DEFICIT)
(Unaudited)
For the Nine Months Ended December 31, 2021
and 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series
A Preferred
|
|
Series
B Preferred
|
|
Common
Stock
|
|
Additional
Paid-In
|
|
Accumulated
|
|
Total
Stockholders’
|
|
|
|
Shares
|
|
Amount
($)
|
|
Shares
|
|
Amount
($)
|
|
Shares
|
|
Amount
($)
|
|
Capital
($)
|
|
Deficit
($)
|
|
Equity/
(Deficit) ($)
|
|
Balance March 31, 2020
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
59,066,942
|
|
|
|
5,906
|
|
|
|
7,310
|
|
|
|
(1,040,681
|
)
|
|
|
(1,027,465
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(17,410
|
)
|
|
|
(17,410
|
)
|
|
Balance June 30, 2020
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
59,066,942
|
|
|
|
5,906
|
|
|
|
7,310
|
|
|
|
(1,058,091
|
)
|
|
|
(1,044,875
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(17,612
|
)
|
|
|
(17,612
|
)
|
|
Balance September 30, 2020
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
59,066,942
|
|
|
|
5,906
|
|
|
|
7,310
|
|
|
|
(1,075,703
|
)
|
|
|
(1,062,487
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(17,602
|
)
|
|
|
(17,602
|
)
|
|
Balance December 31, 2020
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
59,066,942
|
|
|
|
5,906
|
|
|
|
7,310
|
|
|
|
(1,093,305
|
)
|
|
|
(1,080,089
|
)
|
|
|
|
Series
A Preferred
|
|
Series
B Preferred
|
|
Common
Stock
|
|
Additional
Paid-In
|
|
Accumulated
|
|
Total
Stockholders’
|
|
|
|
Shares
|
|
Amount
($)
|
|
Shares
|
|
Amount
($)
|
|
Shares
|
|
Amount
($)
|
|
Capital
($)
|
|
Deficit
($)
|
|
Equity/
(Deficit) ($)
|
|
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
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(60,527
|
)
|
|
|
(60,527
|
)
|
|
Balance June 30, 2021
|
|
|
–
|
|
|
|
–
|
|
|
|
500,000
|
|
|
|
500
|
|
|
|
59,166,942
|
|
|
|
5,916
|
|
|
|
206,800
|
|
|
|
(1,179,140
|
)
|
|
|
(965,924
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancellation of shares
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(9,020,138
|
)
|
|
|
(902
|
)
|
|
|
902
|
|
|
|
–
|
|
|
|
–
|
|
|
Net loss
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
1,089,417
|
|
|
|
1,089,417
|
|
|
Balance September 30, 2021
|
|
|
–
|
|
|
|
–
|
|
|
|
500,000
|
|
|
|
500
|
|
|
|
50,146,804
|
|
|
|
5,014
|
|
|
|
207,702
|
|
|
|
(89,723
|
)
|
|
|
123,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
–
|
|
|
|
(16,024
|
)
|
|
|
(16,024
|
)
|
|
Balance December 31, 2021
|
|
|
–
|
|
|
|
–
|
|
|
|
500,000
|
|
|
|
500
|
|
|
|
50,146,804
|
|
|
|
5,014
|
|
|
|
207,702
|
|
|
|
(105,747
|
)
|
|
|
107,469
|
|
See accompanying notes to condensed consolidated
financial statement
AQUA POWER SYSTEMS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Nine Months Ended
December 31,
|
|
|
|
2021
(Unaudited)
|
|
2020
(Unaudited)
|
|
Cash Flows From Operating Activities:
|
|
|
|
|
|
|
|
|
|
Net Profit (loss)
|
|
$
|
1,012,866
|
|
|
$
|
(52,624
|
)
|
|
Adjustments to reconcile net loss to net cash used in operations
|
|
|
|
|
|
|
|
|
|
Gain on extinguishment of debt
|
|
|
(1,121,407
|
)
|
|
|
–
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Increase in accrued interest payable
|
|
|
24,100
|
|
|
|
52,624
|
|
|
Increase in accounts payable and accrued expenses
|
|
|
24,010
|
|
|
|
–
|
|
|
Net Cash Used In Operating Activities
|
|
|
(60,431
|
)
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
–
|
|
|
|
–
|
|
|
Net Cash Used in Investing Activities
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities:
|
|
|
|
|
|
|
|
|
|
Proceeds from common stock sale
|
|
|
200,000
|
|
|
|
–
|
|
|
Net Cash Provided by Financing Activities
|
|
|
200,000
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash
|
|
|
139,569
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at Beginning of Period
|
|
|
–
|
|
|
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash at End of Period
|
|
$
|
139,569
|
|
|
$
|
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow information:
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Cash paid for interest
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$
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–
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$
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–
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Cash paid for taxes
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$
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–
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$
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–
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Supplemental disclosure of non-cash investing and financing activities:
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Beneficial conversion feature
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$
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–
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$
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–
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See accompanying notes
to condensed consolidated financial statement
AQUA POWER SYSTEMS, INC
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
December 31, 2021
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 nine months ended December 31, 2021, had
a net income of $1,012,866 for the nine months
ended December 31, 2021 due to the gain on extinguishment of debt, and an accumulated deficit of ($105,747).
The Company’s continuation as a going concern is dependent upon, among other things, its ability to generate revenues and its
ability to obtain capital from third parties. No assurance can be given that the Company will be successful in these efforts.
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.
Convertible Instruments
The Company evaluates and accounts for
conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.
Applicable GAAP requires companies to
bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according
to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative
instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument
that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes
in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument
would be considered a derivative instrument.
The Company accounts for convertible instruments
(when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The
Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments
based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the
effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt
to their stated date of redemption.
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 December 31, 2021.
Financial Instruments
The Company’s balance sheet is limited
to organizational startup costs due to the Acquisition was 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 December 31, 2021. 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 December 31, 2021, the Company does not have
any Long-Lived Assets.
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 December 31, 2021, 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 December 31, 2021,
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.
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 – ACCOUNTS PAYABLE
AND ACCRUED EXPENSES
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 judgment, management has determined it is appropriate to write-off certain accounts payable
and accrued expenses due by the Company to third parties with the exception of the payables current management has authorized since its
appointment.
NOTE 5 – 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 judgment, management has determined it is appropriate to write-off the payables due to
prior management and other parties.
Notes Payable - Related Party
On December 16, 2020, the Company issued
a demand note in principal amount of $5,100 to an officer of the Company. The funds were utilized to pay legal expenses on behalf of the
Company. The note has no interest obligations.
NOTE 6 – 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 (or 10.7%
of the total issued and outstanding 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 5, 2021, the Company’s
legal counsel filed a complaint with the courts to cancel a total of 32,942,624 shares of its common stock, representing 65.7% of the
current issued and outstanding shares, that were held Mr. Tadashi Ishikawa, the former CEO of the Company. As of December 31, 2021, the
court has not ruled on the settlement of this complaint.
There were 50,146,804 common shares issued
and outstanding at December 31, 2021.
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.
NOTE 7 – SUBSEQUENT EVENTS
Management has evaluated subsequent events
through the date these financial statements were available to be issued. Based on our evaluation the following material events have occurred
that require further disclosure.
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 success or failure of management’s efforts to implement the Company’s business plan;
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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.
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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 and the Company has no specific business plan or purpose other than to seek new business opportunities or to
engage in a merger or acquisition with an unidentified company. 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.
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.
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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 nine months ended December 31, 2021, the Company had a cash balance of $139,569. 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
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.
Results of Operations for the three
months ended December 31, 2021 and 2020
For the three months ended December 31,
2021 and 2020, 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 December 31,
2021, we incurred total operating expenses of $16,024 which included professional
fees of $10,024 and rent of $6,000. As a result we had a net loss of $16,024 for the three months ended December 31, 2021.
For the three months ended December 31,
2020, we incurred no operating expenses. We had interest expense of $17,602 resulting in net loss of $17,602 for the three months ended
December 31, 2020.
Results of Operations for the nine
months ended December 31, 2021 and 2020
For the nine months ended December 31,
2021 and 2020, 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 nine months ended December 31, 2021, we wrote-off the majority
of the Company’s debt, authorized via a court order disallowing any asserted and unasserted claims, resulting in a gain on the extinguishment
of debt of $1,121,407, and we incurred total operating expenses of $84,421 which included professional fees of $66,421 and rent of $18,000.
We had interest expense of $24,100. As a result we had a net profit of $1,012,866 for the nine months ended December 31, 2021.
For the nine months ended December 31,
2020, we incurred no operating expenses. We had interest expense of $52,624 resulting in net loss of $52,624 for the nine months ended
December 31, 2020.
Liquidity and Capital Resources
Operating Activities
For the nine months ended December 31, 2021, we
had net income of $1,012,866. For the nine months ended December 31, 2021, we had a gain on the extinguishment of debt of $1,121,407,
an increase in accrued interest payable of $24,100 and an increase in accounts payable $24,010. As a result, we had net cash used in operating
activities of $60,431 for the nine months ended December 31, 2021.
For the nine months ended December 31,
2020, we had a net loss of $52,624. For the nine months ended December 31, 2020, we had an increase in accrued interest payable of $52,624.
As a result, we had net cash used in operating activities of $0 for the nine months ended December 31, 2020.
Investing Activities
For the nine months ended December 31,
2021 and 2020, we did not pursue any investing activities.
Financing Activities
For the nine months ended December 31,
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 nine months ended December 31, 2021.
For the nine months ended December 31,
2020, we did not pursue any financing activities.
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.
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We expect to incur costs associated with
filing reports under the Exchange Act over the next twelve months of approximately $10,000 to $25,000. 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 to $24,000 to $34,000
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.