KSSH Kingfish Holding Corporation (CE)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended December 31, 2023

☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-52375

(941) 487-3653

(Registrant’s Telephone Number, Including Area Code)

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

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, or an emerging growth company. See definition of “large accelerated filer,” "accelerated filer,” “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

As of February 1, 2024, the number of issued and outstanding common shares of the registrant was 120,942,987.

KINGFISH HOLDING CORPORATION

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

KINGFISH HOLDING CORPORATION

BALANCE SHEETS

DECEMBER 31, 2023 (unaudited) AND SEPTEMBER 30, 202

The accompanying notes are an integral part of the financial statements

KINGFISH HOLDING CORPORATION

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2023 AND 2022

 (UNAUDIED)

The accompanying notes are an integral part of the financial statements

KINGFISH HOLDING CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE ENDED DECEMBER 31, 2023 AND 2022

 (UNAUDITED)

KINGFISH HOLDING CORPORATION

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED DECEMBER  31, 2023 AND 2022

 (UNAUDITED)

The accompanying notes are an integral part of the financial statements

KINGFISH HOLDING CORPORATION

NOTES TO FINANCIAL STATEMENTS

December 31, 2023

(unaudited)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the operating results and financial condition of the Company for the fiscal quarters ended December 31, 2023 and 2022. The discussion and analysis set forth below is intended to assist you in understanding the financial condition and results of our operations and should be read in conjunction with our financial statements and the accompanying notes included elsewhere in this quarterly report. Our results of operations and financial condition, as reflected in the accompanying statements and related notes, are subject to management’s evaluation and interpretations of business conditions, changing market conditions and other factors. Historical results and trends which might appear should not be taken as indicative of future operations. The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of various factors.

A NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (including the exhibits hereto) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), such as statements relating to our financial condition, results of operations, plans, objectives, future performance or expectations, and business operations.  These statements relate to expectations concerning matters that are not historical fact.  Accordingly, statements that are based on management’s projections, estimates, assumptions, and judgments constitute forward-looking statements.  These forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “plan,” “estimate,” “approximately,” “intend,” “objective,” “goal,” “project,” and other similar words and expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may.”  These forward-looking statements are based largely on information currently available to our management and on our current expectations, assumptions, plans, estimates, judgments and projections about our business and our industry, and such statements involve inherent risks and uncertainties.  Although we believe our expectations are based on reasonable estimates and assumptions, they are not guarantees of performance and there are a number of known and unknown risks, uncertainties, contingencies, and other factors (many of which are outside our control) which may cause actual results, performance, or achievements to differ materially from those expressed or implied by such forward-looking statements.  Accordingly, there is no assurance that our expectations will in fact occur or that our estimates or assumptions will be correct, and we caution investors and all others not to place undue reliance on such forward-looking statements. 

The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements:

 With respect to the proposed Merger, the following additional factors, among others, could cause actual results to differ materially from those described in the forward-looking statements

If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, the results of the Company or the combined company following completion of the Merger could differ materially from the forward-looking statements.  All written or oral forward-looking statements that are made or attributable to us are expressly qualified in their entirety by this cautionary notice.  The forward-looking statements included herein are only made as of the date of this Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2023 (this “Form 10-Q”).  We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

Operations. 

The primary business of the Company is to seek a suitable private company acquisition or other business combination.  The Company has not been engaged in any other business activity during the period covered by this Form 10-Q. 

On October 28, 2022, the Company and Renovo entered into an Agreement and Plan of Merger (“Original Merger Agreement”), pursuant to which (a) Renovo will be merged with and into the Company in accordance with the provisions of the Delaware General Corporation Law and the separate corporate existence of Renovo shall thereupon cease, and (b) the Company shall be the legal successor or surviving corporation in the Merger.

On March 31, 2023, the Company and Renovo entered into the First Amendment to the Merger Agreement (“First Amendment”) which amended the Original Merger Agreement to, among other things; (i) extend the outside termination date for the closing as set forth in the Original Merger Agreement (the “Outside Termination Date”) to May 31, 2023, (ii) reduce the number of shares of the Company’s common stock issuable to the holders of Renovo common shares upon consummation of the Merger; and (iii) revise certain other provisions relating to a delay in the receipt of Renovo’s audited financial statements required as a condition for closing.

On August 17, 2023 the board of directors of the Company approved and, on August 18, 2023, the Company entered into the Second Amendment to the Merger Agreement (the “Second Amendment”) with Renovo.  Pursuant to the Second Amendment, the Merger Agreement was amended to, among other things: (i) eliminate the condition that Renovo acquire 6 LLC, a Florida limited liability company owned and controlled by the shareholders of Renovo that owns the buildings and property (“Property”) on which Renovo conducts its operations (“6 LLC”) prior to the Merger; (ii) require as a condition to the closing of the Merger that Renovo take all steps necessary to cause: (a) 6 LLC to enter into a new lease agreement (the “Lease”), with an initial term of two years for the Property on terms reasonably satisfactory to the Company with Renovo effective concurrently with or immediately after the closing of the Merger; and (b) 6 LLC and all of the 6 LLC owners to grant the surviving corporation an exclusive option to purchase 6 LLC for a period of five years following the closing of the Merger (“Purchase Option”) and to enter into an agreement regarding the Purchase Option with the surviving corporation (the “Purchase Option Agreement”); (iii) require delivery of the executed Purchase Option Agreement and Lease at the closing of the Merger, and (iv) extend the Outside Termination Date to October 31, 2023.

On December 15, 2023, the Company and Renovo entered into a letter agreement (the “Letter Agreement”), whereby they again agreed to extend the Outside Terminate Date to March 31, 2024 and to reduce the number of directors that will be appointed to the Company’s board of directors by Renovo following the Merger.  With respect to the composition of the board of directors following the Merger, Kristen N. Toomey, one of the prospective Renovo appointees, has subsequently informed the parties that she will not serve on the board of directors following the Merger.  Accordingly, pursuant to the Letter Agreement, the parties have determined to revise the terms of the Merger Agreement to only expand the Board to six directors and appoint only Randall A. Moritz, Keri A. Moritz, and Lori M. Toomey as previously disclosed Renovo appointees to the board of directors following the consummation of the Merger.

The Original Merger Agreement, the First Amendment, the Second Amendment, and the Letter Agreement are referred to collectively herein as the “Merger Agreement”.

Under the terms of the Merger Agreement, at the effective time of the Merger, each outstanding common share, no par value, of Renovo (“Renovo Stock”) will be converted into and will represent the right to receive 6,000 shares (“Exchange Ratio”) of common stock, par value $0.0001 per share, of the Company (“Company Stock”), after giving effect to the Reverse Stock Split (as defined below). The Exchange Ratio shall be fixed and no adjustment shall be made under any circumstances other than with respect to certain anti-dilution provision of the Merger Agreement. No fractional share of the Company Stock will be issued pursuant to the Merger. To the extent that a holder of Renovo Stock would otherwise have been entitled to receive a fraction of a share of Company Stock (after taking into account all certificates delivered by such holder), such holder shall receive, in lieu thereof, an additional fraction of a share of the Company Stock rounded up to the nearest whole share of the Company Stock.

Consummation of the Merger is subject to a number of conditions, including among others, the following: (i) approval of the Merger Agreement by Renovo’s stockholders (“Renovo Stockholder Approval”), (ii) the Company, as the surviving corporation in the Merger, shall have been approved as a Secondary Metals Recycler under Section 538.25 of the Florida Statutes to be effective immediately following the closing of the Merger, (iii) Renovo shall have provided the Company with a loan of approximately $200,000 (“Renovo Loan”), as evidenced by a promissory note, to provide the funds necessary for the Company to continue operations and consummate the transactions contemplated by the Merger Agreement (“Renovo Promissory Note”), (iv) the Company shall have entered into a Registration Rights Agreement, a copy of which is attached as Exhibit A to the Original Merger Agreement, with each of the Renovo shareholders, (v) each of the Renovo shareholders shall have entered into an Investment Letter which is attached as Exhibit B to the Original Merger Agreement, (vi) the execution and delivery of the Lease by and between Renovo and 6 LLC, a copy of each which is attached as Exhibit A to the Second Agreement, (vii) the execution and delivery the Purchase Option Agreement by and between the Company and 6 LLC, a copy of each which is attached as Exhibit B to the Second Agreement, (viii) there shall not have been any material adverse effects on the operations of Renovo, (ix) there shall not have been certain additional adverse legal proceedings commenced against the Company or Renovo which prevents the consummation of the Merger transactions, and (x) the satisfaction of certain other customary closing conditions. The Renovo Stockholder Approval and the Renovo Loan conditions have been satisfied as of the date hereof.

In addition to the conditions described above, the closing of the Merger transaction also is conditioned upon the approval and prior implementation of an amendment to the Amended and Restated Certificate of Incorporation of the Company to effect (a) a 1-for-500 reverse stock split, such that every holder of Company Stock shall receive one share of Company Stock for every 500 shares of Company Stock held prior to such reverse stock split, and all fractional shares resulting therefrom will be rounded up to the nearest whole share; and (b) a corresponding reduction of the number of authorized shares of Company Stock from 200,000,000 to 20,000,000 shares and the number of shares of Company’s preferred stock from 20,000,000 to 2,000,000 shares (collectively, the “Reverse Stock Split”).

Further, under the rules and regulations of the Securities and Exchange Commission (“Commission”) , the Company, as a shell company, is required to file a Form 8-K within four business days following the close of such merger transaction that includes certain information relating to the post-Merger surviving corporation as would be required in a Form 10 filed under the Exchange Act, including without limitation, all required disclosures concerning the post-Merger operations and management of the Company and all required consolidated and pro forma financial statements (“Merger Form 8-K”). The ability to prepare the Merger Form 8-K will be largely dependent on the ability of Renovo to furnish the Company with audited financial statements and other information necessary to prepare such Merger Form 8-K. As a result, as a condition to the closing of the Merger, Renovo is required to provide the Company with all information concerning Renovo and the Renovo Owners as the Company may reasonably request in connection with preparing such Merger Form 8-K disclosures. If Renovo is unable to timely furnish such information to the Company, of which there is no assurance, the Merger Agreement may be terminated and the Merger transaction will not be consummated.

The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to (a) the Original Merger Agreement, a complete and true copy of which has been filed as Exhibit 1.1 to our Current Report on Form 8-K filed with the Commission on October 31, 2022 (“Original Merger Form 8-K”), and is incorporated herein by reference, (b) the First Amendment, a complete and true copy of which has been filed as Exhibit to 2.1 to our Current Report on Form 8-K filed with the Commission on April 3, 2023, and is incorporated herein by reference, (c) the Second Amendment, a complete and true copy of which has been filed as Exhibit to 2.1 to our Current Report on Form 8-K filed with the Commission on August 21, 2023 (“Second Amendment Form 8-K”), and is incorporated herein by reference, and (d) the Letter Agreement, a complete and true copy of which has been filed as Exhibit to 2.4 to our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 filed with the Commission on December 19, 2023 (“2023 Form 10-K”), and is incorporated herein by reference .

Financial Condition.  We did not record revenues from operations during the fiscal quarter covered by our financial statements included in this Form 10-Q and are not currently engaged in any business activities that provide cash flows.  We do not expect to generate any revenues during the current fiscal year unless we are able to close the Merger or we are otherwise able to secure additional financing to continue operations.

We have negative working capital, negative shareholders’ equity and have not earned any revenues from operations since the fiscal year ended September 30, 2011. Because we have had no revenues from operations and do not own any significant assets against which we can borrow funds, we historically had relied on funds furnished by Mr. Toomey, a principal shareholder, director and secretary of the Company, through both convertible and non-convertible loans. 

In connection with the Merger Agreement, Renovo provided the Company with the Renovo Loan and, following the execution of the Merger Agreement, has paid various professional fees on behalf of the Company as described below.  If we consummate the Merger, we believe that we will generate sufficient revenue from our operations to fund our operations and our debt obligations. 

Our ability to continue as a going concern also is dependent upon our ability to close the Merger transaction or, if the Merger transaction is not closed, to develop additional sources of capital, locate and complete a merger with another company, and ultimately, achieve profitable operations.  Other than the Merger, we do not have any current plans, understandings or agreements with respect to the raising of such funds.

If, however, we are unable to consummate the Merger or the Merger is otherwise terminated, we will likely need to identify additional sources of financing to continue funding our business activities and repayment of our debt obligations, including those under the Renovo Promissory Note, until such time as we may consummate a merger or business contribution, if ever, with another target company or operation.  Under such circumstances, we may need to seek funds through additional sales of debt or equity securities or by some other means. Although Mr. Toomey has provided us with additional debt financing from time to time, we have no formal commitment that Mr. Toomey or any other person or entity will provide the Company with working capital sufficient to maintain operations until we consummate a merger or other business combination with a target company. 

Except as described herein as it relates to the proposed Merger, we have no specific plans, understandings or agreements with respect to the raising of any additional financings, and we may seek to raise the required capital by the issuance of equity or debt securities or by other means. Furthermore, a failure to consummate the Merger may adversely affect our ability to raise additional capital through Mr. Toomey or any other person or entity. Since we have no such arrangements or plans currently in effect (other than the proposed merger described herein), our limited ability to raise funds to continue operations and to seek an acquisition may have a severely negative impact on our ability to become a viable company.  Our historical operating results disclosed in this Form 10-Q are not meaningful to our future results.

Results of Operations

 Comparison of Three Months Ended December 31, 2023 and 2022

Revenues. Because we currently do not have any business operations, we have not had any revenues during the three months ended December 31, 2023 and December 31, 2022.

Operating Expenses. We had operating expenses of $51,805 and $40,515 for the three months ended December 31, 2023 and 2022, respectively. The increase in expenses for the three months ended December 31, 2023 as compared to the three months year ended December 31, 2022 were primarily due to ongoing professional fees associated with the Merger.

Other Expenses. We had interest expense of $4,675 and $3,810 for the three months ended December 31, 2023 and 2022, respectively. The interest expenses in 2023 increased from those in 2022 due to the interest on the increased amount of outstanding debt.

Net Income (Loss). We recognized a net loss of $56,480 and $44,325 for the three months ended December 31, 2023 and December 31, 2022, respectively. The increase in net loss was directly attributed to an increase in professional fees.

Liquidity and Capital Resources

As of December 31, 2023, the Company had limited cash resources and we had a working capital deficit of $637,974. Our current liabilities were $639,369 at December 31, 2023 and $532,889 at September 30, 2023. Our total assets remained unchanged at $1,395 as of December 31, 2023 and at September 30, 2023.  Our assets were unchanged due to unsecured and non-interest bearing advances made by Renovo to the Company to facilitate the completion of the merger. Liabilities increased from $802,889 to $859,369 principally due to increase in taxes payable of approximately $112,000.

Other than our anticipated consummation of the Merger, we had no material commitments for capital expenditures as of December 31, 2023.  However, if we are able to execute our business plan as anticipated in the future, we would likely incur substantial capital expenditures and require additional financing to fund such expenditures.

We have entered into various lending arrangements with related parties to finance our activities in connection with (a) the reactivation of our reporting obligations in 2014 that had been suspended since 2011 under Section 15(d) of the Exchange Act, (b) the preparation and filing as of March 2, 2022 (“Filing Updates”) of all of the Company’s periodic reports on Form 10-K under the Exchange Act that were not filed from the end of the fiscal year ended September 30, 2016 to the end of the fiscal year ended September 30, 2021, and (c) the negotiation of the Merger transaction and preparation for potential closing of the transaction. Set forth below is a summary of our outstanding debt obligations.

The Company entered into a convertible note with James K. Toomey, the Company’s corporate secretary and a director (“Mr. Toomey”) for $20,000 effective December 7, 2015.  The note bears interest at a rate of 3.5% per annum and all unpaid principal and interest are due on demand by the director.  The outstanding principal and accrued interest balance of the note, which is $25,729 as of December 31, 2023, is convertible into the Company’s shares of common stock at the conversion price of $1.00 per share.

The Company entered into a convertible note with Mr. Toomey for $20,000 effective March 3, 2016.  The note bears interest at a rate of 3.5% per annum and all unpaid principal and interest are due on demand by the director.  The outstanding principal balance and accrued interest of the note, which is $25,473 as of December 31, 2023, is convertible into the Company’s shares of common stock at the conversion price of $1.00 per share.

The Company entered into a convertible note with Mr. Toomey for $30,000 effective July 11, 2016.  The note bears interest at a rate of 3.5% per annum and all unpaid principal and interest are due on demand by the director.  The outstanding principal balance and accrued interest of the note, which is $37,842 as of December 31, 2023, is convertible into the Company’s shares of common stock at the conversion price of $1.00 per share.

The Company entered into a convertible note with Mr. Toomey for $20,000 effective September 19, 2016.  The note bears interest at a rate of 3.5% per annum and all unpaid principal and interest are due on demand by the director.  The outstanding principal balance and accrued interest of the note, which is $25,089 as of December 31, 2023, is convertible into the Company’s shares of common stock at the conversion price of $1.00 per share.

The Company entered into a note to convert prior advances in a note payable with Mr. Toomey for $130,000 effective February 1, 2021 (the “2021 Promissory Note”). The note bears interest, commencing on the date of the loan, at an initial rate of 2% per annum and the note originally matured on December 31, 2023. As of December 31, 2023, the 2021 Promissory Note had an outstanding principal balance and accrued interest of $137,720.  The maturity date of the note will accelerate and be due and payable immediately upon any change of control, merger, or other business combination (as defined in the note). If the maturity date is extended for any reason whatsoever (including in connection with an acceleration event), the note will bear interest at a rate of 5% per annum, commencing on the date of any such extension. The note is not convertible into shares of the Company’s Common Stock.  On December 15, 2023, Mr. Toomey and the Company entered into Amendment to the 2021 Promissory Note (“2021 Promissory Note Amendment”) to extend the maturity date of the 2021 Promissory Note to December 31, 2024. The foregoing description of the 2021 Promissory Note Amendment does not purport to be complete and is qualified in its entirety by reference to the complete text of the 2021 Promissory Note Amendment, a copy of which is filed as Exhibit 10.9 to the 2023 Form 10-K and incorporated into this Form 10-Q by reference.

Following the completion of the Filing Updates, the Company borrowed $50,000 in aggregate principal amount from Mr. Toomey (the “Toomey Loan”). The Toomey Loan is evidenced by a consolidated promissory note, dated March 7, 2022, issued by the Company to Mr. Toomey (the “2022 Promissory Note”). The 2022 Promissory Note bears interest, commencing on the date of the loan, at an initial rate of 2% per annum and the note matures on December 31, 2024.  As of December 31, 2023, the 2022 Promissory Note had an outstanding principal balance and accrued interest of $51,805.  The maturity date of the 2022 Promissory Note will accelerate and be due and payable immediately upon any change of control, merger, or other business combination (as defined in the 2022 Promissory Note).  If the maturity date is extended for any reason whatsoever (including in connection with an acceleration event), the 2022 Promissory Note will bear interest at a rate of 5% per annum, commencing on the date of any such extension. The 2022 Promissory Note is not convertible into our common shares.  The proceeds of the Toomey Loan were used to pay outstanding amounts owed for professional services, to pay operating expenses, and to pursue the Company’s acquisition strategy. 

On October 28, 2022, pursuant to the terms of the Merger Agreement, Renovo loaned $200,000 in principal amount to the Company on October 28, 2022 (referred to as the Renovo Loan).  The Renovo Loan is evidenced by a consolidated promissory note, dated October 28, 2022, issued by the Company to Renovo (referred to as the Renovo Promissory Note). 

The Renovo Promissory Note bears interest, commencing on the date of the loan, at an initial rate of 6% per annum and the note matures on October 28, 2024. No payments of principal or interest are due prior to the maturity date and on such date all such amounts are payable in full. As of December 31, 2023, the Renovo Promissory Note had an outstanding principal balance and accrued interest of $213,973. The Company may prepay the amounts owed under the Renovo Promissory Note at any time without any prepayment penalties. In the event of a default by the Company under the Renovo Promissory Note, the outstanding principal amount, accrued and unpaid interest, and all other amounts payable under the Renovo Promissory Note shall become immediately due and payable without notice, declaration, or other act on the part of the Renovo. The proceeds of the Renovo Loan have been used to provide the funds necessary for the Company to continue operations and consummate the transactions contemplated by the Merger Agreement.

On August 18, 2023, Renovo and the Company negotiated and entered into an addendum to the Renovo Promissory Note (the “Renovo Promissory Note Addendum”), providing that in the event that the Merger does not close, the Company may issue shares of Company Stock to Renovo in order to satisfy its obligations under the Renovo Promissory Note, including all accrued interest.

A complete copy of the Renovo Promissory Note is filed as Exhibit 2.2 to the Original Merger Form 8-K filed with the Commission and a complete copy of the Renovo Promissory Note Addendum is filed as Exhibit to 10.1 to the Second Amendment Form 8-K filed with the Commission, each of which is incorporated herein by reference.

In addition to the Renovo Promissory Note, Renovo has paid various professional fees on behalf of the Company amounting to approximately $226,000 as of December 31, 2023. These advances are non-interest bearing and unsecured.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 As a “Smaller Reporting Company”, the Company is not required to provide the information required by this Item

ITEM 4. CONTROLS AND PROCEDURES

  Evaluation of Disclosure Controls and Procedure

Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in reports filed under the Exchange Act is accumulated and communicated to management, including the principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our management evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report on Form 10-Q. Based upon that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of the end of such period, our disclosure controls and procedures were not effective as of December 31, 2023 due to material weaknesses in our internal control over financial reporting in providing reasonable assurance in timely alerting management to material information relating to the Company and that information required to be disclosed in our reports is recorded, processed, summarized, and reported as required to be included in our periodic filings with the Commission. Due to the Company’s limited resources and staffing, management has not developed a plan to mitigate the above material weaknesses. Despite the existence of these material weaknesses, the Company believes the financial information presented herein is materially correct and in accordance with generally accepted accounting principles in the United States.

However, in the event that the Merger is consummated, we will thoroughly evaluate a number of steps to enhance our disclosure controls and procedures, as well as our internal control over financial reporting, and address these material weaknesses, including: appointing specific financial reporting personnel with technical accounting and financial reporting experience, adopting policies to ensure proper internal communications and review in connection with non-routine transactions, enhancing our internal review procedures during the financial statement closing process, and designing and implementing journal entry procedures and controls.

Changes in Internal Control over Financial Reporting

There were no significant changes in our internal controls or in other factors that could significantly affect our disclosure controls and procedures subsequent to the date of the above referenced evaluation.  Furthermore, there was no change in our internal control over financial reporting or in other factors during the quarterly period covered by this report 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

 There are presently no pending legal proceedings to which the Company, any of its subsidiaries, any executive officer, any owner of record or beneficially of more than five percent of any class of voting securities is a party or as to which any of its property is subject, and no such proceedings are known to the Company to be threatened or contemplated against it.

ITEM 1A. RISK FACTORS

 As a “Smaller Reporting Company”, the Company is not required to provide the information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES

 None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 Not Applicable.

ITEM 4. MINE SAFETY DISCLOSURES

 Not Applicable.

ITEM 5. OTHER INFORMATION

 None.

ITEM 6. EXHIBITS

*  Exhibit Filed Herewith

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.