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2020-12-07 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
xbrli:pure
Table of Contents
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 quarter ended
December 31, 2021
☐ |
Transition Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 |
For the transition period from _______ to _______
Commission File No.
000-53554
AQUA POWER SYSTEMS INC. |
(Exact name of Registrant as specified in its
charter) |
Nevada |
|
27-4213903 |
(State or other jurisdiction of
incorporation or organization) |
|
(IRS Employer Identification
No.) |
2180 Park Avenue North,
Unit 200
Winter Park,
FL
|
|
32789
|
(Address of principal executive
offices) |
|
(Zip Code) |
Registrant's telephone number, including area code:
(407)
674-9444
Securities registered pursuant to Section 12(g) of the Act:
Title of each
class |
|
Trading
Symbol(s) |
|
Name of each exchange on which
registered |
Common Stock , par $0.0001 |
|
APSI |
|
OTCMarkets Pink |
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 at least 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 or
a smaller reporting company or an emerging growth company. See the
definitions of “large accelerated filer”, "accelerated filer”,
“smaller reporting company" and "emerging growth company" in Rule
12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
Non-accelerated filer |
☒ |
Smaller reporting company |
☒ |
Emerging Growth Company |
☐ |
|
|
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any 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 Exchange Act).
Yes ☒ No ☐
As of February 1, 2022, we had
50,146,804 shares or our common stock issued and
outstanding.
AQUA POWER SYSTEMS, INC.
TABLE OF
CONTENTS
PART I.
FINANCIAL INFORMATION
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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for interest |
|
$ |
– |
|
|
$ |
– |
|
Cash
paid for taxes |
|
$ |
– |
|
|
$ |
– |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial
conversion feature |
|
$ |
– |
|
|
$ |
– |
|
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:
|
· |
the success or failure of
management’s efforts to implement the Company’s business
plan; |
|
· |
the ability of the Company to fund
its operating expenses; |
|
· |
the ability of the Company to compete
with other companies that have a similar business plan; |
|
· |
the effect of changing economic
conditions impacting our plan of operation; and |
|
· |
the ability of the Company to meet
the other risks as may be described in future filings with the
Securities and Exchange Commission. |
Readers are cautioned not to place undue reliance on the
forward-looking statements contained herein, which speak only as of
the date hereof. We believe the information contained in this
Registration Statement to be accurate as of the date hereof.
Changes may occur after that date. We will not update that
information except as required by law in the normal course of our
public disclosure practices.
Corporate History
We were originally incorporated in Nevada on December 9, 2010, as
NC Solar Inc. with the goal of developing solar energy collection
farms on commercial and/or industrial buildings located on
distressed, blighted and/or underutilized commercial land in North
Carolina and other southern states of the United States. On June 6,
2014, management changed and, on August 12, 2014, we changed our
name to Aqua Power Systems Inc.
Custodianship
Aqua Power Systems Inc., a
Nevada Corporation. (Petition of SMALL CAP COMPLIANCE,
LLC)
On October 19, 2020, Small Cap Compliance, LLC filed its motion to
serve as custodian of the Company; it was not a shareholder of the
Company on the aforementioned date.
On December 1, 2020, the Eight Judicial District Court of Nevada
entered an order approving the appointment of Small Cap Compliance,
LLC as custodian of the Company, authorizing and directing it to,
among other things, take any action reasonable, prudent and for the
benefit of the Company, including reinstating the Company under
Nevada law, appointing officers and convening a meeting of
stockholders. (Small Cap Compliance, LLC and the Company entered
into a Custodian Services Agreement on December 1, 2020, which set
forth the duties of Small Cap Compliance, LLC)
On December 7, 2020, Small Cap Compliance, LLC filed a Certificate
of Reinstatement for the Company, thereby reinstating the Company,
appointed Stephen Carnes as the sole officer and director of the
Company, and amended the Company’s Certificate of Incorporation to
authorize the issuance of one million shares of Series B preferred
stock. The aforementioned were approved, and Stephen Carnes was
elected as the sole director and the sole executive officer, at a
meeting of the shareholders on January 4, 2021.
On January 1, 2021, Small Cap Compliance, LLC filed a Motion to
Terminate Custodianship.
On March 3, 2021, the Eight Judicial District Court of Nevada
entered an order approving Small Cap Compliance, LLC’s actions,
without prejudice to the claims of interested parties as to
dilution of their interest, terminated Small Cap Compliance, LLC’s
custodianship of the Company, and discharged Small Cap Compliance
as custodian of the Company.
Receivership
In re: AQUA POWER SYSTEMS
INC., a Nevada Corporation, (Application of Stephen
Carnes)
On January 28, 2021, Stephen Carnes filed an application with the
Eight District Court of Nevada to be appointed as the Receiver of
the Company and requested that the Court Order written proof of
claim from all Claimants and Creditors of the Company as a
reasonable and necessary step toward rehabilitating our
insolvency.
On March 1, 2021, the Eighth Judicial District Court of Nevada
ordered that Stephen Carnes be appointed “Receiver” of the Company,
with the authority to rehabilitate the Company by, including but
not limited to, collecting the debts and property due and belonging
to the Company, to compromise and settle with the debtors and
creditors of the Company, to prosecute and defend lawsuits in the
name of the Company, to do all other acts as might be done by the
Com, to do all other acts as may be reasonable and necessary to
continue the business of the Company, and to appoint agents for the
exercise of these duties.
On March 1, 2021, the Eighth Judicial District Court of Nevada
ordered that all claimants and creditors of the Company had sixty
(60) days, from March 1, 2021, to submit written proof of claim to
the receiver.
On May 3, 2021, Claimant Graham Taylor submitted claims on behalf
of himself, Heng Hong Investment, and Puriwanto Handoko.
On June 28, 2021, Receiver filed a motion to shorten time and a
motion to bar asserted claims and unasserted claims.
On August 5, 2021, the Eighth Judicial District Court of Nevada
ordered that all claimants and creditors of the Company are barred
from participating in the distribution of assets of the Company
which arose on or before August 6, 2021 (Notice of entry of the
Order). No appeal was filed by the claimants within the timeframe
for an appeal.
On October 4, 2021, filed a Motion to Terminate the Receivership
and a hearing is set for November 8, 2021.
Blank Check Company Status
Many states have enacted statutes, rules and regulations limiting
the sale of securities of “blank check” companies in their
respective jurisdictions. Management does not intend to undertake
any efforts to cause a market to develop in our securities, either
debt or equity, until we have successfully concluded a business
combination. The Company intends to comply with the periodic
reporting requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) for so long as it is subject to those
requirements.
At present, the Company is a blank check company with no revenues
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:
|
· |
potential for growth, indicated by
new technology, anticipated market expansion or new
products; |
|
· |
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; |
|
· |
strength and diversity of management, either in
place or scheduled for recruitment; |
|
· |
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 |
|
· |
the extent to which the business opportunity can
be advanced considering the availability of both human and economic
capital. |
The foregoing criteria are not intended to be exhaustive and there
may be other criteria that the Company may deem relevant.
In evaluating a prospective business combination, we will conduct
as extensive a due diligence review of potential targets as
possible given the lack of information which may be available
regarding private companies, our limited personnel and financial
resources and the relative inexperience of our management with
respect to such activities. We believe there are many companies and
professionals with significantly more experience than our
management that also are seeking business combination targets.
Due Diligence on Potential Acquisition Targets
We expect that our due diligence will encompass, among other
things, meetings with the target business’s incumbent management
and inspection of its facilities, as necessary, as well as a review
of financial and other information which is made available to us.
This due diligence review will be conducted either by our
management or by unaffiliated third parties we may engage,
including but not limited to attorneys, accountants, consultants or
other such professionals. At this time, the Company has not
specifically identified any third parties that it may engage. The
costs associated with hiring third parties as required to complete
a business combination may be significant and are difficult to
determine as such costs may vary depending on a variety of factors,
including the amount of time it takes to complete a business
combination, the location of the target company, and the size and
complexity of the business of the target company.
Our limited funds and the lack of full-time management will likely
make it impracticable to conduct a complete and exhaustive
investigation and analysis of a target business before we
consummate a business combination. Management decisions, therefore,
will likely be made without detailed feasibility studies,
independent analysis, market surveys and the like which, if we had
more funds available to us, would be desirable. We will be
particularly dependent in making decisions upon information
provided by the promoters, owners, sponsors or others associated
with the target business seeking our participation.
The time and costs required to select and evaluate a target
business and to structure and complete a business combination
cannot presently be ascertained with any degree of certainty. The
amount of time it takes to complete a business combination, the
location of the target company, and the size and complexity of the
business of the target company, whether current stockholders of the
Company will retain equity in the Company, the scope of the due
diligence investigation required, the involvement of the Company’s
auditors in the transaction, possible changes in the Company’s
capital structure in connection with the transaction, and whether
funds may be raised contemporaneously with the transaction are all
factors that determine the costs associated with completing a
business combination transaction. The time and costs required to
complete a business combination can be estimated once a business
combination target has been identified. Any costs incurred with
respect to the evaluation of a prospective business combination
that is not ultimately completed will result in a loss to us.
Marketing Strategy
The Company intends to promote itself privately. The Company
anticipates that the selection of a business opportunity in which
to participate will be complex and risky. Due to general economic
conditions, rapid technological advances being made in some
industries and shortages of available capital, management believes
that there are numerous firms seeking the perceived benefits of a
publicly registered corporation. Such perceived benefits may
include facilitating or improving the terms on which additional
equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statutes), for all
shareholders, and other factors.
There are different situations for private companies which may make
a reverse merger more attractive to an operating private company
than filing its own registration statement on Form 10. It takes
significant time and effort just to be able to learn to file the
necessary documents through the EDGAR database, especially if the
operating company has not invested in filing software to streamline
the process, which is expensive. We believe that small companies
are usually in a hurry to raise capital and some investors require
that the private companies they invest in are or become Securities
and Exchange Commission (“SEC”) reporting. This is because some
investors desire to have an exit strategy and a reverse merger with
a Form 10 shell company is perceived to be one step closer to
liquidity. It should be noted that if a public shell company
consummates a reverse merger with a private operating company, the
Company will be required to file a Current Report on Form 8-K
within four days of the transaction and that the Form 8-K will need
to include audited financial statements of the private operating
company and pro forma financial statements giving effect to the
business combination.
The Company has, and will continue to have, little or no capital
with which to provide the owners of business opportunities with any
significant cash or other assets. As of the 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:
|
· |
maintaining our corporate existence, such as
annual fees due to the State of Nevada; |
|
· |
filing periodic reports under the Exchange Act,
including filing, accounting and legal fees; |
|
· |
investigating and analyzing targets and possibly
consummating a business transaction. |
We expect to incur costs associated with filing reports under the
Exchange Act over the next twelve months of approximately $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.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required under Regulation S-K for “smaller reporting
companies”.
ITEM 4.
CONTROLS AND PROCEDURES
As of the end of the period covered by this report, we carried out
an evaluation, under the supervision and with the participation of
our principal executive officer and outside legal and accounting
resources of the effectiveness of the design and operation of our
disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934 (the Exchange Act)). Based on this evaluation, our principal
executive officer and principal financial officer concluded that
our disclosure controls and procedures are not effective in
alerting them in a timely manner to material information required
to be disclosed in our periodic reports filed with the SEC as a
result of limited resources, and a lack of segregation of
duties.
During our most recent quarter, there has not been any change in
our internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
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
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.
Recent proceedings are listed below.
Custodianship
This legal action is discussed in Item 1 under the title
Custodian.
AQUA POWER SYSTEMS INC. v.
SILVERTON SA, INC.
On May 4, 2021, the Company filed a lawsuit for declaratory relief,
seeking an order declaring void 6,330,138 shares of common stock of
the Company held by Silverton SA, Inc., which was administratively
dissolved July 9, 2018, in book entry with the Company’s transfer
agent, which were not acquired by any consideration.
On August 23, 2021, the Company moved for an entry of default for
Silverton SA, Inc.’s failure to appear or serve any papers as
required by law. On September 15, 2021, the Company filed a Motion
for Entry of Default Final Judgement for failure to appear, file
any responsive pleading or paper in this action, or otherwise
assert any defense to this action as required by law.
On September 22, 2021, the Court ruled that the Motion for Entry of
Default Final Judgement was granted and the Court declared the
6,330,138 shares of common stock in the Company issued to
[Silverton SA, Inc.] on or about October 7, 2015, held in Book
Entry, void and cancelled.
AQUA POWER SYSTEMS INC. v.
PARAMOUNT TRADING COMPANY INC.
On May 4, 2021, the Company filed a lawsuit for declaratory relief,
seeking an order declaring void 2,690,000 shares of common stock of
the Company held by Paramount Trading Company (“PTC”), a defunct
company, in book entry with the Company’s transfer agent, which
were not acquired by any consideration.
On August 23, 2021, the Company moved for an entry of default for
failure to appear or serve any papers as required by law. On
September 15, 2021, the Company filed a Motion for Entry of Default
Final Judgement for failure to appear, file any responsive pleading
or paper in this action, or otherwise assert any defense to this
action as required by law.
On September 24, 2021, the Court ruled that the Motion for Entry of
Default Final Judgement was granted and the Court declared the
2,690,000 shares of common stock in APSI issued to PTC, over two
transactions, on or about October 1, 2015 and on or about July 14,
2017, held in Book Entry, void and cancelled.
ITEM 1A. RISK
FACTORS
Not required under Regulation S-K for “smaller reporting
companies”.
Please refer the Form 10 registration statement filed on October
28, 2021 for a comprehensive disclosure regarding initial risk
factors identified by the Company.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
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.
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE
SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER
INFORMATION
Not applicable.
ITEM 6.
EXHIBITS
The following exhibits are incorporated by reference:
Exhibit Number |
|
Exhibit
Description |
3.1 |
|
Articles of Incorporation filed
December 9, 2010 |
3.1.1 |
|
Certificate of Amendment to the
Articles of Incorporation filed August 5, 2014 |
3.1.2 |
|
Certificate of Amendment by Custodian
dated December 7, 2020 |
3.2 |
|
Certificate of Designation filed
September 9, 2015 |
3.2.1 |
|
Certificate of Amendment to
Designation filed December 7, 2020 |
3.3 |
|
Bylaws of the Registrant dated
December 9, 2010 |
10.1 |
|
Custodian Services Agreement dated
December 1, 2020 |
99.1 |
|
Custodial Order filed December 1,
2020 |
99.2 |
|
Certificate of Reinstatement/Revival
dated December 7, 2020 |
99.3 |
|
Order to Discharging Custodian filed
March 4, 2021 |
The following documents are filed as exhibits hereto:
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
|
Aqua Power Systems,
Inc. |
|
|
|
|
Date: February 7, 2022 |
By: /s/ Stephen
Carnes
Name: Stephen Carnes
Title: Chief Executive Officer
|
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