U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

Mark One

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

 

For the quarterly period ended October 31, 2023

 

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

 

For the transition period from ______ to _______

 

Commission File No. 333-213553

 

NATURAL RESOURCE HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Nevada

 

5960

 

32-0500871

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Number)

 

(IRS Employer

Identification Number)

 

9980 S 300 W Suite 200, Sandy, UT 84070

415-968-5642

boxxyinc@vivaldi.net

(Address and telephone number of principal executive offices)

 

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes ☒     No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. (Check one)

 

Large accelerated filer

Accelerated filer

Non-accelerated Filer

Smaller reporting company

(Do not check if a 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 checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No ☒

 

Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years. N/A

 

Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes ☐     No ☒

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

 

5,709,891 Shares of Common Stock as of November 24, 2023

 

 

 

 

TABLE OF CONTENTS

 

PART I - FINANCIAL INFORMATION

 

 

 

 

 

 

 

Item 1.

Unaudited Condensed Financial Statements

 

3

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

15

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

20

 

Item 4.

Controls and Procedures

 

20

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

 

 

 

Item 1.

Legal Proceedings

 

21

 

Item 1A.

Risk Factor

 

21

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

 

21

 

Item 3.

Defaults Upon Senior Securities

 

21

 

Item 4.

Mine Safety Disclosures

 

21

 

Item 5.

Other Information

 

21

 

Item 6.

Exhibits

 

22

 

SIGNATURES

 

23

 

 

 
2

Table of Contents

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

NATURAL RESOURCE HOLDINGS, INC.

CONDENSED BALANCE SHEETS

 

 

 

October 31, 2023

 

 

April 30, 2023

 

 

 

(Unaudited)

 

 

(Audited)

 

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Total Current Assets

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$19,339

 

 

$31,393

 

Accrued interest

 

 

10,926

 

 

 

8,805

 

Income tax Interest and penalty payable

 

 

125,000

 

 

 

125,000

 

Total Current Liabilities

 

 

155,265

 

 

 

165,198

 

 

 

 

 

 

 

 

 

 

Non-current Liabilities

 

 

 

 

 

 

 

 

Convertible note payable, net of note discount of $7,411 and $9,133, respectively

 

 

70,819

 

 

 

216,153

 

Loan payable

 

 

6,973

 

 

 

6,973

 

Total Liabilities

 

 

233,057

 

 

 

388,324

 

 

 

 

 

 

 

 

 

 

Stockholders’ Deficit

 

 

 

 

 

 

 

 

Common stock, par value $0.001; 75,000,000 shares authorized, 5,709,891 and 209,891 shares issued and outstanding

 

 

5,710

 

 

 

210

 

Additional paid-in capital

 

 

2,196,090

 

 

 

26,590

 

Accumulated deficit

 

 

(2,434,857)

 

 

(415,124)

Total Stockholders’ Deficit

 

 

(233,057)

 

 

(388,324)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT

 

$-

 

 

$-

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
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NATURAL RESOURCE HOLDINGS, INC.

CONDENSED STATEMENTS OF OPERATIONS

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

October 31,

 

 

October 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expenses

 

$7,752

 

 

$11,846

 

 

$15,890

 

 

$17,768

 

Management salaries

 

 

-

 

 

 

-

 

 

 

2,000,000

 

 

 

-

 

Total Operating Expenses

 

 

7,752

 

 

 

11,846

 

 

 

2,015,890

 

 

 

17,768

 

Loss from operations

 

 

(7,752)

 

 

(11,846)

 

 

(2,015,890)

 

 

(17,768)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,725)

 

 

(1,913)

 

 

(3,843)

 

 

(3,788)

Other expenses, net

 

 

(1,725)

 

 

(1,913)

 

 

(3,843)

 

 

(3,788)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

 

(9,477)

 

 

(13,759)

 

 

(2,019,733)

 

 

(21,556)

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

NET LOSS

 

$(9,477)

 

$(13,759)

 

$(2,019,733)

 

$(21,556)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER SHARE: BASIC AND DILUTED

 

$(0.00)

 

$(0.07)

 

$(0.46)

 

$(0.10)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED

 

 

5,479,122

 

 

 

209,502

 

 

 

4,360,164

 

 

 

209,502

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
4

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NATURAL RESOURCE HOLDINGS, INC.

CONDENSED STATEMENTS OF STOCKHOLDERS’ DEFICIT

FOR THE SIX MONTHS ENDED OCTOBER 31, 2023 AND 2022

 

Six Months Ended October 31, 2023

 

 

 

Common Stock

 

 

Additional

 

 

 

 

Total

 

 

 

Number of

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Stockholders'

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - April 30, 2023

 

 

209,891

 

 

$210

 

 

$26,590

 

 

$(415,124)

 

$(388,324)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for management salaries

 

 

5,000,000

 

 

 

5,000

 

 

 

1,995,000

 

 

 

-

 

 

 

2,000,000

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,010,256)

 

 

(2,010,256)

Balance - July 31, 2023

 

 

5,209,891

 

 

$5,210

 

 

$2,021,590

 

 

$(2,425,380)

 

$(398,580)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock for conversion of debts

 

 

500,000

 

 

 

500

 

 

 

174,500

 

 

 

-

 

 

 

175,000

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(9,477)

 

 

(9,477)

Balance - October 31, 2023

 

 

5,709,891

 

 

$5,710

 

 

$2,196,090

 

 

$(2,434,857)

 

$(233,057)

 

Six Months Ended October 31, 2022

 

 

 

Common Stock

 

 

Additional

 

 

 

 

 

Total

 

 

 

Number of

Shares

 

 

Amount

 

 

Paid-in

Capital

 

 

Accumulated

Deficit

 

 

Stockholders'

Deficit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Balance - April 30, 2022

 

 

209,891

 

 

$210

 

 

$26,590

 

 

$(374,380)

 

$(347,580)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(7,797)

 

 

(7,797)

Balance - July 31, 2022

 

 

209,891

 

 

$210

 

 

$26,590

 

 

$(382,177)

 

$(355,377)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(13,759)

 

 

(13,759)

Balance - October 31, 2022

 

 

209,891

 

 

$210

 

 

$26,590

 

 

$(395,936)

 

$(369,136)

 

 * Retroactively reflect reverse stock split of 1:20

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
5

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NATURAL RESOURCE HOLDINGS, INC.

CONDENSED STATEMENTS OF CASH FLOWS

 

 

 

Six Months Ended

 

 

 

October 31,

 

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$(2,019,733)

 

$(21,556)

Adjustments to reconcile net loss to net cash from operating activities:

 

 

 

 

 

 

 

 

Stock based compensation

 

 

2,000,000

 

 

 

-

 

Amortization on note discount

 

 

1,722

 

 

 

1,722

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

(12,054)

 

 

(1,557)

Accrued interest

 

 

2,121

 

 

 

2,066

 

Net cash used in operating activities

 

 

(27,944)

 

 

(19,325)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Proceeds from issuance of promissory notes from unaffiliated party

 

 

27,944

 

 

 

19,325

 

Net cash provided by financing activities

 

 

27,944

 

 

 

19,325

 

 

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

-

 

 

 

-

 

Cash and cash equivalents - beginning of period

 

 

-

 

 

 

-

 

Cash and cash equivalents - end of period

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Supplemental Cash Flow Disclosures

 

 

 

 

 

 

 

 

Cash paid for interest

 

$-

 

 

$-

 

Cash paid for income taxes

 

$-

 

 

$-

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures of Non-Cash Investing and Financing Activities

 

 

 

 

 

 

 

 

Issuance of convertible notes for conversion of debts

 

$175,000

 

 

$-

 

Issuance of common stock for management salaries

 

$

2,000,000

 

 

-

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

 
6

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NATURAL RESOURCE HOLDINGS, INC.

NOTES TO THE UNAUDITED CONDENSED FINANCIAL STATEMENTS

OCTOBER 31, 2023

 

NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS

 

Natural Resource Holdings, Inc. (the “Company”) was incorporated in Nevada on April 19, 2016. We were a development stage company that intended to develop an online beauty sample subscription service.

 

On November 26, 2020, the Company completed an acquisition of working interests in certain mining properties. The mining property right was fully impaired during the year ended April 30, 2022.

 

On October 18, 2022, majority of the Company’s shareholders approved a reverse stock split of our issued and outstanding shares of common stock on a basis of up to twenty (20) old shares for one (1) new share of common stock. The reverse stock split was approved by FINRA for approval on February 21, 2023. The financial statements retroactively reflect the reverse stock split.

 

On January 8, 2023, the Company entered into an agreement with a surveying consulting firm for mining and mineral exploration and surveying services on Potter County, PA Utica Shale area oil and gas properties.

 

On February 14, 2023, the Company’s name changed to Natural Resources Holdings, Inc. and the Company trading symbol changed to “NRHI” effective March 21, 2023.

 

We are currently focusing on mining business.

 

 
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended October 31, 2023 are not necessarily indicative of the results that may be expected for the year ending April 30, 2024. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2023 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended April 30, 2023 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on July 31, 2023.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

 

Fair Value of Financial Instruments

 

ASC 820 “Fair Value Measurements and Disclosures” establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

These tiers include:

 

Level 1: defined as observable inputs such as quoted prices in active markets;

Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying value of accounts payable and accrued liabilities, accrued interest, current portion of long-term debt, other party loan and loan from director approximates its fair value due to their short-term maturity. 

 

Mining Property

 

Costs of lease, exploration, carrying and retaining unproven mineral properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. Interest expense allocable to the cost of developing mining properties and to construct new facilities is capitalized until assets are ready for their intended use.

 

To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed.

 

ASC 930-805, “Extractive Activities-Mining: Business Combinations” states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights which are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.

 

 
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ASC 930-805 provides that in measuring the fair value of mineral assets, an acquirer should take into account both:

 

 

(a)

The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets.

 

 

 

 

(b)

The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.

 

On January 8, 2023, the Company incurred mining exploration expense of $8,500 for surveying services on Potter County, PA Utica Shale area oil and gas properties performed during January and February 2023.

 

Intangible Assets

 

The Company accounts for intangible assets (including mining right) in accordance with ASC 350 “Intangibles-Goodwill and Other.”

 

ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

 

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.

 

Revenue Recognition

 

The Company recognized revenue from the sales of mineral products produced from mining operations in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

 

Step 1: The contract has been signed by both parties or when the invoice has been generated and provided to the customer

Step 2: The performance obligations are stated or implied in the contract or invoice

Step 3: The transaction price has been identified in the contract or invoice

Step 4: The Company has allocated the transaction price to the performance obligations pursuant to the contract or invoice

Step 5: The Company satisfied the performance obligations when the mineral products delivered to the purchaser

 

 
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The Company recognized revenue from the royalty revenue in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

 

Step 1: The contract has been signed by both parties for royalty fees

Step 2: The performance obligations are stated or implied in the contract

Step 3: The transaction price has been identified in the contract

Step 4: The Company has allocated the transaction price to the performance obligations pursuant to the contract

Step 5: The Company has satisfied the performance obligations at the same period as the sales that generate the royalty payment.

 

Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the mining property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement.

 

Income Tax

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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 that includes the enactment date. A valuation allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. The Company has not recognized any tax benefits from uncertain tax positions for any of the reporting periods presented. (See Note 8)

 

The Company has not filed income tax returns from year ended April 30, 2016 through April 30, 2020. $25,000 annual late tax filing interest and penalty was accrued for an aggregate amount of $125,000.

 

Related Party Balances and Transactions

 

The Company follows FASB ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transaction. (Note 4)

 

Basic and Diluted Income (Loss) Per Share

 

The Company computes income (loss) per share in accordance with FASB ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

 

As of October 31, 2023 and October 31, 2022, convertible notes were dilutive instruments and were not included in the calculation of diluted loss per share as their effect would be antidilutive:

 

 

 

October 31,

 

 

October 31,

 

 

 

2023

 

 

2022

 

 

 

(Shares)

 

 

(Shares)

 

Convertible note payable

 

 

223,514

 

 

 

562,945

 

 

 
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As of October 31, 2023 and October 31, 2022, the total convertible shares from convertible notes totaling $70,819 and $186,204 issued to an unaffiliated party from February 4, 2022 through October 31, 2023 with conversion rate of $0.35 per shares was 223,514 shares and 562,945 shares. (Note 5)

 

Recent accounting pronouncements

 

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt-Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging-Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature (“CCF”) and (2) convertible instruments with a beneficial conversion feature (“BCF”). With the adoption of ASU2020-06, entities will not separately present in equity an embedded conversion feature these debts. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has chosen to early adopt this standard on its year ended April 30, 2022 financial statements and did not record BCF on the issuance of convertible notes with conversion rate below the Company’s market stock price on the date of note issuance.

 

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. In November 2019, the FASB issued ASU 2019-10 highlighted the adoption timeline. For smaller reporting entities, Topic 326 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, of which is effective for the Company on April 1, 2023. The adoption of this standard did not have a material impact on the Company's financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

NOTE 3 - GOING CONCERN

 

The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the financial statements, the Company had an accumulated deficit of $2,434,857. For the six months ended October 31, 2023, the Company suffered from a net loss of $2,019,733 and working capital deficit of $155,265.

 

The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.

 

 
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Table of Contents

 

The financial statements do not include any adjustments related 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 4 - RELATED PARTY TRANSACTIONS

 

On July 1, 2021, the Company issued a promissory note of $153,913 to the Company’s director for previous operating expenses of $28,913 and acquisition of mining interest of $125,000 which were paid by the director on the Company’s behalf as of April 30, 2021. The note is unsecured with annual interest rate of 2% and has a mature date of December 31, 2022.

 

In December 2020, the Company acquired several gold mining claims in Canada. The Company planned for exploration on the properties. Due to Covid and economic downturn, the Company was unable to proceed with the mining property exploration. Upon the expiration of the two years term of the property mining rights, the Company decided not to extend beyond the original term of the mining rights and was fully impaired during year ended April 30, 2022.

 

On July 31, 2021, the Company issued a promissory note of $2,822 for the amount the related party paid to the vendors on behalf of the Company during the three months ended July 31, 2021. The note is unsecured with annual interest rate of 2% and has a mature date of December 31, 2022.

 

On October 31, 2021, the Company issued a promissory note of $11,450 for the amount the related party paid to the vendors on behalf of the Company during the three months ended October 31, 2021. The note is unsecured with annual interest rate of 2% and has a mature date of December 31, 2022.

 

On January 31, 2022, the Company issued a promissory note of $7,021 for the amount the related party paid to the vendors on behalf of the Company during the three months ended January 31, 2022. The note is unsecured with annual interest rate of 2% and has a mature date of December 31, 2022.

 

On February 4, 2022, the Company’s director sold the promissory notes with aggregate principal of $175,206 and accrued interest of $1,956 to an unaffiliated party. (Note 5)

 

On June 7, 2023, the Company issued 5,000,000 shares of common stock to the Director of the Company valued at $2,000,000 as management salary for the period from September 29, 2020 to September 28, 2022. (Note 7)

 

NOTE 5 – CONVERTIBLE NOTE PAYABLE

 

As of October 31, 2023 and April 30, 2023, the convertible note payable was shown as follows:

 

 

 

 

 

October 31,

 

 

April 30,

 

 

 

Expiry Date

 

2023

 

 

2023

 

Convertible Note - February 2022

 

12/31/2025

 

$206

 

 

$175,206

 

Convertible Note - April 2022

 

12/31/2025

 

 

2,500

 

 

 

2,500

 

Convertible Note - July 2022

 

12/31/2025

 

 

7,600

 

 

 

7,600

 

Convertible Note - October 2022

 

12/31/2025

 

 

11,725

 

 

 

11,725

 

Convertible Note - January 2023

 

12/31/2025

 

 

12,500

 

 

 

12,500

 

Convertible Note - April 2023

 

12/31/2025

 

 

15,755

 

 

 

15,755

 

Convertible Note - July 2023

 

12/31/2025

 

 

14,394

 

 

 

-

 

Convertible Note - October 2023

 

12/31/2025

 

 

13,550

 

 

 

 

 

 

 

 

 

 

78,230

 

 

 

225,286

 

Less debt discount

 

 

 

 

(7,411)

 

 

(9,133)

 

 

 

 

$70,819

 

 

$216,153

 

 

 
12

Table of Contents

 

On February 11, 2022, the Company entered into an agreement with the unaffiliated note holder of the promissory note of $175,206 sold to him on February 4, 2022 for the amendment of the promissory note to convertible note which bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock. With the adoption of ASU2020-06, the Company did not record beneficial conversion feature (“BCF”) on the convertible note. The Company assessed the note amendment for a debt extinguishment or modification in accordance with ASC 470-50. Although the change in fair value of the note from the note amendment was calculated at 3% which fell below 10% of the carrying value of the original convertible note, the additional of a note conversion feature indicates the note amendment is regarded as a note extinguishment. On February 11, 2022, gain on note extinguishment of $13,344 and note discount of $13,344 was recognized. On September 13, 2023, the Company issued 500,000 shares of common stock for the conversion of principal amount of $175,000. (Note 7) As of October 31, 2023, the convertible note payable was $206.

 

On April 30, 2022, the Company issued a convertible note of $2,500 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended April 30, 2022. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On July 31, 2022, the Company issued a convertible note of $7,600 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended July 31, 2022. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On October 31, 2022, the Company issued a convertible note of $11,725 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended October 31, 2022. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On January 31, 2023, the Company issued a convertible note of $12,500 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended January 31, 2023. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On April 30, 2023, the Company issued a convertible note of $15,755 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended April 30, 2023. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On July 31, 2023, the Company issued a convertible note of $14,394 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended July 31 2023. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On October 31, 2023, the Company issued a convertible note of $13,550 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended October 31, 2023. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

During the six months ended October 31, 2023 and 2022, interest expense of $1,910 and $1,855 was incurred, respectively.

 

During the six months ended October 31, 2023 and 2022, amortization on note discount of $1,722 and $1,722 was incurred, respectively.

 

 
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Table of Contents

 

As of October 31, 2023 and April 30, 2023, the convertible notes payable, net of note discount of $7,411 and $9,133, was $70,819 and $216,153, respectively.

 

NOTE 6 - LOAN PAYABLE

 

The Company has outstanding long-term loan payable of $6,973 and $6,973 as of October 31, 2023 and April 30, 2023, respectively. The loan payable is unsecured with annual interest rate of 6% and had an original maturity date of April 20, 2020. The maturity date is extended through April 20, 2025.

 

Interest expense was $211 and $211 for the six months ended October 31, 2023 and 2022, respectively.

 

As of October 31, 2023 and April 30, 2023, accrued interest was $2,334 and $2,123 respectively.

 

NOTE 7 - STOCKHOLDER’S EQUITY

 

The Company has 75,000,000, $0.001 par value shares of common stock authorized.

 

On October 18, 2022, the sole director of the Company approved a reverse stock split of our issued and outstanding shares of common stock on a basis of up to twenty (20) old shares for one (1) new share of common stock. The reverse stock split was approved by FINRA for approval on February 21, 2023. The financial statements retroactively reflect the reverse stock split.

 

On June 7, 2023, the Company issued 5,000,000 shares of common stock to the Director of the Company valued at $2,000,000 as management salary for the period from September 29, 2020 to September 28, 2022. (Note 4)

 

On September 13, 2023, the Company issued 500,000 shares of common stock for the conversion of convertible debts of $175,000. (Note 5)

 

As of October 31, 2023 and April 30, 2023, the Company had 5,709,891 shares and 209,891 shares issued and outstanding, respectively.

 

 
14

Table of Contents

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

FORWARD-LOOKING STATEMENTS

 

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

 

GENERAL

 

We were incorporated in the State of Nevada on April 16, 2016. On November 26, 2020, the Company completed an acquisition of working interests in certain mining properties. The mining property right was fully impaired during the year ended April 30, 2022. On January 8, 2023, the Company entered into an agreement with a surveying consulting firm for mining and mineral exploration and surveying services on Potter County, PA Utica Shale area oil and gas properties. On February 14, 2023, the Company’s name changed to Natural Resources Holdings, Inc. We are currently focusing on mining business.

 

EMPLOYEES AND EMPLOYMENT AGREEMENTS

 

At present, we have no employees other than our officer and director. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any officers, directors or employees.

 

 
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Table of Contents

 

Results of Operations

 

We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

 

We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

 

The following summary of our operations should be read in conjunction with our unaudited condensed financial statements for the three months and six months ended October 31, 2023 and 2022, which are included herein.

 

Three Months Ended October 31, 2023 and 2022

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

October 31,

 

 

Changes

 

 

 

2023

 

 

2022

 

 

Amount

 

 

% 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

$(7,752)

 

$(11,846)

 

$4,094

 

 

(35

%)

Other Expenses

 

 

(1,725)

 

 

(1,913)

 

 

188

 

 

(10

%)

Net Loss

 

$(9,477)

 

$(13,759)

 

$4,282

 

 

(31

%)

 

During the three months ended October 31, 2023 and 2022, the Company did not earn any revenue.

 

Net loss for the three months ended October 31, 2023 was $9,477 compared to $13,759 for the three months ended October 31, 2022. The decrease in net loss during the three months ended October 31, 2023 was due to a decrease in operating expenses and other expenses.

 

Six Months Ended October 31, 2023 and 2022

 

 

 

Six Months Ended

 

 

 

 

 

 

 

 

 

October 31,

 

 

Changes

 

 

 

2023

 

 

2022

 

 

Amount

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

$(2,015,890)

 

$(17,768)

 

$(1,998,122)

 

 

11246%

Other Expenses

 

 

(3,843)

 

 

(3,788)

 

 

(55)

 

 

1%

Net Loss

 

$(2,019,733)

 

$(21,556)

 

$(1,998,177)

 

9270

%

 

During the six months ended October 31, 2023 and 2022, the Company did not earn any revenue.

 

Net loss for the six months ended October 31, 2023 was $2,019,733 compared to $21,556 for the six months ended October 31, 2022. The increase in net loss during the six months ended October 31, 2023 was due to an increase in operating expenses and other expenses. During the three months ended October 31, 2023, the Company incurred stock based compensation of $2,000,000 for the issuance of 5,000,000 shares of common stock to the Director of the Company valued as management salaries.

 

 
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Table of Contents

 

Liquidity and Capital Resources

 

Working Capital

 

 

 

 As of

 

 

 As of

 

 

 

 

 

 

 

 

 

October 31,

 

 

April 30,

 

 

Changes

 

 

 

2023

 

 

2023

 

 

 Amount

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

$-

 

 

$-

 

 

$-

 

 

 

-

 

Current Liabilities

 

$155,265

 

 

$165,198

 

 

$(9,933)

 

(6.0

%)

Working Capital Deficiency

 

$(155,265)

 

$(165,198)

 

$9,933

 

 

(6.0

%)

 

We had no current assets as of October 31, 2023 and April 30, 2023. Our total current liabilities as of October 31, 2023 were $155,265 as compared to total current liabilities of $165,198 as of April 30, 2023. Our working capital deficiency as of October 31, 2023 was $155,265 as compared $165,198 as of April 30, 2023 due to the decrease in accounts payable and accrued liabilities.

 

Cash Flows

 

 

 

Six Months Ended

 

 

 

 

 

 

 

 

 

October 31,

 

 

Changes

 

 

 

2023

 

 

2022

 

 

Amount

 

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows used in operating activities

 

$(27,944)

 

$(19,325)

 

$(8,619)

 

 

45%

Cash flows provided by financing activities

 

 

27,944

 

 

 

19,325

 

 

 

8,619

 

 

 

45%

Net changes in cash

 

$-

 

 

$-

 

 

$-

 

 

 

-

 

 

Cash Flows from Operating Activities

 

Net cash used in operating activities was $27,944 for the six months ended October 31, 2023 compared with $19,325 for the six months ended October 31, 2022

 

During the six months ended October 31, 2023, the net cash used in operating activities was attributed to net loss of $2,019,733, decreased by stock based compensation of $2,000,000 and amortization of note discount of $1,722, and increased by net changes in operating assets and liabilities of $9,933.

 

During the six months ended October 31, 2022, the net cash used in operating activities was attributed to net loss of $21,556, decreased by amortization of note discount of $1,722 and net changes in operating assets and liabilities of $509.

 

Cash Flows from Investing Activities

 

There were no investing activities during the six months ended October 31, 2023 and 2022.

 

Cash Flows from Financing Activities

 

During the six months ended October 31, 2023 and 2022, net cash from financing activities was $27,944 and $19,325 derived from proceed from issuance of promissory note to unaffiliated party, respectively.

 

Going Concern

 

The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

 
17

Table of Contents

 

As reflected in the financial statements, the Company had an accumulated deficit of $2,434,857, and working capital deficit of $155,265 at October 31, 2023.

 

The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.

 

The financial statements do not include any adjustments related 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.

 

Plan of Operation and Funding

 

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.

 

Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next six months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) acquisition of software; (ii) developmental expenses associated with a start-up business; and (iii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations.

 

Contractual Obligations

 

As a “smaller reporting company”, we are not required to provide tabular disclosure obligations.

 

Off-Balance Sheet Arrangements

 

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 

Critical Accounting Policies

 

The preparation of financial statements in 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. A change in managements’ estimates or assumptions could have a material impact on our financial condition and results of operations during the period in which such changes occurred. Actual results could differ from those estimates. Our financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.

 

 
18

Table of Contents

 

Mining Property

 

Costs of lease, exploration, carrying and retaining unproven mineral properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. Interest expense allocable to the cost of developing mining properties and to construct new facilities is capitalized until assets are ready for their intended use.

 

To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed.

 

ASC 930-805, “Extractive Activities-Mining: Business Combinations” states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights which are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.

 

ASC 930-805 provides that in measuring the fair value of mineral assets, an acquirer should take into account both:

 

(a) The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets.

 

(b) The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.

 

Revenue Recognition

 

The Company recognized revenue from the sales of mineral products produced from mining operations in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

 

Step 1: The contract has been signed by both parties or when the invoice has been generated and provided to the customer

Step 2: The performance obligations are stated or implied in the contract or invoice

Step 3: The transaction price has been identified in the contract or invoice

Step 4: The Company has allocated the transaction price to the performance obligations pursuant to the contract or invoice

Step 5: The Company satisfied the performance obligations when the mineral products delivered to the purchaser

 

The Company recognized revenue from the royalty revenue in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

 

Step 1: The contract has been signed by both parties for royalty fees

Step 2: The performance obligations are stated or implied in the contract

Step 3: The transaction price has been identified in the contract

Step 4: The Company has allocated the transaction price to the performance obligations pursuant to the contract

Step 5: The Company has satisfied the performance obligations at the same period as the sales that generate the royalty payment

 

Recent Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued. Our company’s management believes that these recent pronouncements will not have a material effect on our financial statements.

 

 
19

Table of Contents

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 4. Controls and Procedures

 

Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer (our principal executive officer, principal financial officer and principal accounting officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer has concluded that as of such date, our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

 

Changes in Internal Control Over Financial Reporting

 

During the period covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
20

Table of Contents

 

PART II - OTHER INFORMATION

 

Item 1. Legal Proceedings

 

None

 

Item 1A. Risk Factors

 

As a “smaller reporting company”, we are not required to provide the information required by this Item.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None

 

 
21

Table of Contents

 

Item 6. Exhibits

 

31.1

 

Certification of Chief Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act

 

 

 

32.1

 

Certification of Chief Executive Officer and Chief Financial Officer Under Section 1350 as Adopted Pursuant Section 906 of the Sarbanes-Oxley Act

 

 
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Table of Contents

 

SIGNATURES

 

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Natural Resource Holdings, Inc.

 

 

 

 

Dated: November 29, 2023

By:

/s/ Lian Yao Bin

 

 

 

Lian Yao Bin,

President and Chief Executive Officer

and Chief Financial Officer

 

 
23

 

nullnullv3.23.3
Cover - shares
6 Months Ended
Oct. 31, 2023
Nov. 24, 2023
Cover [Abstract]    
Entity Registrant Name NATURAL RESOURCE HOLDINGS, INC.  
Entity Central Index Key 0001680689  
Document Type 10-Q  
Amendment Flag false  
Current Fiscal Year End Date --04-30  
Entity Small Business true  
Entity Shell Company false  
Entity Emerging Growth Company false  
Entity Current Reporting Status Yes  
Document Period End Date Oct. 31, 2023  
Entity Filer Category Non-accelerated Filer  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2024  
Entity Common Stock Shares Outstanding   5,709,891
Entity File Number 333-213553  
Entity Incorporation State Country Code NV  
Entity Tax Identification Number 32-0500871  
Entity Address Address Line 1 9980 S 300 W Suite 200  
Entity Address City Or Town Sandy  
Entity Address State Or Province UT  
Entity Address Postal Zip Code 84070  
City Area Code 415  
Local Phone Number 968-5642  
Document Quarterly Report true  
Document Transition Report false  
Entity Interactive Data Current Yes  
v3.23.3
CONDENSED BALANCE SHEETS - USD ($)
Oct. 31, 2023
Apr. 30, 2023
Current Assets    
Total Current Assets $ 0 $ 0
TOTAL ASSETS 0 0
Current Liabilities    
Accounts payable and accrued liabilities 19,339 31,393
Accrued interest 10,926 8,805
Income tax Interest and penalty payable 125,000 125,000
Total Current Liabilities 155,265 165,198
Non-current Liabilities    
Convertible note payable, net of note discount of $7,411 and $9,133, respectively 70,819 216,153
Loan payable 6,973 6,973
Total Liabilities 233,057 388,324
Stockholders' Deficit    
Common stock, par value $0.001; 75,000,000 shares authorized, 5,709,891 and 209,891 shares issued and outstanding 5,710 210
Additional paid-in capital 2,196,090 26,590
Accumulated deficit (2,434,857) (415,124)
Total Stockholders' Deficit (233,057) (388,324)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 0 $ 0
v3.23.3
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($)
Oct. 31, 2023
Apr. 30, 2023
CONDENSED BALANCE SHEETS    
Convertible note payable, net of note discount $ 7,411 $ 9,133
Common stock, shares par value $ 0.001 $ 0.001
Common stock, shares authorized 75,000,000 75,000,000
Common stock, shares issued 5,709,891 209,891
Common stock, shares outstanding 5,709,891 209,891
v3.23.3
CONDENSED STATEMENTS OF OPERATIONS - USD ($)
3 Months Ended 6 Months Ended
Oct. 31, 2023
Oct. 31, 2022
Oct. 31, 2023
Oct. 31, 2022
OPERATING EXPENSES        
General and administrative expenses $ 7,752 $ 11,846 $ 15,890 $ 17,768
Management salaries 0 0 2,000,000 0
Total Operating Expenses 7,752 11,846 2,015,890 17,768
Loss from operations (7,752) (11,846) (2,015,890) (17,768)
OTHER EXPENSES        
Interest expense (1,725) (1,913) (3,843) (3,788)
Other expenses, net (1,725) (1,913) (3,843) (3,788)
Loss before income taxes (9,477) (13,759) (2,019,733) (21,556)
Provision for income taxes 0 0 0 0
NET LOSS $ (9,477) $ (13,759) $ (2,019,733) $ (21,556)
NET LOSS PER SHARE: BASIC AND DILUTED $ (0.00) $ (0.07) $ (0.46) $ (0.10)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING: BASIC AND DILUTED 5,479,122 209,502 4,360,164 209,502
v3.23.3
CONDENSED STATEMENTS OF STOCKHOLDERS DEFICIT - USD ($)
Total
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Balance, shares at Apr. 30, 2022   209,891    
Balance, amount at Apr. 30, 2022 $ (347,580) $ 210 $ 26,590 $ (374,380)
Net loss (7,797) $ 0 0 (7,797)
Balance, shares at Jul. 31, 2022   209,891    
Balance, amount at Jul. 31, 2022 (355,377) $ 210 26,590 (382,177)
Balance, shares at Apr. 30, 2022   209,891    
Balance, amount at Apr. 30, 2022 (347,580) $ 210 26,590 (374,380)
Net loss (21,556)      
Balance, shares at Oct. 31, 2022   209,891    
Balance, amount at Oct. 31, 2022 (369,136) $ 210 26,590 (395,936)
Balance, shares at Jul. 31, 2022   209,891    
Balance, amount at Jul. 31, 2022 (355,377) $ 210 26,590 (382,177)
Net loss (13,759) $ 0 0 (13,759)
Balance, shares at Oct. 31, 2022   209,891    
Balance, amount at Oct. 31, 2022 (369,136) $ 210 26,590 (395,936)
Balance, shares at Apr. 30, 2023   209,891    
Balance, amount at Apr. 30, 2023 (388,324) $ 210 26,590 (415,124)
Net loss (2,010,256) $ 0 0 (2,010,256)
Issuance of common stock for management salaries, shares   5,000,000    
Issuance of common stock for management salaries, amount 2,000,000 $ 5,000 1,995,000 0
Balance, shares at Jul. 31, 2023   5,209,891    
Balance, amount at Jul. 31, 2023 (398,580) $ 5,210 2,021,590 (2,425,380)
Balance, shares at Apr. 30, 2023   209,891    
Balance, amount at Apr. 30, 2023 (388,324) $ 210 26,590 (415,124)
Net loss (2,019,733)      
Balance, shares at Oct. 31, 2023   5,709,891    
Balance, amount at Oct. 31, 2023 (233,057) $ 5,710 2,196,090 (2,434,857)
Balance, shares at Jul. 31, 2023   5,209,891    
Balance, amount at Jul. 31, 2023 (398,580) $ 5,210 2,021,590 (2,425,380)
Net loss (9,477) $ 0 0 (9,477)
Issuance of common stock for conversion of debts, shares   500,000    
Issuance of common stock for conversion of debts, amount 175,000 $ 500 174,500 0
Balance, shares at Oct. 31, 2023   5,709,891    
Balance, amount at Oct. 31, 2023 $ (233,057) $ 5,710 $ 2,196,090 $ (2,434,857)
v3.23.3
CONDENSED STATEMENTS OF CASH FLOWS - USD ($)
6 Months Ended
Oct. 31, 2023
Oct. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss $ (2,019,733) $ (21,556)
Adjustments to reconcile net loss to net cash from operating activities:    
Stock based compensation 2,000,000 0
Amortization on note discount 1,722 1,722
Changes in operating assets and liabilities:    
Accounts payable and accrued liabilities (12,054) (1,557)
Accrued interest 2,121 2,066
Net cash used in operating activities (27,944) (19,325)
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from issuance of promissory notes from unaffiliated party 27,944 19,325
Net cash provided by financing activities 27,944 19,325
Net change in cash and cash equivalents 0 0
Cash and cash equivalents - beginning of period 0 0
Cash and cash equivalents - end of period 0 0
Supplemental Cash Flow Disclosures    
Cash paid for interest 0 0
Cash paid for income taxes 0 0
Supplemental Disclosures of Non-Cash Investing and Financing Activities    
Issuance of convertible notes for conversion of debts 175,000 0
Issuance of common stock for management salaries $ 2,000,000 $ 0
v3.23.3
ORGANIZATION AND BUSINESS OPERATIONS
6 Months Ended
Oct. 31, 2023
ORGANIZATION AND BUSINESS OPERATIONS  
ORGANIZATION AND BUSINESS OPERATIONS

NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS

 

Natural Resource Holdings, Inc. (the “Company”) was incorporated in Nevada on April 19, 2016. We were a development stage company that intended to develop an online beauty sample subscription service.

 

On November 26, 2020, the Company completed an acquisition of working interests in certain mining properties. The mining property right was fully impaired during the year ended April 30, 2022.

 

On October 18, 2022, majority of the Company’s shareholders approved a reverse stock split of our issued and outstanding shares of common stock on a basis of up to twenty (20) old shares for one (1) new share of common stock. The reverse stock split was approved by FINRA for approval on February 21, 2023. The financial statements retroactively reflect the reverse stock split.

 

On January 8, 2023, the Company entered into an agreement with a surveying consulting firm for mining and mineral exploration and surveying services on Potter County, PA Utica Shale area oil and gas properties.

 

On February 14, 2023, the Company’s name changed to Natural Resources Holdings, Inc. and the Company trading symbol changed to “NRHI” effective March 21, 2023.

 

We are currently focusing on mining business.

v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
6 Months Ended
Oct. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Presentation

 

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended October 31, 2023 are not necessarily indicative of the results that may be expected for the year ending April 30, 2024. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2023 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended April 30, 2023 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on July 31, 2023.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

 

Fair Value of Financial Instruments

 

ASC 820 “Fair Value Measurements and Disclosures” establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

These tiers include:

 

Level 1: defined as observable inputs such as quoted prices in active markets;

Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying value of accounts payable and accrued liabilities, accrued interest, current portion of long-term debt, other party loan and loan from director approximates its fair value due to their short-term maturity. 

 

Mining Property

 

Costs of lease, exploration, carrying and retaining unproven mineral properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. Interest expense allocable to the cost of developing mining properties and to construct new facilities is capitalized until assets are ready for their intended use.

 

To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed.

 

ASC 930-805, “Extractive Activities-Mining: Business Combinations” states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights which are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.

ASC 930-805 provides that in measuring the fair value of mineral assets, an acquirer should take into account both:

 

 

(a)

The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets.

 

 

 

 

(b)

The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.

 

On January 8, 2023, the Company incurred mining exploration expense of $8,500 for surveying services on Potter County, PA Utica Shale area oil and gas properties performed during January and February 2023.

 

Intangible Assets

 

The Company accounts for intangible assets (including mining right) in accordance with ASC 350 “Intangibles-Goodwill and Other.”

 

ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

 

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.

 

Revenue Recognition

 

The Company recognized revenue from the sales of mineral products produced from mining operations in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

 

Step 1: The contract has been signed by both parties or when the invoice has been generated and provided to the customer

Step 2: The performance obligations are stated or implied in the contract or invoice

Step 3: The transaction price has been identified in the contract or invoice

Step 4: The Company has allocated the transaction price to the performance obligations pursuant to the contract or invoice

Step 5: The Company satisfied the performance obligations when the mineral products delivered to the purchaser

The Company recognized revenue from the royalty revenue in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

 

Step 1: The contract has been signed by both parties for royalty fees

Step 2: The performance obligations are stated or implied in the contract

Step 3: The transaction price has been identified in the contract

Step 4: The Company has allocated the transaction price to the performance obligations pursuant to the contract

Step 5: The Company has satisfied the performance obligations at the same period as the sales that generate the royalty payment.

 

Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the mining property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement.

 

Income Tax

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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 that includes the enactment date. A valuation allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. The Company has not recognized any tax benefits from uncertain tax positions for any of the reporting periods presented. (See Note 8)

 

The Company has not filed income tax returns from year ended April 30, 2016 through April 30, 2020. $25,000 annual late tax filing interest and penalty was accrued for an aggregate amount of $125,000.

 

Related Party Balances and Transactions

 

The Company follows FASB ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transaction. (Note 4)

 

Basic and Diluted Income (Loss) Per Share

 

The Company computes income (loss) per share in accordance with FASB ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

 

As of October 31, 2023 and October 31, 2022, convertible notes were dilutive instruments and were not included in the calculation of diluted loss per share as their effect would be antidilutive:

 

 

 

October 31,

 

 

October 31,

 

 

 

2023

 

 

2022

 

 

 

(Shares)

 

 

(Shares)

 

Convertible note payable

 

 

223,514

 

 

 

562,945

 

As of October 31, 2023 and October 31, 2022, the total convertible shares from convertible notes totaling $70,819 and $186,204 issued to an unaffiliated party from February 4, 2022 through October 31, 2023 with conversion rate of $0.35 per shares was 223,514 shares and 562,945 shares. (Note 5)

 

Recent accounting pronouncements

 

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt-Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging-Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature (“CCF”) and (2) convertible instruments with a beneficial conversion feature (“BCF”). With the adoption of ASU2020-06, entities will not separately present in equity an embedded conversion feature these debts. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has chosen to early adopt this standard on its year ended April 30, 2022 financial statements and did not record BCF on the issuance of convertible notes with conversion rate below the Company’s market stock price on the date of note issuance.

 

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. In November 2019, the FASB issued ASU 2019-10 highlighted the adoption timeline. For smaller reporting entities, Topic 326 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, of which is effective for the Company on April 1, 2023. The adoption of this standard did not have a material impact on the Company's financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

v3.23.3
GOING CONCERN
6 Months Ended
Oct. 31, 2023
GOING CONCERN  
GOING CONCERN

NOTE 3 - GOING CONCERN

 

The Company’s financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

 

As reflected in the financial statements, the Company had an accumulated deficit of $2,434,857. For the six months ended October 31, 2023, the Company suffered from a net loss of $2,019,733 and working capital deficit of $155,265.

 

The Company is attempting to commence operations and generate sufficient revenue; however, the Company’s cash position may not be sufficient to support the Company’s daily operations. Management intends to raise additional funds by way of a private or public offering. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.

The financial statements do not include any adjustments related 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.

v3.23.3
RELATED PARTY TRANSACTIONS
6 Months Ended
Oct. 31, 2023
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS

NOTE 4 - RELATED PARTY TRANSACTIONS

 

On July 1, 2021, the Company issued a promissory note of $153,913 to the Company’s director for previous operating expenses of $28,913 and acquisition of mining interest of $125,000 which were paid by the director on the Company’s behalf as of April 30, 2021. The note is unsecured with annual interest rate of 2% and has a mature date of December 31, 2022.

 

In December 2020, the Company acquired several gold mining claims in Canada. The Company planned for exploration on the properties. Due to Covid and economic downturn, the Company was unable to proceed with the mining property exploration. Upon the expiration of the two years term of the property mining rights, the Company decided not to extend beyond the original term of the mining rights and was fully impaired during year ended April 30, 2022.

 

On July 31, 2021, the Company issued a promissory note of $2,822 for the amount the related party paid to the vendors on behalf of the Company during the three months ended July 31, 2021. The note is unsecured with annual interest rate of 2% and has a mature date of December 31, 2022.

 

On October 31, 2021, the Company issued a promissory note of $11,450 for the amount the related party paid to the vendors on behalf of the Company during the three months ended October 31, 2021. The note is unsecured with annual interest rate of 2% and has a mature date of December 31, 2022.

 

On January 31, 2022, the Company issued a promissory note of $7,021 for the amount the related party paid to the vendors on behalf of the Company during the three months ended January 31, 2022. The note is unsecured with annual interest rate of 2% and has a mature date of December 31, 2022.

 

On February 4, 2022, the Company’s director sold the promissory notes with aggregate principal of $175,206 and accrued interest of $1,956 to an unaffiliated party. (Note 5)

 

On June 7, 2023, the Company issued 5,000,000 shares of common stock to the Director of the Company valued at $2,000,000 as management salary for the period from September 29, 2020 to September 28, 2022. (Note 7)

v3.23.3
CONVERTIBLE NOTE PAYABLE
6 Months Ended
Oct. 31, 2023
CONVERTIBLE NOTE PAYABLE  
CONVERTIBLE NOTE PAYABLE

NOTE 5 – CONVERTIBLE NOTE PAYABLE

 

As of October 31, 2023 and April 30, 2023, the convertible note payable was shown as follows:

 

 

 

 

 

October 31,

 

 

April 30,

 

 

 

Expiry Date

 

2023

 

 

2023

 

Convertible Note - February 2022

 

12/31/2025

 

$206

 

 

$175,206

 

Convertible Note - April 2022

 

12/31/2025

 

 

2,500

 

 

 

2,500

 

Convertible Note - July 2022

 

12/31/2025

 

 

7,600

 

 

 

7,600

 

Convertible Note - October 2022

 

12/31/2025

 

 

11,725

 

 

 

11,725

 

Convertible Note - January 2023

 

12/31/2025

 

 

12,500

 

 

 

12,500

 

Convertible Note - April 2023

 

12/31/2025

 

 

15,755

 

 

 

15,755

 

Convertible Note - July 2023

 

12/31/2025

 

 

14,394

 

 

 

-

 

Convertible Note - October 2023

 

12/31/2025

 

 

13,550

 

 

 

 

 

 

 

 

 

 

78,230

 

 

 

225,286

 

Less debt discount

 

 

 

 

(7,411)

 

 

(9,133)

 

 

 

 

$70,819

 

 

$216,153

 

On February 11, 2022, the Company entered into an agreement with the unaffiliated note holder of the promissory note of $175,206 sold to him on February 4, 2022 for the amendment of the promissory note to convertible note which bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock. With the adoption of ASU2020-06, the Company did not record beneficial conversion feature (“BCF”) on the convertible note. The Company assessed the note amendment for a debt extinguishment or modification in accordance with ASC 470-50. Although the change in fair value of the note from the note amendment was calculated at 3% which fell below 10% of the carrying value of the original convertible note, the additional of a note conversion feature indicates the note amendment is regarded as a note extinguishment. On February 11, 2022, gain on note extinguishment of $13,344 and note discount of $13,344 was recognized. On September 13, 2023, the Company issued 500,000 shares of common stock for the conversion of principal amount of $175,000. (Note 7) As of October 31, 2023, the convertible note payable was $206.

 

On April 30, 2022, the Company issued a convertible note of $2,500 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended April 30, 2022. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On July 31, 2022, the Company issued a convertible note of $7,600 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended July 31, 2022. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On October 31, 2022, the Company issued a convertible note of $11,725 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended October 31, 2022. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On January 31, 2023, the Company issued a convertible note of $12,500 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended January 31, 2023. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On April 30, 2023, the Company issued a convertible note of $15,755 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended April 30, 2023. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On July 31, 2023, the Company issued a convertible note of $14,394 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended July 31 2023. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

On October 31, 2023, the Company issued a convertible note of $13,550 for the amount the unaffiliated party paid to the vendors on behalf of the Company during the three months ended October 31, 2023. The note bears annual interest rate of 2%, has a maturity date of December 31, 2025 and is convertible at $0.35 per share for the Company common stock.

 

During the six months ended October 31, 2023 and 2022, interest expense of $1,910 and $1,855 was incurred, respectively.

 

During the six months ended October 31, 2023 and 2022, amortization on note discount of $1,722 and $1,722 was incurred, respectively.

As of October 31, 2023 and April 30, 2023, the convertible notes payable, net of note discount of $7,411 and $9,133, was $70,819 and $216,153, respectively.

v3.23.3
LOAN PAYABLE
6 Months Ended
Oct. 31, 2023
LOAN PAYABLE  
LOAN PAYABLE

NOTE 6 - LOAN PAYABLE

 

The Company has outstanding long-term loan payable of $6,973 and $6,973 as of October 31, 2023 and April 30, 2023, respectively. The loan payable is unsecured with annual interest rate of 6% and had an original maturity date of April 20, 2020. The maturity date is extended through April 20, 2025.

 

Interest expense was $211 and $211 for the six months ended October 31, 2023 and 2022, respectively.

 

As of October 31, 2023 and April 30, 2023, accrued interest was $2,334 and $2,123 respectively.

v3.23.3
STOCKHOLDERS EQUITY
6 Months Ended
Oct. 31, 2023
Stockholders' Deficit  
STOCKHOLDERS EQUITY

NOTE 7 - STOCKHOLDER’S EQUITY

 

The Company has 75,000,000, $0.001 par value shares of common stock authorized.

 

On October 18, 2022, the sole director of the Company approved a reverse stock split of our issued and outstanding shares of common stock on a basis of up to twenty (20) old shares for one (1) new share of common stock. The reverse stock split was approved by FINRA for approval on February 21, 2023. The financial statements retroactively reflect the reverse stock split.

 

On June 7, 2023, the Company issued 5,000,000 shares of common stock to the Director of the Company valued at $2,000,000 as management salary for the period from September 29, 2020 to September 28, 2022. (Note 4)

 

On September 13, 2023, the Company issued 500,000 shares of common stock for the conversion of convertible debts of $175,000. (Note 5)

 

As of October 31, 2023 and April 30, 2023, the Company had 5,709,891 shares and 209,891 shares issued and outstanding, respectively.

v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
6 Months Ended
Oct. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
Basis of Presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the six months ended October 31, 2023 are not necessarily indicative of the results that may be expected for the year ending April 30, 2024. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for fiscal year 2023 have been omitted. This report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended April 30, 2023 included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on July 31, 2023.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

Fair Value of Financial Instruments

ASC 820 “Fair Value Measurements and Disclosures” establishes a three-tier fair value hierarchy, which prioritizes the inputs in measuring fair value. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

 

These tiers include:

 

Level 1: defined as observable inputs such as quoted prices in active markets;

Level 2: defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level 3: defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

 

The carrying value of accounts payable and accrued liabilities, accrued interest, current portion of long-term debt, other party loan and loan from director approximates its fair value due to their short-term maturity. 

Mining Property

Costs of lease, exploration, carrying and retaining unproven mineral properties are expensed as incurred. The Company expenses all mineral exploration costs as incurred as it is still in the exploration stage. If the Company identifies proven and probable reserves in its investigation of its properties and upon development of a plan for operating a mine, it would enter the development stage and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized on a units-of-production basis over the proven and probable reserves following the commencement of production. Interest expense allocable to the cost of developing mining properties and to construct new facilities is capitalized until assets are ready for their intended use.

 

To date, the Company has not established the commercial feasibility of any exploration prospects; therefore, all exploration costs are being expensed.

 

ASC 930-805, “Extractive Activities-Mining: Business Combinations” states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights which are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.

ASC 930-805 provides that in measuring the fair value of mineral assets, an acquirer should take into account both:

 

 

(a)

The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets.

 

 

 

 

(b)

The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants.

 

On January 8, 2023, the Company incurred mining exploration expense of $8,500 for surveying services on Potter County, PA Utica Shale area oil and gas properties performed during January and February 2023.

Intangible Assets

The Company accounts for intangible assets (including mining right) in accordance with ASC 350 “Intangibles-Goodwill and Other.”

 

ASC 350 requires that goodwill and other intangibles with indefinite lives be tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of an asset has decreased below its carrying value. In addition, ASC 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests when circumstances indicate that the recoverability of the carrying amount of goodwill may be in doubt. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows, determining appropriate discount rates and other assumptions. Changes in these estimates and assumptions or the occurrence of one or more confirming events in future periods could cause the actual results or outcomes to materially differ from such estimates and could also affect the determination of fair value and/or goodwill impairment at future reporting dates.

 

The cost of intangible assets with determinable useful lives is amortized to reflect the pattern of economic benefits consumed, either on a straight-line or accelerated basis over the estimated periods benefited. Patents, technology and other intangibles with contractual terms are generally amortized over their respective legal or contractual lives. When certain events or changes in operating conditions occur, an impairment assessment is performed and lives of intangible assets with determinable lives may be adjusted.

Revenue Recognition

The Company recognized revenue from the sales of mineral products produced from mining operations in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

 

Step 1: The contract has been signed by both parties or when the invoice has been generated and provided to the customer

Step 2: The performance obligations are stated or implied in the contract or invoice

Step 3: The transaction price has been identified in the contract or invoice

Step 4: The Company has allocated the transaction price to the performance obligations pursuant to the contract or invoice

Step 5: The Company satisfied the performance obligations when the mineral products delivered to the purchaser

The Company recognized revenue from the royalty revenue in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

 

Step 1: The contract has been signed by both parties for royalty fees

Step 2: The performance obligations are stated or implied in the contract

Step 3: The transaction price has been identified in the contract

Step 4: The Company has allocated the transaction price to the performance obligations pursuant to the contract

Step 5: The Company has satisfied the performance obligations at the same period as the sales that generate the royalty payment.

 

Inherent in the fair value calculation of an ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors, credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental and political environments. To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a corresponding adjustment is made to the mining property balance. Settlements greater than or less than amounts accrued as ARO are recorded as a gain or loss upon settlement.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. 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 that includes the enactment date. A valuation allowance on deferred tax assets is established when management considers it is more likely than not that some portion or all of the deferred tax assets will not be realized.

 

Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. The Company has not recognized any tax benefits from uncertain tax positions for any of the reporting periods presented. (See Note 8)

 

The Company has not filed income tax returns from year ended April 30, 2016 through April 30, 2020. $25,000 annual late tax filing interest and penalty was accrued for an aggregate amount of $125,000.

Related Party Balances and Transactions

The Company follows FASB ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transaction. (Note 4)

Basic and Diluted Income (Loss) Per Share

The Company computes income (loss) per share in accordance with FASB ASC 260, “Earnings per Share” which requires presentation of both basic and diluted earnings per share on the face of the statement of operations. Basic loss per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of outstanding common shares during the period. Diluted income (loss) per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.

 

As of October 31, 2023 and October 31, 2022, convertible notes were dilutive instruments and were not included in the calculation of diluted loss per share as their effect would be antidilutive:

 

 

 

October 31,

 

 

October 31,

 

 

 

2023

 

 

2022

 

 

 

(Shares)

 

 

(Shares)

 

Convertible note payable

 

 

223,514

 

 

 

562,945

 

As of October 31, 2023 and October 31, 2022, the total convertible shares from convertible notes totaling $70,819 and $186,204 issued to an unaffiliated party from February 4, 2022 through October 31, 2023 with conversion rate of $0.35 per shares was 223,514 shares and 562,945 shares. (Note 5)

Recent accounting pronouncements

In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt-Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging-Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and, (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU2020-06 removes from U.S. GAAP the separation models for (1) convertible debt with a cash conversion feature (“CCF”) and (2) convertible instruments with a beneficial conversion feature (“BCF”). With the adoption of ASU2020-06, entities will not separately present in equity an embedded conversion feature these debts. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has chosen to early adopt this standard on its year ended April 30, 2022 financial statements and did not record BCF on the issuance of convertible notes with conversion rate below the Company’s market stock price on the date of note issuance.

 

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. In November 2019, the FASB issued ASU 2019-10 highlighted the adoption timeline. For smaller reporting entities, Topic 326 is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years, of which is effective for the Company on April 1, 2023. The adoption of this standard did not have a material impact on the Company's financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

 

Management has considered all recent accounting pronouncements issued. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
6 Months Ended
Oct. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  
Schedule of antidilutive securities

 

 

October 31,

 

 

October 31,

 

 

 

2023

 

 

2022

 

 

 

(Shares)

 

 

(Shares)

 

Convertible note payable

 

 

223,514

 

 

 

562,945

 

v3.23.3
CONVERTIBLE NOTE PAYABLE (Tables)
6 Months Ended
Oct. 31, 2023
CONVERTIBLE NOTE PAYABLE  
Schedule of convertible notes payable

 

 

 

 

October 31,

 

 

April 30,

 

 

 

Expiry Date

 

2023

 

 

2023

 

Convertible Note - February 2022

 

12/31/2025

 

$206

 

 

$175,206

 

Convertible Note - April 2022

 

12/31/2025

 

 

2,500

 

 

 

2,500

 

Convertible Note - July 2022

 

12/31/2025

 

 

7,600

 

 

 

7,600

 

Convertible Note - October 2022

 

12/31/2025

 

 

11,725

 

 

 

11,725

 

Convertible Note - January 2023

 

12/31/2025

 

 

12,500

 

 

 

12,500

 

Convertible Note - April 2023

 

12/31/2025

 

 

15,755

 

 

 

15,755

 

Convertible Note - July 2023

 

12/31/2025

 

 

14,394

 

 

 

-

 

Convertible Note - October 2023

 

12/31/2025

 

 

13,550

 

 

 

 

 

 

 

 

 

 

78,230

 

 

 

225,286

 

Less debt discount

 

 

 

 

(7,411)

 

 

(9,133)

 

 

 

 

$70,819

 

 

$216,153

 

v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares
Oct. 31, 2023
Oct. 31, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES    
Convertible note payable 223,514 562,945
v3.23.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
6 Months Ended
Jan. 08, 2023
Oct. 31, 2023
Apr. 30, 2023
Oct. 31, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES        
Convertible shares from convertible notes   $ 70,819 $ 216,153 $ 186,204
Convertible notes   223,514   562,945
Convertible Shares from Convertible note rate per share   $ 0.35    
Interest   $ 25,000    
Mining exploration $ 8,500      
Panalty   $ 125,000    
v3.23.3
GOING CONCERN (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Oct. 31, 2023
Jul. 31, 2023
Oct. 31, 2022
Jul. 31, 2022
Oct. 31, 2023
Oct. 31, 2022
Apr. 30, 2023
GOING CONCERN              
Net loss $ (9,477) $ (2,010,256) $ (13,759) $ (7,797) $ (2,019,733) $ (21,556)  
Accumulated deficit (2,434,857)       (2,434,857)   $ (415,124)
Working capital deficit $ (155,265)       $ (155,265)    
v3.23.3
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended
Jul. 01, 2021
Jan. 31, 2022
Oct. 31, 2021
Jul. 31, 2021
Oct. 31, 2023
Jun. 07, 2023
Apr. 30, 2023
Feb. 04, 2022
Management salary           $ 2,000,000    
Promissory note payable $ 153,913       $ 78,230   $ 225,286  
Common stock shares issued         5,709,891   209,891  
Director [Member]                
Promissory note payable   $ 7,021 $ 11,450 $ 2,822        
Operating expenses 28,913              
Acquisition of mining interest $ 125,000              
Maturity date Dec. 31, 2022 Dec. 31, 2022 Dec. 31, 2022 Dec. 31, 2022        
Interest rate 2.00% 2.00% 2.00% 2.00%        
Aggregate principal amount of promissory note sold               $ 175,206
Accrued interest to unaffiliated party               $ 1,956
Common stock shares issued           5,000,000    
v3.23.3
CONVERTIBLE NOTE PAYABLE (Details) - USD ($)
6 Months Ended
Oct. 31, 2023
Apr. 30, 2023
Oct. 31, 2022
Jul. 01, 2021
Convertible note $ 78,230 $ 225,286   $ 153,913
Less debt discount (7,411) (9,133)    
Convertible note payable 70,819 216,153 $ 186,204  
February 2022        
Convertible note 206 175,206    
Convertible note payable $ 175,000      
Expiry date Dec. 31, 2025      
April 2022        
Convertible note $ 2,500 2,500    
Expiry date Dec. 31, 2025      
July 2022        
Convertible note $ 7,600 7,600    
Expiry date Dec. 31, 2025      
October 2022        
Convertible note $ 11,725 11,725    
Expiry date Dec. 31, 2025      
January 2023        
Convertible note $ 12,500 12,500    
Expiry date Dec. 31, 2025      
April 2023        
Convertible note $ 15,755 15,755    
Expiry date Dec. 31, 2025      
July 2023        
Convertible note $ 14,394 $ 0    
Expiry date Dec. 31, 2025      
October 2023        
Convertible note $ 13,550      
Expiry date Dec. 31, 2025      
v3.23.3
CONVERTIBLE NOTE PAYABLE (Details Narrative) - USD ($)
6 Months Ended
Feb. 11, 2022
Oct. 31, 2023
Oct. 31, 2022
Apr. 30, 2023
Jul. 01, 2021
Net of note discount   $ 7,411   $ 9,133  
Amortization on note discount   1,722 $ 1,722    
Interest expenses   1,910 1,855    
Convertible note   206      
Convertible note payable   70,819 $ 186,204 216,153  
Convertible note   78,230   225,286 $ 153,913
February 2022          
Convertible note payable   $ 175,000      
Conversion of stock   500,000      
Convertible note   $ 206   175,206  
February 2022 | Promissory Note Member          
Amortization on note discount $ 13,344        
Convertible note   $ 175,206      
Interest rate   2.00%      
Description of carrying value   the note amendment was calculated at 3% which fell below 10% of the carrying value of the original convertible note      
Per share value   $ 0.35      
Expiry date   Dec. 31, 2025      
Gain on note extinguishment $ 13,344        
April 2022          
Convertible note   $ 2,500   2,500  
Interest rate   2.00%      
Per share value   $ 0.35      
Expiry date   Dec. 31, 2025      
April 2023          
Convertible note   $ 15,755   15,755  
Interest rate   2.00%      
Per share value   $ 0.35      
Expiry date   Dec. 31, 2025      
July 2023          
Convertible note   $ 14,394   $ 0  
Interest rate   2.00%      
Per share value   $ 0.35      
Expiry date   Dec. 31, 2025      
31 July 2022          
Convertible note   $ 7,600      
Interest rate   2.00%      
Per share value   $ 0.35      
Expiry date   Dec. 31, 2025      
31 October 2022          
Convertible note   $ 11,725      
Interest rate   2.00%      
Per share value   $ 0.35      
Expiry date   Dec. 31, 2025      
31 January 2023          
Convertible note   $ 12,500