Notes to Financial Statements
September 30, 2022
NOTE 1 - DESCRIPTION OF BUSINESS AND HISTORY
Sino American Energy Company (the “Company”) was incorporated as Raphael Industries Ltd. on October 31, 2005 under the laws of the State of Nevada. On November 11, 2010 the Company changed its name to Sino American Oil Company in anticipation of the Company’s new business direction, the exploration for oil and gas.
The company has re-domiciled its corporate status from Nevada to Wyoming in August 2018.
NOTE 2 - SUMMARY OF SIGNIFICANT POLICIES
Basis of presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
Use of estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information that is currently available to the Company and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1:Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2:Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3:Pricing inputs that are generally unobservable inputs and not corroborated by market data.
The carrying amount of the Company’s financial assets and liabilities, such as cash, prepaid expenses and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximates the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements at September 30, 2022.
Income taxes
The Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and
F-8
liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal 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 the Statements of Income in the period that includes the enactment date.
The Company adopted section 740-10-25 of the FASB Accounting Standards Codification (“Section 740-10-25”) with regards to uncertainty income taxes. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only 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 should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of Section 740-10-25.
Net loss per common share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented. For the years ended September 30, 2022 and 2021, the Company’s basis and diluted net loss per share are the same as the inclusion of any dilutive shares would be anti-dilutive due to the Company’s net loss.
Stock-based Compensation
We account for equity-based transactions with employees and non-employees under the provisions of FASB ASC Topic 718, “Compensation - Stock Compensation” (Topic 718), which establishes that equity-based payments to employees and non-employees are recorded at the grant date the fair value of the equity instruments the entity is obligated to issue when the employees and non-employees have rendered the requisite service and satisfied any other conditions necessary to earn the right to benefit from the instruments. Topic 718 also states that observable market prices of identical or similar equity or liability instruments in active markets are the best evidence of fair value and, if available, should be used as the basis for the measurement for equity and liability instruments awarded in these share-based payment transactions. However, if observable market prices of identical or similar equity or liability instruments are not available, the fair value shall be estimated by using a valuation technique or model that complies with the measurement objective, as described in FASB ASC Topic 718.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
NOTE 3 - GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has no source of revenue, has suffered recurring losses since inception and has no assurance of future profitability. The Company will continue to require financing from external sources to finance its operating and investing activities until sufficient positive cash flows from operations can be generated. There is no assurance that financing or profitability will be achieved, accordingly, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements of the Company do not include any adjustments that may result from the outcome of these uncertainties.
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NOTE 4 - LOAN PAYABLE
On September 1, 2021, the Company entered into a loan agreement with Home Run Oil and Gas, Inc. (“Home Run”). Home Run loaned the company $114,103 ($150,000 CAD). The loan in non-interest bearing and is due on or before November 30, 2021. This loan is currently past due.
NOTE 5 - COMMON STOCK
On May 13, 2020, the Company sold 2,467,000 shares of common stock at $0.15 per share for total proceeds of $370,050. As of September 30, 2020, the funds had not been received and have been disclosed as a stock subscription receivable in the Statement of Stockholders’ Deficit. On December 10, 2020, the Company cancelled the 2,467,000 shares of common stock sold for cash as the cash was never received from the purchasing parties.
During the year ended September 30, 2021, the Company granted 2,950,000 shares of common stock for services. The shares were valued $0.0001, for total non-cash stock compensation expense of $295.
During the year ended September 30, 2021, the Company sold 8,000 shares of common stock for total cash proceeds of $20,000. As of September 30, 2021, the shares have not yet been issued by the transfer agent and are disclosed as common stock to be issued.
During the year ended September 30, 2021, the Company granted 1,450,000 shares of common stock for services to White Sands Securities. The shares were valued $0.0001, the share price of recently sold shares to unrelated third parties, for total non-cash stock compensation expense of $145. These shares were cancelled and returned to the Company in June 2022.
On November 15, 2021, the Company issued 80,000 shares of common stock to Dennis Eubanks per the terms of a MOU between the Company and Estacado Energy, LLC. The shares were valued at $0.0001, for total expense of $8.
Effective March 14, 2022, the Company appointed Boriss Aleksandrov as Treasurer and Director of the Company. Mr. Aleksandrov was issued 17,500,000 shares of common stock as incentive to serve in these positions. The shares were valued at $0.0001, for total expense of $1,750.
During the year ended September 30, 2022, the Company cancelled 1,960,000 shares of common stock and had them returned to the Company. The shares were canceled as per the British Columbia Securities Commission (“BCSC”) in order to remove the Cease Trade Order on the Company.
Per the terms of the Acquisition Agreement the Company issued 5,000,000 shares of common stock at $1.00 per share. The shares are being held in escrow pending completion of all requirements for finalization of the acquisition (Note 7).
Refer to Note 8 for shares issued to related parties.
NOTE 6 - PREFERRED STOCK
Effective June 3, 2019, the Company amended its article of incorporation and authorized 10,000,000 shares of Series A preferred stock, par value $0.001 and 10,000,000 shares of Series B preferred stock, par value $0.001.
Series A Preferred Stock
Each share of Series A is convertible into 1,000 shares of common.
During the year ended September 30, 2021, holders of 246,320,000 shares of common stock converted those shares into 492,640 shares of Series A preferred stock.
On June 10, 2022, the Company cancelled 328,428 shares of Series A Preferred Stock and had them returned to the Company.
On July 12, 2022, the Company cancelled 164,212 shares of Series A Preferred Stock and had them returned to the Company.
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As of September 30, 2022, there are no outstanding shares of the Series A Preferred Stock.
Series B Preferred Stock
Effective July 14, 2021, the Company, designated its Series B Preferred Stock as voting only shares at 1,000 votes per share.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
On July 19, 2022, the Company entered into an Acquisition Agreement (the “Agreement”) with Tritium Inc., a corporation organized under the laws of the Province of Alberta, Canada (“Tritium”) and the shareholders of Tritium (the “Shareholders”) after obtaining requisite approval from the Company’s board of directors, which determined that the transaction was in the best interests of the Company and its stockholders.
Pursuant to the Agreement, the Company will acquire 100% of the shares of Tritium through a wholly-owned subsidiary of the Company, Sino Acquisition Corp. The Company will also acquire all assets of Tritium in the transaction. In exchange for 100% of the shares of Tritium, the Company issued five million (5,000,000) shares of common stock at $1.00 a share for a total transaction value of USD $5,000,000.
In July 2022, Tritium acquired a 22% ownership in Base Element Energy Inc., a corporation organized under the laws of the Province of Alberta, Canada.
The acquisition is subject to the delivery of U.S. GAAP audited financial statements from Tritium and the transfer of title and ownership of the company and its assets to the Company. The Company is in the process of updating its SEDAR filings in Canada to remain compliant in Alberta and meet the requirement of the ASE. This acquisition will be subject to the Company being fully compliant with the Securities regulators of both the U.S. and Canada.
Until all terms and conditions of the Agreement have been met and the acquisition is considered closed the 5,000,000 shares of common stock are being held in escrow.
NOTE 8 - RELATED PARTY TRANSACTIONS
On April 18, 2017, the Company entered into a Convertible Loan Agreement with Kim Halvorson, the former CEO. The loan agreement was entered into pursuant to Ms. Halvorson’s agreement to fund the initial expenses of the Company. Per the terms of the agreement any funds loaned to the company or paid out on behalf of the Company will be convertible into shares of common stock at $0.0001 per share. The loans are due on demand and non-interest bearing. During the year ended September 30, 2021, Ms. Halvorson and Triage MicroCap Advisors LLC (“Triage”) (a company owned by Ms. Halvorson) converted $8,707 into 8,680,000 shares of common stock. As of September 30, 2022 and 2021, the balance due to Ms. Halvorson is $69,309 and $51,097, respectively. The shares were canceled in April 2022 as per the British Columbia Securities Commission (“BCSC”) in order to remove the Cease Trade Order on the Company.
During the year ended September 30, 2021, the Company granted 750,000 shares of common stock for services to Triage. The shares were valued $0.001, the share price of recently sold shares to unrelated third parties, for total non-cash stock compensation expense of $75. The shares were canceled in April 2022 as per the British Columbia Securities Commission (“BCSC”) in order to remove the Cease Trade Order on the Company.
During the year ended September 30, 2021, the Company granted 1,450,000 shares of common stock for services to Maximum Ventures Holdings LLC. The shares were valued $0.001, the share price of recently sold shares to unrelated third parties, for total non-cash stock compensation expense of $145. Richard Tang, the former Treasurer, is a member of Maximum Ventures Holdings LLC. The shares were canceled in April 2022 as per the British Columbia Securities Commission (“BCSC”) in order to remove the Cease Trade Order on the Company.
During the year ended September 30, 2021, the Company granted 1,450,000 shares of common stock for services to Avatele Group LLC. The shares were valued $0.0001, the share price of recently sold shares to unrelated third parties, for total non-cash stock compensation expense of $145. Mr. Tang is a member of Avatele Group LLC. The shares were canceled in April 2022 as per the British Columbia Securities Commission (“BCSC”) in order to remove the Cease Trade Order on the Company.
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During the year ended September 30, 2021, Mr. Tang, advance the Company $494 to pay general operating expenses. The advance is non-interest bearing and due on demand. During the quarter ended March 31, 2022, Mr. Tang loaned the Company an additional $20,000. As of September 30, 2022 and 2021, the balance due to Mr. Tang is $20,494 and $494, respectively.
During the year ended September 30, 2021, Mr. Tang converted $408,000 of accrued compensation into 150,000,000 shares of common stock. On June 30, 2021, Mr. Tang, forgave of $24,000 of accrued compensation due to him. The $24,000 was credited to additional paid in capital.
Effective March 7, 2022, Mr. Richard Tang has resigned as Treasurer and officer, and all roles relating to Sino American Oil Company.
Effective March 14, 2022, the Company appointed Boriss Aleksandrov as Treasurer and Director of the Company. Since his appointment Mr. Aleksandrov has advanced the Company $25,725 to pay for general operating expenses.
Effective April 29, 2022, Queenie Wong resigned as a Director of the Company and Kim Halverson resigned as a Director, President and Treasurer of the Company. Ms. Halverson remains as the Secretary of the Company.
On August 23, 2022, the Company appointed Olga Palumbo as a director of the Company. Ms. Palumbo was issued 100,000 shares of common stock. The shares were valued at $1.05, the closing stock price on the date of grant, for total non-cash compensation expense of $105,000.
NOTE 9 - INCOME TAXES
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss, and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The U.S. federal income tax rate of 21% is being used.
Net deferred tax assets consist of the following components as of September 30:
|
| 2022
|
| 2021
|
Federal income tax benefit attributable to:
|
|
|
|
|
Current Operations
|
| $
| 93,900
|
| $
| 130,000
|
Less: valuation allowance
|
|
| (93,900)
|
|
| (130,000)
|
Net provision for Federal income taxes
|
| $
| -
|
| $
| -
|
The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the fiscal years ending, due to the following:
|
| 2022
|
| 2021
|
Deferred tax asset attributable to:
|
|
|
|
|
Net operating loss carryover
|
| $
| 652,200
|
| $
| 558,200
|
Less: valuation allowance
|
|
| (625,200)
|
|
| (558,200)
|
Net deferred tax asset
|
| $
| -
|
| $
| -
|
At September 30, 2022, the Company had net operating loss carry forwards of approximately $652,200 that may be offset against future taxable income from the year 2023 to 2029. No tax benefit has been reported in the September 30, 2022 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for Federal Income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years. With few exceptions, the Company is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for years before 2016.
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NOTE 10 - SUBSEQUENT EVENTS
Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, Subsequent Events, from the balance sheet date through the date the financial statements were issued and has determined that no material subsequent events exist other than the following.
On October 3, 2022, the Company cancelled 80,000 shares of common stock previously issued to Dennis Eubanks on November 15, 2021, per the terms of a MOU between the Company and Estacado Energy, LLC. The Company chose not to proceed with the acquisition applicable to the MOU.
F-13
Item 9A. Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer who also acts as our principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. The disclosure controls and procedures ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the Chief Executive Officer concluded that, as of September 30, 2022, these disclosure controls and procedures were not effective.
Management’s Report on Internal Control Over Financial Reporting
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including the Chief Executive Officer who also acts as our principal financial officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. The disclosure controls and procedures ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, the Chief Executive Officer concluded that, as of September 30, 2022, these disclosure controls and procedures were not effective.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible to establish and maintain adequate internal control over financial reporting. Our Chief Executive Officer is responsible to design or supervise a process that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The policies and procedures include:
·maintenance of records in reasonable detail to accurately and fairly reflect the transactions and dispositions of assets,
·reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and directors, and
·reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
8
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of the end of the period September 30, 2021. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework (2013). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the fiscal year September 30, 2022, our internal control over financial reporting were not effective at that reasonable assurance level. The following aspects of the Company were noted as potential material weaknesses:
·Due to our size and limited resources, we currently do not employ the appropriate accounting personnel to ensure (a) we maintain proper segregation of duties, (b) that all transactions are entered timely and accurately, and (c) we properly account for complex or unusual transactions;
·Due to our size and scope of operations, we currently do not have an independent audit committee in place;
·Due to our size and limited resources, we have not properly documented a complete assessment of the effectiveness of the design and operation of our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or reasonably likely to materially affect, our internal control over financial reporting.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Directors and Executive Officers
The names of our director and executive officers as of December 12, 2022, their ages, positions, and biographies are set forth below. Our executive officers are appointed by, and serve at the discretion of, our board of directors.
Name
|
| Age
|
| Position(s)
| Notes
|
Boriss Aleksandrov
|
|
|
| Chief Executive Officer, President, Director
| Appointed May 3, 2022
|
Olga Palumbo
|
|
|
| Independent Director
| Appointed August 23, 2022
|
Sascha Zilger
|
|
|
| Independent Director
| Appointed August 23, 2022
|
Boriss Aleksandrov
Mr. Aleksandrov has been CEO and President of B Holding since September 2019 and manages strategic and day-to-day processes for several subsidiaries in various industries including but not limited to healthcare and real estate. From June 2014 until September 2019, Mr. Aleksandrov was Chief Financial Officer of Lasbet Tootmine AS, a concrete factory, where he implemented and managed the finance system and ERP system and managed the long-term and short-term budgeting and cash flow of the company. Since September 2017, Mr. Aleksandrov has also been a Professor of Economics at Estonian Entrepreneurship University of Applied Sciences.
Mr. Aleksandrov has held the positions as Chief Executive & Finance Officer in several companies with almost 20 years of experience in finance and business management. He is a partner in several investment projects, and companies related to production. In all of them he was responsible for financial management.
Throughout his career he has demonstrated proficiencies in Finance Management, Financial Modelling, Investments, Budgeting, Business Forecasting, Strategic Planning and Implementation, Cash Flow Management, Risk Management, Corporate Finance, Audit, Market Evaluation. He holds a Master of Business Administration (MBA) and an Enterprising / Business Management (Bachelor’s Degree) from Estonian Entrepreneurship University of Applied Sciences.
Olga Palumbo
Dr. Olga Palumbo earned her pediatrics degree in 1989. In 2006, she was the founder and is the Medical Director at Decus Clinic Swiss SAGL based in Switzerland. She is also the Medical Director of Swiss Health Care International which commenced in 2016.
Sascha Zilger
Sascha Zilger was the founder of TwentyFourSeven Cosmetics in 2013. He has decades of brand building and global business development. Mr. Zilger brings an independent view and approach to the Company relating to the Company’s present and future growth and marketing plans including all aspects of budgetary and fiscal allocations. He has been part of teams that developed businesses and concepts from the startup phase to globally recognized brands.
Indemnification of Directors and Officers
Our Articles of Incorporation and Bylaws both provide for the indemnification of our officers and directors, to the fullest extent, permitted by Wyoming law.
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who own more than ten percent of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock. Officers, directors and ten-percent or greater beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based upon a review of those forms and representations regarding the need for filing for the year ended September 30, 2022, we believe all necessary forms have been filed.
10
Involvement in Certain Legal Proceedings
Our directors and executive officers have not been personally involved in any of the following events during the past ten years:
·any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
·any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
·being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities or banking activities or to be associated with any person practicing in banking or securities activities;
·being found by a court of competent jurisdiction in a civil action, the SEC or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;
·being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or
·being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.
Conflicts of Interest
Investors should be aware of the following potential conflicts of interest:
·None of our officers and directors is required to commit their full time to our affairs and, accordingly, they may have conflicts of interest in allocating their time among various business activities.
Director Independence
We currently do not have any independent directors, as the term “independent” is defined in Section 803A of the NYSE Amex LLC Company Guide. Since the OTC Markets does not have rules regarding director independence, the Board makes its determination as to director independence based on the definition of “independence” as defined under the rules of the New York Stock Exchange (“NYSE”) and American Stock Exchange (“Amex”).
Board Committees
Our board does not currently have a standing Audit Committee, Compensation Committee or Nominating/Corporate Governance Committee due the board’s limited size and the Company’s limited operations. The entire Board of Directors performs all functions that would otherwise be performed by committees. Given the present size of our Board, it is not practical for us to have committees other than those described above, or to have more than two directors on such committees. If we are able to grow our business and increase our operations, we intend to expand the size of our board and our committees and allocate responsibilities accordingly.
Code of Ethics
We have not adopted a code of ethics due to our limited size. We intend to adopt a code of ethics when warranted.
11
Item 11. Executive Compensation
Summary Compensation
The following table provides information as to cash compensation (paid or accrued) of all executive officers of the Company, for each of the Company’s last two fiscal years.
SUMMARY COMPENSATION TABLE
Name and
principal position
| Year
| Salary
($)
| Bonus
($)
| Stock
Awards
($)
| Option
Awards
($)
| Non-Equity
Incentive Plan
Compensation
($)
| Nonqualified
Deferred
Compensation
Earnings
($)
| All Other
Compensation
($)
| Total
($)
|
|
|
|
|
|
|
|
|
|
|
Boriss Aleksandrov
| 2021
| 0
| 0
| 1,750
| 0
| 0
| 0
| 0
| 1,750
|
(CEO and Director)
| 2021
| 0
| 0
| 0
| 0
| 0
| 0
| 0
| 0
|
Jeffrey Standen
| 2022
| 0
| 0
| 0
| 0
| 0
| 0
| 0
| 0
|
(former CEO)
| 2021
| 2,000
| 0
| 0
| 0
| 0
| 0
| 0
| 2,000
|
Richard Tang
| 2022
| 0
| 0
| 0
| 0
| 0
| 0
| 0
| 0
|
(former CEO)
| 2021
| 72,000
| 0
| 0
| 0
| 0
| 0
| 0
| 72,000
|
Kim Halvorson
| 2022
| 90,000
| 0
| 0
| 0
| 0
| 0
| 0
| 90,000
|
(COO)
| 2021
| 150,000
| 0
| 75(1)
| 0
| 0
| 0
| 0
| 150,075
|
(1)750,000 shares issued to Triage Microcap Advisors LLC, a company owned by Ms. Halvorson. Salary is accrued for Triage.
Outstanding Equity Awards at Fiscal Year End. There were no outstanding equity awards as of September 30, 2022.
Board Committees
We do not currently have any committees of the Board of Directors. Additionally, due to the nature of our intended business, the Board of Directors does not foresee a need for any committees in the foreseeable future.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth, as of December 12, 2022, certain information with respect to the beneficial ownership of shares of our common stock by: (i) each person known to us to be the beneficial owner of more than five percent (5%) of our outstanding shares of common stock, (ii) each director or nominee for director of our Company, (iii) each of the executives, and (iv) our directors and executive officers as a group.
Name of Beneficial Owner(1)
|
| Address
|
| Shares of
Common
Stock
|
| Percent of
Class
|
Boriss Aleksandrov
|
| Mae 2A-25 Tallinn 13628 Estonia
|
| 32,500,000
|
| 24.1%
|
Olga Palumbo
|
| Via Nassa 7 Lugano 6900 Switzerland
|
| 100,000
|
| 0.1%
|
Sascha Zilger
|
| Harju, Estonia
|
| -
|
| -
|
All Officers and Directors as a Group
(3 persons)
|
|
|
| 32,600,000
|
| 24.2%
|
|
|
|
|
|
|
|
Decus Pro Ou
|
| J Sutiste Tee 19A-200 Tallinn 13419 Estonia
|
| 20,500,000
|
| 15.2%
|
Olecompa Ou
|
| Tehnika 19 Tamsalu 46106 Estonia
|
| 30,750,000
|
| 22.8%
|
All Others as a Group (2 persons)
|
|
|
| 51,250,000
|
| 38%
|
(1)Beneficial ownership is calculated based on 134,664,500 shares of common stock issued and outstanding as of the date hereof.
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Item 13. Certain Relationships and Related Transactions, and Director Independence
On April 18, 2017, the Company entered into a Convertible Loan Agreement with Kim Halvorson, the former CEO. The loan agreement was entered into pursuant to Ms. Halvorson’s agreement to fund the initial expenses of the Company. Per the terms of the agreement any funds loaned to the company or paid out on behalf of the Company will be convertible into shares of common stock at $0.0001 per share. The loans are due on demand and non-interest bearing. During the year ended September 30, 2021, Ms. Halvorson and Triage MicroCap Advisors LLC (“Triage”) (a company owned by Ms. Halvorson) converted $8,707 into 8,680,000 shares of common stock. As of September 30, 2022 and 2021, the balance due to Ms. Halvorson is $69,309 and $51,097, respectively.
During the year ended September 30, 2021, the Company granted 750,000 shares of common stock for services to Triage. The shares were valued $0.001, the share price of recently sold shares to unrelated third parties, for total non-cash stock compensation expense of $75.
During the year ended September 30, 2021, the Company granted 1,450,000 shares of common stock for services to Maximum Ventures Holdings LLC. The shares were valued $0.001, the share price of recently sold shares to unrelated third parties, for total non-cash stock compensation expense of $145. Richard Tang, the former Treasurer, is a member of Maximum Ventures Holdings LLC.
During the year ended September 30, 2021, the Company granted 1,450,000 shares of common stock for services to Avatele Group LLC. The shares were valued $0.0001, the share price of recently sold shares to unrelated third parties, for total non-cash stock compensation expense of $145. Mr. Tang is a member of Avatele Group LLC.
During the year ended September 30, 2021, Mr. Tang, advance the Company $494 to pay general operating expenses. The advance is non-interest bearing and due on demand. During the quarter ended March 31, 2022, Mr. Tang loaned the Company an additional $20,000. As of September 30, 2022 and 2021, the balance due to Mr. Tang is $20,494 and $494, respectively.
During the year ended September 30, 2021, Mr. Tang converted $408,000 of accrued compensation into 150,000,000 shares of common stock. On June 30, 2021, Mr. Tang, forgave of $24,000 of accrued compensation due to him. The $24,000 was credited to additional paid in capital.
Effective March 7, 2022, Mr. Richard Tang has resigned as Treasurer and officer, and all roles relating to Sino American Oil Company.
Effective March 14, 2022, the Company appointed Boriss Aleksandrov as Treasurer and Director of the Company. Since his appointment Mr. Aleksandrov has advanced the Company $25,725 to pay for general operating expenses.
Effective April 29, 2022, Queenie Wong resigned as a Director of the Company and Kim Halverson resigned as a Director, President and Treasurer of the Company. Ms. Halverson remains as the Secretary of the Company.
On August 23, 2022, the Company appointed Olga Palumbo as a director of the Company. Ms. Palumbo was issued 100,000 shares of common stock. The shares were valued at $1.05, the closing stock price on the date of grant, for total non-cash compensation expense of $105,000.
Director Independence
We currently do not have any independent directors, as the term “independent” is defined in Section 803A of the NYSE Amex LLC Company Guide. Since the OTC Markets does not have rules regarding director independence, the Board makes its determination as to director independence based on the definition of “independence” as defined under the rules of the New York Stock Exchange (“NYSE”) and American Stock Exchange (“Amex”).
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Item 14. Principal Accounting Fees and Services
Audit Fees
The aggregate fees billed for professional services rendered by our auditor Michael Gillespie & Associates, PLLC for the audit and review of our financial statements for the fiscal years ended September 30, 2022 and 2021 amounted to $10,800 and $16,000, respectively.
Audit-Related Fees
During the fiscal years ended September 30, 2022 and 2021 our principal accountant rendered assurance and related services reasonably related to the performance of the audit or review of our financial statements in the amount of $0 and $0, respectively.
Tax Fees
The aggregate fees billed for professional services rendered by our principal accountant for the tax compliance for the years ended September 30, 2022 and 2021 was $0 and $0, respectively.
All Other Fees
During the fiscal years ended September 30, 2022 and 2021, there were no fees billed for products and services provided by the principal accountant other than those set forth above.
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