Adapti, Inc 10-Q, filed Feb 14, 2025
Adapti, Inc. (ADTI)
About this 10-Q
Adapti, Inc filed this 10-Q on February 14, 2025, covering the quarter ended December 31, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: DECEMBER 31, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number: 000-53336
Scepter Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Nevada | 01-0884561 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
2278 Monitor St, Dallas, Texas |
85004 | |
| (Address of Principal Executive Offices) | (Zip Code) |
775-375-1500
Registrant’s telephone number
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Non-accelerated filer ☐ | Smaller reporting company ☒ | |
| Emerging Growth Company ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name
of each exchange on which registered | ||
| Common Shares | BZRL | OTC: PINK |
The number of shares of common stock ($0.001 par value) outstanding as of February 14, 2025 was 6,010,887,116.
SCEPTER HOLDINGS, INC.
FOR THE THREE AND NINE MONTHS ENDED
December 31, 2024
Index to Report
| Page | ||
| PART I | FINANCIAL STATEMENTS (unaudited) | 4 |
| Item 1. | Condensed Balance Sheets | 4 |
| Condensed Statements of Operations | 5 | |
| Condensed Changes in of Stockholder Deficit | 6 | |
| Condensed Statements of Cash Flow | 7 | |
| Notes to Financial Statements | 8 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 21 |
| Item 4. | Controls and Procedures | 24 |
| PART II | OTHER INFORMATION | 24 |
| Item 1. | Legal Proceedings | 24 |
| Item 1A. | Risks Factors | 25 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 25 |
| Item 3. | Defaults Upon Senior Securities | 25 |
| Item 4. | Other Information | 25 |
| Item 5. | Exhibits | 25 |
| 2 |
FORWARD-LOOKING STATEMENTS
This document contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not intend, and undertake no obligation, to update any forward-looking statement. You should, however, consult further disclosures we make in future filings of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:
| - | our current lack of working capital; | ||
| - | inability to raise additional financing; | ||
| - | that our accounting policies and methods are fundamental to how we report our financial condition and results of operations, and they may require our management to make estimates about matters that are inherently uncertain; | ||
| - | deterioration in general or regional economic conditions; | ||
| - | adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations; | ||
| - | inability to efficiently manage our operations; | ||
| - | inability to achieve future sales levels or other operating results; and | ||
| - | the unavailability of funds for capital expenditures. | ||
| - | Our lack of cash due to the shutdown of operations due to the pandemic. | ||
| - | Our late disclosure filings caused by a lack of funding due to the impact of the pandemic on our operations. | ||
For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Item 1A. Risk Factors” in this document.
Throughout this Quarterly Report references to “we”, “our”, “us”, “Scepter Holdings”, “SCEPTER”, “the Company”, and similar terms refer to Scepter Holdings, Inc.
| 3 |
ITEM 1. FINANCIAL STATEMENTS
Condensed Balance Sheets
| (unaudited) | (audited) | |||||||
| December 31, | March 31, | |||||||
| 2024 | 2024 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 25,662 | $ | 702 | ||||
| Accounts receivable | 888 | 1,904 | ||||||
| TOTAL ASSETS | $ | 26,550 | $ | 2,606 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 360,474 | $ | 140,350 | ||||
| Convertible notes payable, accrued interest | 51,266 | |||||||
| Related party convertible notes payable, accrued interest | 205,194 | - | ||||||
| Related party notes payable, accrued interest | 480,988 | 346,016 | ||||||
| Total Current Liabilities | 1,097,922 | 486,366 | ||||||
| EIDL Loans | 7,000 | 7,000 | ||||||
| Total Long - Term Liabilities | 7,000 | 7,000 | ||||||
| Total Liabilities | 1,104,922 | 493,366 | ||||||
| Stockholders’ Deficit: | ||||||||
| Preferred Stock, par value $0.001, authorized 20,000,000 issued and zero outstanding at December 31, 2024 and March 31, 2024, respectively | - | - | ||||||
| Common stock, $0.001 par value, Authorized 200,000,000, 6,010,887,116 and 5,934,220,449 shares outstanding at December 31, 2024 and March 31, 2024, respectively | 6,010,887 | 5,934,220 | ||||||
| Additional paid-in capital | 2,178,936 | 2,127,269 | ||||||
| Accumulated deficit | (9,268,195 | ) | (8,552,249 | ) | ||||
| Total Stockholders’ Deficit | (1,078,372 | ) | (490,760 | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | 26,550 | $ | 2,606 | ||||
See accompanying notes to the financial statements.
| 4 |
Condensed Statements of Operations
| (unaudited) | (unaudited) | |||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues | 1,244 | $ | 4,053 | $ | 4,222 | $ | 10,966 | |||||||||
| Cost of revenue | - | 2,362 | - | 10,625 | ||||||||||||
| Gross Profit | 1,244 | 1,691 | 4,222 | 341 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative | $ | 6,811 | $ | 8,245 | $ | 57,291 | $ | 96,218 | ||||||||
| Professional fees | 261,950 | 351,849 | 624,874 | 1,253,718 | ||||||||||||
| Total Operating Expenses | 268,761 | 360,094 | 682,166 | 1,349,937 | ||||||||||||
| Loss from operations | (267,517 | ) | (358,403 | ) | (677,944 | ) | (1,349,596 | ) | ||||||||
| Other Expense | ||||||||||||||||
| Other income (expense) | $ | - | $ | 25 | - | 25 | ||||||||||
| Interest expense | (17,552 | ) | - | (38,002 | ) | |||||||||||
| Net Other Expense | (17,552 | ) | 25 | (38,002 | ) | 25 | ||||||||||
| Net Loss | $ | (285,069 | ) | $ | (358,378 | ) | $ | (715,945 | ) | $ | (1,349,571 | ) | ||||
| Net Loss Per Common Share: Basic and Diluted | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.000 | ) | $ | (0.000 | ) | ||||
| Weighted Average Number of Common Shares Outstanding: Basic and Diluted | 5,977,553,782 | 5,779,782,043 | 5,969,550,752 | 5,788,518,523 | ||||||||||||
See accompanying notes to the financial statements.
| 5 |
Condensed Statements of Changes in Stockholders’ Deficit
Three months and nine months ended December 31, 2024 and 2023
| Additional | Total | |||||||||||||||||||
| Common Stock | Paid-in | Accumulated | Stockholders’ | |||||||||||||||||
| Number of Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balance September 30, 2023 | 5,736,720,449 | 5,449,577 | 2,157,663 | (7,834,428 | ) | (227,188 | ) | |||||||||||||
| Common shares issued for services | 132,500,000 | 132,500 | 172,250 | - | 304,750 | |||||||||||||||
| Net loss | - | - | - | (355,063 | ) | (355,063 | ) | |||||||||||||
| Balance December 31, 2023 | 5,869,220,449 | 5,582,077 | 2,329,913 | (8,189,491 | ) | (277,501 | ) | |||||||||||||
| Balance March 31, 2023 - Audited | 5,170,233,454 | 5,170,233 | 1,524,333 | (6,843,234 | ) | (148,668 | ) | |||||||||||||
| Common stock issued for conversion of notes payable and accrued interest | 14,056,996 | 14,057 | 1,687 | - | 15,744 | |||||||||||||||
| Common shares issued for services | 684,929,999 | 397,787 | 803,893 | - | 1,201,680 | |||||||||||||||
| Net loss | - | - | - | (1,346,257 | ) | (1,346,257 | ) | |||||||||||||
| Balance December 31, 2023 | 5,869,220,449 | 5,582,077 | 2,329,913 | (8,189,491 | ) | (277,501 | ) | |||||||||||||
| Balance - September 30, 2024 | 5,975,887,116 | $ | 5,975,887 | $ | 2,181,436 | $ | (8,983,124 | ) | $ | (825,801 | ) | |||||||||
| Common shares issued for services | 35,000,000 | 35,000 | (2,500 | ) | - | 32,500 | ||||||||||||||
| Net loss | - | - | - | (285,070 | ) | (285,070 | ) | |||||||||||||
| Balance - December 31, 2024 | 6,010,887,116 | $ | 6,010,887 | $ | 2,178,936 | $ | (9,268,194 | ) | $ | (1,078,371 | ) | |||||||||
| Balance - March 31, 2024 – Audited | 5,934,220,449 | $ | 5,934,220 | $ | 2,127,270 | $ | (8,552,249 | ) | $ | (490,760 | ) | |||||||||
| Common shares issued for services | 76,666,667 | 76,667 | 51,667 | - | 128,334 | |||||||||||||||
| Net loss | - | - | - | (715,945 | ) | (715,945 | ) | |||||||||||||
| Balance - December 31, 2024 | 6,010,887,116 | $ | 6,010,887 | $ | 2,178,936 | $ | (9,268,194 | ) | $ | (1,078,371 | ) | |||||||||
See accompanying notes to the financial statements.
| 6 |
Condensed Statements of Cash Flows
| (unaudited) | ||||||||
| For the Nine Months Ended | ||||||||
| December | ||||||||
| 2024 | 2023 | |||||||
| OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (715,945 | ) | $ | (1,349,572 | ) | ||
| Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
| Stock based compensation | 128,333 | 1,217,424 | ||||||
Issuance of notes payable in exchange for outstanding accounts payable | 103,431 | - | ||||||
| Accounts receivable | 1,016 | (399 | ) | |||||
| Inventory | - | 81,756 | ||||||
| Accrued interest | 38,002 | - | ||||||
| Accounts payable and accrued liabilities | 220,124 | (268,144 | ) | |||||
| Net Cash Used By Operating Activities | (225,040 | ) | (318,934 | ) | ||||
| INVESTING ACTIVITIES: | ||||||||
| Net Cash Used in Investing Activities | - | - | ||||||
| FINANCING ACTIVITIES: | ||||||||
| Notes payable issued for cash | 250,000 | 314,669 | ||||||
| Net Cash Provided by Financing Activities | 250,000 | 314,669 | ||||||
| Net increase (decrease) in cash | 24,960 | (4,266 | ) | |||||
| Cash, beginning of period | 702 | 7,172 | ||||||
| Cash, end of period | $ | 25,662 | 2,906 | |||||
| Supplemental cash flow information | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for taxes | $ | - | $ | - | ||||
| Non-cash transactions: | ||||||||
| Issuance of convertible Notes Payable | $ | 250,000 | $ | |||||
| Issuance of note payable in exchange for outstanding accounts payable | $ | 103,431 | $ | - | ||||
See accompanying notes to the financial statements
| 7 |
NOTE 1. ORGANIZATION AND NATURE OF BUSINESS
In 2018, we began selling our own licensed products direct to consumers through the acquisition of the product formulation, inventory and customer list of Dermacia, a line of skin care and healthcare products (dermaciapro.com) In 2019, we began marketing to our customers through the use of social media such as Instagram, Facebook and other applications, and it became apparent that we needed to employ social media influencers that had specialization in marketing products similar to ours to our desired demographics– typically women who purchase high-end health and beauty products online. We quickly discovered that identifying the appropriate influencers and determining the proper amount to pay for this type of marketing proved to be extremely difficult.
In 2021, we decided that we would need to develop our own software system that would go out and scrape a number of social media applications and help us to determine the most effective influencers for our specific product line (currently only Dermacia). We hired a number of programmers and after several years we created Adapti. Essentially, the Adapti platform is an AI system that creates a ‘data fingerprint’ for client products data and even the entire company by utilizing third party AI such as ChatGPT, OpenAI or Google AI tools. It is management’s belief that Adapti will be able to match product data with influencers best positioned to successfully promote our products and services. Adapti uses such third party AI to determine which influencers will likely be able to generate the most attention - in specifically curated audiences - to attempt to produce the most positive ROI on client spend. The Company has spent approximately $500,000 in fiscal years 2023 and 2024 developing this software.
Adapti also continually analyzes proprietary data for each specific campaign along with public data sources as additional feedback to inform ongoing promotions and to further refine its algorithm and attempt to monetize accumulated data.
At the same time, as we had programming capabilities, we took on several outsourced projects to generate limited income and fully deploy our personnel.
In 2023, we began beta testing Adapti and in 2024 ran a few live transactions utilizing Adapti in a production environment in assisting with the sale of Dermacia. Adapti is expected to become a part of the strategy with the Ballengee Acquisition to assist the Ballengee clients with its social media opportunities. However, Adapti has not generated any revenues.
NOTE 2. GOING CONCERN
As of December 31, 2024, the Company has incurred losses totaling $9,268,195 (March 31, 2024 - $8,552,249) since inception, has not yet generated significant revenue from its operations, and will require additional funds to maintain our operations. As of December 31, 2024, the Company had a working capital deficit of $1,071,372 (2024 - $483,760) and incurred a loss for the three months and nine months ended December 31, 2024 of $285,069 and $715,946 (December 31, 2023 - $358,378 and $1,349,571).
The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they become due. The Company intends to finance operating costs over the next twelve months through continued financial support from its stockholders, the issuance of debt securities and private placements of common stock. The Company has settled some liabilities with share-based compensation and convertible debt in the past and may continue to in the future. The Company expects to close the transaction with the Ballengee Group LLC (“BG”) (Note 14) that they will be able to generate sufficient cash flow from operations.
While the Company strongly believes that its capital resources will be sufficient in the near term, there is no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital or, if additional capital is needed that such funds, if available, will be obtainable in terms of satisfactory to the Company.
The accompanying condensed financial statements have been prepared assuming that the Company will continue as a going concern; however, the above condition raises substantial doubt about the Company’s ability to do so. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) as promulgated in the United States of America.
All figures are in U.S. Dollars.
The fiscal year end is March 31.
| 8 |
Reclassifications
Certain amounts in the prior period have been reclassified to conform to the current period presentation. These reclassifications have no material effect on the reported financial results
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, stock-based compensation, derivate instruments, accounting for preferred stock, and the valuation of acquired assets and liabilities. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates when there are changes in circumstances, facts, and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and on deposit at banking institutions as well as all highly liquid short-term investments with original maturities of 90 days or less. The Company had cash on hand of $25,661 as of December 31, 2024 and $702 March 31, 2024 . The Company has no cash equivalents as of September 30, 2024 and March 31, 2024.
Revenue Recognition
Under Financial Accounting Standards Board (“FASB”) Topic 606, “Revenue from Contacts with Customers” (“ASC 606”), the Company recognizes revenue when the customer obtains control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the products to be sold in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the products in the contract; and (v) recognize revenues when (or as) the Company delivers the contracted product to the customer.
The Company recognizes revenue (i) when they receive a purchase order from the Amazon online system (ii) each purchase order identifies the quantity and products to be purchased (iii) each purchase order has the price including discounts, (iv) there is no requirement for allocation as each sku has a separate price, and (v) the Company recognizes revenue when the customer receives the product from Amazon within a matter of days.
| 9 |
Accounts Receivable
The Company does not currently maintain reserves for potential credit losses on accounts receivable in accordance with ASC 326 Financial Instruments Credit Losses since the balances are so small and the average purchase from our customers is less than $100. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. As of December 31, 2024 and March 31, 2024, the Company did not have an allowance for doubtful accounts.
Convertible Debt
When the Company issues convertible debt, it first evaluates the balance sheet classification of the convertible instrument in its entirety to determine whether the instrument should be classified as a liability under ASC 480, Distinguishing Liabilities from Equity, and second whether the conversion feature should be accounted for separately from the host instrument. A conversion feature of a convertible debt instrument or certain convertible preferred stock would be separated from the convertible instrument and classified as a derivative liability if the conversion feature, were it a standalone instrument, meets the definition of an “embedded derivative” in ASC 815, Derivatives and Hedging. Generally, characteristics that require derivative treatment include, among others, when the conversion feature is not indexed to the Company’s equity, as defined in ASC 815-40, or when it must be settled either in cash or by issuing stock that is readily convertible to cash. When a conversion feature meets the definition of an embedded derivative, it would be separated from the host instrument and classified as a derivative liability carried on the balance sheet at fair value, with any changes in its fair value recognized currently in the statements of operations.
Stock-Based Compensation
ASC 718, “Compensation - Stock Compensation”, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, “Equity - Based Payments to Non-Employees.” Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
| 10 |
Income Taxes
We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the 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. Valuation allowances are recorded, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740, Income Taxes (“ASC 740”), which clarifies the accounting and disclosure for uncertainty in tax positions, as defined, seeks to reduce the diversity in practice associated with certain aspects of the recognition and measurement related to accounting for income taxes. We adopted the provisions of ASC 740 as of January 1, 2007 and have analyzed filing positions in each of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. We have identified the U.S. federal and California as our “major” tax jurisdictions. With limited exceptions, we remain subject to Internal Revenue Service (“IRS”) examination of our income tax returns filed within the last three (3) years, and to California Franchise Tax Board examination of our income tax returns filed within the last four (4) years. However, we have certain tax attribute carryforwards which will remain subject to review and adjustment by the relevant tax authorities until the statute of limitations closes with respect to the year in which such attributes are utilized.
At December 31, 2024 and March 31, 2024, the Company recognized a full valuation allowance against the recorded deferred tax assets.
We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our financial position. Therefore, no reserves for uncertain income tax positions have been recorded pursuant to ASC 740. Our policy for recording interest and penalties associated with income-based tax audits is to record such items as a component of income taxes.
Net Loss per Share
The Company follows ASC 260, “Earnings per Share” (“EPS”), which requires presentation of basic EPS on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation. In the accompanying financial statements, basic earnings (loss) per share are computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.
Diluted earnings per share reflects the potential dilution that could occur if securities were exercised or converted into common stock or other contracts to issue common stock resulting in the issuance of common stock that would then share in the Company’s earnings subject to anti-dilution limitations. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have an anti-dilutive impact.
For the period ended December 31, 2024, and March 31, 2024, potentially dilutive common shares consist of common stock issuable upon the conversion of convertible notes payable. All potentially dilutive securities related to these convertible notes payable were excluded from the computation of diluted weighted average number of shares of common stock outstanding as they would have had an anti-dilutive impact.
Contingencies
The Company follows ASC 450-20, “Loss Contingencies” to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. There were no loss contingencies as of December 31, 2024 and March 31, 2024.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”) which supersedes existing guidance on accounting for leases in “Leases (Topic 840).” The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet. A lessee should recognize in the balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The new guidance is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those fiscal years. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. The Company evaluated the effects of adopting ASU 2016-02 on its financial statements and determined that there are no leases for evaluation.
| 11 |
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This ASU is an update and are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company is currently evaluating how this ASU will impact its financial statements and disclosures.
In November 2024, the FASB issued Accounting Standards Update 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating how this ASU will impact its financial statements and disclosures.
In March 2024, Accounting Standards Update 2024-02—Codification Improvements—Amendments to Remove References to the Concepts Statements: The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2024. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2025. Early application of the amendments in this Update is permitted for all entities, for any fiscal year or interim period for which financial statements have not yet been issued (or made available for issuance). If an entity adopts the amendments in an interim period, it must adopt them as of the beginning of the fiscal year that includes that interim period. The Company is currently evaluating how this ASU will impact its financial statements and disclosures.
In March 2024, the FASB issued Accounting Standards Update 2024-01—Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim period, it should adopt them as of the beginning of the annual period that includes that interim period.The Company is currently evaluating how this ASU will impact its financial statements and disclosure
Management does not believe any other recently issued, but not yet effective accounting pronouncements would have a material effect on our present or future financial statements.
NOTE 4 – ACCOUNTS RECEIVABLE
Accounts Receivable at December 31, 2024 and March 31, 2024 consists of the following:
| December 31, 2024 | March 31, 2024 | |||||||
| Accounts Receivable | $ | 888 | $ | 1,904 | ||||
Accounts receivable balances are primarily made up of sales through the third party vendor and paid within thirty days.
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NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities at December 31, 2024 and March 31, 2024 consists of the following:
| December 31, 2024 | March 31, 2024 | |||||||
| Accounts payable | $ | 53,308 | $ | 36,802 | ||||
| Accrued liabilities | 307,166 | 103,548 | ||||||
| $ | 360,474 | $ | 140,350 | |||||
Accrued liabilities are made up of the following as December 31, 2024 and March 31, 2024:
| Accrued Liabilities | December 31. 2024 | March 31, 2024 | ||||||
| Accounting Firm & Management | $ | 190,000 | $ | 30,000 | ||||
| Legal Counsel | 117,166 | 73,548 | ||||||
| $ | 307,166 | $ | 103,548 | |||||
Approximately $5,000 was owed in accounting and audit fees and $185,000 was owed in management fees.
The $117,166 owed to two of our attorneys that is no longer the Company’s legal counsel is to be settled for common shares. The remaining legal fees will be paid in cash.
NOTE 6 – CONVERTIBLE NOTES PAYABLE
Convertible Notes payable at December 31, 2024 and March 31, 2024 consists of the following:
| December 31, 2024 | March 31, 2024 | |||||||
| Convertible note payable | $ | 50,000 | $ | - | ||||
| Total convertible notes payable | 50,000 | - | ||||||
| Add: accrued interest | 1,266 | - | ||||||
| Total convertible notes payable | $ | 51,266 | $ | - | ||||
On October 15, 2024 the Company entered into $50,000 convertible note agreement bearing an interest rate of 12% with a private investor with a 12 month term. The note will rank senior to all other obligations. The securities will convert into common shares at a conversion price of $0.001 any time prior to maturity.
Convertible note payable balances was $50,000 for the three months ended December 31, 2024 and year ended March 31, 2024, respectively with accrued interest of $1,266 for a total convertible note payable balance of $56,460.
During the nine months ended December 31, 2023, the Company converted principal totaling $15,000 and $756 of interest into an aggregate of 14,056,996 shares of common stock at 20% discount to market price of after discount $0.00012.
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Conversion of Outstanding Promissory Notes
During the Quarter ended June 30, 2023, the Company issued 14,056,996 shares of common stock to Paul Kison for the conversion of $15,000 of debt. During the Quarter ended March 31, 2023 the Company retired $75,000 of debt, $20,000 through the conversion of the Bruce A Smith note issued on September 8, 2022 into 13,810,382 common shares common stock at a 20% discount to market for a price of $0.00152, $10,000 through the conversion of the Larry C. Tankson note issued on September 6, 2022 to 7,2888,813 common stock at a 20% discount to market for a price of $0.00144, $5,000 through the conversion of the Carole Alley Family Trust note issued on August 1, 2022 to 3,126,223 common stock at a 20% discount to market for a price of $0.00168, $5,000 through the conversion of the Donald L. & Hazel J. Christensen Revocable Living Trust note issued on August 1, 2022 to 3,136,823 common stock at a 20% discount to market for a price of $0.00168, $15,000 through the conversion of the William P. Elkins note issued July 26, 2022 to 9,847,603 common stock at a 20% discount to market for a price of $0.00160, $5,000 through the conversion of the Wallace Chapiewski note issued on July 7, 2022 to 3,282,534 common stock at a 20% discount to market for a price of $0.00160, $5,000 through the conversion of the Santuccio Ricciardi note issued on July 5, 2022 to 3,282,534 common stock at a 20% discount for a price of $0.00160, and $10,000 through the conversion of the Arnaldo Aleman note issued on July 19, 2022 to 6,252,446 common stock at a 20% discount to market for a price of $0.00168.
Prior to December 2023, the Company had converted all prior notes payable to common stock.
During the quarter ended September 30, 2023, an adjusting entry was made effecting the conversion to common stock of $175,000 of long term notes. $125,000 through the conversion of three notes issued to OC Sparkle for a 39,908,604 common shares at a 50% discount to market for average share price of $0.00067, and $50,000 through the conversion of the note issued to CZA, Inc. for 30,571,429 common shares at a 50% discount to market for an average share price of $0.00175.
During the Quarter ended June 30, 2023, the Company retired $15,000 of debt through the conversion of the Paul Kison note issued on September 28, 2022 to 14,056,996 common stock at 20% discount to market for a price of $0.00112.
During the Quarter ended March 31, 2023, the Company retired $75,000 of debt, $20,000 through the conversion of the Bruce A Smith note issued on September 8, 2022 to 13,810,382 shares of common stock at 20% discount to market for a price of $0.00152, $10,000 through the conversion of the Larry C. Tankson note issued on September 6, 2022 to 7,288,813 shares of common stock at 20% discount to market for a price of $0.00144, $5,000 through the conversion of the Carole Alley Family Trust note issued on August 1, 2022 to 3,126,223 shares of common stock at 20% discount to market for a price of $0.00168, $5,000 through the conversion of the Donald L. & Hazel J. Christensen Revocable Living Trust note issued on August 1, 2022 to common stock, $15,000 through the conversion of the William P. Elkins note issued July 26, 2022 to 3,136,823 shares of common stock at 20% discount to market for a price of $0.00168, $5,000 through the conversion of the Wallace Chapiewski note issued on July 7, 2022 to 3,282,534 shares of common stock at a 20% discount to market for a price of $0.00160, $5,000 through the conversion of the Santuccio Ricciardi note issued on July 5, 2022 to 3,282,534 shares of common stock at 20% discount to market for a price of $0.00160 , and $10,000 through the conversion of the Arnaldo Aleman note issued on July 19, 2022 to 6,252,446 shares of common stock for a price of $0.00168.
NOTE 7 – RELATED PARTY CONVERTIBLE NOTES PAYABLE
Related party convertible Notes payable at December 31, 2024 and March 31, 2024 consists of the following:
| December 31, 2024 | March 31, 2024 | |||||||
| Related party convertible note payable | $ | 200,000 | $ | - | ||||
| Total related party convertible notes payable | 200,000 | - | ||||||
| Add: accrued interest | 5,194 | - | ||||||
| Total related convertible notes payable, accrued interest | $ | 205,194 | $ | - | ||||
On September 24, 2024 the Company entered into $100,000 convertible note agreement bearing an interest rate of 12% with a private investor with a 12 month term. The note will rank senior to all other obligations. The securities will convert into common shares at a conversion price of $0.001 any time prior to maturity.
On October 30, 2024 the Company entered into $100,000 convertible note agreement bearing an interest rate of 12% with a private investor with a 12 month term. The note will rank senior to all other obligations. The securities will convert into common shares at a conversion price of $0.001 any time prior to maturity.
Related party convertible note payable balances – short term was $200,000 for the three months ended December 31, 2024 and year ended March 31, 2024, respectively with accrued interest of $5,194 for a total convertible note payable balance of $205,194.
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NOTE 8 – RELATED PARTY NOTES PAYABLE
Related party notes payable at December 31, 2024 and March 31, 2024 consists of the following
| December 31, 2024 | March 31, 2024 | |||||||
| Market Group International | $ | 252,003 | $ | 252,003 | ||||
| Stuff International | 188,044 | 84,613 | ||||||
| Total Related Party Notes Payable | 440,047 | 336,616 | ||||||
| Accrued Interest | 40,941 | 9,400 | ||||||
| Related Party Notes Payable | $ | 480,988 | $ | 346,016 | ||||
On December 31, 2024 and March 31, 2024 the Company had two related party notes payables. The first related notes payable was a conversion of accounts payable balance owed to Market Group International into a $250,000 related party notes payable which bear a 10% interest rate and was entered into on December 12, 2023.
As of December 31, 2024, the Company was not in compliance with its note with Market Group International. It is planning to convert the note and all accrued interest into common stock during the quarter ending March 31, 2025 as is it right under the term of the note. Upon conversion of the note, all non-compliance issues will be cured.
The balance related to Market Group International is $252,003 plus accrued interest of $26,581 and $7,595 for total balance of $278,583 and $259,598 as of December 31, 2024 and March 31, 2024.
This note is convertible to common stock with the following terms: if the Filing shall have occurred prior to the Maturity Date, any part of the outstanding balance of the Note into fully paid and non-assessable shares of Common Stock at the Qualified Filing conversion Price, provided that in no event shall this Note be converted in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates and (2) the number of shares of
Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this provision would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock.
The conversion price upon a Filing Conversion shall equal the lower of (i) 80% of the opening price of the Borrower’s shares of Common Stock, as listed on the Senior Exchange, on the first day on which the/ Borrower’s shares are traded thereon (representing a 20% discount), or (ii) 80% of the offering price of shares of Common Stock, (representing a 20% discount) (the “Filing Conversion Price”); (B) the conversion price upon a Non-Filing Conversion shall equal 80% of the Market Price.
Market Group International is owned by Robert Van Boreum our ex – Chief Executive Officer and it holds 918,984,500 of our outstanding common stock as of December 31, 2024 and March 31, 2024.
The second note payable is to Stuff International for funds advanced to the Company and bears a 10% interest rate. The Stuff international Note payable represents a balance of $188,044 and $84,613 of principal and $14,360 and $1,805 of accrued interest for a total note payable of $202,405 and $86,419 as of December 31, 2024 and March 31, 2024 respectively. This note is not convertible into common shares of the Company. Adam Nicosia our current Chief Executive Officer owns Stuff International. He also own Ecoscientific Labs that owns 1,900,000,000 and 1,695,823,333 of our common stock as of December 31, 2024 and March 31, 2024, respectively. Please note the maturity date of this note was extended until December 31, 2025.
NOTE 9 – EIDL LOAN
EIDL Loan at December 31, 2024 and March 31, 2024 consists of the following:
| December 31, 2024 | March 31, 2024 | |||||||
| EIDL Loan | $ | 7,000 | $ | 7,000 | ||||
| Total EIDL Loan | $ | 7,000 | $ | 7,000 | ||||
On April 21, 2020 the Company received an EIDL Advance of $7,000, which the Company has recorded as a loan in the event the grant is not forgiven. As of December 31, 2024 and March 31, 2024 the balance of EIDL loans is $7,000 respectively.
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NOTE 10: STOCKHOLDERS’ DEFICIT
Authorized Capital Stock
The Company’s authorized capital stock consists of (a) 20,00,000,000 shares of Common Stock, $0.001 par value per share (“Common Stock”), (b) 20,000,000 shares of Preferred Stock, $0.001 par value per share (“Preferred Stock”).
As of December 31, 2024 and March 31,2024, the Company had 6,010,887,116 shares and 5,939,220,44 shares of Common Stock and zero shares of Preferred Stock issued and outstanding. All outstanding shares of Common Stock are fully paid and nonassessable.
Common Stock
The Nevada Revised Statues provides that the holders of the Common Stock shall have one vote per share. In addition, except as otherwise required by law, as provided in this Articles of Incorporation, and as otherwise provided in the resolution or resolutions, if any, adopted by the Board with respect to any series of the Preferred Stock, on any matter presented to the holders of Common Stock and Preferred Stock for their action or consideration at any meeting of stockholders of the Company (or by written consent of stockholders in lieu of meeting), the holders thereof shall vote together as a single class.
Holders of the Common Stock will have no preemptive or conversion rights or other subscription rights. The Bylaws of the Company provide that the holders of Common Stock shall not have a right to cumulative voting. The rights, preferences, and privileges of the holders of the Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that the Company may designate and issue in the future. Additionally, the Bylaws may be amended by the Company’s stockholders or the Board of Directors.
Preferred Stock
There are no shares of Preferred Stock outstanding as of December 31, 2024 and March 31, 2024. The Company has filed a Certificate of Designations with the Secretary of State of the State of Nevada for the twenty million 20,000,000 shares of Preferred Stock providing that the rights, preferences, privileges and restrictions granted to and imposed on the Preferred Stock of the Company are as follows: stockholders shall be entitled to one vote per share; shall be senior to common stock and shall have a conversion price to Common Stock subject to board approval; and conversion to Common Stock may occur after a year, at the election of the holder, or upon board approval. The Bylaws provide that the holders of Preferred Stock shall not have a right to cumulative voting.
Common Stock
No dividends, if dividends were issued holders would have a pro-rata right, 1 share 1 vote, no preemption rights.
Preferred Stock
No outstanding Preferred shares.
Issuances of Common Stock from the Conversion of Notes
During the quarter ended December 31, 2024, the Company issued 5,000,000 restricted shares of common stock to Vasil Papov, in exchange for professional services.
During the quarter ended December 31, 2024, the Company issued 30,000,000 restricted shares of common stock to Steven Davis in exchange for his professional services at a price of $0.00007 per share.
During the quarter ended June 30, 2024, the Company issued 41,666,667 restricted shares of common stock to EcoScientific Labs, in exchange for Adam Nicosia’s Management services at a price of $.0023 per share for total compensation costs of $95,833.
During the quarter ended March 31, 2024, the Company issued 2,500,000 restricted shares of common stock to Vasil Popov in exchange for his professional services.
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During the quarter ended March 31, 2024, the Company issued 62,500,000 restricted shares of common stock to EcoScientific Labs, in exchange for Adam Nicosia’s Management services at a price of $.0023 per share for total compensation costs of $143,750.
During the quarter ended December 31, 2023, the Company issued 2,500,000 restricted shares of common stock to Vasil Popov in exchange for his professional services at a price of $.0023 per share for total for total compensation costs of $5,750.
During the quarter ended December 31, 2023, the Company issued 62,500,000 restricted shares of common stock to EcoScientific Labs, in exchange for Adam Nicosia’s Management services at a price of $.0023 per share for total compensation costs of $143,750.
During the quarter ended December 31, 2023, the Company issued 5,000,000 restricted shares of common stock to Johannesen Consulting, Inc., in exchange for Thomas Johannesen’s professional services at a price of $0.0023 per share for total compensation costs of $11,500.
During the quarter ended December 31, 2023, the Company issued 287,430,000 restricted shares of common stock to Johannesen Consulting, Inc., for the conversion of $287,430 of debt.
During the quarter ended December 31, 2023, the Company issued 62,500,000 restricted shares of common stock to Market Group International in exchange for Robert Van Boerum’s Management services at a price of $.0023 per share for total compensation costs of $143,750.
During the quarter ended September 30, 2023, the Company issued 2,500,000 restricted shares of common stock to Vasil Popov in exchange for his professional services at a price of $.0023 per share for total for total compensation costs of $5,750.
During the quarter ended September 30, 2023, the Company issued 62,500,000 restricted shares of common stock to EcoScientific Labs, in exchange for Adam Nicosia’s Management services at a price of $.0023 per share for total compensation costs of $143,750.
During the quarter ended September 30, 2023, the Company issued 5,000,000 restricted shares of common stock to Johannesen Consulting, Inc., in exchange for Thomas Johannesen’s professional services at a price of $0.0023 per share for total compensation costs of $11,500.
During the quarter ended September 30, 2023, the Company issued 287,430,000 restricted shares of common stock to Johannesen Consulting, Inc., for the conversion of $287,430 of debt.
During the quarter ended September 30, 2023, the Company issued 62,500,000 restricted shares of common stock to Market Group International in exchange for Robert Van Boerum’s Management services.
During the quarter ended June 30, 2023, the Company issued 14,056,996 shares of common stock to Paul Kison for the conversion of $15,000 of debt.
During the quarter ended June 30, 2023, the Company issued 2,500,000 restricted shares of common stock to Vasil Popov in exchange for his professional services at a price of $.0023 per share for total for total compensation costs of $5,750.
During the quarter ended June 30, 2023, the Company issued 62,500,000 restricted shares of common stock to EcoScientific Labs, in exchange for Adam Nicosia’s Management services at a price of $.0023 per share for total compensation costs of $143,750.
During the quarter ended June 30, 2023, the Company issued 5,000,000 restricted shares of common stock to Johannesen Consulting, Inc., in exchange for Thomas Johannesen’s professional services at a price of $0.0023 per share for total compensation costs of $11,500.
During the quarter ended June 30, 2023, the Company issued 62,500,000 restricted shares of common stock to Market Group International in exchange for Robert Van Boerum’s Management services at a price of $.0023 per share for total compensation costs of $143,750.
During the quarter ended March 31, 2023, the Company issued 13,810,382 shares of common stock to Bruce A. Smith for the conversion of $20,000 of debt.
During the quarter ended March 31, 2023, the Company issued 7,288,813 shares of common stock to Larry C. Tankson for the conversion of $10,000 of debt.
During the quarter ended March 31, 2023, the Company issued 3,126,223 shares of common stock to Carole Alley Family Trust for the conversion of $5,000 of debt.
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During the quarter ended March 31, 2023, the Company issued 3,136,823 shares of common stock to Donald L. Christensen & Hazel J. Christensen Revocable Living Trust for the conversion of $5,000 of debt.
During the quarter ended March 31, 2023, the Company issued 9,847,603 shares of common stock to William P. Elkins for the conversion of $15,000 of debt.
During the quarter ended March 31, 2023, the Company issued 3,282,534 shares of common stock to Wallace Chapiewski for the conversion of $5,000 of debt.
During the quarter ended March 31, 2023, the Company issued 3,282,534 shares of common stock to Santuccio Ricciardi for the conversion of $5,000 of debt.
During the quarter ended March 31, 2023, the Company issued 6,252,446 shares of common stock to Arnaldo Aleman for the conversion of $10,000 of debt.
During the quarter ended March 31, 2023, the Company issued 2,500,000 restricted shares of common stock to Vasil Popov in exchange for his professional services at a price of $.0023 per share for total for total compensation costs of $5,750.
During the quarter ended March 31, 2023, the Company issued 62,500,000 restricted shares of common stock to EcoScientific Labs, in exchange for Adam Nicosia’s Management services at a price of $.0023 per share for total compensation costs of $143,750.
During the quarter ended March 31, 2023, the Company issued 5,000,000 restricted shares of common stock to Johannesen Consulting, Inc., in exchange for Thomas Johannesen’s professional services at a price of $0.0023 per share for total compensation costs of $11,500.
During the quarter ended March 31, 2023, the Company issued 62,500,000 restricted shares of common stock to Market Group International in exchange for Robert Van Boerum’s Management services at a price of $.0023 per share for total compensation costs of $143,750.
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Date of Transaction | Transaction type (e.g., new issuance, cancellation, shares returned to treasury) | Number of Shares Issued (or cancelled) | Class of Securities | Value of shares issued ($/per share) at Issuance | Were the shares issued at a discount to market price at the time of issuance? (Yes/No) | Individual/ Entity Shares were issued to.
*You must disclose the control person(s) for any entities listed. | Reason for share issuance (e.g. for cash or debt conversion) -OR- Nature of Services Provided | Restricted or Unrestricted as of this filing. | Exemption or Registration Type. | ||||||||||||||
| 3/31/23 | New Issuance | 62,500,000 | Common | $ | 0.00200 | No | EcoScientific Labs (Adam Nicosia) | Professional Services | Restricted | Exempt | |||||||||||||
| 3/31/23 | New Issuance | 62,500,000 | Common | $ | 0.00200 | No | Market Group International (Robert Van Boerum) | Professional Services | Restricted | Exempt | |||||||||||||
| 3/31/23 | New Issuance | 2,500,000 | Common | $ | 0.00200 | No | Vasil Popov | Professional Services | Restricted | Exempt | |||||||||||||
| 3/31/23 | New Issuance | 5,000,000 | Common | $ | 0.00200 | No | Johannesen Consulting, Inc. (Thomas Johannesen) | Professional Services | Restricted | Exempt | |||||||||||||
| 4/5/23 | New Issuance | 14,056,996 | Common | $ | 0.00112 | Yes | Paul Kison | Debt Conversion | Restricted | Exempt | |||||||||||||
| 6/30/23 | New Issuance | 62,500,000 | Common | $ | 0.00200 | No | EcoScientific Labs (Adam Nicosia) | Professional Services | Restricted | Exempt | |||||||||||||
| 6/30/23 | New Issuance | 62,500,000 | Common | $ | 0.00200 | No | Market Group International (Robert Van Boerum) | Professional Services | Restricted | Exempt | |||||||||||||
| 6/30/23 | New Issuance | 2,500,000 | Common | $ | 0.00200 | No | Vasil Popov | Professional Services | Restricted | Exempt | |||||||||||||
| 6/30/23 | New Issuance | 5,000,000 | Common | $ | 0.00200 | No | Johannesen Consulting, Inc. (Thomas Johannesen) | Professional Services | Restricted | Exempt | |||||||||||||
| 8/29/23 | New Issuance | 287,430,000 | Common | $ | 0.00100 | No | Johannesen Consulting, Inc. (Thomas Johannesen) | Debt Conversion | Restricted | Exempt | |||||||||||||
| 9/30/23 | New Issuance | 62,500,000 | Common | $ | 0.00200 | No | EcoScientific Labs (Adam Nicosia) | Professional Services | Restricted | Exempt | |||||||||||||
| 9/30/23 | New Issuance | 62,500,000 | Common | $ | 0.00200 | No | Market Group International (Robert Van Boerum) | Professional Services | Restricted | Exempt | |||||||||||||
| 9/30/23 | New Issuance | 2,500,000 | Common | $ | 0.00200 | No | Vasil Popov | Professional Services | Restricted | Exempt | |||||||||||||
| 9/30/23 | New Issuance | 5,000,000 | Common | $ | 0.00200 | No | Johannesen Consulting, Inc. (Thomas Johannesen) | Professional Services | Restricted | Exempt | |||||||||||||
| 10/27/23 | New Issuance | 14,861,111 | Common | $ | 0.00208 | Yes | OC Sparkle | Debt Conversion | Restricted | Exempt | |||||||||||||
| 10/27/23 | New Issuance | 11,014,706 | Common | $ | 0.00208 | Yes | OC Sparkle | Debt Conversion | Restricted | Exempt | |||||||||||||
| 10/27/23 | New Issuance | 14,032,787 | Common | $ | 0.00208 | Yes | OC Sparkle | Debt Conversion | Restricted | Exempt | |||||||||||||
| 10/27/23 | New Issuance | 30,571,429 | Common | $ | 0.00208 | Yes | CZA, Inc. | Debt Conversion | Restricted | Exempt | |||||||||||||
| 12/31/23 | New Issuance | 62,500,000 | Common | $ | 0.00200 | No | EcoScientific Labs (Adam Nicosia) | Professional Services | Restricted | Exempt | |||||||||||||
| 12/31/23 | New Issuance | 62,500,000 | Common | $ | 0.00200 | No | Market Group International (Robert Van Boerum) | Professional Services | Restricted | Exempt | |||||||||||||
| 12/31/23 | New Issuance | 2,500,000 | Common | $ | 0.00200 | No | Vasil Popov | Professional Services | Restricted | Exempt | |||||||||||||
| 12/31/23 | New Issuance | 5,000,000 | Common | $ | 0.00200 | No | Johannesen Consulting, Inc. (Thomas Johannesen) | Professional Services | Restricted | Exempt | |||||||||||||
| 3/31/24 | New Issuance | 62,500,000 | Common | $ | 0.00200 | No | EcoScientific Labs (Adam Nicosia) | Professional Services | Restricted | Exempt | |||||||||||||
| 3/31/24 | New Issuance | 2,500,000 | Common | $ | 0.00200 | No | Vasil Popov | Professional Services | Restricted | Exempt | |||||||||||||
| 6/30/24 | New Issuance | 41,666,667 | Common | $ | 0.00200 | No | EcoScientific Labs (Adam Nicosia) | Professional Services | Restricted | Exempt | |||||||||||||
| 12/31/24 | New Issuance | 30,000,000 | Common | $ | 0.00007 | No | Steven Davis | Professional Services | Restricted | Exempt | |||||||||||||
| 12/31/24 | New Issuance | 5,000,000 | Common | $ | 0.00200 | No | Vasil Popov | Professional Services | Restricted | Exempt | |||||||||||||
| Date 12/31/2024 | Ending Balance Common: 6,010,887,117 | ||||||||||||||||||||||
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NOTE 11 – COMMITMENTS
Lease Commitments
The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company has lease agreements which include lease and non-lease components, which the Company has elected to account for as a single lease component for all classes of underlying assets. Lease expense for variable lease components are recognized when the obligation is probable.
Operating lease right of use (“ROU”) assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease payments are recognized as lease expense on a straight-line basis over the lease term. The Company primarily leases buildings (real estate) which are classified as operating leases. ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As an implicit interest rate is not readily determinable in the Company’s leases, the incremental borrowing rate is used based on the information available at commencement date in determining the present value of lease payments.
The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. Options for lease renewals have been excluded from the lease term (and lease liability) for the majority of the Company’s leases as the reasonably certain threshold is not met.
Lease payments included in the measurement of the lease liability are comprised of fixed payments, variable payments that depend on index or rate, and amounts probable to be payable under the exercise of the Company option to purchase the underlying asset if reasonably certain.
Variable lease payments not dependent on a rate or index associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed as probable. Variable lease payments are presented as operating expenses in the Company’s income statement in the same line item as expense arising from fixed lease payments. As of March 31, 2024 and March 31, 2023, management determined that there were no variable lease costs.
Litigation
There is no pending, threatened or actual legal proceedings in which the Company is a party.
NOTE 12: SUBSEQUENT EVENTS
On March 25, 2024, the Company signed a merger agreement (the “Merger Agreement”) with BSG Holdings, LLC (“BSG”) and JBAH Holdings, Inc. (“JBAH”, and BSG and JBAH are collectively, the “Sellers”). Pursuant to the terms of the Merger Agreement, at the closing, (i) the Sellers will assign to the Company 100% of the membership interests in the Ballengee Group LLC (“BG”); and (ii) the Sellers will receive a total of $30 million of Scepter common stock and $17 million in the form of a 5 year promissory note issued by Scepter. BG is a sports management agency located in Dallas, Texas. BG represent approximately 200 athletes, of which approximately 50 of the athletes are in Major League Baseball with the remainder predominately within the Minor Leagues. The closing of the Merger Agreement is conditioned upon a reverse split and an increase in authorized shares of the Company and is expected to close as soon as those conditions are met. There are no guarantees that we can meet all of the requirements for closing of the Merger Agreement. After the closing, BG shall be operated as a wholly-owned subsidiary of the Company. The Sellers will hold a controlling majority of the outstanding stock of Scepter after the transaction closes and shall have the right to appoint four members to the Company’s board of directors The Merger Agreement provides that the Company shall file a registration statement to register the shares of Company common stock issued to the Sellers within 90 days after the closing date. The description of the Merger Agreement in this Form 10 is qualified in its entirety by reference to the full text of the Merger Agreement which is attached hereto as Exhibit 10.1.
The Company common stock to be issued at the closing of the Merger Agreement will be calculated with dividing the total value of the stock by the 3-day volume weighted average for the 3 trading days immediately prior to the closing. The promissory notes will be for a term of five years and carry an interest rate of prime plus 3% and shall be secured by a pledge agreement by the Company in favor of the Sellers. Additionally, the obligations of the Company pursuant to the promissory notes shall be guaranteed by BG. Cash payments of interest and principal will be paid based on a formula based on free cash flows of BG with any additional required payments to be paid in stock or cash at the option of the Company.
The closing of the Merger Agreement is subject to closing conditions several of which are outside of the control of the Company. The Company cannot provide any guarantees or assurances that the closing of the Merger Agreement will occur. The merger is still pending and is expected to close shortly.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS
The Company began selling its own licensed products direct to consumers through the acquisition of the product formulation, inventory and customer list of Dermacia, a line of skin care and healthcare products.
Company
Scepter Holdings Corporation is a holding company with subsidiaries that develop, sell, and install software that we believe enhance the shopping experience for shoppers and retailers. As a holding company we also acquire synergistic operating companies that manufacture and sell fashion and other products to other retailers as well as selling these products online. In October 2019, we acquired retail stores in airport terminals and casinos solidifying us as a true Omni-Channel retailer. Owning our own brick and mortar stores will allow us to deploy our cutting-edge software and Apps in the United States, to demonstrate its effectiveness at attracting shoppers and inducing them to purchase. In our own stores, we plan to test in real time new software products which should delight consumers and generate incremental revenues and profits for our stores. If we can show incremental revenues and profits for ourselves, we believe that other retailers may follow our example and deploy our software solutions themselves.
Three Months Ended December 31, 2024 and 2023
Revenues
Merchandise revenues include payments received for products shipped and sold through our vendors. Revenues for the three months ended December 31, 2024 decreased $2,809, or 69%, as compared to the three months ended December 31, 2023, primarily due decreased marketing efforts in 2024. Although our efforts in 2023 were nominal as well.
Cost of Revenues
Cost of revenues primarily include the costs of products. Cost of revenues for the three months ended December 31, 2024 decreased $2,362 or 100%, as compared to the three months ended December 31, 2023, due to the write off of inventory to zero during the 2024 fiscal year.
General and administrative expenses
General and administrative expense include the costs associated with personnel. General and administrative expenses decreased for the three months ended December 31, 2024 by $1,434, or 17%, as compared to the three months ended December 31, 2023, primarily due to the decrease in personnel during 2024 fiscal year.
Professional fees
Professional fees include the costs associated with outside consultants to help manage the public entity as well as other professional consultants. Professional fees decreased for the three months ended December 31, 2024 by $89,899, or 26%, as compared to the three months ended December 31, 2023, primarily due reducing consultants during 2024 fiscal year.
Other expense
Other expense includes interest expense on note payables. Other expense increased for the three months ended December 31, 2024 by $17,577, or 71277%, as compared to the three months ended December 30, 2023, primarily due the fact that the Company has new notes baring interest in 2024 compared to 2023.
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Nine Months Ended December 31, 2024 and 2023
Revenues
Merchandise revenues include payments received for products shipped and sold through our vendors. Revenues for the nine months ended December 31, 2024 decreased $6,744, or 61%, as compared to the nine months ended December 31, 2023, primarily due decreased marketing efforts in 2024. Although our efforts in 2023 were nominal as well.
Cost of Revenues
Cost of revenues primarily include the costs of products. Cost of revenues for the nine months ended December 31, 2024 decreased $10,625 or 100%, as compared to the nine months ended December 31, 2023, due to the write off of inventory to zero during the 2024 fiscal year.
General and administrative expenses
General and administrative expense include the costs associated with personnel. General and administrative expenses decreased for the nine months ended December 31, 2024 by $38,926, or 40%, as compared to the nine months ended December 31, 2023, primarily due to the decrease in personnel during 2024 fiscal year.
Professional fees
Professional fees include the costs associated with outside consultants to help manage the public entity as well as other professional consultants. Professional fees decreased for the nine months ended December 31, 2024 by $628,844, or 50%, as compared to the nine months ended December 31, 2023, primarily due reducing consultants during 2024 fiscal year.
Other expense
Other expense includes interest expense on note payables. Other expense increased for the nine months ended December 31, 2024 by $38,027, or 154204%, as compared to the nine months ended December 31, 2023, primarily due the fact that the Company has new notes baring interest in 2024 compared to 2023.
Comparison of the Nine Months Ended December 31, 2024 and, 2023
Our cash flow activities were as follows for the periods presented:
| Nine Months Ended December 31, | ||||||||||||
| 2024 | 2023 | Change | ||||||||||
| Net cash flows used for operating activities | $ | (328,471 | ) | $ | (318,934 | ) | $ | 9,537 | ||||
| Net cash flows used for investing activities | - | - | - | |||||||||
| Net cash flows provided by financing activities | 353,431 | 314,669 | 38,763 | |||||||||
Operating activities
Net cash flows used for operating activities was ($328,471) and ($318,934) for the nine months ended December 31, 2024 and 2023, respectively. The decrease of net cash flows used for operating activities of $9,537 was primarily due to the Company not issuing shares for stock compensation.
Investing activities
There were no investing activities for the nine months ended December 31, 2024 and 2024, respectively.
Financing activities
The Company issued new notes payable of $353,431 for the nine months ended December 31, 2024 compared to $314,669 for the nine months ended December 31, 2023.
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Liquidity and Capital Resources
Comparison of December 31, 2024 and March 31, 2024
December 31, 2024 | March 31, 2024 2023 | Change | ||||||||||
| Cash | $ | 25,662 | $ | 702 | $ | 24,960 | ||||||
| Current liabilities | 1,097,922 | 486,366 | 611,556 | |||||||||
The Company’s primary sources of liquidity are from cash flows generated from operations and financing activities. As of December 31, 2024 and March 31, 2024, the Company had cash of $25,662 and $702, respectively. As of December 31, 2024 and March 31, 2024, the Company had current liabilities of $1,097,922 and $496,366, respectively.
The Company believes its existing cash and expected cash flows from operations will not be sufficient to meet our working capital, capital expenditures, and expected cash requirements from known contractual obligations for the next twelve months and beyond. It will need to raise additional capital to continue operations.
Net Loss
As a result of the foregoing, for the nine months ended December 31, 2024, we incurred of a net loss of $715,946 compared to a comprehensive net loss of $1,349,571 for the nine months ended December 31, 2023. This decrease in net loss is primarily the result of the decrease in professional fees.
The Company is expending working capital to further their business plan.
Critical Accounting Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments. Based on this definition, the Company has identified the critical accounting policies and judgments addressed below. Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Other Estimates
See Note 1 to the accompanying audited financial statements included herein and starting on page F-1 for further discussion.
Off-Balance Sheet Arrangements
As of December 31, 2024 and March 31, 2024, the Company had no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
Recently Issued and Adopted Accounting Pronouncements
See Note 1 to the accompanying audited financial statements included herein and starting on page F-1 for further discussion.
Liquidity and Capital Resources
The Company has met its current capital requirements primarily through the issuance of notes payable and convertible notes payable. Management views the working capital that is raised notes payable and convertible notes as being equivalent to raising working capital via common equity subscriptions. Any conversion of debt into equity could occur at a higher equity valuation then the Company currently has.
Going Concern
The Company’s financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. Since the Company has not generated significant revenue or gross profits adequate to cover operating costs, has negative cash flows from operations, and negative working capital, the Company has included a reference to the substantial doubt about our ability to continue as a going concern in connection with our condensed financial statements for the period ended December 31, 2024. Our total accumulated deficit as of December 31, 2024 was approximately $9 million.
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The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales notes payable. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, reduce the scope of or eliminate one or more of the Company’s research and development activities or commercialization efforts or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. There is substantial doubt about the ability of the Company to continue as a going concern for one year from the issuance of the accompanying condensed financial statements. The accompanying condensed financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Critical Accounting Policies and Estimates
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, and expenses and the disclosure of contingent assets and liabilities. We use assumptions that we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. We believe there have been no significant changes in accounting policies for the period ended December 31, 2024. See Note 3 to the consdensed statements in this Quarterly Report for a complete discussion of our significant accounting policies and estimates.
Recently Issued Accounting Standards
The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its condensed results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its consolidated financial statements. See Note 3 to the consdensed statements in our 2024 Annual Report for a complete discussion of our significant accounting policies and estimates.
Off-Balance Sheet Transactions
At December 31, 2024, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our Management, with the participation of our Chief Executive Officer and interim Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures, as of December 31, 2024 were not effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A control system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Management’s Quarterly Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes.
From time to time we may be involved in various disputes and litigation matters that arise in the ordinary course of business. We are currently not a party to any material legal proceeding.
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The Company’s investors should consider the risks that could affect its business as set forth in Item 1A, Risk Factors, of its most recent Annual Report on Form 10-KA.
The effectiveness of our disclosure controls and procedures and internal control over financial reporting
The Company has a limited number of personnel which may lead to a risk limited controls and procedures. As a result of the aforementioned reason there is a limit on the amount of internal controls during our financial reporting process.
The Company’s Chief Financial Officer is currently the Chief Financial Officer of another company
The Company Chief Financial Officer is also the Chief Financial Officer of another business and therefore may have limited time to work on the business and may experience time conflicts.
Our directors may lack of an independent director on your Board of Directors
Our directors are also on our Board of Directors and as a result the Board of Directors may lack some independence.
The Chief Executive Officer and the ability to control the Company
The Company’s Chief Executive Officer is also one of the most significant shareholders of the Company and as a result may control the Company.
Small customer base makes us dependent on a few customers
The Company currently has a small base of customers from which it derives its revenue. This could adversely affect the Company as it is dependent on a few customers for its current revenue.
Item 2. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
None.
| Exhibit Number | Exhibit Description | |
| 3.1 | Articles of Incorporation, as amended | |
| 3.2 | Bylaws, as amended | |
| 10.1 | Membership Interest Purchase Agreement dated March 18, 2024 among the Company, BSG Holdings, Inc. and JBAH Holdings, Inc. | |
| 10.2 | Executive Employment Agreement dated April 1, 2024 between the Company and Jeff Campbell | |
| 23.1 | Consent of Independent Registered Public Accounting Firm | |
| 31.1 | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2003. | |
| 32.1 & 32.2 | Certifications of CEO And CFO Pursuant To Section 906 Of The Sarbanes-Oxley Act | |
| 101.INS* | Inline XBRL Instance Document | |
| 101.SCH* | Inline XBRL Taxonomy Extension Schema | |
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase | |
| 101.LAB* | Inline XBRL Taxonomy Extension Labels Linkbase | |
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase | |
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this Form 10 to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: February 13, 2025
Scepter Holdings, Inc
| By: | /s/Adam Nicosia | |
| Adam Nicosia | ||
| Title: | Chief Executive Officer |
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Exhibit 3.1
Exhibit 3.2
BYLAWS OF
BRAZOS INTERNATIONAL EXPLORATION, INC.
CONTENTS OF INITIAL BYLAWS
| ARTICLE | PAGE | |
| 1.00 | CORPORATE CHARTER AND BYLAWS | |
| 1.01 | Corporate Charter Provisions | 4 |
| 1.02 | Registered Agent or Office–Requirement of Filing Changes with Secretary of State | 4 |
| 1.03 | Initial Business Office | 4 |
| 1.04 | Amendment of Bylaws | 4 |
| 2.00 | DIRECTORS AND DIRECTORS’ MEETINGS | |
| 2.01 | Action Without Meeting | 4 |
| 2.02 | Telephone Meetings | 4 |
| 2.03 | Place of Meetings | 5 |
| 2.04 | Regular Meetings | 5 |
| 2.05 | Call of Special Meeting | 5 |
| 2.06 | Quorum | 5 |
| 2.07 | Adjournment–Notice of Adjourned Meetings | 5 |
| 2.08 | Conduct of Meetings | 6 |
| 2.09 | Powers of the Board of Directors | 6 |
| 2.10 | Board Committees–Authority to Appoint | 6 |
| 2.11 | Transactions with Interested Directors | 6 |
| 2.12 | Number of Directors | 6 |
| 2.13 | Term of Office | 7 |
| 2.14 | Removal of Directors | 7 |
| 2.15 | Vacancies | 7 |
| 2.15(a) | Declaration of Vacancy | 7 |
| 2.15(b) | Filling Vacancies by Directors | 7 |
| 2.15(c) | Filling Vacancies by Shareholders | 7 |
| 2.16 | Compensation | 8 |
| 2.17 | Indemnification of Directors and Officers | 8 |
| 2.18 | Insuring Directors, Officers, and Employees | 8 |
| ARTICLE | PAGE | |
| 3.00 | SHAREHOLDERS’ MEETINGS | |
| 3.01 | Action Without Meeting | 8 |
| 3.02 | Telephone Meetings | 8 |
| 3.03 | Place of Meetings | 9 |
| 3.04 | Notice of Meetings | 9 |
| 3.05 | Voting List | 9 |
| 3.06 | Votes per Share | 9 |
| 3.07 | Cumulative Voting | 10 |
| 3.08 | Proxies | 10 |
| 3.09 | Quorum | 10 |
| 3.09(a) | Quorum of Shareholders | 10 |
| 3.09(b) | Adjourn for Lack or Loss of Quorum | 10 |
| 3.10 | Voting by Voice or Ballot | 10 |
| 3.11 | Conduct of Meetings | 10 |
| 3.12 | Annual Meetings | 11 |
| 3.13 | Failure to Hold Annual Meeting | 11 |
| 3.14 | Special Meetings | 11 |
| 4.00 | OFFICERS | |
| 4.01 | Title and Appointment | 11 |
| 4.01(a) | Chairman | 11 |
| 4.01(b) | President | 12 |
| 4.01(c) | Vice President | 12 |
| 4.01(d) | Secretary | 12 |
| 4.01(e) | Treasurer | 13 |
| 4.01(f) | Assistant Secretary or Assistant Treasurer | 13 |
| 4.02 | Removal and Resignation | 13 |
| 4.03 | Vacancies | 14 |
| 4.04 | Compensation | 14 |
| 5.00 | AUTHORITY TO EXECUTE INSTRUMENTS | |
| 5.01 | No Authority Absent Specific Authorization | 14 |
| 5.02 | Execution of Certain Instruments | 14 |
| 6.00 | ISSUANCE AND TRANSFER OF SHARES | |
| 6.01 | Classes and Series of Shares | 14 |
| 6.02 | Certificates for Fully Paid Shares | 15 |
| 6.03 | Consideration for Shares | 15 |
| 6.04 | Replacement of Certificates | 15 |
| 6.05 | Signing Certificates–Facsimile Signatures | 15 |
| ARTICLE | PAGE | |
| 6.06 | Transfer Agents and Registrars | 15 |
| 6.07 | Conditions of Transfer | 15 |
| 6.08 | Reasonable Doubts as to Right to Transfer | 16 |
| 7.00 | CORPORATE RECORDS AND ADMINISTRATION | |
| 7.01 | Minutes of Corporate Meetings | 16 |
| 7.02 | Share Register | 16 |
| 7.03 | Corporate Seal | 16 |
| 7.04 | Books of Account | 17 |
| 7.05 | Inspection of Corporate Records | 17 |
| 7.06 | Fiscal Year | 17 |
| 7.07 | Waiver of Notice | 17 |
| 8.00 | ADOPTION OF INITIAL BYLAWS | 17 |
BYLAWS, PAGE 1
ARTICLE ONE–CORPORATE CHARTER AND BYLAWS
| 1.01 | CORPORATE CHARTER PROVISIONS |
The Corporation’s Charter authorizes one hundred million (70,000,000) shares of common stock (par value $ .001) and five million (5,000,000) shares of Preferred stock (par value $ .001) to be issued. The officers and transfer agents issuing shares of the Corporation shall ensure that the total number of shares outstanding at any given time does not exceed this number. Such officers and agents shall advise the Board at least annually of the authorized shares remaining available to be issued. No shares shall be issued for less than the par value stated in the Charter. Each Charter provision shall be observed until amended by Restated Articles or Articles of Amendment duly filed with the Secretary of State.
| 1.02 | REGISTERED AGENT AND OFFICE–REQUIREMENT OF FILING CHANGES WITH SECRETARY OF STATE |
The address of the Registered Office provided in the Articles of Incorporation, as duly filed with the Secretary of State for the State of Nevada, is: 180 South Carson, #188, Carson City, NV 89701.
The name of the Registered Agent of the Corporation at such address, as set forth in its Articles of Incorporation, is: Nevada Business Services.
The Registered Agent or Office may be changed by filing a Statement of Change of Registered Agent or Office or Both with the Secretary of State, and not otherwise. Such filing shall be made promptly with each change. Arrangements for each change in Registered Agent or Office shall ensure that the Corporation is not exposed to the possibility of a default judgment. Each successive Registered Agent shall be of reliable character and well informed of the necessity of immediately furnishing the papers of any lawsuit against the Corporation to its attorneys.
| 1.03 | INITIAL BUSINESS OFFICE |
The address of the initial principal business office of the Corporation is hereby established as: 2818 Fort Hamilton Parkway, Brooklyn, NY 11218.
The Corporation may have additional business offices within the State of Nevada and where it may be duly qualified to do business outside of Nevada, as the Board of Directors may from time to time designate or the business of the Corporation may require.
| 1.04 | AMENDMENT OF BYLAWS |
The Shareholders or Board of Directors, subject to any limits imposed by the Shareholders, may amend or repeal these Bylaws and adopt new Bylaws. All amendments shall be upon advice of counsel as to legality, except in emergency. Bylaw changes shall take effect upon adoption unless otherwise specified. Notice of Bylaws changes shall be given in or before notice given of the first Shareholders’ meeting following their adoption.
ARTICLE TWO–DIRECTORS AND DIRECTORS’ MEETINGS
| 2.01 | ACTION BY CONSENT OF BOARD WITHOUT MEETING |
Any action required or permitted to be taken by the Board of Directors may be taken without a meeting, and shall have the same force and effect as a unanimous vote of Directors, if all members of the Board consent in writing to the action. Such consent may be given individually or collectively.
| 2.02 | TELEPHONE MEETINGS |
Subject to the notice provisions required by these Bylaws and by the Business Corporation Act, Directors may participate in and hold a meeting by means of conference call or similar communication by which all persons participating can hear each other. Participation in such a meeting shall constitute presence in person at such meeting, except participation for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
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| 2.03 | PLACE OF MEETINGS |
Meetings of the Board of Directors shall be held at the business office of the Corporation or at such other place within or without the State of Nevada as may be designated by the Board.
| 2.04 | REGULAR MEETINGS |
Regular meetings of the Board of Directors shall be held, without call or notice, immediately following each annual Shareholders’ meeting, and at such other regularly repeating times as the Directors may determine.
| 2.05 | CALL OF SPECIAL MEETING |
Special meetings of the Board of Directors for any purpose may be called at any time by the President or, if the President is absent or unable or refuses to act, by any Vice President or any two Directors. Written notices of the special meetings, stating the time and place of the meeting, shall be mailed ten days before, or telegraphed or personally delivered so as to be received by each Director not later than two days before, the day appointed for the meeting. Notice of meetings need not indicate an agenda. Generally, a tentative agenda will be included, but the meeting shall not be confined to any agenda included with the notice.
Meetings provided for in these Bylaws shall not be invalid for lack of notice if all persons entitled to notice consent to the meeting in writing or are present at the meeting and do not object to the notice given. Consent may be given either before or after the meeting.
Upon providing notice, the Secretary or other officer sending notice shall sign and file in the Corporate Record Book a statement of the details of the notice given to each Director. If such statement should later not be found in the Corporate Record Book, due notice shall be presumed.
| 2.06 | QUORUM |
The presence throughout any Directors’ meeting, or adjournment thereof, of a majority of the authorized number of Directors shall be necessary to constitute a quorum to transact any business, except to adjourn. If a quorum is present, every act done or resolution passed by a majority of the Directors present and voting shall be the act of the Board of Directors.
| 2.07 | ADJOURNMENT AND NOTICE OF ADJOURNED MEETINGS |
A quorum of the Directors may adjourn any Directors’ meeting to meet again at a stated hour on a stated day. Notice of the time and place where an adjourned meeting will be held need not be given to absent Directors if the time and place is fixed at the adjourned meeting. In the absence of a quorum, a majority of the Directors present may adjourn to a set time and place if notice is duly given to the absent members, or until the time of the next regular meeting of the Board.
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| 2.08 | CONDUCT OF MEETINGS |
At every meeting of the Board of Directors, the Chairman of the Board, if there is such an officer, and if not, the President, or in the President’s absence, a Vice President designated by the President, or in the absence of such designation, a Chairman chosen by a majority of the Directors present, shall preside. The Secretary of the Corporation shall act as Secretary of the Board of Directors’ meetings. When the Secretary is absent from any meeting, the Chairman may appoint any person to act as Secretary of that meeting.
| 2.09 | POWERS OF THE BOARD OF DIRECTORS |
The business and affairs of the Corporation and all corporate powers shall be exercised by or under authority of the Board of Directors, subject to limitations imposed by law, the Articles of Incorporation, any applicable Shareholders’ agreement, and these Bylaws.
| 2.10 | BOARD COMMITTEES–AUTHORITY TO APPOINT |
The Board of Directors may designate an executive committee and one or more other committees to conduct the business and affairs of the Corporation to the extent authorized. The Board shall have the power at any time to change the powers and membership of, fill vacancies in, and dissolve any committee. Members of any committee shall receive such compensation as the Board of Directors may from time to time provide. The designation of any committee and the delegation of authority thereto shall not operate to relieve the Board of Directors, or any member thereof, of any responsibility imposed by law.
| 2.11 | TRANSACTIONS WITH INTERESTED DIRECTORS |
Any contract or other transaction between the Corporation and any of its Directors (or any corporation or firm in which any of its Directors are directly or indirectly interested) shall be valid for all purposes notwithstanding the presence of that Director at the meeting during which the contract or transaction was authorized, and notwithstanding the Directors’ participation in that meeting. This section shall apply only if the contract or transaction is just and reasonable to the Corporation at the time it is authorized and ratified, the interest of each Director is known or disclosed to the Board of Directors, and the Board nevertheless authorizes or ratifies the contract or transaction by a majority of the disinterested Directors present. Each interested Director is to be counted in determining whether a quorum is present, but shall not vote and shall not be counted in calculating the majority necessary to carry the vote. This section shall not be construed to invalidate contracts or transactions that would be valid in its absence.
| 2.12 | NUMBER OF DIRECTORS |
The number of Directors of this Corporation shall be not less than one or more than fifteen. No Director need be a resident of Nevada or a Shareholder. The number of Directors may be increased or decreased from time to time by amendment to these Bylaws. Any decrease in the number of Directors shall not have the effect of shortening the tenure that any incumbent Director would otherwise enjoy.
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| 2.13 | TERM OF OFFICE |
Directors shall be entitled to hold office until their successors are elected and qualified. Election for all Director positions, vacant or not vacant, shall occur at each annual meeting of the Shareholders and may be held at any special meeting of Shareholders called specifically for that purpose.
| 2.14 | REMOVAL OF DIRECTORS |
The entire Board of Directors or any individual Director may be removed from office by a vote of Shareholders holding a majority of the outstanding shares entitled to vote at an election of Directors. However, if less than the entire Board is to be removed, no one of the Directors may be removed if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the entire Board of Directors. No director may be so removed except at an election of the class of Directors of which he is a part. If any or all Directors are so removed, new Directors may be elected at the same meeting. Whenever a class or series of shares is entitled to elect one or more Directors under authority granted by the Articles of Incorporation, the provisions of this Paragraph apply to the vote of that class or series and not to the vote of the outstanding shares as a whole.
| 2.15 | VACANCIES |
Vacancies on the Board of Directors shall exist upon the occurrence of any of the following events: (a) the death, resignation, or removal of any Director; (b) an increase in the authorized number of Directors; or (c) the failure of the Shareholders to elect the full authorized number of Directors to be voted for at any annual, regular, or special Shareholders’ meeting at which any Director is to be elected.
| 2.15(a) | DECLARATION OF VACANCY |
A majority of the Board of Directors may declare vacant the office of a Director if the Director: (a) is adjudged incompetent by a court order; (b) is convicted of a crime involving moral turpitude; (c) or fails to accept the office of Director, in writing or by attending a meeting of the Board of Directors, within thirty (30) days of notice of election.
| 2.15(b) | FILLING VACANCIES BY DIRECTORS |
Vacancies other than those caused by an increase in the number of Directors may be filled temporarily by majority vote of the remaining Directors, though less than a quorum, or by a sole remaining Director. Each Director so elected shall hold office until a qualified successor is elected at a Shareholders’ meeting.
| 2.15(c) | FILLING VACANCIES BY SHAREHOLDERS |
Any vacancy on the Board of Directors, including those caused by an increase in the number of Directors shall be filled by the Shareholders at the next annual meeting or at a special meeting called for that purpose. Upon the resignation of a Director tendered to take effect at a future time, the Board or the Shareholders may elect a successor to take office when the resignation becomes effective.
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| 2.16 | COMPENSATION |
Directors shall receive such compensation for their services as Directors as shall be determined from time to time by resolution of the Board. Any Director may serve the Corporation in any other capacity as an officer, agent, employee, or otherwise, and receive compensation therefor.
| 2.17 | INDEMNIFICATION OF DIRECTORS AND OFFICERS |
The Board of Directors shall authorize the Corporation to pay or reimburse any present or former Director or officer of the Corporation any costs or expenses actually and necessarily incurred by that officer in any action, suit, or proceeding to which the officer is made a party by reason of holding that position, provided, however, that no officer shall receive such indemnification if finally adjudicated therein to be liable for negligence or misconduct in office. This indemnification shall extend to good-faith expenditures incurred in anticipation of threatened or proposed litigation. The Board of Directors may in proper cases, extend the indemnification to cover the good-faith settlement of any such action, suit, or proceeding, whether formally instituted or not.
| 2.18 | INSURING DIRECTORS, OFFICERS, AND EMPLOYEES |
The Corporation may purchase and maintain insurance on behalf of any Director, officer, employee, or agent of the Corporation, or on behalf of any person serving at the request of the Corporation as a Director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against any liability asserted against that person and incurred by that person in any such corporation, whether or not the Corporation has the power to indemnify that person against liability for any of those acts.
ARTICLE THREE–SHAREHOLDERS’ MEETINGS
| 3.01 | ACTION WITHOUT MEETING |
Any action that may be taken at a meeting of the Shareholders under any provision of the Nevada Business Corporation Act may be taken without a meeting if authorized by a consent or waiver filed with the Secretary of the Corporation and signed by all persons who would be entitled to vote on that action at a Shareholders’ meeting. Each such signed consent or waiver, or a true copy thereof, shall be placed in the Corporate Record Book.
| 3.02 | TELEPHONE MEETINGS |
Subject to the notice provisions required by these Bylaws and by the Business Corporation Act, Shareholders may participate in and hold a meeting by means of conference call or similar communication by which all persons participating can hear each other. Participation in such a meeting shall constitute presence in person at such meeting, except participation for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
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| 3.03 | PLACE OF MEETINGS |
Shareholders’ meetings shall be held at the business office of the Corporation, or at such other place within or without the State of Nevada as may be designated by the Board of Directors or the Shareholders.
| 3.04 | NOTICE OF MEETINGS |
The President, the Secretary, or the officer or persons calling a Shareholders’ Meeting. shall give notice, or cause it to be given, in writing to each Director and to each Shareholder entitled to vote at the meeting at least ten (10) but not more than sixty (60) days before the date of the meeting. Such notice shall state the place, day, and hour of the meeting, and, in case of a special meeting, the purpose or purposes for which the meeting is called. Such written notice may be given personally, by mail, or by other means. Such notice shall be addressed to each recipient at such address as appears on the Books of the Corporation or as the recipient has given to the Corporation for the purpose of notice. Meetings provided for in these Bylaws shall not be invalid for lack of notice if all persons entitled to notice consent to the meeting in writing or are present at the meeting in person or by proxy and do not object to the notice given, Consent may be given either before or after the meeting. Notice of the reconvening of an adjourned meeting is not necessary unless the meeting is adjourned more than thirty days past the date stated in the notice, in which case notice of the adjourned meeting shall be given as in the case of any special meeting. Notice may be waived by written waivers signed either before or after the meeting by all persons entitled to the notice.
| 3.05 | VOTING LIST |
At least ten (10), but not more than sixty (60), days before each Shareholders’ meeting, the officer or agent having charge of the Corporation’s share transfer books shall make a complete list of the Shareholders entitled to vote at that meeting or any adjournment thereof, arranged in alphabetical order, with the address and the number of shares held by each. The list shall be kept on file at the Registered Office of the Corporation for at least ten (10) days prior to the meeting, and shall be subject to inspection by any Director, officer, or Shareholder at any time during usual business hours. The list shall also be produced and kept open at the time and place of the meeting and shall be subject, during the whole time of the meeting, to the inspection of any Shareholder. The original share transfer books shall be prima facie evidence as to the Shareholders entitled to examine such list or transfer books or to vote at any meeting of Shareholders. However, failure to prepare and to make the list available in the manner provided above shall not affect the validity of any action taken at the meeting.
| 3.06 | VOTES PER SHARE |
Each outstanding share, regardless of class, shall be entitled to one (1) vote on each matter submitted to a vote at a meeting of Shareholders, except to the extent that the voting rights of the shares of any class or classes are limited or denied pursuant to the Articles of Incorporation. A Shareholder may vote in person or by proxy executed in writing by the Shareholder, or by the Shareholder’s duly authorized attorney-in-fact.
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| 3.07 | CUMULATIVE VOTING |
No shareholder shall have the right to cumulative voting.
| 3.08 | PROXIES |
A Shareholder may vote either in person or by proxy executed in writing by the Shareholder or his or her duly authorized attorney in fact. Unless otherwise provided in the proxy or by law, each proxy shall be revocable and shall not be valid after eleven (11) months from the date of its execution,
| 3.09 | QUORUM |
| 3.09(a) | QUORUM OF SHAREHOLDERS |
As to each item of business to be voted on, the presence (in person or by proxy) of the persons who are entitled to vote a majority of the outstanding voting shares on that matter shall constitute the quorum necessary for the consideration of the matter at a Shareholders’ meeting. The vote of the holders of a majority of the shares entitled to vote on the matter and represented at a meeting at which a quorum is present shall be the act of the Shareholders’ meeting.
| 3.09(b) | ADJOURNMENT FOR LACK OR LOSS OF QUORUM |
No business may be transacted in the absence of a quorum, or upon the withdrawal of enough Shareholders to leave less than a quorum, other than to adjourn the meeting from time to time by the vote of a majority of the shares represented at the meeting.
| 3.10 | VOTING BY VOICE OR BALLOT |
Elections for Directors need not be by ballot unless a Shareholder demands election by ballot before the voting begins.
| 3.11 | CONDUCT OF MEETINGS |
Meetings of the Shareholders shall be chaired by the President, or, in the President’s absence, a Vice President designated by the President, or, in the absence of such designation, any other person chosen by a majority of the Shareholders of the Corporation present in person or by proxy and entitled to vote. The Secretary of the Corporation, or, in the Secretary’s absence, an Assistant Secretary, shall act as Secretary of all meetings of the Shareholders. In the absence of the Secretary or Assistant Secretary, the Chairman shall appoint another person to act as Secretary of the meeting.
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| 3.12 | ANNUAL MEETINGS |
The time, place, and date of the annual meeting of the Shareholders of the Corporation, for the purpose of electing Directors and for the transaction of any other business as may come before the meeting, shall be set from time to time by a majority vote of the Board of Directors. If the day fixed for the annual meeting shall be on a legal holiday in the State of Nevada, such meeting shall be held on the next succeeding business day. If the election of Directors is not held on the day thus designated for any annual meeting, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the Shareholders as soon thereafter as possible.
| 3.13 | FAILURE TO HOLD ANNUAL MEETING |
If, within any 13-month period, an annual Shareholders’ Meeting is not held, any Shareholder may apply to a court of competent jurisdiction in the county in which the principal office of the Corporation is located for a summary order that an annual meeting be held.
| 3.14 | SPECIAL MEETINGS |
A special Shareholders’ meeting may be called at any time by. (a) the President; (b) the Board of Directors; or (c) one or more Shareholders holding in the aggregate one-tenth or more of all the shares entitled to vote at the meeting. Such meeting may be called for any purpose. The party calling the meeting may do so only by written request sent by registered mail or delivered in person to the President or Secretary. The officer receiving the written request shall within ten (10) days from the date of its receipt cause notice of the meeting to be sent to all the Shareholders entitled to vote at such a meeting. If the officer does not give notice of the meeting within ten (10) days after the date of receipt of the written request, the person or persons calling the meeting may fix the time of the meeting and give the notice. The notice shall be sent pursuant to Section 3.04 of these Bylaws. The notice of a special Shareholders’ meeting must state the purpose or purposes of the meeting and, absent consent of every Shareholder to the specific action taken, shall be limited to purposes plainly stated in the notice, notwithstanding other provisions herein.
ARTICLE FOUR–OFFICERS
| 4.01 | TITLE AND APPOINTMENT |
The officers of the Corporation shall be a President and a Secretary, as required by law. The Corporation may also have, at the discretion of the Board of Directors, a Chairman of the Board, one or more Vice Presidents, a Treasurer, one or more Assistant Secretaries, and one or more Assistant Treasurers. Any two or more offices, including President and Secretary, may be held by one person. All officers shall be elected by and hold office at the pleasure of the Board of Directors, which shall fix the compensation and tenure of all officers.
| 4.01(a) | CHAIRMAN OF THE BOARD |
The Chairman, if there shall be such an officer, shall, if present, preside at the meetings of the Board of Directors and exercise and perform such other powers and duties as may from time to time be assigned to the Chairman by the Board of Directors or prescribed by these Bylaws.
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| 4.01(b) | PRESIDENT |
Subject to such supervisory powers, if any, as may be given to the Chairman, if there is one, by the Board of Directors, the President shall be the chief executive officer of the Corporation and shall, subject to the control of the Board of Directors, have general supervision, direction, and control of the business and officers of the Corporation. The President shall have the general powers and duties of management usually vested in the office of President of a corporation; shall have such other powers and duties as may be prescribed by the Board of Directors or the Bylaws; and shall be ex officio a member of all standing committees, including the executive committee, if any. In addition, the President shall preside at all meetings of the Shareholders and in the absence of the Chairman, or if there is no Chairman, at all meetings of the Board of Directors.
| 4.01(c) | VICE PRESIDENT |
Any Vice President shall have such powers and perform such duties as from time to time may be prescribed by these Bylaws, by the Board of Directors, or by the President. In the absence or disability of the President, the senior or duly appointed Vice President, if any, shall perform all the duties of the President, pending action by the Board of Directors when so acting, such Vice President shall have all the powers of, and be subject to all the restrictions on, the President.
| 4.01(d) | SECRETARY |
The Secretary shall:
| (1) | See that all notices are duly given in accordance with the provisions of these Bylaws and as required by law. In case of the absence or disability of the Secretary. or the Secretary’s refusal or neglect to act, notice may be given and served by an Assistant Secretary or by the Chairman, the President, any Vice President, or by the Board of Directors. |
| (2) | Keep the minutes of corporate meetings, and the Corporate Record Book, as set out in Section 7.01 hereof. |
| (3) | Maintain, in the Corporate Record Book, a record of all share certificates issued or canceled and all shares of the Corporation canceled or transferred. |
| (4) | Be custodian of the Corporation’s records and of any seal which the Corporation may from time to time adopt. when the Corporation exercises its right to use a seal, the Secretary shall see that the seal is embossed on all share certificates prior to their issuance and on all documents authorized to be executed under seal in accordance with the provisions of these Bylaws. |
| (5) | In general, perform all duties incident to the office of Secretary, and such other duties as from time to time may be required by Sections 7.01, 7.02, and 7.03 of these Bylaws, by these Bylaws generally, by the Board of Directors, or by the President. |
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| 4.01(e) | TREASURER |
The Treasurer shall:
| (6) | Have charge and custody of, and be responsible for, all funds and securities of the Corporation, and deposit all funds in the name of the Corporation in those banks, trust companies, or other depositories that shall be selected by the Board of Directors. |
| (7) | Receive, and give receipt for, monies due and payable to the Corporation. |
| (8) | Disburse or cause to be disbursed the funds of the Corporation as may be directed by the Board of Directors, taking proper vouchers for those disbursements. |
| (9) | If required by the Board of Directors or the President, give to the Corporation a bond to assure the faithful performance of the duties of the Treasurer’s office and the restoration to the Corporation of all corporate books, papers, vouchers, money, and other property of whatever kind in the Treasurer’s possession or control, in case of the Treasurer’s death, resignation, retirement, or removal from office. Any such bond shall be in a sum satisfactory to the Board of Directors, with one or more sureties or a surety company satisfactory to the Board of Directors. |
| (10) | In general, perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to the Treasurer by Sections 7.O4 and 7.05 of these Bylaws, by these Bylaws generally, by the Board of Directors, or by the President. |
| 4.01(f) | ASSISTANT SECRETARY AND ASSISTANT TREASURER |
The Assistant Secretary or Assistant Treasurer shall have such powers and perform such duties as the Secretary or Treasurer, respectively, or as the Board of Directors or President may prescribe. In case of the absence of the Secretary or Treasurer, the senior Assistant Secretary or Assistant Treasurer, respectively, may perform all of the functions of the Secretary or Treasurer.
| 4.02 | REMOVAL AND RESIGNATION |
Any officer may be removed, either with or without cause, by vote of a majority of the Directors at any regular or special meeting of the Board, or, except in case of an officer chosen by the Board of Directors, by any committee or officer upon whom that power of removal may be conferred by the Board of Directors. Such removal shall be without prejudice to the contract rights, if any, of the person removed. Any officer may resign at any time by giving written notice to the Board of Directors, the President, or the Secretary of the Corporation. Any resignation shall take effect on the date of the receipt of that notice or at any later time specified therein, and, unless otherwise specified therein, the acceptance of that resignation shall not be necessary to make it effective.
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| 4.03 | VACANCIES |
Upon the occasion of any vacancy occurring in any office of the Corporation, by reason of death, resignation, removal, or otherwise, the Board of Directors may elect an acting successor to hold office for the unexpired term or until a permanent successor is elected.
| 4.04 | COMPENSATION |
The compensation of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving a salary by reason of the fact that the officer is also a Shareholder or a Director of the Corporation, or both.
ARTICLE FIVE–AUTHORITY TO EXECUTE INSTRUMENTS
| 5.01 | NO AUTHORITY ABSENT SPECIFIC AUTHORIZATION |
These Bylaws provide certain authority for the execution of instruments. The Board of Directors, except as otherwise provided in these Bylaws, may additionally authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances. Unless expressly authorized by these Bylaws or the Board of Directors, no officer, agent, or employee shall have any power or authority to bind the Corporation by any contract or engagement nor to pledge its credit nor to render it pecuniarily liable for any purpose or in any amount.
| 5.02 | EXECUTION OF CERTAIN INSTRUMENTS |
Formal contracts of the Corporation, promissory notes, deeds, deeds of trust, mortgages, pledges, and other evidences of indebtedness of the Corporation, other corporate documents, and certificates of ownership of liquid assets held by the Corporation shall be signed or endorsed by the President or any Vice President and by the Secretary or the Treasurer, unless otherwise specifically determined by the Board of Directors or otherwise required by law.
ARTICLE SIX-ISSUANCE AND TRANSFER OF SHARES
| 6.01 | CLASSES AND SERIES OF SHARES |
The Corporation may issue one or more classes or series of shares, or both. Any of these classes or series may have full, limited, or no voting rights, and may have such other preferences, rights, privileges, and restrictions as are stated or authorized in the Articles of Incorporation. All shares of any one class shall have the same voting, conversion, redemption, and other rights, preferences, privileges, and restrictions, unless the class is divided into series, If a class is divided into series, all the shares of any one series shall have the same voting, conversion, redemption, and other. rights, preferences, privileges, and restrictions. There shall always be a class or series of shares outstanding that has complete voting rights except as limited or restricted by voting rights conferred on some other class or series of outstanding shares.
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| 6.02 | CERTIFICATES FOR FULLY PAID SHARES |
Neither shares nor certificates representing shares may be issued by the Corporation until the full amount of the consideration has been received when the consideration has been paid to the Corporation, the shares shall be deemed to have been issued and the certificate representing the shares shall be issued to the shareholder.
| 6.03 | CONSIDERATION FOR SHARES |
Shares may be issued for such consideration as may be fixed from time to time by the Board of Directors, but not less than the par value stated in the Articles of Incorporation. The consideration paid for the issuance of shares shall consist of money paid, labor done, or property actually received, and neither promissory notes nor the promise of future services shall constitute payment nor partial payment for shares of the Corporation.
| 6.04 | REPLACEMENT OF CERTIFICATES |
No replacement share certificate shall be issued until the former certificate for the shares represented thereby shall have been surrendered and canceled, except that replacements for lost or destroyed certificates may be issued, upon such terms, conditions, and guarantees as the Board may see fit to impose, including the filing of sufficient indemnity.
| 6.05 | SIGNING CERTIFICATES-FACSIMILE SIGNATURES |
All share certificates shall be signed by the officer(s) designated by the Board of Directors. The signatures of the foregoing officers may be facsimiles. If the officer who has signed or whose facsimile signature has been placed on the certificate has ceased to be such officer before the certificate issued, the certificate may be issued by the Corporation with the same effect as if he or she were such officer on the date of its issuance.
| 6.06 | TRANSFER AGENTS AND REGISTRARS |
The Board of Directors may appoint one or more transfer agents or transfer clerks, and one or more registrars, at such times and places as the requirements of the Corporation may necessitate and the Board of Directors may designate. Each registrar appointed, if any, shall be an incorporated bank or trust company, either domestic or foreign.
| 6.07 | CONDITIONS OF TRANSFER |
The party in whose name shares of stock stand on the books of the Corporation shall be deemed the owner thereof as regards the Corporation, provided that whenever any transfer of shares shall be made for collateral security, and not absolutely, and prior written notice thereof shall be given to the Secretary of the Corporation, or to its transfer agent, if any, such fact shall be stated in the entry of the transfer.
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| 6.08 | REASONABLE DOUBTS AS TO RIGHT TO TRANSFER |
When a transfer of shares is requested and there is reasonable doubt as to the right of the person seeking the transfer, the Corporation or its transfer agent, before recording the transfer of the shares on its books or issuing any certificate therefor, may require from the person seeking the transfer reasonable proof of that person’s right to the transfer. If there remains a reasonable doubt of the right to the transfer, the Corporation may refuse a transfer unless the person gives adequate security or a bond of indemnity executed by a corporate surety or by two individual sureties satisfactory to the Corporation as to form, amount, and responsibility of sureties. The bond shall be conditioned to protect the Corporation, its officers, transfer agents, and registrars, or any of them, against any loss, damage, expense, or other liability for the transfer or the issuance of a new certificate for shares.
ARTICLE SEVEN–CORPORATE RECORDS AND ADMINISTRATION
| 7.01 | MINUTES OF CORPORATE MEETINGS |
The Corporation shall keep at the principal office, or such other place as the Board of Directors may order, a book recording the minutes of all meetings of its Shareholders and Directors, with the time and place of each meeting, whether such meeting was regular or special, a copy of the notice given of such meeting, or of the written waiver thereof, and, if it is a special meeting, how the meeting was authorized. The record book shall further show the number of shares present or represented at Shareholders’ meetings, and the names of those present and the proceedings of all meetings.
| 7.02 | SHARE REGISTER |
The Corporation shall keep at the principal office, or at the office of the transfer agent, a share register showing the names of the Shareholders, their addresses, the number and class of shares issued to each, the number and date of issuance of each certificate issued for such shares, and the number and date of cancellation of every certificate surrendered for cancellation. The above information may be kept on an information storage device such as a computer, provided that the device is capable of reproducing the information in clearly legible form. If the Corporation is taxed under Internal Revenue Code Section 1244 or Subchapter S, the Officer issuing shares shall maintain the appropriate requirements regarding issuance.
| 7.03 | CORPORATE SEAL |
The Board of Directors may at any time adopt, prescribe the use of, or discontinue the use of, such corporate seal as it deems desirable, and the appropriate officers shall cause such seal to be affixed to such certificates and documents as the Board of Directors may direct.
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| 7.04 | BOOKS OF ACCOUNT |
The Corporation shall maintain correct and adequate accounts of its properties and business transactions, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus, and shares. The corporate bookkeeping procedures shall conform to accepted accounting practices for the Corporation’s business or businesses. subject to the foregoing, The chart of financial accounts shall be taken from, and designed to facilitate preparation of, current corporate tax returns. Any surplus, including earned surplus, paid-in surplus, and surplus arising from a reduction of stated capital, shall be classed by source and shown in a separate account. If the Corporation is taxed under Internal Revenue Code Section 1244 or Subchapter S, the officers and agents maintaining the books of account shall maintain the appropriate requirements.
| 7.05 | INSPECTION OF CORPORATE RECORDS |
A Director or Shareholder demanding to examine the Corporation’s books or records may be required to first sign an affidavit that the demanding party will not directly or indirectly participate in reselling the information and will keep it confidential other than in use for proper purposes reasonably related to the Director’s or Shareholder’s role. A Director who insists on examining the records while refusing to sign this affidavit thereby resigns as a Director.
| 7.06 | FISCAL YEAR |
The fiscal year of the Corporation shall be as determined by the Board of Directors and approved by the Internal Revenue Service. The Treasurer shall forthwith arrange a consultation with the Corporation’s tax advisers to determine whether the Corporation is to have a fiscal year other than the calendar year. If so, the Treasurer shall file an election with the Internal Revenue Service as early as possible, and all correspondence with the IRS, including the application for the Corporation’s Employer Identification Number, shall reflect such non-calendar year election.
| 7.07 | WAIVER OF NOTICE |
Any notice required by law or by these Bylaws may be waived by execution of a written waiver of notice executed by the person entitled to the notice. The waiver may be signed before or after the meeting.
ARTICLE EIGHT—ADOPTION OF INITIAL BYLAWS
The foregoing bylaws were adopted by the Board of Directors on December 7, 2007.
_________________________ Attested to, and certified by: __________________________
David Keating, President and Director
| Inge Kerster, Secretary |
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Exhibit 10.1
| Exhibit C |
| Sample of Net Working Capital Calculation |
| Figures provided are for example only. |
| As of Jan. 31, 2024 | ||||
| Current Assets | ||||
| Checking/Savings | ||||
| Business First Bank (*4159) | $ | 12,573.27 | ||
| Total Checking/Savings | $ | 12,573.27 | ||
| Accounts Receivable | ||||
| Accts. Rec. - Trade | $ | 3,290,794.00 | ||
| Total Accounts Receivable | $ | 3,290,794.00 | ||
| Other Current Assets for purposes of NWC | ||||
| Inventory | $ | 0.00 | ||
| Total Other Current Assets | $ | 0.00 | ||
| Total Current Assets | $ | 3,303,367.27 | ||
| Current Liabilities | ||||
| Accounts Payable | ||||
| Accts. Pay. - Trade | $ | 1,121,384.00 | ||
| Total Accounts Payable | $ | 1,121,384.00 | ||
| Other Current Liabilities | ||||
| Line of Credit B1Bank | $ | 774,815.00 | ||
| Total Other Current Liabilites | $ | 774,815.00 | ||
| Total Current Liabilities | $ | 1,896,199.00 | ||
| Working Capital | $ | 1,407,168.27 | ||
| Target Net Working Capital | $ | 150,000.00 | ||
| Working Capital Surplus (Deficit) | $ | 1,257,168.27 | ||
RELEASE AGREEMENT
THIS RELEASE AGREEMENT (this “Agreement”), dated as of [●], 2024, is made by and among Scepter Holdings, Inc. (“Scepter”) and BSG Holdings, LLC (“BSG”) and JBAH Holdings, LLC, (“JBAH” and, together Jorgan, the “Seller Parties”, and each individually a “Seller Party”). Scepter and Seller Parties are herein referred to collectively as the “Parties” and each, individually, as a “Party”. Capitalized terms used but not defined herein have the meanings ascribed to them in the MIPA (as hereinafter defined).
RECITALS
WHEREAS, Scepter is party to that certain Membership Interest Purchase Agreement by and between Scepter and the Seller Parties, as the equity holders of Ballengee Group, LLC (“BG”), dated as of [●], 2024 (the “MIPA”);
WHEREAS, BSG owns 99% and JBAH owns 1% of all of the issued and outstanding limited liability company membership interests in BG, respectively (the “Membership Interests”), and, pursuant to the terms of the MIPA, subject to the conditions set forth therein, the Seller Parties shall convey such equity interests to Scepter, and Scepter shall pay to the Seller Parties therefor the Purchase Price (as may be adjusted pursuant to the MIPA);
WHEREAS, as a material inducement to Scepter to enter into MIPA, the Parties have agreed to execute and deliver this Agreement to Scepter.
NOW THEREFORE, in consideration for the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby covenant and agree as follows:
AGREEMENT
1. Release by Seller Parties. Effective as of Closing:
(a) Each Seller Party, for itself and on behalf of such Seller Party’s Seller Releasing Parties, does hereby finally, unconditionally, irrevocably, and absolutely release, acquit, remise, and forever discharge Scepter, its Subsidiaries and each of its and their respective past, present, and future equity holders (including, but not limited to, Purchaser and its Affiliates), directors, officers, partners, managers, members, employees, counsel, agents, representatives, contractors, and subcontractors, and each of their respective successors and assigns (individually, a “Scepter Releasee” and, collectively, the “Scepter Releasees”) from any and all accounts, agreements, avoidance actions, bills, bonds, causes, causes of action, charges, claims, complaints, contracts, controversies, costs, counterclaims, damages, debts, demands, equitable proceedings, executions, expenses, legal proceedings, liabilities, losses, matters, objections, obligations, orders, proceedings, reckonings, remedies, rights, setoffs, suits, sums of money, of any kind, at common law, statutory or otherwise, whether known or unknown, whether matured or unmatured, whether absolute or contingent, whether direct or derivative, whether suspected or unsuspected, whether liquidated or unliquidated (including, but not limited to, breach of contract, breach of duty of care, concealment, conflicts of interest, control, course of conduct or dealing, debt recharacterization, deceptive trade practices, deepening insolvency, defamation, disclosure, duress, economic duress, equitable subordination, fraudulent conveyance, fraudulent transfer, gross negligence, insolvency law violations, interference with contractual and business relationships, misuse of insider information, negligence, breach of obligation of fair dealing, breach of obligation of good faith and fair dealing, preference, secrecy, securities and antitrust laws violations, substantive consolidation, tying arrangements, unconscionability, usury, violations of statutes and regulations of governmental entities, instrumentalities and agencies, wrongful recoupment or setoff, or any tort, whether common law, statutory or in equity, and including as a result of, or in relation to, any negligence of any Scepter Releasee) (each, a “Claim,” and collectively, the “Claims”) arising out of or relating to the Business, including, but not limited to, any rights to indemnification, reimbursement, or compensation from any Scepter Releasee, whether pursuant to any contracts, law, arrangement, commitment, undertaking or otherwise whether written or oral and whether or not relating to claims pending on, or asserted after, the Closing; provided, however, that the foregoing shall not be construed to release any Claim (v) relating to matters to the extent occurring following the Closing, (w) a Seller Party or any other Seller Releasing Party has under the express terms of the MIPA or any other agreement or certificate contemplated by the MIPA (each, a “Transaction Document”), (x) a Seller Party or any other Seller Releasing Party has against another Seller Party or its Affiliates, (y) a Seller Party or any other Seller Releasing Party has under any the terms of an employee agreement with any Scepter Releasee, and/or (z) to which a Seller Party is party arising out of the actions of another Seller Party or its Affiliates.
(b) Each Seller Party, severally and not jointly, hereby irrevocably waives and covenants and agrees to forbear and refrain from, directly or indirectly, asserting any Claim, or commencing, instituting or causing to be commenced or instituted, any legal, arbitral or equitable proceeding of any kind (whether actual, asserted or prospective) against any Scepter Releasee, based upon any matter released or purported to be released pursuant to this Agreement (subject to the proviso in clause (a) of Section 1 above).
2. Release by Scepter. Effective as of Closing:
(a) Scepter, for itself and on behalf of the Scepter Releasing Parties, does hereby finally, unconditionally, irrevocably, and absolutely release, acquit, remise, and forever discharge each Seller Party, its Subsidiaries and each of its and their respective past, present, and future equity holders, directors, officers, partners, managers, members, employees, counsel, agents, representatives, contractors, and subcontractors, and each of their respective successors and assigns (individually, a “Seller Party Releasee” and, collectively, the “Seller Party Releasees”) from any and all Claims arising out of or relating to the Business, including, but not limited to, any rights to indemnification, reimbursement, or compensation from any Seller Party Releasee, whether pursuant to any contracts, law, arrangement, commitment, undertaking or otherwise whether written or oral and whether or not relating to claims pending on, or asserted after, the Closing; provided, however, that the foregoing shall not be construed to release any Claim (x) Scepter or any other Scepter Releasing Party has under the express terms of the MIPA or any Transaction Document, (y) relating to matters to the extent occurring prior to the Closing.
(b) Scepter hereby irrevocably waives and covenants and agrees to forbear and refrain from, directly or indirectly, asserting any Claim, or commencing, instituting or causing to be commenced or instituted, any legal, arbitral or equitable proceeding of any kind (whether actual, asserted or prospective) against any Seller Party Releasee, based upon any matter released or purported to be released pursuant to this Agreement (subject to the proviso in clause (a) of Section 2 above).
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3. Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but, if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect in any jurisdiction under any applicable Law, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction in such manner as will effect as nearly as lawfully possible the purposes and intent of such invalid, illegal or unenforceable provision.
4. Successors and Assigns; Third Party Beneficiaries. The obligations of any Party under this Agreement may not be assigned without the prior written consent of the other Party, and any purported assignment in violation of the foregoing shall be void ab initio. Subject to the immediately preceding sentence, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and permitted assigns. Nothing in this Agreement is intended or shall be construed to confer upon any Person other than Purchaser (which is an express third party beneficiary of this Agreement), the Parties, the Releasees, and their respective successors and permitted assigns any right, remedy, or claim under or by reason of this Agreement.
5. Governing Law.
(a) Without regard to principles of conflicts of law, this Agreement, and all claims of causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement or as an inducement to enter into this Agreement) shall be construed and enforced in accordance with and governed by the laws of the State of Nevada, without regard to its rules or principles of conflict of laws.
(b) The Parties hereby irrevocably submit to the exclusive jurisdiction of the federal courts located in Clark County, State of Nevada, for the purposes of any Proceeding arising out of or relating to this Agreement or any transaction contemplated hereby (and agrees not to commence any Proceeding relating hereto except in such courts), so long as such court shall have subject matter jurisdiction over such Proceeding. The Parties further agree that service of any process, summons, notice or document hand delivered or sent by U.S. registered mail to such Party’s respective address set forth in Section 12 shall be effective service of process for any Proceeding in Nevada with respect to any matters to which it has submitted to jurisdiction as set forth in the immediately preceding sentence. The Parties hereby irrevocably waive, to the fullest extent permitted by applicable Laws, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in any such court or any defense of inconvenient forum for the maintenance of such Proceeding. Each Party agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law.
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(c) EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
6. Specific Performance; Remedies. Each Party acknowledges and agrees that Scepter Releasees or Seller Party Releasees, as applicable (the “Other Party’s Releasees”), would be damaged irreparably in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each Party agrees that the Other Party’s Releasees shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof, without the requirement of posting bond or other form of security, in any action instituted in any court of the United States or any state thereof having, in accordance with the terms of this Agreement, jurisdiction over such Party and any of the Other Party’s Releasees, in addition to any other remedy to which it may be entitled, at law or in equity. The remedies contemplated herein are in addition to, and not in lieu of, any remedies available at law or in equity and, accordingly, all such remedies are cumulative and not exclusive. No exercise of any remedy hereunder, at law or in equity shall be deemed an election of remedies.
7. Entire Agreement. This Agreement and the other Transaction Documents constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements, understandings, representations or warranties, written or oral, with respect thereto by or among the Parties.
8. Further Actions. Each Party hereto agrees that it will execute and deliver, or cause to be executed and delivered, on or after the date of this Agreement, all such other instruments and will take all reasonable actions as may be necessary to consummate the transactions contemplated hereby, and to effectuate the provisions and purposes hereof.
9. Knowing and Voluntary Waiver. Each Party, by its respective free and voluntary act of signing below, (a) acknowledges that it has been given appropriate time to consider whether to agree to the terms contained herein, (b) acknowledges that it has been advised to consult with an attorney and has consulted with an attorney prior to executing this Agreement, (c) acknowledges that it understands that this Agreement specifically releases and waives many rights and Claims that it may have, and (d) agrees to all of the terms of this Agreement and intends to be legally bound thereby. The Parties acknowledge and agree that each Party has reviewed and negotiated the terms and provisions of this Agreement and has contributed to its preparation (with advice of counsel). Accordingly, the rule of construction to the effect that ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement. Rather, the terms of this Agreement shall be construed fairly as to all Parties and not in favor of or against any Party based on the fact that such Party may have drafted such terms or provisions.
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10. Interpretation. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by each of the Parties and Purchaser, which is an express third-party beneficiary of this Agreement. Unless the context requires otherwise: (a) the gender (or lack of gender) of all words used in this Agreement includes the masculine, feminine, and neuter; (b) words using the singular or plural number also include the plural or singular number, respectively; and (c) the terms “hereof,” “herein,” “hereunder” and derivative or similar words refer to this entire Agreement. References to a Person are also to its successors and/or permitted assigns, if any. Unless specifically provided for herein, the term “or” shall not be deemed to be exclusive. The word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase shall not mean simply “if”. The words “will” and “will not” are expressions of command and not merely expressions of future intent or expectation. When used in this Agreement, the word “either” shall be deemed to mean “one or the other”, not “both”. All references herein to “dollars” or “$” are to the lawful currency of the United States. The headings contained in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement. “Seller Releasing Parties” means, with respect to an applicable Seller Party, such Seller Party’s former, current or future parents, subsidiaries, divisions and Affiliates (including, without limitation, controlling persons) and each of their respective former, current or future officers, directors, agents, advisors, representatives, managers, members, partners, equity holders, employees, financing sources, insurers, subrogees, principals, and any successors or assigns of any said Person, and any other Person claiming (now or in the future) for such Seller Party, through or on behalf of such Seller Party. “Scepter Releasing Parties” means, with respect to Scepter, Scepter’s former, current or future parents, subsidiaries, divisions and Affiliates (including, without limitation, controlling persons) and each of their respective former, current or future officers, directors, agents, advisors, representatives, managers, members, partners, equity holders, employees, financing sources, insurers, subrogees, principals, and any successors or assigns of any said Person, and any other Person claiming (now or in the future) for Scepter, through or on behalf of Scepter.
11. Survival. The representations, warranties, covenants and agreements of the Parties shall survive the execution and delivery of this Agreement.
12. Notice. All notices and other communications that are required or may be given pursuant to this Agreement must be given in writing, in English and delivered personally, by courier, by telecopy or by registered or certified mail, postage prepaid, as follows:
If to Seller Parties:
BSG Holdings, LLC; JBAH Holdings, LLC
5220 Spring Valley Road, Suite LL20
Dallas, Texas 75234
Attn: James Ballengee
Email: jballengee@ballengeeholdings.com
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With copies (which shall not constitute notice) to:
Jackson Walker LLP
2323 Ross Avenue, Suite 600
Dallas, TX 75201
Attn: Pat Knapp
Email: pknapp@jw.com
If to Scepter:
Scepter Holdings, Inc.
C/O Warren R. Markowitz, Esq
7260 W. Azure Dr, Suite 140-1200
Las Vegas NV 89130
Attn: Adam Nicosia
Email: adamnicosia@gmail.com
With a copy (which shall not constitute notice) to:
Warren R. Markowitz, Esq
1525 US HWY 380 Suite 500-241
Frisco TX 75033
Email: Warren@WarrenMarkowitzEsq.com
Each Party may change its address for notice by notice to the other Parties in the manner set forth above. All notices shall be deemed to have been duly given at the time of receipt by the Party to which such notice is addressed.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement as of the date first written above.
| SELLER PARTIES: | ||
| BSG HOLDINGS, LLC, | ||
| a Texas limited liability company | ||
| By: | ||
| Name: | James H. Ballengee | |
| Title: | Manager | |
| JBAH HOLDINGS, LLC, | ||
| a Texas limited liability company | ||
| By: | ||
| Name: | James H. Ballengee | |
| Title: | Manager | |
| SCEPTER: | ||
| SCEPTER HOLDINGS, INC., | ||
| a Nevada corporation | ||
| By: | ||
| Name: | Adam Nicosia | |
| Title: | CEO | |
Signature Page to Release Agreement
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Exhibit 10.2
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the Registration Statement of Scepter Holdings, Inc. on Form 10 of our report dated September 13, 2024 which includes an explanatory paragraph as to Scepter Holdings, Inc.’s ability to continue as a going concern, relating to our audit of the consolidated balance sheet as of March 31, 2024, and March 31, 2023, and the related consolidated statement of operations, stockholders’ deficit and cash flows for the years ended March 31, 2024, and March 31, 2023.
 |
|
| Houston, Texas | |
| September 16, 2024 | |
| PCAOB ID: 6771 |
Exhibit 31.01
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14
I, Samuel Weiss, certify that:
1. I have reviewed this annual report on Form 10-Q of Scepter Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have, for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: February 13, 2025 | /s/Samuel Weiss | |
| By: | Samuel Weiss | |
| Its: | Chief Executive Officer | |
Exhibit 31.02
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14
I, Samuel Weiss, certify that:
1. I have reviewed this annual report on Form 10-Q of Scepter Holdings, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have, for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. I have disclosed, based on my most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: February 13, 2025 | /s/Samuel Weiss | |
| By: | Samuel Weiss | |
| Its: | Chief Financial Officer | |
Exhibit 32.01
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Scepter Holdings, Inc. (the “Company”) on Form 10-Q for the year ending December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Samuel Weiss, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
| /s/Samuel Weiss | ||
| By: | Samuel Weiss | |
| Chief Executive Officer | ||
Dated: February 13, 2025
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.02
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Scepter Holdings, Inc. (the “Company”) on Form 10-Q for the year ending December 31, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Samuel Weiss, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
| /s/Samuel Weiss | ||
| By: | Samuel Weiss | |
| Chief Financial Officer | ||
Dated: February 13, 2025
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.