CHMX 10-Q/A
NEXT-ChemX Corporation. (CHMX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended:
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to _____________
Commission
File Number:
(Exact Name of Registrant as Specified in Its Charter)
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) |
(Address of principal executive offices, Zip Code)
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
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 ☐
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).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller
reporting company | ||
| Emerging
growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares outstanding of each of the issuer’s classes of common stock, as of September 16, 2025 is as follows:
| Class of Securities | Shares Outstanding | |
| Common Stock, $ par value |
IMPORTANT NOTICE
This present Quarterly Report filed on Form 10-Q/A (the “Report”) includes modifications resulting from the completion of the audit carried out by Fruci & Associates on the Company’s 2023 Annual Report filed on Form 10-K/A on April 28, 2025 (the “2023 10-K/A Report”) as well as the review by the auditors of both the 2024 first quarter 10-Q/A report (the “2024 Q1 10-Q/A Restated Report”) filed on June 30, 2025 and the present Report. The present restated Report is duly filed in replacement of the original June 30, 2024, filing.
The principal changes to the 10-Q are as follows:
Two important adjustments were made to the Company’s financial statements: 1) the Company’s technology, considered in filings since September 2021 to be an indefinite intangible asset was reevaluated and is now considered to have an estimated useful life equivalent to the period of its underlining patent protection, appropriate amortization being charged to the value of the asset accordingly. This has resulted in an adjustment of $533,038 to the asset value as of June 30, 2024. This has resulted in a charge of $224,673 against the value of the asset as amortization; and 2) the balance sheet was readjusted to include $308,365 of retained earnings.
The recording of the issuance of 20,000 Series A shares of Preferred Stock has been restated since these shares, although duly subscribed, were never paid up. The previous reporting of the Series A Preferred recorded the said shares as having been issued; however, since the required payment for the subscription of said shares was never received, the financial statements have been adjusted accordingly.
The Company has provided additional disclosure relating to a loan provided by the Company to a third party company signed on April 4, 2024 noting that although at the time of the execution of the loan the borrower was an independent third party owned and controlled by a third party individual, the borrower company had previously been owned and managed by a former officer and a senior employee of the Company.
The Company has provided additional disclosure related to the repayment of a short-term loan taken at high interest with the issuance of a certain Series F convertible note to the creditor.
On the Company’s condensed balance sheet, the Company will now report any “Commitments and Contingencies” as a separate line item.
Generally, the Report has been made consistent with the 2023 10-K/A Report and the 2024 Q1 10-Q/A Restated Report with the introduction of small changes in presentation and with some greater detail to improve disclosure.
Matters relating to projected timing in the Report have been changed from the original disclosure better to reflect the current belief of management regarding such projections. Where necessary or helpful, the circumstances relating to the need for such adjustment are also reported.
A number of other changes were made to punctuation and grammar that do not affect the sense of disclosure, and where dollar figures included cents, these were rounded up to the nearest dollar.
NEXT-ChemX Corporation
Quarterly Report on Form 10-Q/A
For the Quarter Ended June 30, 2024
TABLE OF CONTENTS
| PART I – FINANCIAL INFORMATION | ||
| Item 1. | Financial Statements | F-2 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 3 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 5 |
| Item 4. | Controls and Procedures | 6 |
| PART II – OTHER INFORMATION | ||
| Item 1. | Legal Proceedings | 7 |
| Item 1A. | Risk Factors | 7 |
| Item 2. | Unregistered Sale of Equity Securities and Use of Proceeds | 7 |
| Item 3. | Defaults Upon Senior Securities | 7 |
| Item 4. | Mine Safety Disclosures | 7 |
| Item 5. | Other Information | 7 |
| Item 6. | Exhibits | 8 |
| Signatures | 9 | |
Caution Regarding Forward-Looking Information
This Quarterly Report on Form 10-Q/A, including, without limitation, statements containing the words “believes”, “anticipates”, “expects” and words of similar import, constitute forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such factors include, among others, the following: international, national and local general economic and market conditions: demographic changes; the ability of the Company to sustain, manage or forecast its growth; the ability of the Company to successfully make and integrate acquisitions; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; and other factors referenced in this and previous filings.
Given these uncertainties, readers of this Form 10-Q/A and investors are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.
| 2 |
NEXT-CHEMX CORPORATION
INTERIM FINANCIAL STATEMENTS
Table of Contents
| F-1 |
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NEXT-ChemX Corporation
Condensed Balance Sheets
|
June 30, |
December 31, | |||||||
2024 (restated) | 2023 (audited) | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | $ | ||||||
| Financial Assets | ||||||||
| Prepaid expense and other current assets | ||||||||
| Total Current Assets | ||||||||
| Property and equipment, net | ||||||||
| Intangible asset, net | ||||||||
| Total Non-current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Other Current Liabilities | ||||||||
| Loan payable | ||||||||
| Due to related party | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities: | ||||||||
| Notes payable | ||||||||
| Total Non-Current Liabilities | ||||||||
| Total Liabilities | $ | $ | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity (Deficit): | ||||||||
Preferred stock, $ par value, shares authorized; Series to be issued as of June 30, 2024 | ||||||||
| Preferred stocks subscription receivables | ( | ) | ||||||
| Common stock, $ par value, shares authorized, issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity (Deficit) | ( | ) | ( | ) | ||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ | $ | ||||||
The accompanying notes are an integral part of these condensed financial statements.
| F-2 |
NEXT-ChemX Corporation
Condensed Statements of Operations
(Unaudited)
| For the three months ended | For the six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
2024 (restated) | 2023 (unaudited) | 2024 (restated) | 2023 (unaudited) | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating expenses | ||||||||||||||||
| Salaries and Employee Benefits | ||||||||||||||||
| Professional fees and contractors | ||||||||||||||||
| Depreciation and Amortization | ||||||||||||||||
| Other operating Expenses | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Income (loss) from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Other income | ||||||||||||||||
| Unrealized Gain on Marketable Securities | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net other Income (expense) | ||||||||||||||||
| Income Tax Liability | ||||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) per common share: Basic and diluted | ) | ) | ) | ) | ||||||||||||
| Weighted average number of common shares outstanding: Basic and diluted | ||||||||||||||||
The accompanying notes are an integral part of these condensed (unaudited) financial statements.
| F-3 |
NEXT-ChemX Corporation
Condensed Statement of Changes in Stockholders’ Equity (Deficit)
(unaudited)
For the Three and Six Months Ended June 30, 2024 (restated)
Preferred Stocks to be Issued | Preferred Stocks-Subscription Receivables | Common Stock | Additional Paid-in | Accumulated | Stockholders’ | |||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||||||
| Balance December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||
| Preferred Stocks to be issued | $ | $ | ( |
) | ||||||||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance June 30, 2024 | $ | $ | ( |
) | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
For the Three and Six Months Ended June 30, 2023 (unaudited)
| Common Stock | Additional Paid-in | Accumulated | Stockholders’ | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
| Balance December 31, 2022 | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Stock Issuances to 3rd Party | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||
| Balance March 31, 2023 | ( | ) | ||||||||||||||||||
| Net Loss | ( | ) | ( | ) | ||||||||||||||||
| Balance June 30, 2023 | $ | $ | $ | ( | ) | $ | ||||||||||||||
The accompanying notes are an integral part of these condensed (unaudited) financial statements.
| F-4 |
NEXT-ChemX Corporation
Condensed Statements of Cash Flows
(Unaudited)
| For the six months ended | ||||||||
| June 30, | ||||||||
2024 (restated) | 2023 (unaudited) | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income(loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | - | - | ||||||
| Depreciation and amortization | ||||||||
| Other income received in form Shares of Stocks | ( | ) | ||||||
| Consultant commission paid in third party stock | ||||||||
| Unrealized gain on trading securities | ( | ) | ||||||
| Changes in Operating Assets and Liabilities: | ||||||||
| Related Party Advances | ||||||||
| Prepaid expenses and other assets | ( | ) | ( | ) | ||||
| Accounts payable and accrued liabilities | ||||||||
| Net cash provided by (used in) operating activities | ( | ) | ( | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| Net cash provided by (used in) investing activities | ||||||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from the Stock Issuance of Common Stocks | ||||||||
| Net proceeds from convertible notes payable | ||||||||
| Net proceeds from loan payable | ||||||||
| Repayment of notes payable | ( | ) | ||||||
| Net cash provided by (used in) financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash, beginning of year | ||||||||
| Cash, end of the period | $ | $ | ||||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Conversion of loan, interest and debt to convertible note | $ | $ | ||||||
| Preferred Stocks to be issued | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURES | ||||||||
| Cash payments for interest, net of capitalized interest | ||||||||
| Cash payments for income taxes, net | ||||||||
The accompanying notes are an integral part of these condensed (unaudited) financial statements.
| F-5 |
NEXT-ChemX Corporation
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
June 30, 2024
NOTE 1 - ORGANIZATION AND BUSINESS OPERATIONS
Organization and Description of Business
NEXT-ChemX Corporation, formerly known as AllyMe Group Inc. (“Company”, “we” or “us”) was incorporated under the laws of the State of Nevada on August 13, 2014, and has adopted a December 31 fiscal year end. The Company trades on the OTC market (Pink Sheet) under the symbol “CHMX”. On December 23, 2021, the Company filed SEC Form 8-A12G becoming a mandatory filer and has since complied with the reporting requirements of the Securities Exchange Commission as a reporting issuer.
Since April 2021, following a complete change of the Company’s shareholders, management, assets and strategy, the business of the Company is the commercialization of a novel innovative Ion-Targeting Continuous-Flow Direct Extraction Technology (“iTDE Technology”) as further described in Note 5 below. The iTDE Technology is embodied in certain patents and patent applications as well as proprietary knowledge.
The primary focus of the Company is the commercial launch of its iTDE Technology in a scalable system, deployable remotely to customer locations, which will enable the commercial extraction of lithium from natural brines and geothermal sources as well as liquors from leached mined ore solutions. In addition, during the first quarter, management began to focus on developing two to three other targeted systems for the mining of metals as well as water treatment systems and recycling.
Potential future commercial applications for the iTDE Technology include:
| ● | Extracting Fatty Acids from Vegetable Oils for More Economical Refining; | |
| ● | Extracting of Radioactive Ions from Nuclear Plant Stored Water; | |
| ● | Extracting of Metal Ions from Mine Leach Solutions, Effluent, or Tailings; and | |
| ● | Desalination of Sea Water, by Extracting Ions for Water Purification |
During the second quarter of 2024, the Company has continued to manage the construction of the first of two pilot plant systems that will form the basis of its ongoing commercialization efforts by demonstrating the scalability of the system for commercial purposes, by providing actual commercial data to define typical running costs, and by generating commercial interest by processing samples supplied by potential customers to demonstrate the iTDE technology’s capability commercially. The two planned systems include (i) a smaller flexible system utilizing the iTDE Technology that will enable the processing of solutions containing lithium to demonstrate the commercial viability of the system; and (ii) a larger system that will handle the processing of industrial quantities of brines, better demonstrating the scalability and performance of the system when used commercially to extract lithium. This work is being carried out in India under contract.
The smaller system was designed to facilitate work on refinement of the basic iTDE system by enabling changes to sensor types and positions as well as adaptations to its other relevant systems. It is expected this will contribute to improvements in efficiency and assist in the modelling of the process for commercial implementation, enabling changes that will reduce the cost and improve the economics of the process. The inherent flexibility of the design also allows the Company to conduct its research into the extraction of other elements thereby exploring the commercial viability of the extraction of other elements.
The first system is expected to be completed during third quarter of 2025.
The Company anticipates first running extraction tests on brine solutions mixed with controlled defined quantities of elements that approximate the naturally occurring brines of potential customers. The Company has already received brine samples from Clontarf Energy plc, a UK AIM listed company with whom the Company concluded an agreement to iTDE Technology in Bolivia through a jointly established commercial venture. The composition of these brines will be the basis for modeling these controlled samples. This initial calibration of the system will be done by making synthetic brines based upon analytical data received from the Bolivian State Lithium Company and should provide a basis for better testing with actual brines. We expect large container sized sample of actual brines to arrive in India around October of 2024 for testing in our pilot plant system.
| F-6 |
We have also engaged with another Indian engineering company to test the effectiveness of their nano-filtration system to use in front of our pilot plant system to remove significant amounts of divalent ions, such as magnesium and calcium, without the use of any chemicals. This may make our complete system more economical in challenging remote areas such as our project with Clontarf in Bolivia.
Due to a lack of funding, the Company has scaled back its intellectual property protection strategy in the near term.
NOTE 2 – GOING CONCERN
The
Company has incurred losses since inception (August 13, 2014) resulting in an accumulated deficit of $
For
the six months ended June 30, 2024, the Company showed a net loss of $
From
the anticipated receipts of any financing, the Company must discharge outstanding payables of $
The
Company estimates it will need to raise an estimated $
The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and or obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from directors and, or the private placement of common stock. There can be no assurances that management’s plans will be successful.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Statements
The accompanying unaudited condensed interim financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring adjustments) that are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be viewed in conjunction with the audited financial statements of the Company for the year ended December 31, 2023.
| F-7 |
The financial statements are presented in United States dollars.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Evaluation of Long-Lived Intangible Assets
The Company acquired its principal intellectual property asset in the second quarter of 2021. The value of the asset was initially derived from the underlying arms’ length transaction in which the company owning the technology transferred the technology to the Company in exchange for a specific number of shares of Common Stock of the Company. The value of the shares was derived from the fact that such shares were bought and sold in an arms’ length transaction that occurred simultaneously. The technology composed initially of patents and patent applications as well as certain knowhow was initially amortized by the Company. However, during fiscal year 2021, due to the nature of the technology behind the asset and its application across multiple disciplines and businesses, Management considered the asset to be greater than the individual patents and possible patent applications. Certain technological ideas give rise to many various applications (‘stem technologies’). For this reason, on September 30, 2021, the asset as a stem technology was reclassified as an intangible asset of indefinite life. The value taken was that of its book value at the third quarter end 2021 following initial amortization. Intangible assets of indefinite life are not amortized but instead tested for impairment at least annually or more frequently if events and circumstances indicate that the asset might be impaired.
The Company is required to evaluate periodically the useful life of its assets and to adjust the value of the asset, depreciating it over its useful life. This revaluation has resulted in the decision to amortize the technology asset as a finite indefinite asset taking as its useful life the protection period of the patents filed to protect the said asset.
The indefinite intangible asset was reevaluated and
is now considered to have an estimated useful life equivalent to the period of its underlining patent protection, appropriate amortization
being charged to the value of the asset accordingly. This has resulted in an adjustment of $
Revenue Recognition
The Company utilizes a five-step process when assessing the recognition of revenue from contractual obligations.
| (i) | Identification of the type and binding nature of the contract as well as an identification and assessment of the goods and services undertaken with specific reference to the intangible nature of the intellectual property rights sold; | |
| (ii) | Identification of specific performance obligations within the overall contract that are distinct. | |
| (iii) | Determination of the specific price or value of the specific performance obligation. | |
| (iv) | Allocation of the transaction price or value of a specific performance obligation; and | |
| (v) | Determination of the moment the obligation undertaken is delivered or performance is satisfied. |
Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing the net income available to common shareholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive shares of common stock consist of the common stock issuable upon the conversion of convertible debt, preferred stock and warrants. The Company uses the if-converted method to calculate the dilutive preferred stock and treasury stock method to calculate the dilutive shares issuable upon exercise of warrants.
For the quarterly periods ended June 30, 2024, and June 30, 2023, there were potentially dilutive debt or equity instruments issued or outstanding and any such shares would have been excluded from the computation because they would have been anti-dilutive as the Company incurred losses in these periods. Notwithstanding this, however, it should be noted that as on June 30, 2024, the Company had the following dilutive instruments outstanding convertible into shares of ordinary shares of common stock as follows:
| a) | ||
| b) | convertible
Instruments with an outstanding debt of $ | |
| c) | certain
employment and consulting agreements with a provision to convert remuneration and expense
owing to such employees at a conversion price of $ |
| F-8 |
Investment Policy in Joint Ventures
It is the policy of the Company to recognize joint ventures only once sufficient consideration has been received for the venture to impact its operations. Neither the execution of an agreement requiring the formation of a joint venture nor the creation of a shell intended to be the venture vehicle is considered sufficient. Once operations commence in a material manner, the Company will recognize the operation of a joint venture in its financial statements.
PP&E depreciation policy of fixed tangible assets
The
depreciation policy of the Company’s long term fixed tangible assets is decided dependent on the useful life a particular asset
is expected to have. The Company currently operates with very few assets having no real estate and with very little operational equipment.
The current book value of all fixed tangible assets owned by the Company is $
Recent accounting pronouncements
The Company continually assesses any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequence of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financials properly reflect the change.
The Company has noted the recent issuance by FASB of ASU 2023-07 on November 27, 2023, that introduces amendments to “improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses” to enable “investors to better understand an entity’s overall performance” and assess “potential future cash flows”. At present, the Company has no marketable product lines, it is currently developing the technology that will enable the introduction of one or more such lines, however, it is too early to predict in what final product form, and more importantly how many different variations of this, the iTDE Technology will eventually be marketed. The Company’s chief operating decision maker, its CEO Mr. Benton Wilcoxon, who is responsible for the allocation of the Company’s resources acts on the principle that the business cannot as yet be considered to operate with different segments of activity nor is investment into development work divided into different segments, its operating capital and investment being dedicated only to one end, that of completion of the iTDE Technology and its incorporation into one or more final marketable product segments. For this reason, the Company does not expect the adoption of this standards update to have a material impact on the financial statements during the year ended December 31, 2024.
The recent release of FASB No. 2024-02 in March 2024 was in general to improve codification by removing references in the regulations to ‘Concepts Statements’. In the opinion of management these modifications will not affect the presentation of the Company’s financial statements
Noting also that the Company does not currently offer any profits interests or similar awards, the Company currently does not have any recent accounting pronouncements that they are studying, and feel may be applicable.
NOTE 4 – PREPAID EXPENSE AND OTHER CURRENT ASSETS
Prepaid
expenses and other current assets amounted to $
The ETD Co was previously owned and managed by a former officer of the Company and one of its other senior employees and used by them for managing technologies not related to the business of the Company. In 2023, ETD Co had sought to invest in the Company by purchasing its convertible instruments and then its equity, however, this investment was unsuccessful. On April 1, 2024, 100% of the ownership of ETD Co was sold by its shareholders to a third party and since that date neither related party had any further involvement of any kind in its ownership or business, in particular neither related party had any involvement in the proposal, negotiation or operation loan agreement.
| F-9 |
NOTE 5 – RESTATEMENT OF THE COMPANY’S INTELLECTUAL PROPERTY ASSET
The Company’s principal asset is its iTDE Technology. This technology is now classified as a finite intangible asset and is amortized over the life of the technology’s underlying patents.
Previously, from September 2021, the Company had classified its iTDE Technology as an indefinite intangible asset and therefore the asset was not amortized, however, during fiscal 2023, the Company reassessed its iTDE Technology, concluding that such technology was a finite, rather than infinite, intangible asset. As a result, the Company began to restate the value of the technology on its books by applying retroactive amortization to the value of the asset. The audited annual report of the Company for 2023 filed with the SEC on form 10-K/A on April 28, 2025, records the results of the reevaluation and this Report continues the accounting treatment of the asset as set forth in the 2023 annual financial statements.
The following table illustrates the result of the reclassification showing amortization applied since December 31, 2022:
| Cost, Amortization and Carrying Amount of the iTDE Technology | ||||
| Cost | ||||
| At December 31, 2022 | $ | |||
| Additions | ||||
| Transfers | ||||
| At June 30, 2023 | ||||
| Additions | ||||
| Disposals | ||||
| At December 31, 2023 | ||||
| Additions | ||||
| Disposals | ||||
| At June 30, 2024 | ||||
| Accumulated Amortization | ||||
| At January 1, 2022 | ||||
| Charge for the year | ||||
| At December 31, 2022 | ||||
| Charge for the year | ||||
| Prior Period Adjustment | ||||
| At December 31, 2023 | ||||
| Charge for the period | ||||
| At June 30, 2024 | ||||
| Carrying amount | ||||
| At December 31, 2022 | ||||
| At December 31, 2023 | ||||
| At June 30, 2024 | ||||
NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
As of June 30, 2024, and December 31, 2023, accounts payable and accrued liabilities consisted of as follows:
| June 30, | December 31 | |||||||
2024 (restated) | 2023 (audited) | |||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Accrued payroll | ||||||||
| Accrued interest | ||||||||
| Total | $ | $ | ||||||
As
on June 30, 2024, the Company owed a total of $
| (i) | A loan of $ | |
| (ii) | A second loan of $ |
All the remaining loans outstanding on June 30, 2024, will fall due after fiscal year end 2025.
On February 29, 2024, seven senior employees and consultants
of the Company who were owed a total of $
| F-10 |
The Debt Extension Agreements were signed to cover all debts owing from time to time to the seven employees and consultants of the Company that were : (i) legitimately incurred unpaid contractual remuneration (ii) existing debts agreed and already deferred; (iii) advances made by the employee or consultant to the Company that are recorded on the books of the Company; (iv) any portion of employee’s or consultant’s agreed future remuneration that will not be paid in a timely fashion, all such debt being accumulated as a recognized debt in accordance with the terms of the Debt Extension Agreements.
The Debt Extension Agreements further set out
the terms under which the seven employees and consultants would receive their past indebtedness as well as how future remuneration
is to be paid. The Debt Extension Agreements also grant the right for each signatory to convert all or a portion of the Indebtedness
and Penalty Interest to shares of common stock of the Company at any time at the lower of
Notwithstanding the above, the Indebtedness shall become due on the fifth anniversary of the Debt Extension Agreements execution, being March 1, 2029.
As of June 30, 2024, a total of $
By signature of an addendum with each of the signatories of the Debt Extension Agreements on May 30, 2025, the said agreements shall only enter into force on the first date following May 30, 2026 on which the total debt of the Company outstanding to any listed shareholders of the Company who are not employees of the Company has been either converted to shares of common stock of the Company, or paid in full, or forgiven; if this suspensive condition is not realized on or before May 30, 2026, each of the Debt Extension Agreements shall become void and cease to have effect.
As at the date of the present Report none of these Debt Extension Agreements had entered into force.
All the Directors, Officers, employees, consultants and professionals owed remuneration and expenses by the Company under the Debt Extension Agreements are considered important to the Company’s operations and business. The Company holds agreements on the deferral of debt with seven of the above that will enter into force under certain conditions whereby the shareholder debtors agree to convert their debt into equity.
NOTE 7 – CONVERTIBLE NOTES, PROMISSORY NOTES AND LOANS
During
the six months ended June 30, 2024, the Company issued
convertible notes (Series F) with aggregate amount of $
On
February 20, 2024, $
On
February 21, 2024, $
On
February 23, 2024, $
On
March 2, 2024, $
On
March 28, 2024, $
On
April 3, 2024, $
On
April 18, 2024, $
On
May 15, 2024, $
On
May 16, 2024, $
On
May 17, 2024, $
On
May 18, 2024, $
On
May 22, 2024, $
As
of June 30, 2024, the total aggregate convertible debt outstanding was $
The Series F convertible note issued on May 15, 2024, was issued to a shareholder to extinguish a short-term loan concluded with the same shareholder on November 16, 2023, that came to maturity on the same date of May 15, 2024. The short-term loan was extinguished on the maturity date without default on the part of the Company.
Around the time of the maturity of the loan, the shareholder
concerned had elected to purchase a second block of $
Whereas in November of 2023, the financial situation
of the Company was more difficult forcing the Company to secure financing of expensive terms, by February of 2024, the situation had improved.
A Form D was filed with the SEC on February 27, 2024,
The short-term November 16 loan was for a principal
loan amount of $
Since, at the time of Maturity the Company was raising money on better terms than those contained in the short term loan, the Company could have simply repaid the short term loan in the normal way with proceeds from the issuance of a Series F note, however, since the investor purchasing the notes was also the lender due repayment of the short term loan, the Company and the debtor elected to extinguish the obligation under the short term loan by offsetting the amount due under the short term loan with the amount payable under the May 15, 2024 Series F note.
In the extinguishment of the short-term loan, the Company recognized neither loss/gain since the principal was converted on the day the loan matured.
| F-11 |
As
of June 30, 2024, the Company had ten outstanding loans with an aggregate value of $
During
the three months ended June 30, 2024, the Company recognized interest expense on its loans and convertible notes of $
NOTE 8 – RELATED PARTY TRANSACTIONS
The Company continues to rely on advances from related parties in support of its operations and cash requirements are expected to continue until such time as the Company can support itself or attain adequate financing through sales of equity or debt financing. Most of this support took the form of the nonpayment of all or a portion of salary payments to senior Directors, Officers, consultants, and employees, effectively constituting a deferred debt payment to such persons.
As
of June 30, 2024, seven Directors, Officers and employees, including full time consultants, were owed a total of $
On June 30, 2024, the following Senior Managers were owed the following amounts:
| Name | Title | Amount owing ($) | Accumulated Leave ($) | Total Liability ($) | ||||||||||
| Benton Wilcoxon | ||||||||||||||
| John Michael Johnson | ||||||||||||||
| Total Liability: | ||||||||||||||
Under the terms of the Debt Extension Agreements concluded
between the Senior Managers and a further five other employees and consultants the outstanding debt to such persons may be converted under
certain terms. In particular, such debt might be converted into shares at the price which is five percent (
On April 4, 2024, the Company entered into a loan agreement with a third-party engineering and technology development company (“ETD Co”). This US based corporation was, prior to the negotiation and signature of the loan agreement, previously owned and managed by a former officer of the Company (who resigned from the Company on February 22, 2024) and one of its other senior employees. Neither of these two related parties had any involvement in negotiation, execution or subsequent business related to the loan or the relationship between the ETD Co and the Company after April 1, 2024.
Since May 4, 2022, ETD Co had sought to invest into the Company by purchasing its convertible notes and shares, however, these proposals were dependent on ETD Co raising funds for its own operations. In raising funds, ETD Co was using the services of a third-party financial expert (the “Financial Consultant”) however, ETD Co was never successful in closing on this finance so no investment was ever made in the Company. In addition, ETD Co proposed introducing the Company to complimentary technologies that might benefit the Company, however, the Company did not pursue any of these introductions or proposals and no funds were ever paid to ETC Co by the Company for this purpose. On April 1, 2024, the Financial Consultant acquired the entire ownership interest in and to the ETD Co and its business including its relationship with the Company. Since the date of the sale neither related party had any further involvement of any kind in its ownership or business, in particular neither related party mentioned in connection with ETD Co had any further involvement with ETD Co and in particular in relation to the proposal, negotiation, execution or operation loan agreement dated on April 4, 2024, this being carried on by the Financial Consultant independently in connection with proposals to provide funding to the Company.
| F-12 |
NOTE 9 – VALUE OF FINANCIAL INSTRUMENTS
As
of June 30, 2024, the Company holds certain shares in the AIM publicly traded company Clontarf Energy plc. These shares were acquired
on May 31, 2023, when the market price for such shares on AIM was GBP . The table below sets forth the fair market value of the
shareholding based on the closing price for the shares on the AIM market. As of June 30, 2024, the market price for Clontarf shares was
GBP , putting the Fair Value of the Investment at $
The
Company recognized a loss of $
From the acquisition Date to period cover June 30, 2024, the fair market value (FMV) of the shareholding was reported as follows:
| Date | Number of Shares | Market Price | Exchange Rate | Amount in USD | ||||||||||||||
| Acquisition Date | GBP | |||||||||||||||||
| Period End | GBP | |||||||||||||||||
| Unrealized (Loss) | ( | ) | ||||||||||||||||
For the six month period from January to June 2024, the FMV was reported as follows:
| Date | Number of Shares | Market Price | Exchange Rate | Amount in USD | ||||||||||||||
| Year End, FMV | GBP | |||||||||||||||||
| Period End | GBP | |||||||||||||||||
| Unrealized Gain | ||||||||||||||||||
NOTE 10 – STOCKHOLDERS’ EQUITY (DEFICIT)
The Company is authorized to issue shares of common stock with a par value of $ and shares of preferred stock with a par value of $.
On June 30, 2024, there were shares of common stock outstanding.
During the six months ended June 30, 2024, the Company issued shares of common stock.
On May 29, 2024, the Company Board of Directors agreed to the issuance of a total of newly authorized preferred stock in a class identified as Class “A” Preferred Stock. Ten thousand () Class “A” Preferred Stock were subscribed by John Michael Johnson, a director of the Company holding the senior management positions of President and CFO, with the additional ten thousand () Class “A” Preferred Stock being subscribed for and on behalf of the Board of Directors of the Company to utilize as the Board sees fit in the best interest of the Company. These shares were to be issued at par value of $ and subscription agreements were duly concluded, however, since the subscriptions were never paid, the offer to subscribe was withdrawn.
As of June 30, 2025, no funds had been transferred to pay for the said subscriptions. As a result, on notice to the subscribers duly given, the issuance of these shares of Class ‘A’ shares of Preferred Stock was revoked for non-payment, and the entire Class “A” Preferred Stock series was cancelled
During the six months ended June 30, 2024, the Company issued options under the Company’s 2021 Stock Incentive Plan (the “Plan”).
During the six months ended June 30, 2024, the Company none of the outstanding convertible debt of the Company was converted into shares of common stock.
NOTE 11 – SUBSEQUENT EVENTS
On June 30, 2025, the Board of Directors, noting that the subscription payments due to effect the issuance of the twenty thousand shares of Class A Preferred Stock payable in accordance with the subscription agreements entered into on May 29, 2024 had not been paid, and following notice duly given, cancelled the said subscriptions. In addition, at the same time the Board of Directors revoked and cancelled the entire series of Class A Preferred Stock.
On September 23, 2024 the Company’s Board of Directors elected to create a new class of preferred stock, identified as Class “F” Preferred Stock. Each share of Class “F” Preferred Stock ranks senior to all Common Stock and any other class of securities. The shares of Class “F” Preferred Stock are under no circumstances convertible into shares of Common Stock at any time and no dividends shall be paid on any Series “F” Preferred Stock. Each Share of Class “F” Preferred Stock shall be entitled to One Thousand (1,000) votes on any matter on which any of the shareholders are required or permitted to vote.
A total of shares of this Series F Preferred Stock was duly authorized. Ten thousand (10,000) Class “F” Preferred Stock was subscribed by John Michael Johnson, a director of the Company holding the senior management positions of President and CFO, and an additional ten thousand (10,000) Class “F” Preferred Stock was subscribed by the Board of Directors of the Company. No payment was made by either party for the said subscriptions to the Class “F” Preferred Stock. As a result, on June 30, 2025, the Board of Directors, noting that the subscription payments remained unpaid, elected to cancel the subscriptions. On the same date, the Board of Directors revoked and cancelled the entire series of Class F Preferred Stock.
During the period commencing on July 1, 2024 and ending with the date of the present Report, the Company financed its business through the issuance of 14 new convertible notes (Series F) with an aggregate principal face value of $1.066 million.
On September 13, 2025, two loans each with a principal amount of $
| F-13 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
The Company was organized on August 13, 2014, as a Nevada corporation under Chapter 78 of the Nevada Revised Statutes. The Company’s registered address is 3773 Howard Hughes Pkwy STE 500S, Las Vegas, NV, 89169, USA, and its principal office is located at 1980 Festival Plaza Drive, Summerlin South, 300, Las Vegas, NV 89135.
The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act which became law in April 2012. The definition of an “emerging growth company” is a company with an initial public offering of common equity securities which occurred after December 8, 2011, and has less than $1 billion of total annual gross revenues during last completed fiscal year.
Overview of the Business
Since April 27, 2021, the Company has changed its business entirely with the acquisition of intellectual property assets related to a novel membrane-based ion extraction process (“iTDE Technology”), which is able to extract ions exiting in low concentrations from liquid solutions. The iTDE Technology is now being used in laboratory pilot testing to enable the Company to produce its first commercial prototypes using the novel the Extraction method. The iTDE Technology allows for the removal of ions from solution: without concentration by evaporation (significantly preserving the water resources); without pressure or additional heating (reducing energy costs); and targets the specific ions to be extracted (reducing the need for further operations and increasing the potential for the sale of other ions present in the solution). Because of the reduced interference with the environment, the lower energy costs, and the lack of a need for large evaporation ponds, management considers the iTDE Technology to be more environmentally friendly and sustainable when compared to alternatives.
The iTDE Technology has been shown effective when extracting lithium from brine solutions or mine leach solutions, and to have significant potential in the following applications: extracting fatty acids from vegetable oils as a superior refining process; extracting glycerides from biodiesel as a superior purification process; extracting radioactive ions from nuclear waste waters; extracting specific metal ions from mine leach solutions and waste effluents; and to remove salts from seawater for desalination, among other things.
Currently, the primary focus of the business is on completion of the first of two pilot plants embodying the iTDE Technology system that will enable the demonstration of the extraction system for the extraction of lithium, calcium, magnesium, boron, and certain other elements. The first system will provide greater flexibility to optimize and extend the reach of the process, allowing for replacement of sensor systems and variation of process parameters. It is anticipated that this pilot plant will not only demonstrate the system and its ability to target lithium using naturally occurring brines and liquors (solutions of crushed ores), but also provide a platform to optimize the extraction process and extend the extraction to other elements. The first pilot plant will enable the Company to establish the percentage level of extraction including the purity of the extracted elements and the chemical form of the extracted elements. This will give a clear indication of the economics of the process.
A second pilot plant system is planned using experience gained from the first pilot plant to improve the current design enabling higher throughputs and a better processing ability for marketing purposes.
The Company believes it has the ability of the system to scale up due to its modular configuration: adding more units increases the extraction potential. It is anticipated following successful completion and trial and calibration of the iTDE System pilot plant, the Company will launch the commercial testing and deployment of its system that will enable the commercial deployment of the system.
It is important for the commercialization process that the Company have access to material to process (“feedstock”) since the process will usually be particularly adapted to suit a particular feedstock. On March 27, 2023, the Company signed a Partnership Agreement with the UK AIM listed company Clontarf Energy plc (“Clontarf”) in accordance with which the partners would pursue together the possibility of using the Company’s iTDE Technology to extract lithium and other materials from feed-stock brines in Bolivia. On behalf of the partners, Clontarf submitted a bid to the “Pública Nacional Estratégica Yacimientos de Litio Bolivianos” (the ‘National Strategic Public Company of Bolivian Lithium Deposits’ or “YLB”) in the Call for Bids (“convocatoria”) for the seven priority salares (salt pans) in Southern Bolivia. since fiscal year 2023, the Clontarf bid has made progress through the bidding process which consists of five phases. Given the extended time and uncertainty of winning the convocatoria, the Company has begun to explore alternative sources of feedstock with commercial potential in particular in the US where environmental considerations and clean-up are paramount and where the Company’s technology may open access to domestic sources of strategic materials.
The Company has been focusing on additional and complementary technologies that will enhance its system either by rendering it more efficient or by reducing cost. In the second quarter of 2024, the Company entered into an agreement with a third-party US engineering and technology development company (“ETD Co”) that may provide access to additional technologies focusing initially on membrane advances before turning to milling technology. If successful, the Company may use all or part of a certain loan to acquire such technology. The funds transferred for this purpose are secured as a loan earning 8% interest and are due to be repaid by May 30, 2026, if no specific technology is acquired by the Company prior to repayment.
| 3 |
Results of Operations
The following table summarizes the results of our operations during the three months ended June 30, 2024, and 2023, respectively:
| Three Months Ended | ||||||||||||
| June 30, (not reviewed) | ||||||||||||
| 2024 | 2023 | Change | ||||||||||
| Revenues | $ | - | $ | - | $ | - | ||||||
| Operating expenses | 440,338 | 581,572 | (141,234 | ) | ||||||||
| Other (Income) expense | (56,959 | ) | (183,849 | ) | 126,890 | |||||||
| Net profit (loss) | (383,379 | ) | (397,723 | ) | 14,344 | |||||||
| Profit (Loss) per share of common stock | (0.01 | ) | (0.01 | ) | - | |||||||
During the three months ended June 30, 2024, the principal focus of the Company was the finalization of the pilot plant engineering and construction in India together with the work in developing specific membranes for use with the Company’s technology. In addition, the Company was focused on seeking finance for its future and dealing with certain litigation issues. During this period, the Company incurred operating expenses of $440,338, a 25% reduction when compared to the same period in 2023. In contrast, Other Income fell from 183,849 to 56,959 leaving the resulting loss at broadly the same level: $383,379 (for 2024) to $397,723 (for 2023), a difference of only $14,344.
Since changes in the Company’s human resources and rental expense took place in the first quarter of 2024, the greatest reduction in operating expense between the second quarter of 2024 and the same period in 2023 was the reduction of $83,405 in salaries for both managers, employees and research and development personnel and the removal of the Illinois research facility expense reducing expense by an additional $13,228. For the remaining employees, the practice of allowing leave to be accumulated was also suspended resulting in a one-time reduction in employee benefit. In addition, the expenses of contractors and consultants were reduced slightly by $16,843 from the same period in 2023. All these measures were the result of efforts to reduce and rationalize running costs given the difficult financial situation of the Company.
Other significant reductions between the periods resulted from a reduction of $38,454 in intellectual property expense, and of $24,331 in marketing, entertainment and events. These reductions were offset by increases in expenses between the same period of 3-months ending June 30 between 2023 and 2024: in legal and auditing fees of $10,154; in interest payable on corporate loans of $22,868; as well as the addition of amortization expense amounting to $37,446 resulting from changes to the classification of the Company’s primary asset, its technology that necessitated amortization of the technology.
In general the significant efforts to reduce costs in 2024 were obscured in the comparison between the periods ending June 30 for years 2023 and 2024, since in the second quarter of 2023, the Company received shares in the publicly traded corporation Clontarf Energy plc worth, at the 2023 quarter end, $203,050. The receipt of additional shares from Clontarf will require completion of the polit plant and the ability to test Bolivian brines.
The following table summarizes the results of our operations during the six months ended June 30, 2024, and 2023, respectively:
| Six Months Ended | ||||||||||||
June 30, (not reviewed) | ||||||||||||
| 2024 | 2023 | Change | ||||||||||
| Revenues | $ | - | $ | - | $ | - | ||||||
| Operating expenses | 939,932 | 1,018,225 | (78,293 | ) | ||||||||
| Other (Income) expense | (145 | ) | (162,529 | ) | 162,384 | |||||||
| Net profit (loss) | (939,787 | ) | (855,696 | ) | (84,091 | ) | ||||||
| Profit (Loss) per share of common stock | (0.03 | ) | (0.03 | ) | - | |||||||
The 6-month period ending 2024, continued the Company’s shift of operations out of the United States to India, with a decrease in operational costs and a reduction of employees offset by a greater use of consultants and contractors. With a majority of the critical staff resident outside the US and the lower costs of operating abroad, this made business sense. Management has been aware since the previous year that the development of the pilot plants would take longer and require considerably more funding if carried out in the US.
This is reflected in the Company’s operating expenses with the 6-month combined expenses for 2024 being $939,932 as compared to $1,018,225 for the same 6-month period of 2023, representing a small reduction of $78,293 between the periods. Much of the underlying picture of the Company’s finances is obscured by the one-off receipt of the Clontarf shares valued at $203,050 recorded as other income in 2023, while for the same period in 2024, only $14,560 of other income was recorded. As a result, the six months ending June 30, 2024, net loss increased by $84,091 over the same period in 2023.
The largest decrease in expenses during the first six months of 2024 when compared to the same period of 2023 was the reduction of $166,307 in salaries for both managers, employees and research and development personnel. This was partially offset by cancellation of leave benefit. In general, the workforce was restructured during this period with a shift to India to reduce overall costs. Intellectual property expenses were also lower in the six month comparison of 2023 over 2024, a reduction of $59,586, however, this tends to be cyclical and payments are dependent on patent work rather than as a predictable expense. The Company was successful in reducing the general operational overheads by small amounts to conserve cash.
The Company’s reliance on debt financing led to an increase in interest expense with $78,897 recorded for the six months ended 2024 as compared to $40,521 for the same period in 2023.
The introduction of the amortization of the Company’s iTDE Technology also resulted in the addition of $74,891 in expense for the six month period ending June 30, 2024 over the same period in 2023.
During the second quarter of 2024, the Company booked interest payments of $41,359 on the indebtedness of long-standing unpaid salaries to senior employees leading to an increase in employee benefits.
| 4 |
Liquidity and Capital Resources
As of June 30, 2024, we had total current assets of $616,895 and an accumulated deficit of $7,451,897.
Our operating activities used $861,765 in cash for the six months ended June 30, 2024, while our operations used $169,669 cash in the six months ended June 30, 2023. During the period, the Company has focused attention on the work necessary to complete the pilot plants. Strategically it is considered necessary to complete the pilot plants to enable the Company to move to the next stage of its marketing plan: to demonstrate the system and its extraction economics to potential users. The Company currently has several companies interested in evaluating the system using their brines and these tests will consume a considerable amount of time once the pilot plants are ready to process. Management considers it preferable to focus on this work, and this has led to an overall reduction in expenses prior to reengaging in other activities.
Our cash requirements continue to be primarily for the finalization of the iTDE System pilot plant. While the Company anticipates opening corporate offices in the US in the future as well as manufacturing facilities, at present the focus is on the shift of development and engineering work to India to accelerate the ability to carry out Pilot Plant trials with customer brines and liquors.
Historically we have depended on investment from our principal shareholders and their affiliated companies to provide us with working capital as required as well as the forbearance of our employees and consultants to forgo all or part of their contracted salaries. There is no guarantee that such funding or other sources of funding will be available when required and there can be no assurance that our stockholders and employees, or any of them, will continue making loans or advances to us in the future.
Off Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital expenditures or capital resources that is material to an investor in our securities.
Seasonality
Our operating results are not affected by seasonality.
Inflation
The Company has in the past used funding from debt convertible equity as its primary source of funding. In the event of a high inflationary environment, this method of funding may become more expensive and may be less readily available. Our core business and operating results are not affected in any material way by inflation.
Critical Accounting Policies
Our financial statements and accompanying notes have been prepared in accordance with GAAP and all amounts recorded throughout this Report are stated in US dollars. The preparation of these financial statements requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. We continually evaluate the accounting policies and estimates used to prepare financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are critical to our results of operations and financial position. Our critical accounting estimates are discussed in Note 2 to our unaudited financial statements contained herein.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.
| 5 |
Item 4 - Controls and Procedures
Disclosure of Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s chief executive officer (who is the Company’s principal executive officer) and the Company’s President (who is the Company’s chief operating officer) as well as its Financial Officer (the Company’s principal financial officer) to allow for timely decisions regarding required disclosure. At present one person combines the roles of President and Chief Financial Officer. In designing and evaluating the Company’s disclosure controls and procedures, the Company’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The Company’s management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The ineffectiveness of the Company’s disclosure controls and procedures was due to material weaknesses identified in the Company’s internal control over financial reporting, described below.
Management’s Report on Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over the Company’s financial reporting. To evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002. Our management, with the participation of the Company’s principal executive officer and principal financial officer has conducted an assessment, including testing, using the criteria in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013). Our system of internal control over financial reporting is designed 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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. This assessment included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation.
Based on this evaluation, the Company’s management concluded its internal control over financial reporting, while significantly improved, was still not effective as of June 30, 2024.
Changes in Internal Control Over Financial Reporting
Principal financial controls are managed by the Company’s controller who maintains the accounts under the supervision of the Chief Financial Officer. At present the Company still relies on advances by officers and employees using their own means of payment to fund the Company, these are then repaid (or accumulated as debt) against an accounting of such expenses. The Company plans to issue its own means of payment in the future that would improve efficiency and transparency. The Company changed its bankers during the course of the third quarter 2023. While we believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any Company have been detected, the Company continues to improve its control environment with a view to establishing an effective control environment and to satisfying the Company auditors of the same.
| 6 |
PART II
OTHER INFORMATION
Item 1 - Legal Proceedings
On April 26, 2024, Judge Elizabeth Leonard of the Midland County District Court in Midland, Texas entered a Third Turnover Order (the “Turnover Order”) requiring the Company to turn over 15,866,096 of its common shares, registered to a corporation with the same name as the Company (NEXT-ChemX Corporation) but registered in a different jurisdiction, to NEXT-ChemX Corporation, a Texas corporation, Glenn A. Little, as Director and Receiver. Sparkie Properties L.L.C. (“Sparkie”) that is managed by Glenn Little who was also appointed receiver of, a privately held Texas corporation.
This decree was issued even though neither the privately held NEXT-ChemX Corporation, chartered in Texas, nor the Company itself was ever involved in the underlying lawsuit giving rise to said decree. This order arose from litigation in Sparkie Properties L.L.C. v. NextMetals Limited and Benton Wilcoxon, CV 58242, In the District Court of Midland County, Texas, 238th Judicial District. The shares of the Company owned by NEXT-ChemX Corporation, the privately held Texas corporation, were alleged to belong to NextMetals Limited, a defendant in the litigation, rather than the aforementioned closely held Texas private company.
In fact, NextMetals Limited, a Gibraltar corporation defendant in the litigation does own shares in the closely held Texas private company, NEXT-ChemX Corporation, however the order has been issued to seize not the shares in the private Texas company but rather the private Texas company’s assets, the shares in the Company. The similarity of names between the Company and the private Texas corporation came about in 2021 when the Company adopted the changed its business and adopted the name of its principal shareholder that has contributed the technology currently exploited by the Company in exchange for a controlling share. These facts were ignored by the Court; moreover, when the private Texas Company whose assets were under threat approached the Court to be heard, the Judge refused allow it a hearing and proceeded with the judgement effectively depriving the private Texas company of its asset.
The Turnover Order is not a final order as it is currently on appeal with the Texas Court of Appeals for the 11th District in Eastland, Texas.
When the Company received notice from its transfer agent, Empire Stock Transfer Inc. (“Empire”) of Henderson, Nevada that, irrespective of the ongoing appeal of the Turnover Order and the fact that the shares covered by the Turnover Order were not the property of Sparkie Properties, L.L.C., Empire nevertheless advised the Company that it intended to issue the shares covered by the Turnover Order. The Company immediately terminated Empire as its transfer agent. This was done via an email and letter delivered on May 23, 2024, in which Empire acknowledged the receipt.
Although Empire no longer represented NEXT-ChemX Corporation, the Nevada public company, Empire promptly cancelled the shares owned by NEXT-ChemX Corporation, the closely held private corporation and issued 15,866,096 common shares in the public company divided into two certificates to NEXT-ChemX Corporation, a Texas corporation, Glenn A. Little, as Director and Receiver.
The Company and its attorneys believe the Turnover Order is illegal for reasons stated in a brief timely filed by attorneys for Benton Wilcoxon and NextMetals Ltd with the Texas Court of Appeals.
Item 1A – Risk Factors
Not applicable.
Item 2 - Unregistered Sale of Equity Securities and Use of Proceeds
None.
Item 3 - Defaults upon Senior Securities
None
Item 4 - Mine Safety Disclosures
Not applicable.
Item 5 - Other Information
None
| 7 |
ITEM 6. EXHIBITS
The following exhibits are filed as part of this report or incorporated by reference:
| Exhibit No. | Description | |
| 31.1* | Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2* | Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 32.1** | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101* | Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q/A. | |
| 104* | Inline XBRL for the cover page of this Quarterly Report on Form 10-Q/A, included in the Exhibit 101 Inline XBRL Document Set. |
* Filed herewith
** Furnished herewith
| 8 |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: September 16, 2025 | NEXT-ChemX Corporation | |
| By: | /s/ Benton Wilcoxon | |
| Benton Wilcoxon | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| 9 |