GRHI 10-Q
Gold Rock Holdings, Inc. (GRHI)
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
Commission file number:
(Name of Small Business Issuer in its charter)
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| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
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| (Address of principal executive offices) | ||||
Registrant's telephone number: (
Indicate by check mark whether the registrant (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically
and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).
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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☐ Emerging growth company |
Accelerated filer ☐ Smaller reporting 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 ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| NONE | NONE | NONE |
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: At October 29, 2024 the registrant had outstanding shares of common stock, par value $0.001 per share.
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TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GOLD ROCK HOLDINGS, INC.
| FINANCIAL REPORTS |
| AT |
| SEPTEMBER 30, 2024 |
INDEX TO FINANCIAL STATEMENTS
| -3- |
| Gold Rock Holdings, Inc. |
| CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED |
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts Receivable | ||||||||
| Total Current Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable and Accrued Expenses | $ | $ | ||||||
| Accrued Board of Director Compensation | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| Stockholders' Equity (Deficit) | ||||||||
| Common Stock - $ Par; Shares Authorized, and Issued and Outstanding, 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 unaudited condensed consolidated financial statements.
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| Gold Rock Holdings, Inc. |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED |
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Sales | $ | $ | $ | $ | ||||||||||||
| Cost of Sales | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses | ||||||||||||||||
| Board of Director Compensation | ||||||||||||||||
| Consulting | ||||||||||||||||
| General and Administrative | ||||||||||||||||
| Total Expenses | ||||||||||||||||
| Net Income (Loss) for the Period | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Weighted Average Number of Common Shares - Basic and Diluted | ||||||||||||||||
| Net Income (Loss) for the Period Per Common Shares - Basic and Diluted | $ | $ | ) | $ | ) | $ | ) | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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| Gold Rock Holdings, Inc. |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED |
| Nine Months Ended September 30, | 2024 | 2023 | ||||||
| Cash Flows from Operating Activities | ||||||||
| Net Loss for the Period | $ | ( | ) | $ | ( | ) | ||
| Non-Cash Adjustments: | ||||||||
| Common Stock Issued for Board of Director & Consulting Services | ||||||||
| Common Stock Issued to Prepay Director for Payment of Operating Expenses | ||||||||
| Changes in Assets and Liabilities: | ||||||||
| Accounts Receivable | ( | ) | ||||||
| Accounts Payable and Accrued Expenses | ( | ) | ||||||
| Accrued Board of Directors Compensation | ||||||||
| Net Cash Flows Used In Operating Activities | ( | ) | ( | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Cash Flows from Financing Activities | ||||||||
| Cash Proceeds Received from Sale of Common Stock | ||||||||
| Capital Contributions from Directors | ||||||||
| Net Cash Flows Provided by Financing Activities | ||||||||
| Net Change in Cash | ( | ) | ||||||
| Cash - Beginning of Period | ||||||||
| Cash - End of Period | $ | $ | ||||||
| Cash Paid During the Period for: | ||||||||
| Interest | $ | $ | ||||||
| Income Taxes | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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| Gold Rock Holdings, Inc. |
| CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - UNAUDITED |
| Common Stock | Additional | Total | ||||||||||||||||||
| $0.001 Par | Paid-In | Accumulated | Stockholders' | |||||||||||||||||
| For The Three and Nine Months Ended September 30, 2023 | Shares | Amount | Capital | Deficit | Equity (Deficit) | |||||||||||||||
| Balance - January 1, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Common Stock Issued for Accounts Payable and Accrued Expenses | ||||||||||||||||||||
| Common Stock Issued to Prepay Director for Payment of Operating Expenses | ||||||||||||||||||||
| Common Stock Issued for Board of Director & Consulting Services | ||||||||||||||||||||
| Net Loss for the Period | - | ( | ) | ( | ) | |||||||||||||||
| Balance - March 31, 2023 | ( | ) | ||||||||||||||||||
| Capital Contributions - Directors | - | |||||||||||||||||||
| Net Loss for the Period | - | ( | ) | ( | ) | |||||||||||||||
| Balance - June 30, 2023 | ( | ) | ( | ) | ||||||||||||||||
| Capital Contributions - Directors | - | |||||||||||||||||||
| Net Loss for the Period | - | ( | ) | ( | ) | |||||||||||||||
| Balance - September 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Common Stock | Additional | Total | ||||||||||||||||||
| $0.001 Par | Paid-In | Accumulated | Stockholders' | |||||||||||||||||
| For The Three and Nine Months Ended September 30, 2024 | Shares | Amount | Capital | Deficit | Equity (Deficit) | |||||||||||||||
| Balance - January 1, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Common Stock Sold | ||||||||||||||||||||
| Capital Contributions - Directors | - | |||||||||||||||||||
| Net Loss for the Period | - | ( | ) | ( | ) | |||||||||||||||
| Balance - March 31, 2024 | ( | ) | ||||||||||||||||||
| Common Stock Sold | ||||||||||||||||||||
| Net Loss for the Period | - | ( | ) | ( | ) | |||||||||||||||
| Balance - June 30, 2024 | ( | ) | ||||||||||||||||||
| Net Income for the Period | - | |||||||||||||||||||
| Balance - September 30, 2024 | $ | $ | $ | ( | ) | $ | ||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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GOLD ROCK HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
NOTE 1 – Organization & Description of Business
The Company was incorporated in the State of Nevada in February 1997 as Affordable Homes of America. In March 1999 we merged into Kowtow, Inc. and changed our name to Affordable Homes of America, Inc. On October 12, 2000, we changed our name to World Homes, Inc. and on August 23, 2001, we changed our name to Composite Industries of America, Inc. On September 02, 2004, the Company changed its name to Gold Rock Holdings, Inc. On January 08, 2009, the Company did a name change to The Affordable Homes Group, Inc. On March 01, 2011, the Company changed its name to Global Green Group, Inc. On January 09, 2015, the Company changed its name back to Gold Rock Holdings, Inc., the current name of the Company. In 2019, Gold Rock Holdings, Inc. established itself as a provider of engineering and construction management services producing site-plans, construction drawings, cost computations, fiber network designs, and other related construction services. The Company changed its business model from engineering and construction management services, as a result of a change in control on October 2, 2023. Gold Rock intends to grow and further establish itself through mergers, acquisition and management of technological assets. On December 12, 2023, the Company formed a wholly owned subsidiary in the State of Wyoming by the name of Loot 8, Inc. Loot8 Inc., had no activity through December 31, 2023. Loot8, Inc. currently is in the beta testing phase of its business and has no revenue. However, it has developed a Web3 content management system (CMS) pioneering the “Relationship Economy” through SocialFi, and a new monetization model. This model is designed to empower individuals with compelling stories to monetize their relationships beyond traditional influencer models.
NOTE 2 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated balance sheet has been derived from the December 31, 2023 audited financial statements and the unaudited condensed consolidated financial statements as of September 30, 2024 and 2023, have been prepared in accordance with generally accepted accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the audited financial statements and related footnotes included in our Annual report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”), filed with the Securities and Exchange Commission (the “SEC”). It is management’s opinion, however, that all material adjustments (consisting of normal recurring adjustments), have been made which are necessary for fair condensed consolidated financial statements presentation. Operating results for the three and nine months ended September 30, 2024, are not necessarily indicative of the results of operations expected for the year ending December 31, 2024.
Principles of Consolidation
The condensed consolidated financial statements include the accounts of Gold Rock Holdings, Inc., and its wholly owned subsidiary, Loot8 Inc., (the “Company”). All significant inter-company balances have been eliminated in consolidation.
Method of Accounting
The Company’s consolidated financial statements have been prepared and presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”)
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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GOLD ROCK HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
NOTE 2 – Summary of Significant Accounting Policies – continued
Cash and Cash Equivalents
Cash and cash equivalents may include time deposits, certificates of deposit, and all highly liquid debt instruments with original maturities of three months or less. The Company maintains cash and cash equivalents at financial institutions located in the United States, which periodically may exceed federally insured amounts.
Earnings (loss) per share of common stock are computed in accordance with FASB ASC 260 “Earnings per Share”. Basic earnings (loss) per share are computed by dividing income or loss available to common shareholders by the weighted-average number of common shares outstanding for each period. Diluted earnings per share are calculated by adjusting the weighted average number of shares outstanding assuming conversion of all potentially dilutive stock options, warrants and convertible securities, if dilutive. Common stock equivalents that are anti-dilutive are excluded from both diluted weighted average number of common shares outstanding and diluted earnings (loss) per share.
We account for employee and non-employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments, including grants of stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.
Fair Value of Financial Instruments
The estimated fair values for financial instruments are determined at discrete points in time based on relevant market information. These estimates involve uncertainties and cannot be determined with precision. The carrying amounts of accounts payable and accrued liabilities approximate fair value given their short-term nature or effective interest rates.
Revenue Recognition
The Company implemented ASC 606, Revenue from Contracts with Customers. These included the development of new policies based on the five-step model provided in the new revenue standard, ongoing contract review requirements, and gathering of information provided for disclosures.
The Company recognizes revenue and cost of goods sold from product sales or services rendered when control of the promised goods are transferred to our clients in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: identify the contract with the client, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to performance obligations in the contract and recognize revenues when or as the Company satisfies a performance obligation.
NOTE 3 – Recently Issued Accounting Standards
The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements, including the new lease standard. The Company does not have any leases and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
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GOLD ROCK HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
NOTE 4 – Going Concern
The Company’s condensed consolidated financial statements have been
presented on the basis that it is a going concern, which contemplates the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has an accumulated deficit of $
NOTE 5 – Related Party Transactions
During the nine months ended September 30, 2024, a director of the Company
paid one invoice of the Company in the amount of $
The Company has a consulting agreement with a majority shareholder/board
of director. The agreement is for $
The Company entered into a compensation agreement beginning January 1,
2023 and ending on December 31, 2028 in the amount of $
NOTE 6 – Stock
Preferred Stock
Preferred stock consists of shares authorized at $ par value. Preferred stock are blank check and have no conversion, dividend or voting rights. On January 11, 2024, the Company designated to be classified as Series A preferred. Series A have voting rights equal to 25 common stock votes, have the same rights to liquidation as common and have no dividend or conversion rights. At September 30, 2024 and December 31, 2023 there were -- preferred shares issued and outstanding.
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GOLD ROCK HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
NOTE 6 – Stock – continued
Common Stock
Common stock consists of shares authorized at $ par value. At September 30, 2024 and December 31, 2023 there were and shares issued and outstanding, respectively.
During the nine months ended September 30, 2023, the Company issued
During the nine months ended September 30, 2023, the Company issued
shares to pay $
During the nine months ended September 30, 2023, the Company issued
shares to pay $
During the nine months ended September 30, 2024 the Company sold
shares and received $
NOTE 7 – Sponsorship Commitment
On February 13, 2024, Loot8, Inc., the
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with our financial statements and related notes thereto included in Part I, Item 1, above.
Forward Looking Statements
Certain matters discussed herein are forward-looking statements. Such forward-looking statements contained in this Form 10-Q involve risks and uncertainties, including statements as to:
· our future strategic plans
· our future operating results;
· our business prospects;
· our contractual arrangements and relationships with third parties;
· the dependence of our future success on the general economy;
· our possible future financing; and
· the adequacy of our cash resources and working capital.
From time to time, we or our representatives have made or may make forward-looking statements, orally or in writing. Such forward-looking statements may be included in, but not limited to, press releases, oral statements made with the approval of an authorized executive officer or in various filings made by us with the Securities and Exchange Commission. Words or phrases "will likely result", "are expected to", "will continue", "is anticipated", "estimate", "project or projected", or similar expressions are intended to identify "forward-looking statements". Such statements are qualified in their entirety by reference to and are accompanied by the above discussion of certain important factors that could cause actual results to differ materially from such forward-looking statements.
The risks identified here are not all inclusive. New risk factors emerge from time to time and it is not possible for management to predict all of such risk factors, nor can it assess the impact of all such risk factors on the company's business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results.
The financial information set forth in the following discussion should be read in conjunction with the financial statements of Gold Rock Holdings, Inc. included elsewhere herein.
Business
Gold Rock Holdings, Inc., (Gold Rock) a Nevada corporation, is a holding company that acquires technological assets.
The Company changed its business model from engineering and construction management services, produce site-plans, construction drawings, cost computations, fiber network designs, and other related construction services, as a result of a change in control on October 2, 2023.
Gold Rock intends to grow and further establish itself through mergers, acquisitions, and management of technological assets. As such, Gold Rock Holdings, Inc. (the "Company") announced on December 12, 2023, that it formed a Wyoming corporation by the name of LOOT8, Inc. as its operating wholly-owned subsidiary. LOOT8, Inc. acquired certain intellectual property known as "LOOT8." LOOT8 is a Web3 Commerce and Content Management Engine Software. At its core, it harnesses the power of multiple public blockchains alongside the IPFS file system, with a user-friendly interface akin to Web2. LOOT8 is engineered to cater to a variety of enterprise necessities including digital product passports, private communication channels, and loyalty programs, among others. LOOT8 provides enterprises the capability to oversee and manage their content on IPFS nodes, leveraging AI to make the underlying content interactive as a way to enable small businesses and content creators to scale at a faster pace and to create differentiated experiences.
LOOT8, Inc. currently in its infancy in marketing its Web3 online platform phase of its business and has no revenue. However, it has developed a Web3 content management system (CMS) pioneering the “Relationship Economy” through SocialFi, and a new monetization model. This model is designed to empower individuals with compelling stories to monetize their relationships beyond traditional influencer models.
The new monetization model is made up of three discrete revenue streams. It is planned that the first stream will be a direct-to-consumer (D2C) model where LOOT8 will employ Web3 technology to manage collectibles and fan engagements. Key initiatives include athletes', musicians', and influencers' Name, Image, and Likeness (NIL) rights, and revenue generation through a 10% transaction fee on subscriptions and digital collectible sales. The model also includes a collaboration with LBX Food Robotics for vending machines at universities and other venues, which serve as sales points for digital memorabilia, and the integration of APPIX for real-time notifications on collectible availability. The second anticipated revenue stream targets the youth market. LOOT8 plans to leverage high-profile athletes, musicians, and influencers to create personalized, customizable avatars. This feature is expected to contribute to revenue through a 10% transaction fee on cosmetic items for AI companions, while maintaining these digital assets on LOOT8’s platform. The third anticipated stream will utilize an enterprise model, leveraging Marcus Daley, GRHI's CEO's background with NeuralMetrics, towards Software as a Service (SaaS) and Platform as a Service (PaaS) licensing models. The Company plans to focus on Annual Contract Value (ACV) and Annual Recurring Revenue (ARR) from corporate clients. This approach will allow the Company to address enterprise needs in digital agent, persona and workflow solutions that accelerate existing business use-cases. For purposes of authenticity and compliance, the offerings optionally leverage digital product passport type solutions that address regulations in Europe and similar use-cases globally. The K-Project division of GRHI is an Artificial Intelligence (AI) operation that seeks to integrate its AI technology applications across various industries.
GRHI's management business plan is to fully deploy, market and and utilize its LOOT8 platform, focusing on its K-Project AI and blockchain innovation in digital assets, the SocialFi revolution, and expanding into direct-to-business relationships.
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Business Operations
On February 13, 2024, LOOT8, Inc., the Company’s wholly owned subsidiary entered a sponsorship commitment with the University of Houston in the amount of $125,000 for one year ending on February 12, 2025 to be paid in twelve (12) installments of $10,416.66 each. The agreement was a month-to-month agreement. LOOT8, Inc., its partner Perpetual Sports, and the University of Houston's Basketball team were working together, building a social media Web3 technology on LOOT8's platform, with a focus on creator-controlled content management and revenues associated with athletes' Name, Image, and Likeness (NIL). As of the date of the filing, the agreement with Perpetual Sports, LLC has been cancelled and the Company is in direct discussion with the University of Houston to seek a new agreement to continue the sponsorship (See Item 5 - Other Information; Subsequent Events).
On February 20, 2024, the Company entered into a Business Advisory Agreement with EAN Companies. The agreement call for EAN Companies and its representative to provide consulting and financial marketing services for a total fee of $15,000; $5000 paid at the time of signing, February 20, 2024, and subsequent monthly payments of $2500. The agreement ended on June 19, 2024 and the Company didn't re-engage.
On April 3, 2024, the Company's wholly-owned subsidiary LOOT8, Inc. hired Anthony Denkinger as its Chief Executive Officer.
During the period ending June 30, 2024, GRHI started a new division, "The K Project" division committed to finding new technological advancements in Artificial Intelligent (AI) applications.
On July 2, 2024, LOOT8, Inc., the Company's wholly-owned subsidiary received from Perpetual Sports. LLC the return of approximately $20,833 to the Company for payments made on the consulting agreement for April and May 2024. The Company and Perpetual Sports mutually agreed to terminated month-to-month consultant agreement on July 18, 2024. The Company's management is in direct negations with the University of Houston to continue its sponsorship agreement, but no definitive agreement has yet to be determined.
Gold Rock Holdings, Inc. maintains an executive office in Virginia Beach, Virginia where all marketing, sales, and customer supports activities are implemented.
Preferred Shares
On January 11, 2024, the board of directors adopted a resolution authorizing the designation of Series A Preferred Shares. The number of shares designated is 20,000,000. Each of these shares has a par value of $0.001, is not entitled to dividends, has voting rights equal to 25 common votes per share, has the same liquidation rights as common and are not convertible. There are no Series A Preferred Shares outstanding.
Current Directors
The following table provides information concerning our officers and directors. All directors hold office until the next annual meeting of stockholders or until their successors have been elected and qualified.
| Marcus Daley | Director/CEO (1)(3) |
| Merle Ferguson | Chairman / President (2) |
| Richard Kaiser | Director/CFO/Secretary |
(1) On October 2, 2023, the Board of Directors (the “Board”) of Gold Rock Holdings, Inc. (the “Company”) appointed Mr. Marcus Daley from Provo, UT as a Board of Director and Chief Executive Officer.
(2) On October 02, 2023, the Board of Directors (“the Board”) accepted the resignation from Mr. Merle Ferguson as the Company’s Chief Executive Officer; Mr. Ferguson remains the Company’s Chairman of the Board and President of the Company.
(3) Marcus Daley recently served as Chief Technology Officer (CTO) for S&P Global Ratings where he revitalized the technology organization and led an initiative to move global operations and product delivery to a single cloud platform. He also served as CTO for Mountain America Credit Union, helping them explore Web3 and digital assets as the next frontier for financial services. Prior to that, he was CTO for Nice inContact and CTO for S&P Global Market Intelligence among other roles as CTO building innovative startups and helping mid-size companies through M&A transformations.
Transfer Agent
Our transfer agent is Legacy Stock Transfer, Inc. (Formerly Signature Stock Transfer, Inc.) whose address is 14673 Midway Road, Suite 220, Addison, Texas, 75001 and its telephone number 972-612-4120.
Company Contact Information
Our principal executive and subsidiary offices are located at 2020 General Booth Blvd., Unit 230, Virginia Beach, VA 23454, telephone (757) 306-6090. The information to be contained in our Internet website, www.goldrockholdings.com, shall not constitute part of this report.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overall Operating Results:
Three Months – September 30, 2024 and 2023 Statements
Sales revenue for the three months ended September 30, 2024 and for the three months ended September 30, 2023 were $66,000 and $-0-, respectively. During the three months ended September 30, 2024, the Company's K-Project division sold AI services to a client, but its LOOT8, Inc. wholly owned subsidiary's Web3 content management system had no revenues, and for the same period ending September 30, 2023, the Company had no revenues from its previous business operations in underground fiber contracting.
The Cost of Goods Sold for the three months ended September 30, 2024 was $-0- and the Cost of Goods Sold for the three months ended September 30, 2023 was $-0-.
Gross Margins for the three months ended September 30, 2024 was 100% , and during the same period in 2023 was 0%. During the three months ended September 30, 2024, the Company's K-Project division sold AI services to a client, but its LOOT8, Inc. wholly owned subsidiary's Web3 content management system had no revenues, and during the same period in 2023 the Company from its previous business operations had no contracts for the laying of underground fiber and copper cables.
Gross Profit for the three months ended September 30, 2024 was $66,000 and for the three months ended September 30, 2023 was $-0-.
Operating expenses for three months ended September 30, 2024, totaled $45,595 from consulting expense and general and administrative expenses, compared to $10,554 for the three months ended September 30, 2023. The increase in September 30, 2024 compared to the same period ended September 30, 2023 was attributed to higher consulting expense and general and administrative expenses.
Nine Months – September 30, 2024 and 2023 Statements
The sales revenue for the Company for the nine months ended September 30, 2024 was $72,500 and for the nine months ended September 30, 2023 was $-0- . During the nine months ended September 30, 2024, the Company's K-Project division sold AI services to a client, but its LOOT8, Inc. wholly owned subsidiary's Web3 content management system had no revenues, and during the same period in 2023 the Company from its previous business operations had no contracts for the laying of underground fiber and copper cables.
Cost of sales for the nine months ended September 30, 2024 was $-0- and for the nine months ended September 30, 2023 was $-0- respectively.
Gross Margins for the nine months ended September 30, 2024 was 100%, and for nine months ended September 30, 2023 was 0%. During the nine months ended September 30, 2024, the Company K-Project division sold AI services to a client, but its LOOT8, Inc. wholly owned subsidiary's Web3 content management system had no revenues, and during the same period in 2023 the Company from its previous business operations had no contracts for the laying of underground fiber and copper cables
Gross Profit for the nine months ended September 30, 2024 was $72,500 and for the nine months ended September 30, 2023 was $-0-.
Operating expenses for nine months ended September 30, 2024, totaled $310,690 from board of director compensation, consulting expense and general and administrative expenses, compared to $217,210 for the nine months ended September 30, 2023. The increase during the same nine month period ended September 30, 2024 was attributed to higher board of director compensation, consulting expense and general and administrative expense.
Net Income/ Net Loss:
Net Income for the three months ended September 30, 2024 was $20,405 and the net loss for the three months ending September 30, 2023 was $10,554. Net loss for the nine months ended September 30, 2024 and 2023 were $238,190 and $217,210, respectively.
Liquidity and Capital Resources:
As of September 30, 2024, the Company’s assets totaled $259,303 which consisted of $215,303 in cash and $44,000 in accounts receivable. Our total liabilities were $81,585. As of September 30, 2024, the Company had an accumulated deficit of $1,104,227 and has working capital of $177,718.
As indicated herein, we need capital for the implementation of our business plan, and we will need additional capital for continuing our operations. We do not have sufficient revenues to pay our operating expenses at this time. Unless the Company is able to raise working capital, it is likely that the Company will either have to cease operations or substantially change its methods of operations or change its business plan (See Note 4 in Financial Statements).
Gold Rock Holdings, Inc. does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company, or any of its subsidiaries’ operating results, financial position, or cash flow.
Cash Provided by (Used in) Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2024 and 2023 were $210,505 and $10,035, respectively.
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Cash Flows from Investing Activities
Net cash used in investing activities was$-0- for both the nine months periods ended September 30, 2024 and 2023.
Cash Provided by Financing Activities
Net cash provided by financing activities was $425,700 for nine months ended September 30, 2024 from the cash proceeds received from sale of common stock and capital contributions from directors, and was $8,907 for nine months ended September 30, 2023 from the amount of capital contributions from the Company's directors.
Critical Accounting Policies
Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Critical accounting policies include revenue recognition and stock-based compensation. The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements, including revenue recognition. The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Revenue Recognition
In accordance with ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"), revenues are recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. To achieve this core principle, we apply the following five steps: (1) Identify the contract with a client; (2) Identify the performance obligations in the contract; (3) Determine the transaction price; (4) Allocate the transaction price to performance obligations in the contract; and (5) Recognize revenues when or as the company satisfies a performance obligation.
We adopted this ASC on January 1, 2019. Although the new revenue standard is expected to have an immaterial impact, if any, on our ongoing net income, we did implement changes to our processes related to revenue recognition and the control activities within them.
Stock-Based Compensation
We account for employee and non-employee stock-based compensation in accordance with the guidance of FASB ASC Topic 718, Compensation—Stock Compensation, which requires all share-based payments, including grants of stock options, to be recognized in the financial statements based on their fair values. The fair value of the equity instrument is charged directly to compensation expense and credited to additional paid-in capital over the period during which services are rendered.
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and is evaluating any that may impact its financial statements, including revenue recognition. The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements.
Going Concern
We have incurred net losses since our inception. We anticipate incurring additional losses before realizing growth in revenue and we will depend on additional financing in order to meet our continuing obligations and ultimately to attain profitability. Our ability to obtain additional financing, whether through the issuance of additional equity or through the assumption of debt, is uncertain. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the uncertainty about our ability to continue our business.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, 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. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Based on our evaluation, our Principal Executive Officer and Principal Financial Officer, after considering the existence of material weaknesses identified, determined that our internal control over financial reporting disclosure controls and procedures were not effective as of September 30, 2024.
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Evaluation of Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our 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 U.S. generally accepted accounting principles.
Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with the authorization of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management, including our Principal Executive Officer and Principal Financial Officer, assessed the effectiveness of our internal control over financial reporting as of September 30, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control – Integrated Framework (2013).
We identified the following deficiencies which together constitute a material weakness in our assessment of the effectiveness of internal control over financial reporting as of September 30, 2024:
| - | The Company has inadequate segregation of duties within its cash disbursement control design. |
| - | During the period ended September 30, 2024, the Company internally performed all aspects of its financial reporting process, including, but not limited to the underlying accounting records and the recording of journal entries and for the preparation of financial statements. This process was deficient, because these duties were performed often times by the same people, and therefore a lack of review was created over the financial reporting process that might result in a failure to detect errors in spreadsheets, calculations, or assumptions used to compile the financial statements and related disclosures as filed with the SEC. These control deficiencies could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected. |
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control system, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
This report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.
We regularly review our system of internal control over financial reporting to ensure that we maintain an effective internal control environment. If deficiencies appear in our internal controls, management will make changes that address those deficiencies.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Company's internal control over financial reporting that occurred during the reporting period ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
At this time, there are no materials pending legal proceedings to which the Company is a party or as to which any of its services and products are subject, and no such proceedings are known to the Company to be threatened or contemplated against it.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and, as such, are not required to provide the information under this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the nine months ended September 30, 2024 the Company sold 7,083,333 restricted 144-shares and received $425,000 per the following agreements:
- On June 24, 2024, Gold Rock Holdings, Inc. (“Company”), the Registrant, issued to an accredited investor a total of 1,250,000 common shares, par value $0.001, 144-restricted shares, pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933. The shares were issued at $0.06 per share through effectuated “Subscription Agreements.”
- On April 4, 2024, Gold Rock Holdings, Inc. (“Company”), the Registrant, issued to two accredited entities and two accredited investors a total of 5,833,333 common shares, par value $0.001, 144-restricted shares, pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933.The shares were issued at $0.06 per share through effectuated “Subscription Agreements.”
The above issuances were not a public offering as defined in Section 4(2) due to the limited number of persons that received the shares, and the manner of the issuance. The proceeds are for the Company's working capital needs.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINING SAFETY DISCLOSURES
Not applicable.
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ITEM 5.
On July 2, 2024, LOOT8, Inc., the Company's wholly-owned subsidiary received from Perpetual Sports. LLC the return of approximately $20,833 to the Company for payments made on the consulting agreement for April and May 2024. The Company and Perpetual Sports mutually agreed to terminate its month-to-month consultant agreement on July 18, 2024. The Company's management is in direct negations with the University of Houston to continue its sponsorship agreement, but no definitive agreement has yet to be determined.
ITEM 6. EXHIBITS
Index to Exhibits.
| Exhibit No. | Description of Exhibit | |
| 10.01 | Copy of Subsciption Agreement (1) | |
| 31.1 | Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.+ | |
| 31.2 | Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002.+ | |
| 32.1 | Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.+ | |
| 32.2 | Certification Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002.+ | |
| 101 | Interactive Financial Data XBRL Extensions (iXBRL)+ | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101+ | |
(1) Previously Filed
+ Filed herewith
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GOLD ROCK HOLDINGS, INC.
| Dated: October 30, 2024 |
By: /s/ Marcus Daley Marcus Daley Chief Executive Officer / Director |
| Dated: October 30, 2024 |
By: /s/ Richard Kaiser Richard Kaiser Chief Financial Officer/ Secretary / Director |
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