GRHI 10-Q/A
Gold Rock Holdings, Inc. (GRHI)
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Amendment No.1 to Form 10-Q)
For the quarterly period ended
Commission file number: 000-56304
(Name of Small Business Issuer in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
(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.
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 [ ] No
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
|
| |
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: At May 04, 2022 the registrant had outstanding
EXPLANATORY NOTE: Amendment is being filed to correct boxes wrongly marked on the main page of the FORM 10Q; Box "YES" is correct regarding all reports being filed in the last 12-months/90-days per above and Box "YES" is correct for iXBRL on the Company website per above.
-1-
TABLE OF CONTENTS
|
| PAGE |
PART I |
|
|
Item 1. | Condensed Unaudited Financial Statements | 3 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 11 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 15 |
Item 4. | Controls and Procedures | 15 |
PART II |
|
|
Item 1. | Legal Proceedings | 17 |
Item 1A. | Risk Factors | 17 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 17 |
Item 3. | Defaults Upon Senior Securities | 17 |
Item 4. | Mining Safety Disclosures | 17 |
Item 5. | Other Information | 17 |
Item 6. | Exhibits | 18 |
| Signatures | 18 |
-2-
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GOLD ROCK HOLDINGS, INC.
FINANCIAL REPORTS |
AT |
MARCH 31, 2022 |
INDEX TO FINANCIAL STATEMENTS
Condensed Balance Sheets at March 31, 2022- Unaudited and December 31, 2021 - Unaudited | 3 |
Condensed Statements of Operations for the Three Months Ended March 31, 2022 and 2021 - Unaudited | 4 |
Condensed Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021 - Unaudited | 5 |
| Condensed Statements of Stockholders' Equity for the Three Months Ended March 31, 2022 and 2021 - Unaudited | 6 |
Notes to the Condensed Unaudited Financial Statements | 7-10 |
-3-
Gold Rock Holdings, Inc. |
CONDENSED BALANCE SHEETS - UNAUDITED |
March 31, | December 31, | ||
| 2022 |
| 2021 |
ASSETS | |||
Current Assets | |||
Cash | $ |
| $ |
Total Current Assets | |
| |
Total Assets | $ |
| $ |
LIABILITIES AND STOCKHOLDERS' DEFICIT | |||
Current Liabilities | |||
Accounts Payable and Accrued Expenses | $ | $ | |
Accrued Board of Director Compensation | |
| |
Total Current Liabilities | |
| |
Total Liabilities | |
| |
Stockholders' Deficit | |||
Common Stock - $0.001 Par; 850,000,000 Shares Authorized, | |||
| | ||
Additional Paid-In-Capital | | | |
Accumulated Deficit | ( |
| ( |
Total Stockholders' Deficit | ( |
| ( |
Total Liabilities and Stockholders' Deficit | $ |
| $ |
The accompanying notes are an integral part of these unaudited condensed financial statements
-4-
Gold Rock Holdings, Inc. |
CONDENSED STATEMENTS OF OPERATIONS - UNAUDITED |
Three Months Ended March 31, | 2022 |
| 2021 |
Operating Expenses | |||
Board of Director Compensation | $ | $ | |
Consulting | | | |
General and Administrative | |
| |
Total Expenses | |
| |
Net Loss for the Period | $ ( |
| $ ( |
Weighted Average Number of Common Shares - Basic and Diluted | | | |
Net Loss for the Period Per Common Shares - Basic and Diluted | $ ( |
| $ ( |
The accompanying notes are an integral part of these unaudited condensed financial statements
-5-
Gold Rock Holdings, Inc. |
CONDENSED STATEMENTS OF CASH FLOWS - UNAUDITED |
Three Months Ended March 31, | 2022 |
| 2021 |
Cash Flows from Operating Activities | |||
Net Loss for the Period | $ ( | $ ( | |
Non-Cash Adjustments: | |||
Common Shares Issued for Professional Services | | ||
Common Shares Issued for Consulting | | ||
Common Shares Issued for Consulting | | ||
Changes in Assets and Liabilities: | |||
Prepaid Expenses | | ||
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 | |||
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 financial statements. | |||
-6-
Gold Rock Holdings, Inc. |
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021 - UNAUDITED |
Common Stock | Additional | Total | |||||||
$0.001 Par | Paid-In | Accumulated | Stockholders' | ||||||
For The Three Months Ended March 31, 2021 | Shares |
| Amount |
| Capital |
| Deficit |
| Deficit |
Balance - January 1, 2021 | | $ | $ ( | $ ( | $ ( | ||||
Common Stock Issued for Accrued Expenses & Directors Fees | | | | - | | ||||
Common Stock Issued for Consulting and Director Compensation | | | | - | | ||||
Capital Contributions - Director | - | - | | - | | ||||
Net Loss for the Period | - |
| - |
| - |
| ( |
| ( |
Balance - March 31, 2021 | |
| $ |
| $ |
| $ ( |
| $ |
Common Stock | Additional | Total | |||||||
$0.001 Par | Paid-In | Accumulated | Stockholders' | ||||||
For The Three Months Ended March 31, 2022 | Shares |
| Amount |
| Capital |
| Deficit |
| Deficit |
Balance - January 1, 2022 | | $ | $ | $ ( | $ ( | ||||
Capital Contributions - Director | - | - | | - | | ||||
Common Stock Issued for Professional Services | | | | - | | ||||
Net Loss for the Period | - |
| - |
| - |
| ( |
| ( |
Balance - March 31, 2022 | |
| $ |
| $ |
| $ ( |
| $ ( |
The accompanying notes are an integral part of these unaudited condensed financial statements. | |||||||||
-7-
GOLD ROCK HOLDINGS, INC.
NOTES TO CONDENSED 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. These services assist underground construction companies in laying high-speed fiber-optics and underground cable in areas of the U.S.
NOTE 2 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed balance sheet has been derived from the December 31, 2021 audited financial statements and the unaudited condensed financial statements as of March 31, 2022 and 2021, 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, 2021 (the “2021 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 financial statements presentation. Operating results for the three months ended March 31, 2022, are not necessarily indicative of the results of operations expected for the year ending December 31, 2022.
Use of Estimates
The preparation of 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.
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
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.
-8-
GOLD ROCK HOLDINGS, INC
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
NOTE 2 – Summary of Significant Accounting Policies - continued
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.
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.
NOTE 4 – Going Concern
The Company’s 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 reported recurring losses from operations and has net current liabilities and an accumulated deficit. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern.
While the Company is attempting to continue operations and generate revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management believes that the actions presently being taken to further implement the Company’s business plan; to expand sales with a dynamic marketing campaign and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues. During the three months ended March 31, 2022, due to lack of revenues the officers of the Company paid for all expenses through additional paid in capital to the Company. This allowed the Company to continue as a going concern.
-9-
GOLD ROCK HOLDINGS, INC
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
NOTE 5 – Related Party Transactions
During the three months ended March 31, 2022 and 2021, the sole board of director paid all expenses of the Company in the amount of $
NOTE 6 – Stock
Preferred Stock
Preferred stock consists of
Common Stock
Common stock consists of
During the three months ended March 31, 2021, the Company issued
During the three months ended March 31, 2021, the Company issued
During the three months ended March 31, 2022, the Company issued
NOTE 7 – Risks and Uncertainties
Coronavirus Impact (COVID-19)
Due to the recent outbreak of the coronavirus reported in many countries worldwide, local and federal governments have issued travel advisories, canceled large scale public events and closed schools. In addition, companies have begun to cancel conferences and travel plans and require employees to work from home. Global financial markets have also experienced extreme volatility and disruptions to capital and credit markets.
We are unable to predict the impact of the coronavirus on our operations at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel, potential impact on our business partners and customers, and other matters affecting the general work and business environment could harm our business and delay the implementation of our business strategy. The adverse events may also adversely impact our ability to raise capital or to continue as a going concern. We continue to monitor the recent outbreak of the coronavirus on our operations.
-10-
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.
·the Covid-19 Pandemic.
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.
Covid-19 Pandemic
Management is currently aware of the global and domestic issues arising from the Covid-19 pandemic and the possible direct and indirect affects on the company's operations which could have a material adverse effect on the company's current financial position, future results of operations, or liquidity, because its current operations are limited. However, investors should also be aware of factors, which includes the possibility of Covid-19 affects on operational status, could have a negative impact on the Company's prospects and the consistency of progress in the areas of revenue generation, liquidity, and generation of capital resources, as the Company implements its business plan. These may include: (i) variations in revenue, (ii) possible inability to attract investors for the Company's equity securities or otherwise raise adequate funds from any source should the Company seek to do so, (iii) increased governmental regulation or significant changes in that regulation, (iv) increased competition, (v) unfavorable outcomes to litigation involving the Company or to which the Company may become a party in the future, and (vi) a very competitive and rapidly changing operating environment.
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.
-11-
Business
Gold Rock Holdings, Inc., (Gold Rock) a Nevada corporation, provides engineering and construction management services, produce site-plans, construction drawings, cost computations, fiber network designs, and other related construction services. In effect the Company will act as the general contractor to design the cable systems and it will hire subcontractors to implement those designs. These services will assist underground construction companies in laying fiber-optics and other underground cable in the United States to help solve the broadband infrastructure gap.
Gold Rock intends to grow and further establish itself through marketing campaigns to achieve awareness of its construction and engineering services, as well as drive business growth by partnering with the high-tech service providers, internet service providers, cable service providers, satellite service providers, mobile phone providers, communication providers, and local municipalities. In addition, the Company is actively considering acquisitions that would be accretive to its business. Currently, Gold Rock markets itself through third-parties that have existing relationships with these providers in their existing demographic service areas. The third parties are construction companies, or other engineering outfits who propose bids on pending or ongoing high-tech and fiber-optic underground projects in areas that are either lacking or upgrading high-tech broadband infrastructures. Gold Rock Holding's management evaluates each engineering and consulting job on a case by case bases with the intent to enter into a contract for its "UGnet" services. At this time, Gold Rock Holdings, Inc. has no contracts.
At this time, the Company expects to receive 100% of its revenues from the sale of the Company's "UGnet"construction management, engineering services and fiber network designs, as it pertains to underground fiber-optic high-speed broadband and cable infrastructures. Gold Rock services are offered through the "UGnet" service line, which stands for "Underground Networks."
The Company proactively seeks to expand its Gold Rock "UGnet" services throughout the U.S., and will continue to approach municipalities, utilities, and cable, phone, mobile phone and internet providers with competitive quotes on underground development of high-speed fiber optic broadband connectivity. The Company will continue to try to advance its social media platform with direct online and targeted marketing with the objective of expanding its demographics.
Gold Rock Holdings, Inc. maintains an executive office in Virginia Beach, Virginia where all marketing, sales, and customer supports activities are implemented.
Transfer Agent
Our transfer agent is Signature Stock Transfer, Inc. whose address is 14673 Midway Road, Suite 220, Addision, 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.us, shall not constitute part of this report.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overall Operating Results:
Three Months – March 31, 2022 and 2021 Statements
The Sales Revenue for the three months ended March 31, 2022 and for the three months ended March 31, 2021 were $-0- and $-0-, respectively. During the three months ended March 31, 2022 the Company had no contracts, and for the same period ending March 31, 2021 the Company had no contracts.
The Cost of Goods Sold for the three months ended March 31, 2022 was $-0- and the Cost of Goods Sold for the three months ended March 31, 2021 was $-0-.
-12-
Gross Margins for the three months ended March 31, 2022 was 0% , and during the same period in 2021 was 0%; no contracts for the design and layout of underground fiber and copper cables.
Gross Profit for the three months ended March 31, 2022 was $-0- and for the three months ended March 31, 2021 was $-0-.
Operating expenses for three months ended March 31, 2022 totaled $51,349 from Board of Directors Compensation, Consulting Expense, General and Administrative Expenses, compared to $33,300 for the three months ended March 31, 2021 This increase in March 31, 2022 compared to the same period ended March 31, 2021 was attributed to higher General and Administrative Expenses.
Net Loss:
Net loss for the three months ended March 31, 2022 and 2021 were $51,349 and $33,300, respectively.
Liquidity and Capital Resources:
As of March 31, 2022, the Company’s assets totaled $1,700 which consisted of cash. Our total liabilities were $43,100. As of March 31, 2022, the Company had an accumulated deficit of $250,893 and working capital deficit $41,410.
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). For the next 12 months the Company has a written commitment from its CEO in Mr. Merle Ferguson's employment contract ( See Exhibit 10.01) to advance funds as necessary in meeting the Company's operating requirements.
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 Used in Operating Activities
Net cash used in operating activities for the three months ended March 31, 2022 and 2021 were $17,524 and $100 respectively. The increase amount was attributed to higher General and Administrative cost, shares issued for Professional Services, Accounts Payable and Accrued Expenses and Accrued Board of Directors Compensation..
Cash Flows from Investing Activities
Net cash used in investing activities was $-0- for both the three month periods ended March 31, 2022 and 2021.
-13-
Cash Provided by Financing Activities
Net cash provided by financing activities was $17,524 for three months ended March 31, 2022 from Capital Contributions from Directors, and was $100 for three months ended March 31, 2021 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.
-14-
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 for three months ending March 31, 2022 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 March 31, 2022.
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.
-15-
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 March 31, 2022. 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 March 31, 2022:
- The Company has inadequate segregation of duties within its cash disbursement control design.
- During the three months ended March 31, 2022, 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 three months ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
-16-
Coronavirus Impact (COVID-19)
Due to the recent outbreak of the coronavirus reported in many countries worldwide, local and federal governments have issued travel advisories, canceled large scale public events and closed schools. In addition, companies have begun to cancel conferences and travel plans and require employees to work from home. Global financial markets have also experienced extreme volatility and disruptions to capital and credit markets.
We are unable to predict the impact of the coronavirus on our operations at this time. Adverse events such as health-related concerns about working in our offices, the inability to travel, potential impact on our business partners and customers, and other matters affecting the general work and business environment could harm our business and delay the implementation of our business strategy. The adverse events may also adversely impact our ability to raise capital or to continue as a going concern. We continue to monitor the recent outbreak of the coronavirus on our operations. The global economic slowdown and the other risks and uncertainties associated with the pandemic could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In addition, to the extent the ongoing COVID-19 pandemic adversely affects the Company's business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties which the Company faces.
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 property is 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
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINING SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION.
On January 01, 2022, the Board of Directors signed a five-year employment contract with Merle Ferguson as the Company's sole director and officer, which expires on December 31, 2026; compensation is $30,000 per year (See Exhibit 10.1).
On March 18, 2022, Management issued 100,000 restricted 144-shares of the Company's stock to Carolyn Merrill, CPA. The issuance was in lieu of cash payment for accounting services rendered totaling of $1000 (see Note 6).
-17-
ITEM 6. EXHIBITS
Index to Exhibits.
Exhibit No. Description of Exhibit
Exhibit No. | Identification of Exhibit | ||||||||||||||
Employment Contract Merle Ferguson | |||||||||||||||
Amended Certification of Merle Ferguson Chief Executive Officer, pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||
Amended Certification of Merle Ferguson, Chief Financial Officer and Principal Accounting Officer, pursuant to 18 U.S.C. §1350, as adopted pursuant to §302 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||
Amended Certification of Merle Ferguson Chief Executive Officer, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||
Amended Certification of Merle Ferguson, Chief Financial Officer and Principal Accounting Officer, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002. | |||||||||||||||
101+ |
iXBRL Interactive Exhibits. | ||||||||||||||
104+ |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)+ | ||||||||||||||
+ filed herewith
* Previously Filed
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused this Amended report to be signed on its behalf by the undersigned, thereunto duly authorized.
GOLD ROCK HOLDINGS, INC.
|
|
Dated: August 22, 2022 | By: /s/ Merle Ferguson Merle Ferguson Chief Executive Officer / President / Chairman |
-18-