GROO 10-Q
Groovy Company, Inc. (GROO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from __________ to __________
Commission file number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation) |
| (IRS Employer Identification Number) |
(Address of principal executive offices) (Zip Code)
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Registrant’s telephone number, including area code
Securities registered under Section 12(b) of the Exchange Act: None
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, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☒ | Smaller reporting company | ||
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| 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. ☐
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of March 10, 2026, there were
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GROOVY COMPANY, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE PERIOD ENDED SEPTEMBER 30, 2025
INDEX
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q of Groovy Company, Inc., a Wyoming corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: the Company’s need for and ability to obtain additional financing, product demand, market and customer acceptance, competition, pricing and development difficulties, as well as general industry and market conditions and growth rates, general economic conditions, and other factors over which we have little or no control; and other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).
Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
INDEX TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS | PAGE |
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Consolidated Condensed Balance Sheets at September 30, 2025 and December 31, 2024 (Unaudited) | 6 |
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Notes to Consolidated Condensed Financial Statements (Unaudited) | 10 |
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Groovy Company, Inc.
Consolidated Condensed Balance Sheets
(Unaudited)
| Sept. 30, 2025 |
| December 31, 2024 | |
ASSETS |
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Property, plant and equipment, net |
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TOTAL ASSETS | $ | $ | ||
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Convertible note payable, net of discount of $ |
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TOTAL LIABILITIES |
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Accumulated deficit |
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Total Stockholders’ Deficit |
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TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ |
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
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Groovy Company, Inc.
Consolidated Condensed Statements of Operations
(Unaudited)
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Sales | $ | $ |
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Operating Expenses |
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Net loss from operations |
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Interest expense |
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Amortization of debt discount |
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Net income (loss) | $ | ( | $ | ( |
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Basic and diluted loss per share | $ | ( | $ | ( |
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The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
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Groovy Company, Inc.
Consolidated Condensed Statement of Stockholders’ Equity
(Unaudited)
For the three and nine month periods ended September 30, 2025 and 2024
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Balance, December 31, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | ( | |||||||
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Balance, March 31, 2024 |
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Balance, June 30, 2024 |
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Balance, Sept. 30, 2024 | $ | $ | $ | $ | $ | ( | $ | $ | ( | |||||||
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Balance, March 31, 2025 |
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Balance, June 30, 2025 |
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Balance, Sept. 30, 2025 | $ | $ | $ | $ | $ | ( | $ | $ | ( | |||||||
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
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Groovy Company, Inc.
Consolidated Condensed Statements of Cash Flows
(Unaudited)
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income (loss) | $ | $ | ( | |
Adjustment to reconcile net loss to net cash provided in operations: |
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Amortization of debt discount |
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Gain on extinguishment of debt |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Cash and cash equivalents End of period | $ | $ | ||
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Cash paid for interest | $ | $ | ||
Cash paid for taxes | $ | $ | ||
The accompanying notes are an integral part of these unaudited consolidated condensed financial statements.
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Groovy Company, Inc.
Notes to the Unaudited Consolidated Condensed Financial Statements
September 30, 2025
NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS
Groovy Company, Inc. (the “Company”) was incorporated in the State of Nevada on July 8, 2009, under the name Santa Pita Corp. The Company’s original mission was to operate an internet portal for dentists and patients to access dental information, as well as a teeth-whitening business.
On July 30, 2012, the Company redirected its focus toward precious metal exploration and mining. Mineral exploration commenced with the execution of a mineral claim acquisition agreement between GEXPLO, SRL (the “Vendor”) and the Company, whereby the Company agreed to acquire from the Vendor a one hundred percent interest in a claim located in the Dominican Republic. Concurrent with this strategic shift, the Company was renamed Santo Mining Corp.
On April 2, 2015, Santo Mining Corp. entered into a “Plan of Exchange” Agreement with Cathay Cigars of Asia Corporation (“Cathay”), a Florida corporation. Pursuant to the terms of this agreement, the Company agreed to acquire 100% of the capital stock of Cathay in exchange for the issuance of 300,000 shares of Series A Preferred Stock of the Company, effectively transferring majority voting power to Cathay.
Santo Mining Corp. redomiciled to the State of Florida in July 2015. From July 2015 to August 2017, the Company evolved from an exporter and distributor of cigars and tobacco to Asia into a software development company specializing in blockchain and cryptocurrency NFTs, operating from Ho Chi Minh City (Saigon), Vietnam.
In July 2021, the Company redomiciled to the State of Wyoming, where it maintains an active business registration in good standing. Concurrently, the Company relocated its operational headquarters from Ho Chi Minh City (Saigon), Vietnam, to Medellín-Bogotá, Colombia. Through its subsidiary, Santo Blockchain Labs of Colombia, S.A.S., the Company continued its principal focus on blockchain, cryptography, artificial intelligence, web3, and fourth industrial revolution (4IR) software development.
On February 7, 2024, the Company filed with the State of Wyoming to change its name from Santo Mining Corp. to Groovy Company, Inc.
On February 19, 2025, the Company entered into an Exchange Agreement with Pineapple Express Cannabis Company. Under this agreement, the Company exchanged all its assets for an 87% controlling interest in Pineapple Express Cannabis Company. The Company will maintain and continue to develop the Groovy Platform as a Service (PaaS) for Pineapple Express Cannabis Company.
The Company has one other subsidiary, BlackFlamingo Ventures, LLC (Florida). This subsidiary focuses on providing essential administrative and logistical support for the Company’s operations. Its specialization in Latin America, Asia, and USA has a focus on facilitating cross-border transactions, navigating international regulations, and managing supply chain logistics.
NATURE OF BUSINESS
Groovy Company, Inc. dba OTCM Protocol is a technology company developing blockchain-based infrastructure for securities markets. The Company’s primary focus is on providing tokenization services for US OTC issuers of securities that currently face limited or no liquidity and in various global markets.
The Company was founded to address what it perceives as a significant gap in the global securities market infrastructure: the lack of accessible liquidity solutions for issuers and holders of securities that trade in markets with limited access or liquidity. The Company’s platform represents an attempt to leverage blockchain technology to facilitate capital formation and secondary market trading for these issuers.
Market Context
Securities of certain issuers trade in markets that face liquidity constraints. In the United States, these include securities that trade in over-the-counter markets and are subject to regulation under SEC Rule 15c2-11, which requires broker-dealers to have current information about an issuer before publishing quotations. When issuers lose eligibility under
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Rule 15c2-11-commonly due to cessation of reporting or loss of market maker support-broker-dealers may cease publishing quotations, potentially limiting or eliminating market liquidity for affected securities.
Similar liquidity challenges exist in markets outside the United States. Issuers on exchanges such as the Toronto Stock Exchange, Frankfurt Stock Exchange, Shanghai Stock Exchange, Hong Kong Stock Exchange, Australian Securities Exchange, Singapore Exchange, Mexican Stock Exchange, and Brazilian B3 may face situations where their securities have limited trading activity, reduced market maker support, or restricted access for certain investors. These issuers and their shareholders may benefit from alternative liquidity solutions.
The Company believes there are thousands of issuers globally whose securities trade with limited liquidity across various exchanges. The total market value of affected securities is difficult to estimate precisely but is believed to be substantial. The Company itself was previously in a position where its own securities faced similar liquidity constraints, which the Company identifies as the original motivation for developing its platform.
This dynamic creates challenges for both issuers and investors. Issuers may find it difficult to raise capital when their securities cannot be readily traded. Investors holding affected securities may face difficulties liquidating their positions, even when the underlying securities retain economic value.
Business Model
The Company provides a platform that enables issuers to create digital representations (“tokens”) of their existing equity securities on a blockchain. The tokens are designed to represent the same economic interests as the underlying securities, subject to the terms of a preferred share class created by the issuer for this purpose. Each token is intended to correspond to one underlying preferred share held in custody.
The platform operates on Solana blockchain infrastructure, which the Company selected for its transaction throughput capabilities and cost structure. The Company has developed proprietary technology including token standards adapted for securities, exchange infrastructure, and compliance systems. The Company’s exchange platform allows for trading of tokenized securities on a 24-hour basis, as opposed to traditional market hours.
Revenue is generated through transaction fees on trading volume conducted through the Company’s exchange platform. The Company may also generate revenue from listing fees, redemption fees, and other service offerings.
Technology
The Company’s platform is built on a nine-layer technology infrastructure designed to support securities tokenization and trading. Each layer serves a specific function and operates in coordination with the other layers to provide a complete solution for tokenizing and trading securities.
•Layer 1 - Blockchain Foundation
The underlying blockchain is Solana, which provides the base layer for transaction processing and consensus. Solana was selected for its high transaction throughput of up to 65,000 transactions per second, low transaction costs (typically fractions of a cent per transaction), and established infrastructure. Solana uses a proof-of-stake consensus mechanism combined with Proof of History, which provides a historical record of events without requiring sequential validation of each transaction. This allows the network to process transactions in parallel while maintaining security. The Company believes Solana’s performance characteristics are suitable for securities trading at scale, as the network can handle trading volumes significantly exceeding traditional equity markets.
•Layer 2 - Security Enforcement (Transfer Hooks)
The Company utilizes token standards adapted from the SPL Token-2022 standard, which supports transfer hook functionality. Transfer hooks are smart contract functions that execute automatically during token transfers, before the transfer is completed. When a token transfer is initiated, the transfer hook code executes first and evaluates whether the transfer should be permitted. The Company has implemented multiple sequential transfer hooks that enforce different compliance conditions.
The first transfer hook verifies that the sender’s wallet has completed required investor verification, including know-your-customer (KYC) requirements. The second hook verifies that the recipient’s wallet has also completed required verification. The third hook confirms with the custody system that sufficient underlying
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shares are held to back the tokens being transferred. The fourth hook screens both sender and recipient addresses against applicable sanctions lists, including the OFAC Specially Designated Nationals list. Additional hooks may perform other compliance checks specific to the security being transferred.
If any condition is not satisfied, the transfer hook reverts the transaction and the token transfer does not occur. This mechanism ensures that every single token transfer on the platform complies with applicable requirements before completion. The Company refers to its implementation as ST22 (Security Token 2022).
•Layer 3 - Federated Liquidity Protocol
The platform maintains liquidity pools for each tokenized security. Each issuer contributes tokens to the liquidity pool as part of the tokenization process, with a minimum contribution of 40% of total token supply required. These pools are designed to provide continuous liquidity for trading without requiring traditional market makers.
The federated liquidity protocol coordinates liquidity across multiple tokenized securities, allowing liquidity to be shared or aggregated where appropriate. Unlike decentralized exchanges where liquidity providers can withdraw their funds at any time, the liquidity in the Company’s pools is structured to remain available to support trading. This design is intended to address one of the key challenges of tokenized securities: ensuring adequate liquidity for secondary market trading.
•Layer 4 - Custom Automated Market Maker
Trading on the platform occurs through an automated market maker (AMM) mechanism, rather than a traditional order book. The AMM uses a constant product formula (x × y = k), where x represents the quantity of one token in the pool and y represents the quantity of the other token (typically a stablecoin used for pricing). The product k remains constant, meaning that when a trader buys tokens from the pool, the price adjusts automatically based on the remaining liquidity.
This approach allows for continuous price discovery and execution without requiring matched buy and sell orders. Traders can buy or sell at any time at the price determined by the AMM formula. The Company developed custom AMM code rather than using existing AMM protocols, because existing decentralized exchange protocols on Solana do not support the transfer hook functionality required for the Company’s compliance controls. By building a custom AMM, the Company ensures that all trades remain subject to the Layer 2 transfer hook compliance checks.
•Layer 5 - CEDEX Exchange
The Company operates a proprietary exchange platform branded as CEDEX (Centralized-Decentralized Exchange). CEDEX provides the user interface through which investors access the platform’s trading functionality. CEDEX includes features such as real-time price displays, trade execution, portfolio viewing, transaction history, and wallet management.
CEDEX is designed to combine the user experience of centralized exchanges with the settlement characteristics of decentralized infrastructure. The frontend provides a familiar trading interface similar to broker-dealer platforms, while settlement occurs through the blockchain infrastructure. CEDEX supports trading of tokenized securities on a 24-hour basis, seven days a week, as opposed to traditional market hours.
•Layer 6 - Oracle Network
The platform integrates with external data sources (oracles) to obtain information required for various platform functions. The oracle network serves three primary purposes.
First, custody verification oracles confirm with Empire Stock Transfer that sufficient underlying shares are held in custody to back outstanding tokens. This verification occurs before each transfer to ensure the 1:1 backing is maintained. Second, sanctions screening oracles check wallet addresses against OFAC and other sanctions lists to ensure neither sender nor recipient is a sanctioned party. Third, price oracles provide reference price data used by the AMM for price discovery, particularly during periods of low trading volume.
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The oracle network is designed with redundancy to ensure reliable operation. The Company may use multiple oracle providers to reduce dependence on any single source.
•Layer 7 - DAO Governance
The platform includes governance mechanisms that allow token holders to participate in protocol upgrades and decision-making. Governance proposals may relate to parameter changes (such as fee structures or liquidity requirements), protocol modifications, or other matters within the scope of the governance framework.
Token holders can submit proposals and vote on changes to the protocol. Voting weight is typically proportional to token holdings. Governance decisions are implemented through smart contract upgrades, which allow the protocol to evolve over time while maintaining decentralization. The DAO structure is intended to provide community input into protocol development while allowing the Company to retain certain protective rights during the platform’s development phase.
•Layer 8 - Wallet Infrastructure
The platform supports interaction with various wallet types, including software wallets (browser extensions and mobile apps) and hardware wallets (physical devices that store private keys offline). The wallet infrastructure is designed to integrate with the platform’s compliance controls.
Before a wallet can send or receive tokens, the wallet address must be registered and verified through the platform’s compliance process. This includes completing investor identification requirements and satisfying any applicable restrictions. The wallet infrastructure supports multi-signature transactions for added security on high-value transfers. Integration with hardware wallets allows investors who prefer enhanced security to hold their tokens on physical devices.
•Layer 9 - Predictive Analytics
The platform incorporates analytics capabilities intended to support issuer acquisition, market making, and liquidity provision. These analytics process data from multiple sources including trading patterns, market conditions, issuer financials, and global market trends.
The predictive analytics layer uses this data to identify potential issuers who may benefit from tokenization, assess optimal pricing for tokenized securities, and optimize liquidity deployment across the platform. The Company believes these capabilities provide a competitive advantage by enabling more efficient capital allocation and market making. The analytics may also be used to generate market intelligence reports for platform participants.
Custody
Custody of underlying securities is maintained by Empire Stock Transfer, a transfer agent registered with the SEC under Section 17A of the Securities Exchange Act. Empire Stock Transfer maintains the official records of beneficial ownership, which are updated to reflect token transfers on the blockchain. The transfer agent uses distributed ledger technology to maintain records in accordance with SEC guidance on transfer agent use of distributed ledger technology.
The custody arrangement is designed to ensure that each outstanding token is backed by one underlying preferred share held in custody. When a token is transferred, the custody records are updated to reflect the new beneficial owner. The transfer agent provides regular attestations regarding the adequacy of custody holdings. The Company does not hold customer funds or securities; custody functions are performed entirely by the third-party transfer agent.
Compliance Controls
The platform includes various compliance controls implemented through the transfer hook mechanism and other smart contract logic. These controls include verification of investor eligibility (KYC), screening against sanctions lists, confirmation of custody adequacy before each transfer, and other conditions. The Company has designed these controls to align with what it believes are applicable securities law requirements, including requirements related to broker-dealer registration, transfer agent responsibilities, and securities offering exemptions.
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SOL Treasury
The Company maintains a SOL Treasury, which serves as a reserve of Solana’s native cryptocurrency (SOL) to support platform operations and provide liquidity. The SOL Treasury is owned by the protocol and managed through the governance mechanism.
The primary purposes of the SOL Treasury include:
Transaction Fee Payment: The SOL Treasury is used to pay blockchain transaction fees (gas fees) for certain platform operations, reducing the cost burden on users and ensuring smooth operation of the platform.
Liquidity Support: The Treasury may be used to provide additional liquidity for trading pairs on the platform, particularly for newly listed tokenized securities that may have limited initial liquidity.
Protocol Development: Proceeds from the Treasury may be allocated to fund ongoing development of the platform, including technology upgrades, security audits, and infrastructure improvements.
Emergency Reserve: The Treasury serves as a reserve to address unforeseen circumstances or platform needs, providing financial flexibility for the protocol.
The SOL Treasury is funded through various mechanisms, including a portion of transaction fees collected on the platform, initial token allocation, and other sources as determined by governance. Treasury holdings are managed transparently on-chain, with governance having oversight over major allocation decisions.
The existence of the Treasury is intended to provide long-term sustainability for the platform and align incentives between the protocol and its participants.
Regulatory Framework
The Company’s operations involve securities tokenization, which is subject to U.S. federal securities laws. The Company has structured its offerings to comply with what it believes are applicable requirements, including requirements related to the registration or exemption of securities offerings. The Company relies on exemptions from securities registration, including exemptions under Regulation D and Regulation S, for certain offerings.
The regulatory environment for tokenized securities remains subject to development and uncertainty. The SEC has issued guidance regarding tokenized securities, including a joint staff statement in January 2026 that provides a framework for analyzing tokenized securities under U.S. securities laws. The Company’s tokenization model is designed to align with this guidance regarding issuer-sponsored tokenized securities. However, the regulatory framework continues to evolve, and there can be no assurance that the Company’s current structure will continue to be viewed as compliant by regulators. Future regulatory developments could require the Company to modify its operations, and such modifications could be costly or could limit the Company’s ability to offer its services.
The Company has submitted proposals to the SEC Crypto Task Force and intends to continue engaging with regulators to clarify the regulatory framework for tokenized securities.
Competition
The Company competes with other entities offering securities tokenization services. Securitize is among the largest competitors, with over $4 billion in assets tokenized and relationships with major institutional investors. Other competitors include various blockchain-based platforms offering tokenization services, as well as traditional financial institutions exploring tokenization.
The Company’s competitive position depends on factors including cost, regulatory compliance, technology capabilities, and market acceptance. The Company believes its focus on the illiquid securities market segment, its lower cost structure compared to some competitors, and its proprietary technology provide certain competitive advantages. However, the Company acknowledges that it is smaller and less established than certain competitors, and that competition could intensify.
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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Going Concern
The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating cost and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.
In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company includes obtaining capital from management and significant stockholders sufficient to meet its minimal operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.
There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
During the nine months ended September 30, 2025, the Company recognized a non-cash gain of $7,772,404 from the Share Purchase Agreement with Pineapple Express Cannabis Company, which significantly reduced the accumulated deficit from $(11,339,099) to $(3,567,435). However, as this gain was non-recurring and non-cash in nature, and the Company continues to generate operating losses of $(343,184) for the nine months ended September 30, 2025, with only $3,133 in cash and cash equivalents, substantial doubt about the Company's ability to continue as a going concern remains.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and its subsidiary. All intercompany accounts and transactions have been eliminated.
Reclassification of Prior Period Presentation
Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.
Fiscal Year End
The Company elected December 31, as its fiscal year ending date.
Use of Estimates
The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require 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 reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less at the date of acquisition to be cash equivalents. Cash and cash equivalents at September 30, 2025 and December 31, 2024 were $
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Cash Flows Reporting
The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period.
Foreign Currency Translation
The functional currency of our wholly owned subsidiaries is the currency of the primary economic environment in which the Company operates. Assets and liabilities denominated in currencies other than the functional currency are remeasured using the current exchange rate for monetary accounts and historical exchange rates for nonmonetary accounts, with exchange differences on remeasurement included in comprehensive income in our condensed consolidated statements of operations and comprehensive income. Our foreign subsidiaries that utilize foreign currency as their functional currency translate such currency into U.S. dollars using (i) the exchange rate on the balance sheet dates for assets and liabilities, (ii) the average exchange rates prevailing during the period for revenues and expenses, and (iii) historical exchange rates for equity. Any translation adjustments resulting from this process are shown separately as a component of accumulated other comprehensive loss within shareholders’ deficit in the condensed consolidated balance sheets.
Related Parties
The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions.
Revenue Recognition
Effective January 1, 2021, the Company adopted Accounting Standards Codification (“ASC”) 606, Revenue From Contracts with Customers, which is effective for public business entities with annual reporting periods beginning after December 15, 2017. This new revenue recognition standard (new guidance) has a five-step process: a) Determine whether a contract exists; b) Identify the performance obligations; c) Determine the transaction price; d) Allocate the transaction price; and e) Recognize revenue when (or as) performance obligations are satisfied. The Company’s initial application of ASC 606 did not have a material impact on its financial statements and disclosures and there was no cumulative effect of the adoption of ASC 606.
Revenue is recognized when all of the following criteria are met:
•Identification of the contract, or contracts, with a customer
A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be transferred and identifies the payment terms related to these goods or services, (ii) the contract has commercial substance and the parties are committed to perform, and (iii) we determine that collection of substantially all consideration to which it will be entitled in exchange for goods or services that will be transferred is probable based on the customer’s intent and ability to pay the promised consideration.
•Identification of the performance obligations in the contract
Performance obligations promised in a contract are identified based on the goods or services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the goods or service either on its own or together with other resources that are readily available from third parties or from us, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple
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promised goods or services, we apply judgment to determine whether promised goods or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised goods or services are accounted for as a combined performance obligation.
•Determination of the transaction price
The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods or services to the customer. Constraints are applied when estimating variable considerations based on historical experience where applicable.
•Allocation of the transaction price to the performance obligations in the contract
All current contracts are of a single performance obligation thus the entire transaction price is allocated to the single performance obligation. We determine standalone selling price taking into account available information such as historical selling prices of the performance obligation, geographic location, overall strategic objective, market conditions and internally approved pricing guidelines related to the performance obligation.
•Recognition of revenue when, or as, we satisfy performance obligation
We satisfy performance obligations either over time or at a point in time as discussed in further detail below. Revenue is recognized at or over the time the related performance obligation is satisfied by transferring a promised good or service to a customer.
The Company generated revenue for the nine months ended September 30, 2025, and 2024 of $11,676 and $1,250, respectively. The performance obligation has been met as per ASC 606.
Concentrations of Credit Risk and Significant Customers
Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities, accounts receivable and restricted cash. The Company limits its exposure to credit loss by placing its cash and cash equivalents with high credit-quality financial institutions in bank deposits, money market funds, U.S. government securities and other investment grade debt securities that have strong credit ratings. The Company has established guidelines relative to diversification of its cash and marketable securities and their maturities that are intended to secure safety and liquidity. These guidelines are periodically reviewed and modified to take advantage of trends in yields and interest rates and changes in the Company’s operations and financial position. Although the Company may deposit its cash and cash equivalents with multiple financial institutions, its deposits, at times, may exceed federally insured limits.
Financial Instruments
The Company’s balance sheet includes certain financial instruments. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.
ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:
Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable
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for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 - Inputs that are both significant to the fair value measurement and unobservable.
The fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2025. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values due to the short-term nature of these instruments.
Property, Plant and Equipment
Furniture and equipment are stated at cost. Depreciation is computed by the straight-line method over estimated useful lives. Long-lived assets such as property, equipment and identifiable intangibles are reviewed for impairment at least Annual or whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. The Company recognized depreciation expenses of $
Intangible Assets
The Company’s intellectual property intangible assets primarily include proprietary technologies that facilitate product authentication and data tracking within our blockchain platform. Based on our evaluation under ASC 350, these assets have been determined to have indefinite useful lives, as they are not subject to foreseeable limits on the period over which they contribute to our cash flows. Accordingly, in line with ASC 350-30-35, these assets are not amortized but are subject to annual impairment testing. The Company evaluates these assets for impairment annually or more frequently if events or changes in circumstances indicate a potential impairment. The balance at September 30, 2025, and December 31, 2024, was $
The accompanying condensed financial statements have been prepared by the Company without audit. In the opinion of management, all adjustments necessary (which include only normal recurring adjustments) to present fairly the financial position, results of operations, and cash flows at September 30, 2025 and for the related periods presented.
| September 30, 2025 |
| December 31, 2024 | ||
Intellectual property | $ | - |
| $ | 190,000 |
Less: Accumulated amortization and impairment |
| - |
|
| - |
Totals | $ | - |
| $ | 190,000 |
Derivative Liabilities
Derivative liabilities include the fair value of instruments such as common stock warrants, preferred stock warrants and convertible features of notes, that are initially recorded at fair value and are required to be re-measured to fair value at each reporting period under provisions of ASC 480, Distinguishing Liabilities from Equity, or ASC 815, Derivatives and Hedging. The change in fair value of the instruments is recognized as a component of other income (expense) in the Company’s statements of operations until the instruments settle, expire or are no longer classified as derivative liabilities. The Company estimates the fair value of these instruments using the Black-Scholes pricing model. The significant assumptions used in estimating the fair value include the exercise price, volatility of the stock underlying the instrument, risk-free interest rate, estimated fair value of the stock underlying the instrument and the estimated life of the instrument. At September 30, 2025 and December 31, 2024, the Company had $
Income Taxes
The Company accounts for income taxes in accordance with ASC 740, Accounting for Income Taxes, as clarified by ASC 740-10, Accounting for Uncertainty in Income Taxes. Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax basis of assets and liabilities and net operating loss and tax credit carryforwards given the provisions of enacted tax laws.
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Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. In providing for deferred taxes, the Company considers tax regulations of the jurisdictions in which the Company operates, estimates of future taxable income, and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required. Valuation allowances are recorded related to deferred tax assets based on the “more likely than not” criteria of ASC 740.
ASC 740-10 requires that the Company recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.
The Company recognizes expenses for tax penalties and interest assessed by the Internal Revenue Service and other taxing authorities upon receiving valid notice of assessments. The Company has received no such notices as of September 30, 2025.
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences will become deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company has recorded a full valuation allowance against its net deferred tax assets because it is not currently able to conclude that it is more likely than not that these assets will be realized. The amount of deferred tax assets considered to be realizable could be increased in the near term if estimates of future taxable income during the carryforward period are increased.
As of September 30, 2025, the Company had unused net operating loss carry forwards of $
No deferred tax assets or liabilities were recognized as of September 30, 2025, or December 31, 2024.
Net Income (Loss) Per Common Share
Net income (loss) per share is calculated in accordance with FASB ASC 260, “Earnings Per Share.” The weighted-average number of common shares outstanding during each year is used to compute basic earnings or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised.
Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding at September 30, 2025, and 2024, respectively. At September 30, 2025, and 2024, the Company had no dilutive potential common shares.
Share-Based Expense
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
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The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity - Based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier performance commitment date or performance completion date.
Share-based expenses were $0 and $0 for the three months ending September 30, 2025, and 2024, respectively.
Commitments and Contingencies
The Company follows ASC 450-20, Loss Contingencies, to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred, and the amount of the assessment can be reasonably estimated. There were no known commitments or contingencies as of September 30, 2025, and 2024.
Recent Accounting Pronouncements
The Company has reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.
NOTE 3 - PROPERTY, PLANT AND EQUIPMENT
The Company has capitalized costs for equipment as follows:
September 30, 2025 |
| December 31, 2024 | ||
Property, plant and equipment | $ | $ | ||
Accumulated depreciation |
|
| ||
Property, plant and equipment, net accumulated depreciation | $ | $ | ||
Depreciation expenses for the nine months ended September 30, 2025, and 2024 were $
NOTE 4 - INTANGIBLE PROPERTY
Overview
The Company’s primary intangible asset consists of proprietary software developed for its Layer 2 blockchain infrastructure platform for securities tokenization on the Solana blockchain. This software represents a significant portion of the Company’s value and is critical to the Company’s business model.
As of September 30, 2025, the Company's intangible assets, consisting of proprietary software and intellectual property, were transferred to Pineapple Express Cannabis Company as part of the Share Purchase Agreement, resulting in a net book value of $0 at September 30, 2025.
NOTE 5 - CONVERTIBLE NOTES PAYABLE
At September 30, 2025 the balance of convertible notes payable were $
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NOTE 6 - ACCRUED INTEREST
The Company’s accrued interest consisted of the following:
| September 30, 2025 |
| December 31, 2024 | |
Carpathia, LLC(1) | $ | $ | ||
JP Carey, LLC(2) |
|
| ||
Total Accrued Interest | $ | $ |
1, 2 Accrued interests at December 31, 2024, was included in the Pineapple Express (PNXP) share purchase agreement.
NOTE 7 - DERIVATIVE LIABILITY
The Company’s derivative liabilities consist of convertible notes with variable conversion price provisions. These instruments are classified as derivative liabilities under ASC 815 due to their potential for a variable number of shares upon settlement. The fair value of these derivative liabilities is estimated at initial recognition and remeasured at each reporting date using the Black-Scholes pricing model. Changes in fair value are recorded as derivative income or expense in the statement of operations. The significant assumptions used in estimating the fair value include the exercise price, volatility of the stock underlying the instrument, risk-free interest rate, estimated fair value of the stock underlying the instrument and the estimated life of the instrument.
A summary of the activity of the derivative liability for the notes above is as follows:
|
| September 30, 2025 |
| December 31, 2024 |
Balance at Beginning of period | $ | - | $ | |
Increase in derivative due to new issuances |
| - |
| |
Derivative income due to mark to market adjustment |
| - |
| ( |
Balance at end of period | $ | - | $ |
NOTE 8 - RELATED PARTY TRANSACTIONS
EMPLOYMENT AND BOARD OF DIRECTOR AGREEMENTS
On July 1, 2025, the Company executed employment and board of director agreements with its key employees, the controlling shareholders, who are its officers and directors of the Company.
·Mr. Berge Abajian, Employment Agreement: Ten (10) year contract, annual salary of $
·Mr. Patrick Mokros, Employment Agreement: Ten (10) year contract, annual salary of $
·Mr. Franjose Yglesias, Employment Agreement: Ten (10) year contract, annual salary of $
Amounts included in accruals represent amounts due to the officers and directors for corporate obligations under the above-mentioned agreements. Payments on behalf of the Company and accruals made under contractual obligation are accrued. As of September 30, 2025, and December 31, 2024, accrued expenses were $
NOTE PAYABLE
In support of the Company’s efforts and cash requirements, it has relied on advances from the Chief Executive Officer’s until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support. All advances made in support of the Company are formalized by demand notes, at a 0.00% annual interest rate.
For the period ended September 30, 2025, and the year ended December 31, 2024, the balance of notes payable-related party was $
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NOTE 9 - STOCKHOLDERS’ DEFICIT
The Company implemented a
At September 30, 2025, and December 31, 2024, there are
At September 30, 2025, and December 31, 2024, there are
NOTE 10 - COMMITMENTS AND CONTINGENCIES
From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company’s financial position or results of operations.
NOTE 11 - SUBSEQUENT EVENTS
In accordance with ASC 855-10, the company has analyzed its operations subsequent to September 30, 2025, through the date these financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements other than the events discussed below.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward- looking statements. Our unaudited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.
Company Overview
Groovy Company, Inc. (“the Company”) was incorporated in the State of Nevada on July 8, 2009, under the name Santa Pita Corp. The Company’s original mission was to operate an internet portal for dentists and patients to access dental information, as well as a teeth-whitening business.
On July 30, 2012, the Company redirected its focus toward precious metal exploration and mining. Mineral exploration commenced with the execution of a mineral claim acquisition agreement between GEXPLO, SRL (the “Vendor”) and the Company, whereby the Company agreed to acquire from the Vendor a one hundred percent interest in a claim located in the Dominican Republic. Concurrent with this strategic shift, the Company was renamed Santo Mining Corp.
On April 2, 2015, Santo Mining Corp. entered into a “Plan of Exchange” Agreement with Cathay Cigars of Asia Corporation (“Cathay”), a Florida corporation. Pursuant to the terms of this agreement, the Company agreed to acquire 100% of the capital stock of Cathay in exchange for the issuance of 300,000 shares of Series A Preferred Stock of the Company, effectively transferring majority voting power to Cathay.
Santo Mining Corp. redomiciled to the State of Florida in July 2015. From July 2015 to August 2017, the Company evolved from an exporter and distributor of cigars and tobacco to Asia into a software development company specializing in blockchain and cryptocurrency NFTs, operating from Ho Chi Minh City (Saigon), Vietnam.
In July 2021, the Company redomiciled to the State of Wyoming, where it maintains an active business registration in good standing. Concurrently, the Company relocated its operational headquarters from Ho Chi Minh City (Saigon), Vietnam, to Medellín-Bogotá, Colombia. Through its subsidiary, Santo Blockchain Labs of Colombia, S.A.S., the Company continued its principal focus on blockchain, cryptography, artificial intelligence, web3, and fourth industrial revolution (4IR) software development.
On February 7, 2024, the Company filed with the State of Wyoming to change its name from Santo Mining Corp. to Groovy Company, Inc.
On February 19, 2025, the Company entered into an Exchange Agreement with Pineapple Express Cannabis Company. Under this agreement, the Company exchanged all its assets for an 87% controlling interest in Pineapple Express Cannabis Company. The Company will maintain and continue to develop the Groovy Platform as a Service (PaaS) for Pineapple Express Cannabis Company.
Currently, the Company has focused its endeavors on the development and operation of OTCM Protocol, a blockchain-based platform that creates digital meme tokens referred to as Security Meme Tokens that are backed by Series “M” Preferred Shares of over-the-counter traded companies. Our goal is to combine traditional securities custody with blockchain tokenization.
The Company has one other subsidiary, BlackFlamingo Ventures, LLC (Florida). This subsidiary focuses on providing essential administrative and logistical support for the Company’s operations. Its specialization in Latin America, Asia, and USA has a focus on facilitating cross-border transactions, navigating international regulations, and managing supply chain logistics.
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Results of Operations for the three months ended September 30, 2025 and 2024:
Revenue and cost of goods sold
For the three months ended September 30, 2025 and 2024, the company generated revenues of $0 and $1,364, respectively. Cost of goods sold was $0 and $0, respectively, resulting in gross profit of $0 and $1,364, respectively.
Operating expenses
Total operating expenses for the three months ended September 30, 2025 and 2024 were $134,274 and $61,202, respectively. The expenses for the three months ended September 30, 2025 consisted of contractor cost of $28,187; management fees of $75,000; professional fees of $11,962; and general and administrative costs of $19,125. The expenses for the three months ended September 30, 2024 consisted of contractor cost of $27,000; professional fees of $12,030; general and administrative costs of $4,567; rent expense of $8,242; and depreciation expense of $9,363.
Other income (expense)
Other expense for the three months ended September 30, 2025 and 2024 was $0 and ($973,708), respectively.
Net Loss
The net loss for the three months ended September 30, 2025 and 2024 was ($134,274) and ($1,033,546), respectively.
Results of Operations for the nine months ended September 30, 2025 and 2024:
Revenue and cost of goods sold
For the nine months ended September 30, 2025 and 2024, the company generated revenues of $11,676 and $1,250, respectively. Cost of goods sold was $1,500 and $0, respectively, resulting in gross profit of $10,176 and $1,250, respectively.
Operating expenses
Total operating expenses for the nine months ended September 30, 2025 and 2024 were $353,360 and $361,804, respectively. The expenses for the nine months ended September 30, 2025 consisted of contractor cost of $63,261; management fees of $150,000; professional fees of $87,946; general and administrative costs of $33,427; and depreciation expense of $18,726. The expenses for the nine months ended September 30, 2024 consisted of contractor cost of $30,277; management fees of $225,000; professional fees of $6,222; general and administrative costs of $66,008; rent expense of $15,571; and depreciation expense of $18,726.
Other income (expense)
Other income (expense) for the nine months ended September 30, 2025 and 2024 was $7,772,404 and ($1,111,694), respectively.
Net Income (Loss)
The net income (loss) for the nine months ended September 30, 2025 and 2024 was $7,429,220 and ($1,353,423), respectively.
Liquidity and Capital Resources
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates, among other things, the realization of assets and satisfaction of liabilities in the ordinary course of business.
As of September 30, 2025, the Company had $3,133 in cash and cash equivalents. The Company generated $11,676 in revenues and has relied primarily upon capital generated from public and private offerings of its securities.
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The Company sustained a loss from operations of $268,184 for the nine months ending September 30, 2025. The Company has accumulated losses totaling $3,642,435 at September 30, 2025. Because of the absence of positive cash flows from operations, the Company will require additional funding for continuing the development and marketing of products. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
We are presently able to meet our obligations as they come due through our borrowing and the support of our shareholders. At September 30, 2025, we had a working capital deficit of $199,025. Our working capital deficit is due to the results of operations.
Cash Flows from Operating, Investing and Financing Activities
The following table summarizes our cash flows for the period indicated:
|
| For the nine months ended September 30, 2025 |
| For the nine months ended September 30, 2024 | ||
Cash flows from operating activities |
| $ | (1,491,656) |
| $ | (166,260) |
Cash flows from investing activities |
| $ | 1,403,105 |
| $ | - |
Cash flows from financing activities |
| $ | 89,500 |
| $ | 172,500 |
Going Concern
Management believes that current trends toward lower capital investment in start-up companies pose the most significant challenge to the Company’s success over the next year and in future years. Additionally, the Company will have to meet all the financial disclosure and reporting requirements associated with being a public reporting company. The Company’s management will have to spend additional time on policies and procedures to make sure it is compliant with various regulatory requirements, especially that of Section 404 of the Sarbanes-Oxley Act of 2002. This additional corporate governance time required of management could limit the amount of time management has to implement is business plan and impede the speed of its operations. Accordingly, the Company’s management has concluded that these conditions raise substantial doubt about our ability to continue as a going concern. There can be no assurance that we will be able to achieve our business plan objectives or be able to achieve or maintain cash- flow-positive operating results. If we are unable to generate adequate funds from operations or raise sufficient additional funds, we may not be able to repay our existing debt, continue to operate our business network, respond to competitive pressures or fund our operations. As a result, we may be required to significantly reduce, reorganize, discontinue or shut down our operations.
Limited operating history; need for additional capital
There is no historical financial information about us upon which to base an evaluation of our performance. We are in a start-up stage of operations and have generated minimal revenues since inception. We cannot guarantee that we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
A smaller reporting company is not required to provide the information required by this Item.
ITEM 4. CONTROLS AND PROCEDURES.
The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Company’s management, as appropriate, to allow timely decisions regarding required disclosure.
The Company’s management, with the participation of our principal executive and principal financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective.
Management’s Report on Internal Controls over Financial Disclosure Controls and Procedures
Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America. 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. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of September 30, 2025 using the criteria established in “Internal Control - Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over financial reporting as of September 30, 2025, the Company determined that there were control deficiencies that constituted material weaknesses, as described below.
1.We do not have an Audit Committee – While not being legally obligated to have an audit committee, it is the management’s view that such a committee, including a financial expert member, is an utmost important entity level control over the Company’s financial statement. Currently the Board of Directors acts in the capacity of the Audit Committee and does not include a member that is considered to be independent of management to provide the necessary oversight over management’s activities.
2.We did not maintain appropriate cash controls – As of September 30, 2025, the Company has not maintained sufficient internal controls over financial reporting for the cash process, including failure to segregate cash handling and accounting functions, and did not require dual signature on the Company’s bank accounts. Alternatively, the effects of poor cash controls were mitigated by the fact that the Company had limited transactions in their bank accounts.
3.We did not implement appropriate information technology controls – As of September 30, 2025, the Company retains copies of all financial data and material agreements; however, there is no formal procedure or evidence of normal backup of the Company’s data or off-site storage of data in the event of theft, misplacement, or loss due to unmitigated factors.
Accordingly, the Company concluded that these control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
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As a result of the material weaknesses described above, management has concluded that the Company did not maintain effective internal control over financial reporting as of September 30, 2025 based on criteria established in Internal Control- Integrated Framework issued by COSO.
System of Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
An evaluation was conducted under the supervision and with the participation of our management of the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2025. Based on that evaluation, our management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As described above, the Company has concluded that the internal control over financial reporting is ineffective in 2023 because of the material weakness identified by management.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
From time to time, we are involved in ordinary routine litigation typical for companies engaged in our line of business. As of the date of this Quarterly Report on Form 10-Q, there are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company that we believe would be likely, individually or in the aggregate, to have a material adverse effect on our financial condition or results of operations.
ITEM 1A. RISK FACTORS
Smaller reporting companies are not required to provide disclosure pursuant to this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 4. MINE SAFETY DISCLOSURES.
Not applicable.
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ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
(a) Exhibits required by Item 601 of Regulation SK.:
Number |
| Description |
|
|
|
| Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
| Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101. INS |
| XBRL Instance Document |
101. SCH |
| XBRL Taxonomy Extension Schema Document |
101. CAL |
| XBRL Taxonomy Calculation Linkbase Document |
101. DEF |
| XBRL Taxonomy Extension Definition Linkbase Document |
101. LAB |
| XBRL Taxonomy Label Linkbase Document |
101. PRE |
| XBRL Taxonomy Presentation Linkbase Document |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Groovy Company, Inc. |
|
|
Dated: March 11, 2026 | /s/ Berge Abajian |
| Berge Abajian |
| Chief Executive Officer (principal executive officer, principal accounting officer and principal financial officer) |
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