Hawkeye Digital, Inc 10-Q/A for FY2025 Q1
Hawkeye Digital, Inc. (HWKE)
About this 10-Q/A
Hawkeye Digital, Inc filed this 10-Q/A on November 20, 2024, covering the quarter ended September 30, 2024 (FY2025 Q1).
Headline figures
Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $156.72K
- compared with a net loss of $214.25K a year earlier
UNITED ESTATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark one)
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
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 or organization) |
| (I.R.S. Employer Identification No.) |
(Address of principal executive offices (Zip Code)
(
Registrant’s telephone number, including area code
____________________________________________________________
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act
Title of Each Class |
| Trading Symbol(s) |
| Name of each Exchange on which registered |
N/A |
| N/A |
| N/A |
Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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. ☒
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). ☒
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 | ☐ | ☒ | |
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. ☐ Yes ☐ No
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
The number of shares outstanding of each of the issuer’s classes of common equity as of November 19, 2024, was
TABLE OF CONTENTS
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| Notes to the Unaudited Condensed Consolidated Financial Statements |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HAWKEYE SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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ASSETS |
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Current assets: |
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Cash |
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Prepaid expenses |
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Total current assets |
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Total assets |
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LIABILITIES AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable and accrued liabilities – related party |
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Accounts payable and accrued liabilities |
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Accrued interest – related party |
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Promissory note payable – related party |
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Total current liabilities |
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Long-term liabilities: |
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Loan payable due to Eagle - JV partner |
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Total liabilities |
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Commitments and contingencies (Note -13) |
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Stockholders’ deficit: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders’ deficit |
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Total liabilities and stockholders’ deficit |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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| Table of Contents |
HAWKEYE SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
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Operating expenses: |
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General and administrative |
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Management compensation |
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Professional fees |
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Total operating expenses |
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Loss from operations |
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Other income (expense), net: |
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Other income |
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Interest income |
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Interest expense - related party |
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Total other income (expense), net |
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Net loss before income taxes provision |
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Provision for income tax |
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Net loss |
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Net loss per common share - basic and diluted |
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Weighted average common shares outstanding - basic and diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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HAWKEYE SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(Unaudited)
For the Three Months ended September 30, 2024
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Balance, June 30, 2024 |
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Stock option cashless exercised |
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Net loss |
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Balance, September 30, 2024 |
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For the Three Months ended September 30, 2023
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Balance, June 30, 2023 |
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Net loss |
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Balance, September 30, 2023 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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HAWKEYE SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
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Cash flows from operating activities: |
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Net loss |
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Change in operating assets and liabilities: |
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Accounts receivable |
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Prepaid expense |
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Interest receivable |
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Accounts payable and accrued liabilities– related party |
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Accounts payable and accrued liabilities |
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Accrued interest - related party |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Note receivable from CNTNR |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Net proceeds from Promissory note - related party |
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Net cash provided by financing activities |
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Net change in cash |
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Cash beginning of period |
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Cash end of period |
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Supplemental cash flow information |
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Cash paid for interest |
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Cash paid for taxes |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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| Table of Contents |
HAWKEYE SYSTEMS, INC.
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2024
Note 1 - Summary of Significant Accounting Policies
Business Overview
Hawkeye Systems, Inc. (the “Company”), is a Nevada corporation incorporated on May 15, 2018. Our previous focus was on pandemic management products and services. From inception until July of 2021, we focused on selling personal protective equipment (“PPE”). In July 2021, our management determined to cease the Company’s operations as a seller of PPE, deeming that continuing operations in that sector was not a productive use of our resources.
We are currently looking for investment opportunities in diversified industries, such as affordable housing development, and technology applications to mitigate the effects of climate change. From inception until the date of this filing our activities have primarily consisted of (i) liquidating our stock of personal protective equipment (“PPE”) products, (ii) the development of our business plan and the evaluation of strategic investment and business development strategies, including the execution of letters of intent and the provision of funding to a few selected target companies.
Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments consisting of normal recurring entries necessary for a fair statement of the periods presented for: (a) the financial position; (b) the result of operations; and (c) cash flows, have been made in order to make the unaudited condensed consolidated financial statements presented not misleading. The results of operations for such interim periods are not necessarily indicative of operations for a full year. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes included in the Company’s Annual Report on Form 10-K, for the year ended June 30, 2024, as filed with the SEC on September 30, 2024.
Use of estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. Significant estimates in the accompanying financial statements include useful lives of property and equipment, fair value assumptions used for stock-based compensation, and the valuation allowance on deferred tax assets.
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| Table of Contents |
Fair value measurements
When required to measure assets or liabilities at fair value, the Company uses a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used. The Company determines the level within the fair value hierarchy in which the fair value measurements in their entirety fall. The categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Level 1 uses quoted prices in active markets for identical assets or liabilities, Level 2 uses significant other observable inputs, and Level 3 uses significant unobservable inputs. The amount of the total gains or losses for the period are included in earnings that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date. The Company has no assets or liabilities that are adjusted to fair value on a recurring basis.
Revenue recognition
As of September 30, 2024, and 2023, the Company had no revenue.
Cost of sales
As of September 30, 2024, and 2023, the Company had no cost of sales.
Basic and diluted earnings per share
Basic earnings per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated based on the weighted average number of common shares outstanding during the period plus the effect of potentially dilutive common stock equivalents, including stock options, warrants to purchase the Company’s common stock, and convertible note payable with accrued interest. For the three months ended September 30, 2024 and 2023, potentially dilutive common stock equivalents not included in the calculation of diluted earnings per share because they were anti-dilutive were as follows:
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Warrants |
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Options |
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Convertible notes |
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Total possible dilutive shares |
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Recent accounting pronouncements
Management has considered all recent accounting pronouncements issued and their potential effect on our financial statements.
In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt-Debt with Conversion and Other Options” and ASC subtopic 815-40 “Hedging-Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has early adopted this standard effective July 1, 2021 using the modified retrospective approach transition method.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for losses. In addition, an entity will have to disclose significantly more information about allowances and credit quality indicators. The new standard is effective for the Company for fiscal years beginning after December 15, 2022. The Company adopted the standard beginning in fiscal year 2023. Because the standard is still in the early stages of adoption, the Company assesses that the current adoption of the standard has not had a material impact on the Company’s consolidated financial statements and will continue to monitor it as it progresses through year-end close.
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Note 2 - Going Concern
The Company’s financial statements are prepared using U.S. GAAP, applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.
The Company’s unaudited condensed consolidated financial statements are prepared using GAAP, applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. During the three months ended September 30, 2024, the Company had a net loss of $
The Company has not established sufficient revenue to cover its operating costs and will require additional capital to continue its operating plan. 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. These factors raise substantial doubt about its ability to continue as a going concern.
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 sales of equity instruments; traditional financing, such as loans; and obtaining capital from management and significant stockholders sufficient to meet its minimum operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing this plan.
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.
Note 3 – Loan payable due to Eagle - JV partner
July 17, 2020, the Company entered into a membership agreement with Eagle Equities LLC (“Eagle”) and Ikon Supplies (“Ikon”) to form a Nevada Limited Liability Company, HIE, LLC (“HIE”) for the purpose of procuring, funding the purchase of and sale of PPE (the “Membership Agreement”). Subject to the provision of the Membership Agreement, the interest of any net profits would be shared
In addition,
HIE did not have any operating activities since July 2021. As a result, the Company’s investment balance in HIE as of September 30, 2024 was $
Note 4 - Related Party Transactions
Related party transactions are described in detail in Note 5, Note 6, Note 7, Note 8, and Note 10.
| 9 |
| Table of Contents |
Note 5 – Inventory Financing Payable – related party
On February 19, 2021, Steve Hall, a shareholder of the Company, advanced $
In June 2021 the Company cancelled the contemplated purchase of inventory and returned $
On October 1, 2021, the Company and Steve Hall entered into a restated and amended promissory note, to consolidate and restate the terms pursuant to which Steve Hall had provided funds to the Company (the “Consolidated Note”). The Consolidated Note consolidated and restated the terms of advances made on
On April 1, 2024, the Company and Steve Hall entered into a debt consolidation agreement, which consolidated all amounts due by the Company to Steve Hall (the “Debt Consolidation Agreement”), including amounts due under the Consolidated Note, which amounted to accrued interest of $
Note 6 – Line of Credit – related party
On October 1, 2021, Steve Hall
On April 1, 2024, the Company and Steve Hall entered into the Debt Consolidation Agreement, which consolidated all amounts due by the Company to Steve Hall under the line of credit. These amounted to accrued interest of $
Note 7 – Promissory Notes Payable – related party
On March 29, 2023, Steve Hall provided the Company with a loan in the principal amount of $
On April 1, 2024, the Company and Steve Hall entered into the Debt Consolidation Agreement, which consolidated all amounts due by the Company to Steve Hall under the Steve Hall Note. These amounts included accrued interest of $
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| Table of Contents |
Note 8 – Accrued Expenses – related party
Between September 2021 to September 2022, the Company had accepted deposits in the total amount of $
On April 1, 2024, the accrued expenses of $
Note 9 – Note Receivable
On February 27, 2023, the Company and CNTNR USA, Inc. (“CNTNR”) entered into a promissory note under which the Company disbursed $
The Amended CNTNR Note had an annual interest rate of
Moreover, the Amended CNTNR Note includes warrant coverage of one warrant for every share issued in repayment of the Principal Amount at the closing of an intended merger with CNTNR which is equal to
On April 1, 2024, the Company assigned and transferred this note receivable to Steve Hall as part of the Debt Consolidation Agreement. The total amounts assigned to Steve Hall were accrued interest of $
Note 10 – Consulting Agreement- Related Party
On January 30, 2023, Hawkeye entered into a consulting agreement with Steve Hall, a shareholder of the Company, to provide real estate and development consulting services, including the supervision of the Company’s senior management, staff and all personnel, whether employees or consultants, strategic planning, property acquisitions and annual budget review.
The contract period was
On April 1, 2024, the service fee of $
Note 11 – Debt Consolidation Agreement
The Company and Steve Hall executed a Debt Consolidation Agreement that was effective as of April 1, 2024, that consolidated the Company’s various historic loans from Steve Hall to an amount of $
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| Table of Contents |
Mr. Hall agrees that there are no rights of set-off, counterclaim or any defenses to the obligations of the amounts consolidated and/or assigned to Mr. Hall.
On April 1, 2024, the various historical loans and the CNTNR Note were consolidated amounting to $
Reference |
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| Total Consolidated Amount |
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Footnote 5 – Inventory Financing Payable |
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Footnote 6 – Line of Credit |
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Footnote 7 – Promissory Notes Payable |
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Footnote 8 – Accrued Expenses - Face Mask |
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Footnote 9 – Note Receivable |
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Footnote 10 – Consulting Agreement |
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Additional Fund Received |
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Final Debt Consolidation Agreement Amount |
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Note 12 - Stockholders’ Equity
Common Stock
The Company issued
Stock Options
Transactions in stock options for the three months ended September 30, 2024 are as follows:
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Outstanding, June 30, 2024 |
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Granted |
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Cancelled |
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Exercised |
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Exercisable, September 30, 2024 |
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During the three months ended September 30, 2024, the Company had not granted any stock options. And all stock options were vested at the fiscal year end June 30, 2023.
At September 30, 2024, the intrinsic value of the outstanding options was $
Note 13 – Commitments and Contingencies
On July 17, 2020, the Company entered into a Membership Agreement with Eagle and Ikon to form HIE. Under the terms and conditions of the Membership Agreement, in the event of a loss of capital of HIE, the Company shall contribute to repay
On January 30, 2023, Hawkeye entered into a consulting agreement with Steve Hall, a shareholder of the Company, to provide real estate and development consulting services. Transactions are described in detail in Note 10 - Consulting Agreement - Related Party.
On February 27, 2023, the Company and CNTNR USA, Inc. (“CNTNR”) entered into a promissory note under which the Company disbursed $
On December 1, 2023, the Company entered into a consulting agreement with Corby Marshall, the Company’s President, Secretary, Chief Executive Officer and Chairman of the Board of Director, to restructure the compensation received by Mr. Marshall from the Company (the “Marshall Consulting Agreement”). Pursuant to the terms of the Marshall Consulting Agreement, Mr. Marshall shall receive $
As we had mentioned on Note 11 – Debt Consolidation Agreement, the Company consolidated all amounts owed to Steve Hall in one instrument and assigned and transferred to Steve Hall all receivables by the Company from CNTNR USA, Inc., described in Note 9 - Note Receivable.
To document the outstanding loan balance (consolidated debt minus note receivable) the Company and Steve Hall entered into a new consolidated promissory note on April 1, 2024, for $
As of September 30, 2024, the outstanding loan balance of the New Consolidated Note was $
Note 15 - Subsequent Events
Management has evaluated subsequent events through the date of these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following discussion relates to the historical operations and financial statements of Hawkeye Systems, Inc. for the three months ended September 30, 2024.
Forward-Looking Statements
The following Management’s Discussion and Analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this quarterly report. The Management’s Discussion and Analysis contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this quarterly report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Risks Factors” in our various filings with the Securities and Exchange Commission. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this quarterly report.
The Company is currently looking for investment opportunities into target businesses in diversified industries, such as affordable housing development, and technology applications to mitigate the effects of climate change.
Financial Condition and Results of Operations
We have incurred recurring losses to date. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue our operations.
We expect we will require additional capital to develop our business plan. We expect to raise additional capital through, among other things, the sale of equity or debt securities.
Results of Operations
Three Months Ended September 30, 2024 compared to three months ended September 30, 2023.
We had no operating revenues, and cost of sales, for the three months ended September 30, 2024, and 2023. Total operating expenses in the three months ended September 30, 2024 were $95,546 compared to $168,841 for the same period in 2023. The decrease in operating expenses is primarily a result of a decrease in professional fees - related party, management compensation, and general and administrative expenses. The Company’s net loss was $156,720 for the three months ended September 30, 2024 compared to $214,247 for the three months ended September 30, 2023. The net loss for this period is primarily a result of operating expenses, and interest expenses.
Liquidity and Capital Resources
Our cash balance at September 30, 2024 was $7 compared to $50,296 at September 30, 2023. We do not believe these cash reserves are sufficient to cover our expenses for our operations for the next 12 months. We will require additional funding for our ongoing operations.
During our first fiscal quarters ended September 30, 2024, and 2023, we received $55,600, and $450,000, from a promissory note issued by a related party.
In addition, we intend to raise funds through the sale of equity and debt securities.
We are a smaller reporting company and have accumulated losses to date. Under a limited operations scenario to maintain our corporate existence, we believe we will require additional funds over the next 12 months to complete our regulatory reporting and filings. However, we will require maximum participation through private placements, or alternative financing to implement our business plan.
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There are no assurances that we will be able to obtain further funds required for our continued operations. Even if additional financing is available, it may not be available on terms we find favorable. Failure to secure the needed additional financing will have an adverse effect on our ability to remain in business.
Plan of Operation and Funding
We expect that working capital requirements will continue to be funded through equity offerings, warrant exercises, and related party advances in the near future. We have no guarantees or firm commitments that the related party advances will continue in the near future.
Existing working capital, further advances, together with anticipated capital raises are expected to be adequate to fund our operations over the next twelve months, but there is no guarantee that we will be successful in raising enough capital, or that we will receive the cash flow required to fund our operations. We have no lines of credit with banking institutions or other bank financing arrangements. Generally, we have financed operations to date through proceeds from convertible loans.
Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences, or privileges senior to our common stock. Additional financing may not be available on acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to continue our operations.
Material Commitments
As of the date of this quarterly report, we have entered into various commitments. For a discussion of the related items, please see Note 13 – Commitments and Contingencies.
Purchase of Significant Equipment
We do not intend to purchase any significant equipment during the next twelve months.
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Off-Balance Sheet Arrangements
As of the date of this quarterly report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Going Concern
As reflected in the accompanying financial statements, the Company had an accumulated deficit of approximately $12,843,924 at September 30, 2024 and net loss from operations of $156,720 for the three months ended September 30, 2024.
We do not yet have a history of financial stability. Historically, the principal source of liquidity has been the issuance of equity securities, proceeds from convertible loans, and related party advances. In addition, the Company is in the development stage and has accumulated losses since inception. These factors raise substantial doubt about our ability to continue as a going concern.
Our ability to continue operations is dependent on the success of Management’s plans and raising of capital through the issuance of equity or debt securities, until such time that funds provided by operations are sufficient to fund working capital requirements.
We will require additional funding to finance our operations and regulatory filing obligations, as well as to identify, negotiate and materialize a business combination with a target business. We believe our current available cash may be insufficient to meet our cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to us, if at all.
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.
Critical Accounting Policies and Estimates
For a discussion of our accounting policies and related items, please see the Notes to the Financial Statements, included in Item 1.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States. In our review, we sought to find potential for material weaknesses in our financial controls, which is defined as a deficiency, or combination of deficiencies, in our accounting 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.
Because of its inherent limitations, which include a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures, internal control over financial reporting may not prevent or detect misstatements, whether unintentional errors or fraud. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
Our management, consisting of Corby Marshall as Chief Executive Officer and Chief Financial Officer, reviewed and evaluated the effectiveness of the Company’s internal control over disclosure controls and procedures (as such term is defined in Rules 13a-15(3) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) and financial reporting as of September 30, 2024. In making this assessment, our management used the criteria described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), as well as the guidance provided in SEC Release 33-8809. In such an evaluation, Mr. Marshall assessed daily interaction, self-assessment and other ongoing monitoring activities as evidence in the evaluation. Furthermore we sought to identify financial reporting risks, identify controls that adequately address financial reporting risks, considered entity level controls, reviewed the role of technology in our controls and reviewed the evidence available to support the assessment.
Based on this evaluation, our management concluded that, as of September 30, 2024, our disclosure controls and our internal controls over financial reporting were not effective in recording, processing, summarizing and reporting on a timely basis information required to be disclosed in the reports that we file or submit under the Exchange Act; and were not effective in assuring that information required to be disclosed in the reports we file or submit under the Exchange Act is actually disclosed or filed. Our management concluded that this is due to material weaknesses including (i) the Company having only two officers handling all financial transactions, (ii) lack of appropriate operational controls and consistency in providing our accounting personnel with financial information, (iii) incomplete financial statements on a daily basis and resulting errors in our underlying accounting system, (iv) lack of proper documentation of our assessment and evaluation, and (v) our determination that internal controls were ineffective due to the limited segregation of duties because of the limited management structure.
Changes in Internal Control over Financial Reporting.
There were no changes in our internal control over financial reporting that occurred during the fiscal quarters ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
From time to time the Company may be named in claims arising in the ordinary course of business. Currently, we are not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this quarterly report, no director, officer, or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. We are not aware of any other legal proceedings pending or that have been threatened against us or our property that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.
Item 1A - Risk Factors
Not required for Smaller Reporting Companies.
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds
No disclosure required.
Item 3 - Defaults Upon Senior Securities
No disclosure required.
Item 4 - Mine Safety Disclosure
No disclosure required.
Item 5 - Other Information
No disclosure required.
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Item 6 - Exhibits
Exhibits:
Exhibit |
| Description |
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31.2* |
| Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934 |
| Certification of Chief Executive Officer pursuant to Section 1350 | |
32.2** |
| Certification of Chief Financial Officer pursuant to Section 1350 |
101.INS |
| Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document. |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB |
| Inline XBRL Taxonomy Extension Labels Linkbase Document. |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
104* |
| Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set. |
* Filed herewith.
** Furnished herewith.
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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.
Hawkeye Systems, Inc. | |||
Date: November 19, 2024 | By: | /s/ Corby Marshall | |
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| Corby Marshall, Chief Executive Officer | |
Principal Executive Officer | |||
Chief Financial Officer | |||
EXHIBIT 31.1 & 31.2
CERTIFICATION
I, Corby Marshall, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q/A of Hawkeye Systems, Inc. (the “Registrant”); |
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| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial; and |
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| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: November 19, 2024 | /s/ Corby Marshall | ||
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| Corby Marshall | |
| Chief Executive Officer | |||
| (Principal Executive Officer) | |||
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| Chief Financial Officer |
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EXHIBIT 32.1 & 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Hawkeye Systems, Inc. (the “Company”) on Form 10-Q/A for the period ended September 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Corby Marshall, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
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| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company |
| Date: November 19, 2024 | /s/ Corby Marshall | ||
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| Corby Marshall | |
| Chief Executive Officer | |||
| (Principal Executive Officer) | |||
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| Chief Financial Officer |
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| (Principal Financial Officer) |
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