Hawkeye Digital, Inc 10-Q for FY2022 Q2

Hawkeye Digital, Inc. (HWKE)

10-Q 2022-04-14 For: 2021-12-31

Added on April 06, 2026

About this 10-Q

Hawkeye Digital, Inc filed this 10-Q on April 14, 2022, covering the quarter ended December 31, 2021 (FY2022 Q2).

Headline figures

Quarter ended December 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $0; compared with $0 a year earlier
Net loss: $486.84K; compared with a net loss of $356.7K a year earlier

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Title of Each Class		Trading Symbol(s)		Name of each Exchange on which registered
N/A		N/A		N/A

☐	Large accelerated filer	☐	Accelerated filer	☒	Smaller reporting company
		☒	Non-accelerated filer	☒	Emerging growth company

		Page
Part 1	FINANCIAL INFORMATION	2

Item 1	Financial Statements (unaudited)	2

	Condensed Consolidated Balance Sheets as of December 31, 2021 and June 30, 2021 (unaudited)	2

	Condensed Consolidated Statements of Operations for the three and six months ended December 31, 2021 and 2020 (unaudited)	3

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended December 31, 2021 and 2020 (unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2021 and 2020 (unaudited)	5

	Notes to the Unaudited Condensed Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11

Item 4.	Controls and Procedures	13

Part II.	OTHER INFORMATION	15

Item 1	Legal Proceedings	15

Item 1A	Risk Factors	15

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	15

Item 3	Defaults Upon Senior Securities	15

Item 4	Mine Safety Disclosures	15

Item 5	Other Information	15

Item 6	Exhibits	16

	SIGNATURES	17

	December 31,			June 30,
	2021			2021
ASSETS
Current assets:
Cash	$	14,488		$	282,131
Prepaid expenses		25,833			3,000
Total current assets		40,321			285,131

Total assets	$	40,321		$	285,131

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued liabilities	$	163,314		$	133,088
Convertible note payable, net of discount - related party		1,105,000			450,933
Inventory financing payable - related party		-			500,000
Common stock payable - related party		200,000			477,000
Total current liabilities		1,468,314			1,561,021

Long-term liabilities:
PPP loan		16,983			16,983
Total liabilities		1,485,297			1,578,004

Stockholders’ deficit:
Preferred stock, $0.0001 par value, 50,000,000 shares authorized; no shares issued or outstanding		-			-
Common stock, $0.0001 par value, 400,000,000 shares authorized; 25,364,148 and 17,921,148 shares issued and outstanding, respectively		2,536			1,792
Additional paid-in capital		8,452,632			7,957,009
Accumulated deficit		(9,900,144	)		(9,251,674	)
Total stockholders’ deficit		(1,444,976	)		(1,292,873	)
Total liabilities and stockholders’ deficit	$	40,321		$	285,131

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2021			2020			2021			2020

Sales	$	-		$	-		$	-		$	382,346
Cost of sales		-			-			-			320,379
Gross profit		-			-			-			61,967

Operating expenses:
General and administrative		91,154			8,482			114,043			22,279
Management compensation		225,440			187,624			396,739			341,286
Professional fees		12,864			17,380			39,134			55,404
Professional fees - related party		113,760			70,840			152,258			210,180
Marketing		2,695			34,871			2,695			83,289
Write-down of inventory		-			-			-			40,164
Total operating expenses		445,913			319,197			704,869			752,602

Loss from operations		(445,913	)		(319,197	)		(704,869	)		(690,635	)

Other expense:
Interest expense		(43	)		-			(85	)		(14,333	)
Interest expense - related party		(40,886	)		(37,504	)		(63,803	)		(62,903	)
Financing expense		-			-			-			(55,497	)
Financing expense - related party		-			-			-			(1,508,211	)
Loss on settlement of debt		-			-			-			(370,269	)
Total other expense		(40,929	)		(37,504	)		(63,888	)		(2,011,213	)

Net loss	$	(486,842	)	$	(356,701	)	$	(768,757	)	$	(2,701,848	)

Net loss per common share - basic and diluted	$	(0.02	)	$	(0.02	)	$	(0.04	)	$	(0.17	)
Weighted average common shares outstanding - basic and diluted		23,265,176			16,194,261			20,604,565			15,905,168

					Additional
	Common Stock				Paid-in			Accumulated			Stockholders’
	Shares		Amount		Capital			Deficit			Equity
Balance, June 30, 2021		17,921,148	$	1,792	$	7,957,009		$	(9,251,674	)	$	(1,292,873	)
Cumulative-effect adjustment from adoption of ASU 2020-06		-		-		(169,354	)		120,287			(49,067	)
Common stock issued for settlement of debt		300,000		30		29,970			-			30,000
Stock based compensation - options		-		-		73,994			-			73,994
Net loss		-		-		-			(281,915	)		(281,915	)
Balance, September 30, 2021		18,221,148	$	1,822	$	7,891,619		$	(9,413,302	)	$	(1,519,861	)
Common shares issued for stock payable		1,108,000		111		276,889			-			277,000
Stock based compensation - options						284,727			-			277,678
Stock option cashless exercised		6,035,000		603		(603	)		-			-
Net loss									(486,842	)		(486,842	)
Balance, December 31, 2021		25,364,148	$	2,536	$	8,452,632		$	(9,900,144	)	$	(1,444,976	)

					Additional		Common
	Common Stock				Paid-in		Stock			Accumulated			Stockholders’
	Shares		Amount		Capital		to be Issued			Deficit			Equity
Balance, June 30, 2020		14,828,036	$	1,483	$	4,527,925	$	139,500		$	(4,509,841	)	$	159,067
Common shares issued for stock to be issued		365,000		37		109,463		(109,500	)		-			-
Warrants exercised for cash		175,000		17		67,483		-			-			67,500
Common shares issued for conversion of debt		469,623		47		525,931		-			-			525,978
Stock based compensation - options		-		-		119,155		-			-			119,155
Stock based compensation - warrant		-		-		1,563,708		-			-			1,563,708
Debt forgiveness		-		-		20,932		-			-			20,932
Net loss		-		-							(2,345,147	)		(2,345,147	)
Balance, September 30, 2020		15,837,659	$	1,584	$	6,934,597	$	30,000		$	(6,854,988	)	$	111,193
Common shares issued for stock to be issued				-							-			-
Common stock issued exchanged for common stock payable		612,000		61		152,939		-			-			153,000
Common stock and warrants issued for cash		100,000		10		19,990		-			-			20,000
Common shares issued for settlement of debt		515,000		51		179,949		-			-			180,000
Stock based compensation - options				-		119,155		-			-			119,155
Stock based compensation - warrant		-		-		-		-			-			-
Beneficial conversion feature		-		-		117,760		-			-			117,760
Net loss				-				-			(356,701	)		(356,701	)
Balance, December 31, 2020		17,064,659	$	1,706	$	7,524,390	$	30,000		$	(7,211,689	)	$	344,407

	·	300,000 shares issued valued at $30,000 for settlement of debt of $30,000.

	·	1,908,000 shares issued valued at $277,000 for stock payable

	·	6,000,000 shares issued for cashless exercise of 7,900,000 stock options

	Number of			Weighted Average
	Warrants			Exercise Price
Balance at June 30, 2021		3,069,329			2.27
Granted		-			-
Exercised - shares issued		-			-
Expired		(575,333	)		0.94
Balance at December 31, 2021		2,493,996		$	2.28

Exercise Price		Number of Warrants		Weighted Average Remaining Life (in years)
$	0.20		100,000		0.92
$	0.30		349,998		2.33
$	0.50		666,666		2.33
$	1.00		708,666		2.33
$	2.00		668,666		2.33
			2,493,996		2.28

	December 31,
	2021
Trading price	$	0.07
Exercise price	$	0.11 - 0.50
Expected term (in years)		5.00
Risk-free rate		0.27	%
Volatility		466	%
Dividend yield		-

Number		Description

31.1*		Certification of Chief Executive Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant Section 302 of the Sarbanes Oxley Act of 2002
31.2*		Certification of Chief Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant Section 302 of the Sarbanes Oxley Act of 2002
32.1*		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101*		Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
104*		Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

	Hawkeye Systems, Inc.

Date: April 14, 2022	By:	/s/ Corby Marshall
		Corby Marshall, Chief Executive Officer
		Principal Executive Officer

Date: April 14, 2022	By:	/s/ Christopher Mulgrew
		Christopher Mulgrew, Chief Financial Officer
		Principal Financial Officer

						Weighted average
	Number of			Weighted average		remaining life
	options			exercise price		(in years)
Outstanding, June 30, 2021		7,280,000			0.23		3.76
Granted		1,876,000			0.20		5.00
Cancelled		(250,000	)		0.50		2.08
Exercised		(7,900,000	)		0.18		3.81
Outstanding, December 31, 2021		1,006,000			0.41		3.33

Exercisable, December 31, 2021		786,400		$	0.42		2.94