SDR Drone, Inc 10-Q for FY2025 Q1
SDR Drone, Inc. (SDCO)
About this 10-Q
SDR Drone, Inc filed this 10-Q on July 14, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $728.93K
- compared with net income of $18.01K a year earlier
- Diluted EPS
- -$0.70
- compared with $0.01 a year earlier
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)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices with Zip Code)
Registrant’s
telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
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.
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, 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 | |
| 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. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of July 14, 2025, there were shares of the issuer’s common stock outstanding.
TABLE OF CONTENTS
| Page No. | ||
| PART I. - FINANCIAL INFORMATION | 3 | |
| Item 1. | Financial Statements. | 3 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Plan of Operations. | 19 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 20 |
| Item 4 | Controls and Procedures. | 20 |
| PART II - OTHER INFORMATION | 21 | |
| Item 1. | Legal Proceedings. | 21 |
| Item 1A. | Risk Factors. | 21 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 21 |
| Item 3. | Defaults Upon Senior Securities. | 21 |
| Item 4. | Mine Safety Disclosures | 21 |
| Item 5. | Other Information. | 21 |
| Item 6. | Exhibits. | 21 |
| Signatures | 22 | |
| 2 |
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
HALLMARK VENTURE GROUP, INC.
| 3 |
HALLMARK VENTURE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
| March 31, 2025 | December 31, 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | $ | ||||||
| Note receivable, net | ||||||||
| Assets from discontinued operations | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accrued compensation | ||||||||
| Due to related parties | ||||||||
| Convertible note payable – related party | ||||||||
| Convertible notes payable – net of debt discount of $ | ||||||||
| Convertible notes payable | ||||||||
| Notes payable | ||||||||
| Accrued interest | ||||||||
| Derivative liability | ||||||||
| Liabilities from discontinued operations | ||||||||
| Total Current Liabilities | ||||||||
| Total Liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ DEFICIT: | ||||||||
| Series A Preferred stock, shares authorized, $ par value; and issued and outstanding, respectively | ||||||||
| Common stock, shares authorized, $ par value; and issued and outstanding, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Stock payable | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Deficit | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 4 |
HALLMARK VENTURE GROUP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| 2025 | 2024 | |||||||
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Expenses: | ||||||||
| General and administrative | $ | $ | ||||||
| Professional fees | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Bad debt expense | ( | ) | ||||||
| Amortization of debt discount | ( | ) | ( | ) | ||||
| Change in fair value of derivative | ( | ) | ||||||
| Total other (expense) income | ( | ) | ||||||
| Net (loss) income before income taxes | ( | ) | ||||||
| Provision for income tax | ||||||||
| Net (Loss) Income from continuing operations | ( | ) | ||||||
| Net (Loss) from discontinued operations | ( | ) | ||||||
| Net Loss | $ | ( | ) | $ | ||||
| (Loss) income per share – basic | $ | ( | ) | $ | ||||
| (Loss) income per share –diluted | $ | ( | ) | $ | ||||
| Weighted average shares outstanding – basic | ||||||||
| Weighted average shares outstanding diluted | ||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 5 |
HALLMARK VENTURE GROUP, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024
(Unaudited)
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||||||
| Series A Preferred Stock | Common Stock | Stock | Additional Paid-in | Accumulated | Total Stockholder’ | |||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | payable | Capital | Deficit | Deficit | |||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ |
$ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Net loss | — | — | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Series A Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Stockholder’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Common stock issued for payment on settlement liability | — | |||||||||||||||||||||||||||
| Net income | — | — | ||||||||||||||||||||||||||
| Net income (loss) | — | — | ||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 6 |
HALLMARK
VENTURE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| 2025 | 2024 | |||||||
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows from Operating Activities: | ||||||||
| Net (loss) income from continued operations | $ | ( | ) | $ | ||||
| Adjustments to reconcile net (loss) income to net cash used by operating activities: | ||||||||
| Amortization of debt discount | ||||||||
| Bad debt expense | ||||||||
| Change in fair value of derivative | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Accrued compensation | ( | ) | ||||||
| Accrued interest | ||||||||
| Due to a related party | ||||||||
| Assets from discontinued operations | ||||||||
| Net cash provided (used) by operating activities from continued operations | ( | ) | ||||||
| Loss from discontinued operations | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities: | ||||||||
| Proceeds from convertible note payable | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ||||||||
| Cash beginning of period | ||||||||
| Cash end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| NON-CASH TRANSACTIONS: | ||||||||
| Common stock issued for payment of debt | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 7 |
HALLMARK VENTURE GROUP, INC.
Notes to Unaudited Financial Statements
March 31, 2025
NOTE 1 — ORGANIZATION AND OPERATIONS
Hallmark Venture Group, Inc., was originally incorporated in the state of Colorado on July 14, 1995, with the name CPC Office Systems, Inc. On July 12, 1999, the Company changed its name to Homesmart USA, Inc. On March 6, 2008, the Company changed its name to Speech Phone, Inc. On March 3, 2006, the Company moved its domicile to Nevada. On March 8, 2006, the Company changed its name to Smart Truck Systems, Inc. On July 16, 2008, the Company changed its name to Hallmark Venture Group, Inc.
On May 4, 2020, Living Waters, LLC (“LWLLC”) obtained management control of the Company from its previous CEO and Director, Robert Cashman (“Cashman”), pursuant to a contingent Share Purchase Agreement (the “SPA”), dated as of May 4, 2020, by and among LWLLC and Cashman, whereby certain preferred shares (the “Preferred Shares”) that represent the voting control interest in the Company were to be issued to LWLLC (the “Transaction”).
On May 27, 2020, in connection with the Transaction and in accordance with provisions of the SPA, LWLLC assigned the SPA to Medical Southern, LLC (“MSLLC”). On August 13, 2020, all issued and outstanding Preferred Shares were issued to a designee of MSLLC, Top Knot, Inc. USA (“TKIU”).
On August 17, 2020, in connection with the Transaction and in accordance with provisions of the SPA, MSLLC assigned the SPA to Stonecrest Acquisition, LLC (“SALLC”). As a consequence of the Transaction, a change of control of the Company occurred. As a result of the Transaction TKIU obtained voting control of the Company. Subsequently, on October 19, 2020, TKIU assigned % of the Preferred Shares it held to Endicott Holdings Group, LLC (“Endicott”).
On June 20, 2022, Endicott transferred % of the preferred shares, and of the shares of common stock it held, to Beartooth Asset Holdings, LLC, an entity controlled by the Company’s Secretary, Paul Strickland, resulting in a change of control of the Company.
On July 7, 2022, Beartooth Asset Holdings, LLC (an entity controlled by Paul Strickland, the Company’s secretary and a member of its board of directors) transferred Series A Preferred Shares to JMJ Associates, LLC, an entity controlled by John D. Murphy, Jr., President CEO of the Company and a Member of the Board of Directors, resulting in a change of control of the Company.
On July 12, 2022, Paul Strickland, the Company’s Principal Financial Officer, became a director of the Company.
On
January 11, 2024, the Company entered into a Change of Control Agreement (the “CoC Agreement”) by and between John D. Murphy,
Jr., the Company’s Director and CEO and JMJ Associates, LLC, an entity controlled by John D. Murphy, Jr. (“Murphy”),
and Paul Strickland, the Company’s Director and Secretary, and Selkirk Global Holdings, LLC, and Beartooth Asset Holdings, LLC,
both entities controlled by Paul Stirckland (“Strickland”), and Steven Arenal and Aurum International Ltd., an entity controlled
by Steven Arenal (“Aurum”) and, pursuant to which Murphy, Strickland, and their respective control entities assigned the
Series A preferred shares controlled by each to Aurum. Strickland transferred in restricted common shares to Aurum. In exchange,
Murphy and Strickland retained
On January 11, 2024, John D. Murphy, Jr. resigned as Director and Officer of the Company and all other positions he held with the Company.
On January 11, 2024, Paul Strickland resigned as Director and Officer of the Company and all other positions he held with the Company.
On January 11, 2024, Steven Arenal was elected as Director of the Company and appointed Chief Executive Officer, President, and Secretary of the Company.
On February 27, 2024, Steve Arenal and Aurum International Ltd. were given notice of default and failure to perform on the agreements they had signed, and Strickland and Murphy also gave notice of cancellation of all the foregoing agreements.
On February 28, 2024, a special meeting of shareholders was held removing Arenal and reinstating Murphy and Strickland and reversing and canceling all of the foregoing Aurum International Ltd / Arenal agreements.
| 8 |
On February 28, 2024, the Company filed an 8-K disclosing the cancellation, termination, and failure to perform on the aforementioned Arenal / Aurum agreements.
On
March 4, 2024, The Company and its Board of Directors approved a
On
March 7, 2024, The Company filed the Amended and Restated Articles of Incorporation with Florida Secretary of State reflecting the
On September 26, 2024, the Company and its Board of Directors approved the following; i) Agreement and Plan of Reorganization; ii) Change of Control Agreement; iii) Escrow Agreement, iv) Anti-Dilution Agreement; v) Cancellation of the October 6, 2022 Selkirk Global Holdings, LLC Note; vi) Cancellation of the April 6, 2023 Selkirk Global Holdings, LLC Note, vii) Cancellation of the December 12, 2023 Strickland Convertible Exchange Note; viii); and the Company authorized its Secretary to open a bank account in the name of the Company.
On
September 26, 2024, the Company and Jubilee Intel, LLC (“Jubilee”) entered into an Agreement and Plan of Reorganization (the
“Merger”) whereby the Company acquired
On
May 12, 2025, the Company, entered into a Membership Interest Assignment Agreement by and between the Company and Evan Bloomberg, its
former officer and director, whereby the Company assigned
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed interim consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States if America of (“US. GAAP”) as found in the Accounting Standards Codification (“ASC”), and the Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”) and are expressed in US Dollars. The unaudited condensed interim consolidated financial statements should be read in conjunction with the notes contained herein as part of the Company’s Quarterly Report in its Form 10-Q filing under the Securities Exchange Commission.
Use of Estimates
The preparation of consolidated financial statements in conformity with 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. Actual results could differ from these estimates and these differences could be material.
The most significant estimates made by management in the preparation of the financial statements relate to the estimates used to calculate the fair value of certain liabilities, the derivative liability, present value of note payable and note receivable, the valuation of investments and any impairment and the net book value of long-lived assets. Management bases its estimates on historical experience and on other various assumptions 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 that are not readily apparent from other sources. Actual results could differ materially from such estimates under different assumptions and conditions.
Management evaluates the collectability of notes receivable in accordance with the Current Expected Credit Loss (“CECL”) model under ASC 326. This approach requires the Company to estimate expected credit losses over the contractual life of the notes, considering historical loss experience, current conditions, and reasonable and supportable forecasts. The allowance for credit losses is adjusted through earnings and reflects management’s best estimate of losses expected to be incurred. When collection is no longer reasonably assured or the note is deemed uncollectible, it is written down to its estimated recoverable amount. These estimates involve significant judgment and are subject to change as conditions evolve.
Principles of Consolidation
The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Jubilee Intel, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.
Cash and Cash Equivalents
The
Company considers all highly liquid investments with an original maturity date of three months or less at the time of purchase to be
cash equivalents. The Company has cash of $
Reclassifications
Certain reclassifications have been made to prior periods to conform with current reporting. These reclassifications did not affect net income, total assets, liabilities or equity reported.
| 9 |
In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 allows companies to account for nonemployee awards in the same manner as employee awards. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those annual periods.
Related Party Transactions
Under ASC 850 “Related Party Transactions” an entity or person is considered to be a “related party” if it has control, significant influence or is a key member of management personnel or affiliate. A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related parties. The Company, in accordance with ASC 850 presents disclosures about related party transactions and outstanding balances with related parties.
Derivative Financial Instruments
The Company evaluates whether embedded conversion features in its financial instruments meet the criteria for separate accounting under ASC 815, “Derivatives and Hedging.” If the conversion feature is not clearly and closely related to the host debt instrument and does not meet the scope exception for equity classification, it is bifurcated and accounted for as a derivative liability. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivative financial instruments, the Company uses a weighted-average Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period.
Fair Value of Financial Instruments
The fair value is an exit price representing the amount that would be received to sell an asset or required to transfer a liability in an orderly transaction between market participants. As such, fair value of a financial instrument is a market-based measurement that should be determined based on the assumptions that market participants would use in pricing an asset or a liability.
A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value:
| ● | Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. | |
| ● | Level 2: Observable inputs that reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |
| ● | Level 3: Unobservable inputs reflecting our own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participants assumptions that are reasonably available. |
The Company’s financial instruments consist of equity investments, note receivables, derivative liabilities and notes payable. The Company’s note receivables were indirectly written down to zero due to potential non-collections. The Company’s derivative liabilities have a fair value of zero principally due to a decline in the stock price. These instruments are in level 3 of the fair value hierarchy.
When determining fair value, whenever possible, the Company uses observable market data, and relies on unobservable inputs only when observable market data is not available. As of March 31, 2025 and December 31, 2024, the Company did not have any level 1 or 2 financial instruments. On March 31, 2025 and December 31, 2024 the Company’s level 3 financial instruments were derivative liabilities for warrants issued and outstanding that were not indexed to the Company’s stock, notes payable and notes receivable valued at their present values and equity investments in other entities.
The following table presents the Company’s assets and liabilities that are measured at fair value on a non-recurring basis.
SCHEDULE OF ASSETS AND LIABILITIES ON A NON-RECURRING
| At March 31, 2025 | ||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant
Other Observable Inputs (Level 2) | Significant
Unobservable Inputs (Level 3) | ||||||||||
| Assets | ||||||||||||
| Note Receivable, Net | $ | |||||||||||
| Liabilities | ||||||||||||
| Convertible Note, related party | $ | |||||||||||
| Convertible Note, net | $ | |||||||||||
| Note Payable | $ | |||||||||||
| Derivative Liability | $ | |||||||||||
At December 31, 2024
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||
| Assets | ||||||||||||
| Note Receivable, Net | $ | |||||||||||
| Liabilities | ||||||||||||
| Convertible Note, related party | $ | |||||||||||
| Convertible Note, net | $ | |||||||||||
| Note Payable | $ | |||||||||||
| Derivative Liability | $ | |||||||||||
| 10 |
The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, “Earnings per Share” which requires presentation of both basic and diluted EPS on the face of the statement of operations. Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all diluted potential common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of warrants or stock or conversion of stock. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.
On
March 31, 2025 the Company had convertible debt outstanding, warrants exercisable to
Revenue Recognition
The Company follows ASC 606, Revenue from Contracts with Customers, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation. The company generates revenues primarily from search engine marketing.
In May 2025, the management of Jubilee Intel and of Hallmark Venture Group decided to cancel the merger agreement resulting in the transfer of Hallmark’s control of the entity (Note 17). Hallmark is evaluating various business opportunities to determine new lines of business to pursue. The continued operations of the Company have no revenue generation streams.
Jubilee,
a now discontinued operations, generates revenue in two ways. The first and more substantial consists of Jubilee launching
and managing Yahoo partner advertisements on its own behalf. The second is a SAAS model in which Jubilee allows third party
companies to use the platform to run Yahoo partner ads. The fee for this service is
Accounts Receivable
The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company’s historical losses and an overall assessment of past due trade accounts receivable outstanding.
Discontinued Operations
The Company accounts for discontinued operations in accordance with ASC 205-20, Presentation of Financial Statements – Discontinued Operations. The disposal of a component or group of components is classified as a discontinued operation if the disposal represents a strategic shift that has, or will have, a major effect on the Company’s operations and financial results. This includes the sale, abandonment, or other disposal of legal entities, business segments, or significant components.
Upon meeting the criteria for discontinued operations, the results of operations, including any gain or loss on disposal, are presented separately in the consolidated statements of operations for all periods presented. Assets and liabilities of discontinued operations are presented separately in the consolidated balance sheets. The results of operations of the discontinued component are still reported separately in the consolidated statement of operations.
Management evaluates and updates the classification of operations as discontinued when relevant events occur, such as the approval of a sale plan, abandonment, or completion of disposal.
Operating Segments
Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”), or decision maker group, in deciding how to allocate resources to an individual segment and in assessing performance. Our chief operating decision–making group is composed of the Chief Executive Officer. The Company’s only operating segment is now classed as a discontinued operations for comparative years presented (Note 17).
Reverse Stock Split
Subsequent
to the reporting period,
In accordance with Staff Accounting Bulletin (“SAB”) Topic 4C and relevant U.S. GAAP guidance, the reverse stock split has been retrospectively reflected in these condensed consolidated financial statements for all periods presented in the accompanying financial statements, including the balance sheets, statements of stockholders’ equity, including all share and per-share amounts (such as earnings per share and weighted-average shares outstanding).
No fractional shares were issued in connection with the Reverse Stock Split. Any fractional shares resulting from the split were rounded up to the next whole share, consistent with the Company’s corporate charter. This accounting policy ensures the comparability of share-related information across all periods presented.
The reverse stock split did not affect the total dollar amount of common stock or total stockholders’ equity.
| 11 |
Allowance for Credit Losses
The Company applies the CECL model under ASC 326 to estimate expected credit losses on financial assets, including trade receivables, notes receivable, and held-to-maturity debt securities. CECL requires consideration of historical loss experience, current conditions, and reasonable forecasts over the asset’s contractual life.
As of the reporting date, a material allowance for credit losses was recorded for an outstanding note receivable; however, management determined that the nature of the underlying balances did not require a CECL-based assessment. Instead, the allowance was estimated using alternative methods consistent with U.S. GAAP, based on the specific characteristics of the assets.
The allowance is reassessed at each reporting period, and changes are recognized in the income statement as credit loss expense.
Income taxes
The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
FASB Accounting Standards Codification Topic 740, Income Taxes (“ASC 740”), clarifies the accounting for uncertainty in income taxes recognized in the financial statements. ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. Income tax positions must meet a more-likely-than-not recognition threshold to be recognized. ASC 740 also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have determined that the Company does not have uncertain tax positions on its tax returns for the years 2023, and prior. Based on the evaluation of the 2024 transactions and events, the Company does not believe it has any material uncertain tax positions that require measurement.
The IRS requires all domestic corporations in existence for any part of the tax year to file an income tax return whether or not they have taxable income. The Company incurred a loss for the fiscal years ended December 31, 2024, and 2023 and has not filed tax returns for either year. The Company has not received any notifications from the IRS. Reported tax benefits and valuation allowances are the Company’s best estimate of its tax positions and have not been reviewed by the taxing authority.
Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. We had no accrual for interest or penalties on our consolidated balance sheets at March 31, 2025 or December 31, 2024, and have not recognized interest and/or penalties in the consolidated statement of operations for the period ended March 31, 2025 or year ended December 31, 2024.
The Company is subject to taxation in the United States and the State of Nevada. The Company’s federal and applicable state income tax returns for the past three years remain subject to examination by the respective tax authorities
Recently Issued Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis, primarily disclosure of significant segment expense categories and amounts for each reportable segment. The new standard is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 in the annual financial statements for the year ended December 31, 2024, and for interim periods beginning in 2025. The Company adopted this ASU, effective for the year ended December 31, 2024. The adoption had no impact on the Company’s financial statements.
In June 2023, the PCAOB adopted amendments to its confirmation standard, AS 2310 - The Auditor’s Use of Confirmation, which become effective for audits of fiscal years beginning on or after June 15, 2024. The updated standard enhances the auditor’s responsibilities when designing and performing confirmation procedures, especially for cash and other third-party balances. The standard emphasizes the presumption that auditors will confirm cash and receivables unless direct access to reliable third-party information is obtained. This standard is not expected to materially impact the Company’s financial statements but may impact the nature and extent of audit procedures applied to cash and note balances in future audits.
In October 2024, the PCAOB adopted a new framework under the AS 1000 series - 1000 Series – General Responsibilities of the Auditor, which consolidates and modernizes the foundational responsibilities of auditors. Key changes include enhancements to professional skepticism, documentation, and coordination of the audit engagement, particularly in relation to the use of technology-assisted audit tools. The standard is effective for audits of financial statements for fiscal years ending on or after December 15, 2024. The Company does not anticipate any material impact from this standard, but it may influence the documentation and review procedures used by the Company’s auditors.
Effective January 1, 2024, for smaller reporting companies, the Financial Accounting Standards Board issued ASU 2020-06 Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments by eliminating the requirement to separately account for beneficial conversion features. The ASU also amends guidance for derivative scope exceptions and improves disclosures for convertible instruments. The Company adopted ASU 2020-06 on January 1, 2024, using the modified retrospective approach. The adoption has no impact on company financial statements.
| 12 |
The Company periodically reviews new accounting standards that are issued. Although some of these accounting standards may apply to the Company, the Company has not identified any new standards that it believes merit further discussion or change to adopted policies, and the Company expects that none would have a significant impact on its financial statements.
NOTE 3 - GOING CONCERN
The Company’s financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates continuity of operations, the realization of assets, and liquidation of liabilities in the normal course of business.
As
of March 31, 2025, the Company had an accumulated deficit of $
These factors and uncertainties raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might incur in the event the Company cannot continue in existence. Management intends to seek additional capital from new equity securities offerings, debt financing and debt restructuring to provide funds needed to increase liquidity, fund internal growth and fully implement its business plan. However, management can give no assurance that these funds will be available in adequate amounts, or if available, on terms that would be satisfactory to the Company.
The timing and amount of the Company’s capital requirements will depend on a number of factors, including maintaining its status as a public company and supporting shareholder and investor relations.
NOTE 4 – ACCOUNTS RECEIVABLE
As
of March 31, 2025, the Company had accounts receivables of $
SCHEDULE OF ACCOUNTS RECEIVABLE
| Description | March 31, 2025 | December 31, 2024 | ||||||
| Accounts receivable beginning balance | $ | $ | ||||||
| Billings | ||||||||
| Collections | ||||||||
| Direct write offs | ||||||||
| Accounts Receivable ending balance | $ | $ | ||||||
| Allowance for doubtful accounts | ||||||||
| Accounts Receivable, net | $ | $ | ||||||
NOTE 5 – NOTE RECEIVABLE
On
May 2, 2024, the Company made a strategic loan to an independent privately-held non-affiliated third party by entering into a $
SCHEDULE OF NOTE RECEIVABLE
| Description | March 31, 2025 | December 31, 2024 | ||||||
| Notes receivable - current portion | $ | $ | ||||||
| Allowance for doubtful accounts | ( | ) | ||||||
| Notes receivable, net | $ | $ | ||||||
NOTE 6 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
As of March 31, 2025 and December 31, 2024, accounts payable and accrued liabilities consist of the following:
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
| Description | March 31, 2025 | December 31, 2024 | ||||||
| Legal fees | $ | $ | ||||||
| Credit card | ||||||||
| Total | $ | $ | ||||||
NOTE 7 – CONVERTIBLE NOTE PAYABLE – RELATED PARTY
On
December 5, 2023, the Company issued a Convertible Exchange Note to John Murphy, for $
NOTE 8 – CONVERTIBLE NOTES PAYABLE
Settlement Liability
On
September 17, 2020, the Company entered into a settlement agreement with Green Horseshoe, LLC., Inc. on its past due notes payable with
a principal balance of $
The
agreement calls for the Company’s transfer agent to issue free-trading common shares to Green Horseshoe, LLC. at a conversion rate
of
| 13 |
On
March 28, 2024, Green Horseshoe, LLC assigned the Settlement Agreement, Court Order, and balance of debt of $
On May 6, 2024, this liability was assigned to Nicosel, LLC, a non-affiliate of the Company, when the parties agreed to convert the balance into a convertible note payable.
Other Convertible Notes Payable
On
March 1, 2024, the Company issued a $
On
May 1, 2024, the Company issued a $
On
March 7, 2025, the Company issued a convertible promissory note to Nicosel, LLC for $
As
of March 31, 2025, the total amount due to Nicosel, LLC is $
As
of December 31, 2024, the total amount due to Nicosel, LLC is $
NOTE 9 – NOTES PAYABLE
On
October 9, 2024, the Company authorized the issuance of up to $
On
October 15, 2024, the Company issued a $
On
October 28, 2024, the Company issued a $
On
November 4, 2024, the Company issued a $
On
November 15, 2024 the Company issued a $
On
November 19, 2024 the Company issued a $
On
December 20, 2024 the Company issued a $
As of March 31, 2025 the total principal owed was $
| 14 |
NOTE 10 – DERIVATIVE LIABILITY
The Company has various convertible notes
outstanding that require derivative liability considerations for its conversion features. Total derivative liability on March 31, 2025
was $
SCHEDULE OF ACTIVITY OF DERIVATIVE LIABILITY
| Balance at December 31, 2023 | $ | |||
| Decrease to derivative due to repayments | ( | ) | ||
| Increase to derivative due to new issuances | ||||
| Derivative gain due to mark to market adjustment | ( | ) | ||
| Balance at December 31, 2024 | ||||
| Balance | ||||
| Decrease to derivative due to repayments | ||||
| Increase to derivative due to new issuances | ||||
| Derivative loss due to mark to market adjustment | ||||
| Balance at March 31, 2025 | $ | |||
| Balance | $ | |||
The following table summarizes the weighted average key inputs used in the Black-Scholes model for all outstanding conversion feature derivative liabilities as of the measurement dates:
SCHEDULE OF OUTSTANDING CONVERSION FEATURE DERIVATIVE LIABILITIES
| March 31, 2025 | December 31, 2024 | |||||||||||||||
| Input | Weighted Avg. | Range | Weighted Avg. | Range | ||||||||||||
| Stock price | $ | $ | $ | $ | ||||||||||||
| Exercise price (conversion price) | - | - | ||||||||||||||
| Risk-free interest rate | % | | % | % | ||||||||||||
| Expected term (years) | | | ||||||||||||||
| Expected volatility | % | % | ||||||||||||||
| Dividend yield | ||||||||||||||||
NOTE 11 – STOCK PAYABLE
The
Company’s related party settlement liability (Note 7) included the requirement to issue shares of the Company’s
common stock in order to cover litigation and legal expenses associated with the settlement agreement. The value of the shares at the
settlement date was $ resulting in a total value of $. The Company issued shares of common stock on November 5, 2020,
at a value of $
NOTE 12 – WARRANTS
On
May 1, 2024, the Company issued a Warrant Subscription Agreement is for
The assumptions used to determine the fair value of the Warrants as follows:
SCHEDULE OF ASSUMPTIONS TO FAIR VALUE OF THE WARRANTS
| Expected life (years) | ||||
| Risk-free interest rate | % | |||
| Expected volatility | % | |||
| Dividend yield | % |
On
October 9, 2024, the Company authorized the issuance of up to $
The assumptions used to determine the fair value of the Warrants as follows:
| Expected life (years) | ||||
| Risk-free interest rate | % | |||
| Expected volatility | % | |||
| Dividend yield | % |
| 15 |
| Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contract Term | Intrinsic Value | |||||||||||||
| Outstanding, December 31, 2023 | $ | — | $ | |||||||||||||
| Issued | $ | — | ||||||||||||||
| Expired | $ | — | — | |||||||||||||
| Exercised | $ | — | — | |||||||||||||
| Outstanding, December 31, 2024 | $ | $ | ||||||||||||||
| Issued | $ | — | — | |||||||||||||
| Expired | $ | — | — | |||||||||||||
| Exercised | $ | — | — | |||||||||||||
| Outstanding, March 31, 2025 | $ | $ | ||||||||||||||
NOTE 13 – PREFERRED STOCK
The
Company is authorized to issue shares of $ par value Series A preferred stock. The Company increased the number of authorized
shares of the Series A preferred stock from to on January 19, 2021. Each share of the Series A Preferred Stock is convertible
at the option of the holder into shares of common stock. The holder has
The Company has shares of Series A Preferred Stock issued and outstanding as of March 31, 2025 and December 31, 2024, respectively. At March 31, 2025, Evan Bloomberg was the holder of all of the outstanding shares of Series A Preferred Stock acquired from John D. Murphy, Jr. and Paul Strickland in conjunction with the Jubilee Intel, LLC transaction.
NOTE 14 – OTHER RELATED PARTY TRANSACTIONS
SCHEDULE OF RELATED PARTY TRANSACTIONS
| Name of Related Party | Related Relationship | |
| Evan Bloomberg | (1) | |
| John D. Murphy Jr. | ||
| Paul Strickland | ||
| Selkirk Global Holdings, LLC | ||
| Green Horseshoe, LLC | ||
| Bruce Bent | ||
| OC Sparkle Inc. | ||
| Nicosel, LLC |
| (1) |
Loans and Cash Advances
John
D. Murphy, Jr., has at times directly paid for various company expenses. The amount was unsecured, non-interest bearing, and due on
demand. On December 5, 2023, the Company issued a Convertible Exchange Note to John Murphy, for the amount due of $
| 16 |
Note 15 – Income Tax
For the quarter ended March 31, 2025 and fiscal year ending December 31, 2024, there was no provision for income taxes and deferred tax assets have been entirely offset by valuation allowances.
As
of March 31, 2025 and December 31, 2024, the Company had net operating loss carry forwards of approximately $
The tax computations are as follows:
Schedule of Tax Computations
| March 31, 2025 | December 31, 2024 | |||||||
| Net losses (gains) before taxes | $ | ( | ) | $ | ||||
| Adjustments to arrive at taxable income/loss | ||||||||
| Permanent differences: | ||||||||
| Temporary differences: | ||||||||
| Taxable income (loss) | ( | ) | ||||||
| Current Year Taxable (loss) income | ( | ) | ||||||
| NOL carried forward prior year (tax return) | ( | ) | ( | ) | ||||
| NOL carried forward at period end | $ | ( | ) | $ | ( | ) | ||
| Deferred Tax Asset - Federal Rate ( | ( | ) | ( | ) | ||||
| Deferred Tax Asset - State Rate | ||||||||
| Total Deferred Tax Asset | ( | ) | ( | ) | ||||
| Valuation Allowance | ||||||||
| Deferred tax per books | $ | $ | ||||||
NOTE 16 – DISCONTINUED OPERATIONS
Subsequent to March 31, 2025, Jubilee Intel, LLC is no longer a wholly-owned subsidiary of the Company (Note 17). The assets and liabilities associated with this business are displayed as assets and liabilities from discontinued operations as of March 31, 2025 and December 31, 2024. Additionally, the revenues and costs associated with this business are displayed as losses from discontinued operations.
Total assets and liabilities included in discontinued operations were as follows:
Jubilee
entered into a Line of Credit Agreement (“LOC”), with NMG Media, LLC (the “Lender”) on February 24, 2025,
effective from October 1, 2024 (“Effective Date”). Jubilee received a loan from the lender for $
SCHEDULE OF ASSETS AND LIABILITIES INCLUDED IN DISCONTINUED OPERATIONS
| March 31, 2025 | December 31, 2024 | |||||||
| Assets from Discontinued Operations: | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivable | ||||||||
| Total assets from discontinued operations | $ | $ | ||||||
| Liabilities from Discontinued Operations: | ||||||||
| Line of credit | $ | $ | ||||||
| Total liabilities from discontinued operations | $ | $ | ||||||
Net loss from discontinued operations for the three months ended March 31, 2025, was comprised of the following components:
SCHEDULE OF NET LOSS FROM DISCONTINUED OPERATIONS
| Discontinued operations - net income (loss) | March 31, 2025 | December 31, 2024 | ||||||
| Revenue | ||||||||
| Service revenue | $ | $ | ||||||
| Revenue total | $ | $ | ||||||
| Expenses: | ||||||||
| General and administrative - cost of revenue | $ | $ | ||||||
| General and administrative - other costs | ||||||||
| Bad debts | ||||||||
| Expenses total | ||||||||
| Net profit(loss) from discontinued operations | ( | ) | ||||||
| Discontinued operations - cash flows | ||||||||
| Net profit(loss) for the year from discontinued operations | $ | ( | ) | $ | ||||
| Net cash (used in) operating activities from discontinued operations | $ | ( | ) | $ | ||||
| 17 |
NOTE 17 — SUBSEQUENT EVENTS
In accordance with ASC 855-10, Subsequent Events, management evaluated subsequent events through the date the financial statements were issued. Management identified the following material subsequent events requiring disclosure in these unaudited financial statements.
The
Company filed the Amended and Restated Articles of Incorporation with Florida Secretary of State reflecting the
On May 2, 2025, the Company’s majority shareholder, Evan Bloomberg, acting pursuant to his
On May 2, 2025, after removing Mr. Strickland from the board of directors, Mr. Bloomberg, as sole director of the Company, held a board meeting and removed Mr. Strickland as Secretary of the Company.
On May 12, 2025, the Company entered into a Membership Interest Assignment Agreement with Mr. Evan Bloomberg. Pursuant
to the agreement, the Company transferred
On May 12, 2025, Mr. Bloomberg, in his capacity as controlling shareholder, held a shareholder meeting and nominated Mr. Paul Strickland to the board of directors.
On May 12, 2025, Mr. Bloomberg, in his capacity as sole director of the Company, held a board meeting and appointed Mr. Paul Strickland as President and Secretary of the Company.
On May 12, 2025, Mr. Bloomberg resigned from the board of the Company and all other positions he held in the Company.
On May 16, 2025, the Company issued shares of common stock to Beartooth Asset Holdings, Inc. (“Beartooth”), for services provided. Beartooth is an entity owned by Mr. Strickland.
Subsequent
to March 31, 2025, Nicosel, LLC loaned the Company an additional $
Subsequent
to March 31, 2025, GMF Ventures LLC loaned the Company $
Subsequent
to March 31, 2025, Phase I Operations, Inc, loaned the Company $
On
May 20, 2025, the Company issued shares of common stock to Nicosel, LLC, for retirement of the $
On June 2, 2025, GMF Ventures LLC, all amounts due into shares of common stock.
On
June 2, 2025, Nicosel, LLC converted $
| 18 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF OPERATIONS.
Forward-looking Statements
Unless the context indicates otherwise, as used in this Quarterly Report, the terms “HLLK,” “we,” “us,” “our,” “our company” and “our business” refer, to HALLMARK VENTURE GROUP, INC., including its subsidiaries named herein. Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements.” These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.
Recent Events
On May 12, 2025, the Company, entered into a Membership Interest Assignment Agreement by and between the Company and Evan Bloomberg, its former officer and director, whereby the Company assigned 100% of the Jubilee Intel, LLC membership interest units it held to Mr. Bloomberg in exchange for Mr. Bloomberg’s transferring all 100,000 Series A Preferred Shares of the Company he held to Selkirk Global Holdings, LLC, an entity controlled by Paul Strickland, sole director and officer of the Company. As a result of the assignment, Jubilee Intel, LLC is no longer a wholly-owned subsidiary of the Company. The Company is currently in the process of restructuring.
Results of Operations
Three Months Ended March 31, 2025, Compared to Three Months Ended March 31, 2024.
The Company generated no revenue during neither the three months ended March 31, 2025 (“Interim 2025”), nor the three months ended March 31, 2024 (“Interim 2024”).
During Interim 2025, the HLLK had total operating expenses (continued operations) of $58,010, which were comprised of $39,717 in general administrative expenses and $18,293 in professional fees, resulting in a loss from operations of $58,010.
During Interim 2024, HLLK had total operating expenses (continued operations) of $18,766, which were comprised entirely of in general administrative expenses, resulting in a loss from operations of $18,766.
During Interim 2025, the Company incurred total other expense of $243,957, which was comprised of $97,752 in interest expense, $105,326 in bad debt expense, $25,000 in amortization of debt discount and $15,879 in change in fair value of derivative, resulting in a net loss from continuing operations of $301,967. Also, during Interim 2025, the Company incurred a net loss from discontinued operations of $426,960, resulting in a net loss of $728,927.
During Interim 2024, the Company incurred total other income of $36,771, which was comprised of $6,864 in interest expense, $126,012 in amortization of debt discount, offset by change in fair value of derivative of $169,647, resulting in a net profit from continuing operations of $18,005. During Interim 2024, the Company incurred a net loss from discontinued operations of $-0-, resulting in a net profit of $18,005.
Cash Flows
For Interim 2025, net cash used in operating activities was $17,085, compared to net cash used in operating activities for Interim 2024 of $18,766.
No cash was used or provided by investing activities during Interim 2025 and Interim 2024.
For Interim 2025, net cash provided by financing activities was $50,000, which was comprised of $50,000 in proceeds from convertible note payable. For Interim 2024, net cash provided by financing activities was $18,766, which was comprised entirely of proceeds from convertible note payable.
Liquidity and Capital Resources
As of March 31, 2025, we had $36,544 in cash and a working capital deficit of $1,286,302, compared to $3,629 in cash and a working capital deficit of $593,505 at December 31, 2024.
| 19 |
Going Concern
We have only limited capital. Additional financing is necessary for us to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern”, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
Off Balance Sheet Arrangements
We have no 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.
Critical Accounting Policies
Refer to Note 2 to the accompanying Financial Statements for the three months ended March 31, 2025, for a condensed discussion of our critical accounting policies and to our Form 10-K for the year ended December 31, 2024, for a full discussion of our critical accounting policies and procedures.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Disclosure controls and procedures are controls and other procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Sole Officer (the “Certifying Officer”), or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of our management, including our Certifying Officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on the foregoing, our Certifying Officer concluded that our disclosure controls and procedures were not effective as of the end of the quarterly period ended March 31, 2025.
Changes in Internal Control over Financial Reporting. There was no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
| 20 |
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and, as such, are not required to provide the information under this Item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no issuances of securities not otherwise reported.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
(a) Documents furnished as exhibits hereto:
| Exhibit No. | Description | |
| 31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (*) | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in exhibit 101). |
| 21 |
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| HALLMARK VENTURE GROUP, INC. | ||
| Date: July 14, 2025 | By: | /s/ Paul Strickland |
Paul Strickland Chief Executive Officer | ||
| 22 |
Exhibit 31.1
CERTIFICATIONS
I, Paul Strickland, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2025, of Hallmark Venture Group, Inc. (the “registrant”); |
| 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; |
| 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; |
| 4. | The registrant’s other certifying officer and I are 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: |
| 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; | |
| 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; | |
| 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 | |
| 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. | The registrant’s other certifying officer and I have disclosed, based on our 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): |
| 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 information; and | |
| 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: July 14, 2025.
| /s/ Paul Strickland | ||
| By: | Paul Strickland | |
| Title: | Chief Executive Officer |
Exhibit 31.2
CERTIFICATIONS
I, Paul Strickland, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2025, of Hallmark Venture Group, Inc. (the “registrant”); |
| 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; |
| 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; |
| 4. | The registrant’s other certifying officer and I are 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: |
| 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; | |
| 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; | |
| 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 | |
| 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. | The registrant’s other certifying officer and I have disclosed, based on our 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): |
| 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 information; and | |
| 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: July 14, 2025.
| /s/ Paul Strickland | ||
| By: | Paul Strickland | |
| Title: | Chief Financial Officer |
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND
CHIEF FINANCIAL OFFICER
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 Hallmark Venture Group, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2025, filed with the Securities and Exchange Commission (the “Report”), I, Paul Strickland, Chief Executive Officer and Principal Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the consolidated financial condition of the Company as of the dates presented and the consolidated result of operations of the Company for the periods presented. |
| By: | /s/ Paul Strickland | |
| Name: | Paul Strickland | |
| Title: | Principal Executive Officer, Principal Accounting Officer and Principal Financial Officer | |
| Date: | July 14, 2025 |
This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.