T-REX Acquisition Corp 10-Q/A for FY2023 Q2
T-REX Acquisition Corp. (TRXA)
About this 10-Q/A
T-REX Acquisition Corp filed this 10-Q/A on February 17, 2023, covering the quarter ended December 31, 2022 (FY2023 Q2).
Headline figures
Quarter ended December 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $11.96K
- compared with $0 a year earlier
- Net loss
- $182.81K
- compared with a net loss of $840.81K a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the three months ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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) |
| (Zip Code) |
( |
(Registrant’s Telephone Number, Including Area Code) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 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).
As of February 17, 2023, there were
Securities registered under Section 12(g) of the Act:
Title of each class registered:
Common
Explanatory Note
This Amendment No. 1 to the Quarterly Report on Form 10-Q for T-REX Acquisition Corp. for the quarter ending December 31, 2022, and originally filed on February 14, 2023 (the “Original Filing”) is being filed solely to correct the inadvertent cover page indication by check mark that the registrant is a “shell company” (as defined by Rule 12b-2 of the Exchange Act). The registrant is no longer a shell company as of February 17, 2022.
Pursuant to Rule 12b-15 of the Exchange Act, as amended, this Form 10-Q/A contains new certifications pursuant to Section 302 of Sarbanes-Oxley Act of 2002, which are attached hereto. Because no financial statements are included with this Form 10-Q/A, paragraph 3 of the certifications in Exhibits 31.1 and 31.2 has been omitted.
This Amendment No. 1 does not update or amend any other items in the Original Filing in any way other than as described in the preceding paragraphs, and the Original Filing, as amended by this Amendment No. 1, continues to speak as of the date of the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing and the Company’s other filings with the Securities and Exchange Commission.
TREX ACQUISITION CORP. |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(A Nevada Corporation)
TABLE OF CONTENTS
|
|
| Page |
|
|
|
| ||
|
|
|
|
|
| 3 |
| ||
|
|
|
|
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
| 4 |
| |
|
|
|
|
|
| 5 |
| ||
|
|
|
|
|
| 5 |
| ||
|
|
|
|
|
|
|
| ||
|
|
|
|
|
| 7 |
| ||
|
|
|
|
|
| 7 |
| ||
|
|
|
|
|
| 7 |
| ||
|
|
|
|
|
| 7 |
| ||
|
|
|
|
|
| 7 |
| ||
|
|
|
|
|
| 7 |
| ||
|
|
|
|
|
| 8 |
| ||
2 |
| Table of Contents |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements.
TREX ACQUISITION CORP.
December 31, 2022
| F-1 |
| |
| F-2 |
| |
| F-3 |
| |
| F-4 |
| |
| F-5 |
|
| 3 |
| Table of Contents |
TREX ACQUISITION CORP.
CONSOLIDATED BALANCE SHEETS
ASSETS |
| December 31, 2022 (Unaudited) |
|
| June 30, 2022 |
| ||
CURRENT ASSETS |
|
|
|
|
|
| ||
Cash |
| $ |
|
| $ |
| ||
Prepaid Consulting |
|
|
|
|
|
| ||
TOTAL CURRENT ASSETS |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS |
|
|
|
|
|
|
|
|
Plant and Equipment |
|
|
|
|
|
| ||
Crypto Currency Held |
|
|
|
|
|
| ||
Prepaid Consulting |
|
|
|
|
|
| ||
Facility Deposit |
|
|
|
|
|
| ||
TOTAL NON-CURRENT ASSETS |
|
|
|
|
|
| ||
TOTAL ASSETS |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Accounts Payable and Accrued Expenses |
| $ |
|
| $ |
| ||
Due to Related Party |
|
|
|
|
|
| ||
TOTAL CURRENT LIABILITIES |
|
|
|
|
|
| ||
TOTAL LIABILITIES |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
Commitments and Contingencies |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
|
|
|
Common Stock, |
|
|
|
|
|
| ||
Additional Paid In Capital |
|
|
|
|
|
| ||
Shares to be issued |
|
|
|
|
|
| ||
Accumulated deficit |
|
| ( | ) |
|
| ( | ) |
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
|
|
| ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
| $ |
|
| $ |
| ||
The accompanying footnotes are an integral part of these consolidated financial statements.
| F-1 |
| Table of Contents |
TREX ACQUISITION CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
for the three and six months ended December 31,
(Unaudited)
|
| Three months ended |
|
| Six months ended |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
REVENUE |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Gross Profit |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transfer Agent and Filing Fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Professional Fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Management and Consulting Fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Share based compensation |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Administration Fees |
|
|
|
|
|
|
|
|
|
|
|
| ||||
TOTAL EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Operations |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on Crypto held |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Interest Expense |
|
|
|
|
|
|
|
|
|
|
|
| ||||
LOSS BEFORE TAXES |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Provision for Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
| ||||
NET LOSS |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS PER COMMON SHARE - BASIC & DILUTED |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC & DILUTED |
|
|
|
|
|
|
|
|
|
|
|
| ||||
The accompanying footnotes are an integral part of these consolidated financial statements.
| F-2 |
| Table of Contents |
TREX ACQUISITION CORP.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
as of December 31,2022
(Unaudited)
|
|
|
|
|
|
|
| Additional |
|
| Shares of Common Stock to be Issued |
|
|
|
|
|
|
| ||||||||||
|
| Common Stock |
|
| Paid in |
|
| Shares to |
|
|
|
|
| Accumulated |
|
|
|
| ||||||||||
|
| Shares |
|
| Amount |
|
| Capital |
|
| be issued |
|
| Amount |
|
| Deficit |
|
| TOTAL |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Balance June 30, 2021 |
|
|
|
|
|
|
| $ |
|
|
| - |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for related party debt conversion |
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Share based expense for warrants vested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Shares issued for subscriptions |
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Shares issued for services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Shares issued for debt conversion |
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
Net Loss |
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Balance June 30, 2022 |
|
|
|
| $ |
|
| $ |
|
| $ | - |
|
|
|
|
|
| $ | ( | ) |
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares issued for cash received |
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Share based expense for warrants vested |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
Adjustment for par value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
Net Loss |
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Balance September 30, 2022 |
|
|
|
|
|
|
| $ |
|
| $ | - |
|
|
|
|
|
| $ | ( | ) |
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares to be issued for cash received |
|
| - |
|
|
|
|
|
|
|
|
|
|
| $ |
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
Net Loss |
|
| - |
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
| ( | ) |
|
| ( | ) | ||
Balance December 31, 2022 |
|
|
|
|
|
|
| $ |
|
|
|
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||||
The accompanying footnotes are an integral part of these consolidated financial statements.
| F-3 |
| Table of Contents |
TREX ACQUISITION CORP.
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended December 31,
(Unaudited)
|
| 2022 |
|
| 2021 |
| ||
OPERATING ACTIVITIES |
| |||||||
Net Loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash used in operating activities |
|
|
|
|
|
|
|
|
Share based compensation |
|
|
|
|
|
| ||
Depreciation |
|
|
|
|
|
| ||
Changes in Assets and Liabilities |
|
|
|
|
|
|
|
|
Changes in Assets and Liabilities |
|
|
|
|
|
|
|
|
Changes in Crypto Currency Held |
|
|
|
|
|
| ||
Facility Deposit |
|
|
|
|
|
|
| |
Related Party Accruals |
|
|
|
|
|
| ||
Accounts Payable and Accrued Expenses |
|
|
|
|
|
| ||
Net Cash Used by Operating Activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of Equipment |
|
| ( | ) |
|
| ( | ) |
Purchase of Land |
|
|
|
|
|
| ||
Net cash used by investing activities |
|
| ( | ) |
|
| ( | ) |
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from subscriptions receivable |
|
|
|
|
|
| ||
Proceeds from common shares issued |
|
|
|
|
|
| ||
Proceeds from common shares to be issued |
|
|
|
|
|
|
| |
Net cash provided by financing activities |
|
|
|
|
|
| ||
NET INCREASE (DECREASE) IN CASH |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
CASH AT BEGINNING OF PERIOD |
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
CASH AT END OF PERIOD |
| $ |
|
| $ |
| ||
|
|
|
|
|
|
|
|
|
Supplemental Cashflow Information |
|
|
|
|
|
|
|
|
Interest Paid |
| $ |
|
| $ |
| ||
Taxes Paid |
| $ |
|
| $ |
| ||
Supplemental Disclosure of Non- Cash Investing and Financing Activities |
|
|
|
|
|
|
|
|
Share-based compensation - warrants vested |
| $ |
|
| $ |
| ||
Share-based compensation - shares vested |
| $ |
|
|
|
| ||
The accompanying footnotes are an integral part of these consolidated financial statements.
| F-4 |
| Table of Contents |
TREX ACQUISITION CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2022
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
T-REX Acquisition Corp. (The “Company”) was formed on January 16, 2008, in the state of Nevada under the name Plethora Resources, Inc. as a development stage enterprise. The Company was originally organized to engage in the business of consulting to oil and gas exploration companies interested in obtaining exploration and production licenses at auction for oil and gas properties in Russia. The Company later changed its name to Sync2 Networks Corp when the Company began to engage in software-related services. On March 20, 2014, the Company changed its name to TREX Acquisition Corp. after the Company business operations under the Sync2 Networks branding had ceased. On June 21, 2021, the Company decided to pivot from seeking an acquisition candidate to operating a cryptocurrency mining business. On February 17, 2022, the Company began mining bitcoin at Ace Hosting, a Tampa, Florida located data center. On August 5, 2022, the Company changed its name to “T-REX Acquisition Corp.”
As of December31, 2022, the Company is a holding company with the following subsidiaries: Raptor Mining LLC, a Florida limited liability company (“Raptor Mining”); and TRXA Merger Sub, Inc., an inactive Delaware corporation (“Merger Sub”). On July 1, 2022, we incorporated Megalodon Mining and Electric, LLC, a Florida limited liability company (“Megalodon”), which is also a dormant entity.
2020 TRXA Merger Sub Inc.
On March 13, 2020, the Company incorporated the Merger Sub in order to facilitate the acquisition of a pre-revenue Software-as-a-Service internet platform business. The Company’s sole Officer and Director currently serves as the sole officer and director of the Merger Sub. As of the date of this filing, neither the Company nor the Merger Sub have entered into a definitive agreement or non-binding letter of intent to acquire a company and Merger Sub is an inactive subsidiary of the Company.
2021 Raptor Mining LLC and 2022 Megalodon Mining and Electric LLC
On July 9, 2021, the Company formed Raptor Mining in order to pursue the Company’s new business operating strategy to engage in cryptocurrency mining, which is used to secure decentralized network protocols and decentralized distributed ledgers. On July 1, 2022, the Company formed Megalodon to investigate and potentially pursue a cryptocurrency co-location business model. The cryptocurrency co-location business model is based on a company, which has access to data centers and inexpensive cryptocurrency mining inputs, such as low-cost electricity supply, offering to host third-party owned cryptocurrency mining equipment in exchange for a fee, which may consist of a mix of cash and cryptocurrency consideration. As of the date of this quarterly filing, the Company has commenced researching the acquisition of land to begin offering co-location services to other cryptocurrency miner owners.
These unaudited interim consolidated financial statements should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s fiscal year end June 30, 2022, and June 30, 2021, respectively. The Company assumes that the users of the interim financial information herein have read, or have access to, the audited financial statements for the preceding period, and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The results of operations for the three and six months ended December 31, 2022, are not necessarily indicative of results for the entire year ending June 30, 2023.
| F-5 |
| Table of Contents |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Determination of Bad Debts
The Company’s policy is to analyze the collectability of Accounts and Notes Receivable on a monthly basis to determine whether any allowance for doubtful accounts is necessary. Once the allowance has been determined the offset is booked to bad debt expense and subsequently if the account is deemed to be a bad debt, it is written off the allowance for doubtful accounts.
Principles of Consolidation
As of December 31, 2022, the accounts include those of the Company and its
On March 13, 2020, the Company incorporated Merger Sub in order to facilitate the acquisition of a pre-revenue Software-as-a-Service internet platform business. The Company’s sole Officer and Director currently serves as the sole officer and director of the Merger Sub. As of the date of this filing, neither the Company nor the Merger Sub have entered into a definitive agreement or non-binding letter of intent to acquire a company. On July 9, 2021, the Company organized Raptor Mining, which currently generates revenues via its operating business. On July 1, 2022, the Company formed Megalodon to investigate and potentially pursue a cryptocurrency co-location business model. The cryptocurrency co-location business model is based on a company, which has access to data centers and inexpensive cryptocurrency mining inputs, such as low-cost electricity supply, offering to host third-party owned cryptocurrency mining equipment in exchange for a fee, which may consist of a mix of cash and cryptocurrency consideration. As of the date of this quarterly filing, the Company has commenced researching the acquisition of land to begin offering co-location services to other cryptocurrency miner owners.
Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include the estimated useful lives of property and equipment. Actual results could differ from those estimates.
Cash equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
| F-6 |
| Table of Contents |
Fair value of financial instruments
The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S.) GAAP and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below:
Level 1 | Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. |
| |
Level 2 | Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. |
| |
Level 3 | Pricing inputs that are generally unobservable inputs and not corroborated by market data. |
The carrying amount of the Company’s financial assets and liabilities, such as cash, and accrued expenses approximate their fair value because of the short maturity of those instruments. The Company’s notes payable approximate the fair value of such instruments based upon management’s best estimate of interest rates that would be available to the Company for similar financial arrangements as of December 31, 2022.
The assets and liabilities recorded on the balance sheet approximate their fair value.
Equipment
Equipment is recorded at cost. Expenditures for major additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred. Depreciation of equipment is computed by the straight-line method (after taking into account their respective estimated residual values) over the assets estimated useful life of three (
Stock based compensation
The Company accounts for stock-based compensation in accordance with ASC Section 718 Compensation – Stock Compensation. Under the fair value recognition provisions of ASC 718 stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expensed ratably over the requisite service period/vesting period.
The company accounts for its non-employee stock-based compensation in accordance with Update 2018-07—Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.
Commitments and contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Since September 30, 2022, and through the date of filing, there have been no intervening lawsuits, claims or judgments filed.
| F-7 |
| Table of Contents |
Revenue recognition
The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:
· | Step 1: Identify the contract with the customer |
|
|
· | Step 2: Identify the performance obligations in the contract |
|
|
· | Step 3: Determine the transaction price |
|
|
· | Step 4: Allocate the transaction price to the performance obligations in the contract |
|
|
· | Step 5: Recognize revenue when the Company satisfies a performance obligation |
The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both.
When determining the transaction price, an entity must consider the effects of all of the following:
· | Variable consideration |
|
|
· | Constraining estimates of variable consideration |
|
|
· | The existence of a significant financing component in the contract |
|
|
· | Noncash consideration |
|
|
· | Consideration payable to a customer |
Crypto asset transaction verification is the output generated from the Company’s ordinary activities. The consideration the Company receives is a bitcoin reward, which the Company measures rewards received from mining at their fair value on the date received. Rewards are earned when the Company successfully places a block (by being the first to solve an algorithm). As a result, the Company receives confirmation from the mining pool of the block being placed and a reward/s earned. The Company uses the quoted price of the bitcoin at closing on the date the coin is mined to value its reward/s. There is no significant financing component in these transactions.
Expenses associated with running the digital currency mining business, such as rent, and electricity cost are also recorded as cost of revenues. Depreciation on digital currency mining equipment is recorded as a component of cost of revenues.
Digital currencies - Bitcoin
Bitcoin is included as a non-current, intangible asset in the balance sheets. It is recorded at cost less impairment. If it is determined that more likely than not an impairment exists, a quantitative impairment test is not necessary. If the Company concludes otherwise, it is required to perform a quantitative impairment test. To the extent an impairment loss is recognized, the loss establishes the new cost basis of the asset. Subsequent reversal of impairment losses is not permitted. The Bitcoin’s cost is accounted for using FIFO cost basis. Rewards in bitcoin are earned for mining activity. The reward a bitcoin miner earns changes roughly every four years, or after every 210,000 blocks are mined and gets reduced by half each time; this whole process is called bitcoin halving. The last halving occurred on May 11, 2020, and reduced the reward per block to 6.25 BTC.
| F-8 |
| Table of Contents |
Income taxes
Federal Income taxes are not currently due since we have had losses since inception.
Income taxes are provided based upon the liability method of accounting pursuant to ASC 740-10-25 Income Taxes – Recognition. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard required by ASC 740-10-25-5.
Deferred income tax amounts reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting purposes.
As of December 31, 2022, we had a net operating loss carry-forward of approximately $(
|
| December 31, 2022 |
|
| June 30, 2022 |
| ||
Deferred Tax Asset |
| $ |
|
| $ |
| ||
Valuation Allowance |
|
| ( | ) |
|
| ( | ) |
Deferred Tax Asset (net) |
| $ |
|
| $ |
| ||
Due to the changes the Tax Reform Act of 1986 and the Tax Cut and Jobs Act of 2017, net operating loss carryforwards for Federal Income tax reporting purposes are subject to additional limitations. Should certain changes in ownership occur, our net operating loss carryforwards may be limited to use in future years. In addition, tax rates on corporations were reduced and certain other deductions limited. These changes may affect the income tax benefit calculation and related allowance during subsequent fiscal years.
Net income (loss) per common share
Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification. Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period. The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented.
There were outstanding warrants that could convert into
| F-9 |
| Table of Contents |
Cash flows reporting
The Company adopted paragraph 230-10-45-24 of the FASB Accounting Standards Codification for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by paragraph 230-10-45-25 of the FASB Accounting Standards Codification to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports the reporting currency equivalent of foreign currency cash flows, using the current exchange rate at the time of the cash flows and the effect of exchange rate changes on cash held in foreign currencies is reported as a separate item in the reconciliation of beginning and ending balances of cash and cash equivalents and separately provides information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to paragraph 830-230-45-1 of the FASB Accounting Standards Codification.
Advertising Costs
The Company expenses the cost of advertising and promotional materials when incurred. Total Advertising costs were zero for all periods.
Par value of common stock
The par value of common stock was previously reported at $
Subsequent events
The Company follows the guidance in Section 855-10-50 of the FASB Accounting Standards Codification for the disclosure of subsequent events. The Company will evaluate subsequent events through the date when the financial statements were issued. Pursuant to ASU 2010-09 of the FASB Accounting Standards Codification, the Company as an SEC filer, considers its financial statements issued when they are widely distributed to users, such as through filing them on EDGAR.
NOTE 3 – GOING CONCERN
As reflected in the accompanying financial statements, the Company incurred a net loss of $
While the Company is attempting to generate greater revenues, the Company’s cash position may not be significant enough to support the Company’s daily operations. Management intends to raise additional funds by way of a public or private offering. Management believes that the actions presently being taken to further implement its business plan and generate revenues provide the opportunity for the Company to continue as a going concern. While the Company believes in the viability of its strategy to generate revenues and in its ability to raise additional funds, there can be no assurances to that effect and there is substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to further implement its business plan and generate revenues.
The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
| F-10 |
| Table of Contents |
NOTE 4 – RELATED PARTY TRANSACTIONS
Office space
The Company leases office space from its Chief Executive Officer at a cost of $
Due to Related Parties
For the year ended June 30, 2022, the company issued
As of December 31, 2022, the company owed $
| F-11 |
| Table of Contents |
NOTE 5 – COMMON STOCK
On June 25, 2022, Frank Horkey received
As compensation for acting on the Company’s Board of Directors, on June 25, 2022, Michael Christiansen received
On June 25, 2022, Squadron Marketing LLC received
| F-12 |
| Table of Contents |
On June 25, 2022, Lazarus Asset Management LLC - received
Shares issued that were not vested for unrestricted use resulted in Prepaid consulting expense of $
On July 1, 2022, James Marshall III received
On July 1, 2022, John Bennet was issued
During the year ended June 30, 2022, the Company issued
During the quarter ending December 31, 2022, the Company has issued
Private Placement Transactions
The Securities Purchase Agreements
On July 22, 2022, we entered into a Securities Purchase Agreement with one private investor who is not a Selling Stockholder (defined above) to whom we sold $
Again, on November 28, 2022, the same private investor purchased another $
The Registration Rights Agreements
On November 10, 2021, in connection with the closing of the transactions contemplated by the Securities Purchase Agreement, we entered into Registration Rights Agreements with the selling stockholders who are parties to the Securities Purchase Agreement. With respect to the selling stockholders who are party to the Securities Purchase Agreement, we are obligated to file a registration statement registering the resale of (i) their Warrant Shares, (ii) any Shares issuable under the terms of the Securities Purchase Agreement, and (iii) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization, or similar event with respect to the foregoing.
| F-13 |
| Table of Contents |
Pursuant to the Registration Rights Agreements, we agreed to file the registration statement(s) no later than the earlier of (a) 180-days after an initial public offering by the Company or (b) twelve (12) months after effective date of the Registration Rights Agreement. Furthermore, we agreed to grant the parties to the Securities Purchase Agreement a “piggy-back” registration right upon at least 10-day notice prior to the Company’s filing of a registration statement (or confidential submission in draft form) with the SEC. As contemplated by the terms of the Registration Rights Agreements, the Company filed a registration statement on Form S-1, as amended, that became effective on September 8, 2022.
Company’s Registration Statement on Form S-1, as amended
On September 8, 2022, the Company’ registration statement on Form S-1, as amended, concerning the registration of
The Shares will be offered and sold by the selling stockholders at a fixed price of $
NOTE 6 – WARRANTS
On May 3, 2014, it was resolved that the Company shall offer
On May 14, 2014, the company entered into a subscription agreement for
On May 14, 2014, the company entered into a subscription agreement for
| F-14 |
| Table of Contents |
On July 14, 2014, the company entered into a subscription agreement for
As of the filing date of this quarterly report,
On May 5, 2022, the Company issued shares and warrants related to that certain Securities Purchase Agreement dated November 10, 2021 with certain of the selling stockholders referenced in our most recent registration statement pursuant to which we sold to such selling stockholders $
Warrants Issued to Management and Consultants
On July 1, 2021, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued a Class C warrant to purchase
On May 26, 2022, the Company issued to Frank Horkey Class C warrant to purchase
On May 26, 2022, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued Class D warrant to purchase
On June 25, 2022, Frank Horkey and Michael Christiansen were each issued
On June 25, 2022, Squadron Marketing LLC and Lazarus Asset Management LLC were each issued a class D warrant to purchase
Certain of the shares and warrants noted above were cumulative amounts due for prior service.
| F-15 |
| Table of Contents |
In addition, certain other of the shares and warrants noted above were issued to Board Members, Advisory Board Members and Consultants for services to be rendered for periods subsequent to June 30, 2022. The amounts related to shares and warrants are treated as prepaid consulting, both current and non-current, in these financial statements. These amounts will be recognized in subsequent periods as they are earned according to the Agreements.
The following is the outstanding warrant activity:
|
| Warrants - Common Share Equivalents |
|
| Weighted Average Exercise price |
|
| Warrants exercisable - Common Share Equivalents |
|
| Weighted Average Exercise price |
|
| Weighted average life in years |
| |||||
Outstanding June 30, 2020 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
| 3.67 |
| ||||
Additions | Granted |
| - |
|
|
|
|
|
| - |
|
|
|
|
|
|
|
| ||
Expired | Expired |
| - |
|
| $ | - |
|
|
| - |
|
|
| - |
|
|
|
|
|
Exercised |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
|
Outstanding June 30, 2021 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
| |||||
Additions | Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Expired | Expired |
| - |
|
| $ | - |
|
|
| - |
|
|
| - |
|
|
|
|
|
Exercised |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
| |
Outstanding June 30, 2022 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
| |||||
Additions | Granted |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||
Expired | Expired |
| - |
|
| $ | - |
|
|
| - |
|
|
| - |
|
|
|
|
|
Exercised |
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
| |
Outstanding December 31, 2022 |
|
|
|
| $ |
|
|
|
|
| $ |
|
|
|
| |||||
As of September 30, 2022, all of the warrants were exercisable. The Securities and Exchange Commission had declared the Company’s most recent registration statement, as amended, effective on September 8, 2022.
NOTE 7. DIGITAL CURRENCY - BITCOIN
The Company carries digital currencies at cost using the first in first out method. Bitcoin activity and balances were as follows:
|
| Six Months Ended December 31, 2022 |
|
| Year Ended June 30, 2022 |
| ||
Beginning balance |
| $ |
|
| $ |
| ||
Increase |
|
|
|
|
|
|
|
|
Revenue recognized from bitcoin mined |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Decrease |
|
|
|
|
|
|
|
|
Bitcoin used for operational expenses |
|
|
|
|
|
| ||
|
|
|
|
|
|
| ||
Ending balance |
| $ |
|
| $ |
| ||
NOTE 8 – SUBSEQUENT EVENTS
The Company has evaluated all events that occurred after the balance sheet date through the date when the financial statements were issued to determine if they must be reported. The Management of the Company determined that there are no subsequent events required disclosure.
| F-16 |
| Table of Contents |
Item 2. Management’s Discussion and Analysis of Financial Condition or Plan of Operation.
FORWARD-LOOKING STATEMENTS
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements. You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms. These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements. Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
In December 2019, a novel strain of coronavirus (COVID-19) was reported in Wuhan, China and has spread throughout the United States and the rest of the world. The World Health Organization has declared the outbreak to constitute a “Public Health Emergency of International Concern.” This contagious disease outbreak, which has not been contained, and is disrupting supply chains and affecting production and sales across a range of industries in United States and other companies as a result of quarantines, facility closures, and travel and logistics restrictions in connection with the outbreak, as well as the worldwide adverse effect to workforces, economies, and financial markets, leading to a global economic downturn. Therefore, the Company expects this matter to negatively impact its operating results. However, the related financial impact and duration cannot be reasonably estimated at this time.
RESULTS OF OPERATION
Our revenue for the three months ended December 31, 2022, was $11,958 compared to $0 for the same period in 2021.
Our revenue for the six months ended December 31, 2022, was $37,387 compared to $0 for the same period in 2021.
Our net loss for the three months ended December 31, 2022, was ($182,813) compared to a net loss of ($840,805) for the same period in 2021.
Our net loss for the six months ended December 31, 2022, was ($1,006,762 compared to a net loss of ($913,862) for the same period in 2021.
During the three months ended December 31, 2022, we incurred operating expenses of $154,620 compared to $840,815 for the same period in 2021. The decrease in expenses was mainly due to shares issued for services in 2021.
During the six months ended December 31, 2022, we incurred operating expenses of $961,863 compared to $913,862 for the same period in 2021. The increase was mainly due to the increase in management fees in 2022.
During the quarter ended December 31, 2022, we incurred interest expense of $0 compared to $0 incurred during the quarter ended December 31, 2021.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2022, our current assets were $101,412 and our current liabilities were $274,453 which resulted in a working capital deficit of $173,041.
As of December 31, 2022, and 2021, our total liabilities were comprised entirely of current liabilities.
Cash Flows from Operating Activities
For the six months ended December 31, 2022, net cash flows used in operating activities was $183,054 compared to $3,115 for the same period in 2021.
Cash Flows from Investing Activities
For the six months ended December 31, 2022, net cash flows used in investing activities were $91,744 compared to $356,400 for the same period in 2021.
Cash Flows from Financing Activities
For the six months ended December 31, 2022, net cash flows from financing activities were $300,000 compared to $360,875 for the same period in 2021.
PLAN OF OPERATION AND FUNDING
We expect that working capital requirements will continue to be funded through a combination of our proceeds from the sales of stock and generation of revenues from acquisitions. Our working capital requirements are expected to increase in line with the growth of our business.
Our principal demands for liquidity are to increase business operations and for general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures related to future business operations, and the expansion of our business, through cash flow provided by funds raised through proceeds from the issuance of debt or equity.
| 4 |
| Table of Contents |
MATERIAL COMMITMENTS
Convertible Debenture
None.
PURCHASE OF SIGNIFICANT EQUIPMENT
During the next twelve months, the Company intends to acquire between fifty (50) and one hundred and fifty (150) ASIC miners per quarter. Although pricing for ASIC miners is generally directly related to the price of bitcoin, ASIC miners as of this Annual Report cost between $2,500 and $6,000 per ASIC miner.
CRITICAL ACCOUNTING POLICIES
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
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
The independent auditors’ report accompanying our June 30, 2022, and June 30, 2021, financial statements contain an explanatory paragraph expressing substantial doubt about our ability 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. We have suffered recurring losses from operations and have a working capital deficit. These factors raise substantial doubt about our ability to continue as a going concern.
RECENTLY ISSUED ACCOUNTING STANDARDS
Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.
We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in the notes to our financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosure about Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
Item 4. Controls and Procedures.
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the periods covered by this report, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective.
| 5 |
| Table of Contents |
MANAGEMENT’S QUARTERLY REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our Chief Executive Officer/Chief Financial Officer is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, our principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, 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 and includes those policies and procedures that:
· | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
· | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and |
· | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
Because of its inherent limitations, our internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Chief Executive Officer/Chief Financial Officer assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, management used the criteria set forth by the 1992 Committee of Sponsoring Organizations of the Treadway Commission (“2013 COSO”) in Internal Control — Integrated Framework.
Based on our assessment, our Chief Executive Officer/Chief Financial Officer believes that, as of December 31, 2022, our internal control over financial reporting is not effective based on those criteria, due to the following:
· | Deficiencies in Segregation of Duties. Lack of proper segregation of functions, duties, and responsibilities with respect to our cash and control over the disbursements related thereto due to our very limited staff, including our accounting personnel. Deficiencies in the staffing of our financial accounting department. The number of qualified accounting personnel with experience in public company SEC reporting and GAAP is limited. This weakness does not enable us to maintain adequate controls over our financial accounting and reporting processes regarding the accounting for non-routine and non-systematic transactions. There is a risk that a material misstatement of the financial statements could be caused, or at least not be detected in a timely manner, by this shortage of qualified resources. |
In light of this conclusion and as part of the preparation of this report, we have applied compensating procedures and processes as necessary to ensure the reliability of our financial reporting. Accordingly, management believes, based on its knowledge, that (1) this report does not contain any untrue statement of a material fact or omit to state a material face necessary to make the statements made not misleading with respect to the periods covered by this report, and (2) the financial statements, and other financial information included in this report, fairly present in all material respects our financial condition, results of operations and cash flows for the years and periods then ended.
This report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to the rules of the SEC that permit us to provide only management’s report in this report.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
There were no significant changes in our internal control over financial reporting during the three months ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| 6 |
| Table of Contents |
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is presently not involved in any legal proceedings which in the opinion of management are likely to have a material adverse effect on the Company’s consolidated financial position or results of operations.
Item 1A. Risk Factors.
There have been no material changes in the Company’s risk factors from those previously disclosed in our Annual Report on Form 10-K for the year ended June 30, 2022.
Item 2. Unregistered Sales of Equity Securities.
On July 22, 2022, we entered into a Securities Purchase Agreement with one private investor who is not a Selling Stockholder (defined above) to whom we sold $100,000 in aggregate principal amount for 133,333 shares of our common stock and warrants to purchase 133,333 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on December 31, 2025. On August 8, 2022, the same private investor purchased another $100,000 in aggregate principal amount for an additional 133,333 shares of our common stock and warrants to purchase 133,333 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on December 31, 2025. Again, on November 28, 2022, the same private investor purchased another $100,000 in aggregate principal amount for an additional 133,333 shares of our common stock and warrants to purchase 133,333 shares of our common stock, with an exercise price of $1.50 per share and exercisable at any time before the close of business on December 31, 2025. We closed the transactions noted above in reliance on Securities Purchase Agreement dated November 10, 202 noted below1. We issued the securities contemplated under the Securities Purchase Agreement in reliance upon the exemption from registration pursuant to Section 4(a)(2) of the Securities Act.
Item 3. Defaults upon Senior Securities.
None
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
None.
| 7 |
| Table of Contents |
Item 6. Exhibits.
The exhibit listed on the Exhibit Index (following the signatures section of this quarterly report dated December 31, 2022, on Form 10-Q are included, or incorporated by reference, in these three months ended December 31, 2021, Report on Form 10-Q.
Exhibit No. |
| Description |
| ||
| ||
| ||
| ||
| ||
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 Schema** |
101.CAL |
| Inline XBRL Taxonomy Calculation Linkbase** |
101.DEF |
| Inline XBRL Taxonomy Definition Linkbase** |
101.LAB |
| Inline XBRL Taxonomy Label Linkbase** |
101.PRE |
| Inline XBRL Taxonomy Presentation Linkbase** |
104 |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)** |
_____________
* Filed herewith.
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
| 8 |
| Table of Contents |
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.
| TREX Acquisition Corp. a Nevada corporation | ||
| |||
February 17, 2023 | By: | /s/ Frank Horkey | |
| Frank Horkey | ||
| Its: | President | |
In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
February 17, 2023 | By: | /s/ Frank Horkey | |
| Frank Horkey | ||
| Its: | President |
| 9 |
EXHIBIT 31.1
I, Frank Horkey, certify that.
| 1. | I have reviewed this quarterly report on Form 10-Q of TREX Acquisition Corp; |
| 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. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) 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 registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of a quarterly report) that has materially affected, or is reasonably likely to 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 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: February 17, 2023 | By: | /s/ Frank Horkey | |
|
| Name: | Frank Horkey | |
|
| Title: | President |
EXHIBIT 32.1
CERTIFICATIONS PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
(18 U.S.C. SECTION 1350)
In connection with the Quarterly report of TREX Acquisition Corp, a Nevada corporation (the “Company”), on Form 10-Q for the three months ended December 31, 2022, as filed with the Securities and Exchange Commission (the “Report”), Frank Horkey, President and Chief Executive Officer of the Company does hereby certify, pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350), that to his knowledge:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| Date: February 17, 2023 | By: | /s/ Frank Horkey | |
|
| Name: | Frank Horkey | |
|
| Title: | President |