WBSR 10-K
Webstar Technology Group Inc. (WBSR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the fiscal year ended
or
For the transition period from ___________ to ___________
(Name of Registrant As Specified In Its Charter)
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(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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| (Address of principal executive offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| None | N/A | N/A |
Securities registered pursuant to Section 12(g) of the Exchange Act:
None
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required
to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant: (1)
has filed all reports required to be filed by Section 13 or 15(d) of the 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted
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 and post such files). Yes ☐
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.
If securities are registered pursuant to Section 12(b)
of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of
an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that require a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D(b). ☐
Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
Indicate by check mark whether the registrant has
filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting
under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report.
The aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which the common equity was last sold as of the last business
day of the registrant’s most recently completed second fiscal quarter was $
As of April 30, 2025, , there were shares of common stock, par value $ per share and 1,000 shares of Series A Preferred Stock, $0.0001 par value per share of the registrant outstanding.
TABLE OF CONTENTS
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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This Annual Report on Form 10-K contains “forward-looking statements”. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “anticipate,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.
We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Annual Report on Form 10-K and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the Annual Report on Form 10-K. All subsequent written and oral forward-looking statements concerning other matters addressed in this Annual Report on Form 10-K and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Annual Report on Form 10-K.
Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.
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PART I
ITEM 1. BUSINESS.
The Company
Webstar Technology Group, Inc. (the “Company”) was incorporated in Wyoming on March 10, 2015. The Company was originally established for the operation of certain licensed and purchased software solutions. Since inception, the Company signed two license agreements with a related party to license proprietary software technology solutions, i.e., Gigabyte Slayer and WARP-G.
During the year ended December 31, 2024, the Company entered into several material definitive agreements as summarized below:
| 1) | On June 14, 2024 (“Closing”), Mr. Ricardo Haynes, Mr. Eric Collins, Mr. Lance Lehr, Ms. Tori White and Mr. Donald Keer, each as an individual (the “Purchasers”) personally acquired 100% of the issued and outstanding shares of the Series A Preferred Stock (the “Preferred Stock”) of the Company from the Frank T. Perone Irrevocable Trust (“Trust”), a Florida trust (the “Seller”), a Trust controlled by Mr. James Owens the Company’s former CEO, founder and majority stockholder. The Purchasers have agreed to purchase the Preferred Stock for $500,000 due as follows: $50,000 at the execution of the letter of intent, $125,000 at the Closing, and the remaining $325,000 ninety days after the Closing. The Preferred Stock will remain held in escrow until the final payment is remitted to the Seller. Further, the Seller retains the voting rights of the Preferred Stock while in escrow. Therefore, Mr. James Owens is referred to as the controlling stockholder in this filing as the Preferred Stock remains in escrow as of the date of this filing. As of the date of this filing, the remaining $325,000 had not been remitted to Mr. Owens by the Purchasers. |
| 2) | On June 21, 2024, the Company entered into a material definitive agreement with Electrical and Compression Optimization, Inc. (“ECO”), a Wyoming corporation owned and controlled by James Owens, for the acquisition of contracts, with a net book value of zero, from the Company. In exchange for the acquisition of the contracts, ECO issued 201,057,278 common shares directly to the stockholders of record of the Company at the close of business June 21, 2024 on a one-to-one basis. |
| 3) | One June 21, 2024, the Company entered into a material definitive agreement with Webnet Technologies Incorporated (“Webnet”), a Wyoming corporation owned and controlled by James Owens, for the acquisition of licenses for the use, development and commercialization of Gigabyte Slayer and WARP-G software. As consideration for the licenses, Webnet assumed liabilities of the Company, specifically related to accrued salaries and related expenses of $3,317,472 and a cash payment of $22,869 which was applied to Webstar’s accounts payable at the time of the same amount. Due to the related party nature of the transaction, the assumption of the liabilities has been recorded as an increase to additional paid in capital of $3,340,341. |
| 4) | On June 24, 2024, the Company agreed to acquire the assets and intellectual property associated with the Bear Village, Inc. family resort developments from Thunder Energies Corporation, an entity owned and controlled by the Purchasers of the Company’s Preferred Stock. An asset sale agreement was executed on July 15, 2024 between the Company and the selling entity. Pursuant to the agreement, the Company agreed to issue the selling entity 201,057,278 shares of common as consideration for the assets acquired related to Bear Village, Inc. These shares were issued to the sellers on October 1, 2024 (see Note 3). |
As a result of the sale of the Preferred Stock, discussed above, the existing officers and directors of the Company, Mr. James Owens, Mr. Michael Hendrickson, Mr. Sanford Simon, and Mr. Don Roberts, were removed and replaced by the below as of June 14, 2024.
Under the terms of the Preferred Stock purchase agreement, the Purchases were permitted to elect representatives to serve on the Board of Directors to fill the seat(s) vacated by prior directors and as new officers as follows:
Chairman/Chief Executive Officer - Mr. Ricardo Haynes
Independent Director – Ms. Marilyn Karpoff
Independent Director – Mr. Gordon Clinkscale
President – Mr. Eric Collins
Interim Chief Financial Officer (CFO) – Ms. Adrienne Anderson
Secretary – Mr. Donald R. Keer
Chief Operating Officer – Mr. Lance Lehr
Ms. Anderson submitted her resignation as interim CFO on February 19, 2025 but continues to provide financial reporting related services to the Company on a consulting basis.
Our principal office is located at 1100 Peachtree St NE, Suite 200, Atlanta, GA 30309. Our corporate website address is www.webstartechnologygroup.com. Information contained on, or accessible through, our website is not a part of, and is not incorporated by reference into, this report.
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Our Products, Services and Plan of Operation
Since execution of the above material definitive agreements, the Company is currently an early-stage specialty real estate development company devoted to the identification, partnership and development of specialty real estate projects in the United States with a focus on multitenant buildings that can be upgraded to green/energy efficient status and entertainment and resort real estate development.
The Company will operate under the brand name “Webstar Technology Group” with the consideration given to future name changes due to a diversification of operations outside of the former business.
Summary Risk Factors
Webstar Technology Group is a start-up. The company was acquired by the new management team in June 25, 2024 and is still in an early stage of development. The company is not close to profitability as projects take approximately 18 months to develop and construct and may not provide a return on investment for approximately 24 months thereafter. Investing in the company involves a high degree of risk (see “Risk Factors”). As an investor, you should be able to bear a complete loss of your investment. Some of the more significant risks include those set forth below:
| ● | This is a very young company. |
| ● | The company’s affiliated entities have no prior performance record. |
| ● | The company has minimal operating capital and no revenue from operations. |
| ● | The success of Webstar Technology Group business is dependent on purchasing large parcels of land at favorable prices. |
| ● | The company may need to raise more capital and future fundraising rounds could result in dilution. |
| ● | Success in the hospitality and entertainment industry is highly unpredictable, and there is no guarantee the company’s content will be successful in the market. |
| ● | The COVID-19 pandemic could have material negative effects on Webstar Technology Groups’ planned operations, including facilities where large groups of people gather in close proximity. |
| ● | Webstar Technology Group operates in a highly competitive market. |
| ● | Competition in the “alternative venues for recreational pursuits” industry could have a material adverse effect on the company’s business and results of operations. |
| ● | Customer complaints or litigation on behalf of our customers or employees may adversely affect our business, results of operations or financial condition. |
| ● | The company’s insurance coverage may not be adequate to cover all possible losses that it could suffer and its insurance costs may increase. |
| ● | The company may not be able to operate its facilities or obtain and maintain licenses and permits necessary for such operation, in compliance with laws, regulations and other requirements, which could adversely affect its business, results of operations or financial condition. |
| ● | The company has concentrated its investments in family entertainment, real estate and facilities, which are subject to numerous risks, including the risk that the values of their investments may decline if there is a prolonged downturn in real estate values. | |
| ● | The company works with national hospitality, hotel and local service providers to create an experience for families. Business risks associated with these providers can affect the company’s operations. |
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| ● | The illiquidity of real estate may make it difficult for the company to dispose of one or more of our properties or negatively affect its ability to profitably sell such properties and access liquidity. |
| ● | The company’s development and growth strategy depend on its ability to fund, develop and open new entertainment venues and operate them profitably. |
| ● | The company’s development and construction of the Georgia and future Tennessee facilities depend on their ability to obtain favorable mortgage financing. | |
| ● | Webstar Technology Group depends on a small management team and may need to hire more people to be successful. |
| ● | The company will require a general manager, who has not yet been hired. |
| ● | Webstar Technology Group may not be able to protect all of its intellectual property. |
| ● | Webstar Technology Group has not yet entered into any master licensing agreements with third party suppliers of technology and Webstar Technology Group has not yet been made a sublicense to the relevant master licensing agreements. |
| ● | The Offering price has been arbitrarily set by the company. |
| ● | The officers of Webstar Technology Group control the company and the company does not currently have any independent directors. |
| ● | Investors in this offering may not be entitled to a jury trial with respect to claims arising under the subscription agreement and claims where the forum selection provision is applicable, which could result in less favourable outcomes to the plaintiff(s) in any such action. |
| ● | There is little to no current market for Webstar Technology Groups’ shares. |
| ● | The interests of Webstar Technology Group and the company’s other affiliates may conflict with your interests. |
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RISK FACTORS
The SEC requires the company to identify risks that are specific to its business and its financial condition. The company is still subject to all the same risks that all companies in its business, and all companies in the economy, are exposed to. These include risks relating to economic downturns, political and economic events and technological developments (such as hacking and the ability to prevent hacking). Additionally, early-stage companies are inherently riskier than more developed companies. You should consider general risks as well as specific risks when deciding whether to invest.
Risks relating to our business
This is a very young company.
The control of the company was changed on June 25, 2024. It is a startup company that has not yet started operations, and has not started to build its facilities. There is no history upon which an evaluation of its past performance and future prospects in the hospitality and entertainment industry can be made. Statistically, most startup companies fail.
The company’s affiliated entities have no prior performance record.
Webstar Technology Group has new management in the market, the affiliates of Webstar Technology Group, such as Bear Village Asset Holdings – GA, LLC, (which will provide management services to Webstar Technology Group) do not have a track record of involvement in hospitality and entertainment that investors may assess. Even if an affiliate of Webstar Technology Group did have such prior experience, that experience would not be indicative of its future performance.
The company has minimal operating capital, no significant assets and no revenue from operations.
The company currently has minimal operating capital and for the foreseeable future will be dependent upon its ability to finance its planned operations from the sale of securities or other financing alternatives. There can be no assurance that it will be able to successfully raise operating capital in this or other offerings of securities, or to raise enough funds to fully construct operational entertainment centers. The failure to successfully raise operating capital could result in its inability to execute its business plan and potentially lead to bankruptcy, which would have a material adverse effect on the company and its investors.
The success of Webstar Technology Group business is dependent on purchasing large parcels of land at favorable prices.
Webstar Technology Group is a capital-intensive operation and requires the purchase of large parcels of land prior to construction. As of the date of this Offering Circular the company has a deposit on its Georgia property for the first of two facilities to be developed. The company does not know whether it will be able to obtain additional properties at acceptable purchase terms that are favorable. Finally, if this Offering does not raise enough capital to purchase the land and begin construction, the company will need to procure external financing for the purchase of the land and/or construction of the facility.
The company may raise more capital and future fundraising rounds could result in dilution.
Webstar Technology Group may need to raise additional funds to finance its operations or fund its business plan. Even if the company manages to raise subsequent financing or borrowing rounds, the terms of those borrowing rounds might be more favorable to new investors or creditors than to existing investors such as you. New equity investors or lenders could have greater rights to our financial resources (such as liens over our assets) compared to existing shareholders. Additional financings could also dilute your ownership stake, potentially drastically. See “Dilution” and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations– Plan of Operation” for more information.
Success in the hospitality and entertainment industry is highly unpredictable and there is no guarantee the company’s content will be successful in the market.
The company’s success will depend on the popularity of its hospitality and entertainment facilities. Consumer tastes, trends and preferences frequently change and are notoriously difficult to predict. If the company fails to anticipate future consumer preferences in the hospitality and entertainment business, its business and financial performance will likely suffer. The hospitality and entertainment industries are fiercely competitive. The company may not be able to develop facilities that will become profitable. The company may also invest in facilities that end up losing money. Even if one of its facilities is successful, the company may lose money in others.
Changes in consumer financial condition, leisure tastes and preferences, particularly those affecting the popularity of family resorts, and other social and demographic trends could adversely affect its business. Significant periods of restricted travel or group gatherings, such as Covid-19 or similar circumstances, could result in situations where facilities usage is below historical levels would have a material adverse effect on its business, results of operations and financial condition. If the company cannot attract patrons, retain its existing resident, its financial condition and results of operations could be harmed.
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The pandemics could have material negative effects on Webstar Technology Groups’ planned operations, including facilities where large groups of people gather in close proximity.
The impact of COVID-19 on companies is well documented. Vaccines have been administered by the states. Webstar Technology Group operates facilities which include restaurants, gathering points and opportunities for large groups of people can gather in close proximity. In the event of another pandemic the Federal Government and local states may institute restrictions which could affect the Company’s operations.
Webstar Technology Group Resorts will implement strict cleaning and sanitizing procedures across each resort. The vaccine distribution program currently ranges from 50% to 80% based on the state. Future variations or mutations of COVID-19 or other pandemic diseases could cause new social restrictions which could affect Webstar Technology Groups’ operations.
Webstar Technology Group operates in a highly competitive market.
Webstar Technology Group plans to operate in a highly competitive market and faces intense competition. Competitors will include Disney, Six Flags, Dollywood, Great Wolf Lodge and other multi-activity resorts. Many of the company’s current and potential competitors have greater resources, longer histories, more customers, and greater brand recognition. Competitors may secure better terms from vendors, adopt more aggressive pricing and devote more resources to technology, infrastructure, fulfilment, and marketing.
Further, Webstar Technology Groups’ properties will compete on a local and regional level with restaurants and other business, dining and social clubs. The number and variety of competitors in this business will vary based on the location and setting of each facility. Some facilities may be situated in intensely competitive areas characterized by numerous resorts and family attractions. In addition, in most regions, the competitive landscape is in constant flux as new resorts and other family venues open or expand their amenities. As a result of these characteristics, the supply in a given region may exceed the demand for such facilities, and any increase in the number or quality of resorts and family venues, or the products and services they provide, in such region could significantly impact the ability of the company’s properties to attract and retain members, which could harm their business and results of operations.
Competition in the “alternative venues for recreational pursuits” industry could have a material adverse effect on the company’s business and results of operations.
Webstar Technology Group properties compete on a local and regional level with alternative venues for recreational pursuits. The company’s results of operations could be affected by the availability of, and demand for, alternative venues for recreational pursuits, such as multi-use facilities and other town center venues.
Customer complaints or litigation on behalf of our customers or employees may adversely affect our business, results of operations or financial condition.
The company’s business may be adversely affected by legal or governmental proceedings brought by or on behalf of their residents, customers or employees. Regardless of whether any claims against the company are valid or whether they are liable, claims may be expensive to defend and may divert time and money away from operations and hurt our financial performance. A judgment significantly in excess of their insurance coverage or not covered by insurance could have a material adverse effect on the company’s business, results of operations or financial condition. Also, adverse publicity resulting from these allegations may materially affect the company.
The company’s insurance coverage may not be adequate to cover all possible losses that it could suffer and its insurance costs may increase.
The company has not yet acquired insurance. It may not be able to acquire insurance policies that cover all types of losses and liabilities. Additionally, once the company acquires insurance, there can be no assurance that its insurance will be sufficient to cover the full extent of all of its losses or liabilities for which it is insured. Further, insurance policies expire annually and the company cannot guarantee that it will be able to renew insurance policies on favorable terms, or at all. In addition, if it, or other leisure facilities, sustain significant losses or make significant insurance claims, then its ability to obtain future insurance coverage at commercially reasonable rates could be materially adversely affected. If the company’s insurance coverage is not adequate, or it becomes subject to damages that cannot by law be insured against, such as punitive damages or certain intentional misconduct by their employees, this could adversely affect the company’s financial condition or results of operations.
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The company may not be able to operate its facilities, or obtain and maintain licenses and permits necessary for such operation, in compliance with laws, regulations and other requirements, which could adversely affect its business, results of operations or financial condition.
Each facility is subject to licensing and regulation by alcoholic beverage control, amusement, health, sanitation, safety, building code and fire agencies in the state, county and/or municipality in which the facility is located.
Each facility is required to obtain a license to sell alcoholic beverages on the premises from a state authority and, in certain locations, county and municipal authorities. Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time. In some states, the loss of a license for cause with respect to one facility may lead to the loss of licenses at all facilities in that state and could make it more difficult to obtain additional licenses in that state. Alcoholic beverage control regulations relate to numerous aspects of the daily operations of each facility, including minimum age of patrons and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling and storage and dispensing of alcoholic beverages. The failure to receive or retain a liquor license, or any other required permit or license, in a particular location, or to continue to qualify for, or renew licenses, could have a material adverse effect on operations and the company’s ability to obtain such a license or permit in other locations.
The company may be subject to “dram shop” statutes in states where its facilities may be located. These statutes generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated individual. Recent litigation against restaurant chains has resulted in significant judgments and settlements under dram shop statutes. Because these cases often seek punitive damages, which may not be covered by insurance, such litigation could have an adverse impact on the company’s business, results of operations or financial condition.
As a result of operating certain entertainment games and attractions, including skill-based games that offer redemption prizes, the company is subject to amusement licensing and regulation by the states, counties and municipalities in which its facilities are to be located. These laws and regulations can vary significantly by state, county, and municipality and, in some jurisdictions, may require the company to modify their business operations or alter the mix of redemption games and simulators that they offer.
Moreover, as more states and local communities implement legalized gambling, the laws and corresponding enabling regulations may also be applicable to the company’s redemption games and regulators may create new licensing requirements, taxes or fees, or restrictions on the various types of redemption games the company offers. Furthermore, other states, counties and municipalities may make changes to existing laws to further regulate legalized gaming and illegal gambling. Adoption of these laws, or adverse interpretation of existing laws, could cause the company to modify its plans for its facilities and if the company creates facilities in these jurisdictions it may be required to alter the mix of games, modify certain games, limit the number of tickets that may be won by a customer from a redemption game, change the mix of prizes that the company may offer or terminate the use of specific games, any of which could adversely affect the company’s operations. If the company fails to comply with such laws and regulations, the company may be subject to various sanctions and/or penalties and fines or may be required to cease operations until it achieves compliance, which could have an adverse effect on the company’s business and financial results.
The company has concentrated its investments in family entertainment, real estate and facilities, which are subject to numerous risks, including the risk that the values of their investments may decline if there is a prolonged downturn in real estate values.
The company’s operations will consist almost entirely of family resorts properties, approximately 30-60 acres in size, that encompass a large amount of real estate holdings. Accordingly, the company is subject to the risks associated with holding real estate investments. A prolonged decline in the popularity of resorts could adversely affect the value of its real estate holdings and could make it difficult to sell facilities or businesses.
The company’s real estate holdings will be subject to risks typically associated with investments in real estate. The investment returns available from equity investments in real estate depend in large part on the amount of income earned, expenses incurred and capital appreciation generated by the related properties. In addition, a variety of other factors affect income from properties and real estate values, including governmental regulations, real estate, insurance, zoning, tax and eminent domain laws, interest rate levels and the availability of financing. For example, new or existing real estate zoning or tax laws can make it more expensive and time-consuming to expand, modify or renovate older properties. Under eminent domain laws, governments can take real property. Sometimes this taking is for less compensation than the owner believes the property is worth. Any of these factors could have an adverse impact on our business, financial condition or results of operations.
The company works with national hospitality, hotel and local service providers to create an experience for families. Business risks associated with these providers can affect the company’s operations.
The company’s operations include partnerships with Wyndham Resorts and Choice Hotels to manage and operate the hotel and timeshare operations. The company also plans to partner with local service partners who provide activities based on the resort surroundings. Issues or business risks associated with each of these partner companies could affect the operation of one or more of the company’s resorts.
The illiquidity of real estate may make it difficult for the company to dispose of one or more of our properties or negatively affect its ability to profitably sell such properties and access liquidity.
The company may from time to time decide to dispose of one or more of its real estate assets. Because real estate holdings generally, are relatively illiquid, the company may not be able to dispose of one or more real estate assets on a timely basis. In some circumstances, sales may result in investment losses which could adversely affect the company’s financial condition. The illiquidity of its real estate assets could mean that it continues to operate a facility that management has identified for disposition. Failure to dispose of a real estate asset in a timely fashion, or at all, could adversely affect the company’s business, financial condition and results of operations.
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The company’s development and growth strategy depend on its ability to fund, develop and open new entertainment venues and operate them profitably.
A key element of the company’s growth strategy is to develop and open family entertainment venues. The company has identified a number of locations for potential future entertainment venues and is still the process of identifying more locations and analysing the locations. The company’s ability to fund, develop and open these venues on a timely and cost-effective basis, or at all, is dependent on a number of factors, many of which are beyond its control, including but not limited to our ability to:
| ● | Find quality locations. |
| ● | Reach acceptable agreements regarding the lease or purchase of locations, and comply with our commitments under our lease agreements during the development and construction phases. |
| ● | Comply with applicable zoning, licensing, land use and environmental regulations. |
| ● | Raise or have available an adequate amount of cash or currently available financing and mortgage terms for construction and opening costs. |
| ● | Adequately complete construction for operations. | |
| ● | Timely hire, train and retain the skilled management and other employees’ necessary to meet staffing needs. |
| ● | Obtain, for acceptable cost, required permits and approvals, including liquor licenses; and |
| ● | Efficiently manage the amount of time and money used to build and open each new venue. |
If the company succeeds in opening family entertainment facilities on a timely and cost-effective basis, the company may nonetheless be unable to attract enough real estate buyers, visitors or customers to these new venues because potential customers may be unfamiliar with its venue or concept, entertainment and other resort options might not appeal to them and the company may face competition from other resorts and leisure venues or governmental regulations at the federal and state levels may restrict travel or group gatherings.
The company’s development and construction of its Georgia facility depends on its ability to obtain favorable construction and mortgage financing.
The company intends to secure both construction and mortgage financing to fund up to 70% of its Georgia resort and plans to use this debt financings to development and construct subsequent facilities. There is no guarantee that the company will be able to obtain financing on favorable terms. In the event that the company is unable to obtain such financing it may limit the company’s ability to effectuate its plans and will increase the costs and expenses of the company, thereby negatively impacting its financial prospects.
Webstar Technology Group depends on a small management team and may need to hire more people to be successful.
The success of Webstar Technology Group will greatly depend on the skills, connections and experiences of the executives, Rick Haynes and Lance Lehr. Webstar Technology Group has not entered into employment agreements with the aforementioned executives. There is no guarantee that the executives will agree to terms and execute employment agreements that are favorable to the company. Should any of them discontinue working for Webstar Technology Group, there is no assurance that the company will continue. Further, there is no assurance that the company will be able to identify, hire and retain the right people for the various key positions.
The company will require a general manager, who has not yet been hired.
Webstar Technology Group is currently performing an executive search for the general manager and operator of Webstar Technology Group. There is no way to be certain that the general manager of Webstar Technology Group, once appointed, will be able to execute the same vision as Webstar Technology Group itself. If an appropriate person is not identified and hired, the company will not succeed and since its performance will depend on that person’s performance, it is possible that other Webstar Technology Group subsidiaries will be more successful than the company.
Webstar Technology Group may not be able to protect all of its intellectual property.
Webstar Technology Group, will be using the intellectual property of its parent, including the following trademarks that will be filed: Webstar Technology Group, Webstar Technology Group Family Resorts and Come See the Bear. The profitability of Webstar Technology Group may depend in part on Webstar Technology Group’ ability, to effectively protect its intellectual property and the ability of Webstar Technology Group and, in the future, each of the other subsidiaries to operate without inadvertently infringing on the proprietary rights of others. Any litigation protecting the Webstar Technology Groups’ intellectual property and defending its original content could have a material adverse effect on the business, operating results and financial condition regardless of the outcome of such litigation.
Webstar Technology Group has not yet entered into any master licensing agreements with third party suppliers and Webstar Technology Group has not yet been made a sublicense to the relevant master licensing agreements.
Webstar Technology Group intends to use Wyndham Hotel and Resorts as the operating facilities of all of its subsidiaries. At the current time negotiations are taking place but a final master licensing agreement has not been entered into at this time.
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Employees
As of the date of this report we have one full-time employee and two contractor. We currently rely on our President and Chief Executive Officer (“CEO”), Ricardo H. Haynes We are currently utilizing external consultants on a contract basis to assist with our filings as a public company.
We intend to hire additional employees on an as-needed basis as our business expands.
Legal Proceedings
We know of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of our directors, officers or any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
Properties
Our principal offices are located at 1100 Peachtree St NE, Suite 200, Atlanta, GA 30309. Our telephone number is 404-994-7819. These offices are leased by Mr. Ownes and provided to the Company free of charge until such time as sufficient funds have been raised to support the business operations. At that time, a lease arrangement will be made.
Emerging Growth Company and Smaller Reporting Company Status
Emerging Growth Company
We are an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As such, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We intend to take advantage of all these exemptions.
In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards, and delay compliance with new or revised accounting standards until those standards are applicable to private companies. We have elected to take advantage of the benefits of this extended transition period.
We could be an emerging growth company until the last day of the first fiscal year following the fifth anniversary of our first common equity offering, although circumstances could cause us to lose that status earlier if our annual revenues exceed $1.0 billion, if we issue more than $1.0 billion in non-convertible debt in any three-year period or if we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act.
Smaller Reporting Company
We also qualify as a “smaller reporting company” under Rule 12b-2 of the Exchange Act, which is defined as a company with a public equity float of less than $75 million. To the extent that we remain a smaller reporting company at such time as are no longer an emerging growth company, we will still have reduced disclosure requirements for our public filings, some of which are similar to those of an emerging growth company, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
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ITEM 1A. RISK FACTORS
Investment in our common stock involves a number of substantial risks. You should not invest in our stock unless you are able to bear the complete loss of your investment. In addition to the risks and investment considerations discussed elsewhere in this Annual Report on Form 10-K, the following factors should be carefully considered. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks actually occur, our business could be harmed. In such case, the trading price of our common stock could decline and investors could lose all or a part of the money paid to buy our common stock.
Risks Relating to our Business
This is a very young Company.
The control of the company was changed on June 25, 2024. It is a startup company that has not yet started operations, and has not started to build its facilities. There is no history upon which an evaluation of its past performance and future prospects in the hospitality and entertainment industry can be made. Statistically, most startup companies fail.
The Company’s affiliated entities have no prior performance record.
Webstar Technology Group has new management in the market, the affiliates of Webstar Technology Group, such as Bear Village Asset Holdings – GA, LLC, (which will provide management services to Webstar Technology Group) do not have a track record of involvement in hospitality and entertainment that investors may assess. Even if an affiliate of Webstar Technology Group did have such prior experience, that experience would not be indicative of its future performance.
The Company has minimal operating capital, no significant assets and no revenue from operations.
The company currently has minimal operating capital and for the foreseeable future will be dependent upon its ability to finance its planned operations from the sale of securities or other financing alternatives. There can be no assurance that it will be able to successfully raise operating capital in this or other offerings of securities, or to raise enough funds to fully construct operational entertainment centers. The failure to successfully raise operating capital could result in its inability to execute its business plan and potentially lead to bankruptcy, which would have a material adverse effect on the company and its investors.
The success of Webstar Technology Group business is dependent on purchasing large parcels of land at favorable prices.
Webstar Technology Group is a capital-intensive operation and requires the purchase of large parcels of land prior to construction. As of the date of this Offering Circular the company has a deposit on its Georgia property for the first of two facilities to be developed. The company does not know whether it will be able to obtain additional properties at acceptable purchase terms that are favorable. Finally, if this Offering does not raise enough capital to purchase the land and begin construction, the company will need to procure external financing for the purchase of the land and/or construction of the facility.
The Company may raise more capital and future fundraising rounds could result in dilution.
Webstar Technology Group may need to raise additional funds to finance its operations or fund its business plan. Even if the company manages to raise subsequent financing or borrowing rounds, the terms of those borrowing rounds might be more favorable to new investors or creditors than to existing investors such as you. New equity investors or lenders could have greater rights to our financial resources (such as liens over our assets) compared to existing shareholders. Additional financings could also dilute your ownership stake, potentially drastically. See “Dilution” and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations– Plan of Operation” for more information.
Success in the hospitality and entertainment industry is highly unpredictable and there is no guarantee the company’s content will be successful in the market.
The company’s success will depend on the popularity of its hospitality and entertainment facilities. Consumer tastes, trends and preferences frequently change and are notoriously difficult to predict. If the company fails to anticipate future consumer preferences in the hospitality and entertainment business, its business and financial performance will likely suffer. The hospitality and entertainment industries are fiercely competitive. The company may not be able to develop facilities that will become profitable. The company may also invest in facilities that end up losing money. Even if one of its facilities is successful, the company may lose money in others.
Changes in consumer financial condition, leisure tastes and preferences, particularly those affecting the popularity of family resorts, and other social and demographic trends could adversely affect its business. Significant periods of restricted travel or group gatherings, such as Covid-19 or similar circumstances, could result in situations where facilities usage is below historical levels would have a material adverse effect on its business, results of operations and financial condition. If the company cannot attract patrons, retain its existing resident, its financial condition and results of operations could be harmed.
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The pandemics could have material negative effects on Webstar Technology Groups’ planned operations, including facilities where large groups of people gather in close proximity.
The impact of COVID-19 on companies is well documented. Vaccines have been administered by the states. Webstar Technology Group operates facilities which include restaurants, gathering points and opportunities for large groups of people can gather in close proximity. In the event of another pandemic the Federal Government and local states may institute restrictions which could affect the Company’s operations.
Webstar Technology Group Resorts will implement strict cleaning and sanitizing procedures across each resort. The vaccine distribution program currently ranges from 50% to 80% based on the state. Future variations or mutations of COVID-19 or other pandemic diseases could cause new social restrictions which could affect Webstar Technology Groups’ operations.
Webstar Technology Group operates in a highly competitive market.
Webstar Technology Group plans to operate in a highly competitive market and faces intense competition. Competitors will include Disney, Six Flags, Dollywood, Great Wolf Lodge and other multi-activity resorts. Many of the company’s current and potential competitors have greater resources, longer histories, more customers, and greater brand recognition. Competitors may secure better terms from vendors, adopt more aggressive pricing and devote more resources to technology, infrastructure, fulfillment, and marketing.
Further, Webstar Technology Groups’ properties will compete on a local and regional level with restaurants and other business, dining and social clubs. The number and variety of competitors in this business will vary based on the location and setting of each facility. Some facilities may be situated in intensely competitive areas characterized by numerous resorts and family attractions. In addition, in most regions, the competitive landscape is in constant flux as new resorts and other family venues open or expand their amenities. As a result of these characteristics, the supply in a given region may exceed the demand for such facilities, and any increase in the number or quality of resorts and family venues, or the products and services they provide, in such region could significantly impact the ability of the company’s properties to attract and retain members, which could harm their business and results of operations.
Competition in the “alternative venues for recreational pursuits” industry could have a material adverse effect on the company’s business and results of operations.
Webstar Technology Group properties compete on a local and regional level with alternative venues for recreational pursuits. The company’s results of operations could be affected by the availability of, and demand for, alternative venues for recreational pursuits, such as multi-use facilities and other town center venues.
Customer complaints or litigation on behalf of our customers or employees may adversely affect our business, results of operations or financial condition.
The company’s business may be adversely affected by legal or governmental proceedings brought by or on behalf of their residents, customers or employees. Regardless of whether any claims against the company are valid or whether they are liable, claims may be expensive to defend and may divert time and money away from operations and hurt our financial performance. A judgment significantly in excess of their insurance coverage or not covered by insurance could have a material adverse effect on the company’s business, results of operations or financial condition. Also, adverse publicity resulting from these allegations may materially affect the company.
The Company’s insurance coverage may not be adequate to cover all possible losses that it could suffer and its insurance costs may increase.
The company has not yet acquired insurance. It may not be able to acquire insurance policies that cover all types of losses and liabilities. Additionally, once the company acquires insurance, there can be no assurance that its insurance will be sufficient to cover the full extent of all of its losses or liabilities for which it is insured. Further, insurance policies expire annually and the company cannot guarantee that it will be able to renew insurance policies on favorable terms, or at all. In addition, if it, or other leisure facilities, sustain significant losses or make significant insurance claims, then its ability to obtain future insurance coverage at commercially reasonable rates could be materially adversely affected. If the company’s insurance coverage is not adequate, or it becomes subject to damages that cannot by law be insured against, such as punitive damages or certain intentional misconduct by their employees, this could adversely affect the company’s financial condition or results of operations.
The Company may not be able to operate its facilities, or obtain and maintain licenses and permits necessary for such operation, in compliance with laws, regulations and other requirements, which could adversely affect its business, results of operations or financial condition.
Each facility is subject to licensing and regulation by alcoholic beverage control, amusement, health, sanitation, safety, building code and fire agencies in the state, county and/or municipality in which the facility is located.
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Each facility is required to obtain a license to sell alcoholic beverages on the premises from a state authority and, in certain locations, county and municipal authorities. Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time. In some states, the loss of a license for cause with respect to one facility may lead to the loss of licenses at all facilities in that state and could make it more difficult to obtain additional licenses in that state. Alcoholic beverage control regulations relate to numerous aspects of the daily operations of each facility, including minimum age of patrons and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling and storage and dispensing of alcoholic beverages. The failure to receive or retain a liquor license, or any other required permit or license, in a particular location, or to continue to qualify for, or renew licenses, could have a material adverse effect on operations and the company’s ability to obtain such a license or permit in other locations.
The company may be subject to “dram shop” statutes in states where its facilities may be located. These statutes generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated individual. Recent litigation against restaurant chains has resulted in significant judgments and settlements under dram shop statutes. Because these cases often seek punitive damages, which may not be covered by insurance, such litigation could have an adverse impact on the company’s business, results of operations or financial condition.
As a result of operating certain entertainment games and attractions, including skill-based games that offer redemption prizes, the company is subject to amusement licensing and regulation by the states, counties and municipalities in which its facilities are to be located. These laws and regulations can vary significantly by state, county, and municipality and, in some jurisdictions, may require the company to modify their business operations or alter the mix of redemption games and simulators that they offer.
Moreover, as more states and local communities implement legalized gambling, the laws and corresponding enabling regulations may also be applicable to the company’s redemption games and regulators may create new licensing requirements, taxes or fees, or restrictions on the various types of redemption games the company offers. Furthermore, other states, counties and municipalities may make changes to existing laws to further regulate legalized gaming and illegal gambling. Adoption of these laws, or adverse interpretation of existing laws, could cause the company to modify its plans for its facilities and if the company creates facilities in these jurisdictions it may be required to alter the mix of games, modify certain games, limit the number of tickets that may be won by a customer from a redemption game, change the mix of prizes that the company may offer or terminate the use of specific games, any of which could adversely affect the company’s operations. If the company fails to comply with such laws and regulations, the company may be subject to various sanctions and/or penalties and fines or may be required to cease operations until it achieves compliance, which could have an adverse effect on the company’s business and financial results.
The Company has concentrated its investments in family entertainment, real estate and facilities, which are subject to numerous risks, including the risk that the values of their investments may decline if there is a prolonged downturn in real estate values.
The company’s operations will consist almost entirely of family resorts properties, approximately 30-60 acres in size, that encompass a large amount of real estate holdings. Accordingly, the company is subject to the risks associated with holding real estate investments. A prolonged decline in the popularity of resorts could adversely affect the value of its real estate holdings and could make it difficult to sell facilities or businesses.
The company’s real estate holdings will be subject to risks typically associated with investments in real estate. The investment returns available from equity investments in real estate depend in large part on the amount of income earned, expenses incurred and capital appreciation generated by the related properties. In addition, a variety of other factors affect income from properties and real estate values, including governmental regulations, real estate, insurance, zoning, tax and eminent domain laws, interest rate levels and the availability of financing. For example, new or existing real estate zoning or tax laws can make it more expensive and time-consuming to expand, modify or renovate older properties. Under eminent domain laws, governments can take real property. Sometimes this taking is for less compensation than the owner believes the property is worth. Any of these factors could have an adverse impact on our business, financial condition or results of operations.
The Company works with national hospitality, hotel and local service providers to create an experience for families. Business risks associated with these providers can affect the company’s operations.
The company’s operations include partnerships with Wyndham Resorts and Choice Hotels to manage and operate the hotel and timeshare operations. The company also plans to partner with local service partners who provide activities based on the resort surroundings. Issues or business risks associated with each of these partner companies could affect the operation of one or more of the company’s resorts.
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The illiquidity of real estate may make it difficult for the company to dispose of one or more of our properties or negatively affect its ability to profitably sell such properties and access liquidity.
The company may from time to time decide to dispose of one or more of its real estate assets. Because real estate holdings generally, are relatively illiquid, the company may not be able to dispose of one or more real estate assets on a timely basis. In some circumstances, sales may result in investment losses which could adversely affect the company’s financial condition. The illiquidity of its real estate assets could mean that it continues to operate a facility that management has identified for disposition. Failure to dispose of a real estate asset in a timely fashion, or at all, could adversely affect the company’s business, financial condition and results of operations.
The Company’s development and growth strategy depend on its ability to fund, develop and open new entertainment venues and operate them profitably.
A key element of the company’s growth strategy is to develop and open family entertainment venues. The company has identified a number of locations for potential future entertainment venues and is still the process of identifying more locations and analyzing the locations. The company’s ability to fund, develop and open these venues on a timely and cost-effective basis, or at all, is dependent on a number of factors, many of which are beyond its control, including but not limited to our ability to:
| ● | Find quality locations. |
| ● | Reach acceptable agreements regarding the lease or purchase of locations, and comply with our commitments under our lease agreements during the development and construction phases. |
| ● | Comply with applicable zoning, licensing, land use and environmental regulations. |
| ● | Raise or have available an adequate amount of cash or currently available financing and mortgage terms for construction and opening costs. |
| ● | Adequately complete construction for operations. | |
| ● | Timely hire, train and retain the skilled management and other employees’ necessary to meet staffing needs. |
| ● | Obtain, for acceptable cost, required permits and approvals, including liquor licenses; and |
| ● | Efficiently manage the amount of time and money used to build and open each new venue. |
If the company succeeds in opening family entertainment facilities on a timely and cost-effective basis, the company may nonetheless be unable to attract enough real estate buyers, visitors or customers to these new venues because potential customers may be unfamiliar with its venue or concept, entertainment and other resort options might not appeal to them and the company may face competition from other resorts and leisure venues or governmental regulations at the federal and state levels may restrict travel or group gatherings.
The Company’s development and construction of its Georgia facility depends on its ability to obtain favorable construction and mortgage financing.
The company intends to secure both construction and mortgage financing to fund up to 70% of its Georgia resort and plans to use this debt financings to development and construct subsequent facilities. There is no guarantee that the company will be able to obtain financing on favorable terms. In the event that the company is unable to obtain such financing it may limit the company’s ability to effectuate its plans and will increase the costs and expenses of the company, thereby negatively impacting its financial prospects.
Webstar Technology Group depends on a small management team and may need to hire more people to be successful.
The success of Webstar Technology Group will greatly depend on the skills, connections and experiences of the executives, Rick Haynes and Lance Lehr. Webstar Technology Group has not entered into employment agreements with the aforementioned executives. There is no guarantee that the executives will agree to terms and execute employment agreements that are favorable to the company. Should any of them discontinue working for Webstar Technology Group, there is no assurance that the company will continue. Further, there is no assurance that the company will be able to identify, hire and retain the right people for the various key positions.
The Company will require a general manager, who has not yet been hired.
Webstar Technology Group is currently performing an executive search for the general manager and operator of Webstar Technology Group. There is no way to be certain that the general manager of Webstar Technology Group, once appointed, will be able to execute the same vision as Webstar Technology Group itself. If an appropriate person is not identified and hired, the company will not succeed and since its performance will depend on that person’s performance, it is possible that other Webstar Technology Group subsidiaries will be more successful than the company.
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Webstar Technology Group may not be able to protect all of its intellectual property.
Webstar Technology Group, will be using the intellectual property of its parent, including the following trademarks that will be filed: Webstar Technology Group, Webstar Technology Group Family Resorts and Come See the Bear. The profitability of Webstar Technology Group may depend in part on Webstar Technology Group’ ability, to effectively protect its intellectual property and the ability of Webstar Technology Group and, in the future, each of the other subsidiaries to operate without inadvertently infringing on the proprietary rights of others. Any litigation protecting the Webstar Technology Groups’ intellectual property and defending its original content could have a material adverse effect on the business, operating results and financial condition regardless of the outcome of such litigation.
Webstar Technology Group has not yet entered into any master licensing agreements with third party suppliers and Webstar Technology Group has not yet been made a sublicense to the relevant master licensing agreements.
Webstar Technology Group intends to use Wyndham Hotel and Resorts as the operating facilities of all of its subsidiaries. At the current time negotiations are taking place but a final master licensing agreement has not been entered into at this time.
Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
Our auditors have indicated that our lack of revenues, historical operating losses, cash used in operations, negative working capital and accumulated deficit raise substantial doubt about our ability to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty. If we are unable to generate significant revenue or secure financing, we may be required to cease or curtail our operations.
Risks Related to Certain Conflicts of Interest
The interests of Webstar Technology Group, Bear Village Asset Holdings – GA, LLC and the company’s other affiliates may conflict with your interests.
The company’s Amended and Restated Certificate of Incorporation, bylaws and Florida law provide company management with broad powers and authority that could result in one or more conflicts of interest between your interests and those of the officers and directors of Webstar Technology Group, Bear Village Asset Holdings – GA, LLC, and the company’s other affiliates. This risk is increased by the affiliated entities being controlled by Webstar Technology Group and all our officers and directors currently have an interest in Webstar Technology Group, through ownership, as an officer or director in Webstar Technology Group contractually or any combination thereof. Potential conflicts of interest include, but are not limited to, the following:
| ● | Webstar Technology Group and the company’s other affiliates will not be required to disgorge any profits or fees or other compensation they may receive from any other business they own separate from the company, and you will not be entitled to receive or share in any of the profits, return, fees or compensation from any other business owned and operated by the management and their affiliates for their own benefit. |
| ● | The Company may engage Webstar Technology Group, or other companies affiliated with Webstar Technology Group to perform services, and determination for the terms of those services will not be conducted at arms’ length negotiations; and |
| ● | The Company’s officers and directors are not required to devote all of their time and efforts to the affairs of the company. |
Risks Related to Our Stock
The officers of Webstar Technology Group control the Company, and the Company does currently have two independent directors.
The Founders are currently the company’s controlling shareholders. Moreover, they are the company’s executive officers and directors, through their ownership in Webstar Technology Group. This could lead to unintentional subjectivity in matters of corporate governance, especially in matters of compensation and related party transactions. The company does not benefit from the advantages of having independent directors, including bringing an outside perspective on strategy and control, adding new skills and knowledge that may not be available within Webstar Technology Group, and having extra checks and balances to prevent fraud and produce reliable financial reports.
There is little to no current market for Webstar Technology Groups’ shares.
There is little to no formal marketplace for the resale of our securities. Shares of the company’s Common Stock may eventually be traded to the extent any demand and/or trading platform(s) exists. However, there is no guarantee there will be demand for the shares, or a trading platform that allows you to sell them. Investors should assume that they may not be able to liquidate their investment or pledge their shares as collateral for some time.
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An active trading market for our common stock may not develop and you may not be able to resell your shares.
There has been a limited public market for shares of our common stock. In the absence of an active trading market for our common stock, investors may not be able to sell their common stock at or above the purchase price or at the time that they would like to sell or at all. Our stock is currently trading on the OTCQB tier of the OTC Markets Group, Inc. We do not know the extent to which investor interest will lead to the development and maintenance of an active trading market for our common stock. A limited trading volume will adversely impact your ability to sell our shares.
The OTCQB, as with other public markets, has from time to time experienced significant price and volume fluctuations. As a result, the market price of shares of our common stock may be similarly volatile, and holders of shares of our common stock may from time to time experience a decrease in the value of their shares, including decreases unrelated to our operating performance or prospects. The price of shares of our common stock could be subject to wide fluctuations in response to a number of factors, including those listed in this “Risk Factors” section of this report. No assurance can be given that the market price of shares of our common stock will not fluctuate or decline significantly in the future or that common stockholders will be able to sell their shares when desired on favorable terms, or at all.
Our Common Stock price is likely to be highly volatile because of several factors, including a limited public float.
We anticipate that the market price of our common stock is likely to be highly volatile in the future. You may not be able to resell shares of our common stock following periods of volatility because of the market’s adverse reaction to volatility.
Other factors that could cause such volatility may include, among other things:
| ● | actual or anticipated fluctuations in our operating results; | |
| ● | the absence of securities analysts covering us and distributing research and recommendations about us; | |
| ● | we may have a low trading volume for a number of reasons, including that a large portion of our stock is closely held; | |
| ● | overall stock market fluctuations; | |
| ● | announcements concerning our business or those of our competitors; | |
| ● | actual or perceived limitations on our ability to raise capital when we require it, and to raise such capital on favorable terms; | |
| ● | conditions or trends in the industry; | |
| ● | litigation; | |
| ● | changes in market valuations of other similar companies; | |
| ● | future sales of common stock; | |
| ● | departure of key personnel or failure to hire key personnel; and | |
| ● | general market conditions. |
Any of these factors could have a significant and adverse impact on the market price of our common stock. In addition, the stock market in general has at times experienced extreme volatility and rapid decline that has often been unrelated or disproportionate to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock, regardless of our actual operating performance.
Because our officers and board of directors will make all management decisions, you should only purchase our securities if you are comfortable entrusting our directors to make all decisions.
Our board of directors will have the sole right to make all decisions with respect to our management. Investors will not have an opportunity to evaluate the specific projects that will be financed with future operating income. You should not purchase our securities unless you are willing to entrust all aspects of our management to our officers and directors.
We need to raise additional capital. If we are unable to raise necessary additional capital, our business may fail, or our operating results and our stock price may be materially adversely affected.
If we borrow more money, we will have to pay interest and may also have to agree to restrictions that limit our operating flexibility. If we are unable to obtain adequate financing, we may have to curtail our operations and our business would fail.
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Our issuance of additional common stock in exchange for the purchase of assets, services or to repay debt would dilute your proportionate ownership and voting rights and could have a negative impact on the market price of our Common Stock.
It is possible that we may issue additional shares of common stock in exchange for debt or for cash under circumstances we may deem appropriate at the time. Any such new issuances may cause a decrease in the quoted price of our common stock.
Our common stock is a “penny stock” under SEC rules. It may be more difficult to resell securities classified as “penny stock.”
Our common stock is a “penny stock” under applicable SEC rules (generally defined as non-exchange traded stock with a per-share price below $5.00). Unless we maintain a per-share price above $5.00, these rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction.
| Legal remedies available to an investor in “penny stocks” may include the following: | ||
| ● | If a “penny stock” is sold to the investor in violation of the requirements listed above, or other federal or states securities laws, the investor may be able to cancel the purchase and receive a refund of the investment. | |
| ● | If a “penny stock” is sold to the investor in a fraudulent manner, the investor may be able to sue the persons and firms that committed the fraud for damages. |
However, investors who have signed arbitration agreements may have to pursue their claims through arbitration. These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our Common Stock and may affect your ability to resell our Common Stock.
Many brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments. For these reasons, penny stocks may have a limited market and, consequently, limited liquidity. We can give no assurance that our Common Stock will not remain classified as a “penny stock” in the future.
Common stock eligible for future sale may adversely affect the market.
From time to time, certain of our stockholders may be eligible to sell all or some of their shares of Common Stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to Rule 144, non-affiliate stockholders may sell freely after six months, subject only to the current public information requirement. Affiliates may sell after six months, subject to the Rule 144 volume, manner of sale (for equity securities), current public information, and notice requirements. There are 158,271,000 shares of our common stock outstanding as of the date of this report. 85,466,340 of these shares are tradable without restriction. Given the lack of a trading history of our common stock, resale of even a small number of shares of our common stock may adversely affect the market price of our common stock.
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We are an emerging growth company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor internal controls attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, our stockholders may not have access to certain information they may deem important. We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700 million as of any June 30 before that time, in which case we would no longer be an emerging growth company as of the following December 31. We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such an election to opt out is irrevocable. We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
As an emerging growth company, our auditor is not required to attest to the effectiveness of our internal controls.
Our independent registered public accounting firm is not required to attest to the effectiveness of our internal control over financial reporting while we are an emerging growth company. This means that the effectiveness of our financial operations may differ from our peer companies in that they may be required to obtain independent registered public accounting firm attestations as to the effectiveness of their internal controls over financial reporting and we are not. While our management will be required to attest to internal control over financial reporting and we will be required to detail changes to our internal controls on a quarterly basis, we cannot provide assurance that the independent registered public accounting firm’s review process in assessing the effectiveness of our internal controls over financial reporting, if obtained, would not find one or more material weaknesses or significant deficiencies. Further, once we cease to be an emerging growth company, we will be subject to independent registered public accounting firm attestation regarding the effectiveness of our internal controls over financial reporting. Even if management finds such controls to be effective, our independent registered public accounting firm may decline to attest to the effectiveness of such internal controls and issue a qualified report.
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We believe we will be considered a smaller reporting company and will be exempt from certain disclosure requirements, which could make our common stock less attractive to potential investors.
Effective on September 10, 2018, Rule 12b-2 of the Exchange Act defines a “smaller reporting company” as an issuer that is not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that:
| ● | had a public float of less than $250 million as of the last business day of its most recently completed second fiscal quarter, computed by multiplying the aggregate worldwide number of shares of its voting and non-voting common equity held by non-affiliates by the price at which the common equity was last sold, or the average of the bid and asked prices of common equity, in the principal market for the common equity; or | |
| ● | in the case of an initial registration statement under the Securities Act or the Exchange Act for shares of its common equity, had a public float of less than $250 million as of a date within 30 days of the date of the filing of the registration statement, computed by multiplying the aggregate worldwide number of such shares held by non-affiliates before the registration plus, in the case of a Securities Act registration statement, the number of such shares included in the registration statement by the estimated public offering price of the shares; or | |
| ● | in the case of an issuer whose public float as calculated under paragraph (1) or (2) of this definition was zero or whose public float was less than $700 million, had annual revenues of less than $100 million during the most recently completed fiscal year for which audited financial statements are available. |
As a smaller reporting company, we will not be required and may not include a Compensation Discussion and Analysis section in our proxy statements; we will provide only two years of financial statements; and we need not provide the table of selected financial data. We also will have other “scaled” disclosure requirements that are less comprehensive than issuers that are not smaller reporting companies which could make our common stock less attractive to potential investors, which could make it more difficult for our stockholders to sell their shares.
It may not be possible to have adequate internal controls.
Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404”) requires our management to report on the operating effectiveness of our Internal Controls over financial reporting for the year ending December 31 following the year in which the Company’s registration statement was declared effective, which was 2020. We must establish an ongoing program to perform the system and process evaluation, and testing necessary to comply with these requirements. At this time, we have not yet fully been able to truly test and expand a system of controls; therefore, it may not be possible to have adequate internal controls until such a system is put into place.
Our compliance with applicable provisions of Section 404 will require that we incur substantial accounting expense and expend significant management time on compliance-related issues as we implement additional corporate governance practices and comply with reporting requirements. Moreover, if we are not able to comply with the requirements of Section 404 applicable to us in a timely manner, or if we or our independent registered public accounting firm identifies deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock could decline and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.
We do not expect to pay cash dividends on our common stock in the foreseeable future.
Holders of shares of our common stock are entitled to receive such dividends as may be declared by our board of directors. To date, we have paid no cash dividends on our shares of common stock and we do not expect to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, to provide funds for operations of our business. Therefore, any return investors in our common stock may have will be in the form of appreciation, if any, in the market value of their shares of common stock. See “Dividend Policy.”
We may, in the future, issue additional shares of common stock, which would reduce investors’ percent of ownership and may dilute our share value.
Our amended and restated articles of incorporation as amended authorize the issuance of 300,000,000 shares of common stock. As of the date of this report, we had 158,271,000 shares of common stock outstanding. The future issuance of common stock may result in substantial dilution in the percentage of our common stock held by our then existing stockholders. We may value any common stock issued in the future on an arbitrary basis. The issuance of common stock for future services or acquisitions or other corporate actions may have the effect of diluting the value of the shares held by our investors, and might have an adverse effect on any trading market for our common stock.
Anti-takeover effects of certain provisions of Wyoming state law hinder a potential takeover of our company.
Though not now, we may be or in the future we may become subject to Wyoming’s control share law. A corporation is subject to Wyoming’s control share law if it has more than 200 stockholders, at least 100 of whom are stockholders of record and residents of Wyoming, and it does business in Wyoming or through an affiliated corporation. The law focuses on the acquisition of a “controlling interest” which means the ownership of outstanding voting shares sufficient, but for the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors: (i) one-fifth or more but less than one-third, (ii) one-third or more but less than a majority, or (iii) a majority or more. The ability to exercise such voting power may be direct or indirect, as well as individual or in association with others.
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The effect of the control share law is that the acquiring person, and those acting in association with it, obtains only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of stockholders. The control share law contemplates that voting rights will be considered only once by the other stockholders. Thus, there is no authority to strip voting rights from the control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed by the control share law.
If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval of voting rights is entitled to demand fair value for such stockholder’s shares.
Wyoming’s control share law may have the effect of discouraging takeovers of the corporation.
In addition to the control share law, Wyoming has a business combination law which prohibits certain business combinations between Wyoming corporations and “interested stockholders” for three years after the “interested stockholder” first becomes an “interested stockholder,” unless the corporation’s board of directors approves the combination in advance. For purposes of Wyoming law, an “interested stockholder” is any person who is (i) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (ii) an affiliate or associate of the corporation and at any time within the three previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term “business combination” is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation’s assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders.
The effect of Wyoming’s business combination law is to potentially discourage parties interested in taking control of our company from doing so if it cannot obtain the approval of our board of directors.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
We have developed and implemented
a cybersecurity risk management program intended to protect the confidentiality,
We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework Special Publication 800-53, 800-61, rev 2 (“NIST CSF). This does not imply that we meet any particular technical standards, specifications, or requirements. We use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business.
We have implemented a number of security measures designed to protect its systems and data, including firewalls, antivirus and malware detection tools, patches, log monitors, routine back-ups, system audits, system hardening, penetration testing and privileged access session management. In addition, we have continued its efforts to migrate its platforms to cloud-based computing, which is designed to further strengthen its security posture.
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Our cybersecurity risk management program includes the following:
| ● | risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; |
| ● | a security team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents; |
| ● | the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security controls; |
| ● | cybersecurity awareness training of our employees, incident response personnel, and senior management; and |
| ● | a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents. |
There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information.
Our Board considers cybersecurity risks as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks.
Ongoing Risks
We have not experienced any material cybersecurity incidents. We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
ITEM 2. PROPERTIES.
Our principal offices are located at 1100 Peachtree St NE, Suite 200, Atlanta, GA 30309. Our telephone number is 404-994-7819 These offices are leased by the new mgmt. of Webstar Technoilogy Group Inc. provided to the Company free of charge until such time as sufficient funds have been raised to support the business operations. At that time, a lease arrangement will be made.
ITEM 3. LEGAL PROCEEDINGS
We know of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of our directors, officers or any of their respective affiliates, or any beneficial stockholder, is an adverse party or has a material interest adverse to our interest.
ITEM 4. MINE SAFETY DISCLOSURES.
Not Applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Currently, our stock is trading on the OTCQB Marketplace of the OTC Markets. There has been limited trading in our stock and there can be no assurance that a significant trading market will develop, or, if developed, that it will be sustained.
Holders of Common Stock
As of March 29, 2024, there were two hundred seventy stockholders of record of our common stock.
Securities authorized for issuance under equity compensation plans
A stock option grant was issued to our Chief Financial Officer on December 9, 2021, for the right to purchase 2,500,000 shares of our common stock at $0.0001 per share. On June 3, 2022, the stock option grant to our Chief Financial Officer was canceled. There are no securities authorized for issuance under equity compensation plans at this time.
Securities authorized for issuance under convertible debt instruments
On June 3, 2022, the Company entered into a settlement agreement with Mr. Owens whereby Mr. Owens was issued a two-year convertible note payable in the amount of $1,101,000 Mr. Owens may convert the note at any time beginning three days after the note issue date at a rate of $0.01 per share for the Company’s common stock. During the year ended December 31, 2023, 18,371,000 shares of common stock were issued to Mr. Owens for the conversion of a portion of the two-year convertible note payable and accrued interest held by Mr. Owens totaling $183,710. As of December 31, 2023, the principal outstanding on the two-year convertible note payable is $1,000,000. The principal on the convertible note is convertible into 100,000,000 authorized shares of the Company’s common stock.
Authorized Capital Stock
As of the date of this report, our authorized capital stock consists of (i) 300,000,000 shares of common stock, par value $0.0001 per share, and (ii) 1,000,000 shares of preferred stock, par value $0.0001 per share, of which 1,000 shares have been designated as Series A Preferred Stock. At April 1, 2025, we had 402,185,985 shares of common stock issued and outstanding and 1,000 shares of Series A Preferred Stock issued and outstanding.
Common Stock
The holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders, including the election of directors. There is no right to cumulate votes in the election of directors. The holders of common stock are entitled to any dividends that may be declared by the board of directors out of funds legally available for payment of dividends subject to the prior rights of holders of preferred stock and any contractual restrictions we have against the payment of dividends on common stock. In the event of our liquidation or dissolution, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no preemptive rights and have no right to convert their common stock into any other securities.
Preferred Stock
The preferred stock is issuable in one or more series with such designations, voting powers, if any, preferences and relative, participating, optional or other special rights, and such qualifications, limitations and restrictions, as are determined by resolution of our board of directors. The issuance of preferred stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, may have the effect of delaying, deferring or preventing a change in control of our company without further action by stockholders and could adversely affect the rights and powers, including voting rights, of the holders of common stock. The rights of holders of our common stock described above, will be subject to, and may be adversely affected by, the rights of any preferred stock that we may designate and issue in the future.
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Each share of Series A Preferred Stock shall have a number of votes at any time equal to 0.3% of the number of shares of the Company’s common stock then issued and outstanding on a fully diluted basis (i.e. assuming conversion into common stock of any other classes of preferred stock or agreements or instruments then convertible into shares of common stock), such that all 1,000 shares of the Series A Preferred Stock shall have a number of votes equal to 300% of the issued and outstanding shares of common stock. The Series A Preferred Stock shall vote on any matter submitted to the holders of the Company’s common stock for as long as a share of the Series A Preferred Stock is issued and outstanding. The Series A Preferred Stock shall not have the right to vote on any matter as to which solely another class of preferred stock of the Company is entitled to vote.
The Series A Preferred Stock is not convertible and is not entitled to receive any dividends paid on any other class of stock of the Company. The Series A Preferred Stock does not have any participation rights and has no preferences in the event of any liquidation, dissolution or winding up of the Company and are not entitled to receive any distribution of the assets or surplus funds of the Company and will not participate with the common stock or any other class of stock of the company therein.
The Certificate of Designations for the Series A Preferred Stock cannot be amended without the prior written consent of the holders of the Series A Preferred Stock. The Series A Preferred Stock are restricted shares and will bear the appropriate restrictive legend.
Transfer Agent
The transfer agent and registrar for our common stock is VStock Transfer, LLC, 18 Lafayette Place, Woodmere, New York 11598, phone (212) 828-8436.
Warrants
There were no outstanding warrants to purchase shares of our common stock as of December 31, 2024 and 2023.
Options
A stock option grant was issued to our Chief Financial Officer on December 9, 2021, for the right to purchase 2,500,000 shares of our common stock at $0.0001 per share. The grant to our Chief Financial Officer was canceled on June 3, 2022.
Dividend Policy
We have not paid any cash dividends on our common stock and do not currently anticipate paying cash dividends in the foreseeable future. The agreements into which we may enter in the future, including indebtedness, may impose limitations on our ability to pay dividends or make other distributions on our capital stock. Payment of future dividends on our common stock, if any, will be at the discretion of our board of directors and will depend on, among other things, our results of operations, cash requirements and surplus, financial condition, contractual restrictions and other factors that our board of directors may deem relevant.
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Unregistered Sales of Equity Securities
The following is a summary of transactions by us within the past three years involving sales or our securities that were not registered under the Securities Act.
In 2023, the Company issued 18,371,000 shares of common stock to Mr. James Owens for the conversion of $101,000 of principal and accrued interest of $82,710 associated with a two-year convertible note held by Mr. James Owens.
The Company believes that the shares of our Common Stock were issued in reliance upon the exemption from securities registration afforded by the provisions of Section 4(a)(2) of the Securities Act. Such securities are restricted as to their transferability as set forth in Rule 144 under the Securities Act and an appropriate restrictive legend is affixed to the stock certificates issued for such shares.
Purchases of Equity Securities by the Registrant and Affiliated Purchasers
We have not repurchased any shares of our common stock during the fiscal years ended December 31, 2024 and 2023.
ITEM 6. SELECTED FINANCIAL DATA.
Smaller reporting companies are not required to provide the information required by this item.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.
You should read the following discussion together with our financial statements and the related notes included elsewhere in this annual report on Form 10-K. This discussion contains forward-looking statements that are based on our current expectations, estimates and projections about our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements.
Overview
Webstar Technology Group, was incorporated in Wyoming on March 10, 2015. The Company was established for the operation of certain licensed and purchased software solutions. However in June 2024 the new management team of Webstar Technology Group Inc. chose to expand the company’s footprint into the commercial real estate development & acquisitions space.
Plan of Operations
Results of Operations for the years ended December 31, 2024 and 2023
The following comparative analysis on results of operations were based primarily on the comparative financial statements, footnotes and related information for the periods identified below and should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this Form 10-K. The results discussed below are for the years ended December 31, 2024 and 2023.
For the years ended December 31, 2024 and 2023, we have had no revenue due to the inability to attract qualified customers to sub-contract our technology. We have funded our operating expenses through loans from our controlling stockholder and accrual of various costs and expenses.
For the years ended December 31, 2024 and 2023, total operating expenses which are comprised of salaries and related expenses and general and administrative expenses were $398,058 and $838,656, respectively. The decrease is primarily attributable to the decrease in salary and related expenses due to the Company’s former CEO and CFO resigning effective June 14, 2024 and March 4, 2024, respectively, and not being replaced full time employees. Further, our general and administrative expenses decreased primarily due to a decrease in legal fees, partially offset by increases in accounting and OTC Market listing fees.
For the years ended December 31, 2024 and 2023, other expenses were $4,101,910 compared to $76,114. The increase is primarily attributable to a loss on the extinguishment of debt with a related party extinguished with shares of common stock that exceeded the carrying value of the liabilities.
The net loss was $4,499,968 and $914,800 for the years ended, 2024 and 2023, respectively. This increase is primarily a result of the transactions discussed above.
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Liquidity, Going Concern and Uncertainties
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of December 31, 2024, our working capital deficit amounted to $81,236 an increase of $3,290,146 as compared to our working capital deficit of $3,371,382 as of December 31, 2023. This decrease in working capital deficit is primarily a result of current liabilities either settled with shares of common stock or assumed by a related party in 2024.
Net cash used in operating activities was $111,934 during the year ended December 31, 2024 compared to $131,929 for the year ended December 31, 2023. The change in cash from operating activities is primarily attributable to an increase in non-cash expenses, offset by an increase in the net loss and decrease in changes in operating assets and liabilities.
Net cash provided by financing activities was $111,784 during the year ended December 31, 2024 compared to $135,921 in the year ended December 31, 2023. The change in cash from financing activities was the result of a decrease in cash received from a stockholder, offset by cash received from a related party.
Generally, the Company’s operations are subject to a number of factors that can affect its operating result and financial condition. Such factors include, but are not limited to, the results of our marketing efforts to promote users for our software solutions, successful launch and acceptance of our software solutions in the marketplace, competition of our software solutions, attraction of talented and skilled employees to support the business and the ability to raise capital to support its operations.
In order to continue as a going concern, we will need, among other things, additional capital resources. Management’s plan is to obtain such resources for our capital needs by obtaining capital from management and significant stockholders sufficient to meet its operating expenses. Further, management cannot provide any assurances that we will be successful in accomplishing any of our plans. Our ability to continue as a going concern is dependent upon our ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if we were unable to continue as a going concern.
Commitments and Contingencies
The Company follows subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. The Company’s legal costs associated with contingent liabilities are recorded to expense as incurred.
Income taxes
We are a corporation for U.S. federal income tax purposes. As such we are subject to U.S. federal, state and local income taxes and are taxed at the prevailing corporate tax rates. We recognize the effect of income tax positions only if these positions are more likely than not to be sustained. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The financial statements included in this annual report do not include a provision for federal income taxes since each of our statements of operations have a net loss. In the future, if we determine that such tax benefits are likely to be realized by us, we will record a deferred tax asset based on the then effective income tax rate.
JOBS Act
We qualify as an “emerging growth company” pursuant to the provisions of the JOBS Act. For as long as we are an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, reduced disclosure obligations relating to the presentation of financial statements in Management’s discussion and analysis of financial condition and results of operations and exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and stockholder advisory votes on golden parachute compensation. We have availed ourselves of the reduced reporting obligations and executive compensation disclosure in this annual report and expect to continue to avail ourselves of the reduced reporting obligations available to emerging growth companies in future filings.
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In addition, an emerging growth company can delay its adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to take advantage of such extended transition period, and as a result, we may not comply with any new or revised accounting standards on the relevant dates on which non-emerging growth companies must adopt such standards.
We will continue to qualify as an emerging growth company until the earliest of:
| ● | The last day of our fiscal year following the fifth anniversary of the date of our IPO; | |
| ● | The last day of our fiscal year in which we have annual gross revenues of $1.0 billion or more; |
| ● | The date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; | |
| ● | The date on which we are deemed to be a “large accelerated filer”, which will occur at such time as we (1) have an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of our most recently completed second quarter, (2) have been required to file annual and quarterly reports under the Exchange Act for a period of at least 12 months and (3) have filed at least one annual report pursuant to the Exchange Act. |
Inflation
In the opinion of management, inflation has not and will not have a material effect on our operations in the immediate future. Management will continue to monitor inflation and evaluate the possible future effects of inflation on our business and operations.
Off-Balance Sheet Arrangements
As of December 31, 2024, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.
Critical Accounting Policies
We have identified the following policies below as critical to our business and results of operations. Our reported results are impacted by the application of the following accounting policies, certain of which require management to make subjective or complex judgments. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact quarterly or annual results of operations. For all of these policies, management cautions that future events rarely develop exactly as expected, and the best estimates routinely require adjustment. Specific risks associated with these critical accounting policies are described in the following paragraphs.
Pursuant to the JOBS Act, as an emerging growth company, we can elect to opt out of the extended transition period for adopting any new or revised accounting standards. We have elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we may adopt the standard for the private company. This may make comparison of our financial statements with any other public company that is neither an emerging growth company, nor an emerging growth company which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.
We have elected to take advantage of the scaled disclosures and other relief under the JOBS Act described above in this annual report (see “Implications of Being an Emerging Growth Company”), and we may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us under the JOBS Act, so long as we qualify as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
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. Actual results could differ from those estimates.
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Stock-based Compensation. We follow the provisions of ASC 718 which requires all share-based payments to employees and non-employees, including grants of employee and non-employee stock options, to be recognized in the statement of operations based on their grant date fair values.
Revenue. The Company recognizes revenues when control of the promised goods or services is transferred to our customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For student fees, the Company generates student fee revenue by registering each student that participates in an on-line classroom utilizing our eCampus platform. This revenue is earned at the time the on-line class takes place and is accrued during the period whether or not actually billed. The student fees are billed to the college conducting the classes during the period the classes are conducted. There are no prepayments for student fees so there is no deferred revenue related to student fees.
Recent Accounting Pronouncements -Not Yet Adopted
In December 2023 FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 requires public business entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages. The guidance requires the rate reconciliation to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate. For entities reconciling to the US statutory rate of 21%, this would generally require disclosing any reconciling items that impact the rate by 1.05% or more. ASU 2023-09 is effective for public business entities for annual periods beginning after Dec. 15, 2024 (generally, calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The adoption of ASU 2023-09 is expected to have a financial statement disclosure impact only and is not expected to have a material impact on the Company’s financial statements.
Recent Accounting Pronouncements - Adopted
In November 2023 the FASB issued ASU 2023-07 (ASU 2023-07), Segment Reporting – Improvements to Reportable Segment Disclosures. The ASU will now require public entities to disclose its significant segment expenses categories and amounts for each reportable segment. Under the ASU, a significant segment expense is an expense that is:
| ● | significant to the segment, | |
| ● | regularly provided to or easily computed from information regularly provided to the chief operating decision maker (CODM), and | |
| ● | included in the reported measure of segment profit or loss. |
The ASU is effective for public entities for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024 (calendar year public entity will adopt the ASU in its 2024 Form 10 K). The ASU should be adopted retrospectively unless it’s impracticable to do so. Early adoption of the ASU is permitted, including in an interim period. The adoption of ASU 2023-07 did not have an impact on the Company’s financial statements since it operates in one reportable segment and has yet to generate revenues.
The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent accounting pronouncements not specifically identified in our disclosures are either not applicable to the Company or are not expected to have a material effect on our financial condition or results of operations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Smaller reporting companies are not required to provide the information required by this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The Company’s financial statements, together with the reports of the independent registered public accounting firms thereon and the notes thereto, are presented beginning at page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None
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ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer (the Company’s principal executive officer and principal and accounting financial officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the fiscal year covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, due to the material weaknesses identified below.
Management’s Annual Report on Internal Control Over Financial Reporting.
As of December 31, 2024, management assessed the effectiveness of our internal control over financial reporting. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act, as a process designed by, or under the supervision of, the Company’s President, Chief Executive Officer and effected by the Company’s 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 GAAP in the United States of America and includes those policies and procedures that:
| ● | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of our assets; | |
| ● | Provide reasonable assurance our transactions are recorded as necessary to permit preparation of our financial statements in accordance with GAAP, and that receipts and expenditures are being made only in accordance with authorizations of our management and 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 statement. |
In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013 framework). Based on that evaluation, our Chief Executive Officer (who is our principal executive officer and principal accounting and financial officer), concluded that, during the period covered by this report, such internal controls and procedures were ineffective to detect the inappropriate application of US GAAP rules as more fully described below.
This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that amounted to be material weaknesses.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (i) inadequate segregation of duties consistent with control objectives; and (ii) we do not have a fully functioning audit committee, resulting in a lack of independent oversight in the establishment and monitoring of required internal controls and procedures. The aforementioned material weaknesses were identified by our Chief Executive Officer and Chief Financial Officer, in connection with the review of our financial statements as of December 31, 2024.
Our management has begun evaluating remedies to reduce these material weaknesses. However, there can be no assurance that the planned remedies can be effectively put in place as planned.
Changes in Internal Controls over financial reporting
No change in our internal control over financial reporting occurred during the year ended December 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
ITEM 9C. Not Applicable
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Directors and Executive Officers
The following table sets forth the names, positions and ages of our directors and executive officers as of the date of this Annual Report on Form 10-K. Each director is elected at our annual meeting of stockholders and holds office until his successor is elected and qualified. Officers are elected by our board of directors and their terms of office are at the discretion of our board.
There is no familial relationship between or among the nominees, directors or executive officers of the Company.
| Name | Position | Age | Term of Office (If indefinite give date of appointment) | |||
| Ricardo Haynes | President / CEO | 59 | Indefinite - June 25, 2024 | |||
| Marilyn Karpoff | Independent Director | 56 | Indefinite - June 25, 2024 | |||
| Gordon Clinkscale | Independent Director | 63 | Indefinite - June 25, 2024 |
OTCQB requires independent directors
The table below sets forth the officers of Webstar Technology Group.
| Name | Position | Age | Term of Office (If indefinite give date of appointment) | |||
| Eric Collins | Chairman | 57 | Indefinite - June 25, 2024 | |||
| Ricardo Haynes | CEO | 59 | Indefinite - June 25, 2024 | |||
| Lance Lehr | COO | 56 | Indefinite - June 25, 2024 | |||
| Adrienne Anderson | CFO | 46 | Indefinite - June 25, 2024 | |||
| Donald R. Keer | Attorney, Secretary, Treasury | 63 | Indefinite - June 25, 2024 |
Mr. Ricardo Haynes, President/CEO
Highly accomplished business development executive with more than 20 years of experience in producing exponential revenue growth as well as cultivating enduring relationships within the luxury hotel & hospitality management industry for flagship entities that include: Marriott / BonVoy & Hyatt Hotels. Prior to his current role Mr Haynes spent the last 15 years in the commercial real estate development lending & acquisitions space as part of a team specializing in the creation and successful implementation of collateralized debt instruments for commercial property purchase and development.
Mr. Eric Collins – Chariman
Mr. Collins is a well-polished leader with over 39 years in project management experience specializing in logistics planning for the U.S. Air Force, Special Operation Forces Division where he was responsible for oversight, coordination and execution of operational cost efficiencies of funds, time, material and facilities to resolve problems and issues in support and maintenance programs. He has also worked for Top Flight Development Group Inc. in Atlanta, GA buying and selling property for residential development.
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Mr. Lance L. Lehr – Operations Officer
Mr. Lehr has 25 years of senior management experience in the Hospitality Industry. He has worked at the senior most level of projects ranging from Ski Area’s with Hotel, Condo, F&B and Adventure Parks to Indoor Water Park Resorts development and operations. Mr. Lehr serves as a senior advisor to one POS, a hospitality technology leader and has developed numerous independent companies and concepts. His entrepreneurial management style of leadership empowers associates and holds them accountable for high level performance.
Mr. Donald R. Keer, P.E., ESQ. – Secretary/Corporate Attorney
Mr. Keer is an attorney and a professional engineer who spent the first half of his career as a construction project manager working for Fluor Corporation and then local developers in New Jersey and Pennsylvania. For the past 25 years, Mr. Keer has represented business clients working on construction projects, real estate development, mergers and acquisitions and publicly traded companies to ensure their businesses and construction projects move forward in a timely manner. He is a sole practitioner and has had his own law practice for 25 years.
Involvement in Certain Legal Proceedings
None of our directors, executive officers, significant employees or control persons has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years.
Corporate Governance
Our board of directors is comprised of one (2) non-independent director and two (2) independent directors.
The Company plans to obtain public company directors’ and officers’ insurance coverage, but has not done so yet, and plans to do so in the future once it raises sufficient funds. However, there can be no assurance that any funds can be raised or that the foregoing can occur as planned.
Code of Ethics
We expect that we will adopt a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. Once adopted, we will make the code of business conduct and ethics available on our website at www.webstartechnologygroup.com. We intend to post any amendments to the code, or any waivers of its requirements, on our website.
Board Structure
Our board has chosen not to separate the positions of Chief Technology Officer and Chairman of the Board as our initial planned operations will be limited. Our board of directors does not believe that such separation will serve any useful purpose at this time.
Role of Board in Risk Oversight Process
Management is responsible for the day-to-day management of risk and for identifying our risk exposures and communicating such exposures to our board. Our board is responsible for designing, implementing and overseeing our risk management processes. The board does not have a standing risk management committee, but administers this function directly through the board as a whole. The whole board considers strategic risks and opportunities and receives reports from our officers regarding risk oversight in their areas of responsibility as necessary. We believe our board’s leadership structure facilitates the division of risk management oversight responsibilities and enhances the board’s efficiency in fulfilling our oversight function with respect to different areas of our business risks and our risk mitigation practices.
Communications with the Board of Directors
Stockholders with questions about us are encouraged to contact us by sending communications to the attention of the Chief Executive Officer at 1100 Peachtree St. NE, Suite 200, Atlanta, GA 30309. If stockholders feel that their questions have not been sufficiently addressed through communications with the Chief Executive Officer, they may communicate with the board of directors by sending their communications to the Board of Directors, c/o the Chief Executive Officer at the same address.
Director Compensation
We have agreed to pay our non-employee directors $3,000 each for attending our quarterly board of directors’ meetings and reimburse them for reasonable travel expenses incurred in attending board and committee meetings once the Company is publicly held. The Company has held quarterly board meetings and the Board has waived director fees for each meeting. Therefore, such fees have not been paid nor accrued to date. We also intend to allow our non-employee directors to participate in any equity compensation plans that we adopt in the future.
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Procedures for Nominating Directors
The sitting directors nominate the people that they recommend to be directors of the Company for the coming year. The recommendations are then presented to the stockholders for a vote at an annual or special meeting of stockholders. The board sets a “record date” for determining stockholders that will be entitled to notice of and to vote at the annual and/or special meeting. Only stockholders of record as of the record date will be entitled to notice of the meeting and to vote at the meeting.
The required quorum for the annual meeting is a majority of the common stock issued and outstanding on the record date. If a quorum is not present when the meeting is called to order on the day and time stated above, the stockholders will be asked to vote to adjourn the meeting in order to enable us to have more stockholders in attendance, either in person or by proxy. Those who are present at the time of the meeting, though less than a quorum to transact other business, are sufficient to have a vote on adjournment of the meeting to a later date.
To approve the election of directors, the number of nominees proposed by the directors receiving the highest number of (or plurality) for votes at the annual and/or special meeting will be elected.
ITEM 11. EXECUTIVE COMPENSATION
The following table summarizes all compensation recorded by us in the past two fiscal years for:
| ● | our principal executive officer or other individual serving in a similar capacity, | |
| ● | our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at December 31, 2024 whose compensation exceed $100,000, and | |
| ● | up to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer at December 31, 2024. |
For definitional purposes, these individuals are sometimes referred to as the “named executive officers.”
2023 Summary Compensation Table
| Name and Principal Position | Fiscal Year Ended | Salary ($) | Bonus ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | |||||||||||||||||||
| James Owens(1) | 12/31/2024 | 1 | - | - | - | - | 1 | |||||||||||||||||||
| 12/31/2023 | 1 | - | - | - | - | 1 | ||||||||||||||||||||
| Don D. Roberts(2) | 12/31/2024 | 166,250 | - | - | - | 5,700 | 171,950 | |||||||||||||||||||
| 12/31/2023 | 350,000 | - | - | - | 12,000 | 362,000 | ||||||||||||||||||||
| Harold E. Hutchins(3) | 12/31/2024 | 59,452 | - | - | - | 2,000 | 362,000 | |||||||||||||||||||
| 12/31/2023 | 350,000 | - | - | - | 12,000 | 362,000 | ||||||||||||||||||||
| Ricardo H. Haynes | 12/31/2024 | - | - | - | - | - | - | |||||||||||||||||||
| (1) | Chief Technology Officer – on June 3, 2022 salary was amended to $1 from $350,000. All salary and other compensation amounts were previously accrued, not paid. Salary related obligations were settled with the CTO on June 3, 2022 through the issuance of a two-year convertible note payable. | |
| (2) | Chief Executive Officer – All amounts accrued, not paid. These accrued obligations were assumed by an entity owned and controlled by Mr. Owens in 2024. | |
| (3) | Chief Financial Officer – In 2024 and 2023, $0 and $30,400, respectively, was paid, and the remaining amounts not paid were accrued. These accrued obligations were assumed by an entity owned and controlled by Mr. Owens in 2024. |
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Long-Term Incentive Plans
There are no arrangements or plans in which we would provide pension, retirement or similar benefits for directors or executive officers.
Director Independence
Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that Marilyn Karpoff, and Gordon Clinkscale do not have a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or responsibilities and that each of these directors is “independent” as that term is defined under the listing standards of NASDAQ.
Outstanding Equity Awards at 2024 Fiscal Year-End
The stock options listed in the table below represent the stock issuable upon conversion of the convertible note payable issued to James Owens under the settlement agreement discussed in Part III, Item 13 of this report.
The following table provides information concerning unexercised options, stock that had not vested and equity incentive plan awards for each named executive officer outstanding as of December 31, 2024:
| OPTION AWARDS | STOCK AWARDS | |||||||||||||||||||||||||||||||||
| Name | Number of Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Unexercisable | Equity Incentive Plan Awards: Number of Underlying Unearned Options (#) | Option Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value Shares Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: of Unearned Shares, Units or Other Rights that Have Not Vested (#) | Equity Incentive Plan Awards: or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#) | |||||||||||||||||||||||||
| James Owens | 100,000,000 | - | - | 0.01 | 12/3/2025 | - | - | - | - | |||||||||||||||||||||||||
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Limitation on Liability
Under the Wyoming Revised Statutes and our amended and restated articles of incorporation, as amended, our directors will have no personal liability to us or our stockholders for monetary damages incurred as the result of the breach or alleged breach by a director of his “duty of care”. This provision does not apply to the directors’ (i) acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) acts or omissions that a director believes to be contrary to the best interests of the corporation or its stockholders or that involve the absence of good faith on the part of the director, (iii) approval of any transaction from which a director derives an improper personal benefit, (iv) acts or omissions that show a reckless disregard for the director’s duty to the corporation or its stockholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director’s duties, of a risk of serious injury to the corporation or its stockholders, (v) acts or omissions that constituted an unexcused pattern of inattention that amounts to an abdication of the director’s duty to the corporation or its stockholders, or (vi) approval of an unlawful dividend, distribution, stock repurchase or redemption. This provision would generally absolve directors of personal liability for negligence in the performance of duties, including gross negligence.
The statute does not affect a director’s responsibilities under any other law, such as the Federal securities laws. The effect of the foregoing is to require our company to indemnify our officers and directors for any claim arising against such persons in their official capacities if such person acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.
Insofar as the limitation of, or indemnification for, liabilities arising under the Securities Act may be permitted to directors, officers, or persons controlling us pursuant to the foregoing, or otherwise, we have been advised that, in the opinion of the SEC, such limitation or indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
At April 15, 2025, we had 400,185,985 shares of our common stock issued and outstanding. The following table sets forth information regarding the beneficial ownership of our common stock as of April 15, 2025 for:
| ● | each of our executive officers, | |
| ● | each of our directors, | |
| ● | all of our directors and executive officers as a group, and | |
| ● | each stockholder known by us to be the beneficial owner of more than 5% of our outstanding shares of common stock. |
Information on beneficial ownership of securities is based upon a record list of our stockholders and we have determined beneficial ownership in accordance with the rules of the SEC. We believe, based on the information furnished to us, that the persons and entities named in the table below have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws, except as otherwise provided below.
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Unless otherwise indicated, the business address of each person listed is in care of Webstar Technology Group, Inc., 1100 Peachtree St. NE, Suite 200, Atlanta, Georgia 30309.
Shares Beneficially | Percentage of Shares(1) | |||||||
| Name of Beneficial Owner | ||||||||
| Directors and Named Officers | ||||||||
| Gary Lagrotteria | 24,607,500 | 6.1 | % | |||||
| Ricardo Haynes | 10,428,736 | 2.6 | % | |||||
| Thunder Energies Corporation | 201,057,278 | 50.2 | % | |||||
| Marilyn Karpoff | 17,404,927 | 4.3 | % | |||||
| Donald Keer | 6,000,000 | 1.5 | % | |||||
| Gordon Clinkscale | 333,334 | 0.1 | % | |||||
| All named executive officers and directors as a group (five persons) | 243,069,705 | 60.7 | % | |||||
| (1) | Based on 400,185,985 shares outstanding as of the date of this filing. |
*Less than 1%
Securities Authorized for Issuance under Equity Compensation Plans
As of December 31, 2024, there were no securities authorized for issuance under equity compensation plans.
The following table sets forth securities authorized for issuance under any equity compensation plans approved by our stockholders as well as any equity compensation plans not approved by our stockholders as of December 31, 2024.
| Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation securities reflected in column (a)) | |||||||||
| Plans approved by our stockholders | - | - | - | |||||||||
| Plans not approved by stockholders* | - | - | - |
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
In addition to the compensation arrangements, including employment, termination of employment and change in control arrangements and indemnification arrangements, discussed in the sections titled “Management” and “Executive Compensation,” the following is a description of each transaction since March 10, 2015 (inception) and each currently proposed transaction in which:
| ● | We have been or will be a participant; | |
| ● | the amount involved exceeds the lesser of $120,000 or one percent of the average of our total assets at year end for the last two completed fiscal years; and | |
| ● | any of our directors, executive officers, beneficial owners of more than 5% of our capital stock or promoters, or any immediate family member of, or person sharing the household with, any of these individuals, had or will have a direct or indirect material interest. |
Mr. Owens is deemed a “promoter” of our company as that term is defined in the rules and regulations promulgated under the Securities Act of 1933.
We do not have a written policy for the review, approval or ratification of transactions with related parties or conflicted transactions. The terms of the following transactions between related parties were not determined as a result of arm’s length negotiations. When such transactions arise, they are referred to our board of directors for its consideration.
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In connection with the formation of our company, we issued an aggregate of 97,000,000 shares of our common stock to James Owens, in exchange for a cash contribution of $9,700.
James Owens, the controlling stockholder of the Company, has loaned the Company money on an as needed basis. As of December 31, 2023, the total amount outstanding from these working capital loans is $228,674. The advances from Mr. Owens are pursuant to an oral agreement, are non-interest bearing and payable upon demand by Mr. Owens. Mr. Owens has orally agreed not to demand repayment of his loans until such time as we have sufficient capital resources to repay such loans.
On August 16, 2017, we entered into an Amended and Restated Consulting Agreement with James Owens. Under the terms of the agreement, Mr. Owens’ duties include: strategic alliances, mergers and acquisitions; corporate planning, strategy and negotiations with potential strategic business partners and/or other general business consulting needs as expressed by us; business development and business advertising and due diligence processes. The term of the agreement commenced on August 16, 2017 and was canceled on December 31, 2019, and Mr. Owens agreed to cancel all the amounts due him under the agreement as of December 31, 2019.
On June 30, 2017, we entered into an Intellectual Property Purchase Agreement with Webstar Networks (the “IP Purchase Agreement”). James Owens, the controlling stockholder of our company controls the voting power of Webstar Networks. Under the terms of this agreement, we agreed to purchase and Webstar Networks agreed to sell to us all intellectual property associated with the Webstar eCampus software and website www.webstarecampus.com and other assets associated with the operation of this website. The purchase price for these assets was 17,000,000 shares of our unregistered common stock. The closing date was to occur no later than July 31, 2018 and was conditioned upon our sale of a minimum of $3,000,000 of our common stock in the planned offering of our common stock pursuant to our Registration Statement on Form S-1 for which we are required to, and plan to file a post-effective amendment. There can be no assurance that we’ll be able to file the post-effective amendment as planned, or that the Securities and Exchange Commission would declare our S-1 effective pursuant to such post-effective amendment, and there can be no assurance that the offering will commence as planned or that any funds will be raised in such offering and therefore, we may not be able to execute the foregoing as planned. Additionally, the IP Purchase Agreement contains additional covenants, representations and warranties that are customary of asset purchase and sale agreements. On May 12, 2018, we entered into an amendment to the IP Purchase Agreement whereby we issued 17,000,000 shares of our unregistered common stock and a promissory note in the principal amount of $675,000 payable upon completion of a sale of a minimum of $3,000,000 of our common stock in the planned offering of our common stock pursuant to our Registration Statement on Form S-1, for which we are required to, and plan to file a post-effective amendment. There can be no assurance that we’ll be able to file the post-effective amendment as planned, or that the Securities and Exchange Commission would declare our S-1 effective pursuant to such post-effective amendment, and there can be no assurance that the offering will commence as planned or that any funds will be raised in such offering. On June 30, 2018, we entered into a Second Amendment to the IP Purchase Agreement whereby we agreed with Webstar Networks to increase from $3,000,000 to $5,000,000 the minimum offering amount triggering the $675,000 principal payment under the promissory note we issued on May 12, 2018. On February 21, 2020, Webstar Networks agreed to cancel the $675,000 note, effective December 31, 2019 pursuant to a Cancellation of Amended and Restated Promissory Note Agreement between the Company and Webstar Networks, dated February 21, 2020.
Joseph P. Stingone, Sr., our former Chief Executive Officer provided us with the use of our principal offices located at 4231 Walnut Bend, Jacksonville, FL 32257 free of charge until April 1, 2019. We then entered into a lease agreement with him. On February 21, 2020, Barbara Stingone, Joseph’s widow and sole heir, canceled the lease, effective December 31, 2019, and agreed to transfer all liabilities owed her under the lease to James Owens. Mr. Owens accepted the transfer of the liabilities from the Company, effective December 31, 2019.
On June 21, 2019 the Company engaged StoneBridge Securities, LLC, and entity solely owned by Michael Hendrickson, a director of the Company, to preform services relating to the future offering of the Company’s common stock. The agreement calls for commissions to StoneBridge ranging from 1% to 3% for assisting in capital raising transactions. The agreement additionally called for a signing bonus of 500,000 warrants for the purchase of the Company’s common stock. The signing bonus was canceled by action of the Company’s Board of Directors on November 22, 2019, effective June 30, 2019.
On December 14, 2019, the Company entered into a subscription agreement (the “Preferred Subscription Agreement”) pursuant to which the Company agreed to issue and sell to James Owens, the Company’s Chairman of the Board, Chief Technology Officer, founder, and controlling shareholder one thousand (1,000) shares of the Series A Preferred Stock, at a total purchase price of $250,000.
On April 2, 2020, pursuant to the terms of a subscription agreement (the “Preferred Subscription Agreement”) the Company issued and sold to James Owens, the Company’s Chairman of the Board, Chief Technology Officer, founder, and controlling shareholder one thousand (1,000) shares of the Series A Preferred Stock, at a total purchase price of $250,000. The total price of $250,000 was recorded as a reduction to the due to stockholder account and an increase to the additional paid-in capital due to the related party nature of the transaction.
On April 21, 2020, the Company entered into the License Agreement with Soft Tech Development Corporation to exclusively license, market and distribute Soft Tech’s Gigabyte Slayer and WARP-G software (the “Licensed Technology”) and further develop and commercialize these softwares throughout the world. James Owens, our controlling stockholder, owns Soft Tech. Pursuant to the terms of the License Agreement, we agreed to pay a contingent licensing fee of $650,000 for each of the two components of Soft Tech’s technology, for a total of $1,300,000 for the Licensed Technology. The contingent licensing fee becomes due and payable only upon the earlier of: (i) the closing of an aggregate of $20 million in net capital offering of our stock or (ii) when our cumulative net sales from the Licensed Technology reaches $20 million. Further, we have agreed to pay a royalty rate of 7% based on the net sales of the Licensed Software. The term of the license agreement is five years with one automatic renewal period. However, the royalty will continue as long as we are selling the Licensed Technology. See “Item 1 Business”.
On August 26, 2020, Margie Simon, wife of Sanford Simon, Director, received 1,000,192 shares of the Company’s common stock in a liquidating distribution of Webstar Networks Corporation. Additionally, on September 17, 2020, Margie Simon purchased 107,500 shares of the Company’s common stock in a registered public offering at the offering price of $0.10 per share.
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On August 26, 2020, the Company’s CEO, Don Roberts, and CFO, Harold Hutchins along with Directors Landmann, England, Hendrickson, Simon, and Harrington, received shares of the Company’s common stock in the liquidating distribution of Webstar Networks Corporation. The amounts of the common stock received by these individuals is listed in “Item 12 – Securities Ownership of Certain Beneficial Owners and Management”.
On December 9, 2021, the Company’s CFO was granted non-qualified options to purchase 2,500,000 shares of the Company’s Common Stock at an exercise price of $0.0001 per share. The options are fully vested and have an expiration date of December 9, 2031. On June 3, 2022, this option grant was canceled.
In February 2022, one of our directors, Dr. England, died. Dr. England has not been replaced as of the date of this report.
On April 30, 2022, in accordance with their agreements, two of the Company’s directors, Dr. Ron Landmann and Kevin Harrington, terms expired. Their replacements have not been named as of the date of this report.
On June 3, 2022, the Company entered into a settlement agreement with Mr. Owens whereby Mr. Owens was issued a two-year convertible note payable in the amount of $1,101,000 in exchange for 1) elimination of the “Due to stockholder” liability of $756,450, 2) elimination of the Company’s obligations under Mr. Owens’ employment agreement for accrued salary of $845,833 and accrued auto allowance of $29,000, and 3) amended his employment agreement to set his salary at $1 per year beginning in June of 2022. The convertible note bears interest at the rate of eight percent (8%) per annum. The interest is accrued from the issue date and payable twenty-four months from the issue date. Mr. Owens may convert the note at any time beginning three days after the note issue date at a rate of $0.01 per share for the Company’s common stock.
On July 15, 2022, the Company amended its Technology Marketing and License Agreement with Soft Tech Development Corp. The material changes to the existing agreement are as follows:
Change Item 1., License
- to make the license exclusive
- to grant the Company a Right-of-First Refusal to acquire future exclusive marketing license for new technologies
- to remove Company’s option to broker and split proceeds on sale of Soft Tech’s technology
Change Item 12, Termination
-to give Licensor (Soft Tech) right to terminate the agreement upon:
- change in executive management of Company
- sale of majority interest in Company to 3rd party
- there is a Change of Control in the Company
On May 15, 2023, the Frank Perone Trust (owned and held by Mr. James Ownes) partially converted $101,000 of two-year convertible note’s principal and $82,710 of accrued interest into 18,371,000 shares of the Company’s common stock at the conversion rate of $0.01 per share, in accordance with the note’s convertible provision. There was no gain or loss related to the partial conversion.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
The following table sets forth the aggregate fees billed through our fiscal year ends to the Company by its independent registered public accounting firms, Assurance Dimensions, Inc. and D. Brooks and Associates CPAs, PA, for the fiscal years indicated.
| ACCOUNTING FEES AND SERVICES | 2024 | 2023 | ||||||
| Audit fees | $ | 45,655 | $ | 44,000 | ||||
| Tax fees | - | - | ||||||
| Total | $ | 45,655 | $ | 44,000 | ||||
The category of “Audit fees” includes fees for our annual audit, quarterly reviews and services rendered in connection with regulatory filings with the SEC, such as the issuance of comfort letters and consents.
All above audit services and audit-related services were pre-approved by the Board of Directors, which concluded that the provision of such services by Assurance Dimensions, Inc. and D. Brooks and Associates CPAs, was compatible with the maintenance of the firm’s independence in the conduct of the audits.
All Other Fees
The Company did not incur any other fees related to services rendered by our principal accountants for the fiscal years ended December 31, 2024 and 2023.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
The following are filed as part of this report:
(a)Financial Statements
The financial statements of the Company and Report of Independent Registered Public Accounting Firm are presented in the “F” pages of this Report.
(b) Exhibits
The following exhibits are filed or “furnished” herewith:
EXHIBIT INDEX
| 35 |
| 36 |
| * | Filed herewith. |
| + | Management contract or compensatory plan or arrangement. |
| 37 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| Webstar Technology Group, Inc. | ||
| Dated: April 30, 2025 | By: | /s/ Ricardo H. Haynes |
| Ricardo H. Haynes | ||
|
Chief Executive Officer and Principal Financial and Accounting Officer (principal executive officer) | ||
Pursuant to the requirements of Section 13 or 15(d) of 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.
| Name | Title and Date | |
| /s/ Ricardo H. Haynes | Director Dated: April 30, 2025 | |
| Ricardo H. Haynes |
| 38 |
| F-1 |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors of
Webstar Technology Group, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Webstar Technology Group, Inc. (the Company) as of December 31, 2023, and the related statement of operations, stockholders’ deficit, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Explanatory Paragraph- Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 of the financial statements, the Company suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flows from operations. The Company’s ability to continue as a going concern is dependent on continued support from a related party. These factors raise substantial doubt about the Company’s ability to continue as a going concern. This gives rise to substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months after the issuance of these financial statements. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
We determined that there were no critical audit matters.
| /s/ |
|
| We have served as the Company’s auditor since 2023. | |
| March 29, 2024 |
| F-2 |
Report of Independent Registered Public Accounting Firm
To
the Shareholders and the board of directors of
Webstar Technology Group Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheet of Webstar Technology Group Inc. (the “Company”) as of December 31, 2024, and the related statements of operations, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).
In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
The financial statements of Webstar Technology Group, Inc. as of December 31, 2023, were audited by Assurance Dimensions, LLC (PCAOB ID 5036), whose report dated March 29, 2024, expressed an unqualified opinion on those statements.
Substantial doubt about Company’s ability to continue as a going concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company suffered recurring losses from operations, has a significant accumulated deficit, has no active business operations and not have any employee. In addition, the Company continues to experience negative cash flows from operations. The Company’s ability to continue as a going concern is dependent on continued support from a related party. These factors raise substantial doubt about the Company’s ability to continue as a going concern. This gives rise to substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months after the issuance of these financial statements. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Corporate Office: “Pipara Corporate House” Near Bandhan Bank Ltd., Netaji Marg, Law Garden, Ahmedabad - 380006 |
Mumbai Office: #3, 13th floor, Tradelink, ‘E’ Wing, A - Block, Kamala Mills, Senapati Bapat Marg, Lower Parel, Mumbai - 400013 |
New York Office: 1270, Ave of Americas, Rockefeller Center, FL7, New York – 10020, USA +1 (646) 387 - 2034 |
Delhi Office: Green Park Desq Work, Gate No. 1, 49/1 Yusuf Sarai, Nr. Green Park Metro station, Delhi - 110016 |
Dubai Office: 1011, B-Block, Mazaya Centre, Sheikh Zayed Rd - Al Wasl - Dubai - UAE |
Singapore Office: 3 Shenton Way, Shenton House, # 08 – 09A, Singapore - 068805 | |||||
| T: + 91 79 40 370370 | E: [email protected] | [email protected] | [email protected] | [email protected] | www.pipara.com |
| F-3 |
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex auditor judgment. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for and Valuation of Bear Village Intellectual Property
As discussed in Note 1 to the financial statements, the Company acquired the Bear Village intellectual property (“Bear Village IP”) as part of a broader restructuring and realignment of operations. This transaction involved related parties and non-cash consideration, and is expected to materially affect the Company’s future operations and strategic direction. Auditing this transaction required significant auditor judgment due to the complexity of the acquisition, the valuation of intangible assets with no prior carrying value, and management’s assumptions related to the proposed development project and expected capital raise.
Our audit procedures related to this critical audit matter included:
| ● | Reviewing the asset purchase agreement and board approvals. | |
| ● | Evaluating the accounting treatment applied, including the identification and recognition of intangible assets. | |
| ● | Assessing the reasonableness of management’s assumptions used in estimating the fair value and business purpose of the acquired assets. | |
| ● | Evaluating the adequacy and clarity of the related disclosures in the financial statements. |
Emphasis of matter para
| ● | As disclosed in Note 1 to the financial statements, on June 14, 2024, there was a change in ownership and control of the Company through the acquisition of 100% of the Company’s Series A Preferred Stock by a group of individuals (the “Purchasers”). The Preferred Stock remains in escrow, with voting control retained by the former CEO and majority shareholder, Mr. James Owens, until final payment is made. This transaction represents a significant change in governance and control, and has implications for subsequent events, related party disclosures, and management’s plans related to the going concern uncertainty. |
| ● | As described in Note 3 to the financial statements, the Company entered into certain transactions with related parties during the year ended December 31, 2024. While we were not able to obtain confirmations directly from those related parties, we performed alternative audit procedures, including reviewing agreements and obtaining representations from management. Based on the audit evidence obtained, we were able to complete our procedures related to these transactions and our opinion is not modified in respect of this matter. |
For,
Pipara & Co LLP (
We have served as the Company’s auditor since 2025
Place:
Date: 02 May, 2025
| F-4 |
Webstar Technology Group, Inc.
Balance Sheets
| December 31, | ||||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Total current assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued salaries and related expenses | ||||||||
| Accrued interest – related party | ||||||||
| Advance from related party | ||||||||
| Due to stockholders | ||||||||
| Convertible note payable – related party | ||||||||
| Total current liabilities | ||||||||
| Commitments (Note 7) | ||||||||
| Stockholders’ deficit | ||||||||
| Preferred stock, $ par value; Authorized shares; designated Series A Preferred, issued and outstanding as of December 31, 2024 and 2023 | ||||||||
| Common stock, $ par value; Authorized shares; and issued and outstanding as of December 31, 2024 and 2023, respectively | ||||||||
| Additional paid-in-capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| F-5 |
Webstar Technology Group, Inc.
Statements of Operations
| For the Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Revenue | $ | $ | ||||||
| Cost of sales | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Salaries and related expenses | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Operating loss | ( | ) | ( | ) | ||||
| Other expense | ||||||||
| Loss on extinguishment of debt with a related party | ( | ) | ||||||
| Interest expense – related party | ( | ) | ( | ) | ||||
| Total other expense | ( | ) | ( | |||||
| Net loss before income taxes | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per share-basic and diluted | $ | ) | $ | ) | ||||
| Weighted average shares outstanding – basic and diluted | ||||||||
The accompanying notes are an integral part of these financial statements.
| F-6 |
Webstar Technology Group, Inc.
Statements of Stockholders’ Deficit
For the Years Ended December 31, 2024 and 2023
| Preferred Stock | Common Stock | Additional Paid-in- | Accumulated | Total Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||||||||
| Balance at December 31, 2022 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Partial conversion of convertible note payable to related party | - | |||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
| Liabilities settled with shares of common stock | - | |||||||||||||||||||||||||||
| Liabilities assumed by related party | - | |||||||||||||||||||||||||||
| Exchange of common stock for intellectual property | - | ( | ) | |||||||||||||||||||||||||
| Net Loss | - | ( | ) | ( | ) | |||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
| F-7 |
Webstar Technology Group, Inc.
Statements of Cash Flows
| For the Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities | ||||||||
| Loss on extinguishment of debt with a related party | ||||||||
| Amortization expense | ||||||||
| Consulting services added to due to stockholder | ||||||||
| Change in assets and liabilities | - | |||||||
| Prepaid expenses | ( | ) | ||||||
| Accounts payable | ( | ) | ||||||
| Accrued salaries and related expenses | ||||||||
| Accrued interest – related party | ||||||||
| Lease liabilities | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Advances from stockholders | ||||||||
| Advance from related parties | ||||||||
| Repayments to stockholders | ( | ) | ||||||
| Net cash provided by financing activities | ||||||||
| Net increase (decrease) in cash | ( | ) | ( | ) | ||||
| Cash at beginning of the year | ||||||||
| Cash at end of the year | $ | $ | ||||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income taxes | $ | $ | ||||||
| Schedule of non-cash financing activities | ||||||||
| Partial conversion of convertible note payable and accrued interest – related to common stock | $ | $ | ||||||
| Accrued salaries and related expenses assumed by related party | $ | $ | ||||||
| Liabilities settled with shares of common stock | $ | $ | ||||||
| Shares issued to related parties for intellectual property | $ | $ | ||||||
The accompanying notes are an integral part of these financial statements.
| F-8 |
WEBSTAR TECHNOLOGY GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2024 and 2023
NOTE 1 - DESCRIPTION OF BUSINESS
Webstar Technology Group, Inc. (the “Company”)
was incorporated in
During the year ended December 31, 2024, the Company entered into several material definitive agreements as summarized below:
| 1) | On June 14, 2024 (“Closing”), Mr. Ricardo Haynes, Mr. Eric Collins, Mr. Lance Lehr, Ms. Tori White and Mr. Donald Keer, each as an individual (the “Purchasers”) personally acquired % of the issued and outstanding shares of the Series A Preferred Stock (the “Preferred Stock”) of the Company from the Frank T. Perone Irrevocable Trust (“Trust”), a Florida trust (the “Seller”), a Trust controlled by Mr. James Owens the Company’s former CEO, founder and majority stockholder. |
| 2) | On June 21, 2024, the Company entered into a material definitive agreement with Electrical and Compression Optimization, Inc. (“ECO”), a Wyoming corporation owned and controlled by James Owens, for the acquisition of contracts, with a net book value of zero, from the Company. In exchange for the acquisition of the contracts, ECO issued common shares directly to the stockholders of record of the Company at the close of business June 21, 2024 on a one-to-one basis. |
| 3) | One June 21, 2024, the Company entered into a material definitive agreement with Webnet Technologies Incorporated (“Webnet”), a Wyoming corporation owned and controlled by James Owens, for the acquisition of licenses for the use, development and commercialization of Gigabyte Slayer and WARP-G software. As consideration for the licenses, Webnet assumed liabilities of the Company, specifically related to accrued salaries and related expenses of $ and a cash payment of $ |
| 4) | On June 24, 2024, the Company agreed to acquire the assets and intellectual property associated with the Bear Village, Inc. family resort developments from Thunder Energies Corporation, an entity owned and controlled by the Purchasers of the Company’s Preferred Stock. An asset sale agreement was executed on July 15, 2024 between the Company and the selling entity. Pursuant to the agreement, the Company agreed to issue the selling entity shares of common as consideration for the assets acquired related to Bear Village, Inc. These shares were issued to the sellers on October 1, 2024 (see Note 3). |
As a result of the sale of the Preferred Stock, discussed above, the existing officers and directors of the Company, Mr. James Owens, Mr. Michael Hendrickson, Mr. Sanford Simon, and Mr. Don Roberts, were removed and replaced by the below as of June 14, 2024.
Under the terms of the Preferred Stock purchase agreement, the Purchases were permitted to elect representatives to serve on the Board of Directors to fill the seat(s) vacated by prior directors and as new officers as follows:
Chairman/Chief Executive Officer - Mr. Ricardo Haynes
Independent Director – Ms. Marilyn Karpoff
Independent Director – Mr. Gordon Clinkscale
President – Mr. Eric Collins
Interim Chief Financial Officer (CFO) – Ms. Adrienne Anderson
Secretary – Mr. Donald R. Keer
Chief Operating Officer – Mr. Lance Lehr
Ms. Anderson submitted her resignation as interim CFO on February 19, 2025 but continues to provide financial reporting related services to the Company on a consulting basis.
Since execution of the above material definitive agreements, the Company is currently an early-stage specialty real estate development company devoted to the identification, partnership and development of specialty real estate projects in the United States with a focus on multitenant buildings that can be upgraded to green/energy efficient status and entertainment and resort real estate development.
The Company will operate under the brand name “Webstar Technology Group” with the consideration given to future name changes due to a diversification of operations outside of the former business.
| F-9 |
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”).
Liquidity, Going Concern and Uncertainties
These financial statements have been prepared in conformity
with US GAAP, which contemplates continuation of the Company as a going concern. To date, the Company’s commercial operations have
not generated sufficient revenues to enable profitability. As of December 31, 2024, the Company had an accumulated deficit of $
The Company’s continued operations will depend on its ability to raise additional capital through various potential sources, such as future equity offerings and/or debt financings, strategic relationships, and to successfully execute its business plans. The Company has relied upon advances from its former Chairman and former majority stockholder, Mr. James Owens, to fund operations since inception. Management is actively pursuing financing but can provide no assurances that such financing will be available on acceptable terms, or at all. Without this funding, the Company could be required to delay, scale back or eliminate some or all of its business plans which would likely have a material adverse effect on the Company.
The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern.
Use of Estimates
The preparation of the financial statements in conformity with US 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Certain of the Company’s estimates, could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. We re-evaluate all of our accounting estimates at least quarterly based on these conditions and record adjustments when necessary. Significant estimates made by management include the valuation of deferred tax assets and the fair value of stock issued to settle liabilities.
Fair Value Measurements
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement (“ASC 820”), requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. ASC 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement.
The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:
| ● | Level 1: Quoted market prices in active markets for identical assets or liabilities. | |
| ● | Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. | |
| ● | Level 3: Unobservable inputs that are not corroborated by market data. |
The carrying amounts reported in the balance sheet for cash, accounts payable, accrued expenses, and due to stockholder approximate their fair value based on the short-term maturity of these instruments. The Company did not have any non-financial assets or liabilities that are measured at fair value on a recurring basis at December 31, 2024 or 2023.
Cash
The Company considers cash and cash equivalents to
include all stable, highly liquid investments with maturities of three months or less. There are
| F-10 |
Leases
The Company accounts for leases under ASU 2016-02. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities on the consolidated balance sheets. The Company leases office equipment used to conduct our business.
Operating lease ROU assets represent the right to use the leased asset for the lease term and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Operating lease expense is recognized on a straight-line basis over the lease term and is included in general and administrative expenses in the consolidated statements of operations.
The Company transferred its leased copy machine to a related party on April 1, 2023. At December 31, 2024, the Company has no leased assets. There was no gain or loss to the Company related to the transfer of the lease.
Revenue Recognition
The Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. The Company anticipates receiving revenue from licensing its software to customers. To determine the appropriate amount of revenue to be recognized for arrangements determined to be within the scope of ASC 606, the Company performs the following five steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect consideration it is entitled to in exchange for the goods or services it transfers to the customer.
The Company intends to generate revenue through the following activities:
| ● | individual and corporate membership sales, | |
| ● | fractional ownership and timeshare sales, | |
| ● | food and beverage sales, | |
| ● | coaching and instruction services, | |
| ● | suite rentals, | |
| ● | retail sales, | |
| ● | sponsorships, advertising and naming rights, and | |
| ● | contest and qualifier fees and ticket purchases. |
The Company had
Stock Based Compensation
Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation –Stock Compensation”, which requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur as permitted under ASU 2016-09 Improvements to Employee Share-Based Payment. During the years ended December 31, 2024 and 2023, the Company did not grant any stock options.
| F-11 |
Income Taxes
Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the assets or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company follows the provisions of FASB ASC 740-10 “Uncertainty in Income Taxes” (ASC 740-10). Certain recognition thresholds must be met before a tax position is recognized in the financial statements. An entity may only recognize or continue to recognize tax positions that meet a “more-likely-than-not” threshold. At December 31, 2024 and December 31, 2023, the Company does not believe it has any uncertain tax positions that would require either recognition or disclosure in the accompanying financial statements.
The Company reports net loss per share in accordance with ASC Topic 260-10, “Earnings per Share.” Basic loss per share is computed by dividing loss available to common stockholders by the weighted average number of shares of common stock outstanding. Diluted loss per share is computed similarly to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and were dilutive.
At December 31, 2024 and 2023, the Company had a convertible note payable outstanding with a related party. For the years ended December 31, 2024 and 2023, the note was convertible into shares of common stock (see Note 3). The dilutive securities have been excluded from loss per share as the inclusion would be anti-dilutive.
Recently Issued Accounting Pronouncements – Not Yet Adopted
In December 2023 FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09). The ASU focuses on income tax disclosures around effective tax rates and cash income taxes paid. ASU 2023-09 requires public business entities to disclose, on an annual basis, a rate reconciliation presented in both dollars and percentages. The guidance requires the rate reconciliation to include specific categories and provides further guidance on disaggregation of those categories based on a quantitative threshold equal to 5% or more of the amount determined by multiplying pretax income (loss) from continuing operations by the applicable statutory rate. For entities reconciling to the US statutory rate of 21%, this would generally require disclosing any reconciling items that impact the rate by 1.05% or more. ASU 2023-09 is effective for public business entities for annual periods beginning after Dec. 15, 2024 (generally, calendar year 2025) and effective for all other business entities one year later. Entities should adopt this guidance on a prospective basis, though retrospective application is permitted. The adoption of ASU 2023-09 is expected to have a financial statement disclosure impact only and is not expected to have a material impact on the Company’s financial statements.
Recently Issued Accounting Pronouncements –Adopted
In November 2023 the FASB issued ASU 2023-07 (ASU 2023-07), Segment Reporting – Improvements to Reportable Segment Disclosures. The ASU will now require public entities to disclose its significant segment expenses categories and amounts for each reportable segment. Under the ASU, a significant segment expense is an expense that is:
| ● | significant to the segment, | |
| ● | regularly provided to or easily computed from information regularly provided to the chief operating decision maker (CODM), and | |
| ● | included in the reported measure of segment profit or loss. |
The ASU is effective for public entities for fiscal years beginning after December 15, 2023 and interim periods in fiscal years beginning after December 15, 2024 (calendar year public entity will adopt the ASU in its 2024 Form 10 K). The ASU should be adopted retrospectively unless it’s impracticable to do so. Early adoption of the ASU is permitted, including in an interim period. The adoption of ASU 2023-07 did not have an impact on the Company’s financial statements since it operates in one reportable segment and has yet to generate revenues.
The Company considers the applicability and impact of all recently issued accounting pronouncements. Recent accounting pronouncements not specifically identified in our disclosures are either not applicable to the Company or are not expected to have a material effect on our financial condition or results of operations.
| F-12 |
NOTE 3 – RELATED PARTY TRANSACTIONS
Asset Purchase Agreement
On October 1, 2024, the Company acquired all of the
intellectual property of Bear Village, Inc. (“Bear Village”) in exchange for from Thunder Energies Corporation
(“TEC”)., an entity controlled by the Purchasers discussed in Note 1. Since the Company shares common ownership with TEC,
the Company treated this transaction in accordance with ASC 805-50-30-5 and has recognized the purchased intellectual property at the
carrying value recognized by TEC $
Advance from Related Party
During the year ended December 31, 2024, the Company
received $
Due to Stockholders
The Trust, controlled by Mr. James Owens, the founder,
stockholder, and former chairman of the board of directors of the Company, advanced the Company money as needed for working capital needs.
During the years ended December 31, 2024 and 2023, the Trust loaned the Company $
Further, during the year ended December 31, 2024,
Mr. Owens provided the Company with consulting services on an as needed basis amounting to $
On June 3, 2024, the Board of Directors approved,
and Mr. Owens agreed, to settle the agreement amount due to the Trust for working capital advances and consulting services totaling $
At December 31, 2024 and December 31, 2023, the balance
remaining on the due to stockholder was $
| F-13 |
Convertible Note Payable
On June 3, 2022 (the “Issue Date”), the
Company entered into a settlement agreement with Mr. Owens whereby Mr. Owens was issued a two-year convertible note payable (the “Note”)
in the amount of $
On May 15, 2023, the Trust partially converted $
On June 3, 2024 the Board of Directors approved, and
Mr. Owens agreed, to settle certain liabilities owed to the Trust with shares of common stock (see below for further details). Included
in this settlement was $
During the years ended December 31, 2024 and 2023,
interest expense on the Note was $
At December 31, 2024 and December 31, 2023, $
On March 20, 2024 Mr. Owens transferred the Note to Mr. Hendrickson, a former director of the Company.
Liabilities Settled with Shares of Common Stock
On June 3, 2024, the Board of Directors approved and
Mr. Owens, as Trustee of the Trust, agreed to settle $ of outstanding liabilities due to the Trust for working capital advances,
consulting services and accrued interest on the Note with shares of common stock. The fair value of the stock was $
on the settlement date based on the stock’s market price. Therefore, a loss on extinguishment of $
Liabilities Assumed by Related Party
On June 21, 2024, the Company
entered into a material definitive agreement with Webnet Technologies Incorporated (“Webnet”), a Wyoming corporation owned
and controlled by James Owens, for the acquisition of licenses for the use, development and commercialization of Gigabyte Slayer and WARP-G
software. The licenses have no net book value. As consideration for the licenses, Webnet assumed liabilities of the Company, specifically
related to accrued salaries and related expenses of $
| F-14 |
License Agreement
On April 21, 2020, the Company entered into a license
agreement with Soft Tech Development Corporation (“Soft Tech”) to exclusively license, market and distribute Soft Tech’s
Gigabyte Slayer and WARP-G software (the “Licensed Technology”) and further develop and commercialize these softwares throughout
the world. James Owens, our controlling stockholder, owns Soft Tech. Pursuant to the terms of the license agreement, we agreed to pay
a contingent licensing fee of $
NOTE 4 – STOCKHOLDERS’ DEFICIT
Series A Preferred Stock
On March 16, 2020, the Company filed a Certificate
of Designations (the “Certificate”) with the Secretary of State of Wyoming to amend its Articles of Incorporation to designate
the Series A Preferred Stock as a series of preferred stock of the Company. shares of Series A Preferred Stock are authorized in
the Certificate.
Common Stock
On August 27, 2024, the Company amended its articles of incorporation with the State of Wyoming and increased its authorized shares of common stock from to shares.
At December 31, 2024 and 2023, the Company had and issued and outstanding shares of common stock, respectively.
On May 15, 2023, shares of the Company’s common stock were issued to the Frank Perone Trust for a partial conversion of a convertible note pursuant to the conversion provisions of the Note(see Note 3).
During the year ended December 31, 2024, the Company issued shares of common stock to settle liabilities owed to a related party (see Note 3).
During the year ended December 31, 2024, the Company issued shares of common stock to related parties in exchange for intellectual property (see Note 3).
| F-15 |
NOTE 5 – INCOME TAXES
Deferred income tax assets and liabilities are computed annually for differences between financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.
The effective tax rate on the net loss before income taxes differs from the U.S. and State statutory rates as follows:
| 12/31/2024 | 12/31/2023 | |||||||
| U.S statutory rate | % | % | ||||||
| Florida state corporate income tax rate | % | % | ||||||
| Total statutory tax rates | % | % | ||||||
| Less valuation allowance | - | % | - | % | ||||
| Net income tax rate | ||||||||
At December 31, 2024, the Company has a tax loss carryover
of approximately $
The ultimate realization of deferred tax assets depends on the generation of future taxable income during those periods in which those temporary differences are deductible. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance is necessary against the deferred tax assets arising from the net operating losses at December 31, 2024 and 2023 due to the uncertainty of the Company being able to generate future taxable income.
The Company’s policy regarding income tax interest and penalties is to expense those items as general and administrative expense but to identify them for tax purposes. During the years ended December 31, 2024 and 2023, there was no income tax, or related interest and penalty items in the income statement, or liabilities on the balance sheet. The Company files income tax returns in the U.S. federal jurisdiction and Wyoming and Florida state jurisdictions.
NOTE 6 – COMMITMENTS
Executive Employment Agreements
On February 21, 2020, effective January 1, 2020, the
Company entered into executive employment agreements with Don D. Roberts its former President and Chief Executive Officer, Harold E. Hutchins
its former Chief Financial Officer, and James Owens as its former Chief Technology Officer. The details of these agreements are found
in Note 6 below (Commitments). The agreements provide for salaries of $
At December 31, 2024 and December 31, 2023, the accrued
salaries resulting from these employment agreements were $
The salaries and related expenses related to these
agreements for the years ended December 31, 2024 and 2023 were $
In June 2024, the accrued liabilities associated with these employment agreements were assumed by Webnet, an entity owned and controlled by Mr. Owens (see Note 3).
NOTE 7 – SUBSEQUENT EVENTS
The Company filed a Regulation A Offering on March
17, 2025 with the Securities and Exchange Commission for an offering up to $
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