WNLV 10-Q
Winvest Group Ltd (WNLV)
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended:
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _________ to _________
Commission File Number
(Exact name of registrant as specified in its charter) |
| ||
(State or other jurisdiction of Incorporation or organization) |
| (IRS Employer Identification No.) |
(
(Issuer’s telephone number including area code)
(Former name, former address, and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
None |
| N/A |
| N/A |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☐ |
☐ | Smaller reporting company | ||
| Emerging growth company | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
State the number of shares outstanding of each of the issuer’s classes of common equity as of the latest practicable date.
As of November 19, 2024, there were
WINVEST GROUP LTD.
CONTENTS
i |
| Table of Contents |
PART 1 – FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements
WINVEST GROUP LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
| September 30, |
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| December 31, |
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| 2024 |
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| 2023 |
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| (Unaudited) |
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ASSETS |
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Cash |
| $ |
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| $ |
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Accounts receivable |
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Accounts receivable other |
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Prepaid expenses |
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Total current assets |
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Investments |
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Security deposit |
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Total Assets |
| $ |
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| $ |
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LIABILITIES & STOCKHOLDERS’ DEFICIT |
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Current liabilities |
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Accounts payable |
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Accrued liabilities |
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Project advances |
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Project advances- related party |
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Loan payable |
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Notes payable-related parties |
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Total current liabilities |
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Total liabilities |
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Commitments and Contingencies |
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STOCKHOLDERS’ DEFICIT |
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Preferred stock Series A, $ |
| $ |
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| $ |
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Common stock, Par Value $ |
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Additional paid in capital |
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Accumulated Deficit |
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Total Stockholders’ Deficit |
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| ( | ) |
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| ( | ) |
Total Liabilities and Stockholders’ Deficit |
| $ |
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| $ |
| ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 1 |
| Table of Contents |
WINVEST GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
| Three months ended |
|
| Nine months ended |
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|
| September 30, 2024 |
|
| September 30, 2023 |
|
| September 30, 2024 |
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| September 30, 2023 |
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Revenue |
| $ |
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| $ |
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| $ |
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Cost of sales |
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Gross margin |
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Operating expenses: |
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Administrative expenses |
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Total operating expenses |
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Loss from operations |
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Other (expense) income: |
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Interest expense |
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Other income |
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Gain on investment |
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Other (expense) income, net |
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Net loss before income tax |
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Income tax expense |
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Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Basic and diluted loss per common share |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Weighted average number of shares outstanding |
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The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 2 |
| Table of Contents |
WINVEST GROUP LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
(Unaudited)
|
|
| Preferred Stock |
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| Common Stock |
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| Additional Paid-In |
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| Accumulated |
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| Total Stockholders’ |
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| Shares |
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| Value |
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| Shares |
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| Value |
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| Capital |
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| Deficit |
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| Deficit |
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Balance, December 31, 2022 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||||
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Common stock issued for services |
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| - |
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| - |
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Misc. common stock adjustment |
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| - |
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| - |
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| - |
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| - |
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| - |
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Net loss |
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| - |
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| - |
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| - |
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| - |
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| - |
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| ( | ) | |
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Balance, March 31, 2023 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||||
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Net loss |
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| - |
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| - |
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| - |
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| - |
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Balance, June 30, 2023 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||||
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Common shares issued as investment |
|
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| - |
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| - |
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| - |
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Net loss |
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| - |
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| - |
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| - |
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Balance, September 30, 2023 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||||
| 3 |
| Table of Contents |
|
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| Preferred Stock |
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| Common Stock |
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| Additional Paid-In |
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| Accumulated |
|
| Total Stockholders’ |
| ||||||||||||||
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| Shares |
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| Value |
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| Shares |
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| Value |
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| Capital |
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| Deficit |
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| Deficit |
| ||||||||
Balance, December 31, 2023 |
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| $ |
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| $ |
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| $ |
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Issuance of shares for investment |
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| - |
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| - |
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| - |
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| - |
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Conversion of preferred stock to common stock |
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Private placement of common shares |
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| - |
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| - |
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| - |
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Net loss |
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| - |
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| - |
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| - |
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| - |
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Balance, March 31, 2024 |
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| $ |
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Cancellation of common shares in return of preferred stock |
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| - |
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Net loss |
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| - |
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| - |
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| - |
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| - |
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| - |
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Balance, June 30, 2024 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||||
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Conversion of preferred stock to common stock |
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Net loss |
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| - |
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| - |
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| - |
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| - |
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| - |
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Balance, September 30, 2024 |
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| $ |
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| $ |
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| $ |
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| $ | ( | ) |
| $ | ( | ) | ||||||
The accompanying notes are an integral part of these unaudited consolidated financial statements.
| 4 |
| Table of Contents |
WINVEST GROUP LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
| Nine months ended |
| |||||
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| September 30, 2024 |
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| September 30, 2023 |
| ||
Cash flows used in operating activities: |
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Net loss |
| $ | ( | ) |
| $ | ( | ) |
Adjustments to reconcile net loss to net cash provided by/ (used in)operating activities: |
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Stock based compensation |
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Gain from repurchase of investment |
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Changes in assets and liabilities |
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Accounts receivable |
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Accounts receivable-other |
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| ( | ) | |
Prepaid expenses |
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Security deposit |
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Other assets |
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| ( | ) | |
Accounts payable |
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| ( | ) |
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Accrued liabilities and project advances |
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| ( | ) | |
Deferred revenue |
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Net cash used in operating activities |
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Cash flows provided in investing activities: |
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Proceeds from investment repurchase |
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Net cash provided by investing activities |
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Cash flows provided by/ (used in) financing activities |
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Loan proceeds |
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Loan repayments |
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Proceeds from private placements |
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Repayments of notes payable-related parties |
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Proceeds from notes payable-related parties |
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Net cash provided by financing activities |
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Net increase in cash |
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Cash, beginning of period |
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Cash, end of period |
| $ |
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| $ |
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Supplemental disclosure of non-cash investing and financing activities |
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Purchase of investment with common shares |
| $ |
|
| $ |
| ||
The accompanying notes are an integral part of these condensed consolidated financial statements.
| 5 |
| Table of Contents |
WINVEST GROUP LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
Winvest Group Ltd, “the Company” (formerly known as Zyrox Mining International Inc. until December 2021) was incorporated in the State of Nevada on June 3, 2009. Winvest Group Ltd began formal operations on June 3, 2009, with the principal purpose of developing, marketing, and selling software products through the Internet, and to provide web based services for individuals and small business. During 2010, this business was discontinued and management focused on developing a biodegradable plastic opportunity.
The Company began trading as Riverdale Capital, Ltd. under the symbol “RICP” on June 3, 2009.
On August 17, 2010, the then Chief Executive Officer resigned and appointed Carl H. Kruse as sole Director and Chief Executive Officer. Carl H. Kruse became the majority shareholder at that time by virtue of a Stock Purchase Agreement with the majority shareholder, resulting in a change of control of the Issuer.
On November 8, 2010, the Company entered into an agreement to acquire
The Company finalized the acquisition of a biodegradable plastic manufacturer, WSPVA, Bio Products International, LLC, a Nevada LLC, on March 12, 2012, for
Effective April 30, 2012, the Company changed its name to Diversified Energy & Fuel International, Inc. and changed its name to Zyrox Mining International, Inc. on August 15, 2012.
During the period from November 2012 through April 2020, the Company was dormant.
The Company’s accounting year-end is December 31.
David Lazar, the principal of Custodian Ventures, LLC conducted due diligence on the Company and determined that the Company would be a potential Custodianship candidate, based upon previous management appearing to have abandoned the Company approximately eleven years ago. Mr. Lazar then chose to buy shares of the Company on the open market and start a Custodianship proceeding.
On December 27, 2019, Custodian Ventures, LLC was appointed as the custodian of the Company by the Eighth Judicial Court of Nevada pursuant to Case No. A-19-805642-B.
On March 5, 2021, as a result of a private transaction,
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Other than as described below, there are no arrangements or understandings between either the former and new control persons and their associates with respect to the election of directors of the Company or other matters.
On April 14, 2021, the existing director and officer resigned immediately. Accordingly, David Lazar, serving as a director and an officer, ceased to be the Company’s Chief Executive Officer, Chief Financial Officer, President, Treasurer, Secretary, and a Director.
On September 14, 2021, The Board of Directors of Zyrox Mining International, Inc. voted to change the Company’s fiscal year end from May 31 to December 31 in order to align it with its intended acquisition target. The Board of Directors of the Company approved this change on September 14, 2021.
On December 17, 2021, Zyrox Mining International, Inc (the “Company”), amended its articles of incorporation change its name to Winvest Group Ltd. (the “Name Change”). The change was made in anticipation of entering into a new line of business operations.
Also on December 17, 2021, Zyrox Mining International, Inc. amended its articles of incorporation to reverse split its common stock at a rate of 1 for 250 (the “Reverse”).
On December 29, 2021, FINRA declared the Name Change and the Reverse effective. Also on December 29, 2021, the Company was informed by FINRA that the Company’s ticker symbol would be changed to WNLV in twenty business days. The Company’s stock symbol changed to WNLV on January 27, 2022.
On September 14, 2021, the Board of Directors of the Company approved a change to its fiscal year end from May 31 to December 31. The change in the fiscal year became effective for the Company’s 2021 fiscal year, which began June 1, 2021, and ended December 31, 2021. Accordingly, the Company is filing this transition report on Form 10-KT for the seven-month period from June 1, 2021 through December 31, 2021.
On December 17, 2021, Zyrox Mining International, Inc. amended its articles of incorporation to change its name to Winvest Group Ltd. (the “Name Change”). The change was made in anticipation of entering into a new line of business operations.
Also on December 17, 2021, Zyrox Mining International, Inc. amended its articles of incorporation to reverse split its common stock at a rate of
On December 29, 2021, FINRA declared the Name Change and the Reverse effective. Also on December 29, 2021, the Company was informed by FINRA that the Company’s ticker symbol would be changed to WNLV in twenty business days. The symbol change occurred on January 27, 2022
On May 16, 2022, the Company entered into a share exchange agreement (the “Share Exchange Agreement”) with The Catalyst Group Entertainment, LLC (“TCG”), a California limited liability company, Joseph Lanius (“Lanius”), Nicholas Burnett (“Burnett”), and Khiow Hui Lim (“Khiow,” “Burnett” and together with Lanius, the “TCG Shareholders”), the sole officers, directors, and shareholders of TCG, IQI Media Inc. (“IQI”), a California corporation, solely 100% women-owned company, Khiow, Lanius, Charlene Logan Kelly (“Kelly”), Burnett, Connie Tsai (“Tsai”), and Amy Morton (“Morton”), as the officers, directors and shareholders of IQI (the “IQI Shareholders”). Under the Share Exchange Agreement, One Hundred Percent (100%) of the ownership interest of TCG and IQI was exchanged for 900,000 shares of common stock of the Company at the Closing issued to the TCG Shareholders and the IQI Shareholders. The transaction has been accounted for as a recapitalization of the Company, whereby WNLV is the accounting acquirer.
Immediately after the completion of such share exchange, the Company had a total of
Consequently, the Company has ceased to fall under the definition of a shell company as defined in Rule 12b-2 under the Exchange Act of 1934, as amended (the “Exchange Act”) and TCG and IQI are now wholly owned subsidiaries.
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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed financial statements have been prepared in accordance with the Financial Accounting Standards Board (“FASB”) “FASB Accounting Standard Codification™” (the “Codification”) which is the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of condensed financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States.
Management’s Representation of Interim Condensed Financial Statements
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in condensed financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements include all of the adjustments, which in the opinion of management are necessary for a fair presentation of financial position and results of operations. All such adjustments are of a normal and recurring nature. Interim results are not necessarily indicative of results for a full year.
Going Concern
The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the twelve months following the date of these condensed consolidated financial statements. The Company has incurred operating losses since its inception. As of September 30, 2024, the Company had a negative working capital deficit of $
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Use of Estimates
The preparation of condensed financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of liabilities at the date of the condensed consolidated financial statements. The most significant estimates relate to income taxes and contingencies. The Company bases its estimates on historical experience, known or expected trends, and various other assumptions that are believed to be reasonable given the quality of information available as of the date of these condensed financial statements. The results of these assumptions provide the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.
Revenue Recognition
On July 1, 2018, the Company adopted Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Results for reporting periods beginning after January 1, 2018, are presented under ASC 606. As of September 30, 2024, the condensed financial statements were not impacted due to the application of Topic 606.
Production – Cost of Revenue
The cost of revenue is comprised of labor expenses calculated based on an hourly labor rate provided by consultants and employees to produce revenue, as well as portion of office expense which is allocated to each project. Additionally, the cost of revenue includes direct expenses related to the revenues provided, such as managing the client’s Amazon sales channel through the creation of promotional advertisements to increase sales, translation of content into different languages, coordination of projects with different work teams to maximize client benefits, production crew for celebrity endorsements and video shooting, and salaries and wages of employees involved in creating and delivering these services.
Administrative Expense
Administrative expenses include office expenses, legal, accounting and other professional fees and other expenses and fess associated with being a public company. These expense are recorded as incurred. A small portion of the office expense is allocated to the cost of revenue.
Business Combinations
Under the acquisition method of accounting, we allocate the fair value of the total consideration transferred to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition. The fair values assigned, defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants, are based on estimates and assumptions determined by management. These valuations require us to make significant estimates and assumptions, especially with respect to intangible assets. We record the excess consideration over the aggregate fair value of tangible and intangible assets, net of liabilities assumed, as goodwill.
If the initial accounting for a business combination is incomplete by the end of a reporting period that falls within the measurement period, we report provisional amounts in our condensed consolidated financial statements. During the measurement period, we adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date and we record those adjustments to our condensed consolidated financial statements.
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Goodwill and Intangible Assets
Goodwill represents the future economic benefit arising from other assets acquired that could not be individually identified and separately recognized. Initially the Company measures goodwill based upon the value of the consideration paid plus or minus net assets assumed. This initial measurement is subject to adjustment based on an independent third party valuation study performed within one year of the acquisition date. The goodwill arising from the Company’s acquisition is attributable to the value of the potential expanded market opportunity with new customers. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight-line basis over their economic or legal life, whichever is shorter. The Company’s amortizable intangible assets consist primarily of customer relationships. The useful life of these customer relationships is estimated to be three 3 years.
Goodwill is not amortized but is subject to annual impairment testing unless circumstances dictate more frequent assessments. The Company performs an annual impairment assessment for goodwill during the fourth quarter of each year and more frequently whenever events or changes in circumstances indicate that the fair value of the asset may be less than the carrying amount. Goodwill impairment testing compares the fair value of the reporting unit to its carrying amount. The fair value of the reporting unit is determined by considering both the income approach and market approaches. The fair values calculated under the income approach and market approaches are weighted based on circumstances surrounding the reporting unit. Under the income approach, the Company determines fair value based on estimated future cash flows of the reporting unit, which are discounted to the present value using discount factors that consider the timing and risk of cash flows. For the discount rate, the Company relies on the capital asset pricing model approach, which includes an assessment of the risk-free interest rate, the rate of return from publicly traded stocks, the Company’s risk relative to the overall market, the Company’s size and industry and other Company specific risks. Other significant assumptions used in the income approach include the terminal value, growth rates, future capital expenditures and changes in future working capital requirements. The market approaches use key multiples from guideline businesses that are comparable and are traded on a public market. If the fair value of the reporting unit is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount exceeds its fair value, then an impairment loss is recognized in an amount equal to the excess. As of December 31, 2022 the Company determined that goodwill and intangible assets had been fully impaired. As a result the Company recorded an impairment charge of $
Cash and cash equivalents
The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. On September 30, 2024, and December 31, 2023, the Company’s cash equivalents totaled $
Prepaid expenses
Prepaid expenses are amounts paid to secure the use of assets or the receipt of services at a future date or continuously over one or more future periods. When the prepaid expenses are eventually consumed, they are charged to expense. Prepaid expenses are recorded at fair market value.
Accrued liabilities
Accrued liabilities include credit card liabilities, and payroll and payroll taxes.
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Income taxes
The Company accounts for income taxes in accordance with ASC 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some or all of any deferred tax assets will not be realized.
Project advances
Project advances represent unsecured, interest-free advances made by investors to help the Company fund film projects. If the film is successful the investor can recoup the money advanced as well as earning a royalty based upon the revenues generated by the film. The terms of this arrangement vary by film and by investor. The Company records royalties payable when it becomes probable that royalties will be payable. As of September 30, 2024 and December 31, 2023 the amount of project advances were $
Stock-based Compensation
The Company accounts for stock-based compensation using the fair value method following the guidance outlined in Section 718-10 of the FASB Accounting Standards Codification for disclosure about Stock-Based Compensation. This section requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award- the requisite service period (usually the vesting period). No compensation cost is recognized for equity instruments for which employees do not render the requisite service.
Net Loss per Share
Net loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, “Earnings per Share.” Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding.
Recent Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” This pronouncement, along with subsequent ASUs issued to clarify provisions of ASU 2016-13, changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. In developing the estimate for lifetime expected credit loss, entities must incorporate historical experience, current conditions, and reasonable and supportable forecasts. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. On November 19, 2019, the FASB issued ASU No. 2019-10, Financial Instruments—Credit Losses (Topic 326), finalized various effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses (CECL), the revised effective date was January 2023. The Company has adopted this accounting standard in the financial year 2023, this new accounting standard has no significant impact to the Company’s financial statements.
In December 2023, the FASB issued ASU No 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 expands disclosures in the rate reconciliation and requires disclosure of income taxes paid by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted.
Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our condensed financial statements.
Leases
The Company adopted FASB Accounting Standards Codification, Topic 842, Leases (“ASC 842”) using the modified retrospective approach, electing the practical expedient that allows the Company not to restate its comparative periods prior to the adoption of the standard on January 1, 2019. As such, the disclosures required under ASC 842 are not presented for periods before the date of adoption. For the comparative periods prior to adoption, the Company presented the disclosures which were required under ASC 842.
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The new leasing standard requires recognition of leases on the consolidated balance sheets as right-of-use (“ROU”) assets and lease liabilities. ROU assets represent the Company’s right to use underlying assets for the lease terms and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. Operating lease ROU assets and operating lease liabilities are recognized based on the present value and future minimum lease payments over the lease term at commencement date. The Company’s future minimum based payments used to determine the Company’s lease liabilities mainly include minimum based rent payments. As most of Company’s leases do not provide an implicit rate, the Company uses its estimated incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
In addition, the adoption of the standard did not have a material impact on the Company’s results of operations or cash flows. Operating lease cost is recognized as a single lease cost on a straight-line basis over the lease term and is recorded in Selling, general and administrative expenses. Variable lease payments for common area maintenance, property taxes and other operating expenses are recognized as expense in the period when the changes in facts and circumstances on which the variable lease payments are based occur.
NOTE 3. BUSINESS ACQUISITION
On May 16, 2022, the Company entered into a share exchange agreement with The Catalyst Group Entertainment, LLC (“TCG”) and IQI Media, Inc (“IQI”) - see Note 1 to the condensed financial statements.
Immediately after completion of such share exchange, the Company had a total of
Consequently, the Company has ceased to fall under the definition of shell company as define in Rule 12b-2 under the Exchange Act of 1934, as amended (the “Exchange Act”) and TCG and IQI are now wholly owned subsidiaries.
For the acquisition of TCG and IQI, the following table summarizes the acquisition date fair value of consideration paid, identifiable assets acquired and liabilities assumed:
Consideration paid:
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The Company did not incur any issuance costs to issue debt or equity instruments used to effect the business combination. The Company’s acquisition related costs for legal and accounting expenses were approximately $
The Company allocated the fair value of the total consideration paid of $
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NOTE 4. INVESTMENTS
On September 28, 2023, (the “Company”) entered into a Securities Exchange Agreement (the “Agreement”) with Infinity Fund Australia Pty Ltd, an Australian corporation (“IFA”). Pursuant to the terms of the Agreement, the Company acquired
In addition to the terms set forth above, the Agreement grants IFA the option to exchange up to an additional
On February 27, 2024, the Company issued
During the Nine months ended September 30, 2024 IFA repurchased
As of September 30, 2024 and December 31, 2023, the balance of investments was $
NOTE 5. LOAN PAYABLE
As of September 30, 2024 and December 31, 2023, the balance of notes payable was $-
NOTE 6. NOTES PAYABLE-RELATED PARTIES
As of September 30, 2024, and December 31, 2023, the balance of notes payable to related parties was $
The Company’s financing subsequent to the change of control on September 30, 2021 primarily has come from the Winvest Group Limited (Cayman), an affiliate with the same name as the Company, and based in the Cayman Islands; and from the CEO of the Company’s IQI subsidiary. Winvest Group Limited (Cayman) is an equity holdings company in the wellness industry and shares the same board of directors as the Company. As of September 30, 2024, the balance of notes payable was comprised of $
The following movements occurred in advances from related parties during the periods ended September 30, 2024, and December 31, 2023:
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NOTE 7. PROJECT ADVANCES, PROJECT ADVANCES RELATED PARTIES
Project advances represent unsecured, interest-free advances made by investors to help the Company fund film projects. If the film is successful the investor can recoup the money advanced as well as earning a royalty based upon the revenues generated by the film. The terms of this arrangement vary by film and by investor. The Company records royalties payable when it becomes probable that royalties will be payable. As of September 30, 2024 and December 31, 2023 the amount of total project advances were $
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NOTE 8. COMMITMENTS AND CONTINGENCIES
The Company did not have any contractual commitments of September 30, 2024, and December 31, 2023.
NOTE 9. INCOME TAX
The Company and its two subsidiaries were incorporated in the United States of America and were subject to United States federal taxation at the tax rate of
Provision for income tax consists of the following:
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The net loss before income taxes and its provision for income taxes as follows:
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NOTE 10. PREPAYMENT EXPENSE
The Company had a prepayment expense amounted $
NOTE 11. ACCRUED LIABILITIES
As of September 30. 2024., the Company had accrued liabilities of $
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NOTE 12. SUBSEQUENT EVENTS
Management has evaluated subsequent events through the date which the financial statements are available to be issued. All subsequent events requiring recognition as of September 30, 2024 have been incorporated into these consolidated financial statements except for the following that require disclosure in accordance with FASB ASC Topic 855, Subsequent Events:
As of September 30, 2024, the Company has a subsequent event. The Company has evaluated events from September 30, 2024 through the date the financial statements were issued. The events requiring disclosure for this period are as follows;
Cancelled of Series A Preferred Stock
On Oct 29, 2024, the Company rescinded and cancelled
Sponsor 100,000 units Shares for Wichita State University Foundation
On November 1, 2024, the company donated
NOTE 13. EQUITY
Common Stock
As of September 30, 2024, the Company had
2024 Issuances
During the Nine months ended September 30, 2024 the Company issued or cancelled the following common shares:
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2023 Issuances
During the Nine months ended September 30, 2023, the Company issued
During the three months ended the Company issued
Preferred Stock
During 2020 the Company had
As of September 30, 2024, the Company has authorized
NOTE 14. LEASE
As of September 30, 2024, the Company has operating lease agreement for its office lease with remaining lease terms of 11 months. Leases with an initial term of 12 months or less are not recorded on the balance sheet.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and the related notes thereto. The management’s discussion and analysis contain forward-looking statements, such as statements of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. The following discussion should be read in conjunction with our audited financial statements and the related notes that appear in our Annual Report on Form 10-K1, as filed with the Securities and Exchange Commission on April 19, 2024.
Overview
Our condensed consolidated financial statements accompanying this Report have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. We have a minimal operating history and no revenues or earnings from operations. We have no significant assets or financial resources. We will, in all likelihood, sustain operating expenses without corresponding revenues for the immediate future.
On May 16, 2022, the Company entered into a share exchange agreement with The Catalyst Group Entertainment, LLC (“TCG”) and IQI Media (“IQI”) -see Note 1 to the financial statements.
Results of Operations for the Nine months Ended September 30, 2024 Compared to the Nine months Ended September 30, 2023
Revenue
For the Nine months ended September 30, 2024, we recorded $77,340 in revenue compared to $214,978 during the Nine months ended September 30, 2023. We are in the process of developing our strategic business plan going forward and, therefore, revenue may vary from period to period.
Operating expenses
Operating expenses for the Nine months ended September 30, 2024 was $398,894 compared to $930,720 during the Nine months ended September 30, 2023. Operating expenses for the Nine months ended September 30, 2024 was $-0- compared to $458,040 in non-cash stock-based compensation during the same period in 2023. Excluding stock-based compensation, operating expenses in the 2024 period and 2023 period were $398,894 and $472,680, respectively. Excluding stock-based compensation and amortization of intangible assets, the significant decrease in operating expenses in the Nine months ended September 30, 2024 compared to the same period in 2023 is due to the write-down of pre-production license rights of $150,000 in 2023 offset by increases in general and administrative expenses in the 2024 period.
Net loss
As a result of the foregoing, we had a loss of $101,727 or $(0.00) per share for the Nine months ended September 30, 2024, compared to a loss of $834,203 or $(0.00) per share for the Nine months ended September 30, 2023.
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Liquidity and Capital Resources
We had $289,039 in cash on hand as of September 30, 2024.
Net cash used in operating activities was $229,531for the Nine months ended September 30, 2024, compared to $225,094 for the Nine months ended September 30, 2023. The increase in cash used in operating activities during the Nine months ended September 30, 2024 was primarily due to the relocation of gain from repurchase of investment to investing activities and changes in assets and liabilities in the 2024 period compared to 2023.
Net cash provided by financing activities was $209,533 for the Nine months ended September 30, 2024, compared to $231,757 for the Nine months ended September 30, 2023. The decrease is primarily attributable to proceeds $199,500 and $37,703 from private placements and notes payable-related parties net of $9,000 in repayments of notes payable-related parties, and Loan repayments of $18,670 in 2024, compared to $41,937 in new loans and to $303,556 in proceeds from notes payable-related parties net of its repayment of $113,736 in 2023.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
Critical Accounting Principles
The preparation of financial statements in accordance with US GAAP requires the Company’s 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 can, and in many cases will, differ from those estimates. We have not identified any critical accounting policies.
New Accounting Pronouncements
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes a new lease accounting model for lessees. The updated guidance requires an entity to recognize assets and liabilities arising from financing and operating leases, along with additional qualitative and quantitative disclosures. The amended guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. In March 2019, the FASB issued ASU 2019-01, Codification Improvements, which clarifies certain aspects of the new lease standard. The FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases in July 2018. Also in 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, which provides an optional transition method whereby the new lease standard is applied at the adoption date and recognized as an adjustment to retained earnings. The amendments have the same effective date and transition requirements as the new lease standard.
We adopted ASC 842 on September 1, 2020. The adoption of this guidance did not have any impact on our financial statements because we have no leases.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the sensitivity of income or loss to changes in interest rates, foreign exchanges, commodity prices, equity prices, and other market-driven rates or prices. We are not presently engaged in any substantive commercial business. Accordingly, the risks associated with foreign exchange rates, commodity prices, and equity prices are not significant. Our debt obligations contain interest rates that are fixed and we do not enter into derivatives or other financial instruments for trading or speculative purposes.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our senior management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of the Evaluation Date that our disclosure controls and procedures were not effective such that the information relating to us required to be disclosed in our Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. The Company’s former management abandoned all operations for many years, and only recently did the Company appoint new management to make filings with the SEC on behalf of the Company. As of September 30, 2024 we have concluded that our disclosure controls and procedures were not effective.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Our Company has been dormant since November 2012. As a result, our management did not evaluate the effectiveness of our internal control over financial reporting as of September 30, 2024, and September 30, 2023 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). without such an evaluation, our management concluded that we did not maintain effective internal control over financial reporting as of September 30, 2024, based on the COSO framework criteria, 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 may be considered to be material weaknesses.
The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the PCAOB were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; (4) complete lack of management of the company from November 2012 until September 30, 2024; and (5) lack of disclosure controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of September 30, 2024.
Management believes that the material weaknesses set forth above did not have an effect on our financial results because the activity during this period was nominal. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside Directors on our Board of Directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the periods ended September 30, 2023 and September 30, 2024, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.
Item 1a. Risk Factors
We are a smaller reporting company and are not required to provide the information under this item pursuant to Regulation S-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the Nine months ended September 30, 2024, the Company issued the following common shares:
| · | 607,500,000 common shares upon the conversion of 12,150,000 Series Preferred shares |
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| · | 133,000 common shares were sold under the Form S-1 registration statement, for proceeds of $199,500 |
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| · | 9,200,000 common shares were exchanged for 9,200,000 shares of Series A Preferred Stock of IFA. These shares were valued at $9,200. See Note 4 – Investments |
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| · | 550,000,000 common shares were cancelled in return of 11,000,000 Series Preferred shares |
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| · | 200,000,000 common shares upon the conversion of 4,000,000 Series Preferred shares |
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.
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Item 6. Exhibits
| Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
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101.INS |
| Inline XBRL Instance Document |
101.SCH |
| Inline XBRL Taxonomy Extension Schema Document |
101.CAL |
| Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF |
| Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB |
| Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE |
| Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104 |
| Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Winvest Group Ltd. |
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| (Registrant) |
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Date: November 19, 2024 | By: | /s/ Jeffrey Wong Kah Mun |
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| Jeffrey Wong Kah Mun, |
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| CEO and CFO |
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