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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q/A

Amendment No. 1

 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarterly Period Ended June 30, 2021

 

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 333-208978

 

TrueNorth Quantum, Inc.

(Exact name of registrant issuer as specified in its charter)

 

Nevada   98-1253258
(State or other jurisdiction of incorporation or organization)   (I.R.S. Employer Identification No.)

 

5428 South Regal Street #30954, Spokane, WA 99223

(Address of principal executive offices, including zip code)

 

Registrant’s phone number, including area code (647) 400-6927

 

United Royale Holdings Corp.

2 Campbell Drive, Suite 307C, Uxbridge, Ontario, Canada

(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
N/A   N/A   N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☐   No ☒

 

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 (section 232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit such files).

Yes ☐   No ☒

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

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

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No ☒

 

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ☐   No ☐

 

APPLICABLE ONLY TO CORPORATE ISSUERS:

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class   Outstanding at November 12, 2021
Common Stock, $0.0001 par value   151,043,725

 

 

     

 

 

EXPLANATORY NOTES

 

This Amendment No. 1 to our Quarterly Report on Form 10-Q/A for the six months ended June 30, 2021, amends in its entirety the Quarterly Report on Form 10-Q that was originally filed on September 8, 2021 (the “Quarterly Report”), to:

 

  ● comply with Rule 10-01(d) Regulation S-X, which requires interim financial statements included in quarterly reports on Form 10-Q to be reviewed by an independent public accountant using professional standards and procedures for conducting such reviews, as established by PCAOB,
     
  ● to update financial statements and various other disclosures throughout this quarterly report, and
     
  ● to include the required certifications of the Company’s Principal Executive Officer and Principal Financial and Accounting Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act.

 

This Amendment No. 1 revises the Original Report and does not otherwise reflect events that may have occurred subsequent to the original filing date.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  i  

 

 

TABLE OF CONTENTS

 

    Page
PART I FINANCIAL INFORMATION  
     
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: 3
     
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 12
     
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 15
     
ITEM 4. CONTROLS AND PROCEDURES 15
     
PART II OTHER INFORMATION  
     
ITEM 1 LEGAL PROCEEDINGS 16
     
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 16
     
ITEM 3 DEFAULTS UPON SENIOR SECURITIES 16
     
ITEM 4 MINE SAFETY DISCLOSURES 16
     
ITEM 5 OTHER INFORMATION 16
     
ITEM 6 EXHIBITS 16
     
SIGNATURES 17

 

 

 

 

 

 

 

 

 

 

 

  1  

 

 

PART I — FINANCIAL INFORMATION

 

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

TrueNorth Quantum, Inc.

(fka United Royale Holdings Corp.)

Interim Financial Statements

(Unaudited)

 

Table of Contents

 

    Page
Condensed consolidated balance sheets at June 30, 2021 and December 31, 2020   3
Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and six months ended June 30, 2021 and 2020   4
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three and six months ended June 30, 2021 and 2020   5
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020   6
Notes to the Condensed Consolidated Financial Statements   7

 

 

 

 

  2  

 

 

TrueNorth Quantum Inc.

(fka United Royale Holdings Corp.)

Condensed Consolidated Balance Sheets

(Unaudited)

 

 

                 
    June 30,     December 31,  
    2021     2020  
ASSETS                
Current Assets:                
Cash and cash equivalents   $ –     $ 6,731  
Prepaid expenses and other receivables     7,000       21,756  
Total Current Assets     7,000       28,487  
                 
Non-current assets from discontinued operation     –       41,691  
TOTAL ASSETS   $ 7,000     $ 70,178  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                
Current Liabilities:                
Accounts payable and accrued liabilities     234       31,533  
Due to related party     –       49,744  
Current liabilities from discontinued operation     –       23,128  
Total Current Liabilities     234       104,405  
                 
Total Liabilities     234       104,405  
                 
Stockholders' Equity (Deficit):                
Preferred stock, $0.0001 par value, 200,000,000 shares authorized, none issued and outstanding             –  
Common stock, $0.0001 par value, 600,000,000 shares authorized, 141,990,387 shares issued and outstanding     14,199       14,199  
Additional paid-in capital     873,597       789,468  
Accumulated other comprehensive income     –       1,477  
Accumulated deficit     (881,030 )     (839,371 )
Total Stockholders' Equity (Deficit)     6,766       (34,227 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT   $ 7,000     $ 70,178  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

 

 

  3  

 

 

TrueNorth Quantum Inc.

(fka United Royale Holdings Corp.)

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

 

 

                                 
    Three Months Ended     Six months ended  
    June 30,     June 30,  
    2021     2020     2021     2020  
                         
Revenues   $ –     $ –     $ –     $ –  
                                 
Operating Expenses                                
General and administrative     6,215       22,655       25,236       69,835  
Total Operating Expenses     6,215       22,655       25,236       69,835  
                                 
Loss from operations     (6,215 )     (22,655 )     (25,236 )     (69,835 )
                                 
Loss from continuing operation     (6,215 )     (22,655 )     (25,236 )     (69,835 )
                                 
Loss from discontinued operations                                
Loss from discontinued operations     –       (1,199 )     (8,062 )     (2,376 )
Loss from disposal of subsidiaries     –       –       (8,361 )     –  
Loss from discontinued operations     –       (1,199 )     (16,423 )     (2,376 )
                                 
Net Loss   $ (6,215 )   $ (23,854 )   $ (41,659 )   $ (72,211 )
                                 
Other Comprehensive Income (loss)                                
Realized foreign currency translation due to disposal of subsidiaries     –       –       (482 )     –  
Foreign currency translation loss     –       398       (995 )     (2,856 )
Comprehensive loss   $ (6,215 )   $ (23,456 )   $ (43,136 )   $ (75,067 )
                                 
Net Loss Per Common Share: Basic and Diluted   $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )
                                 
Weighted Average Number of Common Shares Outstanding: Basic and Diluted     141,990,387       464,667,527       141,990,387       664,499,399  

 

See accompanying notes to the unaudited consolidated financial statements.

 

 

 

 

 

 

  4  

 

 

TrueNorth Quantum Inc.

(fka United Royale Holdings Corp.)

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

(Unaudited)

 

Six months ended June 30, 2021

 

                                                                 
                                  Accumulated              
                Additional     Other              
    Preferred Stock     Common stock     Paid-in     comprehensive     Accumulated        
    Shares     Amount     Shares     Amount     Capital     Income (loss)     Deficit     Total  
                                                 
Balance, December 31, 2020     –     $ –       141,990,387     $ 14,199     $ 789,468     $ 1,477     $ (839,371 )   $ (34,227 )
                                                                 
Disposal of subsidiaries     –       –       –       –       –       (482 )     –       (482 )
Foreign currency translation     –       –       –       –       –       (995 )     –       (995 )
Net loss for the period     –       –       –       –       –       –       (35,444 )     (35,444 )
                                                                 
Balance, March 31, 2021     –     $ –       141,990,387     $ 14,199     $ 789,468     $ –     $ (874,815 )   $ (71,148 )
                                                                 
Debt forgiveness     –       –       –       –       84,129               –       84,129  
Net loss for the period     –       –       –       –       –       –       (6,215 )     (6,215 )
                                                                 
Balance, June 30, 2021     –     $ –       141,990,387     $ 14,199     $ 873,597     $ –     $ (881,030 )   $ 6,766  

  

 

 

Six months ended June 30, 2020

                                                 
    Common Stock     Additional     Accumulated
Other 		          Total  
    Number of Shares     Amount     Paid-in
Capital 		    Comprehensive
Loss 		    Accumulated
Deficit 		    Sttockholders’
Equity 		 
Balance as of December 31, 2019     141,990,387     $ 14,199     $ 789,468     $ 953     $ (712,303 )   $ 92,317  
Net loss for the three months ended March 31, 2020     –       –       –       –       (48,357 )     (48,357 )
Foreign currency translation     –       –       –       (3,254 )     –       (3,254 )
                                                 
Balance as of March 31, 2020     141,990,387     $ 14,199     $ 789,468     $ (2,301 )   $ (760,660 )   $ 40,706  
Net loss     –       –       –       –       (23,854 )     (23,854 )
Foreign currency translation     –       –       –       398       –       398  
Balance as of June 30, 2020     141,965,520     $ 14,199     $ 789,468     $ (1,903 )   $ (784,515 )   $ 17,249  

 

The accompanying notes are an integral part of these unaudited consolidated financial statements.

 

 

 

  5  

 

 

TrueNorth Quantum Inc.

(fka United Royale Holdings Corp.)

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

                 
    Six months ended  
    June 30,  
    2021     2020  
CASH FLOWS FROM OPERATING ACTIVITIES                
Net loss   $ (41,659 )   $ (72,211 )
Accounts receivable - related party     –       –  
Depreciation expense     –       2,255  
Loss on disposal of subsidiaries     8,361       –  
Changes in operating assets and liabilities:                
Prepaid expenses     14,756       7,798  
Accounts payable and accrued liabilities     (31,299 )     (17,091 )
Lease liabilities     –       (1,521 )
Discontinued assets and liabilities     8,725       –  
Net Cash Used in Operating Activities     (41,116 )     (80,770 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Purchase of biological assets     –       (4,522 )
Net cash used in Investing Activities     –       (4,522 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Advance from directors     34,385       27,987  
Net cash provided by Financing Activities     34,385       27,987  
                 
Effect of exchange rate changes in cash and cash equivalents     –       (219 )
                 
Net cash decrease for period     (6,731 )     (57,524 )
Cash at beginning of period     6,731       63,839  
Cash at end of period   $ –     $ 6,315  
                 
SUPPLEMENTAL CASH FLOW INFORMATION:                
Cash paid for income taxes   $ –     $ –  
Cash paid for interest   $ –     $ –  
                 
NON CASH INVESTING AND FINANCING ACTIVITIES                
Initial recognition of operating lease right-of-use assets and operating lease obligations   $ –     $ 21,330  
Debt forgiveness   $ 84,129     $ –  

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

  

 

 

 

  6  

 

 

TrueNorth Quantum Inc.

(fka United Royale Holdings Corp.)

Notes to the Condensed Consolidated Financial Statements

June 30, 2021

(Unaudited)

 

 

1. DESCRIPTION OF BUSINESS AND ORGANIZATION

 

Organization

 

TrueNorth Quantum, Inc., formerly United Royale Holdings Corp., (“the Company”, “TNQ”, “we”, “us” or “our”) was incorporated under the laws of the State of Nevada on June 23, 2015 to offer planting and cultivation services to land owners in regards to the planting and cultivation of Aquilaria Subintegra & Aquilaria Sinensis trees. On February 15, 2017, we changed our name from Bosy Holdings Corp. to United Royale Holdings Corp. to facilitate our re-branding efforts and develop and enhance our business.

 

On September 30, 2018, the Company and Mr. CHEN Zheru, representing the sole shareholder of IV Enterprises Development Limited, a Seychelles corporation (“IVED”), entered into a Sale and Purchase Agreement, pursuant to which the Company acquired 100% (one hundred percent) of the shareholding of IVED. IVED provides tree nurseries, including planting, cultivation and inoculation services through its wholly-owned subsidiary, Oudh Tech Sdn Bhd, in Malaysia. The acquisition is completed on September 30, 2018.

  

On March 30, 2021, the Company and Mr. Li Gongming (“Mr. Li”), the director of the Company, signed an instrument of transfer, pursuant to which Mr. Li acquired 100% (one hundred percent) of the shareholding of IVED. The consideration was set at $1, same as the consideration that the Company acquired IVED in 2018.

 

Our Board of Directors, Li Gongming, Teoh Kooi Sooi and Soh Khay Wee resigned from the board of directors on April 7, 2021. On the same day, Teoh Kooi Sooi resigned from the roles of Chief Executive Officer, Chief Financial Officer and Treasurer of the Company, David Edwin Evans resigned from the role of Chief Operation Officer of the Company, Liao Lin resigned from the role of Chief Sales Officer of the Company, Jaya C Rajamanickam resigned from the role of President of the Company while Feliana Binti Johny resigned from the role of Secretary of the Company.

 

On April 7, 2021, Mr. Gary Bartholomew was appointed as the Director, Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer of the Company.

 

On April 22, 2021, CyberNorth Ventures Inc. acquired an aggregate of 109,423,767 shares of Common Stock of the Company, representing approximately 77.6% of the issued and outstanding shares of Common Stock of the Company as of such date, from the previous majority shareholders of the Company. As a result of such acquisition CyberNorth Ventures Inc. is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company. CyberNorth Ventures Inc. is wholly owned by our director, Gary Bartholomew. 

 

On October 4, 2021, the Company amended its Articles of Incorporation to (i) change its name to TrueNorth Quantum Inc. and (ii) designate its Series A Preferred Stock.

 

On October 20, 2021, the board of directors of the Company appointed Witold (Wit) Ostrenko as a director of the Company, and appointed Brad Herr as the Company’s Chief Financial Officer.

 

 

 

 

  7  

 

 

On October 29, 2021, the Company closed its acquisition of TrueNorth Quantum Inc. (“TNQ”), a corporation existing under the laws of the Province of Alberta, Canada pursuant to the Exchange Agreement, Support Agreement and Trust Agreement disclosed in the Company’s Current Report filed October 13, 2021.

 

On November 8, 2021, the board of directors of the Company appointed William Douglas (Doug) Beynon and David Mironov as directors of the Company.

 

Description of Business

 

TNQ is a technology company that has developed an enterprise platform providing security, connectivity and systems compatibility for existing financial institution’s back and front office. This includes integration into major Banks systems from compliance to customer information, including their trading platforms. The TNQ technology (“Northern Shield”) utilizes quantum cryptography (or Quantum key distribution) to secure the clients private key to their crypto assets and this key is held within the trusted Bank environment with the potential to be insured against cyberattack and theft.

 

Northern Shield enables banks to “institutionalize” crypto currencies the blockchain market. Crypto currencies such as Bitcoin were originally designed to “decentralize” currency. However, the Northern Shield will provide the vehicle for integration to applications and utility for digital wallets inbound and outbound. Northern Shield is a custody solution with insurance. Currently, crypto holders have an account at the crypto-exchange where they invested in that crypto currency. Our solution enables major banks to possess custody on behalf of their clients providing flexibility to trade on multiple exchanges with access to financial and payment networks in a secure and insured account.

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

 

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 8 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

 

In the opinion of management, the balance sheet as of June 30, 2021 which has been derived from unaudited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended June 30, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2021 or for any future period.

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Form 10-K for the year ended December 31, 2020.

 

The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and balances were eliminated in consolidation. As of June 30, 2021, there was no subsidiary held by the Company (see Note 7).

 

Use of estimates

 

Management uses estimates and assumptions in preparing these financial statements in accordance with US GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities in the balance sheet, and the reported revenue and expenses during the periods reported. Actual results may differ from these estimates.

 

 

 

 

  8  

 

 

Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. During the six months ended June 30, 2021, the Company incurred a loss before income tax of $19,021 and used cash in operations of $6,852. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s December 31, 2020 financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

The Company’s ability to continue as a going concern is dependent upon improving its profitability and the continuing financial support from its shareholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due. Despite the amount of funds that we have raised, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its stockholders, in the case of equity financing.

 

Cash and cash equivalents

 

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

 

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments: cash and cash equivalents, prepayments, amount due to a director and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

 

The Company follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

  · Level 1 : Observable inputs such as quoted prices in active markets;

 

  · Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

  · Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions information regarding the impact of the adoption of ASC 842 on the Company’s financial statements.

 

Recent accounting pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

3. PREPAID EXPENSES AND OTHER RECEIVABLES

 

The prepaid expenses as of June 30, 2021 included OTCQB annual fee of $7,000, while the prepaid expenses as of December 31, 2020 included OTCQB annual fee of $14,000, deposit of $600 and $6,410 in transfer agent and our consultancy firm.

 

 

 

 

  9  

 

 

 

4. ACCRUED LIABILITIES

 

The accrued liabilities as of June 30, 2021 included transfer agent fee of $234, while the accrued liabilities as of December 31, 2020 included the auditor’s fee of $4,750, predecessor auditor consent fee of $5,000 and professional fee to our consulting service provider of $19,231.

 

5. AMOUNT DUE TO DIRECTOR

 

As of June 30, 2021, and December 31, 2020, our directors has loaned to the Company $0 and $49,744 as working capital, respectively. This loan is unsecured, non-interest bearing and due on demand. During the six months ended June 30, 2021, directors advanced $34,385 to the Company and due to director of $84,129 was forgiven.

  

6. STOCKHOLDERS’ EQUITY

 

As of June 30, 2021, and December 31, 2020, there were 141,990,387 shares of common stock issued and outstanding.

 

There were no stock options, warrants or other potentially dilutive securities outstanding as of June 30, 2021.

 

7. DISCONTINUED OPERATIONS

 

On March 30, 2021, the Company has signed an instrument of transfer with our director, Mr. Li Gongming. Beginning on January 1, 2020, the Company historical financial results for periods prior to the above transaction have been reflected in our statement of income, retrospectively, as discontinued operations. Additionally, the related assets and liabilities associated with the discontinued operations in the prior year balance sheet are classified as discontinued operations. As such, as of June 30, 2021, the Company accounted for all of its assets, liabilities and results of operations up to March 30, 2021 as discontinued operations.

 

The following table shows the results of operations of the Company for three and six months ended June 30, 2021 and 2020 which are included in the loss from discontinued operations:

 

                               
    Three Months Ended     Six months ended  
    June 30,     June 30,  
    2021     2020     2021     2020  
                         
Revenue   $ –     $ –     $ –     $ –  
General and administrative     –       1,199       8,062       2,376  
Loss from operations     –       (1,199 )     (8,062 )     (2,376 )
Other income (expense)     –       –       –       –  
Loss before income tax     –       (1,199 )     (8,062 )     (2,376 )
Income tax expense (refund)     –       –       –       –  
Net loss from discontinued operations   $ –     $ (1,199 )   $ (8,062 )   $ (2,376 )

 

 

 

 

  10  

 

 

The following table shows the loss from disposal of subsidiaries from carrying amounts of the major classes of assets and liabilities as of March 30, 2021:

 

       
    March 30,  
    2021  
       
Current Assets        
Cash and cash equivalents   $ 1,692  
Prepaid expenses     724  
Plant and equipment, net     1,116  
Biological Assets     38,651  
Amount due to director     (19,800 )
Accounts payable and accrued expenses     (14,504 )
Realized foreign currency translation due to disposal of subsidiaries     482  
Loss from disposal of subsidiaries   $ 8,361  

 

 

8. SUBSEQUENT EVENTS

 

On September 3, 2021, the Company’s sole director and shareholder holding a majority of the Company’s voting stock approved the following actions by written consent: change of the Company’s name to TrueNorth Quantum, Inc., designation of one share of Series A Preferred Stock with special voting rights, and approval of a stock incentive plan and deferred stock unit plan.

 

On October 4, 2021, the Company amended its Articles of Incorporation to (i) change its name to TrueNorth Quantum Inc. and (ii) designate its Series A Preferred Stock.

 

On October 20, 2021, the board of directors of the Company appointed Witold (Wit) Ostrenko as a director of the Company, and appointed Brad Herr as the Company’s Chief Financial Officer.

 

On October 29, 2021, the Company closed its acquisition of TrueNorth Quantum Inc. (“TNQ”), a corporation existing under the laws of the Province of Alberta, Canada pursuant to the Exchange Agreement, Support Agreement and Trust Agreement disclosed in the Company’s Current Report filed October 13, 2021.

 

On November 5, 2021, TrueNorth Quantum, Inc., a Nevada corporation formerly known as United Royale Holdings Corp. (the “Company”) dismissed Zia Masood Kiani & Co. (“ZMKC”) as the Company’s independent registered public accounting firm. Following a careful deliberation, on November 5, 2021, the Company engaged BF Borger CPA PC (“BFB”) as the Company’s independent registered public accounting firm.

 

On November 8, 2021, the board of directors of the Company appointed William Douglas (Doug) Beynon and David Mironov as directors of the Company.

 

 

 

 

 

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The information contained in this quarter report on Form 10-Q/A is intended to update the information contained in our Form 10-K dated March 29, 2021, for the year ended December 31, 2020 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

 

The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form 10-K dated March 29, 2021, in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this transition report on Form 10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.

 

Company Overview

 

TrueNorth Quantum Inc. (formerly United Royale Holdings Corp.) (the “Company”, “TrueNorth”) was incorporated under the laws of the State of Nevada on June 23, 2015 to offer planting and cultivation services to land owners in regards to the planting and cultivation of Aquilaria Subintegra & Aquilaria Sinensis trees. On February 15, 2017, we changed our name from Bosy Holdings Corp. to United Royale Holdings Corp. to facilitate our re-branding efforts and develop and enhance our business.

 

The Company’s products include a highly scalable, institutional-grade cloud platform called the Northern Shield that enables the rapid build and scale of decentralized applications across many industries. The Northern Shield is the convergence of Security, Blockchain, AI, and Big Data into a single platform we call Web 3.0. The Company has started to work with application development companies to adapt or build their application using the Northern Shield. The Northern Shield is offered as a Platform as a Service (PaaS) offering a complex and highly secured and managed system reducing the cost of industry scale application development for disruption in Healthcare, Fintech, AgTech, and Wellness. These industries are transforming to a decentralized architecture enabling the Northern Shield to disrupt the way business is done today. The Company has numerous engagements to build applications using the Northern Shield, allowing for highly secured and insured capability with a global scale running on the blockchain. In addition to offering the Northern Shield as a PaaS, we offer full application development to the business that has the disruptive idea but needs a strong technical partner to implement their decentralized vision. This contract software development service is offered on a fixed price basis based on the Statement of Work mutually agreed to in a services contract.

 

On September 30, 2018, the Company and Mr. CHEN Zheru, representing the sole shareholder of IV Enterprises Development Limited, a Seychelles corporation (“IVED”), entered into a Sale and Purchase Agreement, pursuant to which the Company acquired 100% (one hundred percent) of the shareholding of IVED. IVED provides tree nurseries, including planting, cultivation and inoculation services through its wholly-owned subsidiary, Oudh Tech Sdn Bhd, in Malaysia. The acquisition is completed on September 30, 2018.

  

On March 30, 2021, the Company and Mr. Li Gongming (“Mr. Li”), the director of the Company, signed an instrument of transfer, pursuant to which Mr. Li acquired 100% (one hundred percent) of the shareholding of IVED. The consideration was set at $1, same as the consideration that the Company acquired IVED in 2018.

 

 

 

 

  12  

 

 

Our Board of Directors, Li Gongming, Teoh Kooi Sooi and Soh Khay Wee resigned from the board of directors on April 7, 2021. On the same day, Teoh Kooi Sooi resigned from the roles of Chief Executive Officer, Chief Financial Officer and Treasurer of the Company, David Edwin Evans resigned from the role of Chief Operation Officer of the Company, Liao Lin resigned from the role of Chief Sales Officer of the Company, Jaya C Rajamanickam resigned from the role of President of the Company while Feliana Binti Johny resigned from the role of Secretary of the Company.

 

On April 7, 2021, Mr. Gary Bartholomew was appointed as the Director, Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer of the Company.

 

On April 22, 2021, CyberNorth Ventures Inc. acquired an aggregate of 109,423,767 shares of Common Stock of the Company, representing approximately 77.6% of the issued and outstanding shares of Common Stock of the Company as of such date, from the previous majority shareholders of the Company. As a result of such acquisition CyberNorth Ventures Inc. is able to unilaterally control the election of our board of directors, all matters upon which shareholder approval is required and, ultimately, the direction of our Company. CyberNorth Ventures Inc. is wholly owned by our director, Gary Bartholomew. 

 

On October 4, 2021, the Company amended its Articles of Incorporation to (i) change its name to TrueNorth Quantum Inc. and (ii) designate its Series A Preferred Stock.

 

On October 20, 2021, the board of directors of the Company appointed Witold (Wit) Ostrenko as a director of the Company, and appointed Brad Herr as the Company’s Chief Financial Officer.

 

On October 29, 2021, the Company closed its acquisition of TrueNorth Quantum Inc. (“TNQ”), a corporation existing under the laws of the Province of Alberta, Canada pursuant to the Exchange Agreement, Support Agreement and Trust Agreement disclosed in the Company’s Current Report filed October 13, 2021.

 

On November 8, 2021, the board of directors of the Company appointed William Douglas (Doug) Beynon and David Mironov as directors of the Company.

  

Results of Operation

 

For the three months ended June 30, 2021 and 2020

 

Revenues

 

We have not generated any revenue for the three months ended June 30, 2021 and 2020.

 

General and administrative expenses

 

We incurred a total of $6,215 and $22,655 general and administrative expenses during the three months ended June 30, 2021 and 2020 respectively. The general and administrative expenses are mainly comprised of Form 10-Q review fee, consulting fee, legal fee, transfer agent fee and Edgar filing fee. The decrease of general and administrative expenses is due to decrease in salary payout.

 

Loss from discontinued operations

 

For the three months ended June 30, 2021 and 2020, loss from discontinued operations of $0 and $1,199 consisted of the results of operations of the disposed subsidiaries.

 

 

 

 

  13  

 

 

Net loss

 

For three months ended June 30, 2021 and 2020, we had generated no revenues. We incurred a total net loss of $6,215 and net loss of $23,854 for the three months ended June 30, 2021 and 2020, respectively.

 

For the six months ended June 30, 2021 and 2020

 

Revenues

 

We have not generated any revenue for the six months ended June 30, 2021 and 2020.

 

General and administrative expenses

 

We incurred a total of $25,236 and $69,835 general and administrative expenses during the six months ended June 30, 2021 and 2020 respectively. The general and administrative expenses are mainly comprised of Form 10-Q review fee, consulting fee, legal fee, transfer agent fee and Edgar filing fee. The decrease of general and administrative expenses is due to decrease in salary payout.

 

Loss from discontinued operations

 

For the six months ended June 30, 2021 and 2020, loss from discontinued operations of $8,062 and $2,376 consisted of the results of operations of the disposed subsidiaries and loss form disposal of subsidiaries of $8,361 and $0, respectively.

 

Net loss

 

For six months ended June 30, 2021 and 2020, we had generated no revenues. We incurred a total net loss of $41,659 and net loss of $72,211 for the six months ended June 30, 2021 and 2020 respectively.

 

Liquidity and Capital Resources

 

Cash Used in Operating Activities

 

For the six months ended June 30, 2021 and 2020, the cash flows used in operating activities was $41,116 and $80,770 respectively. The decrease in cash used in operation activities is primarily due to a decrease in operating expenses.

  

Cash Used in Investing Activities

 

For the six months ended June 30, 2021 and 2020, the Company used $0 and $4,522 for purchase of biological assets, respectively.

 

Cash Provided by Financing Activities

 

For the six months ended June 30, 2021 and 2020, the cash flows provided by financial activities was $34,385 and $27,987 respectively, consists of advances from directors.

 

 

 

 

  14  

 

 

Off-balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of June 30, 2021.

 

Contractual Obligations

 

None.

 

Critical Accounting Policies

 

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our financial statements is critical to an understanding of our financial statements.

 

Use of Estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain expenses during the reporting period. Actual results could differ from these good faith estimates and judgments.

 

Item 3 Quantitative and Qualitative Disclosures About Market Risk.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

Item 4 Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures:

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2021. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2021, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of June 30, 2021 our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

 

Changes in Internal Control over Financial Reporting:

 

There were no changes in our internal control over financial reporting during the quarter ending June 30, 2021, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

  15  

 

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.

 

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

 

None.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

ITEM 6. Exhibits

 

2.1 TrueNorth Canadian Exchange Agreement (2)
2.2 TrueNorth Non-Canadian Exchange Agreement (2)
3(i).1 Articles of Incorporation, as amended (1)
3(i).2 Certificate of Amendment (2)
3(ii).1 Bylaws, as amended (1)
10.1 TrueNorth Trust Agreement (2)
10.2 TrueNorth Support Agreement (2)
10.3 Incentive Stock Option Plan (2)
10.4 Deferred Stock Unit Plan (2)
31.1* Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer.
31.2* Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer.
32.1** Section 1350 Certification of Chief Executive Officer and Chief Financial Officer.
101.INS*   Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH*   Inline XBRL Taxonomy 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*   Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.

 

*       Filed herewith

**       Furnished herewith

 

(1) Previously filed as an exhibit to the Company’s Form 8-K filed with SEC on February 15, 2018 and incorporated herein by reference.

 

(2) Previously filed as an exhibit to the Company’s Form 8-K filed with SEC on October 13, 2021 and incorporated herein by reference.

 

 

  16  

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  TrueNorth Quantum Inc.
     
Date: November 24, 2021    
     
  By: /s/ Gary Bartholomew
  Title:

Chief Executive Officer,

(Principal Executive Officer)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  17  

 

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