UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
(Mark
One)
☐
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended 9/30/24
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: 000-52142
GivBux
Inc
Nevada |
|
84-1609495 |
|
|
(I.R.S. Employer Identification No.) |
2751
W Coast Hwy Suite 200 Newport Beach CA |
|
92663 |
|
|
(Zip Code) |
(1)
844-448-2899
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Common
Shares |
|
GBUX |
|
OTC
Pink Sheet |
SEC 1296
(02-23) |
Potential persons who are
to respond to the collection of information contained in this Form are not required to respond unless the Form displays a currently
valid OMB control number. |
Umesh
Singh CEO
Robert
Thompson Director
Michael
Arnkvarn Director
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 (§232.405 of this chapter) during the preceding 12 months (or for such 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, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
|
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
PART
I—FINANCIAL INFORMATION
Item
1. Financial Statements.
GivBux,
Inc
Consolidated
Balance sheets
(Unaudited)
| |
September
30, | | |
December 31, | |
| |
2024 | | |
2023 | |
Assets | |
| | | |
| | |
Current assets | |
| | | |
| | |
Cash | |
$ | 64,655 | | |
$ | 41,870 | |
Prepaid expenses | |
| - | | |
| 22,770 | |
Other
receivable | |
| 10,180 | | |
| 10,000 | |
Total current assets | |
| 74,835 | | |
| 74,640 | |
| |
| | | |
| | |
Operating
lease right of use asset | |
| - | | |
| 60,357 | |
Total
Assets | |
$ | 74,835 | | |
$ | 134,997 | |
| |
| | | |
| | |
Liabilities and Stockholders’
Deficit | |
| | | |
| | |
Current Liabilities | |
| | | |
| | |
Accounts payable | |
$ | 174,296 | | |
$ | 174,475 | |
Accrued liabilities | |
| 954,113 | | |
| 714,986 | |
Due to related party | |
| 3,275 | | |
| 3,275 | |
Notes payable - related
parties | |
| 980,479 | | |
| 1,026,260 | |
Loans payable, net discount
of $0 and 23,904 | |
| 525,150 | | |
| 398,246 | |
Convertible notes, net
discount of $130,506 and $18,070 | |
| 323,473 | | |
| 145,830 | |
Derivative liabilities | |
| 276,286 | | |
| 32,241 | |
Operating
lease liabilities - current | |
| - | | |
| 62,323 | |
Total Current Liabilities | |
| 3,237,072 | | |
| 2,557,636 | |
| |
| | | |
| | |
Total Liabilities | |
| 3,237,072 | | |
| 2,557,636 | |
| |
| | | |
| | |
Stockholders’ Deficit | |
| | | |
| | |
Preferred stock: 10,000,000 authorized; $0.001
par value 0 shares issued and outstanding | |
| - | | |
| - | |
Common stock: 100,000,000 authorized; $0.001
par value 94,579,434 shares and 88,579,434 shares issued and outstanding, respectively | |
| 94,580 | | |
| 88,580 | |
Additional paid in capital | |
| 3,689,447 | | |
| 1,415,447 | |
Subscription received - shares to be issued | |
| 60,000 | | |
| 60,000 | |
Accumulated deficit | |
| (7,006,264 | ) | |
| (3,986,666 | ) |
Total Stockholders’
Deficit | |
| (3,162,237 | ) | |
| (2,422,639 | ) |
Total
Liabilities and Stockholders’ Deficit | |
$ | 74,835 | | |
$ | 134,997 | |
See
accompanying notes to unaudited consolidated financial statements.
GivBux,
Inc
Consolidated
Statement of Operations
(Unaudited)
| |
Three Months
Ended | | |
Nine Months
Ended | |
| |
September
30, | | |
September
30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| |
| | |
| | |
| | |
| |
Revenue | |
$ | 257,920 | | |
$ | 65,470 | | |
$ | 330,319 | | |
$ | 130,961 | |
Cost of revenue | |
| 142,202 | | |
| - | | |
| 142,202 | | |
| - | |
Gross
profit | |
| 115,718 | | |
| 65,470 | | |
| 188,117 | | |
| 130,961 | |
| |
| | | |
| | | |
| | | |
| | |
Operating expenses | |
| | | |
| | | |
| | | |
| | |
General and administrative | |
| 240,233 | | |
| 113,509 | | |
| 603,363 | | |
| 442,945 | |
Sales and marketing | |
| - | | |
| 30,000 | | |
| 60,300 | | |
| 90,000 | |
Stock based-compensation
-management | |
| - | | |
| - | | |
| - | | |
| 37,500 | |
Professional
fees | |
| 10,287 | | |
| 212,167 | | |
| 2,331,590 | | |
| 410,642 | |
Total
operating expenses | |
| 250,520 | | |
| 355,676 | | |
| 2,995,253 | | |
| 981,087 | |
| |
| | | |
| | | |
| | | |
| | |
Loss from operations | |
| (134,802 | ) | |
| (290,206 | ) | |
| (2,807,136 | ) | |
| (850,126 | ) |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense) | |
| | | |
| | | |
| | | |
| | |
Interest expense | |
| (137,804 | ) | |
| (20,754 | ) | |
| (235,983 | ) | |
| (45,373 | ) |
Change
in fair value of derivative liabilities | |
| 48,200 | | |
| (8,497 | ) | |
| 23,521 | | |
| (8,497 | ) |
Total
other expense | |
| (89,604 | ) | |
| (29,251 | ) | |
| (212,462 | ) | |
| (53,870 | ) |
| |
| | | |
| | | |
| | | |
| | |
Loss before income taxes | |
| (224,406 | ) | |
| (319,457 | ) | |
| (3,019,598 | ) | |
| (903,996 | ) |
Provision
for income taxes | |
| - | | |
| - | | |
| - | | |
| - | |
Net
loss | |
$ | (224,406 | ) | |
$ | (319,457 | ) | |
$ | (3,019,598 | ) | |
$ | (903,996 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic and diluted loss
per Common Share | |
$ | (0.00 | ) | |
$ | (0.00 | ) | |
$ | (0.03 | ) | |
$ | (0.01 | ) |
Basic and diluted weighted
average number of common shares outstanding | |
| 94,579,434 | | |
| 88,558,601 | | |
| 92,542,938 | | |
| 88,538,286 | |
See
accompanying notes to unaudited consolidated financial statements.
GivBux,
Inc
Consolidated
Statement of change in Stockholders’ Deficit
(Unaudited)
For
the Three and Nine Months Ended September 30, 2024
| |
Series A | | |
| | |
| | |
Additional | | |
Common | | |
| | |
Total | |
| |
Preferred
Stock | | |
Common
Stock | | |
Paid in | | |
Stock | | |
Accumulated | | |
Stockholders’ | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
to
be issued | | |
Deficit | | |
Deficit | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Balance - December 31, 2023 | |
| - | | |
$ | - | | |
| 88,579,434 | | |
$ | 88,580 | | |
$ | 1,415,447 | | |
$ | 60,000 | | |
$ | (3,986,666 | ) | |
$ | (2,422,639 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (130,397 | ) | |
| (130,397 | ) |
Balance - March 31, 2024 | |
| - | | |
| - | | |
| 88,579,434 | | |
| 88,580 | | |
| 1,415,447 | | |
| 60,000 | | |
| (4,117,063 | ) | |
| (2,553,036 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for
compensation -services | |
| - | | |
| - | | |
| 6,000,000 | | |
| 6,000 | | |
| 2,274,000 | | |
| - | | |
| - | | |
| 2,280,000 | |
Net
loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (2,664,795 | ) | |
| (2,664,795 | ) |
Balance - June 30, 2024 | |
| - | | |
| - | | |
| 94,579,434 | | |
| 94,580 | | |
| 3,689,447 | | |
| 60,000 | | |
| (6,781,858 | ) | |
| (2,937,831 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net
loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (224,406 | ) | |
| (224,406 | ) |
Balance - September
30, 2024 | |
| - | | |
$ | - | | |
| 94,579,434 | | |
$ | 94,580 | | |
$ | 3,689,447 | | |
$ | 60,000 | | |
$ | (7,006,264 | ) | |
$ | (3,162,237 | ) |
For
the Three and Nine Months Ended September 30, 2023
| |
Series A | | |
| | |
| | |
Additional | | |
Common | | |
Deferred | | |
| | |
Total | |
| |
Preferred
Stock | | |
Common
Stock | | |
Paid in | | |
Stock | | |
Stock | | |
Accumulated | | |
Stockholders’ | |
| |
Shares | | |
Amount | | |
Shares | | |
Amount | | |
Capital | | |
to
be issued | | |
compensation | | |
Deficit | | |
Deficit | |
| |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Balance - December 31, 2022 | |
| - | | |
$ | - | | |
| 88,512,767 | | |
$ | 88,513 | | |
$ | 1,294,764 | | |
$ | - | | |
$ | - | | |
$ | (2,879,704 | ) | |
$ | (1,496,427 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for compensation -management | |
| - | | |
| - | | |
| 25,000 | | |
| 25 | | |
| 37,475 | | |
| - | | |
| - | | |
| - | | |
| 37,500 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (331,303 | ) | |
| (331,303 | ) |
Balance - March 31, 2023 | |
| - | | |
| - | | |
| 88,537,767 | | |
| 88,538 | | |
| 1,332,239 | | |
| - | | |
| - | | |
| (3,211,007 | ) | |
| (1,790,230 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| - | | |
| | | |
| | |
Subscription received- shares to be issued | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 60,000 | | |
| - | | |
| - | | |
| 60,000 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (253,236 | ) | |
| (253,236 | ) |
Balance - June 30, 2023 | |
| - | | |
| - | | |
| 88,537,767 | | |
| 88,538 | | |
| 1,332,239 | | |
| 60,000 | | |
| - | | |
| (3,464,243 | ) | |
| (1,983,466 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common stock issued for cash | |
| - | | |
| - | | |
| 16,667 | | |
| 17 | | |
| 24,983 | | |
| - | | |
| - | | |
| - | | |
| 25,000 | |
Common stock issued for compensation -services | |
| - | | |
| - | | |
| 25,000 | | |
| 25 | | |
| 58,225 | | |
| - | | |
| (14,562 | ) | |
| - | | |
| 43,688 | |
Net loss | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (319,457 | ) | |
| (319,457 | ) |
Balance - September
30, 2023 | |
| - | | |
$ | - | | |
| 88,579,434 | | |
$ | 88,580 | | |
$ | 1,415,447 | | |
$ | 60,000 | | |
$ | (14,562 | ) | |
$ | (3,783,700 | ) | |
$ | (2,234,235 | ) |
See
accompanying notes to unaudited consolidated financial statements.
GivBux,
Inc
Consolidated
Statement of Cash Flows
(Unaudited)
| |
Nine Months
Ended | |
| |
September
30, | |
| |
2024 | | |
2023 | |
| |
| | |
| |
CASH FLOWS FROM OPERATING
ACTIVITIES: | |
| | | |
| | |
Net loss | |
$ | (3,019,598 | ) | |
$ | (903,996 | ) |
Adjustments to reconcile
net loss to net cash used in operating activities: | |
| | | |
| | |
Stock-based compensation-management | |
| - | | |
| 37,500 | |
Stock-based compensation
-services | |
| 2,280,000 | | |
| 43,688 | |
Non-cash leases expenses | |
| 60,357 | | |
| 265,042 | |
Amortization of debt discount | |
| 189,713 | | |
| 3,500 | |
Change in fair value of
derivative liabilities | |
| (23,521 | ) | |
| 8,497 | |
Changes in operating assets
and liabilities: | |
| | | |
| | |
Prepaid expenses | |
| 22,770 | | |
| (23,969 | ) |
Other receivable | |
| (180 | ) | |
| - | |
Accounts payable and accrued
liabilities | |
| 212,753 | | |
| 360,973 | |
Accrued interest | |
| 46,521 | | |
| 41,624 | |
Operating
lease liabilities | |
| (62,323 | ) | |
| (271,902 | ) |
Net
Cash used in Operating Activities | |
| (293,508 | ) | |
| (439,043 | ) |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING
ACTIVITIES: | |
| | | |
| | |
Proceeds from issuance
of common stock | |
| - | | |
| 25,000 | |
Proceeds from loans payable | |
| 103,000 | | |
| 283,150 | |
Proceeds from convertible
notes | |
| 279,400 | | |
| 21,000 | |
Proceed from stock subscription | |
| - | | |
| 60,000 | |
Proceeds from related parties | |
| 31,940 | | |
| 148,988 | |
Repayment
to related parties | |
| (98,047 | ) | |
| (109,950 | ) |
Net
Cash provided by Financing Activities | |
| 316,293 | | |
| 428,188 | |
| |
| | | |
| | |
Net change in cash | |
| 22,785 | | |
| (10,855 | ) |
Cash, beginning of period | |
| 41,870 | | |
| 41,951 | |
Cash, end of period | |
$ | 64,655 | | |
$ | 31,096 | |
| |
| | | |
| | |
Supplemental cash flow information | |
| | | |
| | |
Cash
paid for interest | |
$ | | | |
$ | 166 | |
Cash
paid for taxes | |
$ | - | | |
$ | - | |
| |
| | | |
| | |
Non-cash Investing and Financing transactions: | |
| | | |
| | |
Common
stock issued for compensation -management | |
$ | - | | |
$ | 37,500 | |
Common
stock issued for compensation- services | |
$ | 2,280,000 | | |
$ | 58,250 | |
Derivative
liabilities recognized as debt discount | |
$ | 267,566 | | |
$ | 21,000 | |
See
accompanying notes to unaudited consolidated financial statements.
GivBux,
Inc.
Notes
to Consolidated Financial Statements
September
30, 2024
(Unaudited)
NOTE
1 – COMPANY OVERVIEW AND GOING CONCERN
On
January 15, 2021, FINRA declared effective a change of name of the Company from Senaida Tire Company, Ltd. to GivBux, Inc. (the “Company”,
“GivBux”) and a 1-for-20 reverse split of the Company’s common stock. As a condition for approval of the corporate
actions, FINRA required the Company to issue 78,125,000 pre-split shares of common stock to the shareholders of GivBux Global Partners,
Inc. in exchange for all of the issued and outstanding shares of common stock of GivBux Global Partners, Inc. This requirement was contrary
to the terms of the amended Share Exchange Agreement between the Company and GivBux Global Partners, Inc. (the “Agreement”),
as these 78,125,000 shares were required pursuant to the Agreement to be issued after the 1-for-20 reverse split, thus being post-split
shares. As a result, the Company was contractually required to issue an additional 74,218,050 shares of the Company’s post-split
common stock to the former common stock shareholders of GivBux Global Partners, Inc., such that the total number of shares issued pursuant
to the share exchange equals that number required by the Agreement.
Share
Exchange and Reorganization
On
January 7, 2021 (the “Effective Date”), GivBux Global Partners, Inc. (“GivBux Global”) became a 100% subsidiary
of GivBux. Furthermore, the Company entered into and closed on a share exchange agreement with GivBux and its shareholders. Pursuant
to the terms of the share exchange agreement, GivBux issued 78,125,000 shares of its unregistered post-split common stock to the shareholders
of GivBux Global in exchange for all of the shares of GivBux Global’s common stock, representing 100% of its issued and outstanding
common stock and as a result of the share exchange agreement, GivBux Global became a wholly owned subsidiary of GivBux.
Recapitalization
For
financial accounting purposes, this transaction was treated as a reverse acquisition by GivBux and resulted in a recapitalization with
GivBux Global being the accounting acquirer and GivBux as the acquired company. The consummation of this reverse acquisition resulted
in a change of control. Accordingly, the historical financial statements prior to the acquisition are those of the accounting acquirer,
GivBux and have been prepared to give retroactive effect to the reverse acquisition completed on January 7,2021 and represent the operations
of GivBux Global. The consolidated financial statements after the acquisition date, January 7, 2021, include the balance sheets of both
companies at historical cost, the historical results of GivBux Global and the results of the Company from the acquisition date. All share
and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect
the recapitalization.
Going
Concern
The
accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the
United States of America (“U.S. GAAP”), which contemplates the Company’s continuation as a going concern. The Company
has incurred net losses of $3,019,598 during the nine months ended September 30, 2024, and has an accumulated deficit of $7,006,264 as
of September 30, 2024. In addition, current liabilities exceed current assets by $3,162,237 as of September 30, 2024.
Management
intends to raise additional operating funds through equity and/or debt offerings. However, there can be no assurance management will
be successful in its endeavors.
There
are no assurances that the Company will be able to either (1) achieve a level of revenues adequate to generate sufficient cash flow from
operations; or (2) obtain additional financing through either private placement, public offerings and/or bank financing necessary to
support its working capital requirements. To the extent that funds generated from operations and any private placements, public offerings
and/or bank financing are insufficient, the Company will have to raise additional working capital. No assurance can be given that additional
financing will be available, or if available, will be on terms acceptable to the Company. If adequate working capital is not available
to the Company, it may be required to curtail or cease its operations.
Due
to uncertainties related to these matters, there exists a substantial doubt about the ability of the Company to continue as a going concern.
The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of
asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a
going concern.
NOTE
2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the
United States of America (“GAAP”) and are presented in US dollars. The Company’s year-end is December 31.
Principles
of Consolidation
The
consolidated financial statements include the accounts of GivBux, Inc. and its wholly owned subsidiary. Intercompany transactions and
balances have been eliminated.
Use
of Estimates
The
preparation of consolidated 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.
Revenue
recognition
Revenues
are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration
that the Company expects to receive in exchange for those goods or services. The Company applies the following five steps in order to
determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements:
|
● |
identify
the contract with a customer; |
|
● |
identify
the performance obligations in the contract; |
|
● |
determine
the transaction price; |
|
● |
allocate
the transaction price to performance obligations in the contract; and |
|
● |
recognize
revenue as the performance obligation is satisfied. |
Basic
and Diluted Loss Per Common Share
The
Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed
by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share of
common stock are computed by dividing net earnings by the weighted average number of shares and potential shares outstanding during the
period. Potential shares of common stock consist of shares issuable upon the conversion of outstanding convertible debt, preferred stock,
warrants and stock option.
For
the nine months ended September 30, 2024, and 2023, the following common stock equivalents were excluded from the computation of diluted
net loss per share as the result of the computation was anti-dilutive.
| |
September 30 | |
| |
2024 | | |
2023 | |
| |
Shares | | |
Shares | |
Convertible notes | |
| 1,251,403 | | |
| 269,043 | |
Financial
Instruments and Fair Value Measurements
As
defined in ASC 820” Fair Value Measurements,” fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes
market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and
the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally
unobservable. The Company classifies fair value balances based on the observability of those inputs. ASC 820 establishes a fair value
hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices
in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).
The
following table summarizes fair value measurements by level as of September 30, 2024, and December 31, 2023, measured at fair value on
a recurring basis:
September 30, 2024 | |
Level
1 | | |
Level
2 | | |
Level
3 | | |
Total | |
Assets | |
| | | |
| | | |
| | | |
| | |
None | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
Liabilities | |
| | | |
| | | |
| | | |
| | |
Derivative liabilities | |
$ | - | | |
$ | - | | |
$ | 276,286 | | |
$ | 276,286 | |
December
31, 2023 | |
Level
1 | | |
Level
2 | | |
Level
3 | | |
Total | |
Assets | |
| | | |
| | | |
| | | |
| | |
None | |
$ | - | | |
$ | - | | |
$ | - | | |
$ | - | |
Liabilities | |
| | | |
| | | |
| | | |
| | |
Derivative liabilities | |
$ | - | | |
$ | - | | |
$ | 32,241 | | |
$ | 32,241 | |
Derivative
Financial Instruments
The
Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our
financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For
derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value
and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based
derivative financial instruments, the Company used a Black Scholes valuation model to value the derivative instruments at inception and
on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as
liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet
as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months
of the balance sheet date.
Related
Parties
The
Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of
related party transactions (see Note 4).
Commitments
and Contingencies
The
Company follows ASC 450-20, “Loss Contingencies,” to report accounting for contingencies. Liabilities for loss contingencies
arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability
has been incurred and the amount of the assessment can be reasonably estimated.
Cash
and Cash Equivalents
Cash
and cash equivalents consist of cash and highly liquid investments with remaining maturities of less than ninety days at the date of
purchase. We maintain cash and cash equivalent balances with financial institutions that exceed federally-insured limits. We have not
experienced any losses related to these balances, and we believe the credit risk to be minimal. The Company does not have any cash equivalents.
Leases
ASC
842 supersedes the lease requirements in ASC 840 “Leases”, and generally requires lessees to recognize operating and finance
lease liabilities and corresponding right-of-use (“ROU”) assets on the balance sheet and to provide enhanced disclosures
surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements.
ROU
assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease
payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease
payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate
based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date.
The ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate
the lease when it is reasonably certain that we will exercise that option.
Any
lease with a term of 12 months or less is considered short-term. As permitted by ASC 842, short-term leases are excluded from the ROU
assets and lease liabilities on the consolidated balance sheets. Consistent with all other operating leases, short-term lease expense
is recorded on a straight-line basis over the lease term.
The
Company determines the present value of minimum future lease payments for operating leases by estimating a rate of interest that it would
have to pay to borrow on a collateralized basis over a similar term, an amount equal to the lease payments and a similar economic environment
(the “incremental borrowing rate” or “IBR”).The Company determines the appropriate IBR by identifying a reference
rate and making adjustments that take into consideration financing options and certain lease-specific circumstances.
On
February 29, 2024, the term of lease terminated, and the Company moved out from premises. As of December 31, 2023, the Company’s
lease agreement is accounted for as operating leases.
Recent
Accounting Pronouncements
The
Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of
any such pronouncements may be expected to cause a material impact on our consolidated financial statements.
Reclassification
Certain
accounts from prior periods have been reclassified to conform to the current period presentation.
NOTE
3 – LEASES
On
March 1, 2021, the Company entered into lease agreements to rent office and marina spaces for a three-year term at $29,250 per month
for the first twelve months. The Company leases its offices at 2801 W Coast Hwy, Suite 200, Newport Beach CA 92663. The lease was terminated
and February 29, 2024, the Company moved out from premises on April 15, 2024. The Company moved to a new office at 2751W Coast Hwy on
a month-to-month basis.
In
accordance with ASC 842, the Company recognized operating lease ROU assets and lease liabilities as follows:
The
components of lease expense were as follows:
| |
Three Months Ended | | |
Nine Months Ended | |
| |
September
30, | | |
September
30, | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Lease cost: | |
| | | |
| | | |
| | | |
| | |
Operating lease cost | |
$ | - | | |
$ | 90,666 | | |
$ | 60,444 | | |
$ | 271,998 | |
Short-term lease cost | |
| 140,264 | | |
| 8,336 | | |
| 335,734 | | |
| 22,736 | |
Sublease income | |
| - | | |
| (26,000 | ) | |
| (1,500 | ) | |
| (90,900 | ) |
Total lease cost | |
$ | 140,264 | | |
$ | 73,002 | | |
$ | 394,678 | | |
$ | 203,834 | |
Supplemental
cash flow information related to leases was as follows:
| |
Nine Months Ended | |
| |
September
30, | |
| |
2024 | | |
2023 | |
Cash paid for amounts included in the measurement of lease liabilities: | |
| | |
| |
Operating cash flows from operating
leases | |
$ | 337,797 | | |
$ | 301,594 | |
| |
| | | |
| | |
Weighted-average remaining lease term - operating
leases (year) | |
| - | | |
| 0.41 | |
Weighted-average discount rate — operating
leases | |
| 0.00 | % | |
| 3.35 | % |
Supplemental
balance sheet information related to leases was as follows:
| |
September 30, | | |
December 31, | |
| |
2024 | | |
2023 | |
Operating lease right-of-use asset | |
$ | - | | |
$ | 60,357 | |
| |
| | | |
| | |
Operating lease liabilities: | |
| | | |
| | |
Current portion | |
$ | - | | |
$ | 62,323 | |
Non-current portion | |
| - | | |
| - | |
| |
$ | - | | |
$ | 62,323 | |
NOTE
4 – RELATED PARTY ITEMS
Notes
Payable Related Parties
During
the nine months ended September 30, 2024, and 2023, the Company obtained $ 31,940 and $148,988 loan from our related parties, repaid
$98,047 and $109,950 to our related parties and recognized interest of $20,326 and $21,560, respectively.
As
of September 30, 2024, and December 31,2023, the Company had notes payable related parties of $868,747 and $934,854 and accrued interest
of $111,732 and $91,406, respectively. The notes are unsecured, 3% interest bearing and due on demand.
Due
to related party
As
of September 30,2024, and December 31,2023, the Company had due to related party of $3,275.
Stock
based compensation.
During
the nine months ended September 30,2023, the Company issued 25,000 shares of common stock for compensation -management of $37,500.
NOTE
5 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
The
following table summarizes the components of the Company’s accounts payable and accrued liabilities as of the dates presented:
| |
September 30, | | |
December 31, | |
| |
2024 | | |
2023 | |
Trade payable | |
$ | 174,296 | | |
$ | 174,475 | |
Salary payable | |
| 368,000 | | |
| 278,000 | |
Accrued interest | |
| 86,613 | | |
| 60,669 | |
Other current liabilities | |
| 499,500 | | |
| 376,317 | |
| |
$ | 1,128,409 | | |
$ | 889,461 | |
NOTE
6 – LOANS PAYABLE
The
components of loans payable as of September 30, 2024, and December 31, 2023, were as follows:
Payment date | |
Principal Amount | | |
Maturity date | |
Interest rate | | |
September 30, 2024 | | |
December 31, 2023 | |
January 19, 2022 | |
$ | 12,500 | | |
January 19, 2023 | |
| 7 | % | |
$ | 12,500 | | |
$ | 12,500 | |
March 7, 2022 | |
$ | 3,000 | | |
March 7, 2023 | |
| 7 | % | |
| 3,000 | | |
| 3,000 | |
October 13, 2022 | |
$ | 25,000 | | |
October 13, 2023 | |
| 7 | % | |
| 12,500 | | |
| 12,500 | |
January 31, 2023 | |
$ | 100,000 | | |
Due on demand | |
| 0 | % | |
| 100,000 | | |
| 100,000 | |
February 9, 2023 | |
$ | 10,000 | | |
Due on demand | |
| 0 | % | |
| 10,000 | | |
| 10,000 | |
March 1, 2023 | |
$ | 50,000 | | |
Due on demand | |
| 0 | % | |
| 50,000 | | |
| 50,000 | |
April 5, 2023 | |
$ | 25,000 | | |
August 3, 2023 | |
| 15% fixed | | |
| 25,000 | | |
| 25,000 | |
May 19, 2023 | |
$ | 4,000 | | |
Due on demand | |
| 0 | % | |
| 4,000 | | |
| 4,000 | |
June 20, 2023 | |
$ | 40,000 | | |
September 18, 2023 | |
| 12% fixed | | |
| 40,000 | | |
| 40,000 | |
July 12, 2023 | |
$ | 4,150 | | |
Due on demand | |
| 0 | % | |
| 4,150 | | |
| 4,150 | |
July 17, 2023 | |
$ | 50,000 | | |
Due on demand | |
| 0 | % | |
| 50,000 | | |
| 50,000 | |
October 6, 2023 | |
$ | 10,000 | | |
October 6, 2024 | |
| 7 | % | |
| 10,000 | | |
| 10,000 | |
December 6, 2023 | |
$ | 1,000 | | |
Due on demand | |
| 0 | % | |
| 2,000 | | |
| 1,000 | |
December 26, 2023 | |
$ | 100,000 | | |
April 18, 2024 | |
| 0 | % | |
| 100,000 | | |
| 100,000 | |
February 9,2024 | |
$ | 1,000 | | |
Due on demand | |
| 0 | % | |
| 1,000 | | |
| - | |
July 17, 2024 | |
$ | 37,000 | | |
January 15, 2025 | |
| 5 | % | |
| 37,000 | | |
| - | |
August 14, 2024 | |
$ | 64,000 | | |
January 15, 2025 | |
| 5 | % | |
| 64,000 | | |
| - | |
Total loans payable | | |
$ | 525,150 | | |
$ | 422,150 | |
Less: Unamortized debt discount | | |
| - | | |
| (23,904 | ) |
| |
| | | |
| |
| | | |
| 525,150 | | |
| 398,246 | |
Less: Current portion | | |
| 525,150 | | |
| 398,246 | |
Long-term portion | | |
$ | - | | |
$ | - | |
On
December 26, 2023, the Company entered into a promissory note agreement with an investor for the principal amount of $100,000, received
the amount of $75,000 in cash, non-secured, free interest with maturity date of April 18, 2024. The Company recognized a debt discount
of $25,000. The debt discount is being amortized over the life of the note using the effective interest method.
During
the nine months ended September 30, 2024, and 2023, the Company borrowed $103,000 and $283,150, respectively.
As
of September 30, 2024, and December 31, 2023, six (6) and five (5) loans with unpaid balance of $193,000 and $93,000 are in default,
respectively.
During
the nine months ended September 30, 2024, and 2023, the Company recognized interest and default penalty of $6,207 and $10,789 and amortization
debt discount of $23,904 and $0, respectively.
As
of September 30, 2024, and December 31, 2023, the Company had loans payable of $525,150 and $422,150, accrued interest of $20,291 and
$14,085 and amortization debt discount of $0 and $23,904, respectively.
NOTE
7 –CONVERTIBLE NOTES PAYABLE
Issuance date | |
Principal Amount | | |
Maturity date | |
Interest rate | | |
September 30, 2024 | | |
December 31, 2023 | |
September 30, 2019 | |
$ | 30,000 | | |
September 30, 2021 | |
| 8 | % | |
$ | 30,000 | | |
$ | 30,000 | |
January 29, 2020 | |
$ | 10,000 | | |
January 29, 2021 | |
| 8 | % | |
| 10,000 | | |
| 10,000 | |
February 26, 2020 | |
$ | 10,000 | | |
February 26, 2021 | |
| 8 | % | |
| 10,000 | | |
| 10,000 | |
March 6, 2020 | |
$ | 7,500 | | |
March 6, 2021 | |
| 8 | % | |
| 7,500 | | |
| 7,500 | |
March 5, 2020 | |
$ | 3,700 | | |
March 5, 2021 | |
| 8 | % | |
| 5,900 | | |
| 5,900 | |
March 9, 2020 | |
$ | 1,200 | | |
March 9, 2021 | |
| 8 | % | |
| 1,200 | | |
| 1,200 | |
March 26, 2020 | |
$ | 60,000 | | |
March 26, 2021 | |
| 10 | % | |
| 60,000 | | |
| 60,000 | |
March 5, 2021 | |
$ | 11,300 | | |
March 5, 2022 | |
| 8 | % | |
| 11,300 | | |
| 11,300 | |
July 11, 2023 | |
$ | 11,000 | | |
July 11, 2024 | |
| 7 | % | |
| 11,000 | | |
| 11,000 | |
August 22, 2023 | |
$ | 10,000 | | |
August 22, 2024 | |
| 7 | % | |
| 10,000 | | |
| 10,000 | |
November 1, 2023 | |
$ | 7,000 | | |
October 31, 2024 | |
| 7 | % | |
| 7,000 | | |
| 7,000 | |
April 4, 2024 | |
$ | 28,600 | | |
October 3, 2024 | |
| 10 | % | |
| 28,600 | | |
| - | |
April 23, 2024 | |
$ | 5,000 | | |
April 23, 2025 | |
| 10 | % | |
| 5,000 | | |
| - | |
May 7, 2024 | |
$ | 14,111 | | |
October 3, 2024 | |
| 10 | % | |
| 14,111 | | |
| - | |
May 8, 2024 | |
$ | 25,000 | | |
May 8, 2025 | |
| 10 | % | |
| 25,000 | | |
| - | |
May 8, 2024 | |
$ | 25,000 | | |
May 8, 2025 | |
| 20 | % | |
| 25,000 | | |
| - | |
May 17, 2024 | |
$ | 5,556 | | |
October 3, 2024 | |
| 10 | % | |
| 5,556 | | |
| - | |
May 31, 2024 | |
$ | 3,333 | | |
October 3, 2024 | |
| 10 | % | |
| 3,333 | | |
| - | |
June 5, 2024 | |
$ | 25,000 | | |
June 1, 2025 | |
| 10 | % | |
| 25,000 | | |
| - | |
June 6, 2024 | |
$ | 25,000 | | |
June 6, 2025 | |
| 10 | % | |
| 25,000 | | |
| - | |
June 7, 2024 | |
$ | 2,500 | | |
June 1, 2025 | |
| 10 | % | |
| 2,500 | | |
| - | |
June 10, 2024 | |
$ | 5,000 | | |
June 1, 2025 | |
| 10 | % | |
| 5,000 | | |
| - | |
June 11, 2024 | |
$ | 5,000 | | |
June 1, 2025 | |
| 10 | % | |
| 5,000 | | |
| - | |
June 17, 2024 | |
$ | 2,500 | | |
June 1, 2025 | |
| 10 | % | |
| 2,500 | | |
| - | |
June 27, 2024 | |
$ | 700 | | |
June 27, 2025 | |
| 10 | % | |
| 700 | | |
| - | |
July 2, 2024 | |
$ | 6,667 | | |
October 3, 2024 | |
| 10 | % | |
| 6,667 | | |
| - | |
July 29, 2024 | |
$ | 6,667 | | |
October 3, 2024 | |
| 10 | % | |
| 6,667 | | |
| - | |
August 9, 2024 | |
$ | 16,667 | | |
October 3, 2024 | |
| 10 | % | |
| 16,667 | | |
| - | |
August 14, 2024 | |
$ | 27,778 | | |
October 3, 2024 | |
| 10 | % | |
| 27,778 | | |
| - | |
July 2, 2024 | |
$ | 6,000 | | |
June 1, 2025 | |
| 10 | % | |
| 6,000 | | |
| - | |
July 3, 2024 | |
$ | 4,000 | | |
June 1, 2025 | |
| 10 | % | |
| 4,000 | | |
| - | |
July 17, 2024 | |
$ | 25,000 | | |
July 17, 2025 | |
| 10 | % | |
| 25,000 | | |
| - | |
August 22, 2024 | |
$ | 25,000 | | |
August 19, 2025 | |
| 10 | % | |
| 25,000 | | |
| - | |
| |
| | | |
| |
| | | |
$ | 453,979 | | |
$ | 163,900 | |
Less: Unamortized debt discount | | |
| (130,506 | ) | |
| (18,070 | ) |
Total convertible notes payable | | |
| 323,473 | | |
| 145,830 | |
Less: Current portion | | |
| 323,473 | | |
| 145,830 | |
Long-term portion | | |
$ | - | | |
$ | - | |
The
components of convertible notes payable as of September 30, 2024, and December 31, 2023, were as follows:
Convertible
notes payable consists of the following:
| ● | Terms
ranging from five months to one year. |
| ● | Annual
interest rates range from 7% – 10%. |
| ● | Convertible
at the option of the holders at any time during the period of note, after maturity date or
6 months after issuance date. |
| ● | Conversion
prices is a fixed of $0.50 for certain notes. Certain notes have a conversion price of 25%
and 45% discount to the operative market valuation of the Company. |
During
the nine months ended September 30, 2024, and 2023, the Company issued convertible notes of $290,079 and $21,000, respectively.
During
the year ended December 31, 2023, the Company entered into three convertible notes with two investors for the principal amount of $28,000
in cash with an interest rate of 7% per annum. According to terms and condition of the agreement, the noteholder has the right from time
to time during the period of the note to convert the unpaid principal into common stock at conversion price of 25% discount to the average
trading price during the ten (10) day period ending on the last complete training day prior to the conversion date. As of the issuance
date of the notes, the Company recognized the additional of new derivative of $28,000 as debt discount and $2,935 Day 1 loss on derivative.
The debt discount is being amortized over the life of the note using the effective interest method (Note 8).
On
April 4, 2024, the Company entered into a convertible promissory note of $100,000 with 10% original issue discount (OID), interest rate
of 10% per annum, conversion price of 55% of the average price of the Company’s common stock during the 20 consecutive trading
days prior to the date of the conversion with maturity date of October 3,2024. During the period ended September 30,2024, the Company
obtained the initial consideration of $98,700 with 10% OID of $10,679 for total initial principal amount of $109,379.
During
the nine months ended September 30, 2024, the Company entered into seven (7) convertible promissory notes of $180,700 with an interest
rate of 10% and 20% per annum for a term of 12 months. The noteholders have the right from time to time during the period of the note
to convert the unpaid principal into common stock at conversion price of 25% and 45% discount to the average trading price during the
ten (10) day period ending on the last complete training day prior to the conversion date.
As
of September 30, 2024, and December 31, 2023, ten (10) and eight (8) convertible notes with unpaid balance of $156,900 and $135,000 are
in default, respectively
During
the nine months ended September 30, 2024, and 2023, the Company recognized interest of $19,988 and $9,275, amortization debt discount
of $165,809 and $3,500, respectively.
As
of September 30, 2024, and December 31, 2023, the Company had convertible notes payable of $453,979 and $163,900, unamortized debt discount
of $130,506 and $18,070 and accrued interest of $66,322 and $46,335, respectively.
Note
8 -DERIVATIVE LIABILITIES
The
Company analyzed the conversion option for derivative accounting consideration under ASC 815, Derivatives and Hedging, and hedging, and
determined that the instrument should be classified as a liability since the conversion option becomes effective at issuance resulting
in there being no explicit limit to the number of shares to be delivered upon settlement of the above conversion options. The Company
accounts for warrants as a derivative liability due to there being no explicit limit to the number of shares to be delivered upon settlement
of all conversion options.
Fair
Value Assumptions Used in Accounting for Derivative Liabilities.
ASC
815 requires us to assess the fair market value of derivative liability at the end of each reporting period and recognize any change
in the fair market value as other income or expense item.
The
Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate
the fair value as of September 30, 2024. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to
expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the
dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible
note is estimated using the Black-Scholes valuation model.
For
the nine months ended September 30, 2024, and the year ended December 31, 2023, the estimated fair values of the liabilities measured
on a recurring basis are as follows:
| |
| Nine months ended | | |
| Year ended | |
| |
| September 30, | | |
| December 31, | |
| |
| 2024 | | |
| 2023 | |
Term | |
| 0.01 - 1.00 years | | |
| 0.6 - 1.00 years | |
Expected average volatility | |
| 0% - 304 | % | |
| 262 - 365 | % |
Expected dividend yield | |
| - | | |
| - | |
Risk-free interest rate | |
| 3.98% -5.39 | % | |
| 4.79% - 5.46 | % |
The
following table summarizes the changes in the derivative liabilities during the nine months ended September 30, 2024.
Fair Value Measurements Using Significant Observable Inputs (Level 3) | |
| | |
| |
| | |
Balance - December 31, 2023 | |
$ | 32,241 | |
| |
| | |
Addition of new derivatives recognized as debt discounts | |
| 267,566 | |
Addition of new derivatives recognized as loss on derivatives | |
| 48,249 | |
Gain on change in fair value of the derivative | |
| (71,770 | ) |
Balance - September 30, 2024 | |
$ | 276,286 | |
The
aggregate loss on derivatives during the nine months ended September 30, 2024, and 2023 was as follows.
| |
Nine Months Ended | |
| |
September 30 | |
| |
2024 | | |
2023 | |
Day one loss due to derivative liabilities on convertible note | |
$ | 48,249 | | |
$ | 1,406 | |
Loss (gain) on change in fair value of the derivative liabilities | |
| (71,770 | ) | |
| 7,091 | |
| |
$ | (23,521 | ) | |
$ | 8,497 | |
NOTE
9 –STOCKHOLDERS’ EQUITY
The
Company is authorized to issue 110,000,000 shares of stock with a par value of $0.001 per share, 10,000,000 shares of which are Preferred
Stock.
Preferred
Stock
The
Board of Directors has previously designated and adopted (i) Preferred Stock in 1,000,000 shares as Series A (were previously issued
and converted into Common stock during the quarter ended June 30,2021), (ii) 1,000,000 as Series B. On October 31,2022, the Board of
Directors designated Preferred Stock in 1,000,000 shares as Series C, all Series having par value of $0.001 per share.
Series
B Preferred stock will be issued to secure debt or equity or any combination to be acquired by the Company. The holders of Series B Preferred
stock shall be entitled to be paid out of the assets of the Company a value of $20 per share of Series B Preferred stock. As of the date
of these financial Statements, the Agreement has not been closed and no shares of Series B Preferred stock issued.
Series
C Preferred stock shall not be converted into shares of the Common stock. Except as may be required by the Nevada Business Corporation
Act, the Series C Preferred stock shall not be entitled to receive cash, stock or other property as dividends.
Common
Stock
During
the nine months ended September 30, 2023, the Company issued 25,000 shares of common stock for compensation -management, valued at $37,500.
On
March 27, 2024, the Company entered into a consulting agreement for corporate administration and governance purposes for a term of 12
months. The consulting fees agreed by issuance 6,000,000 shares of restricted common stock to consultant. During the nine months of September
30, 2024, the Company issued 6,000,000 shares of restricted common stock, valued at $2,280,000 based on market value on agreement date.
As
of September 30, 2024, and December 31, 2023, the Company had 94,579,434 shares and 88,579,434 shares of Common Stock outstanding, and
no shares of Preferred Stock issued and outstanding (Series A, B and C). The Board of Directors may fix and determine the relative rights
and preferences of the shares of any series established.
NOTE
10 – COMMITMENTS
On
September 28, 2022, the Company entered into a Share Exchange Agreement (‘SEA”) with Active World Holdings, Inc. a Pennsylvania
corporation ( DBA Active World Club) , (“AWC”), for exchange 100% of issued and outstanding shares of capital stock of AWH’s
wholly owned subsidiary, AWC Unity Metaverse, a corporation to be formed whose sole assets is its metaverse platform (“Metaverse
Assets’) which can be replaced for the Company client base for 1,000,000 shares of Series B Convertible Preferred Stock of the
Company. On December 15, 2022, the Company and AWH entered into the first amendment to SEA, and agreed (i) rename AWC Metaverse, Inc.
(ii) issuance 500,000 shares of Series B convertible Preferred Stock upon the signing amendment and 500,000 shares of Series B Convertible
Preferred Stock upon the completion the first $2,500,000 in metaverse sales (iii) AWC will have the sole right to choose the second tranche
of 500,000 shares of Series B Convertible Preferred Stock into a like kind Preferred class to be determined in the wholly owned metaverse
subsidiary contemplated herein. As of September 30,2024, the first tranche of 500,000 shares of Series B Convertible Preferred Stock
has not been issued.
On
November 1, 2023, the Company entered into a mutual venture agreement with an entity for operation of a yacht charter business. During
the year ended December 31, 2023, the Company received $100,000 in advance, but the agreement was not completed and signed. As of September
30, 2024, the Company owns $100,000 to the other part of the agreement.
NOTE
11 - SUBSEQUENT EVENTS
Management
evaluated all additional events through the date the consolidated financial statements were available to be issued. Based upon this review,
unless noted below, the Company did not identify any material subsequent events that would have required adjustment or disclosure in
the consolidated financial statements.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
In
June 2024, the company initiated beta testing of the GivBux App and commenced recruiting Sales associates. This accounts for the increase
in 294% increase in revenue with $ 257,920 for the 3 months ending 9/30/24 versus $ 65,470 for the corresponding 3 months ending 9/30/23.
As we ramp up over the next few quarters we expect to see continual revenue growth. Our sales associates have increased during this quarter
from less than 100 to over 1000.
Net
losses for period are down 29.5% for the quarter in comparison to the same period in 2023 but as we grow we will need to hire more personnel
and staff properly the operations.
Item
3. Quantitative and Qualitative Disclosures About Market Risk.
Risks
Related to Operating as a Public Company
As
a public reporting company, we will be subject to rules and regulations established from time to time by the SEC and PCAOB regarding
our internal control over financial reporting. If we fail to establish and maintain effective internal control over financial reporting
and disclosure controls and procedures, we may not be able to accurately report our financial results or report them in a timely manner.
We
are a public reporting company subject to the rules and regulations established from time to time by the SEC and the Public Company Accounting
Oversight Board (PCAOB). These rules and regulations will require, among other things, that we establish and periodically evaluate procedures
with respect to our internal control over financial reporting. Reporting obligations as a public company are likely to place a considerable
strain on our financial and management systems, processes, and controls, as well as on our personnel.
In
addition, as a public company we will be required to document and test our internal control over financial reporting pursuant to Section
404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting
by the time our second annual report is filed with the SEC and thereafter, which will require us to document and make significant changes
to our internal control over financial reporting. Likewise, our independent registered public accounting firm will be required to provide
an attestation report on the effectiveness of our internal control over financial reporting at such time as we cease to be an “emerging
growth company,” as defined in the JOBS Act, and we become an accelerated or large accelerated filer, although we could potentially
qualify as an “emerging growth company” until as late as the fifth anniversary of being a reporting company. We are continuing
to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed
by us in the reports that we will file with the SEC is recorded, processed, summarized, and reported within the time periods specified
in SEC rules and forms and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended,
or the Exchange Act, is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve
our internal control over financial reporting, which includes hiring additional accounting and financial personnel to implement such
processes and controls.
We
expect to incur costs related to implementing an internal audit and compliance function in the upcoming years to further improve our
internal control environment. If we identify future deficiencies in our internal control over financial reporting or if we are unable
to comply with the demands that will be placed upon us as a public company, including the requirements of Section 404 of the Sarbanes-Oxley
Act, in a timely manner, we may be unable to accurately report our financial results, or report them within the timeframes required by
the SEC. We also could become subject to sanctions or investigations by the SEC or other regulatory authorities. In addition, if we are
unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting
firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting when required, investors
may lose confidence in the accuracy and completeness of our financial reports, we may face restricted access to the capital markets and
our stock price may be adversely affected.
Our
current controls and any new controls that we develop may also become inadequate because of changes in our business, and weaknesses in
our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop or maintain
effective controls or any difficulties encountered in their implementation or improvement could cause us to fail to meet our reporting
obligations, result in a restatement of our financial statements for prior periods, undermine investor confidence in us, and adversely
affect the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able
to remain listed on OTC Markets Pink Sheet.
We
identified material weaknesses in our internal controls over financial reporting and may identify additional material weaknesses in the
future or otherwise fail to maintain an effective system of internal controls, which may result in material misstatements of our consolidated
financial statements or cause us to fail to meet our periodic reporting obligations.
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 a company’s annual or interim financial statements will not be prevented
or detected on a timely basis. We have experienced rapid growth, and this growth has placed considerable strain on our accounting systems,
financial close and reporting process, and personnel. As a result, we identified material weaknesses in our internal control over financial
reporting. These material weaknesses relate to the controls for the financial statement close process and the controls related to unusual
and infrequent transactions (including accounting for complicated stock transactions and the adoption of ASU 2014-09, Revenue from Contracts
with Users or ASC 606). As a result, we made immaterial revisions of our consolidated financial statements as of December 31, 2019, an
immaterial audit adjustment to our consolidated financial statements as of December 31, 2020 and for the year then ended and a correction
of errors relating to the financial statements for the year ended December 31, 2020 in our financial statements for the first and second
quarters of 2021.
We
are taking steps to remediate these material weaknesses through the development and implementation of systems, processes and controls
over the financial close and reporting process. In addition, we have begun to enhance our overall control environment through hiring
additional qualified accounting and financial reporting personnel and engaging external consultants with appropriate expertise for more
challenging technical accounting issues which will add to the depth of our skilled and managerial resources and allow us to scale our
accounting processes to match growth and changes in the business and operations. We will also continue to evaluate our IT systems and
related processes to optimize automation to enhance our financial statement close process, reduce the number of manual journal entries
and facilitate review controls related to our significant classes of transactions.
While
we are designing and implementing new controls and measures to remediate these material weaknesses, we cannot assure you that the measures
we are taking will be sufficient to remediate the material weaknesses or avoid the identification of additional material weaknesses in
the future. Our failure to implement and maintain effective internal control over financial reporting could result in errors in our consolidated
financial statements that could result in a restatement of our financial statements and could cause us to fail to meet our periodic reporting
obligations, any of which could diminish investor confidence in us and cause a decline in the price of our common stock.
We
are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies
will make our Class A common stock less attractive to investors.
For
so long as we remain an “emerging growth company” as defined in the JOBS Act, we may take advantage of certain exemptions
from various requirements that are applicable to public companies that are not “emerging growth companies,” including, but
not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced
disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements
to hold a nonbinding advisory vote on executive compensation and obtain stockholder approval of any golden parachute payments not previously
approved. We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year (A) following the fifth
anniversary of the completion of this offering, (B) in which we have total annual revenue of at least $1.07 billion, or (C) in which
we are deemed to be a large accelerated filer, with at least $700 million of equity securities, which includes Class A common stock and
Class B common stock, held by non-affiliates as of the prior June 30th, the end of our second fiscal quarter, and (ii) the date on which
we have issued more than $1 billion in non-convertible debt during the prior three-year period.
Under
the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards
apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards
that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth
company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial
statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective
dates. While we have not made such an irrevocable election, we have not delayed the adoption of any applicable accounting standards.
As
a result of the reduced disclosure requirements applicable to us, investor confidence in our company and the market price of our Class
A common stock may be adversely affected. We cannot predict if investors will find our Class A common stock less attractive because we
may rely on these exemptions. If some investors find our Class A common stock less attractive, there may be a less active trading market
for our Class A common stock, and our stock price may be more volatile.
We
will incur significant costs as a result of operating as a public company.
Prior
to this offering, we operated on a private basis. After this offering, we will be subject to the reporting requirements of the Exchange
Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the New York Stock Exchange and other applicable securities
laws and regulations. The expenses incurred by public companies generally for reporting and corporate governance purposes are greater
than those for private companies. For example, the Exchange Act requires, among other things, that we file annual, quarterly, and current
reports with respect to our business, financial condition, and results of operations. Compliance with these rules and regulations will
increase our legal and financial compliance costs, and increase demand on our systems, particularly after we are no longer an emerging
growth company. In addition, as a public company, we may be subject to stockholder activism, which can lead to additional substantial
costs, distract management, and impact the manner in which we operate our business in ways we cannot currently anticipate. As a result
of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will
become more visible, which may result in threatened or actual litigation, including by competitors. We expect these rules and regulations
to increase our legal and financial compliance costs and to make some activities more difficult, time-consuming, and costly, although
we are currently unable to estimate these costs with any degree of certainty.
We
also expect that being a public company and being subject to new rules and regulations will make it more expensive for us to obtain directors
and officers liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of
directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company,
we could be subject to delisting of our Class A common stock, fines, sanctions, and other regulatory action and potentially civil litigation.
These factors may therefore strain our resources, divert management’s attention, and affect our ability to attract and retain qualified
board members and executive officers.
Our
senior management team has limited experience managing a public company, and regulatory compliance obligations may divert its attention
from the day-to-day management of our business.
The
individuals who now constitute our senior management team have limited experience managing a publicly-traded company, interacting with
public company investors and complying with the increasingly complex laws pertaining to public companies. Our senior management team
may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting
obligations under federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and
constituents will require significant attention from our senior management and could divert their attention away from the day-to-day
management of our business, which could adversely affect our business, financial condition, and results of operations.
Risks
Related to Our Common Stock
We
are a Penny Stock.
Our
common stock is considered to be a “penny stock,” as defined in Rule 3a51-1 promulgated by the SEC under the Exchange Act.
The penny stock rules require a broker-dealer, prior to a transaction in penny stock not otherwise exempt from the rules, to deliver
a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock
market. These disclosure rules have the effect of reducing the level of trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. So long as our common stock is subject to the penny stock rules, it may be more difficult to sell our
common stock.
Effect
of Amended Rule 15c2-11 on the Company’s securities.
The
SEC released and published a Final Rulemaking on Publication or Submission of Quotations without Specified Information amending Rule
15c2-11 under the Exchange Act (“Amended Rule 15c2-11”). To be eligible for public quotations on an ongoing basis, Amended
Rule 15c2-11 modified the “piggyback exemption” that required that (i) the specified current information about the company
is publicly available, and (ii) the security is subject to a one-sided (i.e., a bid or offer) priced quotation, with no more than four
business days in succession without a quotation. Under Amended Rule 15c2-11, the Company may only rely on the piggyback exemption in
certain limited circumstances. The Amended Rule 15c2-11 will require, among other requirements, that a broker-dealer has a reasonable
basis for believing that information about the issuer of securities is accurate. Our security holders may find it more difficult to deposit
common stock with a broker-dealer, and if deposited, more difficult to trade the securities on the Pink Sheets. The Company intends to
provide the specified current information under the Exchange Act but there is no assurance that a broker-dealer will accept our common
stock or if accepted, that the broker-dealer will rely on our disclosure of the specified current information.
There
is very limited liquidity of the Company’s common stock.
Our
common stock is thinly traded on the Pink Sheets and there is a very limited market in our common stock. As a result, there is only limited
liquidity in our common stock.
There
are significant limitations on a shareholder’s ability to re-sell shares of the Company’s common stock.
Investors
may have difficulty in reselling their shares due to the lack of market or state Blue Sky laws. The holders of our shares of Common Stock
and persons who desire to purchase them in any trading market that might develop in the future should be aware that there may be significant
state law restrictions upon the ability of investors to resell our shares. Accordingly, even if we are successful in having the shares
available for trading on the OTCQB Market (“OTCQB”), investors should consider any secondary market for our securities to
be a limited one. We intend to seek coverage and publication of information regarding our Company in an accepted publication which permits
a “manual exemption.” This manual exemption permits a security to be distributed in a particular state without being registered
if the company issuing the security has a listing for that security in a securities manual recognized by the state. However, it is not
enough for the security to be listed in a recognized manual. The listing entry must contain (1) the names of issuers, officers, and directors,
(2) an issuer’s balance sheet, and (3) a profit and loss statement for either the fiscal year preceding the balance sheet or for
the most recent fiscal year of operations. We may not be able to secure a listing containing all of this information. Furthermore, the
manual exemption is a non-issuer exemption restricted to secondary trading transactions, making it unavailable for issuers selling newly
issued securities. Most of the accepted manuals are those published in Standard and Poor’s, Moody’s Investor Service, Fitch’s
Investment Service, and Best’s Insurance Reports, and many states expressly recognize these manuals. A smaller number of states
declare that they “recognize securities manuals” but do not specify the recognized manuals, while some states do not have
any provisions and therefore do not expressly recognize the manual exemption.
Accordingly,
shares of our common stock should be considered totally illiquid, which inhibits investors’ ability to resell their shares.
The
Company’s common stock may be classified as a penny stock, which may increase reporting obligations for any transaction and increase
the burden on any potential broker.
If
a public market develops for our securities following a business combination or asset acquisition, such securities may be classified
as penny stock depending upon the market price and the manner in which they are traded. The SEC has adopted Rule 15g-9b, which establishes
the definition of a “penny stock”, for purposes relevant to the Company, as any equity security that has a market price of
less than $5.00 per share and that is admitted to quotation but does not trade on NASDAQ or a national securities exchange. For any transaction
involving a penny stock, unless exempt, the rules require the delivery by the broker of a document to investors, stating the risks of
investment in penny stocks, the possible lack of liquidity, commissions paid, current quotation and investors’ rights and remedies,
a special suitability inquiry, regular reporting to the investor and other requirements.
The
Company is an Emerging Growth Company
We
qualify as an “emerging growth company” as defined in the JOBS Act. For as long as a company is deemed to be an emerging
growth company, it may take advantage of specified reduced reporting and other regulatory requirements that are generally unavailable
to other public companies. These provisions include:
A
requirement to have only two years of audited financial statements and only two years of related Management’s Discussion and Analysis
included in an initial public offering registration statement;
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An
exemption to provide less than five years of selected financial data in an initial public offering registration statement; |
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An
exemption from the auditor attestation requirement in the assessment of our internal controls over financial reporting; |
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An
exemption from compliance with any new or revised financial accounting standards until they would apply to private companies; |
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An
exemption from compliance with any new requirement adopted by the Public Company Accounting Oversight Board requiring mandatory audit
firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information
about the audit and the financial statement of the issuer; and reduced disclosure about our executive compensation arrangements |
An
emerging growth company is also exempt from Section 404(b) of the Sarbanes Oxley Act, which requires that the registered accounting firm
shall, in the same report, attest to and report on the assessment on the effectiveness of the internal control structure and procedures
for financial reporting. Similarly, as a Smaller Reporting Company we are exempt from Section 404(b) of the Sarbanes-Oxley Act and our
independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over
financial reporting until such time as we cease being a Smaller Reporting Company.
As
an emerging growth company, we are exempt from Section 14A (a) and (b) of the Exchange Act, which require stockholder approval of executive
compensation and golden parachutes.
Section
107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section
7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can
delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected
to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those
of companies that comply with such new or revised accounting standards.
We
would cease to be an emerging growth company upon the earliest of:
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The
first fiscal year during which our total annual gross revenues were $1.235 billion or more; |
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The
first fiscal year following the fifth anniversary of the filing of this Form 10; |
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The
date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; or |
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The
date on which we are deemed to be a large accelerated filer as defined in Rule 12b-2 of the Securities Exchange Act of 1934. |
The
Company is a smaller reporting company, and if the Company takes advantage of certain exemptions from disclosure requirements available
to smaller reporting companies, this could make the securities of the Company less attractive to investors and may make it more difficult
to compare the Company’s performance with other public companies.
The
Company is a “smaller reporting company” as defined in Rule 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
The Company will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of the Company’s
common stock held by non-affiliates equals or exceeds $250 million as of the end of the prior June 30th, or (2) the Company’s annual
revenues equaled or exceeded $100 million during such completed fiscal year and the market value of the Company’s common stock
held by non-affiliates exceeds $700 million as of the prior June 30th. To the extent the Company takes advantage of such reduced disclosure
obligations, it may also make comparison of the Company’s financial statements with other public companies difficult or impossible.
Your
percentage of ownership in the Company may be diluted in the future.
Your
percentage ownership in the Company may be diluted in the future because of equity issuances for acquisitions, capital market transactions
or otherwise, including shares issued in connection with a business combination and equity awards that we expect will be granted to our
directors, officers and employees, whether prior to or following the closing of a business combination or asset acquisition.
Certain
provisions in our articles of incorporation and bylaws, as amended, and of Nevada law, may prevent or delay an acquisition of the Company,
which could decrease the trading price of our common stock.
Our
articles of incorporation and our bylaws, as well as Nevada corporate law, contain provisions that are intended to deter coercive takeover
practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the acquirer and to encourage prospective
acquirers to negotiate with our board of directors rather than to attempt a hostile takeover. These provisions include, among others:
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the
inability of our stockholders to call a special meeting; |
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limitations
on the ability of our stockholders to present proposals or nominate directors for election at stockholder meetings; |
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the
right of our board of directors to issue preferred stock without stockholder approval; and |
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the
ability of our directors to fill vacancies on our board of directors. |
Nevada
law also imposes some restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding
common stock.
We
believe these provisions may help protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential
acquirers to negotiate with our board of directors and by providing our board of directors with more time to assess any acquisition proposal.
These provisions are not intended to make our Company immune from takeovers. In addition, although we believe these provisions collectively
provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our board of directors, they would
apply even if the offer may be considered beneficial by some stockholders. These provisions may also frustrate or prevent any attempts
by our stockholders to replace or remove our current management team by making it more difficult for stockholders to replace members
of our board of directors, which is responsible for appointing the members of our management.
We
do not expect to pay any cash dividends for the foreseeable future.
We
have not declared any cash dividends. We currently intend to retain any future earnings to finance our business operations, which involve
only the search for a target business or assets, and, therefore, we do not anticipate that we will pay any cash dividends on shares of
our common stock in the foreseeable future. Any determination to pay dividends in the future, whether before or after a business combination
or asset acquisition, will be at the discretion of our board of directors and will be dependent upon our future financial condition,
results of operations and capital requirements, general business conditions and other relevant factors as determined by our board of
directors. Accordingly, if you purchase shares of our common stock, realization of a gain on your investment will depend on the appreciation
of the price of our common stock, which may never occur. Investors seeking cash dividends in the foreseeable future should not purchase
our common stock. See “Dividend Policy.”
If
securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, whether before
or following the closing of a business combination or asset acquisition, our stock price and any trading volume could decline.
The
trading market for our securities, whether before or following the closing of a business combination or asset acquisition, depends in
part on the research and reports that industry or financial analysts publish about us or our business. We do not influence or control
the reporting of these analysts. If one or more of the analysts who do cover us downgrade or provide a negative outlook on our company
or our industry, or the stock of any of our competitors, the price of our common stock could decline. If one or more of these analysts
ceases coverage of our company, we could lose visibility in the market, which in turn could cause the price of our common stock to decline.
Item
4. Controls and Procedures.
Furnish
the information required by Item 307 of Regulation S-K (§ 229.307 of this chapter) and Item 308(c) of Regulation S-K (§229.308(c)
of this chapter).
PART
II—OTHER INFORMATION
Item
1. Legal Proceedings.
There
are no legal proceedings against the company at this time
Item
1A. Risk Factors.
Set
forth any material changes from risk factors as previously disclosed in the registrant’s Form 10-K (§249.310) in response
to Item 1A. to Part 1 of Form 10-K. Smaller reporting companies are not required to provide the information required by this item.
Item
2. Unregistered Sales of Equity Securities and Use of Proceeds.
There
were no unregistered sales of Equity Securities
Item
3. Defaults Upon Senior Securities.
There
were no material defaults during this reporting period
Item
5. Other Information.
Our
current CEO Umesh Singh is currently on medical leave and Robert Thompson Director and Secretary has taken over, temporarily his duties.
The company intends to increase its board members from 3 to 5 in the first quarter of 2025.
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.
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GivBux
Inx |
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(Registrant) |
November
19, 2024 |
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Date |
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Robert
Thompson Director |
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(Signature)
** |
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Date |
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(Signature)
** |
**
Print name and title of the signing officer under his signature.
Grafico Azioni GivBux (PK) (USOTC:GBUX)
Storico
Da Nov 2024 a Dic 2024
Grafico Azioni GivBux (PK) (USOTC:GBUX)
Storico
Da Dic 2023 a Dic 2024